Exhibit 10.1

 

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CREDIT AGREEMENT

dated as of

February 23, 2007

among

CLEARPOINT BUSINESS RESOURCES, INC.

The Several Lenders From Time to Time

Parties Hereto,

MANUFACTURERS AND TRADERS TRUST COMPANY

as Administrative Agent and Issuing Bank

 

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TABLE OF CONTENTS

 

     Page SECTION 1. DEFINITIONS   

            1.1

 

Defined Terms

   1

            1.2

 

Other Definitional Provisions

   24 SECTION 2. LOANS AND TERMS OF COMMITMENTS   

            2.1

 

Commitments

   25

            2.2

 

Notes

   26

            2.3

 

Procedure for Revolving Credit Loans and Term Loans

   26

            2.4

 

Letter of Credit Subfacility

   28

            2.5

 

Interest and Payment Dates

   33

            2.6

 

Default Interest

   33

            2.7

 

Conversion and Continuation Options; Limitations on Tranches

   34

            2.8

 

Commitment Fees

   35

            2.9

 

Termination and Reduction of Revolving Credit Commitments

   36

            2.10

 

Optional and Mandatory Prepayments of Loans

   36

            2.11

 

Illegality

   38

            2.12

 

Requirements of Law

   38

            2.13

 

Taxes

   39

            2.14

 

Indemnity

   40

            2.15

 

Treatment of Loans and Payments

   41

            2.16

 

Payments

   41

            2.17

 

Loan Accounts

   41

            2.18

 

Use of Proceeds

   42 SECTION 3. REPRESENTATIONS AND WARRANTIES   

            3.1

 

Corporate Existence

   42

            3.2

 

Subsidiaries

   42

            3.3

 

Authority and Binding Effect

   42

            3.4

 

Approvals

   43

            3.5

 

Recording and Enforceability

   43

            3.6

 

Litigation

   43

            3.7

 

Financial Information

   43

            3.8

 

Taxes

   44

            3.9

 

Intellectual Property

   44

            3.10

 

No Burdensome Agreements

   44

            3.11

 

Material Agreements

   44

            3.12

 

Compliance With Law

   44

            3.13

 

Title to Property

   45

            3.14

 

Security Interests

   45

            3.15

 

Federal Regulations

   45

            3.16

 

ERISA

   45

            3.17

 

Fictitious Names

   46

 

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            3.18

 

No Event of Default

   46

            3.19

 

Solvency

   46

            3.20

 

Investment Company Act

   46

            3.21

 

Environmental Matters

   46

            3.22

 

Labor Matters

   47

            3.23

 

Anti-Terrorism Laws

   47

            3.24

 

ASG Acquisition

   48

            3.25

 

Subordinated Notes/Proposed ASG Seller Notes

   48

            3.26

 

No Misrepresentations or Material Nondisclosures

   49 SECTION 4. CONDITIONS PRECEDENT   

            4.1

 

Conditions to Closing

   49

            4.2

 

Conditions to Each Loan or Letter of Credit

   52

            4.3

 

Additional Conditions to Term Loans

   52

            4.4

 

Closing

   52 SECTION 5. AFFIRMATIVE COVENANTS   

            5.1

 

Furnishing Financial Statements

   53

            5.2

 

Books and Records

   55

            5.3

 

Taxes

   55

            5.4

 

Corporate Existence and Rights; Compliance with Laws

   55

            5.5

 

Maintenance of Properties

   55

            5.6

 

Performance and Compliance with Material Agreements

   55

            5.7

 

Insurance

   55

            5.8

 

Post-Closing Field Examination/Inspection; Collateral Audit

   56

            5.9

 

Leases and Mortgages

   57

            5.10

 

Pay Indebtedness and Perform Other Covenants

   57

            5.11

 

Notices

   57

            5.12

 

Deposit Accounts

   58

            5.13

 

ERISA

   58

            5.14

 

Environmental Laws

   59

            5.15

 

Notice and Joinder of New Subsidiaries

   59

            5.16

 

Anti-Terrorism Laws

   60

            5.17

 

ASG Acquisition

   60 SECTION 6. NEGATIVE COVENANTS   

            6.1

 

Financial Covenants

   62

            6.2

 

Limitation on Indebtedness

   62

            6.3

 

Limitation on Liens

   63

            6.4

 

Limitations on Fundamental Changes

   64

            6.5

 

Limitations on Sale of Assets

   65

            6.6

 

Limitations on Acquisitions and other Investments

   65

            6.7

 

Limitation on Distributions

   65

            6.8

 

Transactions with Affiliates

   65

            6.9

 

Sale and Leaseback

   66

            6.10

 

Continuation of or Change in Business

   66

            6.11

 

Limitation on Negative Pledge

   66

 

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            6.12

 

Limitation on Optional Prepayment of Indebtedness

   66

            6.13

 

Use of Proceeds

   66

            6.14

 

Fiscal Year

   67

            6.15

 

Clauses Restricting Subsidiary Distributions

   67

            6.16

 

No Misrepresentations or Material Nondisclosure

   67

            6.17

 

Changes in Organizational Documents

   67 SECTION 7. EVENTS OF DEFAULT   

            7.1

 

Events of Default

   67

            7.2

 

Remedies

   69 SECTION 8. THE ADMINISTRATIVE AGENT   

            8.1

 

Appointment

   70

            8.2

 

Delegation of Duties

   71

            8.3

 

Exculpatory Provisions

   71

            8.4

 

Reliance by Administrative Agent

   71

            8.5

 

Notice of Default

   72

            8.6

 

Non-Reliance on Administrative Agent and Other Lenders

   72

            8.7

 

Indemnification

   72

            8.8

 

Administrative Agent in Its Individual Capacity

   73

            8.9

 

Release of Liens

   73

            8.10

 

Successor Administrative Agent

   73

            8.11

 

USA Patriot Act

   73

            8.12

 

Beneficiaries

   74 SECTION 9. MISCELLANEOUS   

            9.1

 

Amendments and Waivers

   74

            9.2

 

Notices

   75

            9.3

 

No Waiver; Cumulative Remedies

   76

            9.4

 

Survival of Representations and Warranties

   76

            9.5

 

Payment of Expenses and Taxes

   76

            9.6

 

Successors and Assigns

   77

            9.7

 

Adjustments; Set-off

   81

            9.8

 

Counterparts

   81

            9.9

 

Severability

   81

            9.10

 

Integration

   82

            9.11

 

GOVERNING LAW

   82

            9.12

 

Confidentiality

   82

            9.13

 

Submission To Jurisdiction; Waivers

   82

            9.14

 

Acknowledgments

   83

            9.15

 

USA PATRIOT ACT

   83

            9.16

 

WAIVERS OF JURY TRIAL

   83

 

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SCHEDULES SCHEDULE I   Lender and Commitment Information SCHEDULE II   Existing
Permitted Investments SCHEDULE III   Existing Notes SCHEDULE 3.2   Subsidiaries
SCHEDULE 3.6   Litigation SCHEDULE 3.11   Material Agreements SCHEDULE 3.14  
Filing Locations SCHEDULE 3.16   ERISA Matters SCHEDULE 3.17   Fictitious Names
SCHEDULE 3.22   Labor Matters SCHEDULE 3.25   Subordinated Notes/Proposed ASG
Seller Notes SCHEDULE 6.2   Existing Indebtedness SCHEDULE 6.3   Existing Liens
EXHIBITS EXHIBIT A-1   Form of Revolving Credit Note EXHIBIT A-2   Form of Term
Note EXHIBIT B   Form of Notice of Borrowing EXHIBIT C   Form of Guaranty
EXHIBIT D   Form of Assignment and Assumption EXHIBIT E   Form of Pledge
Agreement EXHIBIT F   Form of Security Agreement EXHIBIT G   Form of
Subordination Agreement EXHIBIT H   Form of Borrowing Base Certificate

 

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of February 23, 2007, is among CLEARPOINT
BUSINESS RESOURCES, INC., a Delaware corporation (the “Borrower”), the several
banks and other financial institutions from time to time parties hereto
(individually, a “Lender”; collectively, the “Lenders”) and MANUFACTURERS AND
TRADERS TRUST COMPANY, as Administrative Agent (in such capacity, the
“Administrative Agent”).

WITNESSETH:

In consideration of the premises and other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and with the intent to be legally
bound hereby, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

“Accumulated Funding Deficiency”: any accumulated funding deficiency as defined
in Section 302(a) of ERISA.

“Administrative Agent”: as defined in the Preamble hereto, and its successors in
such capacity appointed pursuant to Section 8.10.

“Affiliate”: as to any Person, any other Person which, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person and any member, partner, director, officer or
employee of any such Person. For purposes of this definition, “control” shall
mean the power, directly or indirectly, either to (a) vote 10% or more of the
Capital Stock of such Person, (b) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (c) direct
or in effect cause the direction of the management and policies of such Person
whether by contract or otherwise.

“Agreement”: this Credit Agreement, as amended, supplemented or otherwise
modified from time to time.

“Anti-Terrorism Laws”: any laws relating to terrorism or money laundering,
including Executive Order No. 13224 and the USA Patriot Act.

“Applicable Commitment Fee Percentage”: on any date, the percentage per annum
set forth below opposite the Senior Leverage Ratio set forth below as shown on
the last Compliance Certificate delivered by the Borrower to the Administrative
Agent pursuant to subsection 5.1(c) prior to such date:

 

Level   

Senior Leverage Ratio

  

Applicable Commitment
Fee Percentage

I    Less than or equal to 1.00 to 1.0    0.15% II    Greater than 1.0 to 1.0,
but less than or equal to 2.0    0.20% III    Greater than 2.0 to 1.0    0.25%

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provided, however, that (a) adjustments, if any, to the Applicable Commitment
Fee Percentage resulting from a change in the Senior Leverage Ratio shall be
effective five (5) Business Days after the Administrative Agent has received a
Compliance Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter on or prior to the last date on which it can be
delivered without violation of subsection 5.1(c), the Applicable Commitment Fee
Percentage from such date until such Compliance Certificate is actually
delivered shall be that applicable under Level III, (c) in the event that the
actual Senior Leverage Ratio for any fiscal quarter is subsequently determined
to be greater than that set forth in the Compliance Certificate for such fiscal
quarter, the Applicable Commitment Fee Percentage shall be recalculated for the
applicable period based upon such actual Senior Leverage Ratio, and (d) anything
in this definition to the contrary notwithstanding, until receipt by the
Administrative Agent of the annual audited financial statements required by
subsection 5.1(b) for the fiscal quarter ending March 31, 2007 together with the
accompanying Compliance Certificate, the Applicable Commitment Fee Percentage
shall be that applicable under Level II.

“Applicable Margin”: on any date, for any Loan, the percentage per annum set
forth below in the column entitled “Applicable Margin – Base Rate Loans” or
“Applicable Margin – Eurodollar Loans,” as appropriate, opposite the Senior
Leverage Ratio set forth below as shown on the last Compliance Certificate
delivered by the Borrower to the Administrative Agent pursuant to subsection
5.1(c) prior to such date:

 

Level   

Senior Leverage Ratio

  

Applicable Margin -

Base Rate Loans

  Applicable Margin -
Eurodollar Loans I    Less than or equal to 1.00 to 1.0    0%   1.50% II   
Greater than 1.00 to 1.0, but less than or equal to 2.0 to 1.0    0%   1.875%
III    Greater than 2.0 to 1.0    0%   2.250%

provided, however, that (a) adjustments, if any, to the Applicable Margin
resulting from a change in the Senior Leverage Ratio shall be effective five
(5) Business Days after the Administrative Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been delivered
for a fiscal quarter on or prior to the last date on which it can be delivered
without violation of subsection 5.1(c), the Applicable Margin from such date
until such Compliance Certificate is actually delivered shall be that applicable
under Level III, (c) in the event that the actual Senior Leverage Ratio for any
fiscal quarter is subsequently determined

 

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to be greater than that set forth in the Compliance Certificate for such fiscal
quarter, the Applicable Margin shall be recalculated for the applicable period
based upon such actual Senior Leverage Ratio, and (d) anything in this
definition to the contrary notwithstanding, until receipt by the Administrative
Agent of the annual audited financial statements required by subsection 5.1(b)
for the fiscal quarter ending March 31, 2007 together with the accompanying
Compliance Certificate, the Applicable Margin shall be that applicable under
Level II.

“Application”: in respect of each Letter of Credit issued by the Issuing Bank,
an application, in such form as the Issuing Bank may specify from time to time,
requesting issuance of such Letter of Credit, as it may be amended, supplemented
or modified from time to time.

“ASG”: collectively, ALS, LLC and certain of its subsidiaries that are selling
assets to the Borrower and/or its subsidiaries in the ASG Acquisition.

“ASG Acquisition”: the proposed acquisition by the Borrower and/or its
Subsidiaries of certain assets of ASG, including customer lists, operating
leases, customer contracts and fixed assets. In connection with such
acquisition, the Borrower and its Subsidiaries will not be assuming liabilities
other than certain operating leases for office space and obligations under
customer contracts arising after the closing date of the ASG Acquisition.

“ASG Acquisition Documents”: the Asset Purchase Agreement by and between the
Borrower and ALS, LLC and all documents and instruments related to the ASG
Acquisition as described therein.

“ASG Seller Notes”: the seller note or notes issued by the Borrower in
connection with the ASG Acquisition, as amended, supplemented or otherwise
modified from time to time in a manner permitted hereunder, it being understood
that since, among other things, the ASG Seller Notes require principal payments
prior to the later of the Revolving Credit Termination Date and the Term Loan
Maturity Date, such Indebtedness shall not constitute “Subordinated Debt” for
purposes of this Agreement notwithstanding that such Notes are subordinated.

“Asset Sale”: as defined in subsection 2.10(c).

“Assignment and Assumption”: an assignment and assumption entered into by a
Lender and a Purchasing Lender in accordance with and subject to the terms and
conditions of Section 9.6, substantially in the form of Exhibit D attached
hereto, or such other form as shall be approved by the Administrative Agent, as
it may be amended, supplemented or modified from time to time.

“Base Rate”: for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus  1/2 of 1%. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the definition of such term, the Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition until the

 

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circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

“Base Rate Borrowing”: a Borrowing comprised of Base Rate Loans.

“Base Rate Loans”: any Loan bearing interest at a rate determined by reference
to the Base Rate.

“Borrower”: as defined in the Preamble hereto.

“Borrowing”: each group of Loans of a single Type made by the Lenders under one
Facility on a single date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.

“Borrowing Availability”: at any particular time, an amount equal to the excess,
if any, of (a) the aggregate Revolving Credit Commitments of the Revolving
Credit Lenders at such time over (b) the aggregate Revolving Credit Exposure of
the Revolving Credit Lenders at such time.

“Borrowing Base”: an amount equal to (a) 85% of Eligible Receivables plus
(b) 65% of Eligible Unbilled Receivables, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the Administrative Agent less
(c) any Reserves.

“Borrowing Base Availability”: at any particular time, the lesser of (a) the
Borrowing Availability at such time and (b) the excess, if any, of (i) the
Borrowing Base as of the last Borrowing Base Certificate delivered to the
Administrative Agent and (ii) the aggregate Revolving Credit Exposure at such
time.

“Borrowing Base Certificate”: a borrowing base certificate containing
information in respect of the Borrowing Base delivered by the Borrower to the
Administrative Agent substantially in the form of Exhibit H hereto.

“Borrowing Date”: any Business Day on which a Loan is to be made at the request
of the Borrower under this Agreement.

“Budget”: as defined in subsection 5.1(i).

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in Philadelphia, Pennsylvania, are authorized or required by
law or other governmental action to close and if the applicable Business Day
relates to any Eurodollar Loan, such day must also be a day on which dealings
are carried on in the London interbank market.

“Capital Expenditures”: any expenditure of the Borrower or any Subsidiary of the
Borrower which would be classified as a capital expenditure in accordance with
GAAP; provided, however, that “Capital Expenditures” shall not include property,
plant, equipment, software or other capital expenditures acquired as part of a
Permitted Acquisition.

 

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“Capital Lease”: at any time, a lease with respect to which the lessee is
required to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.

“Capital Lease Obligations”: at any time, the amount of the obligations under
Capital Leases which would be shown at such time as a liability on a
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
prepared in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
partnership interests in a partnership (general or limited), any and all
equivalent ownership interests in a Person (other than a corporation or
partnership), including interests in a limited liability company, and any and
all warrants or options to purchase any of the foregoing.

“Change of Control”: any transaction or occurrence or series of transactions or
occurrences which results at any time in (a) either (i) Michael Traina and Chris
Ferguson owning, whether directly or indirectly, in the aggregate less than
thirty-five percent (35%) of all classes of Capital Stock of the Borrower or
(ii) Michael Traina and Chris Ferguson owning in the aggregate less than
thirty-five percent (35%) of the votes entitled to be cast in the election of
the board of directors of the Borrower (on a fully diluted basis), (b) Michael
Traina ceasing to be the full-time chief executive officer of the Borrower or
Chris Ferguson ceasing to be the full-time President of the Borrower, or (c) the
Borrower ceasing to own, directly or indirectly, 100% of the Capital Stock of
any other Loan Party, other than as a result of a transaction permitted
hereunder.

“Closing” and “Closing Date”: as defined in Section 4.4.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”: all property of the Borrower and the other Loan Parties which is
at the time subject to the Lien of any of the Security Documents in favor of the
Administrative Agent for the benefit of the holders of the Obligations.

“Commitment Fees”: as defined in Section 2.8.

“Commonly Controlled Entity”: an entity, whether or not incorporated, which is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code.

“Compliance Certificate”: as defined in subsection 5.1(c).

“Consideration”: with respect to any Permitted Acquisition, the aggregate
consideration paid or proposed to be paid by the Borrower and its Subsidiaries
with respect to such acquisition (including earnouts, payments under non-compete
arrangements and any assumption of Indebtedness).

 

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“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or any provision 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.

“Default”: any of the events specified in Section 7.1, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition precedent therein set forth, has been satisfied.

“Default Rate”: as defined in Section 2.6.

“Distribution”: in respect of any Capital Stock of any Person (a) dividends or
other distributions on such Capital Stock (except distributions in other Capital
Stock of such Person) and (b) the redemption or acquisition of such Capital
Stock or of warrants, rights or other options to purchase such Capital Stock
(except when solely in exchange for Capital Stock of such Person), including,
without limitation, any payments on or in respect of any redeemable preferred
stock of such Person.

“Dollars” and “$”: dollars in lawful currency of the United States of America.

“EBITDA”: for any period, Net Income for such period plus, to the extent
deducted in the computation of such Net Income for such period, the sum of the
following (a) Interest Expense, (b) income taxes and franchise taxes (but, if
there is a net tax benefit, that shall be deducted from such Net Income in
calculating EBITDA), and (c) depreciation and amortization, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP and without duplication. As used in the definitions of Modified EBITDA and
Permitted Acquisition, EBITDA shall also be determined for any Person who has
(or whose assets have) been acquired by a Loan Party to the extent provided in
such definition.

“Eligible Receivables”: the sum of all of the Borrower’s and each Guarantor’s
accounts (as that term is defined in the UCC), which are outstanding from time
to time, except those accounts which (1) are more than 90 days past due or 120
days past the date of invoice, (2) are due from an Affiliate, (3) are from (i) a
Specified Account Debtor from which fifty percent (50%) or more of the accounts
of such Specified Account Debtor are not Eligible Receivables or (ii) an account
debtor other than a Specified Account Debtor from which twenty-five percent
(25%) or more of the accounts of such account debtor are not Eligible
Receivables, (4) are due from the United States or any agency or department
thereof, unless a notice of assignment acceptable to the Administrative Agent
has been delivered to the Administrative Agent pursuant to the Assignment of
Claims Act of 1940, as amended, (5) are not assignable or in which a security
interest may not be fully perfected by filing UCC financing statements against
the Borrower or any such Guarantor, (6) are for goods or services not contracted
for, provided to or accepted by the account debtor or which constitute
pre-bills, (7) are assigned by the Borrower or any such Guarantor a dating after
the actual date of the account, (8) are due from foreign account debtors or are
payable in a foreign currency (other than those accounts backed by an
irrevocable letter of credit in Dollars acceptable to the Administrative Agent
and issued by a financial institution organized under the laws of the United
States or a State therein and then only to the extent of such letter of credit),
(9) are subject to a prior assignment or encumbrance, (10) are (but only to the
extent) subject to a claim of reduction, counterclaim, set-off, recoupment,
chargeback or any claim for credits, allowances or adjustments by

 

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an account debtor (except for customary discounts allowed for prompt payment),
(11) arise out of a contract with or order from an account debtor that by its
terms forbids or makes the assignment of that account to the Administrative
Agent void or unenforceable, (12) with respect to or in payment of such
accounts, the Borrower or any such Guarantor has received a note, trade
acceptance, draft or other instrument or chattel paper, unless, to the extent
approved by the Administrative Agent in its sole discretion, the Borrower or any
such Guarantor immediately notifies the Administrative Agent and endorses or
assigns and delivers the same to the Administrative Agent, (13) are payable by
an account debtor who has filed for or taken such action (or who has suffered
such actions against it) for termination of existence, insolvency, the
appointment of a receiver for any part of its property, an assignment for the
benefit of creditors, the filing of a petition in bankruptcy or the commencement
of any proceeding under any bankruptcy or insolvency laws, (14) have been
partially paid by the account debtor (but only to the extent of such partial
payment), (15) arise from a sale to the account debtor on a bill and hold,
guaranteed sale, sale or return, sale on approval, consignment or any other
repurchase or return basis, or a contra account, (16) together with all the
accounts of the account debtor and its Affiliates exceed twenty-five percent
(25%) of all of the Borrower’s and Guarantors’ accounts collectively, but only
to the extent of such excess, (17) do not arise in the ordinary course of
business of the Borrower and its Subsidiaries, or (18) are hereafter specified
individually or categorically by the Administrative Agent as unacceptable in the
Administrative Agent’s reasonable judgment. The above eligibility requirements
may be adjusted by the Administrative Agent in its reasonable discretion at any
time upon written notice to Borrower.

“Eligible Unbilled Receivables”: the sum of all of the Borrower’s and each
Guarantor’s unbilled receivables, to the extent that if such receivables were
billed as of such date, the accounts (as that term is defined in the UCC)
resulting therefrom would constitute Eligible Accounts Receivable. The above
eligibility requirements may be adjusted by the Administrative Agent in its
reasonable discretion at any time upon written notice to Borrower.

“Employee Pension Plan”: any pension plan which (a) is maintained by the
Borrower or any Affiliate and (b) is subject to Part 3 of Title I of ERISA.

“Environmental Laws”: any and all Federal, state, local, municipal or foreign
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
binding requirements of any Governmental Authority, or binding Requirement of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment, as now or may at any time hereafter be
in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended, and
any regulations issued thereunder by the Department of Labor or PBGC.

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of such Board) maintained by a
member bank of such System.

 

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“Eurodollar Base Rate”: with respect to any Eurodollar Loan for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16th of 1%) equal to the rate determined by the Administrative Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the average of the London interbank offered rate of
interest per annum for Dollars quoted by the British Bankers’ Association set
forth on Moneyline Telerate (or appropriate successor, or if the British
Bankers’ Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Administrative Agent), display page
3750 (or such other display page on the Moneyline Telerate System as may replace
such page 3750) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the first day of such Interest Period for an amount approximately equal
in principal amount to such Eurodollar Loan and having a borrowing date and a
maturity comparable to the Interest Period for such Eurodollar Loan.

