EX-10.1 2 dzsi-ex101_332.htm EX-10.1 dzsi-ex101_332.htm

 

Exhibit 10.1

EXECUTION VERSION

 

 

REVOLVING CREDIT, TERM LOAN, GUARANTY

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION

(AS AGENT AND JOINT LEAD ARRANGER)

AND

CITIBANK, N.A.

(AS JOINT LEAD ARRANGER AND DOCUMENTATION AGENT)

AND THE LENDERS PARTY HERETO

 

DASAN ZHONE SOLUTIONS, INC.,

and various of its Subsidiaries

 

(BORROWERS)

February 27, 2019

 

 

 


 

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS.1

 

1.1

Accounting Term1

 

 

1.2

General Terms2

 

 

1.3

Uniform Commercial Code Terms68

 

 

1.4

Certain Matters of Constructio.69

 

ARTICLE II

ADVANCES, PAYMENTS.69

 

2.1

Revolving Advances.69

 

 

2.2

Procedures for Requesting Revolving Advances; Procedures for Selection of Applicable Interest Rates for All Advances.71

 

 

2.3

Term Loan73

 

 

2.4

Swing Loans.74

 

 

2.5

Disbursement of Advance Proceed75

 

 

2.6

Making and Settlement of Advances.76

 

 

2.7

Maximum Advance.78

 

 

2.8

Manner and Repayment of Advances.78

 

 

2.9

Repayment of Excess Advances79

 

 

2.10

Statement of Account79

 

 

2.11

Letters of Credit.80

 

 

2.12

Issuance of Letters of Credit.80

 

 

2.13

Requirements For Issuance of Letters of Credit.81

 

 

2.14

Disbursements, Reimbursement.82

 

 

2.15

Repayment of Participation Advances.83

 

 

2.16

Documentation84

 

 

2.17

Determination to Honor Drawing Request.84

 

 

2.18

Nature of Participation and Reimbursement Obligations84

 

 

2.19

Liability for Acts and Omissions.86

 

 

2.20

Prepayments87

 

 

2.21

Use of Proceeds.91

 

 

2.22

Defaulting Lenders.92

 

 

2.23

Payment of Obligation.94

 

 

2.24

Increase in Maximum Revolving Advance Amount.95

 

ARTICLE III

INTEREST AND FEES.97

 

3.1

Interest.97

 

 

3.2

Letter of Credit Fees.98

 

 

3.3

Facility Fee.99

 

 

3.4

Fee Letter; Collateral Evaluation Fees.100

 

 

3.5

Computation of Interest and Fees101

 

 

3.6

Maximum Charges.101

 

 

3.7

Increased Costs101

 

 

3.8

Alternate Rate of Interest.102

 

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3.8.1.

Interest Rate Inadequate or Unfair.  In the event that Agent or any Lender shall have determined that:102

 

 

3.9

Capital Adequacy.104

 

 

3.10

Taxes.104

 

 

3.11

Replacement of Lender.107

 

ARTICLE IV

COLLATERAL: GENERAL TERMS107

 

4.1

Security Interest in the Collateral108

 

 

4.2

Perfection of Security Interest108

 

 

4.3

Preservation of Collateral..109

 

 

4.4

Ownership and Location of Collateral.109

 

 

4.5

Defense of Agent’s and Lenders’ Interests..110

 

 

4.6

Inspection of Premises.110

 

 

4.7

Appraisals..111

 

 

4.8

Receivables; Deposit Accounts and Securities Accounts.111

 

 

4.9

Inventory..114

 

 

4.10

Maintenance of Equipment..114

 

 

4.11

Exculpation of Liability.114

 

 

4.12

Financing Statements..114

 

 

4.13

Investment Property Collateral..115

 

 

4.14

Provisions Regarding Pledged Equity Interests.115

 

 

4.15

Agreements Regarding Korean Collateral.121

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES.122

 

5.1

Authority.122

 

 

5.2

Formation and Qualification.123

 

 

5.3

Survival of Representations and Warranties..123

 

 

5.4

Tax Returns..123

 

 

5.5

Financial Statements.123

 

 

5.6

Entity Names..124

 

 

5.7

O.S.H.A.; Environmental Compliance; Flood Insurance.125

 

 

5.8

Solvency; No Litigation, Violation, Indebtedness or Default; ERISA Compliance.125

 

 

5.9

Intellectual Property127

 

 

5.10

Licenses and Permits..127

 

 

5.11

[RESERVED].127

 

 

5.12

No Default..127

 

 

5.13

No Burdensome Restrictions.127

 

 

5.14

No Labor Disputes..127

 

 

5.15

Margin Regulations.128

 

 

5.16

Investment Company Act..128

 

 

5.17

Delivery of DNI Agreements..128

 

 

5.18

Delivery of KeyMile Acquisition Documents..128

 

 

5.19

Swaps..128

 

 

5.20

Business and Property of Loan Parties.128

 

 

5.21

Ineligible Securities.129

 

 

5.22

Equity Interests..129

 

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5.23

Commercial Tort Claims.130

 

 

5.24

Letter of Credit Rights.130

 

 

5.25

Material Contracts..130

 

 

5.26

Affiliate Transactions..130

 

 

5.27

Certificate of Beneficial Ownership..130

 

 

5.28

Disclosure..130

 

ARTICLE VI

AFFIRMATIVE COVENANTS.130

 

6.1

Compliance with Laws.130

 

 

6.2

Conduct of Business and Maintenance of Existence and Assets..131

 

 

6.3

Books and Records.131

 

 

6.4

Payment of Taxes..131

 

 

6.5

Financial Covenants.132

 

 

6.6

Insurance.135

 

 

6.7

Payment of Indebtedness and Leasehold Obligations..136

 

 

6.8

Environmental Matters.137

 

 

6.9

Standards of Financial Statements.137

 

 

6.10

Federal Securities Laws..138

 

 

6.11

Execution of Supplemental Instruments..138

 

 

6.12

Exercise of Rights.138

 

 

6.13

Government Receivables..138

 

 

6.14

Membership / Partnership Interests..138

 

 

6.15

Keepwell..138

 

 

6.16

Certificate of Beneficial Ownership and Other Additional Information..139

 

 

6.17

Repatriation.139

 

ARTICLE VII

NEGATIVE COVENANTS.140

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets.140

 

 

7.2

Creation of Liens..142

 

 

7.3

Guarantees..142

 

 

7.4

Investments142

 

 

7.5

Loans..142

 

 

7.6

Capital Expenditures..142

 

 

7.7

Restricted Payments.143

 

 

7.8

Indebtedness..143

 

 

7.9

Nature of Business.143

 

 

7.10

Transactions with Affiliates..143

 

 

7.11

[RESERVED].144

 

 

7.12

Subsidiaries.144

 

 

7.13

Fiscal Year and Accounting Changes..148

 

 

7.14

Pledge of Credit.148

 

 

7.15

Amendment of Organizational Documents..148

 

 

7.16

Compliance with ERISA..149

 

 

7.17

Prepayment of Indebtedness; Repayment of Permitted Korean LGU Indebtedness149

 

 

7.18

DNI Subordinated Debt and Obligations.150

 

 

7.19

Amendments to Other Agreements..150

 

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ARTICLE VIII

CONDITIONS PRECEDENT.150

 

8.1

Conditions to Initial Advances.150

 

 

8.2

Conditions to Each Advance.156

 

 

8.3

Post-Closing Covenants/Conditions.156

 

ARTICLE IX

INFORMATION AS TO LOAN PARTIES.159

 

9.1

Disclosure of Material Matters..160

 

 

9.2

Schedules.160

 

 

9.3

Environmental Reports.161

 

 

9.4

Litigation.161

 

 

9.5

Material Occurrence.161

 

 

9.6

Government Receivables..162

 

 

9.7

Annual Financial Statements.162

 

 

9.8

Quarterly Financial Statements..162

 

 

9.9

Monthly Bank Statements.163

 

 

9.10

Other Reports.163

 

 

9.11

Additional Information..163

 

 

9.12

Projected Operating Budget..163

 

 

9.13

Variances from Operating Budget..163

 

 

9.14

Notice of Suits, Adverse Events..163

 

 

9.15

ERISA Notices and Requests..163

 

 

9.16

Additional Documents..164

 

 

9.17

Updates to Certain Schedules..164

 

 

9.18

Financial Disclosure..164

 

ARTICLE X

EVENTS OF DEFAULT.165

 

10.1

Nonpayment.165

 

 

10.2

Breach of Representation.165

 

 

10.3

Financial Information.165

 

 

10.4

Judicial Actions.165

 

 

10.5

Noncompliance.165

 

 

10.6

Judgments.166

 

 

10.7

Bankruptcy.  166

 

 

10.8

[RESERVED].166

 

 

10.9

Lien Priority.166

 

 

10.10

Subordinated Loan Default.166

 

 

10.11

Cross Default.166

 

 

10.12

Breach of Guaranty, Guarantor Security Agreement or Pledge Agreement.167

 

 

10.13

Change of Control.167

 

 

10.14

Invalidity.167

 

 

10.15

Seizures.167

 

 

10.16

[RESERVED].167

 

 

10.17

Pension Plans.167

 

 

10.18

Anti-Terrorism Laws..167

 

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ARTICLE XI

LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.167

 

11.1

Rights and Remedies.168

 

 

11.2

Agent’s Discretion.169

 

 

11.3

Setoff.169

 

 

11.4

Rights and Remedies not Exclusive..170

 

 

11.5

Allocation of Payments and Proceeds of Collateral after Event of Default170

 

ARTICLE XII

WAIVERS AND JUDICIAL PROCEEDINGS.173

 

12.1

Waiver of Notice.173

 

 

12.2

Delay.173

 

 

12.3

Jury Waiver..174

 

ARTICLE XIII

EFFECTIVE DATE AND TERMINATION.174

 

13.1

Term..174

 

 

13.2

Termination.174

 

ARTICLE XIV

REGARDING AGENT.175

 

14.1

Appointment.175

 

 

14.2

Nature of Duties..175

 

 

14.3

Lack of Reliance on Agent..176

 

 

14.4

Resignation of Agent; Successor Agent; Resignation of Non-Agent Issuing Bank..176

 

 

14.5

Certain Rights of Agent.177

 

 

14.6

Reliance..177

 

 

14.7

Notice of Default..178

 

 

14.8

Indemnification.178

 

 

14.9

Agent in its Individual Capacity..178

 

 

14.10

Delivery of Documents.178

 

 

14.11

Loan Parties’ Undertaking to Agent..178

 

 

14.12

No Reliance on Agent’s Customer Identification Program.179

 

 

14.13

Other Agreements..179

 

ARTICLE XV

BORROWING AGENCY.179

 

15.1

Borrowing Agency Provisions.179

 

 

15.2

Waiver of Subrogation.180

 

ARTICLE XVI

MISCELLANEOUS.180

 

16.1

Governing Law..180

 

 

16.2

Entire Understanding.181

 

 

16.3

Successors and Assigns; Participations; New Lenders.184

 

 

16.4

Application of Payments..187

 

 

16.5

Indemnity.187

 

 

16.6

Notice.189

 

 

16.7

Survival.190

 

 

16.8

Severability..191

 

 

16.9

Expenses.191

 

 

16.10

Injunctive Relief..191

 

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16.11

Consequential Damages.191

 

 

16.12

Captions..191

 

 

16.13

Counterparts; Facsimile Signatures..191

 

 

16.14

Construction..192

 

 

16.15

Confidentiality; Sharing Information..192

 

 

16.16

Publicity.192

 

 

16.17

Certifications From Banks and Participants; USA PATRIOT Act.192

 

 

16.18

Anti-Terrorism Laws.193

 

 

16.19

Acknowledgement and Consent to Bail-In of EEA Financial Institutions.194

 

 

16.20

Currency Indemnity..195

 

 

16.21

Sovereign Immunity..195

 

 

16.22

Ex-Im Subfacility.195

 

ARTICLE XVII

GUARANTY AND SURETYSHIP AGREEMENT196

 

17.1

Guaranty and Suretyship Agreement.196

 

 

17.2

Guaranty of Payment and Not Merely Collection..196

 

 

17.3

Guarantor and Suretyship Waivers.197

 

 

17.4

Repayments or Recovery from Secured Parties.198

 

 

17.5

Enforceability of Obligations.198

 

 

17.6

Guaranty Payable upon Event of Default; Remedies.199

 

 

17.7

Waiver of Subrogation..199

 

 

17.8

Continuing Guaranty and Suretyship Agreement.199

 

 

17.9

General Limitation on Guarantee Obligations..200

 

 

17.10

Limitation with respect to German Guarantors.200

 

 

17.11

Right of Contribution..203

 

 

17.12

Keepwell..203

 


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LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

Exhibit 1.2(a)Form of Borrowing Base Certificate

Exhibit 1.2(b)Form of Compliance Certificate

Exhibit 2.1 Form of Revolving Credit Note

Exhibit 2.3(a)Form of Term Loan Note

Exhibit 2.4Form of Swing Loan Note

Exhibit 8.1(g)Form of Financial Condition Certificate

Exhibit 16.3 Form of Commitment Transfer Supplement

 

 

Schedules

 

Schedule 1.1Lenders and Commitments

Schedule 1.2(a)

Dormant Subsidiaries

Schedule 1.2(b)

Disqualified Persons

Schedule 1.2(c)

Existing German Pension Plans/Old Age Part Time Working Schemes

Schedule 2.21(a)

Korean and Japanese Loan Facilities to be Repaid at Closing

Schedule 4.4 Equipment and Inventory Locations; Place of Business, Chief Executive Office, Real Property

Schedule 4.8(j)Deposit and Investment Accounts

Schedule 4.14Pledged Equity Interest Collateral

Schedule 5.1Consents

Schedule 5.2(a) States of Qualification and Good Standing

Schedule 5.2(b) Subsidiaries

Schedule 5.4Federal Tax Identification Number

Schedule 5.6 Prior Names

Schedule 5.8(b) Litigation

Schedule 5.8(e) Plans

Schedule 5.9 Intellectual Property

Schedule 5.14 Labor Disputes

Schedule 5.23Equity Interests

Schedule 5.24Commercial Tort Claims

Schedule 5.25Letter of Credit Rights

Schedule 5.26Material Contracts

Schedule 7.2Permitted Encumbrances

Schedule 7.3 Permitted Guarantees

Schedule 7.4Permitted Investments

Schedule 7.8Permitted Indebtedness

 

 

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REVOLVING CREDIT, TERM LOAN,

GUARANTY AND SECURITY AGREEMENT

 

Revolving Credit, Term Loan, Guaranty and Security Agreement dated as of February 27, 2019, by and among DASAN ZHONE SOLUTIONS, INC., a Delaware corporation (“DZSI”), ZTI MERGER SUBSIDIARY III, INC., a Delaware corporation (“ZTI”and together with DZSI and each Person joined hereto as a borrower from time to time, collectively, the “Borrowers” and each, a “Borrower”), PREMISYS COMMUNICATIONS, INC., a Delaware corporation (“Premisys”), ZHONE TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation, (“Zhone International”), PARADYNE NETWORKS, INC., a Delaware corporation (“Paradyne Networks”), PARADYNE CORPORATION, a Delaware corporation (“Paradyne Corporation”), DASAN NETWORK SOLUTIONS, INC., a California corporation (“DNS”), DASAN NETWORK SOLUTIONS, INC., a corporation organized under the laws of the Republic of Korea (“DNS Korea”), KEYMILE GMBH, a limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of Germany, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Hannover under registration number HRB 208693 (“KeyMile”, and together with (i) Premisys, Zhone International, Paradyne Networks, Paradyne Corporation, DNS and DNS Korea, and (ii) each other Person joined hereto as a guarantor from time to time, collectively, the “Guarantors”, and each, a “Guarantor” and together with the Borrowers, collectively, the “Loan Parties” and each, a “Loan Party”), the financial institutions which are now or hereafter become parties hereto (collectively, the “Lenders” and each a “Lender”), PNC BANK, NATIONAL ASSOCIATION (“PNC”), in its capacity as agent for the Lenders (in such capacity, together with its successors and assigns, the “Agent”), with PNC BANK, NATIONAL ASSOCIATION and CITIBANK, N.A., as Joint Lead Arrangers, and CITIBANK, N.A., as Documentation Agent.

 

IN CONSIDERATION of the mutual covenants and undertakings set forth herein, Loan Parties, Lenders and Agent hereby agree as follows:

ARTICLE IDEFINITIONS.

1.1Accounting Terms.  As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement or any of the Other Documents, all accounting terms not defined in Section 1.2 hereof or elsewhere in this Agreement or partly defined in Section 1.2 hereof to the extent not defined shall have the respective meanings given to such terms under GAAP; provided, however that, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of DZSI and its consolidated Subsidiaries for the fiscal year ended December 31, 2017.  If there occurs after the Closing Date any change in GAAP that affects in any respect the calculation of any covenant set forth in this Agreement or the definition of any term defined under GAAP used in such calculations, Agent, Lenders and Loan Parties shall negotiate in good faith to amend the provisions of this Agreement that relate to the calculation of such covenants with the intent of having the respective positions of Agent, Lenders and Loan Parties after such change in GAAP conform as nearly as possible to their respective positions as of the Closing Date, provided, that, until any such amendments have been agreed upon, the covenants in this Agreement shall be calculated as if no such change in GAAP had occurred and Loan Parties shall provide additional financial statements or supplements thereto,

 


 

attachments to Compliance Certificates and/or calculations regarding financial covenants as Agent may reasonably require in order to provide the appropriate financial information required hereunder with respect to Loan Parties both reflecting any applicable changes in GAAP and as necessary to demonstrate compliance with the financial covenants before giving effect to the applicable changes in GAAP.  However, notwithstanding anything to the contrary provided for in this Section 1.1 or otherwise in this Agreement, (x) leases of the Companies in effect on the Closing Date shall continue to be classified and accounted for on a basis consistent with GAAP as applied in preparation of the audited financial statements of DZSI and its consolidated Subsidiaries for the fiscal year ended December 31, 2017 for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above, and (y) leases of the Companies entered into after the Closing Date shall be classified and accounted for on a basis consistent with GAAP as in effect from time to time, unless the parties hereto shall enter into a mutually acceptable amendment to the contrary, except that, notwithstanding anything to the contrary provided for in this sentence (or otherwise in this Section 1.1), to the extent that, after the Closing Date, (1) DZSI or any of its Subsidiaries shall enter into any new real estate lease in connection with a relocation of DZSI’s corporate headquarters facility currently located at 7195 Oakport Street, Oakland, California, and such new real estate lease is on terms no less favorable on the whole, and at a cost to Companies that is equal to or less than, the existing lease for such existing headquarters facility, or (2) KeyMile or any of its Subsidiaries shall enter into any new real estate lease in connection with a relocation of KeyMile’s corporate headquarters and/or warehouse facilities currently located at Wohlenbergstrasse 5, 30179, Hannover, Germany, and such new real estate lease is on terms no less favorable on the whole, and at a cost to Companies that is equal to or less than, the applicable existing lease for such existing headquarters facility or warehouse facilities, as applicable, each such lease shall be classified and accounted for on a basis consistent with GAAP as applied in preparation of the audited financial statements of DZSI and its consolidated Subsidiaries for the fiscal year ended December 31, 2017 for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto (and specifically notwithstanding the effect of ASC 842).

1.2General Terms.  For purposes of this Agreement the following terms shall have the following meanings:

Accountants” shall have the meaning set forth in Section 9.7 hereof.

Acquisition” shall mean any transaction (or series of related transactions) for the purchase or other acquisition, by merger or otherwise, by any Company of (a) Equity Interests in any Person having ordinary voting power to elect at least a majority of the directors of such Person or other governing body performing similar functions for such Person (or otherwise conferring similar control over the governance and policies of such Person), or (b) all or substantially all the assets of any Person (or all or substantially all the assets constituting a business unit, division, product line or line of business of any Person), but not any other type of Investment in any Person (any such Person, and/or assets and/or business unit, division, product line or line of business of any Person, acquired in any such transaction, the “target”).

Advance Rates” shall mean the advance rates in respect of Eligible Receivables set forth in Section 2.1(a) hereof.

2

 


 

Advances” shall mean and include the Revolving Advances, Letters of Credit, the Swing Loans, and the Term Loan.

Affected Lender” shall have the meaning set forth in Section 3.11 hereof.

Affiliate” of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person which is a director, manager, member, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote five percent (5%) or more of the Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.

Agent” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

Agreement” shall mean this Revolving Credit, Term Loan, Guaranty and Security Agreement, as the same may be amended, modified, supplemented, renewed, restated or replaced from time to time.

Alternate Base Rate” shall mean, for any day, a rate per annum equal to the highest of (a) the Base Rate in effect on such day, (b) the sum of the Overnight Bank Funding Rate in effect on such day plus one half of one percent (0.5%), and (c) the sum of the Daily LIBOR Rate in effect on such day plus one percent (1.0%), so long as a Daily LIBOR Rate is offered, ascertainable and not unlawful.  Any change in the Alternate Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

Alternate Source” shall have the meaning set forth in the definition of Overnight Bank Funding Rate.

Annual Audited Financials” shall mean, as to any fiscal year of Loan Parties, the audited financial statements, related statements and reports, related Accountant’s opinion, letters, and reports, and related Compliance Certificates required to be delivered by Loan Parties with respect to such fiscal year to Agent under Section 9.7 hereof.

Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such Laws, all as amended, supplemented or replaced from time to time.

Applicable Law” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles, all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.

3

 


 

Applicable Margin” shall mean, with respect to each Revolving Advance, Swing Loan, and portion of the Term Loan and also with respect to Letter of Credit Lender Fees, the applicable percentage as follows:

Domestic Rate Revolving Advances

LIBOR Rate Revolving Advances

Swing Loans

Domestic Rate Term Loan

LIBOR Rate Term Loan

Letters of Credit

1.50%

2.50%

1.50%

5.00%

6.00%

2.50%

 

Application Date” shall have the meaning set forth in Section 2.8(b) hereof.

Appraisal Costs” shall have the meaning set forth in Section 3.4(d) hereof.

Approvals” shall have the meaning set forth in Section 5.7(b) hereof.

Approved Credit Insurance Policy” shall mean, as to any Receivable arising from a sale to a Customer outside the United States of America, a policy of credit insurance for comprehensive commercial and political risk under which the payment and collection of such Receivable is insured, if and to the extent that (i) the insurance carrier, coverage amounts and terms of coverage with respect to such Receivable under such insurance policy shall be reasonably acceptable to Agent in its Permitted Discretion (provided that, as of the Closing Date, Euler Hermes is acceptable to Agent), and (ii) such insurance policy shall name Agent as beneficiary, additional insured or lender loss payee, as applicable, to whom all proceeds and payments under such credit insurance policy shall be paid on terms acceptable to Agent pursuant to an endorsement to such credit insurance policy acceptable to Agent in its discretion.

Approved Electronic Communication” shall mean each notice, demand, communication, information, document and other material transmitted, posted or otherwise made or communicated by e-mail, e-fax, the Credit Management Module of PNC’s PINACLE® system, or any other equivalent electronic service agreed to by Agent, whether owned, operated or hosted by Agent, any Lender, any of their Affiliates or any other Person, that any party is obligated to, or otherwise chooses to, provide to Agent pursuant to this Agreement or any Other Document, including any financial statement, financial and other report, notice, request, certificate and other information material; provided that Approved Electronic Communications shall not include any notice, demand, communication, information, document or other material that Agent specifically instructs a Person to deliver in physical form.

Approved Foreign Currencies” shall mean Euros ( € ), Great Britain Pounds Sterling (£), Canadian Dollars (CAD$), United Arab Emirates dirham/ Emirati dirham (AED), and Korean Won (KRW).

Approved LC Foreign Currencies” shall mean United Arab Emirates dirham/ Emirati dirham (AED), and such other currencies other than Dollars as Issuer shall approve in its sole discretion from time to time.

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Approved Fund” shall mean any Fund that is administered, advised, managed, underwritten or sub-advised by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers, advises, manages, underwrites or sub-advises a Lender.

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as in effect from time to time, or any successor statute.

 

Base Rate” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate.  This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

Beneficial Owner” shall mean, for each Loan Party, each of the following: (a) each individual, if any, who, directly or indirectly, owns 25% or more of such Loan Party’s Equity Interests; and (b) a single individual with significant responsibility to control, manage, or direct such Loan Party.

Benefited Lender” shall have the meaning set forth in Section 2.6(e) hereof.

Blocked Account Bank” shall have the meaning set forth in Section 4.8(h) hereof.

Blocked Accounts” shall have the meaning set forth in Section 4.8(h) hereof.

Borrower” or “Borrowers” shall have the meaning set forth in the preamble to this Agreement and shall include their successors and permitted assigns.

Borrowers’ Account” shall have the meaning set forth in Section 2.10 hereof.

Borrowing Agent” shall mean DZSI.

Borrowing Base Certificate” shall mean a certificate in substantially the form of Exhibit 1.2(a) hereto duly executed by the President, Chief Financial Officer or Controller of the Borrowing Agent and delivered to Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.

Business Day” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East

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Brunswick, New Jersey, and, if the applicable Business Day relates to any LIBOR Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

Capital Expenditures” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements (or of any replacements or substitutions thereof or additions thereto) which have a useful life of more than one year and which, in accordance with GAAP, would be classified as capital expenditures.  Capital Expenditures for any period shall include the principal portion of Capitalized Lease Obligations paid in such period.

Capitalized Lease Obligation” shall mean any Indebtedness of any Company represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

Cash Equivalents” shall mean (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s, (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000, (e) deposit accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $500,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above, and (i) with respect to any Foreign Subsidiary of DZSI with respect to investments made in a country outside the United States of America, subject at all times to Sections 10.18 and 16.18, other customarily utilized high-quality investments of credit quality and liquidity equivalent to clauses (a) through (g) above, and, with respect to clause (d) above, with banks of equivalent credit quality, in each case appropriate in the country where such Foreign Subsidiary is located or in which such investment is made.

Cash Management Liabilities” shall mean the indebtedness, obligations and liabilities of any Loan Party or any of their respective Subsidiaries to the provider of any Cash Management Products and Services (including all obligations and liabilities owing to such provider in respect of any returned items deposited with such provider).  For purposes of this Agreement and all of

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the Other Documents, all Cash Management Liabilities of any Loan Party owing to any of the Secured Parties shall be “Obligations” hereunder and under the Other Documents, and the Liens securing such Cash Management Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents, subject to the express provisions of Section 11.5 hereof.

Cash Management Products and Services” shall mean agreements or other arrangements under which Agent or any Lender or any Affiliate of Agent or a Lender provides any of the following products or services to any Loan Party and/or any of their respective Subsidiaries: (a) credit cards; (b) credit card processing services; (c) debit cards and stored value cards; (d) commercial cards; (e) ACH transactions; and (f) cash management and treasury management services and products, including without limitation controlled disbursement accounts or services, lockboxes, automated clearinghouse transactions, overdrafts, interstate depository network services.

Casualty Proceeds Event” shall mean the receipt by any Person in cash of any proceeds of any claim, award, or other amount under any insurance policy on account of damage or destruction of any assets or property or as a result of any taking or condemnation of any assets or property.

CEA” shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from time to time, and any successor statute.

CFTC” shall mean the Commodity Futures Trading Commission.

CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

Certificate of Beneficial Ownership” shall mean, for each Loan Party, a certificate in form and substance acceptable to Agent (as amended or modified by Agent from time to time in its sole discretion), certifying, among other things, the Beneficial Owner of such Loan Party.

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

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Change of Control” shall mean the occurrence of any event (whether in one or more transactions) which results in: (a) any person or group of persons (within the meaning of Section 13(d) or 14(a) of the Exchange Act) other than DNI acquiring beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act) of 35% or more of the voting Equity Interests of DZSI; (b) during any period of 12 consecutive months, a majority of the members of the board of directors or equivalent governing body of DZSI cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board, or (iii) whose election or nomination to that board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board; and (c) the failure of DZSI to hold, directly or indirectly, 100% of the issued and outstanding Equity Interests (other than any directors’ qualifying shares or other de minimus ownership interest required by Applicable Law to be owned by a Person other than DZSI or one or more of its Subsidiaries) of and otherwise control (x) each Loan Party, and (y) its other Subsidiaries other than Zhone Technologies SA and Dasan Network Solutions Japan, Inc. (or, as to Zhone Technologies SA and Dasan Networks Solutions Japan, Inc., the failure of DZSI to hold, directly or indirectly, the same percentage ownership of the issued and outstanding Equity Interest in either such Subsidiary as held, directly or indirectly, by DZSI as of the Closing Date or the same rights of management and/or control with respect to either such Subsidiary as held, directly or indirectly, by DZSI as of the Closing Date.  For purposes of this definition, “control of” any Person shall mean the power, direct or indirect (A) to vote more than 50% of the Equity Interests having ordinary voting power for the election of directors (or the individuals performing similar functions) of such Person or (B) to direct or cause the direction of the management and policies of such Person by contract or otherwise.

 

Charges” shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing authority or other Governmental Body, domestic or foreign (including the PBGC or any environmental agency or superfund), upon the Collateral or any Company.

CIP Regulations” shall have the meaning set forth in Section 14.12 hereof.

Claims” shall have the meaning given to such term in Section 16.5 hereof.

Closing Date” shall mean the date of this Agreement or such other date as may be agreed to in writing by the parties hereto.

"Closing Date Flow of Funds Agreement" shall have the meaning set forth in Section 8.1(bb) hereof.

Closing Date Korean Yangdo Dambo” shall mean the Yangdo-Dambo Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders

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and DNS Korea; as such agreement may be amended, modified, supplemented, renewed, restated or replaced from time to time.

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

Collateral” shall mean and include all right, title and interest of each Loan Party in all of the following property and assets of such Loan Party, in each case whether now existing or hereafter arising or created and whether now owned or hereafter acquired and wherever located:

(a)all Receivables and all supporting obligations relating thereto (including without limitation all Export-Related Accounts Receivable);

(b)all equipment and fixtures;

(c)all general intangibles (including all payment intangibles and all software) and all supporting obligations related thereto (including without limitation all Export-Related General Intangibles);

(d)all Inventory;

(e)all Subsidiary Stock, securities, Investment Property and financial assets (but excluding any Equity Interests of any Subsidiary of Borrowers or Credit Agreement Guarantors that does not constitute Subsidiary Stock);

(f)[RESERVED];

(g)[RESERVED];

(h)all contract rights, rights of payment which have been earned under a contract rights, chattel paper (including electronic chattel paper and tangible chattel paper), commercial tort claims (whether now existing or hereafter arising); documents (including all warehouse receipts and bills of lading), deposit accounts, goods, instruments (including promissory notes), letters of credit (whether or not the respective letter of credit is evidenced by a writing) and letter-of-credit rights, cash, certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), security agreements, eminent domain proceeds, condemnation proceeds, tort claim proceeds and all supporting obligations;

(i)all ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by any Loan Party or in which it has an interest), computer programs, tapes, disks and documents, including all of such property relating to the property described in clauses (a) through and including (h) of this definition; and

(j)all proceeds and products of the property described in clauses (a) through and including (i) of this definition, in whatever form.

It is the intention of the parties that if Agent shall fail to have a perfected Lien in any particular property or assets of any Loan Party for any reason whatsoever, but the provisions of

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this Agreement and/or of the Other Documents, together with all financing statements and other public filings relating to Liens filed or recorded by Agent against Loan Parties, would be sufficient to create a perfected Lien in any property or assets that such Loan Party may receive upon the sale, lease, license, exchange, transfer or disposition of such particular property or assets, then all such “proceeds” of such particular property or assets shall be included in the Collateral as original collateral that is the subject of a direct and original grant of a security interest as provided for herein and in the Other Documents (and not merely as proceeds (as defined in Article 9 of the Uniform Commercial Code) in which a security interest is created or arises solely pursuant to Section 9-315 of the Uniform Commercial Code).

Notwithstanding the foregoing, Collateral shall not include any Excluded Property.

Commitments” shall mean, collectively, the Revolving Commitments and the Term Loan Commitments.

Commitment Transfer Supplement” shall mean a document in the form of Exhibit 16.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.

Companies” shall mean, collectively, all of the Loan Parties and all of their respective Subsidiaries, and “Company” shall mean each and any of them.

Compliance Certificate” shall mean a compliance certificate substantially in the form of Exhibit 1.2(b) hereto to be signed by the Chief Financial Officer or Controller of Borrowing Agent.

Consents” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on any Company’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, the Other Documents, the Ex-Im Subfacility Credit Agreement, or the Ex-Im Subfacility Other Documents, including any Consents required under all applicable federal, state or other Applicable Law.

Consigned Inventory” shall mean Inventory of any Loan Party that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.

Consolidated Basis” shall mean, with respect to any Person the consolidation of the accounts or other items of such Person and its Subsidiaries in accordance with GAAP.

