Exhibit 10.1

Execution Version

 

 

 

 

LOGO [g815819st-1.jpg]

CREDIT AGREEMENT

dated as of

November 3, 2014

among

Rand Worldwide, Inc.,

the other Loan Parties party hereto,

and

JPMORGAN CHASE BANK, N.A.

 

 

 

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Table of Contents

 

            Page  

Article I Definitions

     1   

Section 1.01.

     Defined Terms      1   

Section 1.02.

     Classification of Loans and Borrowings      22   

Section 1.03.

     Terms Generally      22   

Section 1.04.

     Accounting Terms; GAAP      22   

Section 1.05.

     Rounding      22   

Section 1.06.

     Pro Forma Adjustments for Acquisitions and Dispositions      23   

Article II The Credits

     23   

Section 2.01.

     Commitments      23   

Section 2.02.

     Loans and Borrowings      23   

Section 2.03.

     Borrowing Procedures; Requests for Revolving Borrowings      24   

Section 2.04.

     [Section Intentionally Omitted]      24   

Section 2.05.

     [Section Intentionally Omitted]      24   

Section 2.06.

     Letters of Credit      24   

Section 2.07.

     Funding of Borrowings      27   

Section 2.08.

     Interest Elections      27   

Section 2.09.

     Termination of Commitment      28   

Section 2.10.

     Repayment of Principal and Amortization of Term Loan; Evidence of Debt     
29   

Section 2.11.

     Prepayment of Loans      30   

Section 2.12.

     Fees      31   

Section 2.13.

     Interest      32   

Section 2.14.

     Alternate Rate of Interest      33   

Section 2.15.

     Increased Costs      33   

Section 2.16.

     Break Funding Payments      34   

Section 2.17.

     Taxes      34   

Section 2.18.

     Payments Generally; Allocation of Proceeds; Sharing of Set-offs      37   

Section 2.19.

     Indemnity for Returned Payments      38   

Section 2.20.

     Condition Subsequent      39   

Article III Representations and Warranties

     39   

Section 3.01.

     Organization; Powers      39   

Section 3.02.

     Authorization; Enforceability      39   

Section 3.03.

     Governmental Approvals; No Conflicts      39   

Section 3.04.

     Financial Condition; No Material Adverse Change      39   

Section 3.05.

     Properties and Trademarks      40   

Section 3.06.

     Litigation and Environmental Matters      40   

Section 3.07.

     Compliance with Laws and Agreements      41   

Section 3.08.

     Investment Company Status      41   

Section 3.09.

     Taxes      41   

Section 3.10.

     ERISA      41   

Section 3.11.

     Disclosure      41   

Section 3.12.

     Capitalization and Subsidiaries      41   

Section 3.13.

     Security Interest in Collateral      42   

Section 3.14.

     Employment Matters      42   

Section 3.15.

     Embargoed Person      42   

Section 3.16.

     Solvency      43   

Section 3.17.

     Margin Stock      43   

 

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Article IV Conditions

     43   

Section 4.01.

     Effective Date      43   

Section 4.02.

     Each Credit Event      46   

Article V Affirmative Covenants

     46   

Section 5.01.

     Financial Statements; Borrowing Base and Other Information      46   

Section 5.02.

     Notices of Material Events      48   

Section 5.03.

     Existence; Conduct of Business      48   

Section 5.04.

     Payment of Obligations      48   

Section 5.05.

     Maintenance of Properties      49   

Section 5.06.

     Books and Records; Inspection Rights      49   

Section 5.07.

     Compliance with Laws      49   

Section 5.08.

     Use of Proceeds      49   

Section 5.09.

     Accuracy of Information      49   

Section 5.10.

     Insurance      49   

Section 5.11.

     Casualty and Condemnation      49   

Section 5.12.

     Depository Banks      50   

Section 5.13.

     Additional Collateral; Further Assurances      50   

Article VI Negative Covenants

     51   

Section 6.01.

     Indebtedness      52   

Section 6.02.

     Liens      52   

Section 6.03.

     Fundamental Changes      53   

Section 6.04.

     Investments, Loans, Advances, Guarantees and Acquisitions      54   

Section 6.05.

     Asset Sales      55   

Section 6.06.

     Sale and Leaseback Transactions      56   

Section 6.07.

     Swap Agreements      56   

Section 6.08.

     Restricted Payments; Certain Payments of Indebtedness      58   

Section 6.09.

     Transactions with Affiliates      57   

Section 6.10.

     Restrictive Agreements      57   

Section 6.11.

     Amendment of Material Documents      57   

Section 6.12.

     Financial Covenants      58   

Section 6.13.

     Environmental Covenant      58   

Article VII Events of Default

     58   

Article VIII Miscellaneous

     61   

Section 8.01.

     Notices      61   

Section 8.02.

     Waivers; Amendments      62   

Section 8.03.

     Expenses; Indemnity; Damage Waiver      63   

Section 8.04.

     Successors and Assigns      64   

Section 8.05.

     Survival      66   

Section 8.06.

     Counterparts; Integration; Effectiveness      66   

Section 8.07.

     Severability      66   

Section 8.08.

     Right of Setoff      66   

Section 8.09.

     Governing Law; Jurisdiction; Consent to Service of Process      67   

Section 8.10.