“Eurodollar Borrowing”: a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan”: any Loan bearing interest at a rate determined by reference
to the Eurodollar Rate in accordance with the provisions of Section 2.

“Eurodollar Rate”: with respect to each Interest Period pertaining to a
Eurodollar Loan, a rate per annum determined in accordance with the following
formula (rounded upward to the nearest 1/16th of 1%):

 

                  Eurodollar Base Rate                         

1.00 – Eurocurrency Reserve Requirements

Such Eurodollar Rate shall be adjusted with respect to any outstanding
Eurodollar Loan on the effective date of any change in the Eurocurrency Reserve
Requirements as of such effective date. The Administrative Agent shall give
prompt notice to the Borrower of the Eurodollar Rate as determined or adjusted
in accordance herewith, which determination shall be conclusive absent error in
calculation.

“Event of Default”: any of the events specified in Section 7, provided that any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.

“Excluded Taxes”: with respect to the Administrative Agent, any Lender, any
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of Borrower hereunder (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, 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 Borrower is located and (c) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender at the

 

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time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with subsection 2.13(b), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from Borrower with respect
to such withholding tax pursuant to Section 2.13.

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

“Existing Notes”: the notes described on Schedule III hereto.

“Facilities”: the facilities represented by the Term Loans and the Revolving
Credit Loans. The two Facilities are the “Revolving Credit Facility” and the
“Term Loan Facility”.

“Fee Letter”: the letter dated as of February 14, 2007, signed by the Borrower
and M&T relating to fees.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

“Fixed Charge Coverage Ratio”: as of the last day of any fiscal quarter, the
ratio of (a) EBITDA less Capital Expenditures to the extent not financed with
Indebtedness less cash income taxes to (b) Fixed Charges, in each case
determined for the Borrower and its Subsidiaries on a consolidated basis for the
period of four (4) consecutive fiscal quarters ending on such date; provided
that, for the first three fiscal quarters following the Closing Date, the Fixed
Charge Coverage Ratio shall be annualized (i.e., for the period ending March 31,
2007, it shall be determined for the one quarter ending March 31, 2007; for the
quarter ending June 30, 2007, it shall be calculated for the two quarters ending
June 30, 2007; and for the quarter ending September 30, 2007, it shall be
calculated for the three quarters ending September 30, 2007).

“Fixed Charges”: for any period, the sum of (a) cash Interest Expense, (b) cash
Distributions and (c) scheduled principal payments of all Indebtedness
(excluding paydowns of Revolving Credit Loans, but including seller notes), all
as determined for the Borrower and its Subsidiaries, on a consolidated basis in
accordance with GAAP and without duplication.

“Foreign Lender”: any Lender that is not organized under the laws of the United
States of America, any State thereof or the District of Columbia.

“GAAP”: at any time with respect to the determination of the character or amount
of any asset or liability or item of income or expense, or any consolidation or
other accounting computation, generally accepted accounting principles as in
effect in the United States on the date of, or at the end of the period covered
by, the financial statements from which such asset, liability, item of income,
or item of expense, is derived, or, in the case of any such computation, as in
effect on the date when such computation is required to be determined,
consistently applied.

 

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“Governmental Acts”: as defined in subsection 2.4(j).

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

“Guarantor”: each Subsidiary of the Borrower now or hereafter executing and
delivering a Guaranty. The initial Guarantors shall be (a) Allied Contract
Services, LLC, a Pennsylvania limited liability company, (b) ClearPoint
Resources, Inc., a Delaware corporation, (c) Mercer Ventures, Inc., a
Pennsylvania corporation, (d) Quantum Resource Corporation, a Delaware
corporation, (e) StaffBridge, Inc., a Massachusetts corporation, (f) ClearPoint
Managed Services, LLC, a Delaware limited liability corporation, and
(g) ClearPoint Advantage, LLC, a Delaware limited liability company.

“Guaranty”: a Guaranty and Suretyship Agreement delivered to the Administrative
Agent by a Guarantor substantially in the form of Exhibit C hereto, as the same
may be amended, supplemented or otherwise modified from time to time.

“Guaranty Obligation”: as to any Person, any guarantee of payment or performance
by such Person of any Indebtedness or other obligation of any other Person, or
any agreement to provide financial assurance with respect to the financial
condition, or the payment of the obligations of, such other Person (including,
without limitation, purchase or repurchase agreements, reimbursement agreements
with respect to letters of credit or acceptances, indemnity arrangements, grants
of security interests to support the obligations of another Person, keepwell
agreements and take-or-pay or through-put arrangements) which has the effect of
assuring or holding harmless any third Person against loss with respect to one
or more obligations of such third Person; provided, however, the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation of any Person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made and (b) the maximum amount for which such
contingently liable Person may be liable pursuant to the terms of the instrument
embodying such Guaranty Obligation, unless the maximum amount is not stated or
determinable, in which case the amount of such Guaranty Obligation shall be such
contingently liable Person’s maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith and approved by the
Administrative Agent. Guaranty Obligations of any Person shall include the
amount of any future “earnout” or similar payments to be made to any other
Person in connection with a Permitted Acquisition to the extent included in
accordance with GAAP as a liability on the balance sheet of such Person.

“Hedge Agreement”: any (a) interest rate swap agreement, interest rate cap
agreement, interest rate floor agreement, interest rate collar agreement,
interest rate option or any other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of any Person and any confirming letter executed pursuant to such
agreement

 

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and (b) a foreign exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap or any other agreement regarding the hedging of
fluctuations of currency values and any confirming letter executed pursuant to
such agreement, all as amended, restated, supplemented or otherwise modified
from time to time.

“Indebtedness”: of any Person at any date, without duplication:

(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than trade liabilities incurred in
the ordinary course of business not more than 60 days overdue (or being
contested in good faith) and payable in accordance with customary practices),
including seller’s notes, Subordinated Debt and to the extent included as a
liability on the balance sheet of such Person in accordance with GAAP, earnouts
and similar obligations,

(b) any other indebtedness which is evidenced by a note, bond, debenture or
similar instrument,

(c) all Capital Lease Obligations of such Person,

(d) all reimbursement and other obligations of such Person in respect of letters
of credit, bankers’ acceptances and similar obligations created for the account
of such Person, in each case whether or not matured,

(e) all liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof,

(f) all liabilities with respect to redeemable preferred stock obligations
arising prior to the later of the Revolving Credit Termination Date and the Term
Loan Maturity Date,

(g) net liabilities of such Person under any Hedge Agreements, foreign currency
exchange agreements, netting agreements and other hedging agreements or
arrangements (calculated on a basis satisfactory to the Administrative Agent and
in accordance with accepted practice),

(h) withdrawal liabilities of such Person or any Commonly Controlled Entity
under a Plan or withdrawal liabilities of such Person under a Foreign Pension
Plan, and

(i) obligations under synthetic leases and any other off-balance sheet
financing, and

(j) all Guaranty Obligations of such Person with respect to liabilities of a
type described in any of clauses (a) through (i) of this definition.

 

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The Indebtedness of any Person shall include any Indebtedness of any partnership
in which such Person is the general partner.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: has the meaning ascribed thereto in Section 3.9.

“Interest Expense”: for any period, the sum of (a) the amount of interest
accrued on, or with respect to, Indebtedness for such period, including, without
limitation, imputed interest on Capital Leases and imputed or accreted interest
in respect of deep discount or zero coupon obligations, plus (b) the net amount
payable under all Hedge Agreements in respect of such period (or minus the net
amount receivable under all Hedge Agreements in respect of such period) plus
(c) Commitment Fees payable during such period. For purposes of calculating
Interest Expense, it shall be assumed that any Guaranty Obligations constituting
Indebtedness will require payments of interest, if any, in the amounts as called
for in the underlying obligation which is the subject of such Guaranty
Obligations.

“Interest Payment Date”: (a) as to any Base Rate Loan, each January 1, April 1,
July 1 and October 1, (b) as to any Eurodollar Loan, the last day of such
Interest Period, (c) as to any Revolving Credit Loan, in addition to the
foregoing, the Revolving Credit Termination Date and (d) as to any Term Loan, in
addition to the foregoing, the Term Loan Maturity Date.

“Interest Period”: with respect to any Eurodollar Loan:

(a) initially the period commencing on the borrowing or conversion date, as the
case may be, with respect to such Eurodollar Loan and ending one, two or three
months, as selected by the Borrower in its Notice of Borrowing or notice of
conversion, given with respect thereto; and

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

provided that, the foregoing provisions relating to Interest Periods are subject
to the following:

(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;

 

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(iii) with respect to Eurodollar Loans that are Revolving Credit Loans, an
Interest Period that otherwise would extend beyond the Revolving Credit
Termination Date shall end on the Revolving Credit Termination Date;

(iv) with respect to any Eurodollar Loans that are Term Loans, an Interest
Period that otherwise would extend beyond the Term Loan Maturity Date shall end
on the Term Loan Maturity Date; and

(v) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.

“Investments”: investments (by loan or extension of credit, purchase, advance,
guaranty, capital contribution or otherwise) made in cash or by delivery of
Property, by any of the Borrower or any Subsidiary (a) in any Person, whether by
acquisition of stock or other ownership interest, indebtedness or other
obligation or Security, or by loan, advance or capital contribution or (b) in
any Property.

“Issuing Bank”: M&T, in its capacity as issuer of Letters of Credit, and any
successor thereto.

“Joinder”: a Joinder Agreement in a form acceptable to the Administrative Agent
pursuant to which a Subsidiary of the Borrower shall join the applicable Loan
Documents pursuant to Section 5.15, as amended, supplemented or otherwise
modified from time to time.

“Law”: any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree or award of any Governmental Authority.

“L/C Disbursement”: a payment or disbursement made by the Issuing Bank pursuant
to a Letter of Credit.

“L/C Sublimit”: $1,000,000.

“Lender”: as defined in the Preamble hereto and any other Person that becomes a
Lender hereunder by reason of an Assignment and Assumption.

“Letter of Credit Coverage Requirement”: with respect to each Letter of Credit
at any time, 102% of the maximum amount available to be drawn thereunder at such
time (determined without regard to whether any conditions to drawing could be
met at such time).

“Letter of Credit Fee”: has the meaning assigned to that term in subsection
2.4(b).

“Letter of Credit Obligations”: at any time, an amount equal to the sum of
(a) 100% of the maximum amount available to be drawn under all Letters of Credit
outstanding at such time (determined without regard to whether any conditions to
drawing could be met at such time) and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 2.4(d)(i).

 

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“Letter of Credit Participant”: in respect of each Letter of Credit, each Lender
(other than the Issuing Bank) in its capacity as the holder of a participating
interest in such Letter of Credit.

“Letters of Credit”: the letters of credit issued by the Issuing Bank under
Section 2.4, as amended, supplemented, extended or otherwise modified from time
to time.

“Leverage Ratios”: the collective reference to the Senior Leverage Ratio and the
Total Leverage Ratio.

“Lien”: any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).

“Loan Documents”: the collective reference to this Agreement, the Notes, the
Security Documents, the Applications, the Letters of Credit, the Joinders, the
Fee Letter, any Subordination Agreements, and all other documents, instruments,
agreements or certificates delivered in connection herewith or therewith, in
each case as amended, supplemented or otherwise modified.

“Loan Parties”: the Borrower and each of its Subsidiaries that is party to a
Loan Document.

“Loans”: the collective reference to the Revolving Credit Loans and the Term
Loans. Each Revolving Credit Loan and Term Loan shall be either a Eurodollar
Loan or a Base Rate Loan.

“M&T”: Manufacturers and Traders Trust Company.

“Material Adverse Effect”: a material adverse effect on (a) the validity or
enforceability of this Agreement or any other Loan Document, (b) the business,
Property, assets, financial condition or results of operations of the Borrower
and its Subsidiaries taken as a whole, (c) the ability of the Borrower and its
Subsidiaries to timely pay their debts as they come due and to perform their
obligations under the Loan Documents, or (d) the ability of the Administrative
Agent and the Lenders to enforce their legal remedies pursuant to this Agreement
or any other Loan Document.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphynels, and ureaformaldehyde insulation.

“Modified EBITDA”: for any period of four consecutive fiscal quarters (each a
“Reference Period”), EBITDA for such Reference Period; provided that, if at any
time during such Reference Period, the Borrower or any of its Subsidiaries
(a) shall have sold or otherwise divested any material assets or stock in any
Subsidiary, the EBITDA of such Subsidiary or attributable to such

 

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assets shall be excluded from Modified EBITDA and (b) shall have acquired the
stock or assets of any Person in a Permitted Acquisition, then so long as
(i) the Person who is being acquired or who will own the assets being acquired
is (or shall, upon closing of such acquisition, become) a Guarantor, and
(ii) the Borrower complies with Section 5.15 hereof, Modified EBITDA shall
include (x) the historical EBITDA of such Person or attributable to such assets
for the period from the beginning of such Reference Period to the day
immediately preceding the closing date of such Permitted Acquisition determined
based on the historical financial statements of such Person and (y) such
adjustments to such actual EBITDA as shall be determined by the Required Lenders
in their discretion. Accordingly, calculations of Modified EBITDA shall give
effect, on a pro forma basis, to all Permitted Acquisitions and dispositions
made during the quarter or year to which the calculations relate, as if such
Permitted Acquisition or disposition had been consummated on the first day of
the applicable period, provided, that items of revenue and expense shall be
based on actual amounts and not adjusted to give effect to potential savings and
similar adjustments except as specifically provided in clause (ii)(y) of the
immediately preceding sentence. The calculation of the Leverage Ratios in
connection with Permitted Acquisitions shall be based on the results of
operations and financial position of the Borrower and its Subsidiaries set forth
on the most recently delivered financial statements, adjusted, in the case of a
Permitted Acquisition, to give effect to any additional Indebtedness incurred in
connection therewith and to include the results of operations and financial
position of the target during the applicable period and, in the case of a
disposition, to exclude the results of operations and financial position for the
applicable period of the assets so disposed of.

“Moody’s”: Moody’s Investors Services, Inc.

“Multiemployer Plan”: a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA and to which the Borrower or its Subsidiaries, or a
Commonly Controlled Entity of any of the foregoing, is making or is obligated to
make contributions, or has made, or been obligated to make, contributions.

“Net Income”: for any period, the aggregate net income (or loss) of the Borrower
and its Subsidiaries for such period on a consolidated basis determined in
accordance with GAAP, provided that, the following items, without duplication,
shall be excluded from the calculation of Net Income:

(a) after-tax gains and losses from asset sales or abandonment or reserves
relating thereto;

(b) items classified as extraordinary, non-recurring or unusual gains, losses or
charges, and the related tax effecting, each determined in accordance with GAAP;

(c) the net income of any Person acquired in a “pooling of interests”
transaction accrued prior to the date it becomes a Subsidiary of the Borrower or
is merged or consolidated with the Borrower or any Subsidiary of the Borrower;

 

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(d) the net income (but not loss) of any Subsidiary of the Borrower to the
extent that the declaration of dividends, the making of intercompany loans or
similar payments by that Subsidiary of that income is restricted by a contract,
operation of law or otherwise;

(e) the net income of any Person, other than the Borrower or a Subsidiary of the
Borrower, except to the extent of cash dividends or distributions paid to the
Borrower or a Subsidiary of the Borrower by such Person;

(f) any restoration to income of any contingency reserve;

(g) income or loss attributable to discontinued operations (including operations
disposed of during such period whether or not such operations were classified as
discontinued);

(h) income attributable to insurance proceeds, condemnation awards of litigation
awards or settlements; and

(i) any other non-cash gains and non-cash losses.

“Net Proceeds”: with respect to any Asset Sale, the amount equal to (a) the
aggregate amount received in cash (including any cash received by way of
deferred payment pursuant to a note receivable, other non-cash consideration or
otherwise, but only as and when such cash is so received) in connection with
such Asset Sale minus (b) the sum of (i) the principal amount of Indebtedness
which is secured by the asset that is the subject of such Asset Sale (other than
Indebtedness assumed by the purchaser of such asset) and which is required to
be, and is, repaid in connection with such Asset Sale (other than Indebtedness
hereunder) and (ii) the reasonable fees, commissions, income taxes and other
out-of-pocket expenses incurred by the Borrower or such Subsidiary in connection
with such Asset Sale.

“Notes”: the collective reference to the Revolving Credit Notes and the Term
Notes.

“Notice of Borrowing”: with respect to any Loan, a notice from the Borrower in
respect of such Loan, containing the information in respect of such Loan and
delivered to the Administrative Agent, in the manner and by the time specified
pursuant to the terms hereof. A form of the Notice of Borrowing is attached
hereto as Exhibit B.

“Obligations”: collectively, (a) all Reimbursement Obligations and all unpaid
principal of and accrued and unpaid interest on (including, without limitation,
any interest accruing subsequent to the commencement of a bankruptcy, insolvency
or similar proceeding with respect to the Borrower, whether or not such interest
constitutes an allowed claim in such proceeding) the Loans, (b) all accrued and
unpaid fees arising or incurred under this Agreement or any other Loan Document,
(c) any other amounts due hereunder or under any of the other Loan Documents,
including all reimbursements, indemnities, fees, costs, expenses, prepayment
premiums, break-funding costs and other obligations of the Borrower or any other
Loan Party to the Administrative Agent, any

 

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Lender or any indemnified party hereunder or thereunder, (d) any obligations
owed by the Borrower or any other Loan Party to any Lender or to any Affiliate
of any Lender pursuant to a Hedge Agreement, and (e) all out-of-pocket costs and
expenses incurred by the Administrative Agent and the Lenders in connection with
this Agreement and the other Loan Documents, including but not limited to the
reasonable fees and expenses of the Administrative Agent’s counsel and each
Lender’s counsel, which the Borrower is responsible to pay pursuant to the terms
of this Agreement and/or the other Loan Documents.

“Participant”: as defined in subsection 9.6(f).

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
function thereof.

“Permitted Acquisition”: subject to compliance with Section 6.6, an acquisition
by the Borrower or any Subsidiary thereof (whether by merger, consolidation,
reorganization or purchase of assets or stock or other ownership interests) of
any Person engaged in a business that the Borrower and its Subsidiaries are
permitted to engage in pursuant to Section 6.10 that is not hostile in nature;
provided, that, at the time that any definitive agreement is entered into in
respect of such acquisition (or immediately prior to the closing of such
agreement if such agreement contains a contingency for any approval required
under this Agreement with respect to such acquisition), no Default or Event of
Default shall exist or would exist if such acquisition were consummated on such
date (assuming for purposes of the covenants contained in Section 6.1, that
pro forma adjustments are made to the consolidated financial statements of the
Borrower and its Subsidiaries in accordance with the terms hereof reflecting
such acquisition based on the historical audited financial statements (on a GAAP
basis) and other information of such Person received by the Administrative Agent
prior to the consummation of such acquisition), provided further, that approval
of the Required Lenders shall be required for any such acquisition if (a) the
sum of the amount of the Revolving Credit Loans to fund such acquisition and the
amount of any Indebtedness incurred by the Borrower or any Subsidiary thereof in
connection with such acquisition shall in the aggregate exceed $5,000,000 or
(b) at the time that such acquisition is consummated the Senior Leverage Ratio
on a pro forma basis shall exceed 2.50 to 1.0 (e.g., using Total Senior Debt on
the date of and after giving effect to such acquisition and the financing
thereof and Modified EBITDA for the four (4) fiscal quarters ending on the last
day of the immediately preceding fiscal quarter for which the Lenders have
received financial statements under subsection 5.1(a) or (b)). Notwithstanding
the foregoing, any such acquisition shall not be a Permitted Acquisition if
(i) at the time that such acquisition is consummated (x) the Senior Leverage
Ratio on a pro forma basis shall exceed 2.75 to 1.0 or (y) the Total Leverage
Ratio on a pro forma basis shall exceed 3.75 to 1.0 (in each case calculated in
the manner described in clause (b) of the immediately preceding sentence),
(ii) the assets acquired in such acquisition (or, if it is a stock acquisition,
the assets of the Person or Persons acquired in such acquisition) shall not be
free and clear of all Liens other than Liens permitted under Section 6.3(j)
hereof, (iii) any seller debt or potential earnouts payments shall not
constitute Subordinated Debt or (iv) after giving effect to such acquisition,
the Borrowing Base Availability shall be less than $2,000,000. In evidencing
compliance with the provisos in the preceding sentence, the Borrower shall
provide to the Administrative Agent a certificate signed by a Responsible
Officer of the Borrower certifying compliance and attaching the requisite
calculations demonstrating compliance.

 

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“Permitted Investments”: Investments in:

(a) one or more Subsidiaries of the Borrower;

(b) Property to be used in the ordinary course of business of the Borrower and
its Subsidiaries;

(c) current assets arising from the sale or purchase of goods and services in
the ordinary course of business of the Borrower and the Subsidiaries;

(d) direct obligations of the United States of America or any agency or
instrumentality thereof, or obligations guaranteed by the United States of
America or any agency or instrumentality thereof, provided that such obligations
mature within one (1) year from the date of acquisition thereof;

(e) certificates of deposit, time deposits or banker’s acceptances, maturing
within one (1) year from the date of acquisition, with banks or trust companies
organized under the laws of the United States, the unsecured long-term debt
obligations of which are rated “A3” or higher by Moody’s or “A-” or higher by
S&P, and issued, or in the case of banker’s acceptance, accepted, by a bank or
trust company having capital, surplus and undivided profits aggregating at least
$500,000,000;

(f) commercial paper given the highest rating by either S&P or Moody’s maturing
not more than 270 days from the date of creation thereof;

(g) in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended;

(h) in connection with Hedge Agreements that are permitted pursuant to
Section 6.2 hereof;

(i) Investments in connection with any cash management agreements with M&T;

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

(k) loans to shareholders, directors or officers in an aggregate amount not to
exceed $250,000 at any one time outstanding;

(l) advances to employees to meet expenses incurred by such employees in the
ordinary course of business in an aggregate amount not to exceed $250,000 at any
one time outstanding;

 

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(m) Investments existing on the date hereof and set forth on Schedule II hereto;

(n) Permitted Acquisitions; and

(o) Investments not otherwise provided in clauses (a) through (n) above in an
aggregate amount not to exceed $100,000 outstanding at any one time.

“Permitted Liens”: as defined in Section 6.3.

“Person”: an individual, partnership, corporation, limited liability company,
limited liability partnership, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

“Plan”: at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which the Borrower, any Subsidiary or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

“Pledge Agreement”: (a) the Pledge Agreement or Agreements, dated as of the date
hereof, to be executed and delivered on the Closing Date and (b) any other
Pledge Agreement between a Loan Party and the Administrative Agent, each
substantially in the form of Exhibit E hereto, as amended, supplemented or
otherwise modified from time to time.

“Post-Closing Field Examination”: the collateral field examination to be
conducted after the Closing Date by the Administrative Agent or its employees,
agents or consultants of the Borrower and its Subsidiaries.