Contemplated Rights Offering” shall mean an equity rights offering by DZSI, of the type discussed by Lenders and DZSI prior to the Closing Date, that is consummated and closed following the Closing Date resulting in Net Cash Proceeds in respect thereof of not less than $25,000,000.

Contract Rate” shall have the meaning set forth in Section 3.1 hereof.

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

Control Agreement” shall mean a deposit account control agreement or securities account control agreement or blocked account agreement, as applicable, entered into by any one or more Loan Parties, an applicable bank or other depository institution or securities intermediary and Agent, sufficient to provide Agent with “control” (for purposes of Articles 8 or Article 9 of the Uniform Commercial Code, as applicable) over the deposit account(s) or securities accounts(s) subject thereto maintained with such applicable bank or other depository institution or securities intermediary, and otherwise in form and substance reasonably acceptable to Agent in their Permitted Discretion.

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

Corporate Cure Subsidiary” shall have the meaning set forth in Section 8.3(i) hereof.

Covered Entity” shall mean (a) each Loan Party, each of each Loan Party’s Subsidiaries and all pledgors of Collateral and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.

Cure Period” shall have the meaning set forth in Section 6.5(d) hereof.

Cure Right” shall have the meaning set forth in Section 6.5(d) hereof.

Customer” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Company, pursuant to which such Company is to deliver any personal property or perform any services.

Customs” shall have the meaning set forth in Section 2.13(b) hereof.

Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the Reserve Percentage; provided, however, that if the Daily LIBOR Rate determined as provided above would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

Debt Payments” shall mean for any Person for any period, in each case: (a) interest payments paid or payable in cash by such Person on any Advances or any “Advances” under the Ex-Im Subfacility Credit Agreement during such period, plus (b) regularly scheduled principal

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payments paid or payable in cash by such Person in respect of the Term Loan during such period, plus (c)  any fees, commissions and charges set forth herein or in the Ex-Im Subfacility Credit Agreement paid or payable in cash by such Person during such period, plus (d) payments in respect of Capitalized Lease Obligations paid or payable in cash by such Person during such period, plus (e) payments with respect to Interest Expense or regularly scheduled principal payments with any other Indebtedness for borrowed money paid or payable in cash by such Person during such period, including without limitation, (x) regularly scheduled repayments of the Permitted KeyMile Seller Working Capital Facility Indebtedness, and (y) an amount equal to (but not exceeding) fifty percent (50%) of the aggregate amount of the repayment in full in cash of the Permitted LGU Indebtedness on the scheduled maturity thereof as required by Section 7.17(c).

Default” shall mean the occurrence of an event or circumstance which, with the giving of notice or passage of time or both, would constitute an Event of Default.

Default Rate” shall have the meaning set forth in Section 3.1 hereof.

Defaulting Lender” shall mean any Lender that: (a) has failed, within two Business Days of the date required to be funded or paid, to (i) in the case of any Revolving Lender, to fund any portion of such Lender’s Revolving Commitment Percentage of any Revolving Advances, (ii) in the case of any Revolving Lender, to fund any portion of its Participation Commitment in any Letters of Credit or Swing Loans, (iii) the case of any Term Lender, to fund any portion of such Lender’s Term Loan Commitment in any Term Loan, or (iv) pay over to Agent, Issuer, the Swing Loan Lender or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) or clause (iii) above, such Lender notifies Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including a particular Default or Event of Default, if any) has not been satisfied; (b) has notified Borrowers or Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including a particular Default or Event of Default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within two Business Days after request by Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Advances and, if applicable, participations in then outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon Agent’s receipt of such certification in form and substance satisfactory to Agent; (d) has become the subject of an Insolvency Event; or (e) has failed at any time to comply with the provisions of Section 2.6(e) hereof with respect to purchasing participations from the other Lenders, whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its pro rata share of such payments due and payable to all of Lenders.  However, without limiting the generality of or contradicting any of the foregoing, each Lender that is a “Defaulting Lender” for any reason under the Ex-Im Subfacility Credit Agreement shall also be a Defaulting Lender hereunder.

Depository Accounts” shall have the meaning set forth in Section 4.8(h) hereof.

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Designated Lender” shall have the meaning set forth in Section 16.2(d) hereof.

Disposition” shall mean any sale, assignment, lease, sublease, license, sublicense, conveyance, exchange, transfer or other disposition of any assets.  Variations of such term (i.e. “Dispose”) shall have corresponding meanings.

Disqualified Equity Interests” shall mean any Equity Interests which, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition, (a) mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or are redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is six (6) months prior to the last day of the Term (excluding any provisions requiring redemption upon a “change of control” or similar event; provided that such “change of control” or similar event results in the Payment in Full of the Obligations), (b) are convertible into or exchangeable for (i) debt securities or (ii) any Equity Interests referred to in (a) above, in each case, at any time on or prior to the date that is six (6) months prior to the last day of the Term, or (c) are entitled to receive scheduled dividends or distributions in cash prior to the time that the Obligations are Paid in Full.

Disqualified Person” shall mean (a) any natural Person, or (b) any Person listed on Schedule 1.2(b) or any Person that is clearly identifiable as an Affiliate of any such Person listed on Schedule 1.2(b) based on such Affiliate’s name; provided, however, Agent and the Lenders shall be entitled to rely in good faith on any representation and warranty made by a potential purchaser, assignee or transferee that such Person is not a Disqualified Person.

DNI” shall mean Dasan Networks, Inc., a corporation organized under the laws of the Republic of Korea.  As of the Closing Date, DNI owned a majority of the outstanding and issued Equity Interests of DZSI.

DNI Closing Date Loan Amendment” shall mean that certain Amendment Agreement to be dated on or about the Closing Date providing for an amendment to each of the Permitted DNI Subordinated Loans to extend the maturity of each such Permitted DNI Subordinated Loan to a date that is ninety (90) days after the last day of the Term.

DNI IP License” shall have the meaning set forth in Section 8.3(e) hereof.

DNI IP Pledge Consents” shall mean, collectively, the written consents from DNI to the granting of Liens in favor of Agent and Ex-Im Agent pursuant to the Korean IP Pledges in the forms, respectively, of Schedule IV to the Domestic Korean IP Pledge and the Ex-Im Korean IP Pledge.

DNI Subordination Agreement” shall mean that certain Subordination Agreement dated on or about the Closing Date among Agent, Ex-Im Agent, and DNI, as such agreement may be amended, modified, supplemented, renewed, restated or replaced from time to time in accordance with the terms thereof.

DNI/DNS Korea Guarantee Fee Agreement” shall mean that certain Guarantee Fee Agreement dated as of April 1, 2015 by DNS Korea as the “Delagator” and DNI as the “Delagatee”.

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DNS Japan” shall mean Dasan Network Solutions Japan, Inc., a Subsidiary of DZSI and DNS.

Document” shall have the meaning given to the term “document” in the Uniform Commercial Code.

Dollar” and the sign “$” shall mean lawful money of the United States of America.

Dollar Equivalent” means at any time (i) as to any amount denominated in Dollars, the amount thereof at such time, and (ii) as to any amount denominated in any other currency, the equivalent amount in Dollars calculated by the Agent in good faith at such time using the Exchange Rate in effect on the day of determination.

Dollar Equivalent Drawing Amount” shall have the meaning set forth in Section 2.14(b) hereof.

Domestic Loan Party” means any Loan Party that is not a Foreign Loan Party.

Domestic Obligations” shall mean any and all Obligations other than Ex-Im Obligations.

Domestic Rate Loan” shall mean any Advance that bears interest based upon the Alternate Base Rate.

Dormant Subsidiaries” shall mean, collectively, each Subsidiary of DZSI designated by Credit Parties as a Dormant Subsidiary either on Schedule 1.2(a)  delivered by Loan Parties on the Closing Date, or, in the case of any applicable Subsidiary acquired (directly or indirectly) by DZSI in a transaction permitted under this Agreement, in a written notice given to Agent as of the first date Credit Parties are obligated to give Agent notice of such acquisition (or, if no such notice is otherwise required, on the date such acquisition occurs), provided that, as of the date of such designation, all of the representations and warranties set forth in Section 5.20(d) hereof shall be true and correct as to such Subsidiary; provided that, notwithstanding the foregoing or anything to the contrary contained herein, Credit Parties may at any time give written notice to Agent that any Dormant Subsidiary wishes to become a Loan Party hereunder, and upon the giving of any such notice and completion by Loan Parties and such Subsidiary of all the requirements of Section 7.12(a), as applicable, with respect to such Subsidiary and the Equity Interests of such Subsidiary as though such Subsidiary was a newly acquired Subsidiary, such Subsidiary shall cease to be a Dormant Subsidiary and shall be a Loan Party for all purposes hereunder.

Drawing Date” shall have the meaning set forth in Section 2.14(b) hereof.

EBITDA” shall mean for any period with respect to Loan Parties on a Consolidated Basis, the sum of (a) net income (or loss) for such period (excluding extraordinary gains and losses), plus (b) all Interest Expense for such period, plus (c) all charges against income, for such period for federal, foreign, state, local, franchise, excise and similar taxes and foreign withholding taxes of Loan Parties paid or accrued during such period, plus (d) depreciation expenses for such period, plus (e) amortization expenses for such period, plus, (f) the amount of all non-recurring expenses, fees, costs and charges incurred during such period in connection with (x) the KeyMile Acquisition (to the extent incurred prior to the Closing Date), (y) the Transactions contemplated by this

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Agreement, and (z) any Contemplated Rights Offering, plus (g) the amount of all non-recurring expenses, fees, costs and charges incurred for such period in connection with any proposed or actual Permitted Acquisition or Permitted Investment (excluded any Permitted Investment by one or more Companies in any other one or more Companies); provided that, the amount of all such expenses, fees, costs and charges incurred in any fiscal year and added back to EBITDA under this clause (g) with respect to any proposed Permitted Acquisition(s) or Permitted Investment(s) shall not exceed $1,000,000 in the aggregate, and further provided that, the amount of all such expenses, fees, costs and charges incurred in any fiscal year and added back to EBITDA under this clause (g) with respect to any actual Permitted Acquisition(s) or Permitted Investment(s) shall not exceed $2,000,000 in the aggregate; plus (h) all non-cash stock based compensation expense for such period; plus (i) non-cash goodwill write-offs and write-downs for such period; plus (j) non-cash purchase accounting adjustments during such period; plus (k) any other non-cash charges for such period; plus (l) the amount of business restructuring charges for such period (which, for the avoidance of doubt, shall include the effect of plant closure, retention, severance and excess pension charges); plus (m) the amount of cost savings, operating expense reductions and cost synergies projected by Loan Parties in good faith to result from actions taken or committed to be taken no later than twelve (12) months after the end of such period (calculated on a pro forma basis as though such cost savings, operating expense reductions and cost synergies had been realized on the first day of such measurement period for which EBITDA is being determined and as if such cost savings, operating expense reductions and cost synergies were realized during the entirety of such measurement period), net of the amount of actual benefits realized during such measurement period from such actions; plus (n) the amount of unusual, extraordinary or non-recurring losses or expenses during such period not otherwise covered by any other clause of this definition to the extent acceptable to Agent in its Permitted Discretion; plus (o) the amount of any foreign currency translation gains or losses during such period; plus (p) the amount of any cash proceeds received by any Compan(ies) during such period in respect of claims under business interruption insurance; plus (q) [RESERVED;] plus (r) Special Projects Costs during such period; plus (s) costs and expenses for such period related to the initial implementation by the Companies of their “enterprise resource planning” (or “ERP”) systems; provided that, notwithstanding the foregoing, (I) the amounts added back to EBITDA pursuant to the foregoing clauses (l), (m), (n), (r) and (s) in any applicable fiscal measurement period shall not exceed, in the aggregate, fifteen percent (15%) of the EBITDA for Loan Parties on a Consolidated Basis for such fiscal measurement period (after giving effect to such addback), and (II) any amounts added back to EBITDA pursuant to the foregoing clauses (l), (m), (n), and (r) in any applicable fiscal measurement period shall be conditioned upon receipt by Agent, if so requested by Agent in its sole discretion, of supporting documentation and evidence for such addback satisfactory to Agent in its Permitted Discretion.

EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

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EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

Effective Date” shall mean the date indicated in a document or agreement to be the date on which such document or agreement becomes effective, or, if there is no such indication, the date of execution of such document or agreement.

Eligibility Date shall mean, with respect to each Loan Party and each Swap, the date on which this Agreement or any Other Document becomes effective with respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be the Effective Date of such Swap if this Agreement or any Other Document is then in effect with respect to such Loan Party, and otherwise it shall be the Effective Date of this Agreement and/or such Other Documents to which such Loan Party is a party).

Eligible Contract Participant” shall mean an “eligible contract participant” as defined in the CEA and regulations thereunder.

Eligible Export-Related Accounts Receivable” shall mean, collectively, all “Eligible Export-Related Accounts Receivables” of the Ex-Im Borrowers as defined in the Ex-Im Subfacility Credit Agreement.

Eligible Foreign Receivable” shall mean any Receivable of any Borrower denominated in Dollars or in an Approved Foreign Currency arising in the Ordinary Course of Business that (i) in the case of any Receivable of any Borrower that is also an Ex-Im Borrower, would qualify as an Eligible Export-Related Account Receivable as defined in the Ex-Im Subfacility Credit Agreement but for the provisions of clause (ff) of the definition of Eligible Export-Related Accounts Receivable set forth in the Ex-Im Subfacility Credit Agreement; (ii) would qualify as an Eligible Receivable but for the provisions of clause (b) and/or (g) of the definition of Eligible Receivables, (iii) is not due or unpaid more than ninety (90) days after the original invoice date (or such greater number of days past invoice date for such Receivable permitted under the applicable Approved Credit Insurance Policy) or more than sixty (60) days after the original due date (or such greater number of days past due for such Receivable permitted under the applicable Approved Credit Insurance Policy), (iv) is insured through an Approved Credit Insurance Policy, and (v) is owing from a Customer that has been approved by Agent in its Permitted Discretion from time to time upon request of the Borrowers as an eligible Customer for Eligible Foreign Receivables (as of the Closing Date, Agent has approved Emirates Telecommunications Corp., Axtel S.A. de C.V., and Baud Telecom Company, and also, so long as the Approved Credit Insurance Policy under which their Receivables are insured is issued by Euler Hermes, WNI Equipamentos Electronics Ltda. and Furukawa Electric Co, Ltd., as eligible Customers for Eligible Foreign Receivables; provided that, Agent in its Permitted Discretion may from time to time in its Permitted Discretion and notice to the Borrowing Agent revoke such approval as to any such Customer described in this parenthetical); provided that, for the avoidance of doubt and without limiting the generality of any of the foregoing or of any clause(s) of the definition of Eligible Receivables, but notwithstanding anything to the contrary provided for otherwise in this Agreement (x) Agent may from time to time in its Permitted Discretion establish a sublimit with respect to any Eligible Foreign Receivables owing for any approved Customer, and (y) no such Receivable otherwise described

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in this definition shall be an Eligible Foreign Receivable if Agent in its Permitted Discretion shall have deemed it excluded from Eligible Foreign Receivables based on such consideration as Agent may from time to time deem to be appropriate (which such considerations may include risks related to any political or extraordinary conditions that are adverse to the interests of Agent and Lenders in the country where the applicable Customer on the Receivable is located).

Eligible Receivables” shall mean and include, each Receivable of a Borrower denominated in Dollars or in an Approved Foreign Currency arising in the Ordinary Course of Business and which Agent, in its Permitted Discretion, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time deem appropriate.  In addition, no Receivable shall be an Eligible Receivable if:

(a)such Receivable arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;

(b)such Receivable is due or unpaid more than ninety (90) days after the original invoice date (or, in the case of any Eligible Foreign Receivable, to the extent the applicable Approved Credit Insurance Policy covering such Eligible Foreign Receivables permits original repayment terms for such Receivable for a greater number of days past original invoice date, such greater number of days) or more than sixty (60) days after the original due date;

(c)such Receivable is due from a Customer with respect to which fifty percent (50%) or more of the Receivables (other than Export-Related Accounts Receivable) owing from such Customer are not deemed Eligible Receivables (including Eligible Foreign Receivables) hereunder (such percentage may, in Agent’s Permitted Discretion, be increased or decreased from time to time), or such Receivable is due from a Customer with respect to which fifty percent (50%) or more of the Receivables (including Export-Related Accounts Receivable) owing from such Customer are not deemed Eligible Receivables (including Eligible Foreign Receivables) hereunder or Ex-Im Eligible Export-Related Accounts Receivable under the Ex-Im Subfacility Credit Agreement (such percentage may, in Agent’s Permitted Discretion, be increased or decreased from time to time);

(d)such Receivable is not subject to Agent’s first priority perfected Lien or is subject to any other Liens (other than Permitted Encumbrances);

(e)any covenant, representation or warranty set forth in this Agreement with respect to such Receivable has been breached;

(f)such Receivable is due from a Customer with respect to which an Insolvency Event shall have occurred;

(g)the sale is to a Customer outside the United States of America, unless the sale is on letter of credit, Guaranty or acceptance terms, in each case acceptable to Agent in its Permitted Discretion (including approval by Agent of the bank or financial institution issuing such Letter of Credit in accordance with Agent’s institutional procedures);

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(h)the sale giving rise to such Receivable is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis with the applicable Customer or is evidenced by chattel paper;

(i)Agent believes, in its sole discretion, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

(j)such Receivable is due from a Customer which is the United States of America, any state or any department, agency or instrumentality of any of them, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances;

(k)the goods giving rise to such Receivable have not been delivered to and accepted by the Customer, the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Customer or such Receivable otherwise does not represent a final sale;

(l)with respect to any Eligible Foreign Receivables, the Receivables of the Customer from which such Receivable is owing exceed a credit limit determined by the applicable credit insurer, to the extent such Receivable exceeds such limit;

(m)such Receivable is owing from a Customer whose total Receivables (other than Export-Related Accounts Receivable) owing to all Borrowers exceed 20% of all Eligible Receivables (including Eligible Foreign Receivables), to the extent of the obligations owing by such Customer in excess of such percentage; provided, however, such percentages, as applied to a particular Customer (x) may be reduced at any time by Agent in its Permitted Discretion if the creditworthiness of such Customer deteriorates in the determination of Agent in its Permitted Discretion, and (y) may be increased at any time by Agent in its Permitted Discretion;

(n)the Receivable is subject to any offset, deduction, defense, dispute, credits or counterclaim (because, among other reasons, the Customer is also a creditor or supplier of a Borrower) or the Receivable is contingent in any respect or for any reason (but such Receivable shall only be ineligible to the extent of such offset, deduction, defense, counterclaim or contingency);

(o)the applicable Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

(p)any return, rejection or repossession of the merchandise the sale of which gave rise to such Receivable has occurred or the rendition of services giving rise to such Receivable has been disputed;

(q)such Receivable is not payable to a Borrower;

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(r)such Receivable is not evidenced by an invoice or other documentary evidence satisfactory to Agent; or

(s)such Receivable is not otherwise satisfactory to Agent as determined by Agent in its Permitted Discretion.

Notwithstanding anything to the contrary contained in the foregoing or in any other provision of this Agreement or any Other Document, no Receivable of any Borrower that is also an Ex-Im Borrower may simultaneously be both a Eligible Receivable eligible for inclusion in the Formula Amount under this Credit Agreement and an Eligible Export-Related Account Receivable eligible for inclusion in the Ex-Im Formula Amount under the Ex-Im Subfacility Credit Agreement, and in the event any Receivable of any Ex-Im Borrower would otherwise fit within the definitions of both an Eligible Receivable (or, if applicable, an Eligible Foreign Receivable) under this Agreement, and an Eligible Export-Related Account Receivable under the Ex-Im Subfacility Credit Agreement, the parties hereto agree that (x) if such Receivable of any Ex-Im Borrower is payable by an Customer located in the United States, it shall be a Eligible Receivable, and (y) if such Receivable of any Ex-Im Borrower is payable by an Customer located outside of the United States, it shall be an Eligible Export-Related Account Receivable (provided that, for the avoidance of doubt, any Receivable of any Ex-Im Borrower that would otherwise be an Eligible Export-Related Account Receivable but for the provisions of clause (ff) of the definition of Eligible Export-Related Account Receivable set forth in the Ex-Im Subfacility Credit Agreement shall be an Eligible Foreign Receivable under this Agreement if and to the extent that such Receivable shall satisfy all the requirements of the definition of Eligible Foreign Receivable hereunder).

Notwithstanding anything to the contrary, unless the context shall expressly provide or shall require otherwise, all Eligible Foreign Receivables shall be Eligible Receivables for all purposes under this Agreement except for the purposes of Section 2.1(a)(y)(i)(A).

Environmental Complaint” shall have the meaning set forth in Section 9.3(b) hereof.

Environmental Laws” shall mean all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes as well as common laws, relating to the protection of the environment, human health and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Materials and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state, international and local governmental agencies and authorities with respect thereto.

Equity Interests” shall mean, with respect to any Person, any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act), including in each case all of the following rights relating to such Equity Interests, whether arising under the Organizational Documents of the Person issuing such Equity Interests (the “issuer”) or under the applicable laws of such issuer’s jurisdiction of organization relating to the formation, existence

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and governance of corporations, limited liability companies or partnerships or business trusts or other legal entities, as the case may be (all of the following rights, as to any applicable Equity Interests, the “Related Equity Interest Rights”): (i) all economic rights (including all rights to receive dividends and distributions) relating to such Equity Interests; (ii) all voting rights and rights to consent to any particular action(s) by the applicable issuer; (iii) all management rights with respect to such issuer; (iv) in the case of any Equity Interests consisting of a general partner interest in a partnership, all powers and rights as a general partner with respect to the management, operations and control of the business and affairs of the applicable issuer; (v) in the case of any Equity Interests consisting of the membership/limited liability company interests of a managing member in a limited liability company, all powers and rights as a managing member with respect to the management, operations and control of the business and affairs of the applicable issuer; (vi) all rights to designate or appoint or vote for or remove any officers, directors, manager(s), general partner(s) or managing member(s) of such issuer and/or any members of any board of members/managers/partners/directors that may at any time have any rights to manage and direct the business and affairs of the applicable issuer under its Organizational Documents as in effect from time to time or under Applicable Law; (vii) all rights to amend the Organizational Documents of such issuer, (viii) in the case of any Equity Interests in a partnership or limited liability company, the status of the holder of such Equity Interests as a “partner”, general or limited, or “member” (as applicable) under the applicable Organizational Documents and/or Applicable Law; and (ix) all certificates evidencing such Equity Interests.

ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time and the rules and regulations promulgated thereunder.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

Event of Default” shall have the meaning set forth in Article X hereof.

Ex-Im Agent” shall mean the “Agent” pursuant to the Ex-Im Subfacility Credit Agreement, as such term is defined therein.

Ex-Im Agreements” shall mean, collectively, the Ex-Im Borrower Agreement, the Ex-Im Joint Application, the Ex-Im Loan Authorization Notice, the Ex-Im Master Guarantee and the Ex-Im Waivers, each as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Bank” shall mean the Export-Import Bank of the United States.

Ex-Im Borrower” shall mean those Borrowers that are party to the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents as “Borrowers” from time to time.  The parties hereto acknowledge that as of the Closing Date, the only Ex-Im Borrowers are DZSI and ZTI.

Ex-Im Credit Agreement Guarantors” shall mean the “Guarantors” party to the Ex-Im Subfacility Credit Agreement from time to time.  

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Ex-Im Credit Parties” shall mean, collectively, the Ex-Im Borrowers and the Ex-Im Credit Agreement Guarantors.

Ex-Im Default” shall mean any “Default” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Event of Default” shall mean any “Event of Default” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Foreign Currency Letter of Credit” shall mean any “Foreign Currency Letter of Credit (as defined in the Ex-Im Subfacility Credit Agreement) made under the Ex-Im Subfacility Credit Agreement.

Ex-Im Formula Amount” shall mean the “Formula Amount” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Lenders” shall mean the “Lenders” pursuant to the Ex-Im Subfacility Credit Agreement, as such term is defined therein.

Ex-Im Letter of Credit” shall mean any “Letter of Credit” as defined in and issued under the Ex-Im Subfacility Credit Agreement in reliance on the Ex-Im Formula Amount.

Ex-Im Obligations” shall mean any and all loans (including without limitation, all Ex-Im Revolving Advances), advances, debts, expenses, fees, liabilities and obligations (including reimbursement obligations and cash collateralization obligations in respect of any letters of credit issued under the Ex-Im Subfacility Credit Agreement, if any and if applicable) covenants and duties owing by Ex-Im Borrowers or Ex-Im Credit Agreement Guarantors to Ex-Im Agent or any Ex-Im Lender arising under, relating to, or evidenced by the Ex-Im Subfacility Credit Agreement or any Ex-Im Subfacility Other Documents, of any kind or nature, present or future (including any prepayment premiums, interest or other amounts accruing thereon, any fees accruing under or in connection therewith, any costs and expenses of any Person payable by any Ex-Im Borrower or Ex-Im Credit Agreement Guarantor and any indemnification obligations payable by any Ex-Im Borrower or Ex-Im Credit Agreement Guarantor, in each case arising or payable after maturity, or after the filing of any petition in bankruptcy, or the commencement of an Insolvency Proceeding relating to any Ex-Im Borrower or Ex-Im Credit Agreement Guarantor, whether or not a claim for post-filing or post-petition interest, fees or other amounts is allowable or allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise, including all costs and expenses of Ex-Im Agent and any Ex-Im Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing to the extent provided for in the Ex-Im Subfacility Credit Agreement or any Ex-Im Subfacility Other Documents, including but not limited to reasonable attorneys’ fees and expenses to the extent provided for under the Ex-Im Subfacility Credit Agreement or any Ex-Im Subfacility Other Documents, and all obligations of any Loan Party to Ex-Im Agent or any Ex-Im Lender to perform acts or refrain from taking any action provided however, that, for the avoidance of doubt, Ex-Im Obligations shall expressly exclude any Cash Management Liabilities and any Hedge Liabilities.

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Ex-Im Reserves” shall mean any “Reserves” (as defined in the Ex-Im Subfacility Credit Agreement) in effect against the Ex-Im Subfacility Maximum Amount at any time.

Ex-Im Revolving Advances” shall mean, collectively, all “Revolving Advances” (as defined in the Ex-Im Subfacility Credit Agreement) made under the Ex-Im Subfacility Credit Agreement.

Ex-Im Revolving Commitment” shall mean, as to each Ex-Im Lender, such Ex-Im Lender’s “Revolving Commitment” under the Ex-Im Subfacility Credit Agreement.

Ex-Im Revolving Commitment Percentage” shall mean, as to each Ex-Im Lender, such Ex-Im Lender’s “Revolving Commitment Percentage” under the Ex-Im Subfacility Credit Agreement.

Ex-Im Secured Parties” shall mean, collectively, all “Secured Parties” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Specified Event of Default” shall mean any “Specified Event of Default” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Subfacility” shall mean the credit subfacility for revolving credit advances based on the Ex-Im Formula Amount made available by Ex-Im Lenders to Ex-Im Borrowers under the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents.

Ex-Im Subfacility Credit Agreement” shall mean that certain Export-Import Revolving Credit and Security Agreement dated as of the Closing Date among Ex-Im Borrowers, the Ex-Im Credit Agreement Guarantors, Ex-Im Lenders and Ex-Im Agent, as hereafter amended, modified, supplemented, restated or replaced from time to time in accordance with the terms thereof.

Ex-Im Subfacility Maximum Amount” shall mean the “Maximum Revolving Advance Amount” as defined in the Ex-Im Subfacility Credit Agreement.

Ex-Im Subfacility Other Documents” shall mean, collectively, all of the “Other Documents” as defined under the Ex-Im Subfacility Credit Agreement.

Ex-Im Subfacility Outstandings Amount” shall mean, as of any date, the Dollar Equivalent of the sum of (x) the aggregate outstanding principal balance as of such date of all Ex-Im Revolving Advances and all Ex-Im Swing Loans plus (y) the Dollar Equivalent of the “Maximum Undrawn Amount” (as defined in the Ex-Im Subfacility Credit Agreement) of all Ex-Im Letters of Credit outstanding out as of such date.

Ex-Im Swing Loan Lender” shall mean the “Swing Loan Lender” pursuant to the Ex-Im Subfacility Credit Agreement, as such term is defined therein.

Ex-Im Swing Loans” shall mean, collectively, all “Swing Loans” (as defined in the Ex-Im Subfacility Credit Agreement) made under the Ex-Im Subfacility Credit Agreement.

Ex-Im Waivers” shall have the meaning given to such term in the Ex-Im Subfacility Credit Agreement.

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Excess Cash Flow” shall mean, for any period with respect to Loan Parties on a Consolidated Basis:

(A)EBITDA for such period, minus

(B)the sum of the following, without duplication, in each case to the extent (x) actually paid in cash during such period and deducted in the determination of net income for such period and (y) not paid/made in violation of the terms of this Agreement or any Other Document:

(i)Debt Payments; plus

(ii)Unfinanced Capital Expenditures, plus

(iii)Taxes, plus

(iv)expenses and fees incurred during such period to consummate the Transactions contemplated by this Agreement or the KeyMile Acquisition (to the extent incurred prior to the Closing Date), but solely to the extent permitted to be added-back to net income for such period under clause (f) of the definition of “EBITDA” and actually paid in cash and deducted in the determination of net income for such period.

Excess Cash Flow Percentage” shall mean fifty percent (50%); provided that, if the Leverage Ratio for Loan Parties on a Consolidated Basis calculated as of the last day in any fiscal year shall equal or be less than 1.50 to 1.00, the Excess Cash Flow Percentage to be used in the calculation of any mandatory prepayment under Section 2.20(b)(ii) hereof with respect to the Excess Cash Flow of such fiscal year shall be twenty-five percent (25%).

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Exchange Rate” shall mean, with respect to any calculation of the Dollar Equivalent of any amount denominated in any currency other than Dollars on any date of determination (including the amount of any Receivable denominated in an Approved Foreign Currency outstanding on such date of determination or the Maximum Undrawn Amount of any Foreign Currency Letter of Credit outstanding on such date of determination), the prevailing spot rate of exchange for the conversion of such other currency into Dollars as determined by Agent’s foreign exchange department (in the exercise of its ordinary business practices regarding foreign currency exchange for customers of the Agent similarly situated to Borrowers) as of the close of business for Agent’s foreign exchange department on the Business Day immediately preceding such date of determination; provided that, notwithstanding the foregoing, in the context of (x) any actual conversion by Agent or any Lender of any funds received by Agent or any Lender (whether as a payment made by any Loan Party or the proceeds of any Collateral (including any collections on any Receivable received by Agent or any Lender)) from one currency to another for the purpose of applying such funds to the Obligations in accordance with the terms of this Agreement, Exchange Rate” means the spot-buying or spot-selling (as the case may be) rate of exchange at which Agent or such Lender is actually able to exchange the one currency for the other in the exercise of its ordinary business practices regarding foreign currency exchange at the time of such actual conversion, or (y) any actual conversion by Agent or any Lender of the proceeds of any

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Revolving Advance or Participation Advance made in Dollars for purposes of satisfying any Reimbursement Obligation to Issuer and/or repayment of any Letter of Credit Borrowing in connection with any Foreign Currency Letter of Credit (and/or the determination of the Dollar Equivalent amount of such Reimbursement Obligation and/or any Letter of Credit Borrowing with respect to such Reimbursement Obligation and/or the determination of the amount in Dollars of any Revolving Advance and/or Participation Advance needed/necessary/to be advanced to satisfy any such Reimbursement Obligation and/or Letter of Credit Borrowing), “Exchange Rate” means the spot-buying or spot-selling (as the case may be) rate of exchange at which Agent or such Lender is actually able to exchange Dollars for the currency in which such Foreign Currency Letter of Credit is denominated in the exercise of its ordinary business practices regarding foreign currency exchange at the time of the actual satisfaction of such Reimbursement Obligation and/or Letter of Credit Borrowing and/or of the making of the applicable Revolving Advance and/or Participation Advance to satisfy such Reimbursement Obligation and/or Letter of Credit Borrowing, as applicable.  

Excluded Account” shall mean (a) any deposit account, securities account, commodities account or other account of any Loan Party (and all cash, cash equivalents and other securities or investments held therein) to the extent solely and exclusively used for payment of payroll, employee benefits and withholding taxes, (b) any deposit account, securities account, commodities account or other account of any Loan Party to the extent solely and exclusively used to hold any cash or Cash Equivalents pledged as a Permitted Encumbrance, and (c) deposit accounts of any Loan Party which do not hold more than $50,000 in the aggregate at any time.

Excluded Hedge Liability or Liabilities shall mean, with respect to each Loan Party, each of its Swap Obligations if, and only to the extent that, all or any portion of this Agreement or any Other Document that relates to such Swap Obligation is or becomes illegal under the CEA, or any rule, regulation or order of the CFTC, solely by virtue of such Loan Party’s failure to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap. Notwithstanding the foregoing or any other provision of this Agreement or any Other Document, the foregoing is subject to the following provisos: (a) if a Swap Obligation arises under a master agreement governing more than one Swap, this definition shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guaranty or security interest is or becomes illegal under the CEA, or any rule, regulations or order of the CFTC, solely as a result of the failure by such Loan Party for any reason to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap; (b) if a guarantee of a Swap Obligation would cause such obligation to be an Excluded Hedge Liability but the grant of a security interest would not cause such obligation to be an Excluded Hedge Liability, such Swap Obligation shall constitute an Excluded Hedge Liability for purposes of the guaranty but not for purposes of the grant of the security interest; and (c) if there is more than one Loan Party executing this Agreement or the Other Documents and a Swap Obligation would be an Excluded Hedge Liability with respect to one or more of such Loan Parties, but not all of them, the definition of “Excluded Hedge Liability or Liabilities” with respect to each such Loan Party shall only be deemed applicable to (i) the particular Swap Obligations that constitute Excluded Hedge Liabilities with respect to such Loan Party, and (ii) the particular Loan Party with respect to which such Swap Obligations constitute Excluded Hedge Liabilities.

Excluded Korean Receivable” shall have the meaning given such term in Section 4.15 of this Agreement.

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Excluded Property” shall mean, collectively (a) any lease, license, franchise, charter or other governmental authorization, or any other contract or agreement to which any Loan Party is a party, and any of its rights or interests thereunder or assets subject thereto, if and to the extent that a Lien in favor of Agent is prohibited by or in violation of (i) any Applicable Law, or (ii) a term, provision or condition of any such lease, license, charter, governmental authorization, contract or agreement; provided, that, in each case, if such Applicable Law, term, provision or condition would be rendered ineffective with respect to the creation or enforcement of such security interest pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other Applicable Law (including the United States Bankruptcy Code) or principles of equity, or the consent of any applicable Person to the granting of such Lien in favor of Agent has been obtained, then the foregoing shall not constitute Excluded Property (and shall constitute Collateral) immediately at such time as the contractual or legal prohibition shall no longer be applicable; provided, further, that, to the extent severable, Agent’s Lien shall attach immediately to any portion of such lease, license, charter, governmental authorization, contract, agreement or assets not subject to the foregoing prohibitions; (b) any Equity Interests of a Subsidiary of a Loan Party that do not constitute Subsidiary Stock; (c) “intent-to-use” United States trademark applications to the extent that an amendment to allege use or statement of use has not been filed under 15 U.S.C. §1051(c) or 15 U.S.C. §1051(d), respectively, or if filed, has not been deemed in conformity with 15 U.S.C. §1051(a) or (c), it being agreed that for purposes of this Agreement and the Other Documents, no Lien granted to Agent on any “intent-to-use” United States trademark applications is intended to be a present assignment thereof; (d) any Excluded Account of the type described in clause (a) or (b) of the definition thereof (including all deposits and other financial assets maintained in any such Excluded Account); (e) all Real Property including all Leasehold Interests;  (f) cash pledged pursuant to a Permitted Encumbrance; and (g) all Excluded Korean Receivables; provided, however, that Excluded Property shall not include any proceeds (or right to receive proceeds) of any of the assets described in the foregoing clauses (a) – (e) or (g) or any goodwill of any Loan Party’s business associated therewith or attributable thereto.

Excluded Subsidiaries” shall mean, collectively, at any time of determination, the Dormant Subsidiaries at such time and the Foreign Legal Restrictions Subsidiaries at such time.

Excluded Taxes” shall mean, with respect to Agent, any Lender, Participant, Swing Loan Lender, Issuer or any other recipient of any payment to be made by or on account of any Obligations, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office or applicable lending office is located or, in the case of any Lender, Participant, Swing Loan Lender or Issuer, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Company is located, (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.10(e) hereof, except to the extent that such Foreign Lender or Participant (or its assignor or seller of a participation, if any) was entitled, at the time of designation of a new lending office (or assignment or sale of a participation), to receive additional amounts from Companies with respect to such

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withholding tax pursuant to Section 3.10(a) hereof, or (d) any Taxes imposed on any “withholding payment” payable to such recipient as a result of the failure of such recipient to satisfy the requirements set forth in the FATCA after December 31, 2012.

 

Existing WF Letters of Credit” shall mean each of the letters of credit listed on Exhibit B to the Wells Fargo Payoff Letter.

Export-Related Accounts Receivable” shall mean, collectively, all “Export-Related Accounts Receivable” of any Ex-Im Borrower as defined in the Ex-Im Subfacility Credit Agreement.

Export-Related Collateral” shall mean the “Export-Related Collateral” as defined in the Ex-Im Subfacility Credit Agreement.

Export-Related General Intangibles” shall mean, collectively, all “Export-Related General Intangibles” of any Ex-Im Borrower as defined in the Ex-Im Subfacility Credit Agreement.

Facility Fee” shall have the meaning set forth in Section 3.3(b) hereof.

 

FATCA” shall mean Sections 1471 through 1474 of the Code, as of Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations thereunder or official interpretations thereof.

Federal Funds Effective Rate” shall mean, for any day, the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) determined by the Federal Reserve Bank of New York (or any successor), based on such day’s federal funds transactions by depositary institutions, as determined in such manner as such Federal Reserve Bank (or any successor) shall set forth on its public website from time to time, and as published on the next succeeding Business Day by such Federal Reserve Bank as the “Federal Funds Effective Rate”; provided that if such Federal Reserve Bank (or its successor) does not publish such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

Fee Letter” shall mean the fee letter, dated as of the Closing Date, by and among Borrowers and PNC.

Field Examination” shall mean, with respect to (x) any Loan Party, (y) any Subsidiary or Person acquired (or to be acquired) by any Loan Party that is required to become a Loan Party under the provisions of Section 7.12 hereof, or (z) any assets of any Person or line or business or division of a Peron acquired (or to be acquired) by any Loan Party (or Person that is required to become a Loan Party under the provisions of Section 7.12 hereof), a customary asset-based lender’s field examination and audit of such Person and its business and assets and/or such assets conducted by Agent and its employees and/or any third party retained by Agent for such purpose of a scope and detail acceptable to Agent in its Permitted Discretion.

Field Examination Fees and Costs” shall have the meaning set forth in Section 3.4(c) hereof.

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Fixed Charge Coverage Ratio” shall mean, with respect to any Person for any fiscal period, the ratio of (a) the result of (i) EBITDA for such Person for such period, minus (ii) Unfunded Capital Expenditures made by such Person during such period, minus (iii) cash taxes paid or required to be paid by such Person during such period, to (b) the sum of (i) all Debt Payments for such Person during such period, plus (ii) Restricted Payments made by such Person during such period, but expressly excluding any Permitted Restricted Payments made pursuant to clause (c) of the definition of Permitted Restricted Payments.

Flood Laws” shall mean all Applicable Laws relating to policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and other Applicable Laws related thereto.

Foreign Cash Liquidity” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Foreign Subsidiaries of DZSI held in deposit accounts or securities accounts outside the United States which such cash and Cash Equivalents are (i) unrestricted, (ii) not subject to any Lien (other than Permitted Encumbrance of the types described in clauses (a) and (k) of the definition of Permitted Encumbrances), (iii) freely available to such Foreign Subsidiaries for withdrawal/transfer without registration or approval of any Governmental Body (other than registrations or approvals by Governmental Bodies in the Republic of Korea that are not materially more onerous or restrictive than the registrations and approvals by Governmental Bodies in the Republic of Korea as in effect on the Closing Date), (iv) freely available for repatriation (by means of dividends and distributions from the respective Foreign Subsidiaries to the respective Domestic Loan Parties) at the option of such Foreign Subsidiaries and DZSI without restriction due to any applicable currency controls of any applicable local Governmental Body (other than currency controls of any applicable local Governmental Bodies in the Republic of Korea that are not materially more onerous or restrictive than the currency controls by Governmental Bodies in the Republic of Korea as in effect on the Closing Date), (v) denominated in Dollars or in a currency that can be easily converted into Dollars on the international foreign currency exchange markets, and (vi) is not and could not reasonably be expected to be at risk of nationalization or expropriation by any applicable local Governmental Body.

Foreign Currency Hedge” shall mean any foreign exchange transaction, including spot and forward foreign currency purchases and sales, listed or over-the-counter options on foreign currencies, non-deliverable forwards and options, foreign currency swap agreements, currency exchange rate price hedging arrangements, and any other similar transaction providing for the purchase of one currency in exchange for the sale of another currency entered into by any Loan Party and/or any of their respective Subsidiaries.

Foreign Currency Hedge Liabilities” shall mean the liabilities of the Loan Parties and their Subsidiaries owing to the provider of a Foreign Currency Hedge.  For purposes of this Agreement and all of the Other Documents, all Foreign Currency Hedge Liabilities of any Loan Party or Subsidiary that is party to any Lender-Provided Foreign Currency Hedge shall, for purposes of this Agreement and all of the Other Documents, be “Obligations” of such Person and of each other Loan Party, be guaranteed obligations under any Guaranty and secured obligations under any Guarantor Security Agreement, as applicable, and otherwise treated as Obligations for purposes of the Other Documents, except to the extent constituting Excluded Hedge Liabilities of such Person.  The Liens securing the Foreign Currency Hedge Liabilities shall be pari passu with

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the Liens securing all other Obligations under this Agreement and the Other Documents, subject to the express provisions of Section 11.5 hereof.

Foreign Currency Letter of Credit” shall have the meaning set forth in Section 2.11(a) hereof.

Foreign Law Guaranty/Security Documents” shall mean, collectively, (i) the German Law Guarantees and the German Loan Security Documents, (ii) the Korean Law Guarantees and Security Documents, (iii) each other Guaranty from time to time executed by any Guarantor that is governed by the laws of a jurisdiction other than the United States, any State or territory thereof or the District of Columbia, (iv) any Guarantor Security Agreement from time to time executed by any Guarantor with respect to any assets or property of any Guarantor that is governed by and/or creates and/or perfects Liens under the laws of a jurisdiction other than the United States, any State or territory thereof or the District of Columbia, or (v) any Pledge Agreement from time to time executed by any Loan Party with respect to a pledge and creation and grant of a Lien on any Equity Interests of any Foreign Subsidiary that is governed by the laws of the jurisdiction of organization of such Foreign Subsidiary or any other jurisdiction other than the United States, any State or territory thereof or the District of Columbia

Foreign Legal Restrictions Subsidiary” shall mean any Foreign Subsidiary that (as demonstrated by Loan Parties to the reasonable satisfaction of Agent in its Permitted Discretion) is prohibited by Applicable Law from giving a Guaranty with respect to the Guaranteed Obligations.    

Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which Loan Parties are resident for tax purposes.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

Foreign Loan Party” shall mean any Loan Party that is not organized or incorporated in the United States, any State or territory thereof or the District of Columbia.

Foreign Secured Loan Parties” shall mean, collectively, at any time (x) DNS Korea, (y) KeyMile, and (z) each other Tier I Foreign Material Subsidiary that, as of such time, has fully complied with the requirements of Section 7.12(a).

Foreign Subsidiary” shall mean any Subsidiary of any Person that is not organized or incorporated in the United States, any State or territory thereof or the District of Columbia.

Foreign Unsecured Loan Parties” shall mean, collectively, at any time, each Tier II Foreign Material Subsidiary that, as of such time, has fully complied with the requirements of Section 7.12(a).  As of the Closing Date, there are no Foreign Unsecured Loan Parties.

Formula Amount” shall have the meaning set forth in Section 2.1(a) hereof.

Fund” shall mean any Person that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

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Funded Debt” shall mean, with respect to any Person, without duplication, the sum of (x) all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at such Person’s option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short term debt extendible beyond one year at the option of the debtor, and also including, in the case of Companies, the Obligations and, without duplication, Indebtedness consisting of guaranties of Funded Debt of other Persons, and (y) all “earnouts” and similar contingent obligations in connection with Acquisitions, in each case, valued in accordance with GAAP.  For the avoidance of doubt, the undrawn face amount of any letters of credit (including but not limited to Letters of Credit issued under this Agreement and Ex-Im Letters of Credit issued under the Ex-Im Subfacility Credit Agreement) are not included in the definition of Funded Debt.

GAAP” shall mean generally accepted accounting principles in the United States of America, except that, when it comes to the internal and/or consolidating books and records of a Foreign Subsidiary of DZSI, GAAP may mean, at DZSI’s election, the generally accepted accounting principles in the jurisdiction of such Foreign Subsidiary’s establishment or incorporation (including IFRS), in each case as in effect from time to time.

German Guarantor” means a Guarantor incorporated as a limited liability company (Gesellschaft mit beschränkter Haftung) or established as a limited partnership with a limited liability company as general partner (GmbH & Co KG), in each case under the laws of Germany.”

German Law Assignment Agreement” shall mean that certain Assignment Agreement governed by German law, dated on or about the date hereof, by KeyMile in favor of Agent and Ex-Im Agent, as amended, restated, supplemented or otherwise modified from time to time.

German Law Guarantees” shall mean, collectively, (i) the Guarantee governed by German law dated on or about the date hereof by KeyMile in favor of Agent and Ex-Im Agent, and (ii) any other Guaranty governed by German law executed subsequent to the Closing Date by any Loan Party to secure the Obligations, in each case as such Guaranty may be amended, modified, supplemented, renewed, restated or replaced from time to time

German Law Security Documents” shall mean, collectively (i) the German Law Assignment Agreement, (ii) the Share Pledge Agreement governed by German law dated on or about the Closing Date by ZTI in favor of Agent and Ex-Im Agent with respect to the Equity Interests in KeyMile, (iii) the Share Pledge Agreement governed by German law dated on or about the Closing Date by KeyMile in favor of Agent and Ex-Im Agent with respect to the Equity Interests in KeyMile Networks GmbH, (iv) the Account Pledge Agreement governed by German law dated on or about the Closing Date by KeyMile in favor of Agent and Ex-Im Agent, and (v) any other pledge agreement(s), assignment agreement(s), or other security documents governed by German law executed subsequent to the Closing Date by any Loan Party to create a Lien under German law in any assets or properties of such Loan Party to secure the Obligations, in each case as such agreement may be amended, modified, supplemented, renewed, restated or replaced from time to time.

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Governmental Acts” shall mean any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Body.

Governmental Body” shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to a government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing), and any group or body having financial regulatory authority over any applicable Person or any applicable bank, depositary institution or other financial institution.

Guarantees” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Guarantee at any time shall be deemed to be an amount equal to the lesser at such time of (i) the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (or, if not stated or determinable, the maximum reasonably anticipated amount of the obligations in respect of which such Guarantee is made) and (ii) the maximum amount for which the guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee.

Guaranteed Obligations” shall have the meaning set forth in Section 17.1 hereof.

Guarantor” shall have the meaning set forth in the preamble to this Agreement and shall extend to each Person which may hereafter guarantee payment or performance of the whole or any part of the Obligations, and shall also extend to all successors and permitted and assigns of such Persons, and “Guarantors” shall mean collectively all such Persons.

Guarantor Security Agreement” shall mean any security agreement executed by any Guarantor in favor of Agent securing the Obligations or the Guaranty of such Guarantor, in form and substance satisfactory to Agent, including with respect to Guarantors that are parties hereto, the provisions of Article IV of this Agreement; as each may be amended, modified, supplemented, renewed, restated or replaced from time to time.

Guaranty” shall mean any guaranty of the Obligations executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance satisfactory

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to Agent, including, with respect to Guarantors that are parties hereto, the provisions of Article XVII hereof, as each may be amended, modified, supplemented, renewed, restated or replaced from time to time.

Hazardous Discharge” shall mean any Release or threat of Release of a reportable quantity of any Hazardous Materials at the Real Property owned or leased by any Company.

Hazardous Materials” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in or subject to regulation under Environmental Laws.

Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.

Hedge Liabilities” shall mean collectively, the Foreign Currency Hedge Liabilities and the Interest Rate Hedge Liabilities.

Increasing Lender” shall have the meaning set forth in Section 2.24(a) hereof.

Indebtedness” shall mean, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (a) borrowed money; (b) amounts received under or liabilities in respect of any note purchase or acceptance credit facility, and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all Capitalized Lease Obligations; (d) reimbursement obligations (contingent or otherwise) under any letter of credit agreement, banker’s acceptance agreement or similar arrangement; (e) obligations under any Interest Rate Hedge, Foreign Currency Hedge, or other interest rate management device, foreign currency exchange agreement, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement; (f) any other advances of credit made to or on behalf of such Person or other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements including to finance the purchase price of property or services and all obligations of such Person to pay the deferred purchase price of property or services (but not including trade payables and accrued expenses or guarantees or credit support therefor, including electronic trade payable transactions, incurred in the Ordinary Course of Business which are not represented by a promissory note or otherwise reflected as indebtedness in the books and records of the Person and which, unless Properly Contested, are not more than seventy-five (75) days past due; (g) all Disqualified Equity Interests; (h) all indebtedness, obligations or liabilities secured by a Lien on any asset of such Person, whether or not such indebtedness, obligations or liabilities are otherwise an obligation of such Person; (i) all obligations of such Person for “earnouts”, purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of purchase and sale contracts; (j) off-balance sheet liabilities and/or pension plan liabilities of such Person; (k) obligations arising under bonus,

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deferred compensation, incentive compensation or similar arrangements, other than those arising in the Ordinary Course of Business; and (l) any guaranty of any indebtedness, obligations or liabilities of a type described in the foregoing clauses (a) through (k); provided that Indebtedness, shall exclude any obligation or liability arising from the application or interpretation of ASC Topic 840 or 842 or any related, similar or successor pronouncement, guideline, publication or rule.

Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

Ineligible Security(ies)” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

Initial Projections” shall have the meaning set forth in Section 5.5(b) hereof.

Insolvency Event” shall mean, with respect to any Person, including without limitation any Lender, such Person or such Person’s direct or indirect parent company (a) becomes the subject of an Insolvency Proceeding (including any proceeding under the Bankruptcy Code), or regulatory restrictions, (b) has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or has called a meeting of its creditors, (c) admits in writing its inability, or be generally unable, to pay its debts as they become due or ceases operations of its present business, (d) with respect to a Person having its center of main interest (in accordance with EU Regulation 2015/848) in Germany, a reason for the opening of insolvency proceedings pursuant to §§ 17 - 19 German Insolvency Code applies, (e) with respect to a Lender, such Lender is unable to perform hereunder due to the application of Applicable Law, or (f) in the good faith determination of Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment of a type described in clauses (a) or (b), provided that an Insolvency Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by a Governmental Body or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Body or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Insolvency Law” shall mean as applicable, (a) the Bankruptcy Code, (b) the German Insolvency Code, and (b) any other federal, state, provincial or foreign Applicable Law  regarding the insolvency of a Person or a business, or for the relief of debtors or affecting creditors’ rights generally, or regarding the appointment of a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person with respect to any Person or the assets or properties of any Person, or regarding the reorganization or liquidation of a Person or a business.

Insolvency Proceeding” shall mean (a) any voluntary case or proceeding under any Insolvency Law with respect to any Loan Party, (b) any other voluntary proceeding or involuntary or bankruptcy case or proceeding, or any interim receivership, liquidation or other similar case or proceeding with respect to any Loan Party or with respect to a material portion of its assets, (c) any liquidation, dissolution, or winding up of any Loan Party whether voluntary or involuntary and

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whether or not involving any Insolvency Law or (d) any assignment for the benefit of any creditors or any other marshaling of assets or liabilities of any Loan Party.

Intellectual Property” shall mean property constituting a patent, copyright, trademark (or any application in respect of the foregoing), service mark, trade name, mask work, trade secrets, design right, assumed name or license or other right to use any of the foregoing under Applicable Law.

Intellectual Property Collateral” shall mean all Collateral constituting Intellectual Property.

Interest Expense” shall mean, for any period, the aggregate interest expense of the Loan Parties on a Consolidated Basis, determined in accordance with GAAP.

Interest Period” shall mean the period provided for any LIBOR Rate Loan pursuant to Section 2.2(b) hereof.

Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap, floor, adjustable strike cap, adjustable strike corridor, cross-currency swap or similar agreements entered into by any Loan Party or its Subsidiaries in order to provide protection to, or minimize the impact upon, such Loan Party and/or its Subsidiaries of increasing floating rates of interest applicable to Indebtedness.

Interest Rate Hedge Liabilities” shall mean the liabilities owing to the provider of any Interest Rate Hedge.  For purposes of this Agreement and all of the Other Documents, all Interest Rate Hedge Liabilities of any Loan Party or Subsidiary that is party to any Lender-Provided Interest Rate Hedge shall be “Obligations” hereunder and under the Other Documents, except to the extent constituting Excluded Hedge Liabilities of such Person, and the Liens securing such Interest Rate Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents, subject to the express provisions of Section 11.5 hereof.

Inventory” shall mean and include as to each Person all of such Person’s inventory (as defined in Article 9 of the Uniform Commercial Code or as such term is used under any Applicable Law) and all of such Person’s goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Person’s business or used in selling or furnishing such goods, merchandise and other personal property, and all Documents of such Person.

Inventory Collateral” shall mean all Collateral consisting of Inventory and the proceeds thereof.

Investment” means, as to any Person, (a) any Acquisition by such Person, (b) any direct or indirect acquisition or investment by such Person in another Person, whether by means of the purchase or other acquisition of Equity Interests or debt or other securities of another Person (including any partnership or joint venture interest), or (c) any direct or indirect loan, advance or

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capital contribution to, Guarantee with respect to any Indebtedness or other obligation of, such other Person.  For purposes of covenant compliance, the amount of any Investment on any date of determination shall be, in the case of any Investment in the form of (i) a loan or an advance, the principal amount thereof outstanding on such date, (ii) a Guarantee, the amount of such Guarantee as determined in accordance with the last sentence of the definition of such term, (iii) a transfer of Equity Interests or other property by the investor to the investee, including any such transfer in the form of a capital contribution, or the issuance of Equity Interests to such investor, the fair market value (as determined reasonably and in good faith by the chief financial officer of the Borrowing Agent) of such Equity Interests or other property as of the time of the transfer or issuance, without any adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment, and (iv) any Investment (other than any Investment referred to in clauses (i), (ii) or (iii) above) in the form of an Acquisition or a purchase or other acquisition for value of any evidences of Indebtedness or other securities of any other Person, the original cost of such Investment (including any Indebtedness assumed in connection therewith), plus the cost of all additions, as of such date, thereto, and minus the amount, as of such date, of any portion of such Investment repaid to the investor in cash as a repayment of principal or a return of capital, as the case may be, but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment.  

Investment Property” shall mean and include, with respect to any Person, all of such Person’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts, and any other asset or right that would constitute “investment property” under the Uniform Commercial Code.

Issuershall mean, both collectively and individually: (a) Agent in its capacity as an Issuer of Letters of Credit under this Agreement, (b) Citibank, N.A. in its capacity as an Issuer of Letters of Credit under this Agreement, and (c) any other Person which Agent in its discretion, and with the consent of such Person, shall designate as Issuer of and cause to issue any particular Letter of Credit under this Agreement in place of Agent as issuer.

KeyMile Acquisition” shall mean the sale by KeyMile Seller and purchase by ZTI of all of the issued and outstanding Equity Interests of KeyMile pursuant to and on the terms and conditions provided for in the KeyMile Purchase Agreement, and the transactions related thereto contemplated by the KeyMile Purchase Agreement to occur substantially contemporaneously with such sale and purchase, including the incurrence of the Permitted KeyMile Seller Working Capital Indebtedness, which sale and purchase and related transactions were closed and consummated on January 3, 2019.

KeyMile Acquisition Documents” shall mean the KeyMile Purchase Agreement and all of the other agreements, documents and instruments executed and delivered in connection therewith or related thereto (including all exhibits, schedules and disclosure letters referred to therein or delivered pursuant thereto, if any) and all amendments thereto, waivers relating thereto and other side letters or agreements affecting the terms thereof.

KeyMile Purchase Agreementshall mean that certain share purchase agreement dated as of Share Purchase Agreement dated as of October 5, 2018 (deed no. 1206/2018 B of notary Dr.

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Gesa Beckhaus, Hamburg) between, amongst others, the KeyMile Seller and ZTI, including all annexes, exhibits and schedules thereto, as amended by that certain agreement on various issues in relation to postponed closing dated as of December 31, 2018 between the KeyMile Seller and ZTI.

KeyMile Seller” shall mean Riverside KM Beteiligung GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of Germany, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Hannover under registration number HRB 208686.

KeyMile Seller Working Capital Facility Agreement” shall mean that certain Working Capital Facility Agreement dated on or about January 3, 2019 between the KeyMile Seller, as the grantor of a working capital facility consisting of a single working capital advance in the principal amount of €4,000,000 funded by the KeyMile Seller allowing the “Retained Cash Amount” (as defined  in the KeyMile Purchase Agreement) to remain with KeyMile, and KeyMile, as the recipient of such working capital facility.

KeyMile Seller Working Capital Facility Guaranty” shall mean that certain Guaranty Agreement dated on or about October 5/6, 2018 by DZSI and ZTI, as guarantors, in favor of the KeyMile Seller, as the grantor of the working capital facility under the KeyMile Seller Working Capital Facility Agreement, pursuant to which DZSI and ZTI shall guaranty such working capital facility on an unsecured but unconditional and unlimited basis.

Korean Law Customer Notices” shall mean such stamped notices directed to Customers as are necessary under Korean law to (1) where required, obtain the consent of the Customer to the establishment of Liens and/or (2) perfect Agent’s or Lender’s Liens in the Receivables of DNS Korea.

 

Korean Law Guarantee and Security Documents” shall mean, collectively, (i) the Guaranty and Security Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders, the Borrowers and DNS Korea, (ii) the Intellectual Property Keun-Pledge Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders and DNS Korea, (iii) the Share Keun-Pledge Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders and DNS, (iv) the Yangdo-Dambo Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders and DNS Korea and (v) any other pledge agreement(s), security agreement(s), guarantee agreement(s), or other security documents governed by Korean law executed subsequent to the Closing Date by any Loan Party to create a Lien under Korean law in any assets or properties of such Loan Party to secure the Obligations, in each case as such agreement may be amended, modified, supplemented, renewed, restated or replaced from time to time.

Law(s)” shall mean any law(s) (including common law and equitable principles), constitution, statute, treaty, regulation, rule, ordinance, opinion, issued guidance, code, release, ruling, order, executive order, injunction, writ, decree, bond judgment authorization or approval,

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lien or award of or any settlement arrangement, by agreement, consent or otherwise, with any Governmental Body, foreign or domestic.

Leasehold Interests” shall mean all of each Loan Party’s right, title and interest in and to, and as lessee of, the premises identified as leased Real Property on Schedule 4.4 hereto.

Lender” and “Lenders” shall have the meanings given to such terms in the preamble to this Agreement and shall include all of their transferees, successor and permitted assigns.  For purposes of any provision of this Agreement or any Other Document which provides for the granting of a security interest or other Lien to Agent for the benefit of Lenders as security for the Obligations, “Lenders” shall include any Affiliate of a Lender to which such Obligation (specifically including any Hedge Liabilities and any Cash Management Liabilities) is owed.

Lender-Provided Foreign Currency Hedge” shall mean a Foreign Currency Hedge which is provided by any Lender or Agent, or any Affiliate of any Lender or Agent, and with respect to which such provider confirms to Agent in writing prior to the execution thereof that it: (a) is documented in a standard International Swap Dealers Association, Inc. Master Agreement or another reasonable and customary manner; (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner; and (c) is entered into for hedging (rather than speculative) purposes.

Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is provided by any Lender or Agent, or any Affiliate of any Lender or Agent, and with respect to which such provider confirms to Agent in writing prior to the execution thereof that it: (a) is documented in a standard International Swap Dealers Association, Inc. Master Agreement or another reasonable and customary manner; (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner; and (c) is entered into for hedging (rather than speculative) purposes.

Letter of Credit Application” shall have the meaning set forth in Section 2.12(a) hereof.

Letter of Credit Borrowing” shall have the meaning set forth in Section 2.14(d) hereof.

Letter of Credit Default Rate” shall have the meaning set forth in Section 3.2(a) hereof.

Letter of Credit Fees” shall have the meaning set forth in Section 3.2(a) hereof.

Letter of Credit Lender Fees” shall have the meaning set forth in Section 3.2(a) hereof.

Letter of Credit Sublimit” shall mean $10,000,000.

Letters of Credit” shall have the meaning set forth in Section 2.11 hereof.

Leverage Ratio” shall mean, for any Person for any period of determination, the ratio of (a) Funded Debt of such Person on the last day of such period to (b) EBITDA of such Person for such period.

LIBOR Alternate Source” shall have the meaning set forth in the definition of “LIBOR Rate”.

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LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest Period relating thereto, the interest rate per annum determined by Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (a) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (a “LIBOR Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for U.S. Dollars for an amount comparable to such LIBOR Rate Loan and having a borrowing date and a maturity comparable to such Interest Period (or (x) if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error), (y) if the LIBOR Rate is unascertainable as set forth in Section 3.8.2(i) hereof, a comparable replacement rate determined in accordance with Section 3.8.2 hereof), by (b) a number equal to 1.00 minus the Reserve Percentage; provided, however, that if the LIBOR Rate determined as provided above would be less than zero (0.00%), such rate shall be deemed to be zero (0.00%) for purposes of this Agreement.  The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date.  Agent shall give reasonably prompt notice to the Borrowing Agent of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

LIBOR Rate Loan” shall mean any Advance that bears interest based on the LIBOR Rate.

LIBOR Termination Date” shall have the meaning set forth in Section 3.8.2(a) hereof.

Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.

Lien Waiver Agreement” shall mean an agreement in form and substance reasonably satisfactory to Agent which is executed in favor of Agent by a Person who owns or occupies, or holds a senior mortgage with respect to, premises at which any Collateral may be located from time to time.

Liquidity” shall mean, as of any date of determination, the sum of (a) Undrawn Availability as of such date plus (b) Qualified Cash as of such date.

Loan Party” and “Loan Parties” shall have the meanings set forth in the preamble to this Agreement and shall include their successors and permitted assigns.  For the avoidance of doubt, (x) no Guarantor that is not a party to this Agreement shall be included within the meaning of the

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term “Loan Party”, and (y) DNI shall not under any circumstances or at any time be considered a Loan Party for any purpose hereunder.

Loan Parties on a Consolidated Basis” shall mean the consolidation in accordance with GAAP of the accounts or other items of DZSI and its Subsidiaries.

Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, results of operations, assets, business, or properties of Loan Parties taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) the value of the Collateral, taken as a whole, or Agent’s Liens on the Collateral, taken as a whole, or the priority of any such Lien or (d) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies (taken as a whole) under this Agreement and the Other Documents.

Material Contract” shall mean any contract, agreement, instrument, permit, lease or license, written or oral, of any Company (x) that accounts for/produces (or could reasonably be expected to account for/produce) more than ten percent (10%) of the gross revenues of Loan Parties on a Consolidated Basis in any fiscal year, or (y) the termination of which could reasonably be expected to result in a Material Adverse Effect.

Maximum Permitted Korean Export-Import Bank Amount” an amount equal to the total principal balance of the Permitted Korean Export-Import Bank Indebtedness remaining outstanding after giving effect to all of the transactions provided for in Section 5 of the Closing Date Flow of Funds Agreement.

Maximum Revolving Advance Amount” shall mean $15,000,000 as such amount may be increased in accordance with Section 2.24 hereof.

Maximum Swing Loan Advance Amount” shall mean $2,000,000; provided that, upon the effective date of each increase in the Maximum Revolving Advance Amount in accordance with Section 2.24 hereof, the Maximum Swing Loan Advance Amount shall increase by an amount equal to ten percent (10%) of the amount of such increase in the Maximum Revolving Advance Amount.

Maximum Undrawn Amount” shall mean, with respect to any outstanding Letter of Credit as of any date, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

Modified Commitment Transfer Supplement” shall have the meaning set forth in Section 16.3(d) hereof.

Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 3(37) or 4001(a)(3) of ERISA to which contributions are required or, within the preceding five plan years, were required by any Company or any member of the Controlled Group.