“Prime Rate”: the rate of interest per annum publicly announced from time to
time by M&T as its prime rate in effect at its principal office in Buffalo, New
York, which rate may not be the lowest rate then being charged to commercial
borrowers by M&T; each change in the Prime Rate shall be effective on the date
such change is publicly announced as effective.

“Prior Credit Agreement”: the Loan and Security Agreement by and among Bridge
Healthcare Finance, LLC, Bridge Opportunity Finance, LLC and Mercer Staffing,
Inc., Mercer Ventures, Inc., and Allied Contract Services, LLC dated
February 28, 2005, as amended.

“Properties”: the collective reference to the facilities and properties owned,
leased or operated by the Borrower and its Subsidiaries.

“Purchasing Lender”: as defined in subsection 9.6(b).

“Register”: as defined in subsection 9.6(d).

“Regulations D, T, U and X”: Regulations D, T, U and X promulgated by the Board
of Governors of the Federal Reserve System (12 C.F.R. Part 204 et seq., 12
C.F.R. part 220 et seq., 12 C.F.R. Part 221 et seq. and 12 C.F.R. Part 224
et seq., respectively), as such regulations are now in effect and as may
hereafter be amended.

 

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“Reimbursement Obligations”: in respect of each Letter of Credit, the obligation
of the Borrower to reimburse the Issuing Bank for all drawings made thereunder
in accordance with subsection 2.4(d) and the Application related to such Letter
of Credit for amounts drawn under such Letter of Credit.

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c)(1), (2), (4),
(5), (6), (10) and (13) of ERISA.

“Required Lenders”: at any time, such Lenders as hold, individually or
collectively, at least (a) 66-2/3% of the sum of (i) the Revolving Credit
Commitments and (ii) the aggregate principal amount of the Term Loans then
outstanding, or (b) in the event that the Revolving Credit Commitments have
expired or terminated, 66-2/3% of the Total Exposure of all of the Lenders at
such time; provided that, at any time that there are only two Lenders party
hereto, Required Lenders shall mean both such Lenders.

“Requirement of Law”: as to any Person, the Articles or Certificate of
Incorporation or Formation, By-Laws, partnership agreement, operating agreement
or other organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case binding upon such Person or any of its
property or to which such Person or any of its property is subject.

“Reserves”: any and all reserves against borrowing availability as imposed or
modified by the Administrative Agent in its good faith discretion.

“Responsible Officer”: with respect to any Person, the chief executive officer,
president or chief or principal financial officer. Unless otherwise qualified,
all references to a “Responsible Officer” in this Agreement shall refer to a
Responsible Officer of the Borrower.

“Revolving Credit Commitment”: with respect to each Revolving Credit Lender, the
commitment of such Lender to make Revolving Credit Loans and/or participate in
Letters of Credit in the aggregate amount not to exceed at any one time
outstanding: (a) as to any Revolving Credit Lender which is an original
signatory to this Agreement, the amount set forth opposite such Lender’s name on
Schedule I hereto under the caption “Revolving Credit Loans,” as such amount may
be increased or decreased from time to time in accordance with the provisions of
this Agreement, or (b) as to any Revolving Credit Lender which is not an
original signatory to this Agreement but which becomes a Revolving Credit Lender
by executing an Assignment and Assumption, the Revolving Credit Commitment for
such Lender set forth on Schedule I to such Assignment and Assumption, as such
amount may be increased or decreased from time to time in accordance with the
provisions of this Agreement. The aggregate amount of the Revolving Credit
Commitments on the Closing Date is $20,000,000.

“Revolving Credit Commitment Percentage”: as to any Revolving Credit Lender at
any time, the percentage which such Lender’s Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments of all of the
Revolving Credit Lenders at such time (or, at any time after the Revolving
Credit Commitments shall have expired or been terminated, the percentage which
such Lender’s Revolving Credit Exposure constitutes of the Revolving Credit
Exposure of all of the Revolving Credit Lenders at such time).

 

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“Revolving Credit Commitment Period”: the period from and including the Closing
Date to, but not including, the Revolving Credit Termination Date, or such
earlier date on which the Revolving Credit Commitments shall terminate in their
entirety as provided herein.

“Revolving Credit Exposure”: as to any Revolving Credit Lender at any time, the
sum of (a) the aggregate principal amount of all Revolving Credit Loans made by
such Lender then outstanding and (b) such Lender’s Revolving Credit Commitment
Percentage multiplied by the aggregate Letter of Credit Obligations at such
time.

“Revolving Credit Lender”: at any time, any Lender having a Revolving Credit
Commitment and/or outstanding Revolving Credit Loans or issuing or participating
in Letters of Credit.

“Revolving Credit Loans”: as defined in subsection 2.1(a).

“Revolving Credit Note”: as defined in subsection 2.2(a).

“Revolving Credit Termination Date”: the earlier of (a) February 22, 2010 and
(b) the date the Revolving Credit Commitments are terminated in their entirety
as provided herein.

“SEC”: the Securities and Exchange Commission or any successor governmental
agency thereof.

“S&P”: Standard & Poor’s Rating Group, a division of McGraw-Hill Corporation.

“Security”: “security” as defined in Section 2(1) of the Securities Act of 1933,
as amended.

“Security Agreement”: (a) the Security Agreement entered into on the Closing
Date among the Borrower, the Guarantors as of such date and the Administrative
Agent for the benefit of the secured parties thereunder (including the Lenders)
and (b) any other Security Agreement entered into by a Guarantor and the
Administrative Agent, in each case substantially in the form of Exhibit F
hereto, as the same may be amended, supplemented or otherwise modified from time
to time.

“Security Documents”: collectively, any and all of (a) the Security
Agreement(s), (b) the Guaranty(ies), (c) the Pledge Agreement(s) and (d) all
additional documents and instruments entered into from time to time for the
purpose of securing the Obligations, as the foregoing may be amended,
supplemented or otherwise modified from time to time.

“Senior Debt”: at any time (a) Total Debt at such time minus (b) all
Subordinated Debt at such time of the Borrower and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.

 

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“Senior Leverage Ratio”: as of the last day any fiscal quarter, the ratio of
(a) Senior Debt at such date to (b) Modified EBITDA for the period of four
(4) consecutive fiscal quarters ending on such date.

“Solvent”: as to any Person, as of the time of determination, the financial
condition under which the following conditions are satisfied:

(a) the fair market value of the assets of such Person will exceed the debts and
liabilities, subordinated, contingent or otherwise, of such Person;

(b) the present fair saleable value of the Property of such Person will be
greater than the amount that will be required to pay the probable liability of
such Person on its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;

(c) such Person intends and will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and

(d) such Person will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is then conducted and is
proposed to be conducted after the date thereof.

“Specified Account Debtor”: Penske, Ryder, Exel, ABB Chimes, Florida Power and
Light, Clayman Associates, Procurestaff, Yoh Managed Services, Community Council
of Philadelphia and Phillip Morris.

“Subordinated Debt”: Indebtedness of the Borrower and its Subsidiaries which is
subordinated to the Obligations in a manner satisfactory to the Administrative
Agent, including that (a) no portion of the principal of such Indebtedness shall
be payable prior to ninety (90) days after the later of the Revolving Credit
Termination Date and the Term Loan Maturity Date, (b) such Indebtedness shall be
unsecured and (c) the subordinated creditor(s) shall be subject to a standstill
period of at least one hundred eighty (180) days with respect to the exercise of
its remedies following the occurrence of an Event of Default; provided that,
notwithstanding the foregoing, the Existing Notes shall be considered
Subordinated Debt if they are subordinated to the Obligations on terms
acceptable to the Administrative Agent even though the terms of such
subordination may, among other things, permit payments prior to the Term Loan
Maturity Date.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership, limited liability company or other entity are at the time owned, or
the management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.

 

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“Taxes”: as defined in Section 2.13.

“Term Loan”: as defined in subsection 2.1(b).

“Term Loan Commitment”: with respect to each Term Loan Lender, the commitment of
such Lender to make a Term Loan on the Term Loan Funding Date pursuant to
subsection 2.1(b) in an amount not to exceed the amount set forth opposite such
Lender’s name on Schedule I hereto with respect to Term Loans; provided that,
the Term Loan Commitments shall expire on April 30, 2007 if the Term Loans have
not been made by such date. The aggregate amount of the Term Loan Commitments on
the Closing Date is $3,000,000.

“Term Loan Funding Date”: the date on which the Term Loans are made hereunder in
accordance with Section 2.1(b).

“Term Loan Lender”: at any time, any Lender which has a Term Loan Commitment or
which holds an outstanding Term Loan.

“Term Loan Maturity Date”: the date that is five years from the Term Loan
Funding Date.

“Term Loan Percentage”: as to any Term Loan Lender, (a) until the funding of the
Term Loans, the percentage which such Lender’s Term Loan Commitment constitutes
of the aggregate Term Loan Commitments of all of the Term Loan Lenders and
(b) thereafter, the percentage which such Lender’s Term Loan constitutes of the
aggregate Term Loans of all of the Term Loan Lenders then outstanding.

“Term Notes”: as defined in subsection 2.2(b)(i).

“Total Debt”: at any time, all Indebtedness of the Borrower and its Subsidiaries
at such time (excluding Indebtedness that is “Indebtedness” only by reason of
clauses (g) or (h) of the definition of “Indebtedness”) determined on a
consolidated basis in accordance with GAAP and without duplication.

“Total Exposure”: as to any Lender, at any time, the sum of (a) the Revolving
Credit Exposure of such Lender at such time and (b) the aggregate amount of all
Term Loans made by such Lender then outstanding.

“Total Leverage Ratio”: as of the last day of any fiscal quarter, the ratio of
(a) Total Debt at such date to (b) Modified EBITDA for the period of four
(4) consecutive fiscal quarters ending on such date.

“Total Percentage”: as to any Lender at any time, the percentage which such
Lender’s Revolving Credit Commitment plus principal amount of Term Loans then
outstanding (or, if the Term Loans have not yet been extended, such Lender’s
Term Loan Commitment at such time) then constitutes of the aggregate Revolving
Credit Commitments plus principal amount of Term Loans then outstanding (or, if
the Term Loans have not yet been extended, the aggregate Term Loan Commitments
at such time) (or at any time after the Revolving Credit Commitments shall have
expired or been terminated, the percentage which such Lender’s Total Exposure
constitutes of the Total Exposure of all of the Lenders at such time).

 

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“Tranche”: the collective reference to (a) Eurodollar Loans whose Interest
Periods begin on the same date and end on the same later date (whether or not
such Loans originally were made on the same date) and are under the same
Facility and (b) Base Rate Loans.

“Type”: when used in respect of any Loan or Borrowing, shall refer to the Rate
by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, “Rate” shall include the
Eurodollar Rate and the Base Rate.

“UCC”: the Uniform Commercial Code as in effect from time to time in the
Commonwealth of Pennsylvania.

“Unused Revolving Credit Commitment”: as to any Lender at any particular time
during the Revolving Credit Commitment Period, an amount equal to the excess, if
any, of the Revolving Credit Commitment of such Lender at such time over the
Revolving Credit Exposure of such Lender at such time.

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

“Withdrawal Liability”: any withdrawal liability as defined in Section 4201 of
ERISA.

1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
Notes, the other Loan Documents or any certificate or other document made or
delivered pursuant hereto or thereto. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principals of
consolidation where appropriate). As used herein and in the Notes and the other
Loan Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.

(b) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Subsection, Schedule
and Exhibit references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined in this Agreement shall be equally
applicable to both the singular and plural forms of such terms.

 

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SECTION 2. LOANS AND TERMS OF COMMITMENTS

2.1 Commitments.

(a) Revolving Credit Commitments. Subject to the terms and conditions hereof,
each Revolving Credit Lender severally agrees to make revolving credit loans
(the “Revolving Credit Loans”) to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the lesser of (i) the amount of such Lender’s
Revolving Credit Commitment and (ii) such Lender’s Revolving Credit Commitment
Percentage of the Borrowing Base as of the last Borrowing Base Certificate
delivered to the Administrative Agent, minus the sum of such Lender’s Revolving
Credit Commitment Percentage of all Letter of Credit Obligations then
outstanding; provided that no Revolving Credit Loan shall be made if, after
giving effect thereto and the simultaneous application of the proceeds thereof,
the Revolving Credit Exposure of all Revolving Credit Lenders would exceed the
lesser of (i) the Revolving Credit Commitments of all Revolving Credit Lenders
at such time and (ii) the Borrowing Base as of the last Borrowing Base
Certificate delivered to the Administrative Agent. If at any time the aggregate
Revolving Credit Exposure of all of the Revolving Credit Lenders exceeds the
lesser of (i) the Revolving Credit Commitments of all of the Revolving Credit
Lenders at such time and (ii) the Borrowing Base as of the last Borrowing Base
Certificate delivered to the Administrative Agent, the Borrower shall promptly
prepay the excess to the Administrative Agent, to be applied first to repay the
Revolving Credit Loans and then as cash collateral to secure the Letter of
Credit Obligations. Unless otherwise directed by the Borrower, payments on
Revolving Credit Loans pursuant to the preceding sentence shall be applied first
to Base Rate Loans and then to Eurodollar Loans in the direct order of maturity.
The Revolving Credit Commitments may be reduced or terminated from time to time
pursuant to Section 2.9. Within the foregoing limits, the Borrower may during
the Revolving Credit Commitment Period borrow, repay and reborrow from time to
time under the Revolving Credit Commitments, subject to and in accordance with
the terms and limitations hereof. The failure of any Revolving Credit Lender to
perform its obligations hereunder shall not relieve any other Revolving Credit
Lender of its obligations hereunder (it being understood, however, that no
Revolving Credit Lender shall be responsible for the failure of any other
Revolving Credit Lender to make any Revolving Credit Loan required to be made by
such other Revolving Credit Lender). Each Revolving Credit Loan shall be made in
accordance with the procedures set forth in Section 2.3.

(b) Term Loan Commitments. Subject to the terms and conditions hereof, each Term
Loan Lender severally agrees to make to the Borrower on the Term Loan Funding
Date a term loan (hereinafter separately called a “Term Loan” and collectively
the “Term Loans”) in an amount equal to its Term Loan Percentage of the
aggregate amount of Term Loans requested by the Borrower but not to exceed such
Term Loan Lender’s Term Loan Commitment. The Term Loan Commitment of each Term
Loan Lender shall terminate on the earlier of (i) the Term Loan Funding Date and
(ii) April 30, 2007. No portion of a Term Loan which is repaid may be
reborrowed. Subject to any prepayment obligation provided in this Agreement, the
outstanding principal amount of the Term Loans shall be due and payable in
twenty (20) equal quarterly principal installments payable on the first Business
Day of each calendar quarter; provided that (x) the first such payment shall be
on the first Business Day in the calendar quarter immediately succeeding the
calendar quarter in which the Term Loan Funding Date occurs and (y) the final
payment shall be due on the Term

 

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Loan Maturity Date together with all outstanding principal and accrued interest
under the Term Loan Facility. The failure of any Term Loan Lender to perform its
obligations hereunder shall not relieve any other Term Loan Lender of its
obligations hereunder (it being understood, however, that no Term Loan Lender
shall be responsible for the failure of any other Term Loan Lender to make any
Term Loan required to be made by such other Term Loan Lender).

2.2 Notes.

(a) Revolving Credit Notes. The Revolving Credit Loans made by each Revolving
Credit Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-1 hereto, with appropriate insertions as
to payee, date and principal amount (as each may be amended, supplemented or
otherwise modified, a “Revolving Credit Note”), payable to the order of such
Revolving Credit Lender and in a principal amount equal to the amount of the
initial Revolving Credit Commitment of such Revolving Credit Lender. Each
Revolving Credit Lender is hereby authorized to record the date, Type, and
amount of each Revolving Credit Loan made by such Revolving Credit Lender, and
the date and amount of each payment or prepayment of principal thereof, on the
schedule annexed to and constituting a part of its Revolving Credit Note,
provided that the failure of any Revolving Credit Lender to make such
recordation (or any error in such recordation) shall not affect the obligations
of the Borrower hereunder or under such Revolving Credit Note. Each Revolving
Credit Note shall (a) be dated the Closing Date, (b) be stated to mature on the
Revolving Credit Termination Date and (c) provide for the payment of interest in
accordance with Sections 2.5 and 2.6.

(b) Term Notes. The Term Loan made by each Term Loan Lender shall be evidenced
by a promissory note of the Borrower, substantially in the form of Exhibit A-2
hereto, with appropriate insertions as to payee, date and principal amount (as
each may be amended, supplemented or otherwise modified, a “Term Note”), payable
to the order of such Lender and in a principal amount equal to the principal
amount of such Lender’s Term Loan Commitment. Each Term Loan Lender is hereby
authorized to record the date, Type and amount of the Term Loan made by such
Term Loan Lender, and the date and amount of each payment or prepayment of
principal thereof, on the schedule annexed to and constituting a part of its
Term Note, provided that the failure of any Term Loan Lender to make such
recordation (or any error in such recordation) shall not affect the obligations
of the Borrower hereunder or under such Term Note. Each Term Note shall (a) be
dated the Closing Date, (b) be stated to mature on the Term Loan Maturity Date
and (c) provide for the payment of interest in accordance with Sections 2.5 and
2.6 hereof.

2.3 Procedure for Revolving Credit Loans and Term Loans. The Borrower may borrow
(a) under the Revolving Credit Commitments from time to time during the
Revolving Credit Commitment Period on any Business Day and (b) Term Loans only
on the Term Loan Funding Date. The Borrower shall give the Administrative Agent
a Notice of Borrowing (a) in the case of a Eurodollar Borrowing, not later than
2:00 p.m., Philadelphia time, three (3) Business Days before such proposed
Borrowing and (b) in the case of a Base Rate Borrowing, not later than
2:00 p.m., Philadelphia time, on the day of such proposed Borrowing. All Loans
borrowed on the Closing Date or the Term Loan Funding Date shall initially be
Base Rate Loans, provided that such Loans can be converted

 

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thereafter to Eurodollar Loans in accordance with the terms hereof. Such Notice
of Borrowing shall be irrevocable and shall in each case specify (a) whether the
Borrowing then being requested is to be a Revolving Credit Loan or Term Loan;
(b) the date of such Borrowing (which shall be a Business Day) and the amount
thereof; and (c) if such Borrowing is to be a Eurodollar Borrowing, the Interest
Period with respect thereto. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be a Base Rate
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration. Each borrowing under the Revolving
Credit Commitments shall be in a minimum amount equal to (x) with respect to
Eurodollar Borrowings, $250,000 or in integral multiples of $100,000 in excess
thereof and (y) with respect to Base Rate Borrowings, $100,000 or in integral
multiples of $100,000 in excess thereof (or, with respect to Base Rate
Borrowings, if the aggregate Unused Revolving Credit Commitments at such time
are less than $100,000, such lesser amount, as applicable).

Upon receipt of a Notice of Borrowing from the Borrower, the Administrative
Agent shall promptly notify each Revolving Credit Lender or Term Loan Lender, as
applicable, of such request. Each Revolving Credit Lender or Term Loan Lender,
as the case may be, will make the amount of its pro rata share of such Borrowing
(based on its Revolving Credit Commitment Percentage or Term Loan Percentage, as
the case may be, at that time) available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
Section 9.2 prior to 2:00 p.m., Philadelphia time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such Borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.

Unless the Administrative Agent shall have received notice from a Revolving
Credit Lender or Term Loan Lender, as the case may be, prior to the date of any
borrowing of Revolving Credit Loans or Term Loans, as applicable, that such
Lender will not make available to the Administrative Agent such Lender’s
pro rata portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the
date of such borrowing in accordance with this subsection and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and the Borrower (without prejudice to the Borrower’s rights against such
Lender) severally agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Revolving Credit Loans or Term
Loans, as the case may be, comprising such Borrowing and (ii) in the case of
such Lender, the Federal Funds Effective Rate, provided, that, if such Lender
shall not pay such amount within three (3) Business Days of such Borrowing Date,
the interest rate on such overdue amount shall, at the expiration of such
three-Business Day period, be the rate per annum applicable to the Revolving
Credit Loans or the Term Loans, as the case may be, comprising such Borrowing.
If such Lender shall repay to the Administrative Agent such corresponding
amount, such amount shall constitute such Lender’s Revolving Credit Loan or Term
Loan, as the case may be, as part of such Borrowing for purposes of this
Agreement.

 

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2.4 Letter of Credit Subfacility.

(a) During the Revolving Credit Commitment Period, the Borrower may request the
issuance of standby Letters of Credit to support obligations of the Borrower and
the other Loan Parties which finance the working capital and business needs of
the Borrower and the other Loan Parties by delivering to the Issuing Bank a
completed Application for letters of credit in such form and with such other
certificates, documents and information as the Issuing Bank may specify from
time to time by no later than 12:00 noon, Philadelphia time, at least five
(5) Business Days (or such shorter period as may be agreed to by the Issuing
Bank) in advance of the proposed date of issuance. Each Application for issuance
of a Letter of Credit shall be accompanied by an issuance fee based upon the
Issuing Bank’s standard schedule of fees charged for issuing letters of credit
as such may be amended from time to time. A copy of the Issuing Bank’s standard
schedule of fees as of the Closing Date has been provided to the Borrower.
Subject to the terms and conditions hereof and in reliance on the agreements of
the other Revolving Credit Lenders set forth in this Section, the Issuing Bank
will issue a Letter of Credit, provided, that each Letter of Credit shall
(i) have a maximum maturity of twelve (12) months from the date of issuance, and
(ii) in no event expire later than five (5) Business Days prior to the Revolving
Credit Termination Date, and provided further, that in no event shall the amount
of the Letter of Credit Obligations at any one time exceed the least of (i) the
L/C Sublimit, (ii) the aggregate Revolving Credit Commitments minus the
aggregate principal amount of the Revolving Credit Loans then outstanding and
(iii) the Borrowing Base as of the last Borrowing Base Certificate delivered to
the Administrative Agent minus the principal amount of the Revolving Credit
Loans then outstanding. The Issuing Bank shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Bank or any Letter of Credit Participant to exceed, any limits
imposed by any applicable Requirement of Law. Notwithstanding the provisions of
this Section, the Revolving Credit Lenders and the Borrower hereby agree that
the Issuing Bank may issue upon the Borrower’s request, one or more Letter(s) of
Credit which by its or their terms may be extended for additional periods of up
to one year each provided that (I) the initial expiration date (or any
subsequent expiration date) of each such Letter of Credit is not later than five
(5) Business Days prior to the Revolving Credit Termination Date, and
(II) renewal of such Letter(s) of Credit, at the Issuing Bank’s discretion,
shall be available upon written request from the Borrower to the Issuing Bank at
least thirty (30) days (or such other time period as agreed by the Borrower and
the Issuing Bank) before the date upon which notice of renewal is otherwise
required.