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

Net Cash Proceeds” shall mean:

(a)with respect to any Disposition (other than any issuance or sale of Equity Interests), proceeds in cash as and when received by the Person making a Disposition of assets (including without limitation, any deferred payments of cash, delayed purchase price adjustments or earnouts, and payments on any “seller note”), net of: (a) all reasonable and customary transaction costs and expenses with respect thereto (including, without limitation, any reasonable legal or other reasonable professional fees) or other actual transaction costs and expenses approved by Agent, in each case to the extent payable to a Person that is not an Affiliate of a Company, (b) sale, use or other transaction Taxes paid or payable as a result thereof, (c) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Permitted Encumbrance, which is senior to the Lien of Agent, on the assets subject to such Disposition and that is required to be repaid under the terms thereof as a result of such Disposition, (d) income Taxes payable as a result thereof, and (e) reserves or escrows for indemnification obligations and purchase price adjustments and other similar contingent liabilities that are required to be in place under the terms of the agreement providing for such Disposition; provided, that, if any amounts described in clauses (a) – (e) which are retained by any Loan Party in anticipation of paying any item described in clauses (a) – (e) are not thereafter in fact required to make any such anticipating payment and/or released from any such reserve or escrow, such amounts shall constitute Net Cash Proceeds;

 

(b)with respect to any issuance of Indebtedness or any issuance or sale of Equity Interests by any Company, the cash proceeds thereof, net of all reasonable and customary transaction costs and expenses with respect thereto (including, without limitation, any reasonable legal or other reasonable professional fees) or other actual transaction costs and expenses approved by Agent, in each case to the extent payable to a Person that is not an Affiliate of a Company; and

 

(c)with respect to any Casualty Proceeds Event, proceeds in cash, as and when received, of such Casualty Proceeds Event, net of: (a) all reasonable and customary collection expenses thereof (including, without limitation, any reasonable legal or other reasonable professional fees) or other actual collection expenses approved by Agent, in each case to the extent payable to a Person that is not an Affiliate of a Company, (b) sale, use or other transaction Taxes paid or payable as a result thereof, (c) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Permitted Encumbrance which is senior to the Lien of Agent on the assets subject to such taking, condemnation, damage or destruction and that is required to be repaid under the terms thereof as a result of such taking, condemnation, damage or destruction, and (d) income Taxes payable as a result thereof; provided, that, if any amounts described in clauses (a) – (d) which are retained by any Loan Party in anticipation of paying any item described in clauses (a) – (d) are not thereafter in fact required to make any such anticipating payment, such amounts shall constitute Net Casualty Proceeds.

 

New Lender” shall have the meaning set forth in Section 2.24(a) hereof.

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Non-Core Companies” shall mean, collectively, at any time (x) all Foreign Unsecured Loan Parties, and (y) all Companies that are not Loan Parties.

Non-Defaulting Lender” shall mean, at any time, any Revolving Lender that is not a Defaulting Lender at such time.

Non-Qualifying Party” shall mean any Loan Party that on the Eligibility Date fails for any reason to qualify as an Eligible Contract Participant.

Notes” shall mean collectively, the Term Notes, the Revolving Credit Note and the Swing Loan Note.

Obligations” shall mean and include (a) any and all loans (including without limitation, all Advances), advances, debts, liabilities, obligations (including without limitation all reimbursement obligations and cash collateralization obligations with respect to Letters of Credit issued hereunder), covenants and duties owing by any Loan Party (including in its capacity as an Ex-Im Borrower or Ex-Im Credit Agreement Guarantor) or any Subsidiary of any Loan Party to Issuer, Swing Loan Lender, Lenders or Agent (or to any other direct or indirect subsidiary or Affiliate of Issuer, Swing Loan Lender, any Lender or Agent), or to Ex-Im Agent or any Ex-Im Lender arising under, relating to, or evidenced by this Agreement and the Other Documents or by the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents, of any kind or nature, present or future (including any prepayment premiums, interest or other amounts accruing thereon, any fees accruing under or in connection therewith, any costs and expenses of any Person payable by any Loan Party (including in its capacity as an Ex-Im Borrower or Ex-Im Credit Agreement Guarantor) or any Subsidiary of any Loan Party and any indemnification obligations payable by any Loan Party (including in its capacity as an Ex-Im Borrower or Ex-Im Credit Agreement Guarantor) or any Subsidiary of any Loan Party, in each case arising or payable after maturity, or after the filing of any petition in bankruptcy, or the commencement of an Insolvency Proceeding relating to any Loan Party or any Subsidiary of any Loan Party, whether or not a claim for post-filing or post-petition interest, fees or other amounts is allowable or allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise, including all costs and expenses of Agent, Issuer, Swing Loan Lender, any Lender, Ex-Im Agent, and any Ex-Im Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing to the extent provided for in this Agreement and the Other Documents or by the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents, including but not limited to reasonable attorneys’ fees and expenses to the extent provided for in this Agreement and the Other Documents or by the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents, and all obligations of any Loan Party to Agent, Issuer, Swing Loan Lender or Lenders to perform acts or refrain from taking any action, (b) all Hedge Liabilities, (c) all Cash Management Liabilities, and (d) all rights, claims or obligations coming into existence after the opening of Insolvency Proceedings.  Notwithstanding the foregoing, the Obligations shall not include any Excluded Hedge Liabilities.

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Ordinary Course of Business” shall mean, with respect to any Company, the ordinary course of such Company’s business as conducted on the Closing Date (or in the case of any Person that is formed and/or becomes a Company after the Closing Date, as conducted as of the date such Person in formed and/or becomes a Company).

Organizational Documents” shall mean, with respect to any Person, any charter, articles or certificate of incorporation, certificate of organization, registration or formation, certificate of partnership or limited partnership, bylaws, operating agreement, limited liability company agreement, or partnership agreement of such Person and any and all other applicable documents relating to such Person’s formation, organization or entity governance matters (including any shareholders’ or equity holders’ agreement or voting trust agreement) and specifically includes, without limitation, any certificates of designation for preferred stock or other forms of preferred equity.

Other Documents” shall mean the Notes, the Perfection Certificates, the Fee Letter, any Guaranty, any Guarantor Security Agreement, any Pledge Agreement, any Foreign Law Guaranty/Security Documents, any Lender-Provided Interest Rate Hedge, any Lender-Provided Foreign Currency Hedge, any documents and agreements giving rise to Cash Management Liabilities, the DNI Subordination Agreement, the Closing Date Flow of Funds Agreement, and any and all other agreements, instruments and documents, including intercreditor agreements, subordination agreements, guaranties, pledges, powers of attorney, consents, interest or currency swap agreements and all other agreements, documents and instruments heretofore, now or hereafter executed by any Loan Party and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement, in each case together with all amendments, modifications, supplements, extensions, renewals, substitutions, restatements and replacements thereto and thereof.

Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any Other Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any Other Document.

Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(e) hereof.

Overnight Bank Funding Rate” shall mean, for any day, the rate per annum (based on a year of 360 days and actual days elapsed) comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S. managed banking offices of depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of New York, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by such Federal Reserve Bank (or by such other recognized electronic source (such as Bloomberg) selected by Agent for the purpose of displaying such rate) (an “Alternate Source”); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further,  that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error).  If the Overnight Bank Funding Rate determined as set forth above would be less than zero, then such rate shall be deemed to be zero for purposes of this Agreement.  The rate of interest charged

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shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrowers.

Participant” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

Participation Advance” shall have the meaning set forth in Section 2.14(d) hereof.

Participation Commitment” shall mean the obligation hereunder of each Revolving Lender to buy a participation equal to its Revolving Commitment Percentage (subject to any reallocation pursuant to Section 2.22(b)(iii) hereof) in the Swing Loans made by Swing Loan Lender hereunder as provided for in Section 2.4(c) hereof and in the Letters of Credit issued hereunder as provided for in Section 2.14(a) hereof.

Payment Conditions” shall mean, on any applicable date of determination with respect to any proposed transaction(s) as to which satisfaction of such Payment Conditions is a requirement under this Agreement: (a) no Default or Event of Default shall exist or shall have occurred and be continuing on such date, or would occur after giving effect to such proposed transaction, and (b) after giving pro forma effect to such proposed transaction(s) and to any Advances being made in connection with and/or to fund any portion of such proposed transaction(s), in each case as though such proposed transaction(s) and any such Advances had occurred and been made on the first day of the applicable four quarter fiscal measurement period, (i) Borrowers shall have Undrawn Availability on such date of not less than $6,000,000, (ii) Loan Parties shall have Qualified Cash on such date of not less than $5,000,000, (iii) Loan Parties on a Consolidated Basis shall have a Leverage Ratio of not more than 3.75 to 1.00, and (iv) Loan Parties shall be in pro forma compliance with each of the covenants set forth in Section 6.5 hereof as of and for the four quarter fiscal measurement period ending as of the last day of in the most recently ended fiscal quarter of DZSI and its Subsidiaries for which the Quarterly Financials have been delivered to Agent .

Payment in Full” or “Paid in Fullmeans, with respect to the Obligations, (i) the termination of all commitments of the Lenders to extend credit under this Agreement, (ii) the indefeasible payment in full in cash of all of the Obligations, including interest accruing on or after the commencement of any Insolvency Proceeding, whether or not such interest would be allowed in such Insolvency Proceeding (other than contingent obligations for which no claim or demand for payment, whether oral or written, has been made at such time and obligations in respect of outstanding Letters of Credit, and outstanding Interest Rate Hedge Liabilities under Lender-Provided Interest Rate Hedges and outstanding Foreign Currency Hedge Liabilities under Lender-Provided Foreign Currency Hedges), and (iii) the termination or cash collateralization (in an amount and in the manner required by the Loan Documents) of Revolving Loan Obligations consisting of (A) outstanding Letters of Credit (but not, in any event, in an amount greater than 103% of the aggregate undrawn face amount of such Letters of Credit), (B) Interest Rate Hedge Liabilities under Lender-Provided Interest Rate Hedges (but not, in any event, in an amount greater than 100% of amount reasonably estimated by Agent as the maximum amount of indebtedness, obligations, and liabilities that could reasonably be expected to become due and owing to the applicable Secured Party thereunder), (C) Foreign Currency Hedge Liabilities under Lender-Provided Foreign Currency Hedges (but not, in any event, in an amount greater than 100% of

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amount reasonably estimated by Agent as the maximum amount of indebtedness, obligations, and liabilities that could reasonably be expected to become due and owing to the applicable Secured Party thereunder), and (D) any Cash Management Liabilities (but not, in any event, in an amount greater than 100% of amount reasonably estimated by Agent as the maximum amount of indebtedness, obligations, and liabilities that could reasonably be expected to become due and owing to the applicable Secured Party thereunder).

 

Payment Office” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.

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

Pension Benefit Plan” shall mean at any time any “employee pension benefit plan” as defined in Section 3(2) of ERISA (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Sections 412, 430 or 436 of the Code and either (i) is maintained or to which contributions are required by Company or any member of the Controlled Group or (ii) has at any time within the preceding five years been maintained or to which contributions have been required by Company or any entity which was at such time a member of the Controlled Group.

Perfection Certificate” shall mean the information questionnaire and the responses thereto provided by each Loan Party and delivered to Agent.

Permitted Acquisitions” shall mean any Acquisition by any Domestic Loan Party or any Foreign Secured Loan Party so long as and to the extent that:

(a) after giving pro forma effect to such Acquisition (and to any Revolving Advances to be requested to fund any part thereof), the Payment Conditions shall have been satisfied;

(b)the total costs and liabilities (including without limitation, all assumed liabilities, all potential earn-out payments, deferred payments and the value of any other stock or assets transferred, assigned or encumbered with respect to such acquisitions) of all such Acquisitions that are not funded with Net Cash Proceeds of any substantially contemporaneous issuance of Equity Interest (excluding any Disqualified Equity Interests) do not exceed $20,000,000 in the aggregate during the Term; but provided further that, to the extent any such Acquisition shall be made with any proceeds of any Revolving Advance (and/or any Ex-Im Revolving Advance) and/or any cash of any Domestic Loan Party or any Foreign Secured Loan Party, such total costs and liabilities of all such Acquisitions of any Foreign Subsidiary that will not be a Tier II Foreign Material Subsidiary upon the closing of such Acquisition (as determined in accordance with Section 7.12(b)(ii) (including, in the case of any Acquisition consisting of an Acquisition pursuant to which both one or more Domestic Subsidiaries/Tier II Foreign Material Subsidiaries and one or more Foreign Subsidiary that will not be a Tier II Foreign Material Subsidiary upon the closing of such Acquisition shall be acquired, the portion of the total costs and liabilities of such Acquisition attributable to such Foreign Subsidiary that will not be a Tier II Foreign Material Subsidiary upon the closing of such Acquisition) in any fiscal year of DZSI and

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its Subsidiaries, taken together with (x) all Permitted Intercompany Advances made during such fiscal year under clause (b) of the definition of Permitted Intercompany Advances, (y) all Permitted Intercompany Investments made during such fiscal year under clause (b) of the definition of Permitted Intercompany Investments, and (z) all Investments made during such fiscal year under clause (p) of the definition of Permitted Investments, shall not exceed the Permitted General Investment Bucket for such fiscal year;

(c)the target shall have a positive EBITDA for target and any Subsidiaries on a Consolidated Basis in accordance with GAAP measured for the trailing twelve (12) fiscal month measurement period ending as of the most recently ended fiscal quarter of such target for which audited or management-prepared financial statements are available;

(d) with respect to any Acquisition consisting of an acquisition of the Equity Interests of any Person, all of the provisions of Section 7.12 hereof shall be complied no later than substantially contemporaneously with the closing and consummation of such Acquisition;

(e) the business or property acquired is used or useful in Loan Parties’ Ordinary Course of Business;

(f)without limiting clause (d) above, Agent shall have received a first-priority security interest in all acquired assets or Equity Interests constituting Collateral in accordance with the provisions of this Agreement, subject to documentation satisfactory to Agent;

(g)the board of directors (or other comparable governing body) of the Person being acquired and/or of the seller of the assets being acquired shall have duly approved the transaction;

(h) at least thirty (30) days (or such shorter period as may be agreed by Agent) prior to the anticipated closing date of the proposed acquisition, Loan Parties shall have delivered to Agent: (i) written notice of the proposed Acquisition and a summary of the material terms thereof as anticipated as of the date of such notice, (ii) a pro forma balance sheet and pro forma financial statements and a Compliance Certificate demonstrating that, upon giving effect to such Acquisition on a pro forma basis, Loan Parties would be in compliance with the financial covenants set forth in Section 6.5 hereof as of the most recent fiscal quarter end, (iii) financial statements of the acquired entity for the two most recent fiscal years then ended, in form and substance reasonably acceptable to Agent;

(i)if such acquisition includes general partnership interests or any other Equity Interest that does not have a corporate (or similar) limitation on liability of the owners thereof, then such acquisition shall be effected by having such Equity Interests acquired by a corporate holding company directly or indirectly wholly-owned by a Loan Party and newly formed for the sole purpose of effecting such acquisition;

(j)no Indebtedness will be incurred, assumed or would exist with respect to any Company as a result of such acquisition other than Permitted Indebtedness, and no Liens will be incurred, assumed or would exist with respect to the assets of any Company (including any assets of any target and/or any acquired assets) as a result of such acquisition, other than Permitted Encumbrances;

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(k)if the total consideration, including the purchase price and liabilities assumed, of any such acquisition shall exceed $15,000,000, Borrowing Agent shall have delivered to Agent a quality of earnings report performed by a third party firm acceptable to Agent;

(l)not later than five (5) Business Days prior to the anticipated closing date of the proposed Acquisition, Borrowing Agent has provided Agent with copies of the most recent drafts of the acquisition agreement and other material agreements, documents and instruments related to the proposed acquisition, including, without limitation, any related management, non-compete, employment, option or other material agreements (the “Acquisition Documents”), and, in any event, no later than the closing and consummation of such Acquisition, Borrowing Agent shall provide Agent with true, correct and complete copies of the Acquisition Documents, in each case duly authorized, executed and delivered by the parties thereto, together with any schedules to such Acquisition Documents;

(m)such assets shall be located in the United States or such Target shall be incorporated in a state within the United States; and

(n)no assets acquired in any such Acquisition and/or of any Person acquired in any such Acquisition shall be included in the Formula Amount for any purpose (including any determination of compliance with the Payment Conditions under clause (a) of this definition above) unless such assets will, after giving effect to such Acquisition and the provisions of clause (d) above, such assets will be owned by a Borrower, nor until Agent has received a Field Examination with respect to such assets, in form and substance, and with results, acceptable to Agent in its Permitted Discretion; provided that, upon Borrower’s written request, Agent shall complete such Field Examination as promptly as is commercially reasonable following the earlier of (x) the Acquisition of such Subsidiary, or (y) the time Borrowers shall obtain from any Person to be acquired and/or whose assets are being acquired sufficient access for Agent to commence such Field Examination and Inventory Appraisal, and provided further that, notwithstanding anything to the contrary in Sections 3.4(c) and 16.9 hereof, Borrowers shall be liable for the Field Examination Fees and Costs of any such Field Examination conducted under this paragraph, and such Field Examination Fees and Costs shall not be subject to (and shall not be included in) any generally applicable limitations on the number of Field Examinations, or the Borrowers’ liability for Field Examination Fees and Costs, under this Agreement.

Permitted Assignees” shall mean: (a) Agent, any Lender or any of their direct or indirect Affiliates; (b) a federal or state chartered bank, a United States branch of a foreign bank, an insurance company, or any finance company generally engaged in the business of making commercial loans; (c) any Approved Fund; and (d) any Fund to whom Agent or any Lender assigns its rights and obligations under this Agreement as part of an assignment and transfer of such Agent’s or Lender’s rights in and to a material portion of such Agent’s or Lender’s portfolio of commercial credit facilities and shall exclude any Disqualified Person, the Loan Parties and any of their Affiliates (including DNI).

Permitted Discretion” shall mean a determination made in good faith and in the exercise (from the perspective of a secured asset-based lender) of commercially reasonable business judgment.

Permitted Dispositions” shall mean:

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(a)the sale, lease, license, exchange, transfer or other disposition of equipment that is substantially worn, damaged or obsolete or no longer used or useful in the Ordinary Course of Business of the Loan Parties or their Subsidiaries, and leases or subleases of Real Property that is not useful in the conduct of the business of the Loan Parties or their Subsidiaries;

(b)sales of Inventory to Customers in the Ordinary Course of Business;

(c)the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or any of the Other Documents;

(d)(x) the licensing of patents, trademarks, copyrights, and other Intellectual Property rights on a non-exclusive basis in the Ordinary Course of Business, (y) the licensing of patents, trademarks, copyrights, and other Intellectual Property rights on a non-exclusive to Affiliates of a Loan Party or its Subsidiaries and (z) the licensing of patents, trademarks, copyrights, and other Intellectual Property rights on a non-exclusive or exclusive basis by DNS Korea to DZSI;

(e)the granting of Permitted Encumbrances;

(f)any involuntary loss, damage or destruction of property;

(g)any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;

(h)the leasing or subleasing of assets of any Loan Party or its Subsidiaries in the Ordinary Course of Business;

(i)(i) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of DZSI, (ii) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of any wholly-owned Subsidiary of a Loan Party that is itself a Loan Party to such Loan Party, and (iii) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of any Subsidiary that is not a Loan Party to any Loan Party or to any Subsidiary that is not a Loan Party;

(j)(i) the lapse of registered patents, trademarks, copyrights and other Intellectual Property of any Loan Party or its Subsidiaries to the extent not economically desirable in the conduct of its business or (ii) the abandonment of patents, trademarks, copyrights or other Intellectual Property rights so long as (in each case under clauses (i) and (ii)), (A) such patents, trademarks, copyrights or other Intellectual Property rights do not generate material revenue, (B) such lapse or abandonment would not reduce the recurring royalty revenue stream of assets not Disposed of, and (C) such lapse or abandonment is not materially adverse to the interests of Agent and the other Secured Parties;

(k)the making of Restricted Payments that are expressly permitted to be made pursuant to this Agreement;

(l)any other Disposition permitted under Section 7.1 of this Agreement;

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(m)the making of Permitted Investments; and

(n)transfer, assign or pledge to a pension trustee or similar Person any policies of insurance obtained by KeyMile or any other Company organized under the laws of the Germany supporting/safeguarding any pension obligations of KeyMile or such other German Company and/or obligations under any old age part-time working schemes of KeyMile or such other German Company permitted under clause (s) of the definition of Permitted Indebtedness.

Permitted DNI Subordinated Loans” shall mean, collectively, (i) all Indebtedness, obligations, and liabilities owing by DNS Korea to DNI as lender under that certain loan agreement dated as of March 27, 2018, with a maximum principal loan amount outstanding thereunder not to exceed KRW 1,500,000,000 at any time (the “DNI/DNS Korea 2018 Loan”), (ii) all Indebtedness, obligations, and liabilities owing by DZSI to DNI as lender under that certain loan agreement dated as of December 27, 2018, with a maximum principal loan amount outstanding thereunder not to exceed $6,000,000 at any time (the “DNI/DZSI 2018 Loan”), and (iii) all Indebtedness, obligations, and liabilities owing by DNS to DNI as lender under that certain loan agreement dated as of February 15, 2016, with a maximum principal loan amount outstanding thereunder not to exceed $1,800,000 at any time, as amended by a written agreement dated as of February 27, 2017, and as further amended by a written agreement dated as of that certain amendment 2 to the loan agreement dated as of January 31, 2018 (the “DNI/DNS 2016 Loan”), each of the foregoing as further amended on the Closing Date by the DNI Closing Date Loan Amendment and as further amended, modified, or supplemented in accordance with the terms of this Agreement.

Permitted DNI Reimbursement Obligations” shall mean all Indebtedness, obligations, guarantee fees, and liabilities, whether contractual, statutory, or under common law (or the equivalent of “common law” in the Republic of Korea) owing from DNS Korea to DNI, contingent or liquidated, in connection with any guarantee(s) given by DNI with respect to (but only to the extent of) (x) the Permitted Korean Export-Import Bank Indebtedness and/or any payments by DNI under any such guarantee(s), (y) the Permitted Korean Development Bank Indebtedness and/or any payments by DNI under any such guarantee(s), and (z) the Permitted Korean Bank LC Indebtedness and/or any payments by DNI under any such guarantee(s).  

Permitted Encumbrances” shall mean: 

(a)Liens (x) in favor of Agent, for the benefit of Secured Parties, including without limitation, Liens securing Hedge Liabilities and Cash Management Products and Services, (y) in favor of Ex-Im Agent, for the benefit of Ex-Im Secured Parties, and (z) in favor of Ex-Im Bank under the Ex-Im Borrower Agreement;

(b)Liens for taxes, assessments or other governmental charges not delinquent or being Properly Contested;

(c) deposits or pledges of cash to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance;

(d)deposits or pledges of cash, including time deposits, to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and

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appeal bonds, performance bonds and guarantees, and other obligations of like nature arising in the Ordinary Course of Business;

(e)Liens arising by virtue of the rendition, entry or issuance against any Company or any Subsidiary, or any property of any Company or any Subsidiary, of any judgment, writ, order, or decree to the extent the rendition, entry, issuance or continued existence of such judgment, writ, order or decree (or any event or circumstance relating thereto) has not resulted in the occurrence of an Event of Default under Section 10.6 hereof;

(f) carriers’, landlords’, bailees’, repairmens’, mechanics’, workers’, materialmen’s or other like Liens arising by statute and in the Ordinary Course of Business with respect to obligations which are not due or which are being Properly Contested;

(g)purchase money Liens or the interests of lessors under a Capitalized Lease Obligation to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof;

(h)easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other charges or encumbrances with respect to any Company’s Real Property, in each case, which were not incurred in connection with the borrowing of money or the obtaining of advances or credit, which do not in the aggregate materially detract from Agent’s or Lenders’ rights in and to such Real Property or the value of such Real Property which do not materially impair the use thereof in the operation of any Company’s business or otherwise interfere in any material respect with the Ordinary Course of Business of Companies and their Subsidiaries;

(i)the interests of lessors (and interests in the title of such lessors) under operating leases and non-exclusive licensors (and interests in the title of such licensors) under license agreements;

(j)Liens that are replacements of Permitted Encumbrances to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness;

(k)rights of setoff or bankers’ liens upon deposits of funds in favor of banks or other depository institutions and Liens arising under the general terms of business of an account bank, solely to the extent incurred in connection with the maintenance of deposit accounts or giro accounts of the Loan Parties and their Subsidiaries in the Ordinary Course of Business (not incurred in connection with the borrowing of money or the obtaining of advances or credit);

(l)Liens granted in the Ordinary Course of Business on the unearned portion of insurance premiums securing the financing of insurance premiums;

(m)Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

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(n)Liens on certain accounts receivable of DNS Korea as further specified in Section 4 of the DNI Closing Date Loan Amendment securing the DNI/DNS Korea 2018 Loan to the extent subject to the DNI Subordination Agreement;

(o) Liens on the Equity Interests of Dasan Network Solutions Japan, Inc. securing the DNI/DNS 2016 Loan to the extent subject to the DNI Subordination Agreement,

(p) Liens set forth on Schedule 7.2 hereto; provided that such Liens shall secure only the Indebtedness or other obligations which they secure on the Closing Date (and any Refinancing Indebtedness in respect thereof permitted hereunder) and shall not subsequently apply to any other property or assets of any Company other than the property and assets to which they apply as of the Closing Date;

(q)Liens on assets of Foreign Subsidiaries operating in jurisdictions where retention of title by vendors of goods are customary and enforceable arising under retention of title arrangements with suppliers in the Ordinary Course of Business;

(r)to the extent constituting Liens, any policies of insurance, bonds, or bank guarantees or similar third-party guarantees obtained by KeyMile or any other Company organized under the laws of the Germany supporting/safeguarding any pension obligations of KeyMile or such other German Company and/or obligations under any old age part-time working schemes of KeyMile or such other German Company permitted under clause (s) of the definition of Permitted Indebtedness, in each such case (x) to the extent obtained in the Ordinary Course of Business consistent with the past practices of KeyMile, and (y) so long as the obligations and liabilities of KeyMile or such other German Company to the issuers of such policies of insurance, bonds, or guarantees are unsecured;

(q) extensions, renewals and replacements of Liens referred to in clauses (a) through (p) above; provided, however, that any such extension, renewal or replacement Lien shall be limited to the property or assets covered by the Lien extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the obligations secured by the Lien extended, renewed or replaced;

(r)the Permitted Korean Export-Import Bank Indebtedness Liens; and

(s)subject to the time restrictions in Section 8.3(d), the Florida Judgment Lien.

 

Permitted General Investment Bucket” shall mean, for any fiscal year, $3,000,000.

Permitted Indebtedness” shall mean:

(a)the Ex-Im Obligations and all other Obligations;

(b)Indebtedness as of the Closing Date set forth on Schedule 7.8 hereto and any Refinancing Indebtedness in respect of such Indebtedness;

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(c)Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness; provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed $1,000,000 at any time;

(d)endorsement of instruments or other payment items for deposit;

(e)Indebtedness consisting of guarantees permitted under Section 7.3 hereof;

(f)[RESERVED];

(h)Indebtedness (x) constituting deferred purchase price obligations consisting of standard “working capital adjustment” provisions or similar provisions arising in connection with Permitted Acquisitions, and (y) under non-compete payment obligations arising in connection with Permitted Acquisitions, provided that, such Indebtedness shall at all times be unsecured;

 

(i)Indebtedness incurred in the Ordinary Course of Business under performance, surety, bid, statutory, or appeal bonds, performance guarantees, and related reimbursement obligations;

 

(j)Indebtedness owed to any Person providing property, casualty, liability or other insurance to any Company, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year;

(k)Indebtedness consisting of Interest Rate Hedges and Foreign Currency Hedges (including Hedging Liabilities) that is incurred for the bona fide purpose of hedging the interest rate, commodity or foreign currency risks associated with the operations of the Companies and not for speculative purposes;

(l)Cash Management Liabilities;

(m)Indebtedness of any Company or its Subsidiaries in respect of Permitted Intercompany Advances;

(n)any Permitted KeyMile Seller Working Capital Indebtedness;

(o)any Permitted DNI Subordinated Loans, to the extent subject to the DNI Subordination Agreement;

(p)any Permitted Korean Bank LC Indebtedness and any Permitted DNI Reimbursement Obligations related thereto, to the extent subject to the DNI Subordination Agreement;

(q)any Permitted Korean Development Bank Indebtedness, and any Refinancing Indebtedness in respect of such Indebtedness (provided that, notwithstanding clause (a) of the definition of “Refinancing Indebtedness”, the principal amount of such Refinancing Indebtedness may be in a principal amount equal to or less than the outstanding principal amount

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of such Permitted Korean Development Bank Indebtedness as of the Closing Date, plus the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and the amount of unfunded commitments with respect thereto), and any Permitted DNI Reimbursement Obligations related thereto, to the extent such Permitted DNI Reimbursement Obligations are subject to the DNI Subordination Agreement;

(r)any Permitted Korean Export-Import Bank Indebtedness, and any Refinancing Indebtedness in respect of such Indebtedness (provided that, notwithstanding clause (a) of the definition of “Refinancing Indebtedness”, the principal amount of such Refinancing Indebtedness may be in a principal amount equal to or less than the Maximum Permitted Korean Export-Import Bank Indebtedness Amount, plus the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and the amount of unfunded commitments with respect thereto), and any Permitted DNI Reimbursement Obligations related thereto, to the extent such Permitted DNI Reimbursement Obligations are subject to the DNI Subordination Agreement;

(s)Indebtedness of KeyMile and/or any Subsidiary of KeyMile organized under the laws of the Germany (i) arising from pension obligations and obligations under old age part-time working schemes under the pension obligations and old age part-time working schemes of KeyMile or such other German Company in existence on the Closing Date and listed on Schedule 1.2(c) hereof, and (ii) any Indebtedness relating to any policies of insurance, bonds, bank guarantees or similar third-party guarantees obtained by KeyMile or any other Company organized under the laws of the Germany supporting/safeguarding any pension obligations of KeyMile or such other German Company and/or obligations under any old age part-time working schemes of KeyMile or such other German Company, in each such case under this clause (ii): (x) to the extent obtained in the Ordinary Course of Business as required under German Applicable Law, and (y) so long as the obligations and liabilities of KeyMile or such other German Company to the issuers of such policies of insurance, bonds, or guarantees are unsecured;

(t)any Permitted LGU Indebtedness;

(u)Indebtedness secured by Liens of the type permitted under clause (f) of the definition of Permitted Encumbrances; and

(w)Indebtedness in an aggregate principal amount not to exceed $200,000 at any time outstanding.

Permitted Intercompany Advances” shall mean any loans, extensions of credit, and/or advances made:

(a)among any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties;

(b)by any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties to any one or more Non-Core Companies (including Foreign Unsecured Loan Parties) in an amount funded during any fiscal year of DZSI and its Subsidiaries not to exceed, taken together with (x) the total costs and liabilities of all Permitted Acquisitions made during such fiscal year pursuant to the final proviso to clause (b) of the definition of Permitted Acquisitions, (y) all Permitted Intercompany Investments made during such fiscal year under

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clause (b) of the definition of Permitted Intercompany Investments, and (z) all Investments made during such fiscal year under clause (p) of the definition of Permitted Investments, not to exceed the Permitted General Investment Bucket for such fiscal year;

(c)among any one or more Non-Core Companies; and

(d)by any one or more Companies that are neither Domestic Loan Parties nor Foreign Secured Loan Parties to any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties;

provided that, in each such case under this definition, to the extent requested by Agent, (i) the applicable loan or advance is evidenced by a promissory note (including any master intercompany note among DZSI and its Subsidiaries) on terms and conditions (including terms subordinating payment of the Indebtedness evidenced by such note owing by any Loan Party to the prior Payment in Full of all of the Obligations) acceptable to Agent in its Permitted Discretion and (ii) the original of such note has been delivered to Agent either endorsed in blank or together with an undated instrument of transfer executed in blank by the applicable the Loan Parties that are the payees on such note.

Permitted Intercompany Investments” shall mean any Investment (other than a loan or other advance) made:

(a)among any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties;

(b)by any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties to any one or more Non-Core Companies (including Foreign Unsecured Loan Parties) in an amount funded during any fiscal year of DZSI and its Subsidiaries not to exceed, taken together with (x) the total costs and liabilities of all Permitted Acquisitions made during such fiscal year pursuant to the final proviso of clause (b) of the definition of Permitted Acquisitions,  (y) all Permitted Intercompany Advances made during such fiscal year under clause (b) of the definition of Permitted Intercompany Advances, and (z) all Investments made during such fiscal year under clause (p) of the definition of Permitted Investments, not to exceed the Permitted General Investment Bucket for such fiscal year;

(c)among any one or more Companies that are neither Domestic Loan Parties nor Foreign Secured Loan Parties; and

(d)any one or more Companies that are neither Domestic Loan Parties nor Foreign Secured Loan Parties to any one or more Domestic Loan Parties and/or any one or more Foreign Secured Loan Parties;

provided that, for all purposes under this Agreement and the Other Documents, any guaranty given by any Company with respect to any Indebtedness or other obligation or liability of any other Company shall be deemed to be an Investment by the guaranteeing Company in the Company whose Indebtedness, etc. is being guaranteed, and shall only be permitted to the extent that an Investment in the form of a capital contribution in the amount of the Indebtedness, etc. being

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guaranteed would have been permitted by the guaranteeing Company in the Company whose Indebtedness, etc. is being guaranteed at the time such guarantee is given.

Permitted Investments” shall mean:

(a)Investments in cash and Cash Equivalents;

(b)Investments in negotiable instruments deposited or to be deposited for collection in the Ordinary Course of Business;

(c)Permitted Loans;

(d)Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the Ordinary Course of Business or owing to any Loan Party or any of its Subsidiaries in any Insolvency Proceeding involving a Customer or upon the foreclosure or enforcement of any Lien in favor of a Company;

(e)Investments owned by any Company on the Closing Date and set forth on Schedule 7.4 hereto;

(f)guarantees permitted under Section 7.3 hereof;

(g)Permitted Intercompany Advances and Permitted Intercompany Investments;

(h)Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Company (in any Insolvency Proceeding of any Customer or supplier or otherwise outside the Ordinary Course of Business) or as security for any such Indebtedness or claims;

(i)deposits of cash made in the Ordinary Course of Business to secure performance of operating leases;

(j)Permitted Acquisitions;

(k)Investments resulting from entering into (i) Interest Rate Hedges and Foreign Currency Hedges incurred for the bona fide purpose of hedging the interest rate, commodity or foreign currency risks associated with the operations of the Companies and not for speculative purposes or Cash Management Products and Services, or (ii) agreements relative to Indebtedness that is permitted under clause (i) of the definition of “Permitted Indebtedness”;

(l)Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition;

(m)any Investment by way of (i) merger, consolidation, reorganization or recapitalization, (ii) reclassification of Equity Interests; or (iii) transfer of assets, in each case solely to the extent permitted by Section 7.1 hereof;

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(n)to the extent constituting an Investment, any Restricted Payment to the extent permitted by Section 7.7 hereof; and

(o)any other Investments of a type not described in the foregoing clauses of this definition in an aggregate amount not to exceed, taken together with (x) the total costs and liabilities of all Permitted Acquisitions made during such fiscal year pursuant to the final proviso to clause (b) of the definition of Permitted Acquisitions, (y) all Permitted Intercompany Advances made during such fiscal year under clause (b) of the definition of Permitted Intercompany Advances, and (z) all Permitted Intercompany Investments made during such fiscal year under clause (b) of the definition of Permitted Intercompany Investments, not to exceed the Permitted General Investment Bucket for such fiscal year for all such Investments made pursuant to this clause (q) in any fiscal year; provided that on the date any Investment is made and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom.

Permitted Loans” shall mean:

(a)the extension of trade credit by a Company to a Customer in the Ordinary Course of Business in connection with a sale of Inventory or rendition of services, in each case on open account terms;

(b)loans and advances to employees and officers of any Loan Party or any of its Subsidiaries in the Ordinary Course of Business for any other business purpose and in an aggregate amount not to exceed $100,000 at any one time; and

(c)Permitted Intercompany Loans.

Permitted KeyMile Seller Working Capital Indebtedness” shall mean all unsecured Indebtedness, obligations, and liabilities of (x) KeyMile to KeyMile Seller under the KeyMile Seller Working Capital Facility Agreement, and (y) of DZSI and ZTI to KeyMile Seller under the KeyMile Seller Working Capital Facility Guaranty.

Permitted Korean Bank LC Indebtedness” shall mean unsecured Indebtedness of DNS Korea owing to any one or more banks organized under the laws of the Republic of Korea (and/or branches under the laws of the Republic of Korea of banks organized under the laws of other jurisdictions) with respect to letters of credit issued by such banks/bank branches for the account of DNS Korea (“Korean LCs”) with an aggregate maximum undrawn face amount (including all automatic increases provided for in such Korean LCs, whether or not any such automatic increase has become effective) not to exceed the Dollar Equivalent of $13,000,000 outstanding at any one time; provided that, such Indebtedness shall only constitute Permitted Korean Bank LC Indebtedness (and Permitted Indebtedness permitted under the provisions of Section 7.8) to the extent that (i) such Indebtedness with respect to each such Korean LC remains fully guaranteed by unlimited and unconditional guarantee(s) thereof by DNI in favor of the applicable bank/bank branch that has issued such Korean LC, (ii) Agent shall be reasonably satisfied in its Permitted Discretion that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under such guaranty if, when, and as provided for under the terms of such guaranty (and, without limiting the generality of the foregoing, no event of the type described in Section 10.7 shall have occurred with respect to DNI nor shall DNI have become subject to any Insolvency Proceeding), and (iii) no Company other

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than DNS Korea shall have any obligation or liability (whether pursuant to any guaranty or suretyship agreement or otherwise) for such Indebtedness.  For the avoidance of doubt, nothing in this Agreement (including the definition of Refinancing Indebtedness) shall be construed to limit the ability of DNS Korea to obtain/open Korean LCs, replace any Korean LCs outstanding at any time with new Korean LCs (whether or not such new Korean LCs are issued by the same banks/bank branches as the outstanding Korean LCs), or renew or extend any Korean LCs outstanding at any time, so long as the conditions and limitations of the preceding sentence are complied with at all times.  Notwithstanding anything to the contrary in this Agreement, if Agent shall determine that it is not satisfied that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under the aforesaid guaranty by DNI in favor of the applicable bank/bank branch that has issued Korean LCs, Agent shall provide the Borrowing Agent written notice thereof and such Indebtedness shall continue to constitute Permitted Korean Bank LC Indebtedness (and Permitted Indebtedness permitted under the provisions of Section 7.8) for forty-five (45) days after the Borrower Agent’s receipt of such written notice.

Permitted Korean Development Bank Indebtedness” shall mean unsecured Indebtedness of DNS Korea owing to the Korea Development Bank under that certain loan agreement between the Korea Development Bank and DNS Korea (with the first draw-down made thereunder in the amount of KRW Five Billion (₩5,000,000,000) on August 8, 2018) and under any promissory notes or other loan documents relating thereto, with an aggregate maximum principal amount (exclusive of interest, fees, and other non-principal amounts) not to exceed KRW Five Billion (₩5,000,000,000) outstanding at any one time; provided that, such Indebtedness shall only constitute Permitted Korean Development Bank Indebtedness (and Permitted Indebtedness permitted under the provisions of Section 7.8) to the extent that (i) such Indebtedness remains fully guaranteed by an unlimited and unconditional guaranty thereof by DNI in favor of the Korea Development Bank, (ii) Agent shall be reasonably satisfied in its Permitted Discretion that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under such guaranty if, when, and as provided for under the terms of such guaranty (and, without limiting the generality of the foregoing, no event of the type described in Section 10.7 shall have occurred with respect to DNI nor shall DNI have become subject to any Insolvency Proceeding), and (iii) no Company other than DNS Korea shall have any obligation or liability (whether pursuant to any guaranty or suretyship agreement or otherwise) for such Indebtedness, and further provided that, any refinancing, renewal or extension of such unsecured Indebtedness of DNS Korea owing to the Korea Development Bank that constitutes Refinancing Indebtedness under the terms of the clause (q) of the definition of “Permitted Indebtedness” shall constitute Permitted Korean Development Bank Indebtedness (and thereby be permitted under the provisions of Section 7.8) only if and to the extent that any such Refinancing Indebtedness is unsecured and at all times complies with the requirements of clauses (i) through (iii) of the previous proviso.  Loan Parties shall provide at least thirty (30) days prior written notice to Agent and Lenders of any intention to incur any Refinancing Indebtedness to refinance the Permitted Korean Development Bank Indebtedness.  Notwithstanding anything to the contrary in this Agreement, if Agent shall determine that it is not satisfied that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under the aforesaid guaranty by DNI in favor of Korea Development Bank, Agent shall provide the Borrowing Agent written notice thereof and such Indebtedness shall continue to constitute Permitted Korean Development Bank Indebtedness (and

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Permitted Indebtedness permitted under the provisions of Section 7.8) for forty-five (45) days after the Borrower Agent’s receipt of such written notice.

Permitted Korean Export-Import Bank Indebtedness” shall mean Indebtedness of DNS Korea owing to the Export-Import Bank of Korea under that certain agreement for loan (limit) transactions between the Export-Import Bank of Korea and DNS Korea (with the first draw-down made thereunder in the amount of KRW Seven Billion Two Hundred Million (₩7,200,000,000) on December 31, 2018) and under any promissory notes or other loan documents relating thereto, with an aggregate maximum principal amount (exclusive of interest, fees, and other non-principal amounts) not to exceed the Maximum Permitted Korean Export-Import Bank Indebtedness Amount outstanding at any one time; provided that, such Indebtedness shall only constitute Permitted Korean Export-Import Bank Indebtedness (and Permitted Indebtedness permitted under the provisions of Section 7.8) to the extent that (i) such Indebtedness remains fully guaranteed by an unlimited and unconditional guaranty thereof by DNI in favor of the Korea Development Bank, (ii) Agent shall be reasonably satisfied in its Permitted Discretion that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under such guaranty if, when, and as provided for under the terms of such guaranty (and, without limiting the generality of the foregoing, no event of the type described in Section 10.7 shall have occurred with respect to DNI nor shall DNI have become subject to any Insolvency Proceeding), (iii) such Indebtedness shall not be secured by any Liens on any assets of any Company other than Liens on Inventory of DNS Korea (but only to the extent of any such Liens on the Inventory in Korea in favor of the Export-Import Bank of Korea securing such Indebtedness in existence on the date hereof (including, if applicable, Liens on Inventory of DNS Korea acquired after the Closing Date to the extent (but only to the extent) that the existing loan documents, security documents, and pledges between DNS Korea and the Export-Import Bank of Korea with respect to such Indebtedness provide for and would create valid and enforceable Liens on any such Inventory of DNS Korea acquired after the Closing Date) and cash deposit in an amount not to exceed  ₩2,500,000,000 at any time (such liens, the “Permitted Korean Export-Import Bank Indebtedness Liens”), and (iii) no Company other than DNS Korea shall have any obligation or liability (whether pursuant to any guaranty or suretyship agreement or otherwise) for such Indebtedness, and further provided that, any refinancing, renewal or extension of such unsecured Indebtedness of DNS Korea owing to the Korea Export-Import Bank that constitutes Refinancing Indebtedness under the terms of clause (r) of the definition of “Permitted Indebtedness” shall constitute Permitted Korean Export-Import Bank Indebtedness (and thereby be permitted under the provisions of Section 7.8) only if and to the extent that any such Refinancing Indebtedness at all times complies with the requirements of clauses (i) through (iv) of the previous proviso.  Loan Parties shall provide at least thirty (30) days prior written notice to Agent and Lenders of any intention to incur any Refinancing Indebtedness to refinance the Permitted Korean Export-Import Bank Indebtedness.  Notwithstanding anything to the contrary in this Agreement, if Agent shall determine that it is not satisfied that DNI’s financial condition and financial performance are and could reasonably be expected to remain sufficient for DNI to fully perform its obligations under the aforesaid guaranty by DNI in favor of Korea Export-Import Bank, Agent shall provide the Borrowing Agent written notice thereof and such Indebtedness shall continue to constitute Permitted Korean Export-Import Bank Indebtedness (and Permitted Indebtedness permitted under the provisions of Section 7.8) for forty-five (45) days after the Borrower Agent’s receipt of such written notice.

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Permitted LGU Indebtedness” shall mean, prior to and through (but not after) June 18, 2019, shall mean, prior to June 18, 2019, unsecured Indebtedness of DNS Korea owing to LG Uplus Corp. under that certain loan agreement dated as of June 11, 2018 between  LG Uplus Corp. and DASAN Network Solutions, Inc. and under any promissory notes or other loan documents relating thereto, with an aggregate maximum principal amount (exclusive of interest, fees, and other non-principal amounts) not to exceed KRW Two Billion (₩2,000,000,000) outstanding at any one time.

Permitted Purchase Money Indebtedness” shall mean, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred after the Closing Date and at the time of, or within ninety (90) days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.

Permitted Restricted Payments” shall mean:

(a)distributions and dividends payable by any Company to any other Company;

(b)distributions and dividends by any Company to DZSI to allow DZSI to make, and distributions and dividends by DZSI to, former employees, officers or directors of DZSI and its Subsidiaries (or any spouses, ex-spouses or estates of any of the foregoing) on account of redemptions of Equity Interests of DZSI held by such Persons, provided that (i) such Restricted Payments are permitted by Applicable Law; (ii) no Event of Default or Default shall have occurred or would occur after giving pro forma effect to any such Restricted Payment (and to any Revolving Advances to be requested to fund any part thereof); and (iii) the aggregate amount of such Restricted Payments shall not exceed $3,000,000 during the term of this Agreement; and

(c)distributions and dividends by DZSI to the holders of its Equity Interests in an aggregate amount not to exceed $10,000,000 to the extent made solely from (and substantially contemporaneously with receipt by DZSI of) the proceeds of any Contemplated Rights Offering that yields Net Cash Proceeds of at least $50,000,000, so long as both prior to and after giving effect thereto, no Event of Default shall have occurred and remain outstanding.

Person” shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).

Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit Plan and a Multiemployer Plan, as defined herein) maintained by any Company or any member of the Controlled Group or to which any Company or any member of the Controlled Group is required to contribute.

Pledge Agreement” shall mean (i) the Share Pledge Agreement governed by German law dated on or about the Closing Date by ZTI in favor of Agent and Ex-Im Agent with respect to the Equity Interests in KeyMile, (ii) the Share Pledge Agreement governed by German law dated on or about the Closing Date by KeyMile in favor of Agent and Ex-Im Agent with respect to the

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Equity Interests in KeyMile Networks GmbH, (iii) the Share Keun-Pledge Agreement governed by Korean law dated on or about the Closing Date, by and among Agent, the Lenders and DNS, and (ii) any other pledge agreements executed subsequent to the Closing Date by any Loan Party or other Person with respect to any Subsidiary Stock and/or any other Investment Property of any Company to secure the Obligations, including as applicable any such pledge agreement that constitutes a Foreign Law Guaranty/Security Document, in each case as such pledge agreement may be amended, modified, supplemented, renewed, restated or replaced from time to time.

Pledged Equity Interest Collateral” shall have the meaning set forth in Section 4.14(a) hereof.

Pledged Issuer” shall mean any Subsidiary of any Loan Party in its capacity as the “issuer” (as defined in the definition of “Equity Interest”) of any Subsidiary Stock in which any Loan Party has any right, title or interest and which is subject to a Lien in favor of Agent for the benefit of the Secured Parties created under this Agreement or any Other Document.

PNC” shall have the meaning set forth in the preamble to this Agreement and shall include all of its successors and assigns.

Projectionsshall mean, for any fiscal year, the forecasted consolidated and consolidating balance sheets, profit and loss/income statements, and cash flow statements of DSZI and its Subsidiaries for such fiscal year on a quarterly basis and the forecasted Undrawn Availability of Borrowers and Liquidity of Domestic Loan Parties for such fiscal year on a quarterly basis , all prepared on a basis consistent with such Borrower’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

Properly Contested” shall mean, in the case of any Indebtedness, trade payable, Lien or Taxes, as applicable, of any Person that are not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay the same or concerning the amount thereof: (a) such Indebtedness, trade payable, Lien or Taxes, as applicable, are being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted upon the Person’s actual notice thereof; (b) such Person has established appropriate reserves as shall be required in conformity with GAAP; (c) the non-payment of such Indebtedness, trade payable or Taxes will not have a Material Adverse Effect or will not result in the forfeiture of any assets of such Person; (d) no Lien is imposed upon any of such Person’s assets with respect to such Indebtedness, trade payable or taxes unless such Lien (x) does not attach to any Receivables or Inventory, (y) is at all times junior and subordinate in priority to the Liens in favor of Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and, (z) enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; and (e) if such Indebtedness or Lien, as applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review.

Protective Advances” shall have the meaning set forth in Section 16.2(f) hereof.

Published Rate” shall mean the rate of interest published each Business Day in the Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a

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one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the LIBOR Rate for a one month period as published in another publication selected by Agent).

Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.

Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.

Qualified Cash” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Loan Parties held in deposit accounts or securities accounts in the United States which are (i) subject to the perfected first-priority Lien of Agent and (ii) either (x) maintained with Agent or (y) prior to the deadline under clause (y) of Section 8.3(b) for the transfer of the primary cash management accounts and services of Domestic Loan Parties to Agent, subject to a Control Agreement in favor of Agent satisfactory in form and substance to Agent in its Permitted Discretion.

Qualified ECP Loan Party” shall mean each Loan Party or other Guarantor that on the Eligibility Date is (a) a corporation, partnership, proprietorship, organization, trust, or other entity other than a “commodity pool” as defined in Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause another person to qualify as an Eligible Contract Participant on the Eligibility Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise providing a “letter of credit or keepwell, support, or other agreement” for purposes of Section 1a(18)(A)(v)(II) of the CEA.

Quarterly Financials” shall mean, as to any fiscal quarter of Loan Parties, the financial statements, related statements and reports, and related Compliance Certificates required to be delivered by Loan Parties with respect to such fiscal quarter to Agent under Section 9.9 hereof.

RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended, modified or supplemented from time to time.

Real Property” shall mean all real property assets (whether or not owned in fee, leased or otherwise) of any Loan Party, together with all buildings, fixtures, improvements, leases, licenses, permits and approvals of any Loan Party with respect to any real estate asset, including all of the premises owned and leased by the Loan Parties listed on Schedule 4.4 hereto or hereafter owned or leased by any Loan Party.

Receivables” shall mean and include, as to any Person, all of such Person’s accounts (as defined in Article 9 of the Uniform Commercial Code) and all of such Person’s contract rights, instruments (including those evidencing indebtedness owed to such Person by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating to accounts, contract rights, instruments, documents and chattel paper, and drafts and acceptances, credit card receivables and all other forms of obligations owing to such Person arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.

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Refinancing Indebtedness” shall mean any financing, renewal or extension of Indebtedness so long as:

(a)such refinancing, renewal or extension does not result in an increase in the principal amount of the Indebtedness so refinanced, renewed or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto;

(b)such refinancing, renewal or extension does not result in a shortening of the average weighted maturity (measured as of the date of the refinancing, renewal or extension) of the Indebtedness so refinanced, renewed or extended, and such refinancing, renewal or extension is not on terms or conditions that, taken as a whole, are less favorable to the interests of the Secured Parties than the terms and conditions of the Indebtedness being refinanced, renewed or extended;

(c)if the Indebtedness that is refinanced, renewed or extended was unsecured Indebtedness, then the refinancing, renewal, or extension shall remain unsecured,

(d)if the Indebtedness that is refinanced, renewed or extended was secured Indebtedness, the refinancing, renewal or extension may (but need not) remain secured by Liens on assets of the Companies identical in scope and nature to the Liens on assets of the Companies securing the Indebtedness that is refinanced, renewed or extended that were both (x) in existence and (y) constituted Permitted Encumbrances at the time of such refinancing, renewal or extension,

(d)if the Indebtedness that is refinanced, renewed or extended was subordinated Indebtedness, then the terms and conditions of the refinancing, renewal or extension shall include subordination terms and conditions that are at least as favorable to the Secured Parties as those that were applicable to the refinanced, renewed or extended Indebtedness; and

(e)the Indebtedness that is refinanced, renewed or extended is not recourse to any Person that is liable on account of the Obligations, other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed or extended.

Register” shall have the meaning set forth in Section 16.3(e) hereof.

Reimbursement Obligation” shall have the meaning set forth in Section 2.14(b) hereof.

Related Equity Interest Rights” shall have the meaning set forth in the definition of “Equity Interests”.

Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.

Replacement Notice” shall have the meaning set forth in Section 3.11 hereof.

Reportable Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned,

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or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.

Reportable ERISA Event” shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.

Required Lenders” shall mean Lenders (not including Swing Loan Lender (in its capacity as such Swing Loan Lender) or any Defaulting Lender) holding more than sixty-six and 66/00 percent (66.66%) of the aggregate of (x) the Revolving Commitment Amounts of all Lenders (excluding any Defaulting Lender) (or, if the Revolving Commitments hereunder have been terminated, the aggregate amount of the outstanding principal balance of all Revolving Advances (other than Revolving Advances held by any Defaulting Lender), the aggregate amount of the outstanding Participation Commitments of all Revolving Lenders (excluding any Defaulting Lender) with respect to all outstanding Swing Loans, and the aggregate amount of the Participation Commitments of all Revolving Lenders (excluding any Defaulting Lender) with respect to the Maximum Undrawn Amount of all outstanding Letters of Credit), and (y) the outstanding principal amount of the Term Loan; provided, however, if there are fewer than three (3) Lenders (excluding any Defaulting Lender), Required Lenders shall mean all Lenders (excluding any Defaulting Lender) and if there are at least two Lenders (excluding any Defaulting Lender), Required Lenders must include at least two (2) Lenders (provided that, for purposes of this proviso, all Lenders that are Affiliates of each other shall be counted together as one Lender).

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

Reserves” shall mean reserves against the Maximum Revolving Advance Amount or the Formula Amount as Agent may reasonably deem proper and necessary from time to time in its Permitted Discretion.

Restricted Payment” shall mean (a) the declaration or payment of any dividend or the making of any other payment or distribution, directly or indirectly, on account of Equity Interests issued by any Company (including any payment in connection with any merger or consolidation involving any Company) or to the direct or indirect holders of Equity Interests issued by any Company in their capacity as such holders (other than dividends or distributions payable in Qualified Equity Interests issued by Holdings), (b) the purchase, redemption or making of any sinking fund or similar payment, or otherwise acquisition or retirement for value (including in connection with any merger or consolidation involving any Loan Party) of any Equity Interests issued by any Company, or (c) the making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of any Company now or hereafter outstanding.  For the avoidance of doubt, payments and repayments of the Permitted KeyMile Seller Working Capital Indebtedness in accordance with the terms and conditions of the

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KeyMile Seller Working Capital Facility Agreement as provided for in the exhibits to the KeyMile Purchase Agreement shall not constitute Restricted Payments.

Revolving Advances” shall mean all Advances other than Letters of Credit, the Term Loan and the Swing Loans, and shall include all Advances made pursuant to Section 2.1 and 2.2 hereof and all Out-of-Formula Loans and Protective Advances, whether funded by Agent or the Revolving Lenders.

Revolving Commitment” shall mean the obligation of each Revolving Lender to make Revolving Advances and participate in Swing Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the Revolving Commitment Amount of such Revolving Lender.

Revolving Commitment Amount” shall mean, as to any Revolving Lender, the revolving loan commitment amount set forth opposite such Revolving Lender’s name on Schedule 1.1 hereto (or, in the case of (x) any Revolving Lender that became party to this Agreement after the Closing Date as a result of any assignment of any Revolving Commitment to such Revolving Lender pursuant to Section 16.3(c) or (d) hereof, the Revolving Commitment Amount of such Revolving Lender as set forth in the applicable Commitment Transfer Supplement, or (y) in the case of any Revolving Lender that become party to this Agreement after the Closing Date as a New Lender pursuant to Section 2.24 hereof, the Revolving Commitment Amount of such Revolving Lender as set forth on Schedule 1.1 hereto as amended and restated at such time in accordance with Section 2.24] hereof); as such Revolving Commitment Amount may be increased or decreased from time to time upon any assignment of any Revolving Commitment by or to such Revolving Lender pursuant to Section 16.3(c) or (d) hereof or any increase of the Revolving Commitment of such Revolving Lenders as an Increasing Lender under and pursuant to Section 2.24 hereof.

Revolving Commitment Percentage” shall mean, as to any Revolving Lender prior to the termination of the Revolving Commitment of such Revolving Lender and/or the Revolving Commitments of all Revolving Lenders in accordance with the terms hereof, the percentage equal to (a) the Revolving Commitment Amount of such Revolving Lender divided by (b) the Maximum Revolving Advance Amount as in effect at the applicable time of determination.

Revolving Lender” shall mean each Lender that holds any Revolving Commitment and/or any interest in any Revolving Advances; provided that, each Person that is a Revolving Lender under this Agreement must also be an Ex-Im Lender under the Ex-Im Subfacility Credit Agreement holding an Ex-Im Revolving Credit Commitment with an Ex-Im Revolving Credit Percentage corresponding to its Revolving Credit Percentage hereunder.

Revolving Credit Note” shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.

Revolving Interest Rate” shall mean (a) with respect to (x) Revolving Advances that are Domestic Rate Loans and (y) all Swing Loans, an interest rate per annum equal to the sum of the Applicable Margin plus the Alternate Base Rate, and (b) with respect to Revolving Advances that are accruing interest as a LIBOR Rate Loans for any particular Interest Period, an interest rate per annum equal to the sum of the Applicable Margin plus the LIBOR Rate for such LIBOR Rate Loan for such Interest Period.

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Sanctioned Country” shall mean a country subject to a sanctions program maintained under any Anti-Terrorism Law.

Sanctioned Person” shall mean any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law.

SEC” shall mean the Securities and Exchange Commission or any successor thereto.

Secondary Collateral” shall mean all Collateral other than the Export-Related Collateral.

Secured Loan Parties” shall mean, collectively, all Domestic Loan Parties and all Foreign Secured Loan Parties.

Secured Parties” shall mean, collectively, Agent, Issuer, Swing Loan Lender and Lenders, together with any Affiliates of Agent or any Lender to whom any Hedge Liabilities or Cash Management Liabilities are owed and with each other holder of any of the Obligations, and the respective successors and assigns of each of them.

Securities Act” shall mean the Securities Act of 1933, as amended.

Settlement” shall have the meaning set forth in Section 2.6(d) hereof.

“Settlement Date” shall have the meaning set forth in Section 2.6(d) hereof.

Special Projects Costs” means, as to any Person, costs associated with or in anticipation of, or preparation for:  (a) compliance with the requirements of (i) with the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, costs relating to compliance with the provisions of the Securities Act and the Exchange Act, as applicable to companies with equity or debt securities held by the public, and the rules of national securities exchanges, as applicable to companies with listed equity or debt securities, listing fees, independent directors’ compensation, fees and expense reimbursement, costs relating to investor relations (including any such costs in the form of investor relations employee compensation), shareholder meetings and reports to shareholders or debtholders, directors’ and officers’ insurance, legal and other professional fees and/or other costs or expenses, in each case, to the extent arising solely as a result of becoming or being a public company; and (ii) ASC Topic 840 or 842; (b) any costs associated with making the Keymile and its Subsidiaries compliant with GAAP; (c) moving the headquarters of DZSI; (d) relocating any testing laboratories of the Loan Parties; and (d) the costs, fees and expenses for the services of any consultants, advisors and other professionals in connection with the foregoing.

Specified Equity Contribution” shall mean any cash contribution to DZSI in accordance with Section 6.5(d) in exchange for Equity Interests (other than Disqualified Equity Interests).

Specified Event of Default” shall mean (i) any Event of Default under Section 10.1 hereof, (ii) any Event of Default under Section 10.3 hereof, (iii) any Event of Default under Section 10.7 hereof, (iv) any Event of Default under Section 10.5 hereof resulting from any breach or violation

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of or failure to comply with any provision of Sections 6.5, 6.17, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.10 (but, in the case of Sections 7.3, 7.4, 7.5, and 7.8, only to the extent such breach or violation or failure to comply relates to any guaranty of any Indebtedness, obligation or liability of any Company by another Company, Investment in any Company by another Company, or Loan by any Company to any other Company that is not expressly permitted to be made hereunder), 9.2, 9.7, 9.8, 9.9,and (v) any Event of Default under clause (a) of Section 10.11 as a result of any Ex-Im Specified Event of Default.

Subsidiary” shall mean of any Person a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.

Subsidiary Stock” shall mean with respect to the Equity Interests issued to a Loan Party by any Subsidiary, 100% of such issued and outstanding Equity Interests; provided that, if (but only to the extent that) a pledge of all and/or any of the particular Equity Interests of the Foreign Subsidiary of a Loan Party shall be prohibited by Applicable Law (as demonstrated by Loan Parties to the reasonable satisfaction of Agent in its Permitted Discretion), the Equity Interests of such Foreign Subsidiary subject to such prohibition shall not constitute Subsidiary Stock.  Notwithstanding the foregoing, the parties hereto acknowledge that, due to restrictions under German law regarding creating pledges under German law on the Equity Interests of non-German entities, none of the Equity Interests held by any German Loan Party in any of its Subsidiaries not organized under the laws of Germany shall constitute Subsidiary Stock.

Surplus Foreign Cash” shall mean, as of any date of determination, the aggregate amount (as demonstrated by Loan Parties to the reasonable satisfaction of Agent in its Permitted Discretion) of the cash and Cash Equivalents of each of the Foreign Subsidiaries of DZSI at such time in excess of (x) the reasonably foreseeable and anticipated cash operating needs of each such Foreign Subsidiary (taking into account reasonably foreseeable and anticipated future cash receipts and revenues of each such Foreign Subsidiary that would reasonably be expected to be available to satisfy such future cash operating needs) and (y) to the extent in excess of the foregoing clause (y), any cash and Cash Equivalents required to be maintained by each such Foreign Subsidiary under (x) any minimum capitalization requirements or other similar Applicable Laws of the jurisdiction of organization of such Foreign Subsidiary or (y) Applicable Laws of the jurisdiction of organization of such Foreign Subsidiary restricting the repatriation of cash or Cash Equivalents outside of such jurisdiction by such Foreign Subsidiary to any of the holders of its Equity Interests.

Swap” shall mean any “swap” as defined in Section 1a(47) of the CEA and regulations thereunder other than (a) a swap entered into on, or subject to the rules of, a board of trade designated as a contract market under Section 5 of the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).

Swap Obligation” shall mean any obligation to pay or perform under any agreement, contract or transaction that constitutes a Swap which is also a Lender-Provided Interest Rate Hedge, or a Lender-Provided Foreign Currency Hedge.

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

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Swing Loan Note” shall mean the promissory note described in Section 2.4(a) hereof.

Swing Loans” shall mean the Advances made pursuant to Section 2.4 hereof.

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

Term” shall have the meaning set forth in Section 13.1 hereof.

Term Loan” shall have the meaning given thereto in Section 2.3(a) hereof (and, if and to the extent the context may provide, may also mean any portion of such Term Loan and/or of the advance in respect of such Term Loan made by any Term Loan Lender)

Term Loan Commitment” shall mean, as to any applicable Term Loan Lender, the obligation of such Term Loan Lender to fund a portion of the Term Loan in an aggregate principal amount equal to the Term Loan Commitment Amount of such Term Loan Lender.

Term Loan Commitment Amount” shall mean, as to any Term Loan Lender, the Term Loan commitment amount set forth opposite such Term Loan Lender’s name on Schedule 1.1 hereto, and the “Total Term Loan Commitment Amount” shall mean the aggregate of all of the term loan commitment amounts of all Term Loan Lenders reflected on Schedule 1.1 hereto.

Term Loan Commitment Percentage” shall mean, as to any Term Loan Lender, prior to the funding in full of the Term Loan on the Closing Date, the percentage equal to (a) the Term Loan Commitment Amount of such Term Loan Lender set forth on Schedule 1.1 hereto divided by (b) the Total Term Loan Commitment Amount.

Term Loan Interest Rate” shall mean (a) with respect to any portion of the Term Loan that is accruing interest as a Domestic Rate Loans, an interest rate per annum equal to the sum of the Applicable Margin plus the Alternate Base Rate, and (b) with respect to any portion of the Term Loan that are accruing interest as a LIBOR Rate Loans for any particular Interest Period, an interest rate equal to the sum of the Applicable Margin plus the greater of (i) the LIBOR Rate for such LIBOR Rate Loan for such Interest Period, and (ii) one percent (1.00%).

Term Loan Lender” shall mean each Lender that (x) prior to the funding in full of the Term Loan on the Closing Date, each Lender holding a Term Loan Commitment, and (y) at all times thereafter, each Lender holding any interest in any portion of the Term Loan.

Term Loan Note” shall mean, collectively and/or individually (as applicable), the promissory notes and/or any one of them described in Section 2.3(a) hereof.

Termination Event” shall mean: (a) a Reportable ERISA Event with respect to any Plan; (b) the withdrawal of any Company or any member of the Controlled Group from a Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (d) the commencement of proceedings by the PBGC to terminate a

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Plan; (e) any event or condition (i) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (ii) that may result in the termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; (f) the partial or complete withdrawal within the meaning of Section 4203 or 4205 of ERISA of any Company or any member of the Controlled Group from a Multiemployer Plan; (g) notice that a Multiemployer Plan is subject to Section 4245 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent, upon any Company or any member of the Controlled Group.