(b) The Borrower shall pay to the Administrative Agent for the ratable account
of the Revolving Credit Lenders a fee (the “Letter of Credit Fee”) equal to the
amount of the Applicable Margin for Revolving Credit Loans that are Eurodollar
Loans in effect from time to time multiplied by the daily average of the undrawn
face amount of each Letter of Credit during the preceding fiscal quarter (or
shorter period commencing with the Closing Date or ending on the Revolving
Credit Termination Date), and shall be payable quarterly in arrears on each
January 1, April 1, July 1 and October 1 commencing with April 1, 2007 and on
the Revolving Credit Termination Date. The Borrower shall also pay to the
Issuing Bank the Issuing Bank’s then in effect customary fees, plus (i)

 

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if there shall be two or more Lenders at such time, a fronting fee of twelve and
one-half basis points (.125%) on the face amount of each such Letter of Credit,
and (ii) administrative expenses payable with respect to each Letter of Credit
issued or renewed by it as the Issuing Bank may generally charge from time to
time. Once paid, all of the above fees shall be nonrefundable under all
circumstances. All periodic interest, fees and commissions shall be calculated
on the basis of the actual days elapsed in a 360 day year.

(c) (i) The Issuing Bank irrevocably agrees to grant and hereby grants to each
Letter of Credit Participant, and, to induce the Issuing Bank to issue Letters
of Credit hereunder, each Revolving Credit Lender irrevocably agrees to accept
and purchase and hereby accepts and purchases from the Issuing Bank, on the
terms and conditions hereinafter stated, for such Letter of Credit Participant’s
own account and risk, an undivided interest equal to such Letter of Credit
Participant’s Revolving Credit Commitment Percentage in the Issuing Bank’s
obligations and rights under each Letter of Credit issued by the Issuing Bank
and the amount of each draft paid by the Issuing Bank thereunder. Each Letter of
Credit Participant unconditionally and irrevocably agrees with the Issuing Bank
that, if a draft is paid under any Letter of Credit issued by the Issuing Bank
for which the Issuing Bank is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such Letter of Credit Participant
shall pay to the Issuing Bank upon demand at the Issuing Bank’s address for
notices specified herein an amount equal to such Letter of Credit Participant’s
share (based on its Revolving Credit Commitment Percentage) of (x) the amount of
such draft or any part thereof, which is not so reimbursed and (y) any taxes,
fees, charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. Any action taken or omitted by the Issuing Bank
under or in connection with a Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Issuing Bank any resulting liability to any Lender.

(ii) If any amount required to be paid by any Letter of Credit Participant to
the Issuing Bank pursuant to subsection 2.4(c)(i) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
not paid to the Issuing Bank on the date such payment is due from such Letter of
Credit Participant, such Letter of Credit Participant shall pay to the Issuing
Bank on demand an amount equal to the product of (x) such amount, times (y) the
daily average Federal Funds Effective Rate, as quoted by the Issuing Bank,
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Bank, times
(z) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. A certificate of the Issuing
Bank submitted to any Letter of Credit Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.

(iii) Whenever, at any time after the Issuing Bank has made payment under any
Letter of Credit and has received from any Letter of Credit Participant its
pro rata share of such payment in accordance with subsection 2.4(c)(i), the
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including by way of set-off or proceeds
of collateral applied thereto by the Issuing Bank), or any payment of interest
on account thereof, the Issuing Bank will distribute to such Letter of Credit
Participant its pro rata share thereof; provided, however, that in the event
that any such

 

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payment received by the Issuing Bank shall be required to be returned by the
Issuing Bank, such Letter of Credit Participant shall return to the Issuing Bank
the portion thereof previously distributed by the Issuing Bank to it.

(d) (i) The Borrower agrees to reimburse the Issuing Bank in respect of a Letter
of Credit on each date on which a draft presented under such Letter of Credit is
paid by the Issuing Bank for the amount of (a) such draft so paid and (b) any
taxes, fees, charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. Each such payment shall be made to the Issuing
Bank in immediately available funds. Notwithstanding any other provisions of
this Agreement, unless other acceptable arrangements for the immediate
reimbursement by the Borrower of amounts required to be advanced by the Issuing
Bank pursuant to a Letter of Credit have been made by the Borrower and the
Issuing Bank and such reimbursement is made by the Borrower, any and all amounts
which the Issuing Bank is required to advance pursuant to a Letter of Credit
shall, at the option of the Issuing Bank, become, at the time the amounts are
advanced, Revolving Credit Loans from the Revolving Credit Lenders made as a
Base Rate Borrowing. The Administrative Agent will notify the Revolving Credit
Lenders of the amount required to be advanced pursuant to the Letters of Credit.
Before 10:00 A.M. (Philadelphia time) on the date of any advance the Revolving
Credit Lenders are required to make pursuant to the Letters of Credit, each
Revolving Credit Lender shall make available to the Administrative Agent such
Revolving Credit Lender’s Revolving Credit Commitment Percentage of such advance
in immediately available funds.

(ii) Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the per annum rate of the then applicable Default Rate for Revolving Credit
Loans which are Base Rate Loans and shall be payable on demand by the Issuing
Bank.

(e) (i) The Borrower also agrees with the Issuing Bank that the Issuing Bank
shall not be responsible for, and the Borrower’s Reimbursement Obligations under
subsection 2.4(d)(i) shall not be affected by, among other things (x) the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged,
provided, that reliance upon such documents by the Issuing Bank shall not have
constituted gross negligence or willful misconduct of the Issuing Bank or
(y) any dispute between or among the Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred
or (z) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.

(ii) The Issuing Bank shall not be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Bank’s gross negligence or willful misconduct.

(iii) The Borrower agrees that any action taken or omitted by the Issuing Bank
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct,
shall be binding on the Borrower and shall not result in any liability of the
Issuing Bank to the Borrower.

 

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(f) If any draft shall be presented for payment to the Issuing Bank under any
Letter of Credit, the Issuing Bank shall promptly notify the Borrower of the
date and amount thereof. The responsibility of the Issuing Bank to the Borrower
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit and any other obligation expressly imposed by the provisions of
the Uniform Customs and Practice for Documentary Credits, 1993 Revision,
International Chamber of Commerce Publication No. 500 (“Publication 500”) other
than Article 48(g) thereof, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment are in conformity with such Letter of Credit.

(g) To the extent that any provision of any Application related to any Letter of
Credit is inconsistent with the provisions of this Agreement, the provisions of
this Agreement shall govern.

(h) Subject to subsection 2.4(g) above, the Borrower agrees to be bound by the
terms of each Application and the Issuing Bank’s written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from the Borrower’s own. It is understood and agreed that,
except in the case of gross negligence or willful misconduct, the Issuing Bank
shall not be liable for any error, negligence and/or mistakes, whether of
omission or commission, in following the Borrower’s instructions or those
contained in the Letters of Credit or any modifications, amendments or
supplements thereto. To the extent not otherwise inconsistent with this
Agreement, the provisions of Publication 500 are hereby made a part of this
Agreement with respect to the obligations in connection with each Letter of
Credit.

(i) Each Revolving Credit Lender’s payment obligation under subsection 2.4(c)
and the Reimbursement Obligations shall be absolute, unconditional and
irrevocable under any circumstances, and shall be performed strictly in
accordance with the terms of this Section 2.4 under all circumstances, including
the following circumstances:

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

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

(iii) the existence of any claim, set-off, defense or other right which any Loan
Party or any Revolving Credit Lender may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), the Issuing Bank or any Revolving Credit 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 and the beneficiary for which any Letter of
Credit was procured);

 

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(iv) any draft, demand, certificate or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect even
if the Issuing Bank has been notified thereof;

(v) payment by the Issuing Bank under any Letter of Credit against presentation
of a demand, draft or certificate or other document which does not comply with
the terms of such Letter of Credit, provided that such payment shall not have
constituted gross negligence or willful misconduct on the part of the Issuing
Bank;

(vi) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Borrower and their
Subsidiaries;

(vii) any breach of this Agreement or any other Loan Document by any Loan Party;

(viii) the occurrence or continuance of an insolvency proceeding with respect to
any Loan Party;

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

(x) the fact that the Revolving Credit Termination Date shall have passed or
this Agreement or the Revolving Credit Commitments hereunder shall have been
terminated; and

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

(j) In addition to amounts payable as provided in Section 9.5, the Borrower
hereby agrees to protect, indemnify, pay and save harmless the Issuing Bank, the
Administrative Agent and the Lenders from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel) which the Issuing Bank
or the Lenders may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit, other than as a result of (A) the
gross negligence or willful misconduct of the Issuing Bank as determined by a
final judgment of a court of competent jurisdiction or (B) subject to the
following clause (ii), the wrongful dishonor by the Issuing Bank of a proper
demand for payment made under any Letter of Credit, or (ii) the failure of the
Issuing Bank to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called “Governmental Acts”).

(k) As among the Borrower and the Issuing Bank, the Borrower 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

 

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foregoing, the Issuing Bank 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 the
Issuing Bank 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, facsimile, cable, telex or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Issuing
Bank, including any Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of the Issuing Bank’s rights or powers
hereunder.

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

2.5 Interest and Payment Dates. (a) Subject to the provisions of Section 2.6,
each Base Rate Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Base Rate plus the Applicable Margin for Base Rate Loans.

(b) Subject to the provisions of Section 2.6, each Eurodollar Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 360 days) at a rate per annum equal to the Eurodollar Rate for the Interest
Period in effect for such Loan plus the Applicable Margin for Eurodollar Loans.

(c) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan; provided that, interest accruing on overdue amounts
pursuant to Section 2.6 shall be payable on demand as provided in such Section.
The Eurodollar Rate and the Base Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent error.

2.6 Default Interest. To the extent not contrary to any Requirement of Law, upon
the occurrence and during the continuation of an Event of Default, any
principal, past due interest, fee or other amount outstanding hereunder shall
bear interest for each day thereafter until paid in full (after as well as
before judgment) at a rate per annum which shall be equal to two percent (2%) in

 

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excess of the rate which would otherwise be in effect for Base Rate Loans (such
rate being referred to as the “Default Rate”); provided that, with respect to
Eurodollar Loans, such rate shall be the higher of the Default Rate and two
percent (2%) in excess of the rate which would otherwise be applicable to such
Eurodollar Loan. The Borrower acknowledges that such increased interest rate
reflects, among other things, the fact that such loans or other amounts have
become a substantially greater risk given their default status and that the
Lenders are entitled to additional compensation for such risk.

2.7 Conversion and Continuation Options; Limitations on Tranches. (a) The
Borrower shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 2:00 p.m., Philadelphia time, on the
Business Day of conversion, to convert any Eurodollar Loan to a Base Rate Loan,
(b) not later than 2:00 p.m., Philadelphia time, three (3) Business Days prior
to conversion or continuation (x) to convert any Base Rate Loan into a
Eurodollar Loan, or (y) to continue any Eurodollar Loan as a Eurodollar Loan for
any additional Interest Period and (c) not later than 2:00 p.m., Philadelphia
time, three (3) Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Loan to another permissible Interest
Period, subject in each case to the following:

(A) a Eurodollar Loan may not be converted at a time other than the last day of
the Interest Period applicable thereto;

(B) any portion of a Loan maturing or required to be repaid in less than one
month may not be converted into or continued as a Eurodollar Loan;

(C) no Eurodollar Loan may be continued as such and no Base Rate Loan may be
converted to a Eurodollar Loan when any Default or Event of Default has occurred
and is continuing;

(D) any portion of a Eurodollar Loan that cannot be converted into or continued
as a Eurodollar Loan by reason of clauses (B) or (C) above automatically shall
be converted at the end of the Interest Period in effect for such Loan to a Base
Rate Loan;

(E) if by the third Business Day prior to the last day of any Interest Period
for Eurodollar Loans the Borrower has failed to give notice of conversion or
continuation as described in this subsection, the Administrative Agent shall
give notice thereof to the Lenders and such Loans shall be automatically
converted to Base Rate Loans on the last day of such then expiring Interest
Period;

(F) all conversions and continuations of Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections that, after giving effect thereto, the aggregate principal amount of
the Loans comprising each Tranche of Eurodollar Loans shall be equal to $250,000
or in increments of $100,000 in excess thereof; and

(G) the Borrower shall not have outstanding at any one time more than five
(5) Tranches in the aggregate of Eurodollar Loans.

 

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Each request by the Borrower to convert (but not continue) a Loan shall
constitute a representation and warranty that each of the representations and
warranties made by the Borrower herein is true and correct in all material
respects on and as of such date as if made on and as of such date (except to the
extent that such representations and warranties relate expressly to an earlier
date, in which case such request shall constitute a representation and warranty
that such representations and warranties are true and correct as of such date).
Accrued interest on a Loan (or portion thereof) being converted shall be paid by
the Borrower at the time of conversion.

(b) In the event, and on each occasion, that on the day two (2) Business Days
prior to the commencement of any Interest Period for a Eurodollar Loan, the
Administrative Agent shall have determined (which determination absent manifest
error shall be conclusive and binding upon the Borrower) that dollar deposits in
the principal amount of such Eurodollar Loan are not generally available in the
London Interbank Market, or that the rate at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the applicable
Lenders of making or maintaining the principal amount of such Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the Eurodollar Base Rate, the Administrative Agent shall, as soon
as practicable thereafter, give written or telephonic notice of such
determination to the Borrower and the applicable Lenders, and any request by the
Borrower for a Eurodollar Loan or for conversion to or maintenance of a
Eurodollar Loan pursuant to the terms of this Agreement shall be deemed a
request for a Base Rate Loan. After such notice shall have been given and until
the circumstances giving rise to such notice no longer exist, each request for a
Eurodollar Loan shall be deemed to be a request for a Base Rate Loan. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.

2.8 Commitment Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Revolving Credit Lender, on each January 1, April 1, July 1
and October 1, commencing April 1, 2007, during the Revolving Credit Commitment
Period and on the date on which the Revolving Credit Commitments shall be
permanently terminated or reduced as provided herein, a revolving credit
commitment fee (collectively, the “Commitment Fees”) at a rate per annum equal
to the Applicable Commitment Fee Percentage in effect from time to time on the
average daily amount of the Unused Revolving Credit Commitments of each
Revolving Credit Lender during the preceding fiscal quarter (or shorter period
commencing with the Closing Date or ending on the Revolving Credit Termination
Date). The Commitment Fees due to each Revolving Credit Lender shall commence to
accrue on the Closing Date and shall cease to accrue on the Revolving Credit
Termination Date. The Administrative Agent shall distribute the Commitment Fees
among the Revolving Credit Lenders pro rata in accordance with their respective
Revolving Credit Commitment Percentages. The foregoing fees shall be
(a) computed on the basis of the actual number of days elapsed in a year of 360
days, including the first day but excluding the last day occurring in the period
for which such fees are payable, and (b) paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, as appropriate,
to the applicable Lenders and/or the Administrative Agent. Once paid, none of
the foregoing fees shall be refundable under any circumstances, except in the
case of manifest error by the Administrative Agent in the computation of any
such amount, which error is raised in writing by the Borrower to the
Administrative Agent within twenty (20) days of payment of such amount.

 

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2.9 Termination and Reduction of Revolving Credit Commitments. (a) The Revolving
Credit Commitments shall be automatically terminated on the Revolving Credit
Termination Date whereupon the entire outstanding principal balance of the
Revolving Credit Loans, plus all accrued and unpaid interest thereon, and any
fees or other amounts owed under the Loan Documents in connection with the
Revolving Credit Facility (including all Commitment Fees and fees and other
amounts in connection with the Letters of Credit) shall be due and payable.

(b) Upon at least five (5) Business Days’ prior irrevocable written notice to
the Administrative Agent, the Borrower may at any time prior to the Revolving
Credit Termination Date, in whole permanently terminate, or from time to time in
part permanently reduce, the Revolving Credit Commitments; provided, however,
that (A) each partial reduction of such Revolving Credit Commitments shall be in
a minimum aggregate principal amount of $1,000,000 or in integral multiples of
$500,000 in excess thereof, and (B) the Revolving Credit Commitments may not be
reduced or terminated if, after giving effect thereto and to any prepayments of
the Revolving Credit Loans made on the effective date thereof, the aggregate
amount of the Revolving Credit Exposure of the Revolving Credit Lenders at such
time would exceed the aggregate Revolving Credit Commitments of the Revolving
Credit Lenders (as the same are being reduced) at such time. Each reduction in
the Revolving Credit Commitments hereunder shall be made ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Commitment Percentages. The Borrower shall pay to the Administrative Agent for
the account of the Revolving Credit Lenders on the date of each termination or
reduction of the Revolving Credit Commitments, the Commitment Fees on the amount
of the Revolving Credit Commitments so terminated or reduced accrued to the date
of such termination or reduction.

2.10 Optional and Mandatory Prepayments of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing, in whole or
in part, without premium or penalty (but in any event subject to Section 2.14),
upon prior written, telecopy or telephonic notice to the Administrative Agent
given no later than 11:00 a.m., Philadelphia time, (i) in the case of Base Rate
Loans, on the same day such prepayment is to be made, and (ii) in the case of
Eurodollar Loans, three (3) Business Days before any proposed prepayment is to
be made; provided, however, that each such partial prepayment shall be in the
principal amount of at least (A) $100,000 or in whole multiples of $100,000 in
the case of Base Rate Loans and (B) $500,000 or in whole multiples of $500,000
in excess thereof in the case of Eurodollar Loans.

(b) On the date of any termination or reduction of the Revolving Credit
Commitments pursuant to Section 2.9, the Borrower shall pay or prepay so much of
the Revolving Credit Loans as shall be necessary in order that the aggregate
Revolving Credit Exposure of the Revolving Credit Lenders will not exceed the
aggregate Revolving Credit Commitments of the Revolving Credit Lenders after
giving effect to such termination or reduction.

(c) In the event of (i) any direct or indirect sale or other disposition of any
of the assets, including lines of business, of the Borrower or any Subsidiary
(other than sales or dispositions referred to in subsections 6.5(a), (b) or (c))
(each, an “Asset Sale”) the sale price for which in the aggregate with all prior
Asset Sales made since the date of this Agreement (but only those Asset

 

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Sales the Net Proceeds of which were not applied as a prepayment as hereinafter
provided in this subsection 2.10(c)) is greater than $500,000 or (ii) the
incurrence of additional Indebtedness for borrowed money by the Borrower or any
of its Subsidiaries (other than Indebtedness incurred to a seller in connection
with a Permitted Acquisition or otherwise permitted under Section 6.2 (other
than Subordinated Debt under subsection (f) thereto unless such Subordinated
Debt was incurred in connection with financing a Permitted Acquisition), the
Borrower shall promptly prepay the outstanding Loans in an amount equal to one
hundred percent (100%) of the amount of the Net Proceeds of such Asset Sale or
incurrence of additional Indebtedness; provided that, the amount of any
prepayment hereunder shall be rounded down to the nearest multiple of $1,000;
provided, further, that no such repayment shall be required in respect of the
Net Proceeds arising from an Asset Sale if, and to the extent, that the Borrower
or such Subsidiary has reinvested any such Net Proceeds arising from such Asset
Sale in productive assets of a kind then used or useable in the business of the
Borrower and its Subsidiaries (including Capital Expenditures) prior to the date
that is one hundred eighty days (180) after the date such Asset Sale is closed.
At the time any such Asset Sale or incurrence of additional Indebtedness is
completed, the Borrower shall deliver to the Administrative Agent an accounting
of the Net Proceeds in sufficient detail and form acceptable to the
Administrative Agent together with the amount of any prepayment or repayment
required at such time. Payments made pursuant to this subsection 2.10(c) shall
be applied in accordance with subsection 2.10(e) below.

(d) Each notice of prepayment pursuant to subsections (a) and (b) of this
Section 2.10 shall specify (i) the prepayment date, (ii) the principal amount of
each Borrowing to be prepaid and (iii) in the case of prepayments pursuant to
subsection (a), to which Facility the prepayment is to be applied. Each notice
of prepayment shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein. Each prepayment
under the Term Loan Facility pursuant to subsections (a) and (b) of this
Section 2.10 shall be applied to the Term Loans in the inverse order of
maturity. All prepayments under this Section 2.10 on other than Base Rate
Borrowings shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment and any amounts owed under Section 2.14.

(e) Payments pursuant to clause (c) of this Section 2.10 shall be applied first
to the Term Loans in the inverse order of maturity until paid in full and second
to Revolving Credit Loans until paid in full; provided that, if an Event of
Default shall have occurred and be continuing, any such payments shall be
applied pro rata to the Loans and the Letter of Credit Obligations (based on the
principal amount of the Loans outstanding and the aggregate amount of the Letter
of Credit Obligations then outstanding), with any amounts attributable to the
Letter of Credit Obligations to be held by the Administrative Agent in a cash
collateral account pursuant to Section 7.2 or, at the Administrative Agent’s
discretion, applied to the Revolving Credit Loans then outstanding. Payments of
the Revolving Credit Loans and/or in respect of the Letter of Credit Obligations
shall not reduce the Revolving Credit Commitments. To the extent any prepayments
are required pursuant to clause (c) of this Section 2.10 after the Loans have
been paid in full but Letters of Credit remain outstanding, then, no such
payments shall be required unless an Event of Default shall have occurred and be
continuing, in which case the Borrower shall deliver to the Administrative
Agent, to be held in a cash collateral account pursuant to Section 7.2, an
amount equal to the difference between (i) the Letter of Credit Coverage
Requirement and

 

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(ii) the amount of cash, if any, then held by the Administrative Agent in a
collateral account pursuant to Section 7.2, with any remaining Net Proceeds to
be applied first to any other outstanding Obligations and next to be retained by
the Borrower or its Subsidiary, as applicable. So long as no Event of Default
shall have occurred and be continuing, unless otherwise requested by the
Borrower, each payment, to the extent consistent with its application to the
appropriate Facility, shall be applied first to Base Rate Loans and next to
Eurodollar Loans in the direct order of maturity of Interest Periods.

2.11 Illegality. Notwithstanding any other provision herein, if any change in
any Requirement of Law or in the interpretation or application thereof shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert or
refinance Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and
(b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.14.

2.12 Requirements of Law. (a) In the event that any change in any Requirement of
Law or in the interpretation, or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement, any Note or any Eurodollar Loan made by it, or change the basis
of taxation of payments to such Lender in respect thereof (except for taxes
covered by Section 2.13 and changes in the rate of tax on the overall net
income, gross receipts or revenue of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special deposit or
similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not otherwise
included in the determination of the interest rate on such Eurodollar Loan
hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof then, in any such case, the Borrower shall as
promptly as practicable pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall as promptly as practicable notify the
Borrower, through the Administrative Agent, of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to

 

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this subsection submitted by such Lender, through the Administrative Agent, to
the Borrower shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder. If any amount is refunded to such Lender,
such Lender will reimburse the Borrower for amounts paid in respect of the
refunded amount without interest (except to the extent of any interest actually
received by such Lender from the relevant Governmental Authority with respect to
such refund).

(b) In the event that any Lender shall have determined that any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of return on
such Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender’s or such corporation’s policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission as promptly as practicable by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.

(c) Each Lender agrees that it will use reasonable efforts in order to avoid or
to minimize, as the case may be, the payment by the Borrower of any additional
amount under subsections 2.12(a) and (b); provided, however, that no Lender
shall be obligated to incur any expense, cost or other amount in connection with
utilizing such reasonable efforts.

2.13 Taxes. (a) All payments made by the Borrower under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
other than Excluded Taxes (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called “Taxes”). If
any Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder or under the Notes, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the Notes. Whenever
any Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.