Tier I Foreign Material Subsidiary” means, at any date of determination, any Foreign Subsidiary of DSZI (other than DNS Korea or KeyMile) that as of the last day of the most-recently completed fiscal quarter for which Quarterly Statements have been delivered to Agent as required under Section 9.8 hereof (each a “Reference Quarter”), either (x) has EBITDA for the four fiscal quarter measurement period ending with such Reference Quarter (when combined with the EBITDA for the four fiscal quarter measurement period ending with such Reference Quarter of such Subsidiary’s Subsidiaries, after eliminating intercompany obligations) of fifteen percent (15.00%) or more of the EBITDA for Loan Parties on a Consolidated Basis for such period, or (y) has Working Capital Assets (when combined with the Working Capital Assets of such Subsidiary’s Subsidiaries, after eliminating intercompany obligations) as of the last day of such Reference Quarter fifteen percent (15.00%) or more of the Working Capital Assets of Loan Parties on a Consolidated Basis.

Tier II Foreign Material Subsidiary” means, at any date of determination, any Foreign Subsidiary of DSZI (other than DNS Korea or KeyMile) that as of the last day of the most-recently completed fiscal quarter for which Quarterly Statements have been delivered to Agent as required under Section 9.8 hereof (each a “Reference Quarter”), either (x) has EBITDA for the four fiscal quarter measurement period ending with such Reference Quarter (when combined with the EBITDA for the four fiscal quarter measurement period ending with such Reference Quarter of such Subsidiary’s Subsidiaries, after eliminating intercompany obligations) of five percent (5.00%) or more of the EBITDA for Loan Parties on a Consolidated Basis for such period, or (y) has Working Capital Assets (when combined with the Working Capital Assets of such Subsidiary’s Subsidiaries, after eliminating intercompany obligations) as of the last day of such Reference Quarter five percent (5.00%) or more of the Working Capital Assets of Loan Parties on a Consolidated Basis.  

Total Borrowing Availability” shall mean, at any time of determination, the lesser of (i) the Maximum Revolving Advance Amount as in effect at such time, less Reserves established hereunder as in effect at such time, less Ex-Im Reserves established under the Ex-In Subfacility Credit Agreement as in effect at such time, or (ii) the sum of (x) the Formula Amount (calculated without giving effect to or making any deduction therefrom with respect to Section 2.1(a)(y)(iii) hereof) as in effect at such time plus (y) the lesser of (I) the Ex-Im Formula Amount (calculated without giving effect to or making any deduction therefrom with respect to Section 2.1(a)(y)(iii) of the Ex-Im Subfacility Credit Agreement) as in effect at such time or (II) the Ex-Im Subfacility Maximum Amount as in effect at such time.

Total Domestic Borrowing Availability” shall mean, at any time of determination, the lesser of (i) the Maximum Revolving Advance Amount as in effect at such time, less Reserves

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established hereunder as in effect at such time, less Ex-Im Reserves established under the Ex-In Subfacility Credit Agreement as in effect at such time, less the Ex-Im Subfacility Outstandings Amount at such time, or (ii) the Formula Amount (calculated without giving effect to or making any deduction therefrom with respect to Sections 2.1(a)(y)(iii) hereof) as in effect at such time.

Toxic Substance” shall mean and include any material present on any Real Property (including the Leasehold Interests) which has been shown to have significant adverse effect on human health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances. “Toxic Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.

Transactions” shall mean the transactions to occur on or about the Closing Date under and/or as contemplated by this Agreement, the Other Document, the Ex-Im Subfacility Credit Agreement and the Ex-Im Subfacility Other Documents, the incurrence of the Term Loan and the other initial Advances hereunder and this initial Ex-Im Revolving Advances under the Ex-Im Subfacility Credit Agreement, and the repayment of the Existing Wells Fargo Debt referenced in Section 8.1(o) and other repayments of Indebtedness contemplated by Section 2.21(a) hereof.

Transferee” shall have the meaning set forth in Section 16.3(d) hereof.

Undrawn Availability” at a particular date shall mean an amount equal to (a) the lesser of (i) the sum of (x) the Formula Amount (calculated without giving effect to or making any deduction therefrom with respect to Sections 2.1(a)(y)(iii) hereof) as of such date plus (y) the lesser of (I) the Ex-Im Subfacility Formula Amount (calculated without giving effect to or making any deduction therefrom with respect to Section 2.1(a)(y)(iii) of the Ex-Im Subfacility Credit Agreement) as of such date or (II) the Ex-Im Subfacility Maximum Amount as in effect on such date or (ii) the amount equal to the Maximum Revolving Advance Amount as in effect on such date less Reserves established hereunder as in effect on such date less Ex-Im Reserves established under the Ex-Im Subfacility Credit Agreement as in effect on such date, minus (b) the sum of (i) the aggregate amount as of such date of the outstanding principal balance of all Revolving Advances (including any Out-of-Formula Loans and Protective Advances, whether funded by Agent or the Revolving Lenders) and all Swing Loans and the Maximum Undrawn Amount of all outstanding Letters of Credit plus (ii) the Ex-Im Subfacility Outstandings Amount as of such date plus (iii) all amounts due and owing to any Company’s trade creditors as of such date which are outstanding beyond normal trade terms and in any event more than seventy-five (75) days past their due date (unless Properly Contested), plus (iv) for any calculation of Undrawn Availability on the Closing Date, and without duplication of clause (b)(i) and (ii) above, fees and expenses in connection with the Transactions (including any such fees and expenses under this Agreement and the Other Documents, and the Ex-Im Subfacility Credit Agreement and the other Ex-Im Agreements and Ex-Im Subfacility Other Documents) for which Loan Parties are liable but which have not been paid or charged to Borrowers’ Account (or, if applicable and permitted under the Ex-Im Subfacility Credit Agreement, to the “Borrowers’ Account” under the Ex-Im Subfacility Credit Agreement).

Unfunded Capital Expenditures” shall mean, as to any Company, without duplication, a Capital Expenditure funded (a) from such Loan Party’s internally generated cash flow or (b) with the proceeds of a Revolving Advance or Swing Loan.

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Uniform Commercial Code” shall have the meaning set forth in Section 1.3 hereof.

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

Usage Amount” shall have the meaning set forth in Section 3.3(b) hereof.

Valuation Date” shall mean, with respect to any Foreign Currency Letter of Credit or any Ex-Im Foreign Currency Letter of Credit, each of the following: (i) each date of issuance of such Foreign Currency Letter of Credit or Ex-Im Foreign Currency Letter of Credit, (ii) each date of an amendment of Foreign Currency Letter of Credit or Ex-Im Foreign Currency Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the applicable Issuer under such Foreign Currency Letter of Credit or Ex-Im Foreign Currency Letter of Credit, (iv) the date any Borrowing Base Certificate is delivered, and (v) such additional dates as the Agent or the Issuer shall determine in its Permitted Discretion or the Required Lenders shall require in their Permitted Discretion.

Wells Fargo Payoff Letter” shall have the meaning set forth in Section 8.1(o)(i).

"Working Capital Assets" shall mean, collectively as to any Person, the Receivables, Inventory, and unrestricted cash and unrestricted Cash Equivalents of such Person; provided that, for any calculation/determination as to whether any Foreign Subsidiary organized under the laws of the Republic of India is a Tier I Foreign Material Subsidiary or a Tier II Foreign Material Subsidiary, when determining the amount of the Working Capital Assets of such Indian Subsidiary (but not the amount of the Working Capital Assets of Loan Parties on a Consolidated Basis ), Working Capital Asset shall consist only of the unrestricted cash and unrestricted Cash Equivalents of such Indian Subsidiary.

Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.3Uniform Commercial Code Terms.  All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “Uniform Commercial Code”) shall have the meaning given therein unless otherwise defined herein.  Without limiting the foregoing, the terms “accounts”, “chattel paper” (and “electronic chattel paper” and “tangible chattel paper”), “commercial tort claims”, “deposit accounts”, “documents”, “equipment”, “financial asset”, “fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit rights”, “payment intangibles”, “proceeds”, “promissory note” “securities”, “software” and “supporting obligations” as and when used in the description of Collateral shall have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code.  To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

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1.4Certain Matters of Construction.  The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision.  All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any pronoun used shall be deemed to cover all genders.  Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.  Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications, supplements or amendments thereto, any and all restatements or replacements thereof and any and all extensions or renewals thereof.  Except as otherwise expressly provided for herein, all references herein to the time of day shall mean the time in New York, New York.  Unless otherwise provided, all financial calculations shall be performed with Inventory valued on a first-in, first-out basis.  Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”.  A Default or an Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Required Lenders.  Any Lien referred to in this Agreement or any of the Other Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders.  Wherever the phrase “to the best of Loan Parties’ knowledge” or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or Other Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained if he/she had engaged in a good faith and diligent performance of his/her duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Loan Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists.  In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.

ARTICLE IIADVANCES, PAYMENTS.

2.1Revolving Advances.

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(a)Amount of Revolving Advances.  Subject to the terms and conditions set forth in this Agreement including Sections 2.1(b), each Revolving Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Revolving Lender’s Revolving Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount as in effect at such time, less the outstanding amount of Swing Loans at such time, less the aggregate Maximum Undrawn Amount of all Letters of Credit outstanding at such time, less Reserves established hereunder as in effect at such time, less Ex-Im Reserves established under the Ex-Im Subfacility Credit Agreement as in effect at such  time less the outstanding Ex-Im Subfacility Outstandings Amount at such time, or (y) an amount equal to the Dollar Equivalent of sum of:

(i)up to 85% of Eligible Receivables (including Eligible Foreign Receivables), plus

(ii)[RESERVED], minus

(iii)the Dollar Equivalent of the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus

(iv)Reserves established hereunder, specifically including but not limited to any reserves to reflect the risks, as determined by Agent in its Permitted Discretion, of currency exchange rate fluctuations with respect to any of the Approved Foreign Currencies in which the Eligible Receivables are denominated and/or any of the Approved LC Foreign Currencies in which any Foreign Currency Letters of Credit are denominated (provided that, no Reserve for currency exchange rate Reserves shall be established with respect to Eligible Receivables denominated in any Approved Foreign Currencies and/or Foreign Currency Letters of Credit to the extent that Borrowers have entered into appropriate Foreign Currency Hedges to protect against such risks).

The amount derived from the sum of (x) Sections 2.1(a)(y)(i) and (ii) above minus (y) Sections 2.1(a)(y)(iii) and (iv) above at any time and from time to time shall be referred to as the “Formula Amount”.  The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the “Revolving Credit Note”) substantially in the form attached hereto as Exhibit 2.1.  Notwithstanding the foregoing or otherwise in this Agreement, (A) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time shall not exceed the Total Domestic Borrowing Availability at such time, and (B) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time, plus the Ex-Im Subfacility Outstandings Amount at such time shall not the Total Borrowing Availability at such time.  

For purposes of calculating the Dollar Equivalent of the aggregate Maximum Undrawn Amount of all outstanding Foreign Currency Letters of Credit, the Formula Amount, the Total Domestic Borrowing Availability, the Total Borrowing Availability, or Ex-Im Subfacility Outstandings Amount at any time/as of any date for any purpose under this Agreement (including, without limitation, Sections 2.4, 2.7, 2.9, or 2.11(a) hereof) or the Ex-Im Subfacility Credit Agreement, the Dollar Equivalent of each Foreign Currency Letter of Credit and each Ex-Im Foreign Currency

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Letter of Credit at such time/as of such date shall be the Dollar Equivalent of each such Foreign Currency Letter of Credit and each such Ex-Im Foreign Currency Letter of Credit as of the most recent Valuation Date.

(b)Discretionary Rights.  The Advance Rates may be increased or decreased by Agent at any time and from time to time in the exercise of its Permitted Discretion.  Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing or imposing Reserves may limit or restrict Advances requested by Borrowing Agent.  The rights of Agent under this subsection are subject to the provisions of Section 16.2(b) hereof.

2.2Procedures for Requesting Revolving Advances; Procedures for Selection of Applicable Interest Rates for All Advances.

(a)Borrowing Agent on behalf of Borrowers may notify Agent prior to 2:00 p.m. on a Business Day of Borrowers’ request to incur, on that day, a Revolving Advance hereunder.  Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation under this Agreement, become due, the same shall be deemed a request for a Revolving Advance maintained as a Domestic Rate Loan as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation, and such request shall be irrevocable.

(b)Notwithstanding the provisions of subsection (a) above, in the event Borrowers desires to obtain a LIBOR Rate Loan for any Advance (other than a Swing Loan), Borrowing Agent shall give Agent written notice by no later than 2:00 p.m. on the day which is three (3) Business Days prior to the date such LIBOR Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and the amount of such Advance to be borrowed, which amount shall be in a minimum amount of $500,000 and in integral multiples of $100,000 thereafter, and (iii) the duration of the first Interest Period therefor.  Interest Periods for LIBOR Rate Loans shall be for one, two or three months; provided that, if an Interest Period would end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding calendar month in which case the Interest Period shall end on the next preceding Business Day.  Any Interest Period that begins on the last Business Day of a calendar month (or a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent or at the direction of the Required Lenders, no LIBOR Rate Loan shall be made available to any Borrower, and at Agent’s election, or the direction of the Required Lenders, and upon notice to Borrowing Agent, all LIBOR Rate Loans in effect during an Event of Default shall be converted to Domestic Rate Loans.  After giving effect to each requested LIBOR Rate Loan, including those which are converted from a Domestic Rate Loan under Section 2.2(e), there shall not be outstanding more than three (3) Eurodollar Rate Loans, in the aggregate, under this Agreement or more than two (2) Eurodollar Rate Loans, in the aggregate, under the Ex-Im Subfacility Credit Agreement.

(c)Each Interest Period of a LIBOR Rate Loan shall commence on the date such LIBOR Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in subsection (b)(iii) above, provided that the exact length of each Interest Period shall be

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determined in accordance with the practice of the interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term.

(d)Borrowing Agent shall elect the initial Interest Period applicable to a LIBOR Rate Loan by its notice of borrowing given to Agent pursuant to Section 2.2(b) hereof or by its notice of conversion given to Agent pursuant to Section 2.2(e) hereof, as the case may be.  Borrowing Agent shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not later than 2:00 p.m. on the day which is three (3) Business Days prior to the last day of the then current Interest Period applicable to such LIBOR Rate Loan.  If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent, Borrowing Agent shall be deemed to have elected to convert such LIBOR Rate Loan to a Domestic Rate Loan as of the last day of the Interest Period applicable to such LIBOR Rate Loan subject to Section 2.2(e) below.

(e)Provided that no Default or Event of Default shall have occurred and be continuing, Borrowing Agent may, on the last Business Day of the then current Interest Period applicable to any outstanding LIBOR Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such loan into a loan of another type in the same aggregate principal amount provided that any conversion of a LIBOR Rate Loan shall be made only on the last Business Day of the then current Interest Period applicable to such LIBOR Rate Loan.  If Borrowing Agent desires to convert a loan, Borrowing Agent shall give Agent written notice by no later than 2:00 p.m. (i) on the day which is three (3) Business Days prior to the date on which such conversion is to occur with respect to a conversion from a Domestic Rate Loan to a LIBOR Rate Loan, or (ii) on the day which is one (1) Business Day prior to the date on which such conversion is to occur (which date shall be the last Business Day of the Interest Period for the applicable LIBOR Rate Loan) with respect to a conversion from a LIBOR Rate Loan to a Domestic Rate Loan, specifying, in each case, the date of such conversion, the loans to be converted and if the conversion is to a LIBOR Rate Loan, the duration of the first Interest Period therefor.

(f)At its option and upon written notice given prior to 2:00 p.m. at least three (3) Business Days prior to the date of such prepayment, Borrowers may, subject to Section 2.2(g) and Section 2.20 hereof, prepay the LIBOR Rate Loans in whole at any time or in part from time to time with accrued interest on the principal being prepaid to the date of such repayment.  Borrowers shall specify the date of prepayment of Advances which are LIBOR Rate Loans and the amount of such prepayment.  In the event that any prepayment of a LIBOR Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, Borrowers shall indemnify Agent and Lenders therefor in accordance with Section 2.2(g) hereof.

(g)Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses or expenses that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the principal of or interest on any LIBOR Rate Loan or failure by Borrowers to complete a borrowing of, a prepayment of or conversion of or to a LIBOR Rate Loan after notice thereof has been given, including, but not limited to, any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.  A

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certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive absent manifest error.

(h)Notwithstanding any other provision hereof, if any Applicable Law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, including without limitation any Change in Law, shall make it unlawful for Lenders or any Lender (for purposes of this subsection (h), the term “Lender” shall include any Lender and the office or branch where any Lender or any Person controlling such Lender makes or maintains any LIBOR Rate Loans) to make or maintain its LIBOR Rate Loans, the obligation of Lenders (or such affected Lender) to make LIBOR Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any affected LIBOR Rate Loans are then outstanding, promptly upon request from Agent, either pay all such affected LIBOR Rate Loans or convert such affected LIBOR Rate Loans into loans of another type.  If any such payment or conversion of any LIBOR Rate Loan is made on a day that is not the last day of the Interest Period applicable to such LIBOR Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts set forth in clause (g) above.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive absent manifest error.

(i)Anything to the contrary contained herein notwithstanding, neither any Agent nor any Lender, nor any of their participants, is required actually to acquire LIBOR deposits to fund or otherwise match fund any Obligation as to which interest accrues based on the LIBOR Rate.  The provisions set forth herein shall apply as if each Lender or its participants had match funded any Obligation as to which interest is accruing based on the LIBOR Rate by acquiring LIBOR deposits for each Interest Period in the amount of the LIBOR Rate Loans.

2.3Term Loan.  Subject to the terms and conditions of this Agreement, each Term Loan Lender, severally and not jointly, will make a term loan advance to Borrowers in the amount equal to such Lender’s Term Loan Commitment Percentage of the Total Term Loan Commitment Amount (all such advances, collectively, the “Term Loan”).  The Term Loan shall be advanced on the Closing Date and shall be, with respect to principal, payable as follows, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination of this Agreement:

Installment Due Date

Installment Amount

June 30, 2019

$625,000

September 30, 2019

$625,000

December 31, 2019

$625,000

March 31, 2020

$625,000

June 30, 2020

$625,000

September 30, 2020

$625,000

December 31, 2020

$625,000

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Installment Due Date

Installment Amount

March 31, 2021

$625,000

June 30, 2021 and the last day of each calendar quarter ending thereafter

$937,500

The last day of the Term

All remaining unpaid principal and accrued interest thereon

 

The Term Loan shall be evidenced by one or more secured promissory notes (collectively, the “Term Loan Note”) in substantially the form attached hereto as Exhibit 2.3(a) to the extent requested by the applicable Lender. The Term Loan and any portion(s) thereof may consist of Domestic Rate Loans or LIBOR Rate Loans, or a combination thereof, as Borrowing Agent may request; and in the event that Borrowers desire to obtain or extend any portion of the Term Loan as a LIBOR Rate Loan or to convert any portion of the Term Loan from a Domestic Rate Loan to a LIBOR Rate Loan, Borrowing Agent shall comply with the notification requirements set forth in Sections 2.2(b) and/or (e) hereof and the provisions of Sections 2.2(b) through (i) hereof shall apply.

2.4Swing Loans.

(a)Subject to the terms and conditions set forth in this Agreement, and in order to minimize the transfer of funds between Revolving Lenders and Agent for administrative convenience, Agent, Revolving Lenders and Swing Loan Lender agree that in order to facilitate the administration of this Agreement, Swing Loan Lender may, at its election and option made in its sole discretion cancelable at any time for any reason whatsoever, make swing loan advances (“Swing Loans”) available to Borrowers as provided for in this Section 2.4 at any time or from time to time after the Closing Date to, but not including, the last day of the Term, in an aggregate principal amount up to but not in excess of the Maximum Swing Loan Advance Amount, provided that the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding shall not exceed an amount equal to the lesser of (i) the Maximum Revolving Advance Amount less the Maximum Undrawn Amount of all outstanding Letters of Credit less Reserves established hereunder as in effect at such time less Ex-Im Reserves established under the Ex-Im Credit Agreement as in effect at such time less the Ex-Im Subfacility Outstandings Amount at such time, or (ii) the Formula Amount as in effect at such time.  All Swing Loans shall be Domestic Rate Loans only.  Borrowers may borrow (at the option and election of Swing Loan Lender), repay and reborrow (at the option and election of Swing Loan Lender) Swing Loans and Swing Loan Lender may make Swing Loans as provided in this Section 2.4 during the period between Settlement Dates.  All Swing Loans shall be evidenced by a secured promissory note (the “Swing Loan Note”) substantially in the form attached hereto as Exhibit 2.4.  Swing Loan Lender’s agreement to make Swing Loans under this Agreement is cancelable at any time for any reason whatsoever and the making of Swing Loans by Swing Loan Lender from time to time shall not

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create any duty or obligation, or establish any course of conduct, pursuant to which Swing Loan Lender shall thereafter be obligated to make Swing Loans in the future.

(b)Upon either (x) any request by Borrowing Agent for a Revolving Advance made pursuant to Section 2.2(a) hereof or (y) the occurrence of any deemed request by Borrowers for a Revolving Advance pursuant to the provisions of Section 2.2(a) hereof, Swing Loan Lender may elect, in its sole discretion, to have such request or deemed request treated as a request for a Swing Loan, and may advance same day funds to Borrowers as a Swing Loan; provided that notwithstanding anything to the contrary provided for herein, Swing Loan Lender may not make Swing Loan Advances if Swing Loan Lender has been notified by Agent or by Required Lenders that one or more of the applicable conditions set forth in Section 8.2 hereof have not been satisfied or the Revolving Commitments have been terminated for any reason.

(c)Upon the making of a Swing Loan (whether before or after the occurrence of a Default or an Event of Default and regardless of whether a Settlement has been requested with respect to such Swing Loan), each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from Swing Loan Lender, without recourse or warranty, an undivided interest and participation in such Swing Loan in proportion to its Revolving Commitment Percentage.  Swing Loan Lender or Agent may, at any time, require the Revolving Lenders to fund such participations by means of a Settlement as provided for in Section 2.6(d) hereof.  From and after the date, if any, on which any Revolving Lender is required to fund, and funds, its participation in any Swing Loans purchased hereunder, Agent shall promptly distribute to such Revolving Lender its Revolving Commitment Percentage of all payments of principal and interest and all proceeds of Collateral received by Agent in respect of such Swing Loan; provided that no Revolving Lender shall be obligated in any event to make Revolving Advances in an amount outstanding at any time in excess of its Revolving Commitment Amount as in effect at such time minus its Participation Commitment (taking into account any reallocations under Section 2.22 hereof) of the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time minus its Ex-Im Revolving Commitment Percentage of the Ex-Im Subfacility Outstandings Amount at such time.

2.5Disbursement of Advance Proceeds.  All Advances shall be disbursed from whichever office or other place Agent may designate from time to time and, together with any and all other Obligations of Loan Parties to Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s books.  The proceeds of each Revolving Advance or Swing Loan requested by Borrowing Agent on behalf of Borrowers or deemed to have been requested by Borrowers under Sections 2.2(a), 2.14, or 2.22 hereof shall, (i) with respect to requested Revolving Advances, to the extent Revolving Lenders make such Revolving Advances in accordance with Sections 2.2(a), 2.14, or 2.22 hereof, and with respect to Swing Loans made upon any request or deemed request by Borrowing Agent for a Revolving Advance to the extent Swing Loan Lender makes such Swing Loan in accordance with Section 2.4(b) hereof, be made available to the Borrowers on the day so requested by way of credit to Borrowers’ operating account at Agent, or such other bank as Borrowing Agent may designate following notification to Agent, in immediately available federal funds or other immediately available funds, or (ii) with respect to Revolving Advances deemed to have been requested by Borrowers or Swing Loans made upon any deemed request for a Revolving Advance by Borrowers, be disbursed to Agent to be applied to the outstanding Obligations giving rise to such deemed request.  During the Term, Borrowers may use the Revolving Advances and

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Swing Loans by borrowing, prepaying and reborrowing, all in accordance with the terms and conditions hereof.

2.6Making and Settlement of Advances.

(a)Each borrowing of Revolving Advances shall be advanced according to the applicable Revolving Commitment Percentages of the respective Revolving Lenders (subject to any contrary terms of Section 2.22 hereof).  The Term Loan shall be advanced on the Closing Date according to the applicable Term Loan Commitment Percentages of the respective Term Loan Lenders.  Each borrowing of Swing Loans shall be advanced by the Swing Loan Lender alone.

(b)Promptly after receipt by Agent of a request or a deemed request for a Revolving Advance pursuant to Section 2.2(a) hereof and, with respect to Revolving Advances, to the extent Agent elects not to provide a Swing Loan or the making of a Swing Loan would result in the aggregate amount of all outstanding Swing Loans exceeding the maximum amount permitted in Section 2.4(a) hereof, Agent shall notify the Revolving Lenders of its receipt of such request specifying the information provided by Borrowing Agent and the apportionment among Revolving Lenders of the requested Revolving Advance as determined by Agent in accordance with the terms hereof.  Each Revolving Lender shall remit the principal amount of each Revolving Advance to Agent such that Agent is able to, and Agent shall, to the extent the applicable Revolving Lenders have made funds available to it for such purpose and subject to Section 8.2 hereof, fund such Revolving Advance to Borrowers in U.S. Dollars and immediately available funds at the Payment Office prior to the close of business, on the applicable borrowing date; provided that if any applicable Revolving Lender fails to remit such funds to Agent in a timely manner, Agent may elect in its sole discretion to fund with its own funds the Revolving Advance of such Revolving Lender on such borrowing date, and such Revolving Lender shall be subject to the repayment obligation in Section 2.6(c) hereof.

(c)Unless Agent shall have been notified by telephone, confirmed in writing, by any Revolving Lender that such Revolving Lender will not make the amount which would constitute its applicable Revolving Commitment Percentage of the requested Revolving Advance available to Agent, Agent may (but shall not be obligated to) assume that such Revolving Lender has made such amount available to Agent on such date in accordance with Section 2.6(b) hereof and may, in reliance upon such assumption, make available to Borrowers a corresponding amount. In such event, if a Revolving Lender has not in fact made its applicable Revolving Commitment Percentage of the requested Revolving Advance available to Agent, then the applicable Revolving Lender and Borrowers severally agree to pay to Agent on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrowers through but excluding the date of payment to Agent, at (i) in the case of a payment to be made by such Revolving Lender, the greater of (A) (x) the daily average Federal Funds Effective Rate (computed on the basis of a year of 360 days) during such period as quoted by Agent, times (y) such amount or (B) a rate determined by Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by Borrowers, the Revolving Interest Rate for Revolving Advances that are Domestic Rate Loans or the Term Loan Interest Rate for the portion of the Term Loan consisting of Domestic Rate Loans, as applicable.  If such Revolving Lender pays its share of the applicable Revolving Advance to Agent, then the amount so paid shall constitute such Revolving Lender’s Revolving Advance.  Any

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payment by Borrowers shall be without prejudice to any claim Borrowers may have against a Revolving Lender that shall have failed to make such payment to Agent.  A certificate of Agent submitted to any Revolving Lender or Borrowers with respect to any amounts owing under this paragraph (c) shall be conclusive, in the absence of manifest error.

(d)Agent, on behalf of Swing Loan Lender, shall demand settlement (a “Settlement”) of all or any Swing Loans with Revolving Lenders on at least a weekly basis, or on any more frequent date that Agent elects or that Swing Loan Lender at its option exercisable for any reason whatsoever may request, by notifying Revolving Lenders of such requested Settlement by facsimile, telephonic or electronic transmission no later than 2:00 p.m. on the date of such requested Settlement (the “Settlement Date”).  Subject to any contrary provisions of Section 2.22 hereof, each Revolving Lender shall transfer the amount of such Revolving Lender’s Revolving Commitment Percentage of the outstanding principal amount (plus interest accrued thereon to the extent requested by Agent) of the applicable Swing Loan with respect to which Settlement is requested by Agent, to such account of Agent as Agent may designate not later than 5:00 p.m. on such Settlement Date if requested by Agent by 2:00 p.m., otherwise not later than 5:00 p.m. on the next Business Day.  Settlements may occur at any time notwithstanding that the conditions precedent to making Revolving Advances set forth in Section 8.2 hereof have not been satisfied or the Revolving Commitments shall have otherwise been terminated at such time.  All amounts so transferred to Agent shall be applied against the amount of outstanding Swing Loans and, when so applied shall constitute Revolving Advances of such Revolving Lenders accruing interest as Domestic Rate Loans.  If any such amount is not transferred to Agent by any Revolving Lender on such Settlement Date, Agent shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon as specified in Section 2.6(c) hereof.

(e)If any Lender or Participant (a “Benefited Lender”) shall at any time receive any payment of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances, or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly permitted hereunder, such Benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender’s Advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.  Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that each Lender so purchasing a portion of another Lender’s Advances may exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion, and the obligations owing to each such purchasing Lender in respect of such participation and such purchased portion of any other Lender’s Advances shall be part of the Obligations secured by the Collateral, and the obligations owing to each such purchasing Lender in respect of such participation and such purchased portion of any other Lender’s Advances shall be part of the Obligations secured by the Collateral.

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2.7Maximum Advances.  Notwithstanding anything to the contrary set forth in Section 2.1(a) hereof or otherwise in this Agreement, (A) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time shall not exceed the Total Domestic Borrowing Availability at such time, and (B) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of Maximum Undrawn Amount of all Letters of Credit outstanding at such time, plus the Ex-Im Subfacility Outstandings Amount at such time shall not exceed the Total Borrowing Availability at such time.  Notwithstanding anything to the contrary in any of the foregoing or otherwise herein or in the Ex-Im Subfacility Credit Agreement, at no time may (I) the Dollar Equivalent of the sum of (x) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time, plus (y) the Ex-Im Subfacility Outstandings Amount at such time exceed (II) the Maximum Revolving Advance Amount as in effect at such time, less Reserves established hereunder as in effect at such time, less Ex-Im Reserves established under the Ex-In Subfacility Credit Agreement as in effect at such time, and no Advance shall be made hereunder (including the issuance of any Letter of Credit) at any time if, after giving effect to the making (or issuance) thereof, the foregoing provisions of this sentence would be violated.

2.8Manner and Repayment of Advances.

(a)The Revolving Advances and Swing Loans shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided.  The Term Loan shall be due and payable as provided in Section 2.3(a) hereof and shall be due and payable in full on the last day of the Term, subject to mandatory prepayments as herein provided.  Notwithstanding the foregoing, all Advances shall be subject to earlier repayment upon (x) acceleration upon the occurrence of an Event of Default under this Agreement or (y) termination of this Agreement.  Subject to the provisions of Sections 4.8(h) and 11.5 hereof, each payment (including each prepayment) by on behalf of any Loan Party on account of the principal of and/or interest on the Advances (other than the Term Loan and the Letters of Credit) shall be applied, first to the outstanding Swing Loans, and next, to the Revolving Advances pro rata according to the applicable Revolving Commitment Percentages of the Revolving Lenders (subject to any contrary provisions of Section 2.22 hereof).  Subject to the provisions of Sections 2.20 and 11.5 hereof, each payment (including each prepayment) by or on behalf of any Loan Party on account of the principal of and/or interest on the Term Loan shall be applied to the Term Loan pro rata according to the ratable interests of the Lenders therein, and, with respect to any such prepayment of principal, in the inverse order of maturities of the scheduled principal amortization with respect to the Term Loan.  

(b)Each Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the date received by Agent.  Agent shall conditionally credit Borrowers’ Account for each item of payment on the next Business Day after the Business Day on which such item of payment is received by Agent (and the Business Day on which each such item of payment is so credited shall be referred to, with respect to such item, as the “Application Date”).  Agent is not, however, required to credit Borrowers’ Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge Borrowers’ Account for the amount of any item of payment which is returned, for any reason whatsoever, to Agent unpaid.  Subject to the foregoing,

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Borrowers agree that for purposes of computing the interest charges under this Agreement, each item of payment received by Agent shall be deemed applied by Agent on account of the Obligations on its respective Application Date.  Borrowers further agree that there is a monthly float charge payable to Agent for Agent’s sole benefit, in an amount equal to (y) the face amount of all items of payment received during the prior month (including items of payment received by Agent as a wire transfer or electronic depository check) multiplied by (z) the Revolving Interest Rate with respect to Domestic Rate Loans for one (1) Business Day.  All proceeds received by Agent shall be applied to the Obligations in accordance with Section 4.8(h) hereof.

(c)All payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to Agent at the Payment Office not later than 2:00 p.m. on the due date therefor in Dollars in federal funds or other funds immediately available to Agent.  Agent shall have the right to effectuate payment of any and all Obligations due and owing hereunder by charging Borrowers’ Account or by making Advances as provided in Section 2.2 hereof.

(d)Except as expressly provided herein, all payments (including prepayments) to be made by Borrowers on account of principal, interest, fees and other amounts payable hereunder shall be made without deduction, setoff or counterclaim and shall be made to Agent on behalf of Lenders to the Payment Office, in each case on or prior to 2:00 p.m., in Dollars and in immediately available funds.