 

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(b) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Each such Foreign Lender shall also
deliver to the Borrower (with a copy to the Administrative Agent) such further
documentation on or before the date that any documentation previously delivered
to the Borrower hereunder shall expire or become obsolete and after the
occurrence of any event requiring a change in such previously delivered
documentation.

(c) The Borrower shall not be required to pay any additional amounts to the
Administrative Agent or any Lender in respect of payments of United States
withholding tax or other Taxes made by the Borrower which are consistent with
the forms and information delivered to the Borrower and the Administrative Agent
or if the payment of such amounts would not have arisen but for a failure by the
Administrative Agent or such Lender to comply with the requirements of
subsection 2.13(b) or the Administrative Agent or such Lender did not timely
deliver to the Borrower the forms listed or described in subsection 2.13(b) or
did not take such other steps as reasonably may be available to it under
applicable tax laws and any applicable tax treaty or convention to obtain an
exemption from, or reduction (to the lowest applicable rate) of, such United
States withholding tax and other Taxes or, if such steps were taken, the
information was not timely and duly delivered to the Borrower.

2.14 Indemnity. (a) The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender sustains or
incurs as a consequence of (i) default by the Borrower in payment when due of
the principal amount of or interest on any Eurodollar Loan, (ii) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (iii) default by the Borrower in making
any prepayment after the Borrower has given a notice thereof in accordance with
the provisions of this Agreement or (iv) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, including, without limitation, in each case, any such loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained. A
certificate as to any amounts (including a calculation thereof) that a Lender is
entitled to receive under this Section 2.14 submitted by such Lender, through
the Administrative Agent, to the Borrower shall be conclusive in the absence of
clearly demonstrable error and all such amounts shall be paid by the Borrower
promptly upon demand by such Lender. This covenant shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.

(b) For the purpose of calculation of all amounts payable to a Lender under this
Section, each Lender shall be deemed to have actually funded its relevant
Eurodollar Loan through the purchase of a deposit bearing interest at the
Eurodollar Rate

 

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in an amount equal to the amount of that Eurodollar Loan and having a maturity
comparable to the relevant Interest Period or applicable period for such
Eurodollar Loan; provided, however, that each Lender may fund each of its
Eurodollar Loans in any manner it sees fit, and the foregoing assumptions shall
be utilized only for the calculation of amounts payable under this subsection.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.

2.15 Treatment of Loans and Payments. Except as provided under Sections 2.4,
2.11, 2.13 or subsection 9.6(g), each Borrowing by the Borrower hereunder, each
payment or prepayment of principal of the Loans, each payment of interest on the
Loans, each payment of Commitment Fees and participation in Letters of Credit
shall be made pro rata among the relevant Lenders in accordance with their
respective Revolving Credit Commitment Percentage, Term Loan Percentage or Total
Percentage, as the case may be. Each Lender agrees that in computing such
Lender’s portion of any borrowing to be made hereunder, the Administrative Agent
may, in its discretion, round each Lender’s amount of such borrowing to the next
higher or lower whole dollar amount.

2.16 Payments. (a) The Borrower shall make each payment (including principal of
or interest on any Borrowing or any fees or other amounts) hereunder not later
than 12:00 (noon), Philadelphia time, on the date when due to the Administrative
Agent at its offices set forth in Section 9.2, in immediately available funds.
Such payments shall be made without setoff or counterclaim of any kind. The
Administrative Agent shall distribute to the Lenders any payments received by
the Administrative Agent for their account promptly upon receipt in like funds
as received, provided that, any payment received by the Administrative Agent for
the account of the Lenders at or before 2:00 p.m. Pennsylvania time will be
distributed to the Lenders on the same Business Day and any such payment
received after that time on a given day will be distributed on the next Business
Day.

(b) Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest or fees, as the case may
be, provided that if such extension would cause payment of any interest on or
principal of the Loans or payment of any commitment fees to be made in the next
following calendar month, such payment shall be made on the immediately
preceding Business Day.

(c) In the event that any payment of principal, interest or commitment fees due
the Lenders or the Administrative Agent under any of the Loan Documents is not
paid when due, the Administrative Agent is hereby authorized to effect such
payment upon prior notice to the Borrower by debiting any demand deposit account
of the Borrower now or in the future maintained with the Administrative Agent.
This right of debiting accounts of the Borrower is in addition to any right of
setoff accorded the Lenders hereunder or by operation of law.

2.17 Loan Accounts. Each Lender shall open and maintain on its books a loan
account in the Borrower’s name with respect to Loans made, repayments,
prepayments, the computation and payment of interest and other amounts due and
sums paid to such

 

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Lender hereunder and under the Loan Documents, and such records shall be prima
facie evidence of the accuracy of the existence and amounts at any time due to
such Lender from the Borrower. The failure of any Lender to make an entry in its
loan account shall not abrogate the Borrower’s duty to repay the Indebtedness
and other amounts owed to such Lender under the Loan Documents.

2.18 Use of Proceeds. The proceeds of the Revolving Credit Loans may be used by
the Borrower for its working capital, capital expenditures and general corporate
purposes in the ordinary course of business (including paying the fees and
expenses associated with the Loan Documents) and to finance all or a portion of
the purchase price and transaction costs in connection with the ASG Acquisition
and other Permitted Acquisitions. The proceeds of the Term Loans may only be
used to fund a portion of the Purchase Price of the ASG Acquisition. The Letters
of Credit shall be letters of credit required in the ordinary course of the
Borrower’s or any other Loan Party’s business or in connection with Permitted
Acquisitions.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent, the Lenders and the Issuing Bank to enter
into this Agreement and to make the Loans and to issue and/or participate in
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:

3.1 Corporate Existence. Each of the Borrower and the other Loan Parties is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and is duly qualified or licensed to do
business and is in good standing in all other jurisdictions in which the
character of the properties owned or the nature of the activities conducted by
it makes such qualification or licensing necessary, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.

3.2 Subsidiaries. The Subsidiaries of the Borrower and the record ownership of
each such Subsidiary on the date hereof are listed on Schedule 3.2 attached
hereto.

3.3 Authority and Binding Effect. Each of the Borrower and the other Loan
Parties has all requisite power and authority, corporate and otherwise, to own,
lease, encumber and operate its properties and assets and to carry on its
business as now being conducted and to enter into and to perform its obligations
under this Agreement, the Notes and the other Loan Documents to which it is a
party and to fulfill its obligations set forth herein and therein. The
execution, delivery and performance of this Agreement, the borrowings hereunder
and the execution and delivery of the Notes, the Applications and the other Loan
Documents to which the Borrower or any other Loan Party is a party have been
duly authorized by all requisite corporate action and will not violate or
constitute a default under any Requirement of Law, or of any indenture, note,
loan or credit agreement, license or any other agreement, lease or instrument to
which the Borrower or any of its Subsidiaries is a party or by which the
Borrower or any of its Subsidiaries or any of its or their Properties are bound.
This Agreement and the other Loan Documents have each been duly executed and
delivered by each Loan Party party thereto. This Agreement constitutes, and the
Notes and other Loan Documents issued or to be issued hereunder, when executed
and delivered pursuant hereto, will constitute, the authorized, valid and
legally binding obligations of the Borrower or other Loan Party party thereto
enforceable in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws or
equitable principles from time to time in effect relating to or affecting the
rights of creditors generally.

 

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3.4 Approvals. No consent or approval of any trustee or holder of any
indebtedness, nor any authorization, consent, approval, license, exemption of or
registration, declaration or filing with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary to the valid execution and delivery of this Agreement, the
Notes or the other Loan Documents or the consummation by the Borrower or the
other Loan Parties of the transactions contemplated by this Agreement, except
such as have been obtained.

3.5 Recording and Enforceability. No recording, filing, registration, notice or
other similar action is required in order to insure the legality, validity,
binding effect or enforceability of this Agreement, the Notes or the other Loan
Documents as against the Borrower and any other Loan Party.

3.6 Litigation. Schedule 3.6 attached hereto contains a list as of the date
hereof of all litigation, claims, disputes, assessments, judgments, judicial and
administrative orders outstanding against the Borrower or any of its
Subsidiaries and any actions, suits or proceedings at law or in equity or by or
before any governmental or administrative instrumentality or other agency
pending or, to the knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries or affecting its or their property or rights which in
any such case if decided adversely individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary is in default under any applicable statute, rule, order,
certificate or regulation of any Governmental Authority having jurisdiction over
the Borrower or any Subsidiary thereof which default could reasonably be
expected to have a Material Adverse Effect. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened against the Borrower, any other
Loan Party or any of its or their respective Subsidiaries or against any of its
or their respective business, operations, properties, prospects or condition
(financial or otherwise) (a) with respect to this Agreement, the Notes, the
other Loan Documents or any of the transactions contemplated hereby, or (b) as
to which there is a reasonable likelihood of an adverse determination and which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect.

3.7 Financial Information. The Borrower has delivered to the Administrative
Agent true, correct and complete copies of the Borrower’s audited balance sheet
as of December 31, 2005 and statements of profit and loss and surplus for the
year then ended which have been certified by Lazar Levine & Felix, LLP and the
Borrower’s unaudited internally prepared balance sheet as of September 30, 2006
and statements of profit and loss and surplus for the quarter then ended. All
such financial statements have been prepared in accordance with GAAP, except for
the absence of footnotes and subject to year-end adjustments in the unaudited
financial statements, and are true and complete and present fairly in accordance
with GAAP, the financial condition and results of operations of the Borrower and
its Subsidiaries as of such dates and for the periods covered thereby, and said
balance sheets accurately reflect all liabilities, including contingent
liabilities that are required by GAAP to be reflected thereon as of the dates
thereof.

 

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Since September 30, 2006, there has been no development or event nor any
prospective development or event which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

3.8 Taxes. Each of the Borrower and its Subsidiaries has filed all federal,
state and local tax returns which it is required by law to file, subject to the
timely filing of any extension therefor, and has paid all material taxes,
assessments and other governmental charges due in respect of such returns,
except to the extent that any such taxes, assessments or other governmental
charges are being contested in good faith and as to which the Borrower or such
Subsidiary has set aside on its books adequate reserves. No federal tax Lien has
been filed against the Borrower or any of its Subsidiaries.

3.9 Intellectual Property. Each of the Borrower and the other Loan Parties owns,
or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted (the “Intellectual Property”) except for those as to which the failure
to own or license could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, no claim has been asserted against the Borrower
or any Subsidiary and is pending by any Person challenging or questioning the
use of any such Intellectual Property, nor to the Borrower’s knowledge, is any
such claim threatened and, with respect to any time thereafter, no such claim
has been asserted which could reasonably be expected to have a Material Adverse
Effect. To the Borrower’s knowledge, the use of such Intellectual Property by
the Borrower and the other Loan Parties does not infringe the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have such a Material Adverse Effect.

3.10 No Burdensome Agreements. Neither the Borrower nor any Subsidiary thereof
is a party to or bound by any agreement or instrument or subject to any
corporate or other restriction the performance or observance of which now has
or, as far as the Borrower can reasonably foresee, may have, a Material Adverse
Effect.

3.11 Material Agreements. As of the date hereof, Schedule 3.11 attached hereto
contains a list of all of the Borrower’s and its Subsidiaries’ material leases,
contracts, agreements, understandings and commitments of any kind the breach of
which could directly or indirectly reasonably be expected to have a Material
Adverse Effect and all parties (including the Borrower and its Subsidiaries) to
all such material leases, contracts, agreements, understandings and commitments
have to the Borrower’s knowledge complied with the provisions thereof in all
material respects and neither the Borrower nor any of its Subsidiaries is in
material default under any material provision thereof and to the knowledge of
the Borrower (i) no other party thereto is in default under any material
provision thereof and (ii) no event has occurred which, but for the giving of
notice or the passage of time, or both, would constitute a material default
thereunder.

3.12 Compliance With Law. Each of the Borrower and its Subsidiaries is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not in the aggregate reasonably be expected to have a
Material Adverse Effect. As of the date hereof, no Loan Party has received any
notice, not heretofore complied with, from any federal, state or local authority
or any insurance or inspection body to the effect that any of its properties,
facilities, equipment or business procedures or practices fail to comply with
any applicable law, ordinance, regulation, building or zoning law, or any other
requirements of any such authority or body, except where such failure could not
reasonably be expected to have a Material Adverse Effect.

 

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3.13 Title to Property. Each of the Borrower and its Subsidiaries has good title
to or valid leasehold interests in or license to use or similar interests in all
personal properties, assets and other rights which it purports to own or lease
or which is reflected as owned or leased on its respective books and records
(except where failure to have good title to, or valid leasehold or similar
interests in, could not reasonably be expected to have a Material Adverse
Effect), free and clear of all Liens except Permitted Liens, and subject to the
terms and conditions of the applicable leases. Except for financing statements
evidencing Permitted Liens or protective filings related to operating leases or
other assets in the possession of, but not owned by, the Borrower or any of its
Subsidiaries, no effective financing statement under the Uniform Commercial Code
is in effect in any jurisdiction and no other filing which names the Borrower or
any of its Subsidiaries as debtor or which covers or purports to cover any of
the assets of the Borrower or any of its Subsidiaries is currently effective and
on file in any state or other jurisdiction. All of the assets and properties of
the Borrower and its Subsidiaries that are necessary for the operation of their
respective businesses are in good working condition and are able to serve the
functions for which they are currently being used, except for ordinary wear and
tear.

3.14 Security Interests. At all times after execution and delivery of the
Security Documents by the Loan Party or Loan Parties party thereto and
completion of the filings and recordings (to the extent not already filed and
recorded prior to the Closing Date) in the jurisdictions listed on Schedule
3.14, and delivery to the Administrative Agent of possession or control, as
applicable, of all Collateral the perfection of a security interest in which
requires possession or control under the Uniform Commercial Code, the security
interests created for the benefit of the Administrative Agent and the Lenders
pursuant to the Security Documents will constitute valid, perfected security
interests in the Collateral subject thereto, subject to no other Liens
whatsoever, except Permitted Liens.

3.15 Federal Regulations. No part of the proceeds of any Loans will be used for
“purchasing” or “carrying” any “margin stock” within the respective meanings of
each of the quoted terms under Regulation U or for any purpose which violates
the provisions of Regulation U or any other Regulations of the Board of
Governors of the Federal Reserve System. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-l referred to in said Regulation U. No part of the
proceeds of the Loans hereunder will be used for any purpose which violates, or
which is inconsistent with, the provisions of any of Regulations D, T, U and X.

3.16 ERISA. Neither the Borrower nor any Subsidiary maintains any Employee
Pension Plan. Except as specifically disclosed on Schedule 3.16 to this
Agreement: (a) there is no Accumulated Funding Deficiency with respect to any
Employee Pension Plan, (b) no Reportable Event (excluding those for which notice
has been waived by the PBGC) has occurred with respect to any Employee Pension
Plan, (c) neither the Borrower nor any Commonly Controlled Entity has incurred
Withdrawal Liability with respect to any Multiemployer Plan, and (d) no
Multiemployer Plan is in Reorganization. No liability (whether or not such
liability

 

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is being litigated) in excess of $250,000 has been asserted against the Borrower
or any Commonly Controlled Entity in connection with any Employee Pension Plan
or any Multiemployer Plan by the PBGC, by a trustee appointed pursuant to
Section 4042(b) or (c) of ERISA, or by a sponsor or an agent of a sponsor of a
Multiemployer Plan, and no Lien has been attached and no Person has, to the
Borrower’s knowledge, threatened to attach a Lien on any of the Borrower’s or
any Commonly Controlled Entity’s property as a result of failure to comply with
ERISA or as a result of the termination of any Employee Pension Plan. Each
Employee Pension Plan, as most recently amended, including amendments to any
trust agreement, group annuity or insurance contract, or other governing
instrument, is the subject of a favorable determination by the Internal Revenue
Service with respect to its qualification under Section 401(a) of the Code, and
to the knowledge of the Borrower, no amendment adopted after such determination
negatively affects the qualification of such Plan. Neither the Borrower nor any
Commonly Controlled Entity has an unfulfilled obligation to contribute to any
Multiemployer Plan.

3.17 Fictitious Names. Neither the Borrower nor its Subsidiaries operate or do
business under any assumed, trade or fictitious names, other than as listed on
Schedule 3.17, or if after the date hereof, disclosed to the Administrative
Agent in writing.

3.18 No Event of Default. No Default or Event of Default has occurred and is
continuing.

3.19 Solvency. Each of the Borrower and its Subsidiaries is, and after receipt
and application of any Loans hereunder, including the initial Loans, will be,
Solvent.

3.20 Investment Company Act. Neither the Borrower nor any Subsidiary thereof is
an “investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

3.21 Environmental Matters. Except to the extent that all of the following could
not reasonably be expected to have a Material Adverse Effect:

(a) The Properties do not contain, and have not previously contained, in, on, or
under, including, without limitation, the soil and groundwater thereunder, any
Materials of Environmental Concern in amounts or concentrations that constitute
or constituted a violation of, or could reasonably be expected to give rise to
liability under, Environmental Laws.

(b) The Properties and all operations and facilities at the Properties are in
compliance, and have in the last five years been in compliance with all
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the business operated by the Borrower and its Subsidiaries which could
reasonably be expected to interfere with the continued operation of any of the
Properties or impair the fair saleable value of any thereof. Neither the
Borrower nor any Subsidiary has assumed any liability of any Person under
Environmental Laws.

(c) Neither the Borrower nor any Subsidiary has received nor is it aware of any
claim, notice of violation, alleged violation, non-compliance, investigation or
advisory action or potential liability regarding environmental matters or
compliance of

 

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Environmental Law with regard to the Properties which has not been
satisfactorily resolved by the Borrower or its Subsidiary and neither the
Borrower nor any Subsidiary is aware and has no reason to believe that any such
action is being contemplated, considered or threatened.

(d) Materials of Environmental Concern have not been generated, treated, stored,
transported, disposed of, at, on, from or under any of the Properties by the
Borrower or any of its Subsidiaries, nor have any Materials of Environmental
Concern been transferred by the Borrower or any of its Subsidiaries from the
Properties to any other location except in either case in the ordinary course of
business of the Borrower and its Subsidiaries in compliance with all
Environmental Laws and such that it could not reasonably be expected to give
rise to liability under any applicable Environmental Law.

(e) There are no governmental, administrative actions or judicial proceedings
pending or, to the best knowledge of the Borrower, contemplated or threatened
under any Environmental Laws to which the Borrower or any of its Subsidiaries is
or will be named as a party with respect to the Properties, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties.

3.22 Labor Matters. Except as set forth on Schedule 3.22, as of the Closing
Date, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or its Subsidiaries, and neither the
Borrower nor its Subsidiaries has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years and to the
knowledge of the Borrower, there are none now threatened.

3.23 Anti-Terrorism Laws. (a) Neither the Borrower, its Subsidiaries nor, to the
Borrower’s knowledge, their Affiliates are in violation of any Anti-Terrorism
Law nor does the Borrower or its Subsidiaries engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

(b) Executive Order No. 13224. Neither the Borrower, its Subsidiaries nor, to
the Borrower’s knowledge, any of their Affiliates or agents acting or benefiting
in any capacity in connection with the extensions of credit or other
transactions hereunder, is any of the following (each a “Blocked Person”):

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

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

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

 

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

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

(vi) a Person who is affiliated or affiliated with a Person listed above.

The Borrower does not nor, to the Borrower’s knowledge, does any of the
Borrower’s Subsidiaries, Affiliates or agents acting in any capacity in
connection with the extensions of credit hereunder or other transactions
hereunder (x) conduct any business or engage in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order
No. 13224.

3.24 ASG Acquisition.

(a) Complete and correct copies of the principal ASG Acquisition Documents as of
the Closing Date have been provided to the Administrative Agent.

(b) Each of the Loan Parties party to an ASG Acquisition Document (A) has the
power and authority under the laws of its jurisdiction of organization and under
its other organization documents to enter into and perform the ASG Acquisition
Documents to which it is a party and (B) has taken all actions (corporate or
otherwise) necessary for the execution and performance by it of the ASG
Acquisition Documents to which it is a party. The ASG Acquisition Documents
constitute the valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Parties in accordance with their respective terms,
except that the enforceability of the obligations of the parties under the ASG
Acquisition Documents is subject to the provisions of bankruptcy, insolvency,
reorganization, moratorium or other similar laws and is subject to general
equity principles which may limit the specific enforcement of certain remedies.

(c) The making and performance of the ASG Acquisition Documents does not in any
material respects violate any provision of any law or regulation, federal, state
or local, and does not violate any provisions of the organizational documents of
any Loan Party, or constitute a default under any material agreement by which
any Loan Party or its property may be bound. No contracts that are material, in
the aggregate which were acquired in the ASG Acquisition may be terminated by
the counterparty(ies) thereto as a result of the ASG Acquisition and the change
of ownership occasioned thereby.

3.25 Subordinated Notes/Proposed ASG Seller Notes. Part A of Schedule 3.25
hereto sets forth a true and complete list of each seller note or other
Subordinated Debt, and a description of all potential earnout payments, for
which the Borrower or any other Loan Party is liable for as of the Closing Date.
Part B of Schedule 3.25 sets forth a true and complete description of the
proposed ASG Seller Notes and any potential earnout payments to be made pursuant
to the ASG Acquisition as contemplated on the Closing

 

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Date. Copies of the documents evidencing such obligations have been delivered to
the Administrative Agent on or prior to the Closing Date.

3.26 No Misrepresentations or Material Nondisclosures. Neither this Agreement
nor any other document, certificate or statement furnished to the Administrative
Agent or the Lenders in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. As of the Closing Date,
there is no fact known to the Borrower which could reasonably be expected to
have a Material Adverse Effect which has not been set forth in this Agreement or
in the other documents, certificates and statements furnished to the Lenders in
connection with the transactions contemplated hereby.

All of the foregoing representations and warranties shall survive the execution
and delivery of the Notes and the making by the Lenders of the Loans and
issuance of Letters of Credit hereunder and shall continue in full force and
effect so long as any indebtedness or obligation of the Borrower to the Lenders
and/or the Administrative Agent hereunder or under the other Loan Documents is
outstanding or unperformed or this Agreement remains in effect.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions to Closing. The agreement of each Lender to enter into this
Agreement and to make the initial Loans requested to be made and the Issuing
Bank and each Revolving Credit Lender to issue and/or participate in Letters of
Credit requested to be issued on the Closing Date is subject to the satisfaction
on and as of the Closing Date of the following conditions precedent:

(a) Credit Agreement and Notes. The Administrative Agent shall have received
(i) this Agreement, (A) executed and delivered by a duly authorized officer of
the Borrower, with a counterpart for each Lender, and (B) executed and delivered
by a duly authorized officer of the Administrative Agent and each Lender,
(ii) for the account of each (as applicable) Lender, a Revolving Credit Note
and/or Term Note, with each such Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrower.