2.9Repayment of Excess Advances.  If at any time the aggregate balance of outstanding Revolving Advances, Swing Loans, Term Loan, and/or Advances taken as a whole exceeds the maximum amount of such type of Advances and/or Advances taken as a whole (as applicable) permitted hereunder (specifically including without limitation, if at any time (A) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time exceeds the Total Domestic Borrowing Availability at such time, or (B) the aggregate principal amount of Swing Loans and the Revolving Advances at any one time outstanding plus the Dollar Equivalent of the Maximum Undrawn Amount of all Letters of Credit outstanding at such time, plus the Ex-Im Subfacility Outstandings Amount at such time exceeds the Total Borrowing Availability at such time), such excess Advances shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or an Event of Default has occurred.

2.10Statement of Account.  Agent shall maintain, in accordance with its customary procedures, a loan account (“Borrowers’ Account”) in the name of Borrowers in which shall be recorded the date and amount of each Advance made by Agent or Lenders and the date and amount of each payment in respect thereof; provided, however, the failure by Agent to record the date and amount of any Advance shall not adversely affect Agent or any Lender.  Each month, Agent shall send to Borrowing Agent a statement showing the accounting for the Advances made, payments made or credited in respect thereof, and other transactions between Agent, Lenders and Borrowers and the other Loan Parties during such month.  The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is received by Borrowing Agent.  

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The records of Agent with respect to Borrowers’ Account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and of payments applicable thereto.

2.11Letters of Credit.

(a)Subject to the terms and conditions hereof, Issuer shall issue or cause the issuance of standby and/or trade letters of credit denominated in Dollars or an Approved LC Currency (“Letters of Credit”, and any Letter of Credit denominated in any currency other than Dollars is a “Foreign Currency Letter of Credit”) for the account of any Borrower except to the extent that the issuance thereof would then cause any of (A) the sum of (i) the outstanding Revolving Advances plus (ii) the outstanding Swing Loans, plus (iii) the Dollar Equivalent of the Maximum Undrawn Amount of all outstanding Letters of Credit, plus (iv) the Dollar Equivalent of the Maximum Undrawn Amount of the Letter of Credit to be issued to exceed Total Domestic Borrowing Availability, or (B) the sum of (i) the outstanding Revolving Advances plus (ii) the outstanding Swing Loans, plus (iii) the Dollar Equivalent of the Maximum Undrawn Amount of all outstanding Letters of Credit, plus (iv) the Ex-Im Subfacility Outstandings Amount plus (v) the Dollar Equivalent of the Maximum Undrawn Amount of the Letter of Credit to be issued to exceed Total Borrowing Availability.  The Dollar Equivalent of the Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit.  All disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for Domestic Rate Loans.  Letters of Credit that have not been drawn upon shall not bear interest (but fees shall accrue in respect of outstanding Letters of Credit as provided in Section 3.2 hereof).

(b)Notwithstanding any provision of this Agreement, Issuer shall not be under any obligation to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Body or arbitrator shall by its terms purport to enjoin or restrain Issuer from issuing any Letter of Credit, or any Law applicable to Issuer or any request or directive (whether or not having the force of law) from any Governmental Body with jurisdiction over Issuer shall prohibit, or request that Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date, and which Issuer in good faith deems material to it, or (ii) the issuance of the Letter of Credit would violate one or more policies of Issuer applicable to letters of credit generally.

2.12Issuance of Letters of Credit.

(a)Borrowing Agent, on behalf of any Borrower, may request any Issuer to issue or cause the issuance of a Letter of Credit by delivering to Issuer, with a copy to Agent at the Payment Office, prior to 2:00 p.m., at least five (5) Business Days prior to the proposed date of issuance, such Issuer’s form of Letter of Credit Application (the “Letter of Credit Application”) completed to the satisfaction of Agent and Issuer; and, such other certificates, documents and other papers and information as Agent or Issuer may reasonably request.  Issuer shall not issue any requested

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Letter of Credit if such Issuer has received notice from Agent or any Lender that one or more of the applicable conditions set forth in Section 8.2 hereof have not been satisfied or the Revolving Commitments have been terminated for any reason.

(b)Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of usance drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein, and (ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance and in no event later than the last day of the Term (provided that, any Issuer may, in its sole discretion, agree from time to time to issue any one and/or more Letters of Credit with a term longer than  twelve (12) months but not extending beyond the last day of the Term, and further provided that, any Issuer may, in its sole discretion, agree from time to time to issue any one and/or more Letters of Credit with customary “evergreen” provisions providing that the applicable Letter of Credit will automatically renew at the end of the initial term thereof (and at the end of any subsequent renewal term) for a stated renewal term unless such Issuer shall deliver a notice of non-renewal to the beneficiary thereof by a stated deadline prior to the expiration of any such initial and/or renewal term (but in any such case, no Issuer shall allow any such Letter of Credit to be extended for a renewal term that would expire after the last day of the Term as in effect at the time of any applicable deadline under any such “evergreen” Letter of Credit for such Issue to give such a notice of non-renewal).  Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce at the time a Letter of Credit is issued (the “UCP”) or the International Standby Practices (International Chamber of Commerce Publication Number 590), or any subsequent revision thereof at the time a standby Letter of Credit is issued, as determined by Issuer, and each trade Letter of Credit shall be subject to the UCP.  In addition, no trade Letter of Credit may permit the presentation of an ocean bill of lading that includes a condition that the original bill of lading is not required to claim the goods shipped thereunder.

(c)Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent for a Letter of Credit hereunder.

2.13Requirements For Issuance of Letters of Credit.

(a)Borrowing Agent shall authorize and direct any Issuer to name the applicable Borrower as the “Applicant” or “Account Party” of each Letter of Credit.  If Agent is not Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct Issuer to deliver to Agent all agreements, documents, instruments and property received by Issuer pursuant to such Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with such Letter of Credit, and the application therefor.

(b)In connection with all trade Letters of Credit issued or caused to be issued by Issuer under this Agreement, each Loan Party hereby appoints Issuer, or its designee, as its attorney, with full power and authority if an Event of Default shall have occurred: (i) to sign and/or endorse such Loan Party’s name upon any warehouse or other receipts, and acceptances; (ii) to sign such Loan Party’s name on bills of lading; (iii) to clear Inventory through the United States of America Customs Department (“Customs”) in the name of such Loan Party or Issuer or Issuer’s designee, and to sign and deliver to Customs officials powers of attorney in the name of such Loan Party for

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such purpose; and (iv) to complete in such Loan Party’s name or Issuer’s, or in the name of Issuer’s designee, any order, sale or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof.  Neither Agent, Issuer nor their attorneys will be liable for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent’s, Issuer’s or their respective attorney’s willful misconduct.  This power, being coupled with an interest, is irrevocable as long as any Letters of Credit remain outstanding.

2.14Disbursements, Reimbursement.

(a)Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Issuer a participation in each Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Revolving Commitment Percentage of the Dollar Equivalent of the Maximum Undrawn Amount of such Letter of Credit (as in effect from time to time) and the amount of such drawing, respectively.

(b)In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Issuer will promptly notify Agent and Borrowing Agent.  Regardless of whether Borrowing Agent shall have received such notice, Borrowers shall reimburse (such obligation to reimburse Issuer shall sometimes be referred to as a “Reimbursement Obligation”) Issuer prior to 2:00 p.m. on each date that an amount is paid by Issuer under any Letter of Credit (each such date, a “Drawing Date”) in an amount in Dollars equal to the Dollar Equivalent of the amount so paid by Issuer (the “Dollar Equivalent Drawing Amount”).  In the event Borrowers fail to reimburse Issuer for the full Dollar Equivalent Drawing Amount of any drawing under any Letter of Credit by 2:00 p.m. on the Drawing Date, Issuer will promptly notify Agent and each Revolving Lender thereof, and Borrowers shall be automatically deemed to have requested that a Revolving Advance in Dollars in the amount of the applicable Dollar Equivalent Drawing Amount maintained as a Domestic Rate Loan be made by Lenders to be disbursed on the Drawing Date under such Letter of Credit, and Revolving Lenders shall be unconditionally obligated to fund such Revolving Advance (all whether or not the conditions specified in Section 8.2 hereof are then satisfied or the Revolving Commitments have been terminated for any reason) as provided for in Section 2.14(c) hereof.  Any notice given by Issuer pursuant to this Section 2.14(b) may be oral if promptly confirmed in writing; provided that the lack of such a confirmation shall not affect the conclusiveness or binding effect of such notice.

(c)Each Revolving Lender shall upon any notice pursuant to Section 2.14(b) hereof make available to Issuer through Agent at the Payment Office an amount in immediately available funds equal to its Revolving Commitment Percentage (subject to any contrary provisions of Section 2.22 hereof) of the Dollar Equivalent Drawing Amount, whereupon the participating Lenders shall (subject to Section 2.14(d) hereof) each be deemed to have made a Revolving Advance in Dollars maintained as a Domestic Rate Loan to Borrowers in that amount.  If any Revolving Lender so notified fails to make available to Agent, for the benefit of Issuer, the amount of such Lender’s Revolving Commitment Percentage of such Dollar Equivalent Drawing Amount by 5:00 p.m. on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three (3) days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving

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Advances maintained as a Domestic Rate Loan on and after the fourth day following the Drawing Date.  Agent and Issuer will promptly give notice of the occurrence of the Drawing Date, but failure of Agent or Issuer to give any such notice on the Drawing Date or in sufficient time to enable any Revolving Lender to effect such payment on such date shall not relieve such Lender from its obligations under this Section 2.14(c), provided that such Lender shall not be obligated to pay interest as provided in this Section 2.14(c) until and commencing from the date of receipt of notice from Agent or Issuer of a drawing.

(d)With respect to any unreimbursed drawing that is not converted into a Revolving Advance in Dollars in the amount of the applicable Dollar Equivalent Drawing Amount maintained as a Domestic Rate Loan to Borrowers in whole or in part as contemplated by Section 2.14(b) hereof, because of Borrowers’ failure to satisfy the conditions set forth in Section 8.2 hereof (other than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in Dollars in the amount of the applicable Dollar Equivalent Drawing Amount.  Such Letter of Credit Borrowing shall be due and payable in Dollars on demand (together with interest) and shall bear interest at the rate per annum applicable to a Revolving Advance in Dollars in the amount of the applicable Dollar Equivalent Drawing Amount maintained as a Domestic Rate Loan and, until paid shall be part of the Obligations secured by the Collateral.  Each applicable Lender’s payment to Agent pursuant to Section 2.14(c) hereof shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a “Participation Advance” from such Lender in satisfaction of its Participation Commitment in respect of the applicable Letter of Credit under this Section 2.14.

(e)Each applicable Lender’s Participation Commitment in respect of the Letters of Credit shall continue until the last to occur of any of the following events: (x) Issuer ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and uncancelled; and (z) all Persons (other than Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.

2.15Repayment of Participation Advances.

(a)Upon (and only upon) receipt by Agent for the account of Issuer of immediately available funds in Dollars from Borrowers (i) in reimbursement of any payment made by Issuer or Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of interest on such a payment made by Issuer or Agent under such a Letter of Credit, Agent will pay to each Revolving Lender, in the same funds as those received by Agent, the amount of such Lender’s Revolving Commitment Percentage of such funds, except Agent shall retain the amount of the Revolving Commitment Percentage of such funds of any Revolving Lender that did not make a Participation Advance in respect of such payment by Agent (and, to the extent that any of the other Revolving Lenders have funded any portion such Defaulting Lender’s Participation Advance in accordance with the provisions of Section 2.22 hereof, Agent will pay over to such Non-Defaulting Lenders a pro rata portion of the funds so withheld from such Defaulting Lender).

(b)If Issuer or Agent is required at any time to return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any portion of the

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payments made by Borrowers or any other Loan Party to Issuer or Agent pursuant to Section 2.15(a) hereof in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each applicable Lender shall, on demand of Agent, forthwith return to Issuer or Agent the amount of its Revolving Commitment Percentage of any amounts so returned by Issuer or Agent plus interest at the Federal Funds Effective Rate.

2.16Documentation.  Each Loan Party agrees to be bound by the terms of the Letter of Credit Application and by Issuer’s interpretations of any Letter of Credit issued on behalf of any Borrower and by Issuer’s written regulations and customary practices relating to letters of credit, though Issuer’s interpretations may be different from such Loan Parties’ own.  In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), Issuer shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following Borrowing Agent’s or any Loan Party’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

2.17Determination to Honor Drawing Request.  In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, Issuer shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.

2.18Nature of Participation and Reimbursement Obligations.  The obligation of each Revolving Lender in accordance with this Agreement to make the Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Issuer upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.18 under all circumstances, including the following circumstances:

(i)any set-off, counterclaim, recoupment, defense or other right which such Lender or any Loan Party, as the case may be, may have against Issuer, Agent, any Loan Party or Lender, as the case may be, or any other Person for any reason whatsoever;

(ii)the failure of any Borrower or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of Lenders to make Participation Advances under Section 2.14 hereof;

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

(iv)any claim of breach of warranty that might be made by any Loan Party, Agent, Issuer or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, cross-claim, defense or other right which any Loan Party, Agent, Issuer or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or assignee

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of the proceeds thereof (or any Persons for whom any such transferee or assignee may be acting), Issuer, Agent or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Loan Party or any Subsidiaries of such Loan Party and the beneficiary for which any Letter of Credit was procured);

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

(vi)payment by Issuer under any Letter of Credit against presentation of a demand, draft or certificate or other document which is forged or does not fully comply with the terms of such Letter of Credit (provided that the foregoing shall not excuse Issuer from any obligation under the terms of any applicable Letter of Credit to require the presentation of documents that on their face appear to satisfy any applicable requirements for drawing under such Letter of Credit prior to honoring or paying any such draw);

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

(viii)any failure by Issuer or any of Issuer’s Affiliates to issue any Letter of Credit in the form requested by Borrowing Agent, unless Agent and Issuer have each received written notice from Borrowing Agent of such failure within three (3) Business Days after Issuer shall have provided Agent and Borrowing Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(ix)the occurrence of any Material Adverse Effect;

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

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

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

(xiii)the fact that the Term shall have expired or this Agreement or the Commitments have been terminated;

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(xiv)with respect to any Foreign Currency Letter of Credit, any fluctuation in the Exchange Rates between Dollars and the Approved LC Foreign Currency in which such Foreign Currency Letter of Credit over time and from time to time is denominated; and

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

2.19Liability for Acts and Omissions.

(a)As between Loan Parties and Issuer, Swing Loan Lender, Agent and Lenders, each Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, Issuer shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Issuer or any of its Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, facsimile, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Issuer, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of Issuer’s rights or powers hereunder.  Nothing in the preceding sentence shall relieve Issuer from liability for Issuer’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment) in connection with actions or omissions described in such clauses (i) through (viii) of such sentence.  In no event shall Issuer or Issuer’s Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

(b)Without limiting the generality of the foregoing, Issuer and each of its Affiliates: (i) may rely on any oral or other communication believed in good faith by Issuer or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court

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order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by Issuer or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on Issuer or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a steamship agent or carrier or any document or instrument of like import (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

(c)In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Issuer under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall not put Issuer under any resulting liability to any Loan Party, Agent or any Lender.

2.20Prepayments

(a)Voluntary Prepayments.

(i)Voluntary Prepayments of the Revolving Advances.  Borrowers may voluntarily prepay the Swing Loans and Revolving Advances outstanding hereunder at any time in whole or in part, without any penalty or premium.  Any and all voluntary prepayments of the Swing Loans and Revolving Advances under this Section 2.20(a)(i) shall be applied: first, to the repayment in full of the outstanding principal amount of any Out-of-Formula Loans and any Protective Advances made by Agent, second, to the repayment in full of the outstanding amount of any Swing Loans, third, ratably, to the repayment in full of the outstanding principal amount of all other Revolving Advances (shared among the Revolving Lenders on a pro rata basis in accordance with their respective Revolving Commitment Percentages), and fourth, if any Event of Default shall have occurred and be continuing, the cash collateralization in full of all outstanding Letters of Credit in accordance with the requirement of Section 3.2(b) hereof, all subject to Borrowers’ ability to reborrow Revolving Advances and request Letters of Credit in accordance with the terms hereof.

(ii)Voluntary Prepayments of the Term Loan. At its option and upon written notice given to Agent prior to 2:00 p.m. at least three (3) Business Days’ prior to the date of such prepayment, the Borrowers may voluntarily prepay the Term Loan in whole at any time or in part; provided that any such prepayment of Term Loan shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding).  Each such notice shall specify the date and amount of such prepayment.  Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s

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applicable pro rata share of such prepayment.  Notwithstanding the foregoing or anything else in this Agreement, the Borrowers may revoke, rescind or extend a notice relative to proposed prepayment in full of the Obligations with the proceeds of third party Indebtedness or other transactions if the closing for such issuance or incurrence of Indebtedness or other transactions does not happen on the date of the proposed prepayment.  Subject to the foregoing, if such notice is given by the Borrowers, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein together with all accrued and unpaid interest thereon, and any voluntary prepayment of the Term Loan shall be accompanied by all accrued interest on the amount prepaid, together with any applicable fee(s) or other amounts payable under the Fee Letter in connection with or with respect to such voluntary prepayment.  In the event that any prepayment of a LIBOR Rate Loan shall occur in connection with any such voluntary prepayment of the Term Loan on a date other than the last Business Day of the then current Interest Period, the Borrowers shall indemnify Agent and the Lenders therefor in accordance with Section 2.2(g) hereof.  Each voluntary prepayment of the Term Loan shall be applied to the remaining scheduled payments in respect of the Term Loan as provided for under Section 2.3 hereof (including the final scheduled payment due and payable on the last day of the Term) in the inverse order of the maturity thereof, and shall be shared among the Term Loan Lenders on a pro rata basis in accordance with their respective Term Loan Commitment Percentages.

(b)Mandatory Prepayments.

(i)When any Domestic Loan Party or Foreign Secured Loan Party makes any Disposition of any Collateral (other than (A) Export-Related Collateral or (B) any Disposition permitted by Sections 7.1, excluding Dispositions of other than Export-Related Collateral permitted by clause (a) of the definition of Permitted Dispositions, which shall be subject to the provisions of this Section 2.20(b)(i)) or any Casualty Proceeds Event occurs with respect to the Collateral (other than Export-Related Collateral) of any Domestic Loan Party or Foreign Secured Loan Party, Borrowers shall repay the Advances in an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Disposition or Casualty Proceeds Event, such repayments to be made promptly but in no event more than five (5) Business Days following receipt of such Net Cash Proceeds, and until the date of payment, such proceeds shall be held in trust for Agent; provided however that, no such mandatory prepayment shall be required under this Section 2.20(b)(i) with respect to (x) any such Disposition or Casualty Proceeds Event with respect to the Collateral (other than Export-Related Collateral) of any Domestic Loan Party to the extent that the aggregate amount of all Net Cash Proceeds of all Dispositions and Casualty Proceeds Events with respect to all Collateral (other than Export-Related Collateral) of Domestic Loan Parties in any fiscal year shall not exceed $250,000, and (y) any such Disposition or Casualty Proceeds Event with respect to the Collateral of any Foreign Secured Loan Party to the extent that the aggregate amount of all Net Cash Proceeds of all Dispositions and Casualty Proceeds Events with respect to all Collateral of Foreign Secured Loan Parties in any fiscal year shall not exceed $1,000,000, and further provided, however, with respect to Net Disposition Proceeds which would otherwise give rise to a prepayment under this Section 2.20(b)(i) (taking into account the preceding proviso), so long as no Event of Default shall have occurred and be continuing and the Borrowing Agent shall have notified Agent within five (5) Business Days following receipt of such Net Cash Proceeds of the applicable Domestic Loan Party’s or Foreign Secured Loan Party’s election to reinvest all or any portion of such Net Cash Proceeds (the “Reinvestment Proceeds”) in fixed or capital assets or

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other assets useful to the business of such Loan Party that will be Collateral for the Obligations, the Borrowers shall not be required to make such prepayment out of the Reinvestment Proceeds so long as within one hundred eighty (180) days after the initial receipt of such Reinvestment Proceeds, such reinvestment shall have been consummated (and, for the avoidance of doubt, to the extent such reinvestment is not so consummated, Borrowers shall make a mandatory prepayment of the Obligations under this Section 2.20(b)(i) in the amount of such Reinvestment Proceeds that is not so reinvested on the one hundred eighty-first (181st) day after the initial receipt of such Reinvestment Proceeds).  The foregoing shall not be deemed to be implied consent to any Disposition or other transaction prohibited by the terms and conditions of this Agreement or any Other Document.

(ii)Commencing with the year ending December 31, 2019 and for each fiscal year ending thereafter, Borrowers shall prepay the outstanding amount of the Advances in an amount equal to the Excess Cash Flow Percentage of Excess Cash Flow for such fiscal year, payable within fifteen (15) days after delivery to Agent of the Annual Audited Financials for such fiscal year, but in any event not later than fifteen (15) days after the date such Annual Audited Financials are required to be delivered under Section 9.7 hereof.  In the event that the Annual Audited Financials for any fiscal year are not so delivered by the date required to be delivered under Section 9.7 hereof, then a calculation based upon estimated amounts and the Quarterly Financials delivered for such year (to the extent delivered) shall be made by Agent upon which calculation and notice thereto Borrowers shall make the prepayment required by this Section 2.20(b)(ii), subject to adjustment when such required to be delivered under Section 9.7 hereof are delivered to Agent as required hereby.  The calculation made by Agent shall not be deemed a waiver of any rights Agent or any Lender may have as a result of the failure by Borrowers to deliver such financial statements.

(iii)In the event of any issuance or other incurrence of Indebtedness (other than Permitted Indebtedness) by any Company, Borrowers shall, no later than three (3) Business Days after the receipt by the applicable Company of the Net Cash Proceeds thereof, repay the Advances in an amount equal to one hundred percent (100%) of such Net Cash Proceeds; provided that, notwithstanding anything to the contrary provided for in the foregoing or otherwise in this Agreement, with respect to any Contemplated Rights Offering, none of the Net Cash Proceeds of such Contemplated Rights Offering shall be subject to this Section 2.20(b)(iii).

(iv)In the event of any receipt by ZTI of either (x) any proceeds under the policy of Warranty and Indemnity Liability Insurance issued to ZTI by Pembroke Syndicate in connection with the KeyMile Acquisition as contemplated by Exhibit 9.1.3 of the KeyMile Purchase Agreement, (y) any payment under or in connection with the KeyMile Purchase Agreement and/or the KeyMile Acquisition in respect of a purchase price adjustment, working capital adjustment, release from escrow, or similar payment, or (z) any indemnification payment under or in connection with the KeyMile Purchase Agreement and/or the KeyMile Acquisition (excluding any indemnification payment that is paid (either directly by the indemnifying party for the benefit of any Company or within three (3) Business Days after receipt by ZTI for the benefit of any Company to any third-party claimant in respect of which such indemnification payment is being made), Borrowers shall, no later than five (5) Business Days after the receipt by ZTI thereof, repay the Advances in an amount equal to one hundred percent (100%) of such proceeds/payment.

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(v)In the event of any issuance or other sale of Equity Interests of, or receipt of cash proceeds of an equity contribution to, any Company (other than (1) issuances to and cash contributions from (x) another Company in accordance with the provisions of this Agreement and (y) employees, officers or directors of any Loan Party or Subsidiary thereof pursuant to an equity incentive plan approved by the board of directors of such Loan Party or Subsidiary thereof and (2) issuance or other sale of Equity Interests by DZSI the Net Cash Proceeds of which are to be used for a Permitted Acquisition or Permitted Investment), Borrowers shall, no later than three (3) Business Days after the receipt by the applicable Loan Party or Subsidiary thereof of such Net Issuance Proceeds, repay the Advances in an amount equal to fifty percent (50%) of such Net Issuance Proceeds; provided that, in connection with any Net Cash Proceeds received pursuant to a Change of Control and any Net Cash Proceeds of any Specified Equity Contribution, the Advances shall immediately be repaid in an amount equal to one hundred percent (100%) of such Net Issuance; and provided further that, notwithstanding anything to the contrary provided for in the foregoing or otherwise in this Agreement, with respect to any Contemplated Rights Offering, none of the Net Cash Proceeds of such Contemplated Rights Offering shall be subject to this Section 2.20(b)(v):

(vi)Subject to the provisions of Section 11.5 hereof, each mandatory prepayment under this Section 2.20 shall be applied to the Obligations as follows : first, ratably, to the remaining scheduled payments in respect of the Term Loan as provided for under Section 2.3 hereof (including the final scheduled payment due and payable on the last day of the Term) in the inverse order of the maturity thereof until repaid in full, second, to the repayment in full of the outstanding principal amount of any Out-of-Formula Loans and any Protective Advances made by Agent, third, to the repayment in full of the outstanding amount of any Swing Loans, fourth, ratably, to the repayment in full of the outstanding principal amount of all other Revolving Advances (shared among the Revolving Lenders on a pro rata basis in accordance with their respective Revolving Commitment Percentages), and fifth, if any Event of Default shall have occurred and be continuing, the cash collateralization in full of all outstanding Letters of Credit in accordance with the requirement of Section 3.2(b) hereof, all subject to Borrowers’ ability to reborrow Revolving Advances and request Letters of Credit in accordance with the terms hereof.  However, notwithstanding anything to the contrary provided for in any of the foregoing or in any other provision of this Agreement

(A) with respect to any mandatory prepayment under Section 2.20(b)(ii) hereof or under Section 2.20(b)(v) hereof with respect to the Net Cash Proceeds of any Specified Equity Contribution, to the extent that, as of the close of business on the Business Day immediately preceding the date such mandatory prepayment is paid in accordance herewith, Borrowers shall have Undrawn Availability of less than the minimum amount of Undrawn Availability required under Section 6.5(c) hereof, the funds representing such mandatory prepayment shall first be applied, to the extent of the positive difference of (x) the minimum amount of Undrawn Availability required under Section 6.5(c) hereof minus (y) the actual Undrawn Availability (prior to giving effect to such prepayment) as of the close of business on the Business Day immediately preceding the date such mandatory prepayment is paid (such amount, the “Availability Shortfall”), to the repayment of the Revolving Advances and Swing Loans outstanding under this Agreement (in accordance with clauses second through fourth of the first sentence of this Section 2.20(b)(vi)) (and, to the extent that the aggregate amount of the Revolving Advances and Swing Loans

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outstanding under this Agreement at the time of any such prepayment under this sentence is less than the Availability Shortfall, then after prepayment in full of the Revolving Advances and Swing Loans outstanding under this Agreement, the funds of any such prepayment under this sentence shall be applied next to the repayment of the Ex-Im Revolving Advances and Ex-Im Swing Loans (in accordance with the provisions of Section 2.20(a)(i) of the Ex-Im Subfacility Agreement) to the extent of the excess of the Availability Shortfall over such aggregate amount of the Revolving Advances and Swing Loans outstanding under this Agreement ), and thereafter to the extent of any remaining funds representing such mandatory prepayment as follows : first, ratably, to the remaining scheduled payments in respect of the Term Loan as provided for under Section 2.3 hereof (including the final scheduled payment due and payable on the last day of the Term) in the inverse order of the maturity thereof until repaid in full, second, to the repayment in full of the outstanding principal amount of any Out-of-Formula Loans and any Protective Advances made by Agent, third, to the repayment in full of the outstanding amount of any Swing Loans, fourth, ratably, to the repayment in full of the outstanding principal amount of all other Revolving Advances (shared among the Revolving Lenders on a pro rata basis in accordance with their respective Revolving Commitment Percentages), and fifth, if any Event of Default shall have occurred and be continuing, the cash collateralization in full of all outstanding Letters of Credit in accordance with the requirement of Section 3.2(b) hereof, all subject to Borrowers’ ability to reborrow Revolving Advances and request Letters of Credit in accordance with the terms hereof; and

(B)with respect to any mandatory prepayment under Section 2.20(b)(iv) hereof, the funds representing such mandatory prepayment shall first be applied to the repayment of the Revolving Advances and Swing Loans outstanding under this Agreement (in accordance with clauses second through fourth of the first sentence of this Section 2.20(b)(vi)) (and, to the extent that the aggregate amount of the Revolving Advances and Swing Loans outstanding under this Agreement at the time of any such prepayment under this sentence is greater than the total amount of the Revolving Advances and Swing Loans outstanding under this Agreement, then after prepayment in full of the Revolving Advances and Swing Loans outstanding under this Agreement, the funds of any such prepayment under this sentence shall be applied next to the repayment of the Ex-Im Revolving Advances and Ex-Im Swing Loans (in accordance with the provisions of Section 2.20(a)(i) of the Ex-Im Subfacility Agreement)), and thereafter to the extent of any remaining funds representing such mandatory prepayment, such remaining funds shall be remitted to ZTI.

2.21Use of Proceeds.

(a)Borrowers shall use the proceeds of the Advances hereunder (i) on the Closing Date, to repay the Existing Wells Fargo Debt referenced in Section 8.1(o), (ii) repay the Indebtedness outstanding under those certain bank loan facilities of DNS Korea and DNS Japan listed on Schedule 2.21(a) attached hereto, (iii) repay a portion of the outstanding principal under the Permitted Korean Export-Import Bank Indebtedness in an amount equal to the outstanding principal amount of the Permitted LGU Indebtedness as of the Closing Date, together with the interest thereon, (iv) repay all Indebtedness, obligations, and liabilities owing by DZSI to DNI as lender under that certain loan agreement dated as of September 9, 2015 (with an original maximum principal loan amount thereunder of $5,000,000), and (v) pay fees and expenses relating to the

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Transactions, and (v) provide for working capital needs of the Borrowers and reimburse drawings under Letters of Credit. Borrowers shall not use the proceeds of any Revolving Advance to voluntarily prepay the Term Loan.

(b)Without limiting the generality of Section 2.21(a) above, neither the Loan Parties nor any other Person which may in the future become party to this Agreement or the Other Documents as a Borrower or Guarantor, intends to use nor shall they use any portion of the proceeds of the Advances, directly or indirectly, for any purpose in violation of Applicable Law.

2.22Defaulting Lenders.

(a)Notwithstanding anything to the contrary set forth herein, in the event any Lender is a Defaulting Lender, all rights and obligations hereunder of such Defaulting Lender and of the other parties hereto shall be modified to the extent of the express provisions of this Section 2.22 so long as such Lender is a Defaulting Lender.

(b)(i)except as otherwise expressly provided for in this Section 2.22, Revolving Advances shall be made pro rata from Revolving Lenders which are not Defaulting Lenders based on their respective Revolving Commitment Percentages, and no Revolving Commitment Percentage of any Lender or any pro rata share of any Revolving Advances required to be advanced by any Lender shall be increased as a result of any Lender being a Defaulting Lender.  Amounts received in respect of principal of any type of Revolving Advances shall be applied to reduce such type of Revolving Advances of each Revolving Lender (other than any Defaulting Lender) in accordance with their Revolving Commitment Percentages; provided, that, Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder (including any principal, interest or fees).  Amounts payable to a Defaulting Lender that is a Revolving Lender (a “Defaulting Revolving Lender”) shall instead be paid to or retained by Agent.  Agent may hold and, in its discretion, re-lend to a Borrower the amount of such payments received or retained by it for the account of such Defaulting Revolving Lender.)

(ii)fees pursuant to Section 3.3(b) hereof shall cease to accrue in favor of such Defaulting Lender.