(b) Other Loan Documents. The Administrative Agent shall have received each of
the Security Documents and other Loan Documents duly executed and delivered by
each party thereto (including any stock certificates and undated stock powers.
Any document (including without limitation UCC financing statements) required to
be filed, registered or recorded in order to create, in favor of the
Administrative Agent for the benefit of the Lenders, a perfected, first priority
Lien (subject only to Permitted Liens), shall have been filed, registered or
recorded and/or properly prepared for filing, registration or recording in each
office in each jurisdiction in which such filings, registration and recordation
are required to perfect such first priority security interests created by the
Security Documents, and the Administrative Agent shall be satisfied that all
such recordings and filings have been or will be completed promptly following
the Closing Date and that all necessary filing, recording and other fees and all
taxes and expenses related to such filings, registrations and recordings have
been or will be paid in full by the Borrower.

 

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(c) Loan Party Certificates. The Administrative Agent shall have received a
certificate of the Secretary or Assistant Secretary of the Borrower and the
other Loan Parties certifying the resolutions of the board of directors of such
Person and true and correct copies of the certificate or articles of
incorporation, bylaws or other applicable governing documents of such Person and
the signatures and incumbency of the officers of such Person authorized to sign
the Loan Documents to which it is a party, and such certificates and attachments
thereto shall be in form and substance satisfactory to the Administrative Agent.

(d) Prior Credit Agreement. The Borrower shall provide evidence to the
Administrative Agent that the Prior Credit Agreement was terminated prior to the
Closing Date, all Indebtedness thereunder paid in full and the Liens securing
any such Indebtedness released.

(e) Fees. The Administrative Agent shall have received all fees to be received
by it individually or on behalf of the Lenders on the Closing Date pursuant to
the Fee Letter.

(f) Legal Opinions. The Administrative Agent shall have received the executed
legal opinion of White and Williams LLP, counsel to the Borrower and the other
Loan Parties. Such opinion shall be addressed to the Lenders and the
Administrative Agent and cover such matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.

(g) UCC Filing and Other Searches. The Administrative Agent shall have received
the results of (i) Uniform Commercial Code searches made with respect to each of
the Borrower and the other Loan Parties, together with copies of financing
statements disclosed by such searches and (ii) such tax and judgment lien
searches as the Administrative Agent shall reasonably request, and each of the
foregoing searches shall disclose no Liens, except for Permitted Liens or, if
unpermitted Liens are disclosed, the Administrative Agent shall have received
satisfactory evidence of the release of such Liens.

(h) Insurance. The Administrative Agent shall have received certificates of
insurance with respect to the Borrower’s and the other Loan Parties’ fire,
casualty, liability and other insurance covering its respective property and
business, including lender loss payee endorsements in favor of the
Administrative Agent on Acord Form 27.

(i) Good Standing. The Administrative Agent shall have received long-form
certificates of good standing, subsistence and/or status dated a recent date
from the Secretary of State or appropriate authorities in the state of formation
of each of the Borrower and the other Loan Parties and such other jurisdictions
as the Administrative Agent may request.

(j) No Material Adverse Effect; Closing Certificate. No Material Adverse Effect
shall have occurred since September 30, 2006. The Administrative Agent shall
have received a certificate from the Borrower and the other Loan Parties, dated
as of the Closing Date, and executed by a Responsible Officer of such party
stating that, as of the Closing Date and after giving effect to this Agreement
and any Loans made on the Closing Date (i) all of the representations and
warranties made by such party herein and in the other Loan Documents are true
and correct in all material respects (except that representations and warranties
that expressly

 

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relate to an earlier date are true and correct in all material respects as of
such date), (ii) no Default or Event of Default exists and (iii) no Material
Adverse Effect has occurred since September 30, 2006.

(k) Governmental Approvals. The Administrative Agent shall have received
evidence that any necessary authorizations from any Governmental Authority for
the consummation of the transactions contemplated hereby have been obtained.

(l) Due Diligence. The Administrative Agent and the Lenders shall have completed
their due diligence review, including, without limitation, a review of true and
correct copies of the ASG Acquisition Documents as in effect on the Closing Date
and any third party due diligence reports prepared in connection therewith, the
results of which shall be satisfactory to the Lenders.

(m) Financial Statements and Projections. The Borrower shall have delivered to
the Administrative Agent and the Lenders (i) consolidated financial statements
for the Borrower and its Subsidiaries for the fiscal quarter ended September 30,
2006 and (ii) consolidated financial projections on a yearly basis for the next
three (3) years.

(n) Principal Deposit Accounts. The Borrower and the other Loan Parties shall
have established their principal deposit accounts at M&T.

(o) Terra Nova Merger. The Administrative Agent shall have received evidence
satisfactory to it of the consummation of the merger with Terra Nova Acquisition
Corp. under terms acceptable to the Administrative Agent, including retention by
the Borrower of at least $30,000,000.

(p) Subordination of Existing Notes. The Administrative Agent shall have
received one or more Subordination Agreements subordinating certain existing
notes in an amount at least equal to $1,290,000 on terms and conditions
acceptable to the Administrative Agent.

(q) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate.

(r) ASG Acquisition Documents. The Borrower shall have delivered to the
Administrative Agent copies of the principal ASG Acquisition Documents as in
effect on the Closing Date, and such document shall be acceptable to the
Administrative Agent, including as to purchase price.

(s) Additional Matters. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal opinions
in respect of any aspect or consequence of the transactions contemplated hereby
or thereby as it shall reasonably request.

 

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4.2 Conditions to Each Loan or Letter of Credit. The agreement of each Lender to
make any Loan requested to be made by it and of the Issuing Bank and each
Revolving Credit Lender to issue and/or participate in Letters of Credit
requested to be issued on any date (including the Closing Date and the Term Loan
Funding Date) is subject to the satisfaction of the following conditions
precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by the Borrower or any other Loan Party herein or under the other Loan
Documents or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as of such
date as if made on and as of such date (except to the extent that such
representations and warranties relate expressly to an earlier date in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date).

(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the making of such Loan or
issuing such Letter of Credit.

(c) No Material Adverse Effect. At the time of making such Loan or issuing such
Letter of Credit, no Material Adverse Effect shall have occurred and be
continuing.

Each request by the Borrower for a Loan or Letter of Credit hereunder shall
constitute a representation and warranty by the Borrower as of the date thereof
that the conditions contained in this Section 4.2 have been satisfied.

4.3 Additional Conditions to Term Loans. The Agreement of each Term Loan Lender
to make the Term Loans on the Term Loan Funding Date is subject to the
satisfaction of the following conditions precedent in addition to the conditions
precedent set forth in Sections 4.1 and 4.2:

(a) Section 5.17. The Borrower shall have complied with Section 5.17 hereof; and

(b) Additional Matters. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the ASG Acquisition shall
be satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal opinions
in respect of any aspect or consequence of the ASG Acquisition as it shall
reasonably request.

4.4 Closing. The closing (the “Closing”) of the transactions contemplated hereby
shall take place at the offices of Ballard Spahr Andrews & Ingersoll, LLP, 1735
Market Street, Philadelphia, PA 19103, commencing at 10:00 A.M., Philadelphia
time, on February 23, 2007, or such other place or date as to which the
Administrative Agent, the Lenders and the Borrower shall agree. The date on
which the Closing shall be completed is referred to herein as the “Closing
Date”.

 

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SECTION 5. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Revolving Credit Commitments or
the Term Loan Commitments remain in effect, any Note or Letter of Credit remains
outstanding and unpaid, or any other amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, the Borrower
shall and (except in the case of delivery of financial information, reports and
notices and Section 5.17) shall cause each of its Subsidiaries to:

5.1 Furnishing Financial Statements. Furnish or cause to be furnished to the
Administrative Agent:

(a) as soon as available, but in any event not later than 90 days (or such
earlier date mandated by the SEC) after the close of each fiscal year of the
Borrower, a copy of the annual audit report for such year for the Borrower and
its consolidated Subsidiaries, including therein a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such fiscal
year, and related consolidated statements of income and retained earnings and
changes in cash flows of the Borrower and its consolidated Subsidiaries for such
fiscal year, all in reasonable detail, prepared in accordance with GAAP applied
on a basis consistently maintained throughout the period involved and with the
prior year with such changes thereon as shall be approved by the Borrower’s
independent certified public accountants, such financial statements to be
certified by Lazar Levine & Felix, LLP or a nationally recognized independent
certified public accountants selected by the Borrower and reasonably acceptable
to the Administrative Agent, without a “going concern” or like qualification or
exception or qualification arising out of the scope of the audit;

(b) as soon as available, but in any event not later than 45 days after the end
of each fiscal quarter of the Borrower (other than the last fiscal quarter),
unaudited consolidated financial statements of the Borrower and its consolidated
Subsidiaries, including therein (i) a consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such fiscal quarter, (ii) the
related consolidated statements of income and retained earnings of the Borrower
and its consolidated Subsidiaries, and (iii) the related consolidated statement
of changes in cash flows of the Borrower and its consolidated Subsidiaries all
for the period from the beginning of such fiscal quarter to the end of such
fiscal quarter and the portion of the fiscal year through the end of such
quarter setting forth in each case in comparative form the corresponding figures
for the like period of the preceding fiscal year; all in reasonable detail,
prepared in accordance with GAAP applied on a basis consistently maintained
throughout the period involved and with prior periods (except for the absence of
footnotes and subject to year-end adjustments) and accompanied by a certificate
of a Responsible Officer of the Borrower stating that the financial statements
fairly present the financial condition of the Borrower and its consolidated
Subsidiaries as of the date and for the periods covered thereby;

(c) concurrently with the delivery of:

(i) the annual and quarterly financial statements referred to in subsections
5.1(a) and 5.1(b), respectively, a certificate of a Responsible Officer of the
Borrower (each a “Compliance Certificate”) showing in detail the calculations
demonstrating compliance with the financial covenants set forth in Section 6.1
and the Applicable Margin and Applicable

 

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Commitment Fee Percentage, together with a certificate of a Responsible Officer
of the Borrower stating that, to the best of his or her knowledge, the Borrower
during such period has kept, observed, performed and fulfilled each and every
covenant and condition contained in this Agreement and in the Notes and the
other Loan Documents to which it is a party and that such officer has obtained
no knowledge of any Default or Event of Default except as specifically
indicated; if the Compliance Certificate shall indicate that such officer has
obtained knowledge of a Default or Event of Default, such Compliance Certificate
shall state what efforts the Borrower is making to cure such Default or Event of
Default; and

(ii) the financial statements referred to in subsections 5.1(a) and 5.1(b),
sufficient financial information to permit the Lenders to calculate Modified
EBITDA, including with respect to any Person who has (or whose assets have) been
acquired in a Permitted Acquisition and who is (or whose assets have been) owned
for less than four (4) full fiscal quarters, calculations on a quarterly basis
of the EBITDA attributable to such Person (or such assets) for the applicable
period prior to such acquisition.

(d) any reports, including management letters, promptly after their submittal to
the Borrower by its independent accountants in connection with any annual,
interim or special audit;

(e) within 20 days after the end of each month (i) an account receivable aging
report, and (ii) a Borrowing Base Certificate for such month.

(f) promptly following the execution thereof, a copy of any letter of intent
executed by the Borrower or any other Loan Party in respect of a proposed
acquisition;

(g) any reports, notices or proxy statements generally distributed by the
Borrower to its stockholders on a date no later than the date supplied to such
stockholders;

(h) on or before sixty (60) days after the end of each fiscal year, an operating
budget for the current fiscal year (and, if available, for the next fiscal year)
approved by the board of directors of the Borrower (including a balance sheet,
income statement and statement of cash flow and assumptions relating to such
budget) (each a “Budget”), and copies of any updates to such Budget prepared by
or for any Loan Party;

(i) promptly after the same become publicly available, copies of all periodic,
other reports, proxy statements or other materials filed by the Borrower or any
Subsidiary thereof with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, or
distributed to its equityholders, as the case may be; and

(j) promptly, such additional financial and other information as the
Administrative Agent or any Lender may from time to time reasonably request;

All balance sheets, statements and other information furnished pursuant hereto
shall be prepared in accordance with GAAP, except for the absence of footnotes
and subject to year-end adjustments in the case of the unaudited financial
statements, and shall fairly set forth the consolidated financial condition of
the Borrower and its Subsidiaries and the results of their operations. The
Lenders shall

 

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have the right, from time to time, to discuss the Loan Parties’ affairs directly
with the Borrower’s independent certified public accountants after not less than
five (5) days prior written notice to the Borrower and the opportunity for the
Borrower to be present at any such discussions. The Administrative Agent and
each Lender is authorized to show or deliver a copy of any financial statement
or any other information relating to the business, operations or financial
condition of the Borrower and its Subsidiaries which may be furnished to any
Lender or come to its attention pursuant to this Agreement or otherwise, to any
regulatory body or agency having jurisdiction over such Lender and to any bank
or other financial institution which is a present or potential participant with
such Lender in the Loans and other extensions of credit hereunder, provided such
bank or financial institution agrees to keep such information confidential on
the terms hereof.

5.2 Books and Records. Maintain proper and complete books and records of account
in which shall be set forth accurately and in accordance with GAAP, all of its
dealings and transactions.

5.3 Taxes. Pay when due all taxes, assessments, charges and levies imposed upon
it or any of its properties or which it is required to withhold and pay over,
and provide evidence of such payment to the Administrative Agent if requested,
except where such taxes, assessments or charges shall be contested in good faith
by appropriate proceedings and where adequate reserves therefor have been set
aside on its books, provided that the Borrower and its Subsidiaries shall pay or
cause to be paid all such taxes, assessments, charges, and levies forthwith
whenever foreclosure on any Lien that attaches (or security therefor) appears
imminent.

5.4 Corporate Existence and Rights; Compliance with Laws. Preserve and keep in
full force and effect its corporate existence, rights, permits, patents,
franchises, licenses, trademarks and trade names and other Intellectual Property
and comply with any and all laws, regulations, rules or requirements of any
federal agency or department and of any state, local or municipal government,
agency or department which may at any time be applicable to it, except to the
extent failure to do so could not reasonably be expected to have a Material
Adverse Effect.

5.5 Maintenance of Properties. Maintain all of its tangible property (except for
obsolete property not yet disposed of) in good repair, working order and
condition and, from time to time, make all appropriate and proper repairs,
renewals, replacements, additions and improvements thereto, except to the extent
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

5.6 Performance and Compliance with Material Agreements. Perform and comply with
each of the provisions of all Loan Documents and, except to the extent failure
to do so would not otherwise cause an Event of Default or could not reasonably
be expected to have a Material Adverse Effect, all other material agreements.

5.7 Insurance. Carry at all times, in coverage, form and amount reasonably
satisfactory to the Administrative Agent (and, in any event in such amounts and
covering such risks as is consistent with sound business practice and other
similarly situated companies), hazard insurance and business interruption
coverage (with fire, extended coverage, vandalism, malicious mischief

 

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coverage and business interruption coverage and coverage against such other
hazards as are customarily insured against by companies in the same or similar
business), comprehensive general liability insurance, worker’s compensation
insurance, comprehensive automobile liability insurance and such other insurance
as may be required by the Loan Documents and as the Administrative Agent may
from time to time reasonably require, and pay all premiums on the policies for
such insurance when and as they become due and do all other things necessary to
maintain such policies in full force and effect. The Borrower shall from time to
time upon request by the Administrative Agent or the Required Lenders, promptly
furnish or cause to be furnished to the Administrative Agent or the Lenders
evidence in form and substance satisfactory to the Administrative Agent or the
Required Lenders, of the maintenance of all insurance required to be maintained
by this Section 5.7 including, but not limited to, such originals or copies as
the Administrative Agent or the Required Lenders may request of policies,
certificates of insurance, riders and endorsements relating to such insurance
and proof of premium payments. The Borrower shall cause all hazard insurance
policies and any policies insuring the inventory and equipment covered by the
Security Agreement to provide, and the insurers issuing such policies to certify
to the Lenders, that (a) the interest of the Administrative Agent shall be
insured regardless of any breach or violation by the Borrower or any Subsidiary
thereof or the holder or owner of the policies of any warranties, declarations
and conditions contained in such policies; (b) if such insurance be proposed to
be canceled or materially changed for any reason whatsoever, such insurer will
promptly notify the Administrative Agent and such cancellation or change shall
not be effective as to the Administrative Agent for thirty (30) days after
receipt by the Administrative Agent of such notice, unless the effect of such
change is to extend or increase coverage under the policy; (c) the
Administrative Agent and the Lenders will have the right at their election to
remedy any default in the payment of premiums within thirty (30) days of notice
from the insurer of such default; and (d) loss payments in each instance will be
payable to the Administrative Agent as secured party, or otherwise as its or the
Lenders’ interests may appear. The Administrative Agent, its officers, employees
and authorized agents, are hereby irrevocably appointed attorneys-in-fact of the
Borrower to endorse any draft or check which may be payable to the
Administrative Agent, in order to collect the proceeds of such insurance
covering the collateral and distribute the same as the Required Lenders may
determine; provided that, if at the time of receipt of any such proceeds no
Event of Default has occurred and is continuing, such proceeds shall be released
to the Borrower to pay the costs of repairing, restoring or replacing the assets
lost, damaged or destroyed.

5.8 Post-Closing Field Examination/Inspection; Collateral Audit. (a) Permit
representatives of the Administrative Agent to complete the Post-Closing Field
Examination within thirty (30) days after the Closing Date.

(b) Permit any representative of the Administrative Agent and the Lenders to
visit and inspect any of its properties, to examine its books of account and
other records and files, to make copies thereof, and to discuss their affairs,
business, finances and accounts with its officers and employees, all at such
reasonable times and as often as the Administrative Agent or any Lender may
reasonably request, provided that such inspections shall not unreasonably
interfere with the conduct of the Loan Parties’ business. All reasonable costs
incurred by the Administrative Agent and the Lenders in connection with the
Post-Closing Field Examination and any other additional collateral/field or
other such inspections shall be paid by the Borrower, it being understood that
the

 

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Administrative Agent currently plans to do at least one such collateral/field
examination each year. The inspections are solely for the protection of the
Administrative Agent and the Lenders and no action or inaction of the
Administrative Agent or the Lenders shall constitute any representation that the
Borrower is in compliance with the terms of this Agreement or that the
Administrative Agent or the Lenders approve of the Loan Parties’ affairs,
business, finances or accounts.

5.9 Leases and Mortgages. Pay all rent or other sums required by any lease or
mortgage to which it is a party as the same becomes due and payable, duly
perform and comply with all of its other obligations as tenant or mortgagor
thereunder, except to the extent that any such obligation is the subject of a
good faith dispute and adequate reserves have been set aside therefor, and keep
all such leases in full force and effect, except to the extent the absence or
loss of such lease could not reasonably be expected to have a Material Adverse
Effect.

5.10 Pay Indebtedness and Perform Other Covenants. Make full and timely payment
of the principal of, and interest on, the Notes, the Reimbursement Obligations,
the Commitment Fees and (except to the extent non-payment of such Indebtedness
would not violate Section 7.1(f)) all other Indebtedness of the Loan Parties,
whether now existing or hereafter arising, and duly comply with all covenants
and agreements set forth in or required pursuant to any other agreement or
document previously, concurrently or hereafter executed or delivered by the Loan
Parties in connection with this Agreement, except that the Loan Parties may
contest in good faith after making appropriate reserves therefor amounts owing
in respect of Indebtedness other than Indebtedness arising under the Loan
Documents.

5.11 Notices. Promptly give notice to the Administrative Agent on behalf of the
Lenders of:

(a) as soon as the Borrower has knowledge, the occurrence of any Default or
Event of Default;

(b) any (i) default or event of default under any material Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect or result in a liability in excess of
$250,000;

(c) any litigation or proceeding which could give rise to a liability of the
Borrower or any of its Subsidiaries of $100,000 or more and not covered by
insurance as reasonably determined by the Borrower’s corporate counsel or in
which injunctive or similar relief is sought;

(d) the occurrence or existence of a material default by any party, including
the Borrower or any of its Subsidiaries, to any material contract to which the
Borrower or a Subsidiary is a party, or the actual or threatened termination,
revocation or non-renewal of any such material contract;

 

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(e) entry of any order, judgment, decree or decision issued by any court,
arbitrator or Governmental Authority in any proceeding to which the Borrower or
any of its Subsidiaries is a party and which could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect;

(f) any material default, event of default or breach by any Person under any ASG
Acquisition Document; and

(g) any other event which, to the best of the Borrower’s knowledge, has had or
could reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto. Upon the request of the Administrative Agent, the Borrower
shall send (or cause to be sent) to the Administrative Agent and/or the Lenders
copies of all Federal, state, local and foreign tax returns and reports filed by
the Borrower or any of its Subsidiaries in respect of taxes measured by income.

5.12 Deposit Accounts. Maintain its principal domestic deposit accounts with
M&T.

5.13 ERISA. Furnish to the Administrative Agent (a) promptly and in any event
within 30 days after it has knowledge that it or any Affiliate has incurred
Withdrawal Liability, or that any Multiemployer Plan is in Reorganization or
that any Reportable Event has occurred with respect to any Employee Pension Plan
or that PBGC has instituted or will institute proceedings under Title IV of
ERISA to terminate any Employee Pension Plan or to appoint a trustee to
administer any Employee Pension Plan, a statement setting forth the amount of
such Withdrawal Liability, the details of the Reorganization, Reportable Event
or termination or appointment proceedings and the action which it (or the
Multiemployer Plan sponsor or Employee Pension Plan sponsor if other than the
Borrower) proposes to take with respect thereto, together with a copy of any
notice of Withdrawal Liability or Reorganization given to the Borrower or any
Affiliate and a copy of the notice of such Reportable Event given to PBGC if a
copy of such notice is reasonably available to the Borrower or any of its
Affiliates, and (b) promptly after receipt thereof, a copy of any notice the
Borrower or any of its Affiliates or the sponsor of any Employee Pension Plan
receives from PBGC or the Internal Revenue Service which sets forth or proposes
any negative action or determination with respect to such Employee Pension Plan.
The Borrower will promptly notify the Administrative Agent of any excise taxes
which have been assessed against the Borrower or any of its Subsidiaries or any
of its Affiliates by the Internal Revenue Service with respect to any Employee
Pension Plan or Multiemployer Plan. Within the time required for notice to the
PBGC under Section 302(f)(4)(A) of ERISA, the Borrower will notify the
Administrative Agent of any Lien of which the Borrower has knowledge arising
under Section 302(f) of ERISA in favor of any Employee Pension Plan. The
Borrower will promptly notify the Administrative Agent of the following events,
and in any event within 30 days after the Borrower knows or has reason to know
thereof: (i) a failure to make any required contribution to a Plan or any Lien
in favor of PBGC, any Plan, or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Plan or (ii) assessment of
liability under the Coal Industry Retiree Health Benefit Act of 1992.

 

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5.14 Environmental Laws.

(a) Comply with, and require compliance by all tenants and all subtenants, if
any, with, all Environmental Laws and obtain and comply with and maintain, and
require that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, registrations or permits required by Environmental
Laws, except to the extent that failure to so comply or obtain or maintain such
documents could not reasonably be expected to have a Material Adverse Effect or
result in a liability in excess of $100,000;

(b) Comply with all lawful and binding orders and directives of all Governmental
Authorities respecting Environmental Laws, except to the extent the failure to
so comply could not reasonably be expected to have a Material Adverse Effect or
result in a liability in excess of $100,000; and

(c) Defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective Affiliates, employees, agents, advisors, officers,
directors, successors and assigns (each, an “Indemnitee”) from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to any violation of or noncompliance with
or liability under any Environmental Laws, or any orders, requirements or
demands of Governmental Authorities related thereto which in each case relate to
or arise in connection with the Borrower, any Subsidiaries thereof, any Property
or any activities relating to any property or business of the Borrower or any
Subsidiaries thereof or the enforcement of any rights provided herein or in the
other Loan Documents, including, without limitation, attorneys’ and consultants’
fees, response costs, investigation and laboratory fees, court costs and
litigation expenses, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of such Indemnitee. This indemnity
shall continue in full force and effect regardless of the termination of this
Agreement and the payment of the Notes and other Obligations.

5.15 Notice and Joinder of New Subsidiaries. Notify the Administrative Agent as
soon as practicable after acquiring or creating a new Subsidiary, and cause

(a)(i) any new Subsidiary to execute and deliver to the Administrative Agent
(A) a Guaranty (or Joinder, as determined by the Administrative Agent) and (B) a
Security Agreement (or Joinder, as determined by the Administrative Agent) and
(ii) the owner of such Subsidiary to execute and deliver a Pledge Agreement (or
Joinder as determined by the Administrative Agent) pursuant to which all of the
Capital Stock in such Subsidiary shall be pledged to the Administrative Agent,
for the benefit of the holders of the Obligations, as Collateral for the
Obligations.

(b) any Loan Party that is the owner of a Subsidiary of the Borrower to execute
and deliver to the Administrative Agent a Pledge Agreement (or Joinder as
determined by the Administrative Agent) pursuant to which the issued and
outstanding Capital Stock of such Subsidiary (to the extent owned by the
Borrower or a Subsidiary) shall be pledged to the Administrative Agent, for the
benefit of the holders of the Obligations, as Collateral for the Obligations.

 

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(c) in connection with any such Guaranties, Security Agreements, Pledge
Agreements and/or Joinders, the Borrower and/or the applicable Subsidiary or
Subsidiaries to execute and deliver or cause to be executed and delivered such
additional documentation as the Administrative Agent shall reasonably require,
including without limitation, certificates similar to those referred to in
subsection 4.1(c), opinions and stock certificates, if any, evidencing such
Capital Stock (together with undated stock powers endorsed in blank).

5.16 Anti-Terrorism Laws. Neither the Borrower nor its Affiliates, Subsidiaries
and agents shall (a) conduct any business or engage in any transaction or
dealing with any Blocked Person, including the making or receiving of any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, (b) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No. 13224;
or (c) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or the USA Patriot Act. The
Borrower shall deliver to the Administrative Agent any certification or other
evidence requested from time to time by the Administrative Agent in its sole
discretion, confirming Borrower’s compliance with this Section 5.16.

5.17 ASG Acquisition.

(a) Prior to or concurrently with the consummation of the ASG Acquisition,
furnish or cause to be furnished to the Administrative Agent:

(i) complete and correct copies of all of the principal ASG Acquisition
Documents and such evidence of the consummation of the ASG Acquisition as the
Administrative Agent may reasonably request, and such documents shall be
reasonably acceptable to the Administrative Agent;

(ii) a certificate from a Responsible Officer of the Borrower, with calculations
attached thereto (i) certifying that the ASG Acquisition has been consummated on
terms and conditions consistent with the terms of the ASG Acquisition Documents
delivered to Administrative Agent pursuant to subsection 4.1(s), (ii) certifying
that the purchase price paid in connection with the ASG Acquisition does not
exceed in the aggregate $24,000,000 (including seller notes and payments in
Capital Stock, but excluding reasonable transaction expenses) and (iii) such
aggregate purchase price will be partially funded with the ASG Seller Notes in
an amount not less than $2,500,000; and

(iii) a certificate dated as of the Closing Date and executed by a Responsible
Officer of the Borrower, with calculations attached thereto, evidencing a
minimum Borrowing Base Availability of $2,000,000 after giving effect to the
Revolving Credit Loans made by the Lenders on the Term Loan Funding Date.

 

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(b) Upon the consummation of the ASG Acquisition, be deemed to have represented
and warranted to the Administrative Agent and the Lenders that:

(i) Each of the Loan Parties party to an ASG Acquisition Document (I) has the
power and authority under the laws of its jurisdiction of organization and under
its other organization documents to enter into and perform under such ASG
Acquisition Document and (II) has taken all actions (corporate or otherwise)
necessary for the execution and performance by it of such ASG Acquisition
Documents. Such ASG Acquisition Documents constitute the valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan
Parties in accordance with their respective terms, except that the
enforceability of the obligations of the parties under such ASG Acquisition
Documents is subject to the provisions of bankruptcy, insolvency,
reorganization, moratorium or other similar laws and is subject to general
equity principles which may limit the specific enforcement of certain remedies;

(ii) The making and performance of the ASG Acquisition Documents does not in any
material respects violate any provision of any law or regulation, federal, state
or local, and does not violate any provisions of the organizational documents of
any Loan Party, or constitute a default under any material agreement by which
any Loan Party or its property may be bound. No contracts that are material, in
the aggregate which were acquired in the ASG Acquisition may be terminated by
the counterparty(ies) thereto as a result of the ASG Acquisition and the change
of ownership occasioned thereby; and

(iii) In connection with the ASG Acquisition, the Borrower and its Subsidiaries
have not assumed any liabilities of ASG other than liabilities under operating
leases for office space that have been transferred to the Borrower and its
Subsidiaries.

(c) Within five Business Days after the consummation of the ASG Acquisition,
deliver to the Administrative Agent (i) each of the documents and agreements
required by Section 5.15 hereof in connection with the ASG Acquisition duly
executed and delivered by each party thereto (including any stock certificates
and undated stock powers), (ii) to the extent that a new Subsidiary is formed in
connection with the ASG Acquisition, a certificate of the Secretary or Assistant
Secretary of such Subsidiary certifying the resolutions of the board of
directors of such Subsidiary and true and correct copies of the certificate or
articles of incorporation and bylaws of such Subsidiary and the signatures and
incumbency of the officers of such Subsidiary authorized to sign the Loan
Documents to which they are a party, and such certificates and attachments
thereto shall be in form and substance satisfactory to the Administrative Agent,
(iii) such executed legal opinions as shall be requested by the Administrative
Agent relating to the ASG Acquisition, such opinions to be addressed to the
Lenders and the Administrative Agent and cover such matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require, (iv) certificates of insurance of any new Subsidiary with
respect to its fire, casualty, liability and other insurance covering its
respective property and business, including lender loss payee endorsements in
favor of the Administrative Agent on Accord Form 27; and (v) long-form
certificates of good standing, subsistence and/or status dated a recent date
from the Secretary of State or appropriate authorities in the state of formation
of any such new Subsidiaries and such other jurisdictions as the Administrative
Agent shall determine.

 

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SECTION 6. NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Revolving Credit Commitments
remain in effect, any Note or Letter of Credit remains outstanding and unpaid,
or any other amount is owing to any Lender or the Administrative Agent hereunder
or under any other Loan Document, the Borrower shall not, and shall not permit
the Borrower or any of its Subsidiaries to, directly or indirectly:

6.1 Financial Covenants.

(a) Total Leverage Ratio. Permit, as of the last day of any fiscal quarter, the
Total Leverage Ratio to exceed 4.00 to 1.0.

(b) Senior Leverage Ratio. Permit, as of the last day of any fiscal quarter, the
Senior Leverage Ratio to exceed 3.00 to 1.00.

(c) Fixed Charge Coverage Ratio. Permit, as of the end of any fiscal quarter,
the Fixed Charge Coverage Ratio to be less than 1.20 to 1.00.

6.2 Limitation on Indebtedness. At any time incur, create, assume, or suffer to
exist any Indebtedness except:

(a) amounts outstanding under the Loan Documents;

(b) purchase money Indebtedness on equipment purchased in the ordinary course of
business and Capital Lease Obligations not exceeding, together with any purchase
money Indebtedness or Capital Lease Obligations listed on Schedule 6.2, an
aggregate principal amount at any time outstanding of $750,000;

(c) Indebtedness existing as of the date hereof described on Schedule 6.2
(including, except with respect to seller notes, any extensions or renewals or
refinancings thereof provided there is no increase in the amount thereof or
other significant change in the terms thereof);

(d) Indebtedness in an aggregate amount not to exceed $250,000 at any one time
outstanding of a Person which becomes a Subsidiary after the Closing Date,
provided that (i) such Indebtedness existed at the time such Person became a
Subsidiary and was not created in anticipation of the acquisition,
(ii) immediately after giving effect to the acquisition of such Person by the
Borrower or a Subsidiary, no Default or Event of Default shall have occurred and
be continuing and (iii) the Borrower has complied with Section 5.15 hereof;

(e) unsecured Indebtedness of the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed $250,000 at any time outstanding the proceeds of
which are to be used for the Borrower’s and its Subsidiaries’ general corporate
purposes;

(f) Subordinated Debt, including earnouts and seller notes in connection with
Permitted Acquisitions which qualify as Subordinated Debt;

 

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(g) subject to Section 6.6, Indebtedness owed to a Loan Party by another Loan
Party;

(h) Guaranty Obligations incurred in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any other Loan Party,
including Indebtedness of the Borrower or any of its Subsidiaries permitted
under this Section 6.2 (except (x) as regards Indebtedness under clause
(c) above, only if and to the extent such Indebtedness was guaranteed on the
Closing Date and (y) Subordinated Debt under clause (f) above);

(i) The ASG Seller Notes, provided that the terms of such Notes, including the
subordination provisions thereof, are reasonably acceptable to the
Administrative Agent; and

(j) Indebtedness relating to Hedge Agreements entered into with Lenders for
non-speculative purposes.

6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, including, without limitation, the
stock of any Subsidiary, whether now owned or hereafter acquired, except for
(the following, collectively, “Permitted Liens”):

(a) Liens in favor of the Lenders or the Administrative Agent arising under the
Loan Documents;

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

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

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

(c) liens for taxes not yet due or which are being contested in compliance with
Section 5.3;

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business;

(e) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security or social welfare legislation;

 

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(f) liens of landlords or of mortgagees of landlords arising by operation of law
and deposits to secure the performance of leases in the ordinary course of
business;

(g) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business of the Loan Parties;

(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not interfere with the ordinary conduct of
the business of the Loan Parties;

(i) Liens which were in existence on the date hereof and shown on Schedule 6.3
and extensions or replacements thereof;

(j) Liens on assets (other than inventory or receivables) of Persons which
become Subsidiaries after the date of this Agreement, provided that such Liens
existed at the time the respective corporations became a Subsidiary and were not
created in anticipation thereof, provided that, (i) any such Lien does not by
its terms cover any property or assets after the time such company becomes a
Subsidiary which were not covered immediately prior thereto and (ii) the
Borrower has complied with Section 5.15 hereof; and

(k) Capital Leases and purchase money security interests as and to the extent
permitted under this Agreement.

6.4 Limitations on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets except:

(a) a Subsidiary of the Borrower may merge, consolidate or amalgamate into the
Borrower so long as the Borrower is the surviving entity;

(b) a Subsidiary of the Borrower may merge, consolidate or amalgamate into or
with any Subsidiary provided that the surviving entity is or becomes a Loan
Party;

(c) a Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any other Loan Party; and

(d) a merger permitted under Section 6.6.

provided that, immediately after each such transaction and after giving effect
thereto, the Borrower is in compliance with this Agreement and no Default or
Event of Default shall be in existence or result from such transaction.

 

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6.5 Limitations on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, accounts receivables and leasehold interests), whether now owned or
hereafter acquired, except:

(a) obsolete or worn out property disposed of in the ordinary course of
business;

(b) the sale of inventory or other assets in the ordinary course of business;

(c) as permitted by Section 6.4; and

(d) Permitted Lien;

This Section 6.5 shall not prohibit the Borrower or any Subsidiary from
purchasing, holding or acquiring any Investment that is a Permitted Investment.

6.6 Limitations on Acquisitions and other Investments. Purchase, hold or acquire
beneficially any stock, other securities or evidences of indebtedness of, or
make or permit any Investment (including in any other Person), except for
Permitted Investments (including without limitation, Permitted Acquisitions);
provided that, no Permitted Acquisition shall be completed after the Closing
Date (other than the ASG Acquisition) unless prior to the 15th Business Day
before such completion, the Borrower has provided to the Administrative Agent
(a) audited, if available, and, if not, unaudited annual financial statements of
the Person being acquired (or whose assets are being acquired) for three
(3) fiscal years (or such lesser period of such Person’s existence),
(b) unaudited financial statements for any interim fiscal period(s) prior to the
consummation of such proposed acquisition, and (c) such additional independent
third party due diligence reports and field audits and/or examinations, as the
Required Lenders may request, all in form and substance satisfactory to the
Required Lenders.

6.7 Limitation on Distributions. At any time make (or incur any liability to
make) or pay any Distribution (whether in cash or property or obligations of a
Borrower or any Subsidiary thereof) in respect of the Borrower or any Subsidiary
thereof (other than a Distribution payable to the Borrower or from a Subsidiary
of the Borrower to another Subsidiary of the Borrower); except that, the
Borrower shall be permitted to make Distributions to its shareholders from and
after the Closing Date, so long as (a) no Default or Event of Default shall have
occurred and be continuing, (b) no Default or Event of Default would occur under
Section 6.1 after giving pro forma effect to such Distributions as if made on
the last day of the immediately preceding fiscal quarter for which financial
statements have been delivered to the Administrative Agent and (c) the Total
Leverage Ratio as of the last day of the immediately preceding fiscal quarter
for which financial statements have been delivered to the Administrative Agent
on a pro forma basis (i.e., after giving effect to such Distribution and any
related Indebtedness as if made or incurred on the last day of such fiscal
quarter) shall not exceed 1.50 to 1.0.

6.8 Transactions with Affiliates. Except as expressly permitted in this
Agreement, directly or indirectly enter into any transaction or arrangement
whatsoever or make any payment to or otherwise deal with any Affiliate other
than a Loan Party, except, as to all of the foregoing in the ordinary course of
business pursuant to the reasonable requirements of the Loan Parties’ businesses
and upon fair and reasonable terms no less favorable to the Loan Parties than
would be obtained in a comparable arm’s length transaction with a Person not an
Affiliate.

 

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6.9 Sale and Leaseback. Enter into any arrangement with any Person providing for
the leasing by the Borrower or any Subsidiary of real or personal property which
has been or is to be sold or transferred by the Borrower or any Subsidiary to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary.

6.10 Continuation of or Change in Business. Engage in any business either
directly or through any Subsidiary except for businesses in which the Borrower
and its Subsidiaries are engaged in on the date of this Agreement and any
business activities directly related to such existing businesses.

6.11 Limitation on Negative Pledge. Enter into any agreement with any Person
other than the Administrative Agent and the Lenders which prohibits or limits
the ability of the Borrower or its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its or their properties, assets or
revenues, whether now owned or hereafter acquired; provided, that, the Borrower
or any Subsidiary thereof may enter into such agreement in connection with any
Lien permitted by subsection 6.2(b) of this Agreement, when such prohibition or
limitation is by its terms effective only against the assets subject to such
Lien.

6.12 Limitation on Optional Prepayment of Indebtedness. Make any optional
payment or prepayment or redemption, defeasance or purchase of any Subordinated
Debt, earnouts and any other Indebtedness evidenced by any seller notes; or
amend, modify or change, or consent or agree to any amendment, modification or
change to, any of the terms of any Subordinated Debt or any seller notes or
earnout arrangements (other than any amendment, modification or change of a
nature which (a) would extend the maturity or reduce the amount of any payment
of principal thereof, (b) would reduce the rate or extend the date for payment
of interest thereon or (c) is not material and, in any event, will not involve
accelerating the date or increasing the amount of any payment or prepayment).
Notwithstanding anything in this Section 6.12 to the contrary, the Borrower and
its Subsidiaries shall be permitted to set off amounts owed by them under any
seller note against indemnification obligations owed to them by the payee of
such note in accordance with the terms thereof, and such setoff shall not be
deemed an optional payment or prepayment or redemption, defeasance or purchase
of any Indebtedness or earnout payment under this Section 6.12. Promptly
following any such set-off, the Borrower shall provide the Administrative Agent
with notice of such set-off setting forth in reasonable detail the amount of
such set-off and the resulting principal amount then outstanding under such
seller note after giving effect to such set-off.

6.13 Use of Proceeds. Directly or indirectly apply any part of the proceeds of
the Loans to the purchasing or carrying of any “margin stock” within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System, or any
regulations, interpretations or rulings thereunder.

 

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6.14 Fiscal Year. Permit any fiscal year of the Borrower to end on a day other
than December 31.

6.15 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist
or become effective any (a) consensual encumbrance or restriction or
(b) injunction or other order imposing a restriction, on the ability of any
Subsidiary of the Borrower to (i) make Distributions in respect of any Capital
Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower
or any other Subsidiary, (ii) make loans or advances to, or other Investments
in, the Borrower or any other Subsidiary of the Borrower or (iii) transfer any
of its assets to the Borrower or any other Subsidiary of the Borrower, except
for any restrictions existing under the Loan Documents.

6.16 No Misrepresentations or Material Nondisclosure. Furnish the Administrative
Agent or any Lender any certificate or other document that will contain any
untrue statement of a material fact or that will omit to state a material fact
necessary in order to make it not misleading in light of the circumstances under
which it was furnished.

6.17 Changes in Organizational Documents. Amend in any respect its certificate
of incorporation (including any provisions or resolutions relating to Capital
Stock), by-laws or other organizational documents without providing at least
thirty (30) calendar days’ prior written notice to the Administrative Agent.

SECTION 7. EVENTS OF DEFAULT

7.1 Events of Default. Each of the following shall constitute an event of
default (an “Event of Default”):

(a) The Borrower fails to pay on or before the date when due, whether on demand
or otherwise, any principal of the Notes or any Reimbursement Obligation, or
fails to pay within five (5) days after the date when due, any interest thereon
or any other Indebtedness (including fees and expenses) to the Administrative
Agent or the Lenders under this Agreement or the other Loan Documents.

(b) The Borrower fails to comply with or perform as and when required or to
observe any of the terms, conditions or covenants contained in Sections 5.1,
5.7, 5.11, 5.15 or 5.17 or Section 6 of this Agreement.

(c) The Borrower or any Loan Party fails to comply with or perform as and when
required any of the terms, covenants, or conditions of this Agreement or any
other Loan Document (other than as provided in subsections (a) and (b) above) to
be complied with, performed or observed by the Borrower or such Loan Party and
such failure shall continue unremedied for a period of 30 days.

(d) Any financial statement or any representation or warranty of the Borrower or
any Loan Party made herein or in any other Loan Document or in any report,
certificate or other document furnished under or in connection with this
Agreement proves to have been false or misleading in any material respect on or
as of the date made or deemed made.

 

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(e) There occurs a default or event of default under (i) any of the other Loan
Documents or any other document or instrument delivered to the Administrative
Agent by the Borrower or any other Loan Party or (ii) any Hedge Agreement
entered into with a Lender or Affiliate thereof, and such default or event of
default continues unremedied beyond the grace period, if any, provided therein.

(f) The Borrower or any Subsidiary thereof shall (i) default in the payment of
any principal of or interest on or any other amount payable on any Indebtedness
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness was created and the
aggregate amount of such Indebtedness in respect of which such default or
defaults shall have occurred is at least $100,000; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness in excess of $100,000 contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, with the giving of notice
if required, such Indebtedness to become due and payable prior to its stated
maturity.

(g)(i) The Borrower or any Subsidiary thereof makes an assignment for the
benefit of its creditors or a composition with its creditors, or is unable or
admits in writing its inability to pay its debts as they mature, or files a
petition in bankruptcy, or commences a federal bankruptcy proceeding in which an
order for relief or such other court order or statutory provision which
authorizes the case to proceed is entered against it, or is adjudicated
insolvent or bankrupt, or petitions or applies to any tribunal for the
appointment of any custodian, receiver, liquidator or trustee of or for it or
any substantial part of its properties or assets, or commences any proceeding
relating to it under any bankruptcy, reorganization, arrangement, readjustment
of debt, receivership, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or there is commenced against
the Borrower or any Subsidiary thereof any such proceeding which shall remain
undismissed for a period of 60 days, or an order for relief, order, judgment or
decree approving the petition in any such proceeding is entered; (ii) or the
Borrower or any Subsidiary thereof by any act or failure to act indicates its
consent to, approval of or acquiescence in any such proceeding or in the
appointment of any custodian, receiver, liquidator or trustee of or for it or
any substantial part of its properties or assets, or suffers any such
appointment; (iii) or the Borrower or any Subsidiary thereof takes any action
for the purpose of effecting any of the foregoing.

(h) One or more judgments or decrees shall be entered against the Borrower or
any Subsidiary thereof involving in the aggregate a liability (to the extent not
covered by insurance as to which the insurer does not dispute coverage thereof)
of $500,000 or more and all such judgments or decrees shall not have been
vacated, discharged, settled, satisfied or paid, or stayed or bonded pending
appeal, within 30 days from the entry thereof.

(i) Any of the Loan Documents shall cease to be legal, valid and binding
agreements enforceable against a Loan Party executing the same in accordance
with the respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged and thereby deprive or deny the

 

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Lenders and the Administrative Agent of the intended benefits thereof or they
shall thereby cease substantially to have the rights, titles, interests,
remedies, powers or privileges intended to be created thereby.

(j) Any attachment or execution process is issued against 10% or more of the
assets of the Borrower or any Subsidiary thereof; or any material uninsured
damage to, or loss, theft or destruction of, any of the collateral subject to
the Security Documents occurs which could reasonably be expected to result in a
Material Adverse Effect.

(k) The suspension by the Borrower or any other Loan Party of all or any
significant part of its business operations or the loss, suspension, revocation
or failure of the Borrower or any other Loan Party to renew any license or
permit now held or hereafter acquired by the Borrower or any other Loan Party,
which loss, suspension, revocation or failure to file could reasonably be
expected to have a Material Adverse Effect.

(l)(A) (i) Any Employee Pension Plan is terminated within the meaning of Title
IV of ERISA, or (ii) a trustee is appointed by the appropriate United States
District Court to administer any Employee Pension Plan, or (iii) PBGC institutes
proceedings to terminate any Employee Pension Plan or to appoint a trustee to
administer any Employee Pension Plan, or (iv) any Reportable Event occurs which
the Required Lenders determine in good faith indicates a substantial likelihood
that an event described in (i), (ii) or (iii) above will occur, or (v) the
Borrower or any of their Affiliates incurs any Withdrawal Liability with respect
to any Multiemployer Plan, or (vi) any Multiemployer Plan enters Reorganization,
and (B) with respect to events described in (i)-(iv) above, only if, (1) the
benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA) exceed
the market value of the assets in the fund under the Employee Pension Plan by 5%
or more of the Borrower’s or respective Affiliate’s tangible net worth or
(2) there occurs an Accumulated Funding Deficiency in excess of $100,000 with
respect to any Employee Pension Plan or (3) there occurs any Accumulated Funding
Deficiency with respect to any Employee Pension Plan and the Borrower or any of
their Affiliates fails to correct such Accumulated Funding Deficiency prior to
the end of the correction period within the meaning of Section 4971(c)(3) of the
Code, or (4) there arises a Lien under Section 302(f) of ERISA in favor of any
Employee Pension Plan.