(iii)if any Swing Loans are outstanding or any Letter of Credit Obligations (or drawings under any Letter of Credit for which Issuer has not been reimbursed) are outstanding or exist at the time any Revolving Lender becomes a Defaulting Lender, then:

(A)such Defaulting Lender’s Participation Commitment in the outstanding Swing Loans and of the Maximum Undrawn Amount of all outstanding Letters of Credit shall be reallocated among Non-Defaulting Lenders in proportion to the respective Revolving Commitment Percentages of such Non-Defaulting Lenders to the extent (but only to the extent) that (x) such reallocation does not cause the aggregate sum of outstanding Revolving Advances made by any such Non-Defaulting Lender plus such Lender’s reallocated Participation Commitment in the outstanding Swing Loans plus such Lender’s reallocated Participation Commitment in the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit plus such Lender’s Ex-Im Revolving Commitment Percentage of the Ex-Im Subfacility Outstandings Amount (after giving effect to any reallocation under Section 2.22 of the Ex-Im

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Subfacility Credit Agreement of such Lender’s Participation Commitment (as defined in the Ex-Im Subfacility Credit Agreement) of any Ex-Im Swing Loans or Ex-Im Letters of Credit) to exceed the Revolving Commitment Amount of any such Non-Defaulting Lender, and (y) no Default or Event of Default has occurred and is continuing at such time;

(B)if the reallocation described in clause (A) above cannot, or can only partially, be effected, Borrowers shall within one Business Day following notice by Agent (x) first, prepay any outstanding Swing Loans that cannot be reallocated, and (y) second, cash collateralize, for the benefit of Issuer, Borrowers’ obligations corresponding to such Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit (after giving effect to any partial reallocation pursuant to clause (A) above) in accordance with Section 3.2(b) hereof for so long as such Obligations are outstanding;

(C)if Borrowers cash collateralize any portion of such Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit pursuant to clause (B) above, Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 3.2(a) hereof with respect to such Defaulting Lender’s Revolving Commitment Percentage of Maximum Undrawn Amount of all Letters of Credit during the period such Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit are cash collateralized;

(D)if such Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit is reallocated pursuant to clause (A) above, then the Letter of Credit Lender Fees payable to Revolving Lenders pursuant to Section 3.2(a) hereof shall be adjusted and reallocated to Non-Defaulting Lenders in accordance with such reallocation; and

(E)if all or any portion of such Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit is neither reallocated nor cash collateralized pursuant to clause (A) or (B) above, then, without prejudice to any rights or remedies of Issuer or any other Lender hereunder, all Letter of Credit Lender Fees payable under Section 3.2(a) hereof with respect to such Defaulting Lender’s Revolving Commitment Percentage of the Maximum Undrawn Amount of all Letters of Credit shall be payable to Issuer (and not to such Defaulting Lender) until (and then only to the extent that) such Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit is reallocated and/or cash collateralized; and

(F)so long as any Revolving Lender is a Defaulting Lender, Swing Loan Lender shall not be required to fund any Swing Loans and Issuer shall not be required to issue, amend or increase any Letter of Credit, unless such Issuer is satisfied that the related exposure and Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit and all Swing Loans (after giving effect to any such issuance, amendment, increase or funding) will be fully allocated to Non-Defaulting Lenders and/or cash collateral for such Letters of Credit will be provided by Borrowers in accordance with clause (A) and (B) above, and participating interests in any newly made Swing Loan or any newly issued or increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a manner consistent with Section 2.22(b)(ii)(A) above (and such Defaulting Lender shall not participate therein).

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(c)A Defaulting Lender shall not be entitled to give instructions to Agent or to approve, disapprove, consent to or vote on any matters relating to this Agreement and the Other Documents, and all amendments, waivers and other modifications of this Agreement and the Other Documents may be made without regard to a Defaulting Lender and, for purposes of the definition of “Required Lenders”, a Defaulting Lender shall not be deemed to be a Lender, to have any outstanding Advances or a Revolving Commitment or any Term Loan Commitment, provided, that this clause (c) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification described in clauses (i) or (ii) of Section 16.2(b) hereof.

(d)Other than as expressly set forth in this Section 2.22, the rights and obligations of a Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall remain unchanged.  Nothing in this Section 2.22 shall be deemed to release any Defaulting Lender from its obligations under this Agreement and the Other Documents, shall alter such obligations, shall operate as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.

(e)In the event that Agent, Borrowers, and, if such Defaulting Lenders is a Revolving Lender, Swing Loan Lender and Issuer, agree in writing that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then Agent (A) will so notify the parties hereto, and (B) if such cured Defaulting Lender is a Revolving Lender, then the Participation Commitments of all Revolving Lenders (including such cured Defaulting Lender) of the Swing Loans and Maximum Undrawn Amount of all outstanding Letters of Credit shall be reallocated to reflect the inclusion of such Lender’s Revolving Commitment, and on such date, such cured Defaulting Lender is a Revolving Lender shall purchase at par such of the Revolving Advances of the other Revolving Lenders as Agent shall determine may be necessary in order for such Lender to hold such Revolving Advances in accordance with its Revolving Commitment Percentage.

(f)If Swing Loan Lender or Issuer has a good faith belief that any Revolving Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, Swing Loan Lender shall not be required to fund any Swing Loans and Issuer shall not be required to issue, amend or increase any Letter of Credit, unless Swing Loan Lender or Issuer, as the case may be, shall have entered into arrangements with Borrowers or such Lender, satisfactory to Swing Loan Lender or Issuer, as the case may be, to defease any risk to it in respect of such Lender hereunder.

2.23Payment of Obligations.  Agent may charge to Borrowers’ Account as a Revolving Advance or, at the discretion of Swing Loan Lender, as a Swing Loan (i) all payments with respect to any of the Obligations required hereunder (including without limitation principal payments, payments of interest, payments of Letter of Credit Fees and all other fees provided for hereunder and payments under Sections 16.5 and 16.9 hereof) as and when each such payment shall become due and payable (whether as regularly scheduled, upon or after acceleration, upon maturity or otherwise), (ii) without limiting the generality of the foregoing clause (i), (a) all amounts expended by Agent or any Lender pursuant to Sections 4.2 or 4.3 hereof and (b) all expenses which Agent incurs in connection with the forwarding of Advance proceeds and the establishment and maintenance of any Blocked Accounts or Depository Accounts as provided for in Section 4.8(h)

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hereof, and (iii) any sums expended by Agent or any Lender due to any Loan Party’s failure to perform or comply with its obligations under this Agreement or any Other Document including any Loan Party’s obligations under Sections 3.3, 3.4, 4.4, 4.7, 6.4, 6.6, 6.7 and 6.8 hereof, and all amounts so charged shall be added to the Obligations and shall be secured by the Collateral.  To the extent Revolving Advances are not actually funded by the other Lenders in respect of any such amounts so charged, all such amounts so charged shall be deemed to be Revolving Advances (or, if applicable, Swing Loans) made by and owing to Agent and Agent shall be entitled to all rights (including accrual of interest) and remedies of a Lender under this Agreement and the Other Documents with respect to such Revolving Advances.

2.24Increase in Maximum Revolving Advance Amount.

(a)Borrowers may at any time request that the Maximum Revolving Advance Amount be increased by (1) one or more of the current Lenders increasing their Revolving Commitment Amount (any current Lender which elects to increase its Revolving Commitment Amount shall be referred to as an “Increasing Lender”) or (2) one or more new lenders (each a “New Lender”) joining this Agreement and providing a Revolving Commitment Amount hereunder, subject to the following terms and conditions:

(i)no current Lender shall be obligated to increase its Revolving Commitment Amount and any increase in the Revolving Commitment Amount by any current Lender shall be in the sole discretion of such current Lender, but in the event all current Lenders elect, in their sole discretion, to participate in any such requested increase in an amount, as to each of them, equal to or greater than their respective Revolving Commitment Percentages (prior to giving effect to the requested increase) of the requested increase, the current Lenders shall participate in such requested increase on a pro rata basis in accordance with such respective Revolving Commitment Percentages;

(ii)Borrowers must provide the current Lenders with written notice of any such requested increase at least thirty (30) days prior to the date requested by the Borrowers as the deadline for a response from each such current Lender regarding its participation in such requested increase, in order to allow sufficient time for the credit review and credit approval process of the Lenders, and Borrowers may not request the addition of a New Lender unless (and then only to the extent that) there is insufficient participation (after giving effect to such 30 day notice period) on behalf of the existing Lenders in the increased Revolving Commitments being requested by Borrowers;

(iii)no Event of Default shall exist on the effective date of such increase after giving effect to such increase;

(iv)both prior to and after giving pro forma effect to the requested increase, the Leverage Ratio of Loan Parties on a Consolidated Basis as of the most recently ended fiscal quarter for which the Quarterly Financials have been delivered by Loan Parties shall not be greater than 3.75 to 1.00;

(v)after giving effect to such increase, the Maximum Revolving Advance Amount shall not exceed $25,000,000;

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(vi)Borrowers may not request an increase in the Maximum Revolving Advance Amount under this Section 2.24 more than two (2) times during the Term, and no single such increase in the Maximum Revolving Advance Amount shall be for an amount less than $5,000,000 (and in additional increments of $1,000,000 in excess thereof);

(vii)Loan Parties shall deliver to Agent on or before the effective date of such increase the following documents in form and substance satisfactory to Agent: (1) certifications of their corporate secretaries with attached resolutions certifying that the increase in the Revolving Commitment Amounts has been approved by such Loan Parties, (2) certificate dated as of the effective date of such increase certifying that no Default or Event of Default shall have occurred and be continuing and certifying that the representations and warranties made by each Loan Party herein and in the Other Documents are true and complete in all respects with the same force and effect as if made on and as of such date (except to the extent any such representation or warranty expressly relates only to any earlier and/or specified date), (3) such other agreements, instruments and information (including supplements or modifications to this Agreement and/or the Other Documents) executed by Loan Parties as Agent reasonably deems necessary in order to document the increase to the Maximum Revolving Advance Amount and to protect, preserve and continue the perfection and priority of the liens, security interests, rights and remedies of Agent and Lenders hereunder and under the Other Documents in light of such increase, and (4) an opinion of counsel in form and substance satisfactory to Agent which shall cover such matters related to such increase as Agent may reasonably require and each Loan Party hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders;

(viii)Borrowers shall execute and deliver (1) to each Increasing Lender a replacement Revolving Credit Note reflecting the new amount of such Increasing Lender’s Revolving Commitment Amount after giving effect to the increase (and the prior Revolving Credit Note issued to such Increasing Lender shall be deemed to be cancelled) and (2) to each New Lender a Revolving Credit Note reflecting the amount of such New Lender’s Revolving Commitment Amount;

(ix)any New Lender shall be subject to the approval of Agent and Issuer following not less than five (5) Business Days written notice from Borrowers’ to Agent and Issuer of the identity of such New Lender; and

(x)each New Lender shall execute a lender joinder in form and substance reasonably satisfactory to Agent pursuant to which such New Lender shall join and become a party to this Agreement and the Other Documents with a Revolving Commitment Amount as set forth in such lender joinder.

(b)On the effective date of such increase, (i) unless the increase shall be effected by the pro rata participation of the current Lenders in accordance with their respective Revolving Commitment Percentages (prior to giving effect to the requested increase), Borrowers shall repay all Revolving Advances then outstanding, subject to Borrowers’ obligations under Sections 3.7, 3.9 or 3.10 hereof; provided that subject to the other conditions of this Agreement, the Borrowing Agent may request new Revolving Advances on such date, and the Revolving Commitment Percentages of Revolving Lenders (including each Increasing Lender and/or New Lender) shall be recalculated such that each such Lender’s Revolving Commitment Percentage is

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equal to (x) the Revolving Commitment Amount of such Lender divided by (y) the aggregate of the Revolving Commitment Amounts of all Lenders; (ii) each Lender shall participate in any new Revolving Advances made on or after such date in accordance with its Revolving Commitment Percentage after giving effect to the increase in the Maximum Revolving Advance Amount and any recalculation of the Revolving Commitment Percentages contemplated by this Section 2.24; and (iii) each reference to the term “Maximum Revolving Advance Amount” herein and in any of the Other Documents shall be deemed amended to mean the amount of the Maximum Revolving Advance Amount as so increased pursuant to this Section 2.24; and (iv) each reference in any provision hereof to a minimum amount of Undrawn Availability to be maintained (including Section 6.5 hereof) and/or to a minimum dollar threshold of Undrawn Availability as a condition precedent to some other action being permitted hereunder that is set forth in this Agreement shall be automatically increased to an amount such that the ratio of Undrawn Availability to the Maximum Revolving Advance Amount as so increased remains the same as prior to such increase.

(c)On the effective date of such increase, unless the increase shall be effected by the pro rata participation of the current Lenders in accordance with their respective Revolving Commitment Percentages (prior to giving effect to the requested increase), each Increasing Lender shall be deemed to have purchased an additional/increased participation in, and each New Lender will be deemed to have purchased a new participation in, each then outstanding Letter of Credit and each drawing thereunder and each then outstanding Swing Loan in an amount equal to such Lender’s Revolving Commitment Percentage (as calculated pursuant to Section 2.24(b) above) of the Maximum Undrawn Amount of each such Letter of Credit (as in effect from time to time) and the amount of each drawing and of each such Swing Loan, respectively.  As necessary to effectuate the foregoing, each existing Revolving Lender that is not an Increasing Lender shall be deemed to have sold to each applicable Increasing Lender and/or New Lender, as necessary, a portion of such existing Lender’s participations in such outstanding Letters of Credit and drawings and such outstanding Swing Loans such that, after giving effect to all such purchases and sales, each Revolving Lender (including each Increasing Lender and/or New Lender) shall hold a participation in all Letters of Credit (and drawings thereunder) and all Swing Loans in accordance with their respective Revolving Commitment Percentages (as calculated pursuant to Section 2.24(b) above).

(d)On the effective date of such increase, Borrowers shall pay all costs and expenses incurred by Agent and by each Increasing Lender and New Lender in connection with the negotiations regarding, and the preparation, negotiation, execution and delivery of all agreements and instruments executed and delivered by any of Agent, Borrowers and/or Increasing Lenders and New Lenders in connection with, such increase (including all fees for any supplemental or additional public filings of any Other Documents necessary to protect, preserve and continue the perfection and priority of the liens, security interests, rights and remedies of Agent and Lenders hereunder and under the Other Documents in light of such increase and the reasonable fees and expenses of counsel to Agent).

ARTICLE IIIINTEREST AND FEES.

3.1Interest.  Interest on Advances shall be payable in arrears (a) on the first day of each month with respect to Domestic Rate Loans, and (b) with respect to LIBOR Rate Loans having an Interest Period of one, two or three months, at the end of the applicable Interest Period, provided that all accrued and unpaid interest shall be due and payable at the end of the Term.  Interest

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charges shall be computed on the actual principal amount of Advances outstanding for each day during the month and/or any applicable Interest Period at a rate per annum equal to (i) with respect to Revolving Advances, the applicable Revolving Interest Rate, (ii) with respect to Swing Loans, the Revolving Interest Rate for Domestic Rate Loans, and (iii) with respect to the Term Loan and/or any applicable portion(s) thereof, as applicable, the applicable Term Loan Interest Rate (as applicable, the “Contract Rate”).  Except as expressly provided otherwise in this Agreement, any Obligations other than the Advances that are not paid when due shall accrue interest at the Revolving Interest Rate for Domestic Rate Loans, subject to the provision of the final sentence of this Section 3.1 regarding the Default Rate.  Whenever, subsequent to the Closing Date, the Alternate Base Rate is increased or decreased, the applicable Contract Rate with respect to any Domestic Rate Loans shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Alternate Base Rate during the time such change or changes remain in effect.  The LIBOR Rate with respect to any LIBOR Rate Loans shall be adjusted with respect to LIBOR Rate Loans without notice or demand of any kind on the effective date of any change in the Reserve Percentage as of such effective date.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent, or at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7 hereof, immediately and automatically upon the occurrence of any such Event of Default without the requirement of any affirmative action by any party), the interest rate applicable to the Revolving Advances, the Term Loan, and/or any other Obligations (or, in the case of any Event of Default under Section 10.7 hereof, all Obligations) shall be at rate per annum equal to the applicable Contract Rate per annum plus an additional two percent (2.00%) (200 basis points) per annum (as applicable, the “Default Rate”).

3.2Letter of Credit Fees.

(a)Borrowers shall pay (x) to Agent, for the ratable benefit of Revolving Lenders, fees for each outstanding Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the aggregate daily Maximum Undrawn Amount of all outstanding Letters of Credit multiplied by the Applicable Margin for Letters of Credit, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each calendar quarter and on the last day of the Term, and (y) to Issuer, a fronting fee of one quarter of one percent (0.25%) per annum times the aggregate daily face amount of all outstanding Letters of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, to be payable quarterly in arrears on the first day of each calendar quarter and on the last day of the Term (all of the foregoing fees, the “Letter of Credit Fees”).  In addition, Borrowers shall pay to Agent, for the benefit of Issuer, any and all administrative, issuance, amendment, payment and negotiation charges with respect to Letters of Credit and all fees and expenses as agreed upon by Issuer and the Borrowing Agent in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder, all such charges, fees and expenses, if any, to be payable on demand.  All such charges shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.  Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in Issuer’s prevailing charges for that type of transaction.  Upon and after the occurrence of an Event of Default, and

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during the continuation thereof, at the option of Agent or at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7 hereof, immediately and automatically upon the occurrence of any such Event of Default without the requirement of any affirmative action by any party), the Letter of Credit Fees described in clause (x) of this Section 3.2(a) (the “Letter of Credit Lender Fees”) shall be increased by an additional two percent (2.00%) (200 basis points) per annum (as to such Letter of Credit Fees, the “Letter of Credit Default Rate”).

(b)At any time following the occurrence of an Event of Default, at the option of Agent or at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7 hereof, immediately and automatically upon the occurrence of such Event of Default, without the requirement of any affirmative action by any party), or upon the last day of the Term or any other termination of this Agreement (and also, if applicable, in connection with any mandatory prepayment under Section 2.20 hereof), Borrowers will cause cash to be provided to Agent, to be held by Agent as cash collateral, in an amount equal to one hundred and three percent (103%) of the Maximum Undrawn Amount of all outstanding Letters of Credit, which may be held by Agent in one or more general ledger accounts of Agent, and each Borrower (and each Guarantor that may provide any cash collateral under its Guaranty) hereby irrevocably authorizes Agent, in its discretion, on such Loan Party’s behalf and in such Loan Party’s name, to fund any such required cash collateral to be held by Agent out of the proceeds of Receivables or other Collateral or out of any other funds of such Loan Party coming into any Lender’s possession at any time.  Agent may hold such cash collateral in any one or more general ledger accounts of Agent, and Agent shall have no obligation (and Loan Parties hereby waive any claim) under Article 9 of the Uniform Commercial Code or under any other Applicable Law to pay interest on such cash collateral being held by Agent.  No Loan Party may withdraw amounts credited to any such account except upon the occurrence of all of the following: (x) Payment in Full of all Obligations; (y) expiration of all Letters of Credit; and (z) termination of this Agreement.  Loan Parties hereby assign, pledge and grant to Agent, for its benefit and the ratable benefit of the Secured Parties, a continuing security interest in and to and Lien on any such cash collateral and any right, title and interest of Loan Parties in any deposit account, securities account or investment account into which such cash collateral may be deposited and/or in which such cash collateral may be held by Agent from time to time to secure the Obligations, specifically including all Obligations with respect to any Letters of Credit.  Loan Parties agree that upon the coming due of any Reimbursement Obligations (or any other Obligations, including Obligations for Letter of Credit Fees, with respect to the Letters of Credit), Agent may use such cash collateral to pay and satisfy such Obligations.

3.3Facility Fee.

(a)[RESERVED].  

(b)Facility Fee.  If, for any day in each calendar quarter during the Term, the daily unpaid balance of the sum of Revolving Advances outstanding on such day plus Swing Loans outstanding on such day plus the Maximum Undrawn Amount of all Letters of Credit outstanding on such day plus the Ex-Im Subfacility Outstandings Amount for such day (the “Usage Amount”) for each day of such calendar quarter does not equal the Maximum Revolving Advance Amount, then Borrowers shall pay to Agent, for the ratable benefit of the Revolving Lenders based on their Revolving Commitment Percentages, a fee at a rate equal to one-half of one percent (0.50%) per annum on the amount by which the Maximum Revolving Advance Amount on such day exceeds

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such Usage Amount (the “Facility Fee”).  Such Facility Fee shall be due and payable to Agent in arrears on the first Business Day of each calendar quarter with respect to each day in the previous calendar quarter and on the last day of the Term with respect to the period from the end of the previous calendar quarter through and including the last day of the Term.

3.4Fee Letter; Collateral Evaluation Fees.

(a)Fee Letter.  Without duplication of any amount paid with respect to the Ex-Im Subfacility Credit Agreement, Borrowers shall pay each amount payable to the applicable Secured Party as, if, and when due under the Fee Letter.

(b)[RESERVED].

(c)Field Examinations.  Borrowers shall pay to Agent, for its sole and separate account and not the account of any Lender, promptly at the conclusion of any Field Examination conducted in accordance with the terms of Section 4.6 hereof (whether such examination is performed by Agent’s employees or by a third party retained by Agent), a collateral evaluation fee in an amount equal to (x) $1,500 per day (or such other amount customarily charged by Agent to its customers) per day for each person employed and/or retained by Agent to perform such evaluation (based on an eight (8) hour day and subject to adjustment if additional hours are worked), plus (y) a per examination field examination management fee in the amount of $2,500 (for a new facility) for each such Field Examination and $1,500 for each recurring Field Examination (or, in each case, such other amount customarily charged by Agent to its customers), plus (z) all out-of-pocket costs and disbursements incurred by Agent and its employees and agents in the performance of such Field Examination (all collectively as to any Field Examination, the “Field Examination Fees and Costs”), in full and without any deduction, off-set or counterclaim by Borrowers; provided that, notwithstanding the foregoing or anything to the contrary in this Agreement, in the absence of the occurrence and continuance of any Event of Default, Borrowers shall not be required to pay the Field Examination Fees and Costs for more than four (4) such Field Examinations in any Fiscal Year; but also provided further that the limitations set forth in the immediately foregoing proviso (1) shall not apply to any Field Examination initiated after the occurrence and during the continuance of any Event of Default (and any Field Examination conducted in Agent’s Permitted Discretion and at Borrowers’ expense after the occurrence and during the continuance of any Event of Default shall not be counted against such limitations), (2) shall not apply with respect to any Field Examination conducted by Agent with respect to any assets acquired by Loan Parties in any Acquisition (including with respect to the asset of any target acquired in any such Acquisition (and any appraisal obtained at Borrowers’ expense in connection with an Acquisition shall not be counted against such limitations), and (3) shall not limit the right of Agent in its Permitted Discretion to conduct additional Field Examinations in any Fiscal Year at its own cost and expense pursuant to Section 4.6 hereof.

(d)Appraisals.  Borrowers shall pay to Agent, for its sole and separate account and not the account of any Lender, promptly at the conclusion of any appraisal of any Loan Parties’ assets obtained by Agent in accordance with the terms of Section 4.7, the out-of-pocket costs and expenses incurred by Agent in obtaining such appraisal (as to any such appraisal, the “Appraisal Costs”), in full and without deduction, off-set or counterclaim by Borrowers; provided that, notwithstanding the foregoing or anything to the contrary otherwise in this Agreement, in the

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absence of the occurrence and continuance of any Event of Default, Borrowers shall not be required to pay the Appraisal Costs for more than one (1) such appraisals in any fiscal year; but also provided further that the limitations set forth in the immediately foregoing proviso (1) shall not apply after the occurrence and during the continuance of any Event of Default, (and any appraisal obtained at Borrowers’ expense after the occurrence and during the continuance of any Event of Default shall not be counted against such limitations), (2) shall not apply with respect to any appraisal conducted by Agent with respect to any assets acquired by Loan Parties in any Acquisition (including with respect to the asset of any target acquired in any such Acquisition (and any appraisal obtained at Borrowers’ expense in connection with an Acquisition shall not be counted against such limitations), and (3) shall not limit the rights of Agent in its discretion to obtain any appraisal at its own expense and cost subject to the provisions of Section 4.7 hereof.  

3.5Computation of Interest and Fees.  Interest and fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed.  If any payment to be made hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the applicable Contract Rate during such extension.

3.6Maximum Charges.  In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under Applicable Law.  In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under Applicable Law: (i) the interest rates hereunder will be reduced to the maximum rate permitted under Applicable Law; (ii) such excess amount shall be first applied to any unpaid principal balance owed by Borrowers; and (iii) if then remaining excess amount is greater than the previously unpaid principal balance, Lenders shall promptly refund such excess amount to Borrowers and the provisions hereof shall be deemed amended to provide for such permissible rate.

3.7Increased Costs.  In the event that any Applicable Law or any Change in Law or compliance by any Lender (for purposes of this Section 3.7, the term “Lender” shall include Agent, Swing Loan Lender, any Issuer or Lender and any corporation or bank controlling Agent, Swing Loan Lender, any Lender or Issuer and the office or branch where Agent, Swing Loan Lender, any Lender or Issuer (as so defined) makes or maintains any LIBOR Rate Loans) with any request or directive (whether or not having the force of law) from any central bank or other financial, monetary or other authority, shall:

(a)subject Agent, Swing Loan Lender, any Lender or Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Rate Loan, or change the basis of taxation of payments to Agent, Swing Loan Lender, such Lender or Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.10 hereof and the imposition of, or any change in the rate of, any Excluded Tax payable by Agent, Swing Loan Lender, such Lender or Issuer);

(b)impose, modify or deem applicable any reserve, special deposit, assessment, compulsory loan, insurance charge or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by, any office of Agent, Swing

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Loan Lender, Issuer or any Lender, including pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or

(c)impose on Agent, Swing Loan Lender, any Lender or Issuer, any other condition, loss or expense (other than Taxes) affecting this Agreement or any Other Document or any Advance made by any Lender, or any Letter of Credit or participation therein;

and the result of any of the foregoing is to increase the cost to Agent, Swing Loan Lender, any Lender or Issuer of making, converting to, continuing, renewing or maintaining its Advances hereunder by an amount that Agent, Swing Loan Lender, such Lender or Issuer deems to be material or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Advances by an amount that Agent, Swing Loan Lender or such Lender or Issuer deems to be material, then, in any case Borrowers shall promptly pay Agent, Swing Loan Lender or such Lender or Issuer, upon its demand, such additional amount as will compensate Agent, Swing Loan Lender, such Lender or Issuer for such additional cost or such reduction, as the case may be, provided that the foregoing shall not apply to increased costs which are reflected in the LIBOR Rate, as the case may be.  Agent, Swing Loan Lender, such Lender or Issuer shall certify the amount of such additional cost or reduced amount to Borrowing Agent, and such certification shall be conclusive absent manifest error.

3.8Alternate Rate of Interest.

3.8.1.Interest Rate Inadequate or Unfair.  In the event that Agent or any Lender shall have determined that:

(a)reasonable means do not exist for ascertaining the LIBOR Rate applicable pursuant to Section 2.2 hereof for any Interest Period;

(b)Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank LIBOR market, with respect to an outstanding LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed conversion of a Domestic Rate Loan into a LIBOR Rate Loan;

(c)the making, maintenance or funding of any LIBOR Rate Loan has been made impracticable or unlawful by compliance by Agent or such Lender in good faith with any Applicable Law or any interpretation or application thereof by any Governmental Body or with any request or directive of any such Governmental Body (whether or not having the force of law), or

(d)the LIBOR Rate will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any LIBOR Rate Loan,

then Agent shall give Borrowing Agent prompt written or telephonic notice of such determination.  If such notice is given prior to a LIBOR Termination Date (as defined below) or prior to the date on which Section 3.8.2(a)(ii) hereof applies, (i) any such requested LIBOR Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall notify Agent no later than 2:00 p.m. two (2) Business Days prior to the date of such proposed borrowing, that its request for such borrowing shall be cancelled or made as an unaffected type of LIBOR Rate Loan, (ii) any Domestic

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Rate Loan or LIBOR Rate Loan which was to have been converted to an affected type of LIBOR Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 2:00 p.m. two (2) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of LIBOR Rate Loan, and (iii) any outstanding affected LIBOR Rate Loans shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 2:00 p.m. two (2) Business Days prior to the last Business Day of the then current Interest Period applicable to such affected LIBOR Rate Loan, shall be converted into an unaffected type of LIBOR Rate Loan, on the last Business Day of the then current Interest Period for such affected LIBOR Rate Loans (or sooner, if any Lender cannot continue to lawfully maintain such affected LIBOR Rate Loan).  Until such notice has been withdrawn, Lenders shall have no obligation to make an affected type of LIBOR Rate Loan or maintain outstanding affected LIBOR Rate Loans and no Borrower shall have the right to convert a Domestic Rate Loan or an unaffected type of LIBOR Rate Loan into an affected type of LIBOR Rate Loan.

3.8.2.

Successor LIBOR Rate Index.

(a)If Agent determines (which determination shall be final and conclusive, absent manifest error) that either (i) (A) the circumstances set forth in Section 3.8.1(a) hereof have arisen and are unlikely to be temporary, or (B) the circumstances set forth in Section 3.8.1(a) hereof have not arisen but the applicable supervisor or administrator (if any) of the LIBOR Rate or a Governmental Body having jurisdiction over Agent has made a public statement identifying the specific date after which the LIBOR Rate shall no longer be used for determining interest rates for loans (either such date, a “LIBOR Termination Date”), or (ii) a rate other than the LIBOR Rate has become a widely recognized benchmark rate for newly originated loans in Dollars in the U.S. market, then Agent may (in consultation with Borrowing Agent) choose a replacement index for the LIBOR Rate and make adjustments to applicable margins and related amendments to this Agreement as referred to below such that, to the extent practicable, the all-in interest rate based on the replacement index will be substantially equivalent to the all-in LIBOR Rate-based interest rate in effect prior to its replacement.

 

(b)Agent and the Loan Parties shall enter into an amendment to this Agreement to reflect the replacement index, the adjusted margins and such other related amendments as may be appropriate, in the discretion of Agent, for the implementation and administration of the replacement index-based rate.  Notwithstanding anything to the contrary in this Agreement or the Other Documents (including, without limitation, Section 16.2 hereof), such amendment shall become effective without any further action or consent of any other party to this Agreement at 5:00 p.m. on the tenth (10th) Business Day after the date a draft of the amendment is provided to the Lenders, unless Agent receives, on or before such tenth (10th) Business Day, a written notice from the Required Lenders stating that such Lenders object to such amendment.

 

(c)Selection of the replacement index, adjustments to the applicable margins, and amendments to this Agreement (i) will be determined with due consideration to the then-current market practices for determining and implementing a rate of interest for newly originated loans in the United States and loans converted from a LIBOR Rate-based rate to a replacement index-based rate, and (ii) may also reflect adjustments to account for (x) the effects of the transition from the LIBOR Rate to the replacement index and (y) yield- or risk-based differences between the LIBOR Rate and the replacement index.

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(d)Until an amendment reflecting a new replacement index in accordance with this Section 3.8.2 hereof is effective, each advance, conversion and renewal of a LIBOR Rate Loan will continue to bear interest with reference to the LIBOR Rate; provided however, that if Agent determines (which determination shall be final and conclusive, absent manifest error) that a LIBOR Termination Date has occurred, then following the LIBOR Termination Date, all LIBOR Rate Loans shall automatically be converted to Domestic Rate Loans until such time as an amendment reflecting a replacement index and related matters as described above is implemented.

 

(e)Notwithstanding anything to the contrary contained herein, if at any time the replacement index is less than zero, at such times, such index shall be deemed to be zero for purposes of this Agreement.

 

3.9Capital Adequacy.

(a)In the event that Agent, Swing Loan Lender, Issuer or any Lender shall have determined that any Applicable Law or guideline regarding capital adequacy, or any Change in Law or any change in the interpretation or administration thereof by any Governmental Body, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Agent, Swing Loan Lender, Issuer or any Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent, Swing Loan Lender, Issuer or any Lender and any corporation or bank controlling Agent, Swing Loan Lender or any Lender and the office or branch where Agent, Swing Loan Lender or any Lender (as so defined) makes or maintains any LIBOR Rate Loans) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Agent’s, Swing Loan Lender’s, Issuer’s or any Lender’s capital as a consequence of its obligations hereunder (including the making of any Swing Loans) to a level below that which Agent, Swing Loan Lender, Issuer or such Lender could have achieved but for such adoption, change or compliance (taking into consideration Agent’s, Swing Loan Lender’s, Issuer’s and each Lender’s policies with respect to capital adequacy) by an amount deemed by Agent, Swing Loan Lender, Issuer or any Lender to be material, then, from time to time, Borrowers shall pay upon demand to Agent, Swing Loan Lender, Issuer or such Lender such additional amount or amounts as will compensate Agent, Swing Loan Lender, Issuer or such Lender for such reduction.  In determining such amount or amounts, Agent, Swing Loan Lender, Issuer or such Lender may use any reasonable averaging or attribution methods.  The protection of this Section 3.9 shall be available to Agent, Swing Loan Lender, Issuer and each Lender regardless of any possible contention of invalidity or inapplicability with respect to the Applicable Law, rule, regulation, guideline or condition.

(b)A certificate of Agent, Swing Loan Lender, Issuer or such Lender setting forth such amount or amounts as shall be necessary to compensate Agent, Swing Loan Lender or such Lender with respect to Section 3.9(a) hereof when delivered to Borrowing Agent shall be conclusive absent manifest error.

3.10Taxes.

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(a)Any and all payments by or on account of any Obligations hereunder or under any Other Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if Loan Parties shall be required by Applicable Law to deduct any Indemnified Taxes (including any 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) Agent, Swing Loan Lender, Lender, Issuer or Participant, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) Loan Parties shall make such deductions and (iii) Loan Parties shall timely pay the full amount deducted to the relevant Governmental Body in accordance with Applicable Law.

(b)Without limiting the provisions of Section 3.10(a) above, Loan Parties shall timely pay any Other Taxes to the relevant Governmental Body in accordance with Applicable Law.

(c)Each Loan Party shall indemnify Agent, Swing Loan Lender, each Lender, Issuer and any Participant, as soon as practicable after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by Agent, Swing Loan Lender, such Lender, Issuer, or such Participant, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto.  A certificate as to the amount of such payment or liability