(m) Any Change of Control shall occur.

(n) The Administrative Agent shall have completed the Post-Closing Field
Examination within thirty (30) days of the Closing Date and the results of the
Post-Closing Field Examination shall be acceptable to the Administrative Agent
in its reasonable discretion.

(o) There is a Material Adverse Effect.

7.2 Remedies. If an Event of Default specified in subsection 7.1(g) with respect
to the Borrower shall occur and be continuing, the Revolving Credit Commitments
(including the obligation of the Issuing Bank to issue Letters of Credit) and
the Term Loan Commitments shall automatically and immediately terminate, and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Notes and the other Loan Documents shall automatically
and immediately become due and payable (including, without limitation, all
Letter of Credit Obligations, whether or not the beneficiaries of the then

 

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outstanding Letters of Credit shall have presented the documents required
thereunder). If any other Event of Default shall occur and be continuing, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall (a) by
notice to the Borrower declare the Revolving Credit Commitments and/or the Term
Loan Commitments to be terminated forthwith, whereupon such Revolving Credit
Commitments and/or Term Loan Commitments and the obligations of the applicable
Lenders to make such Loans and the obligation of the Issuing Bank to issue
Letters of Credit, shall immediately terminate; (b) by notice of default to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement, the Notes and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately become due
and payable (including, without limitation, all Letter of Credit Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder); (c) exercise such remedies as
may be available to the Administrative Agent and the Lenders hereunder or under
the Security Documents, the other Loan Documents or otherwise at law or equity;
and/or (d) by notice to the Borrower require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest bearing account with the
Administrative Agent, as cash collateral for its obligations under this
Agreement, the Notes and the Applications, an amount equal to the aggregate
Letter of Credit Coverage Requirement, and the Borrower hereby pledges to the
Administrative Agent and the Lenders, and grants to the Administrative Agent and
the Lenders a security interest in, all such cash as security for such
obligations. Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under the Letters of
Credit, and the unused portion thereof after all the Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all the Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
or Persons as may be lawfully entitled thereto). The Borrower shall execute and
deliver to the Administrative Agent, for the account of the Issuing Bank and the
Letter of Credit Participants, such further documents and instruments as the
Administrative Agent may request to evidence the creation and perfection of the
within security interest in such cash collateral account. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.

SECTION 8. THE ADMINISTRATIVE AGENT

8.1 Appointment. Each Lender hereby irrevocably designates and appoints M&T as
administrative agent of such Lender, in each case under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes M&T, in such
capacity to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement and the other Loan Documents, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein or therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement and the other Loan
Documents or otherwise exist against the Administrative Agent. M&T agrees to act
as the Administrative Agent on behalf of the Lenders to the extent provided in
this Agreement and the other Loan Documents.

 

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8.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for the advice and
services of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible to the Lenders for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

8.3 Exculpatory Provisions. The Lenders hereby agree that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or the other Loan Documents (except for its or such Person’s own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower, any other party or any officer thereof contained in this
Agreement, the other Loan Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or the other Loan Documents or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the Notes or the other Loan Documents or for any
failure of the Borrower or any other party to perform its or their obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of the other parties to the Loan Documents (or any of them).

8.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or any other party to a Loan Document), independent accountants and
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or the
other Loan Documents unless it shall first receive such advice or concurrence of
the Required Lenders (or such other percentage of the Lenders as shall be
required hereunder) as it deems appropriate and it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Lenders hereby agree that the Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement,
the Notes or the other Loan Documents in accordance with a request of the
Required Lenders (or such other percentage of Lenders as shall be required
hereunder), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.

 

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8.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender, the Borrower or any other
Loan Party referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or such other percentage of the
Lenders as shall be required hereunder); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of the Borrower
and/or any other party to the Loan Documents, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
parties to the Loan Documents and made its own decision to make its Loans
hereunder, issue and/or participate in Letters of Credit and enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower or any other party to the Loan Documents which may come into the
possession of the Administrative Agent or its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.

8.7 Indemnification. The Lenders agree to indemnify the Administrative Agent in
its agent capacity hereunder and under the other Loan Documents (to the extent
not reimbursed by the Borrower and without limiting the obligation, if any, of
the Borrower to do so) ratably in accordance with each Lender’s respective Total
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at

 

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any time (including, without limitation, at any time following the payment of
the Notes) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement, the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent’s gross negligence or willful misconduct. The agreements in this
Section 8.7 shall survive the payment of the Notes and all other amounts payable
hereunder.

8.8 Administrative Agent in Its Individual Capacity. The Administrative Agent
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Borrower or any other party to the Loan
Documents as though the Administrative Agent were not an agent hereunder. With
respect to its Loans made or renewed by it and any Notes issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the administrative agent hereunder and under the other Loan
Documents, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

8.9 Release of Liens. Upon the sale or other transfer of any assets of the
Borrower or any other Loan Party in compliance with Section 6.5, and so long as
it is not aware that any Default or Event of Default shall exist, the
Administrative Agent will take such action as may be necessary to evidence the
release of the Administrative Agent’s Lien on such assets, including delivering
to the Borrower or such other Loan Party, at the cost of the Borrower,
appropriate collateral releases.

8.10 Successor Administrative Agent. The Administrative Agent may resign as
administrative agent hereunder and under the other Loan Documents upon 30 days’
notice to the Lenders and the Borrower. If the Administrative Agent shall
resign, then the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders, which appointment shall be
subject to (unless a Default or Event of Default shall exist) the approval of
the Borrower (which approval shall not be unreasonably withheld or delayed) and
the appointee, whereupon such successor administrative agent shall succeed to
the rights, powers and duties of the Administrative Agent and the term
“Administrative Agent” shall mean such successor administrative agent effective
upon its appointment and the former Administrative Agent’s rights, powers and
duties shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the other parties to this
Agreement or the other Loan Documents or any holders of the Notes. After any
retiring Administrative Agent’s resignation, the provisions of this Article 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Administrative Agent under this Agreement and the other Loan
Documents.

8.11 USA Patriot Act. Each Lender or assignee or participant of a Lender that is
not incorporated under the Laws of the United States of America or a state
thereof (and is not excepted from the certification requirement contained in
Section 313 of the USA Patriot Act and the applicable regulations because it is
both (a) an Affiliate of a depository institution or foreign bank that

 

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maintains a physical presence in the United States or foreign country, and (b)
subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to the Administrative
Agent the certification, or, if applicable, recertification, certifying that
such Lender is not a “shell” and certifying to other matters as required by
Section 313 of the USA Patriot Act and the applicable regulations: (i) within 10
days after the Closing Date, and (ii) at such other times as are required under
the USA Patriot Act.

8.12 Beneficiaries. Except as expressly provided herein, the provisions of this
Section 8 are solely for the benefit of the Administrative Agent and the
Lenders, and the Borrower and the other Loan Parties shall not have any right to
rely on or enforce any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, the Administrative
Agent shall act solely as administrative agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower or any of the other
Loan Parties.

SECTION 9. MISCELLANEOUS

9.1 Amendments and Waivers.

(a) Subject to the remaining provisions of this Section 9.1, the Required
Lenders, or the Administrative Agent with the consent of the Required Lenders,
and the Borrower (or, in the case of the other Loan Documents, the relevant
parties thereto) may from time to time enter into amendments, extensions,
supplements and replacements to and of this Agreement and the other Loan
Documents to which they are parties, and the Required Lenders may from time to
time waive compliance with a provision of any of the Loan Documents. Subject to
the remaining provisions of this Section 9.1, no amendment, extension,
supplement, replacement or waiver shall be effective unless it is in writing and
is signed by the Required Lenders or the Administrative Agent with the consent
of the Required Lenders, and the Borrower (or, in the case of the other Loan
Documents, the relevant parties thereto). Each waiver shall be effective only
for the specific instance and for the specific purpose for which it is given.

(b) The foregoing notwithstanding, no such amendment, extension, supplement,
replacement or waiver shall, directly or indirectly, without the consent of all
the Lenders:

(i) Increase the Revolving Credit Commitments (except as expressly provided in
Section 2.9), the Term Loan Commitments or the principal amount of the Loans
which may be outstanding hereunder;

(ii) reduce any interest rate hereunder (other than to waive the Default Rate)
or any of the fees due hereunder or under any of the other Loan Documents (other
than fees to the Administrative Agent, which shall require the consent of the
Borrower and the Administrative Agent to change);

 

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(iii) postpone any scheduled payment date of principal, interest or fees
hereunder or under any of the other Loan Documents (excluding mandatory
principal prepayment of the Loans);

(iv) release all or substantially all of the Lenders’ security interest in the
Collateral securing the Obligations;

(v) change the definition of “Required Lenders”;

(vi) release or discharge, or consent to any release or discharge of (A) the
Borrower as borrower under the Loan Documents or (B) a Guarantor as guarantor
(other than in connection with a sale of such Guarantor in a transaction
permitted hereunder); or permit the Borrower or any Affiliate to assign to
another Person any of its obligations under the Loan Documents;

(vii) amend this Section 9.1; or

(viii) change Section 2.15 in a manner that would alter the pro rata sharing
provisions required thereby.

(c) The foregoing notwithstanding, no such amendment, extension, supplement, or
replacement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank hereunder of any other Loan Document
without the prior written consent of the Administrative Agent or the Issuing
Bank, as the case may be.

(d) Any waiver or amendment, supplement or modification permitted hereunder
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent and all future holders of the
Notes. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

9.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by electronic
transmission, telecopy transmission or posting on a secured web site), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or three days after being deposited in the
mail, postage prepaid, or the next Business Day if sent by reputable overnight
courier, postage prepaid, for delivery on the next Business Day, or, in the case
of telecopy notice, when received during normal business hours, or in the case
of electronic transmission, when received and in the case of posting on a
secured web site, upon receipt of (i) notice of such posting and (ii) rights to
access such web site, addressed as follows in the case of the Borrower, the
Administrative Agent and the Issuing Bank, and as set forth in Schedule I or in
its Assignment and Assumption in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties hereto
and any future holders of the Notes:

 

If to the Borrower:

  

ClearPoint Business Resources, Inc.

1600 Manor Drive

Suite 110

Chalfont, PA 18914

Attention: Michael D. Traina, Chief Executive Officer

Telecopy: (215) 997-7711

If to the Administrative

Agent or the Issuing Bank:

  

Manufacturers and Traders Trust Company

601 Dresher Road

Horsham, PA 19044

Attention: Shannon A. Patterson

Telecopy: (215) 956-7074

Telephone: (215) 956-7077

 

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provided (a) any notice, request or demand to or upon the Administrative Agent,
the Issuing Bank or the Lenders pursuant to Sections 2.3, 2.4, 2.9 and 2.10
shall not be effective until received and (b) any notice of a Default or Event
of Default hereunder shall be sent by telecopy or reputable overnight courier.

9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Issuing Bank or any
Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.

9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Administrative Agent for all of its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and the syndication and administration of, this Agreement, the Notes, the
other Loan Documents and any other documents executed and delivered in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel, (b) to pay or reimburse the Administrative
Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the performance of or any amendment, supplement or modification
or proposed amendment, supplement or modification to this Agreement, the Notes
and the other Loan Documents and any other documents executed and delivered in
connection therewith, including without limitation, the reasonable fees and
disbursements of counsel, (c) pay or reimburse each Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the Notes, the other Loan Documents and any such other documents,
including, without limitation, reasonable fees and disbursements of counsel, (d)
to pay, indemnify,

 

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and hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents, and (e) to pay, indemnify, and hold each
Lender, the Administrative Agent and each of their respective Affiliates and the
officers, directors, employees, agents and advisors of such Persons and such
Affiliates (the “Indemnified Parties”) harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions (whether
sounding in contract, in tort or on any other ground), judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of or in any
other way arising out of or relating to, this Agreement, the Notes, the other
Loan Documents, or any such other documents contemplated by or referred to
herein or therein or any action taken by any Lender or the Administrative Agent
with respect to the foregoing (all the foregoing, collectively, the “indemnified
liabilities”), provided, that the Borrower shall have no obligation hereunder to
any Indemnified Party with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of such Indemnified Party. The agreements
in this subsection shall survive repayment of the Notes and all other amounts
payable hereunder.

9.6 Successors and Assigns.

(a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party; and all covenants, promises and agreements by or on behalf of the
Borrower, the Administrative Agent or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of its respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations under this Agreement or the other Loan Documents without the prior
written consent of each Lender.

(b) Each Lender may, in accordance with applicable law, sell to any Lender or
Affiliate thereof and, with the consent of the Borrower (except when any Event
of Default exists) and the Administrative Agent (which consents shall not be
unreasonably withheld or delayed), to one or more other banks or financial
institutions (each, a “Purchasing Lender”) all or a part of its interests,
rights and obligations under this Agreement, the Notes and the other Loan
Documents (including all or a portion of its Revolving Credit Commitment and the
Loans at the time owing to it and the Notes held by it); provided, however, that
(i) so long as no Event of Default shall exist and be continuing, such
assignment shall be in an amount not less than $5,000,000 (or such lesser amount
as the Borrower and the Administrative Agent shall agree in their sole
discretion), unless the sum of such assigning Lender’s Total Exposure plus
Unused Revolving Credit Commitment is less than $5,000,000 in which case such
assigning Lender may transfer all, but not less than all, of its interests
hereunder, (ii) such assignment shall be of a pro rata interest in the Revolving
Credit Loans and Term Loans of such assignee, and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent and the
Borrower for its acceptance (to the extent required) and recording in the
Register an Assignment and Assumption, together with the Notes subject to such
assignment and, except for assignments by a Lender to one of its Affiliates, a
processing and

 

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recordation fee of $3,500. Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.6, from and after the effective date specified in the
applicable Assignment and Assumption, which effective date shall be at least
five Business Days after the receipt thereof by the Administrative Agent and the
Borrower (unless otherwise agreed by the Administrative Agent), (A) such
Purchasing Lender shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of subsections 2.12, 2.13, 2.14, 5.14(c) and 9.5 (to
the extent that such Lender’s entitlement to such benefits arose out of such
Lender’s position as a Lender prior to the applicable assignment) as well as to
any Commitment Fees or interest accrued for its account and not yet paid. Such
Assignment and Assumption shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting amounts and percentages held by the Lenders arising
from the purchase by such Purchasing Lender of all or a pro rata portion of the
rights and obligations of such assigning Lender under this Agreement, the Notes
and the other Loan Documents.

(c) By executing and delivering an Assignment and Assumption, the assigning
Lender thereunder and the Purchasing Lender thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its commitment, and the outstanding balances of its Loans, without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Assumption, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto, or the financial condition of the
Borrower, any other Loan Party or any other party or the performance or
observance by the Borrower, any other Loan Party or any other party of any of
its obligations under this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
Purchasing Lender represents and warrants that it is legally authorized to enter
into such Assignment and Assumption; (iv) such Purchasing Lender confirms that
it has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 5.1 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption; (v) such
Purchasing Lender will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents; (vi) such Purchasing Lender
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms hereof or

 

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thereof, together with such powers as are reasonably incidental thereto; and
(vii) such Purchasing Lender agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender including,
if it is organized under the laws of a jurisdiction outside the United States,
its obligation pursuant to and to the extent provided in Section 2.13 to deliver
the forms prescribed by the Internal Revenue Service of the United States
certifying as to the Purchasing Lender’s exemption from United States
withholding taxes with respect to all payments to be made to the Purchasing
Lender under this Agreement.

(d) The Administrative Agent shall maintain at its offices a copy of each
Assignment and Assumption and the names and addresses of the Lenders, and the
commitments of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive in the absence of manifest error and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.

(e) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and a Purchasing Lender (and in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the Borrower
(unless an Event of Default shall then exist) and the Administrative Agent)
together with the Note or Notes subject to such assignment and the processing
and recordation fee referred to in paragraph (b) above, the Administrative Agent
shall promptly (i) accept such Assignment and Assumption, (ii) record the
information contained therein in the Register and (iii) give notice thereof to
the Lenders. Within five Business Days after receipt of notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent, in
exchange for the surrender of the original Note or Notes (A) a new Revolving
Credit Note and Term Loan Note, as applicable, to the order of such Purchasing
Lender in the appropriate amounts assumed and (B) if the assigning Lender has
retained an interest hereunder, the applicable Note or Notes in the appropriate
amount(s). Such new Note(s) shall be dated the date of the surrendered Note(s)
which such new Note(s) replace and shall otherwise be in substantially the form
of Exhibit A-1 and A-2, as applicable. Canceled Notes shall be returned to the
Borrower.

(f) Each Lender may, in accordance with applicable law, sell participations to
any Lender or Affiliate thereof and to one or more banks or other Persons (each
a “Participant”), in each case in any Loan owing to such Lender, any Note held
by such Lender, any commitment of such Lender, or any other interest of such
Lender hereunder and under the other Loan Documents, provided, however, that
(i) such Lender’s obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes
under this Agreement and the other Loan Documents, (iv) the Borrower, the
Lenders and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement and the other Loan Documents, (v) in any proceeding under the

 

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Bankruptcy Code, such Lender shall be, to the extent permitted by law, the sole
representative with respect to the obligations held in the name of such Lender,
whether for its own account or for the account of any Participant and (vi) such
Lender shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of this
Agreement or the Notes held by such Lender or any other Loan Document, other
than with respect to the matters described in clauses (i) through (viii) of
subsection 9.1(b).

(g) If amounts outstanding under this Agreement and the Notes are due or unpaid,
or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that in purchasing such participation such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7 The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 2.12, 2.13, 2.14,
5.14(c) and 9.5 with respect to its participation in the commitments and the
Loans outstanding from time to time; provided, that no Participant shall be
entitled to receive any greater amount pursuant to such subsections than the
assigning Lender would have been entitled to receive in respect of the amount of
the participation transferred by such assigning Lender to such Participant had
no such transfer occurred.

(h) If any Participant of a Lender is organized under the laws of any
jurisdiction other than the United States or any state thereof, the assigning
Lender, concurrently with the sale of a participating interest to such
Participant, shall cause such Participant (i) to represent to the assigning
Lender (for the benefit of the assigning Lender and the other Lenders), the
Administrative Agent and the Borrower that under applicable law and treaties no
taxes will be required to be withheld by the Administrative Agent, the Borrower
or the assigning Lender with respect to any payments to be made to such
Participant in respect of its participation in the Loans and Letters of Credit
and (ii) to agree (for the benefit of the assigning Lender, the other Lenders,
the Administrative Agent and the Borrower) that it will deliver the tax forms
and other documents required to be delivered pursuant to subsection 2.13(b) and
comply from time to time with all applicable U.S. laws and regulations with
respect to withholding tax exemptions.

(i) Notwithstanding any other provision contained in this Agreement or any other
Loan Document to the contrary, any Lender may, without obtaining any consents
from any of the parties hereto, at any time (i) assign all or any portion of the
Loans or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank and (ii) in the case of a Lender that is or owns,
controls or serves as originator for a fund, trust or similar entity, assign or
pledge all or any portion of the Loans or Notes held by it to a trustee under
any indenture to which such Lender is a party or to the lenders to such Lender
for collateral security purposes, provided that any payment in respect of such
assigned Loans or Notes made by the Borrower to or for the account of the
assigning or pledging Lender in accordance with the terms of this Agreement
shall satisfy the Borrower’s obligations hereunder in respect to such assigned
Loans or Notes to the extent of such payment. No such assignment shall release
the assigning Lender from its obligations hereunder.

 

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9.7 Adjustments; Set-off. (a) Except as otherwise expressly provided herein, if
any Lender (a “benefited Lender”) shall at any time receive any payment of all
or part of its Loans or the Reimbursement Obligations owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in subsection 7.1(g), or otherwise), in a greater proportion than
any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender’s Loans or the Reimbursement Obligations owing to
it, or interest thereon, such benefited Lender shall purchase for cash from the
other Lenders such portion of each such other Lender’s Loans or the
Reimbursement Obligations owing to it, or shall provide such other Lenders 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 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. The Borrower agrees that each Lender so
purchasing a portion of another Lender’s Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.

(b) In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the continuance of an Event of Default, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower hereunder or under
the Notes or the other Loan Document (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.

9.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.

9.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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9.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the parties hereto with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES, AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES, SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF
PENNSYLVANIA.

9.12 Confidentiality. Each of the Lenders severally agrees that it will use
reasonable precautions to keep confidential, in accordance with its customary
procedures for handling confidential information of the same nature any
non-public information supplied to it by the Borrower or any other Loan Party
pursuant to the Loan Documents; provided that nothing herein shall prevent any
Lender from disclosing any such information (a) to the Administrative Agent or
any other Lender, (b) to any prospective assignee or participant in connection
with any assignment or participation (or proposed assignment or participation)
of Loans or commitments permitted by this Agreement, (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors,
rating agencies, and funding sources, (d) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) which has been publicly
disclosed other than in breach of this Agreement or (g) in connection with the
exercise of any remedy hereunder or under the Notes or other Loan Documents.

9.13 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, the Notes or the other Loan Documents, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the Commonwealth of
Pennsylvania, the courts of the United States of America for the Eastern
District of Pennsylvania, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) waives and hereby acknowledges that it is estopped from raising any
objection based on forum non conveniens, any claim that any of the
above-referenced courts lack proper venue or any objection that any of such
courts lack personal jurisdiction over it so as to prohibit such courts from
adjudicating any issues raised in a complaint filed with such courts against the
Borrower concerning this Agreement or the other Loan Documents;

 

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(d) acknowledges and agrees that the choice of forum contained in this
Section 9.13 shall not be deemed to preclude the enforcement of any judgment
obtained in any forum or the taking of any action under the Loan Documents to
enforce the same in any appropriate jurisdiction;

(e) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(f) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(g) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
subsection any special, indirect, exemplary or punitive or consequential
damages.

9.14 Acknowledgments. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement, the Notes and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship to the Borrower or any other party to the Loan Documents (or any of
them) and the relationship hereunder between the Administrative Agent and
Lenders, on the one hand, and the Borrower and its Affiliates parties to the
Loan Documents, on the other hand, is solely that of debtor and creditor; and

(c) no joint venture exists among the Borrower and its Affiliates parties to the
Loan Documents (or any of them) and the Lenders or the Administrative Agent.

9.15 USA PATRIOT ACT. Each Lender that is subject to the requirements of the USA
Patriot Act hereby notifies the Borrower and the other Loan Parties that
pursuant to the requirements of the USA Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower and such other Loan
Parties, which information includes the name and address of the Borrower and
such other Loan Parties and other information that will allow such Lender to
identify the Borrower and such other Loan Parties in accordance with the USA
Patriot Act.

9.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.

 

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[Signature Pages to Follow]

 

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.

 

CLEARPOINT BUSINESS RESOURCES, INC.

By:

 

/s/ Christopher Ferguson

Name:

  Christopher Fergusoin

Title:

  President MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent,
Issuing Bank and a Lender

By:

 

/s/ Shannon Patterson

Name:

  Shannon Patterson

Title:

  Assistant Vice President

 

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