     WAIVER OF JURY TRIAL      67   

Section 8.11.

     Headings      67   

Section 8.12.

     Confidentiality      68   

 

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Section 8.13.

     Nonreliance; Violation of Law      68   

Section 8.14.

     USA PATRIOT Act      68   

Section 8.15.

     Disclosure      68   

Section 8.16.

     Interest Rate Limitation      68   

Article IX Loan Guaranty

     69   

Section 9.01.

     Guaranty      69   

Section 9.02.

     Guaranty of Payment      69   

Section 9.03.

     No Discharge or Diminishment of Loan Guaranty      69   

Section 9.04.

     Defenses Waived      70   

Section 9.05.

     Rights of Subrogation      70   

Section 9.06.

     Reinstatement; Stay of Acceleration      70   

Section 9.07.

     Information      70   

Section 9.08.

     Termination      71   

Section 9.09.

     Taxes      71   

Section 9.10.

     Maximum Liability      71   

Section 9.11.

     Contribution      71   

Section 9.12.

     Liability Cumulative      72   

Section 9.13.

     Liability for Swap Obligations      72   

 

SCHEDULES:

Schedule 2.20 – Conditions Subsequent

Schedule 3.05(a) – Real Property

Schedule 3.05(c)(i) – Intellectual Property

Schedule 3.05(c)(ii) - Infringement

Schedule 3.06 – Disclosed Matters

Schedule 3.12 – Capitalization and Subsidiaries

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions

 

EXHIBITS:

Exhibit A – [reserved] Exhibit B – Opinion of Counsel for the Loan Parties
Exhibit B-1 – Borrowing Request Exhibit C - Borrowing Base Certificate Exhibit D
– Financial Officer Certificate Exhibit E – Joinder Agreement Exhibit F-1 – Form
of U.S. Tax Compliance Certificate (For Foreign Lenders that are Not
Partnerships

       For U.S. Federal Income Tax Purposes)

Exhibit F-2 – Form of U.S. Tax Compliance Certificate (For Foreign Participants
That Are Not

       Partnerships For U.S. Federal Income Tax Purposes)

Exhibit F-3 – Form of U.S. Tax Compliance Certificate (For Foreign Participants
that Are Partnerships

       For U.S. Federal Income Tax Purposes

Exhibit F-4 – Form of U.S. Tax Compliance Certificate (For Foreign Lenders that
are Partnerships for

       U.S. Federal Income Tax Purposes)

 

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This CREDIT AGREEMENT is dated as of November 3, 2014 (as it may be amended or
modified from time to time, this “Agreement”), and is made among Rand Worldwide,
Inc., the other Loan Parties party hereto, and JPMORGAN CHASE BANK, N.A., as
Lender.

The parties hereto agree as follows:

Article I

Definitions

Section 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“3K” means 3K Limited Partnership, a Delaware limited partnership.

“Account” has the meaning assigned to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which any Loan Party (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.

“Act” has the meaning assigned to the term in Section 8.14.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (i) 2.50% in the case of a Revolving Loan or 3.15%
in the case of a Term Loan plus (ii) the LIBO Rate for such Interest Period
multiplied by the Statutory Reserve Rate.

“Adjusted Daily One Month LIBOR Rate” means, with respect to an Advance for any
day, the sum of (i) the Applicable Margin plus (ii) the quotient of (a) the
interest rate determined by the Lender by reference to the Page to be the rate
at approximately 11:00 a.m. London time, on such date or, if such date is not a
Business Day, on the immediately preceding Business Day for dollar deposits with
a maturity equal to one (1) month, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to dollar deposits in the London
interbank market with a maturity equal to one (1) month. This rate is subject to
change daily.

“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum
equal to the sum of (i) 2.50% per annum in the case of a Revolving Loan or 3.15%
in the case of a Term Loan plus (ii) the Adjusted LIBO Rate for a one-month
interest period on such day (or if such day is not a Business Day, the
immediately preceding Business Day); provided that, for the avoidance of doubt,
the Adjusted LIBO Rate for any day shall be based on the rate appearing on the
Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding).

“Advance” means any Revolving Loan under this Agreement.

 

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“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.

“Applicable Contribution Percentage” has the meaning assigned to the term in
Section 9.11.

“Applicable Margin” means with respect to any LIBOR Rate Advance, 2.50% Per
Annum on the Revolving Credit Facility, 3.15% on the Term Loan and, 0.00% with
respect to any Prime Rate Advance.

“Approved Fund” has the meaning assigned to the term in Section 8.04(b).

“ASJ” means ASJ Computer Graphics of Canada, Ltd., an Ontario corporation.

“Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Revolving Commitment and (ii) the Borrowing Base minus (b) the Revolving
Exposure.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Revolving Credit Maturity Date and the date of
termination of the Revolving Commitments.

“Banking Services” means each and any of the following bank services provided to
any Loan Party or any Subsidiary by Chase or any of its Affiliates: (a) credit
cards for commercial customers (including, without limitation, “commercial
credit cards” and purchasing cards), (b) stored value cards, (c) merchant
processing services, and (d) treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services).

“Banking Services Obligations” means any and all obligations of the Loan
Parties, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Lender, has taken any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any such proceeding or appointment, provided
that a Bankruptcy Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person by a
Governmental Authority or instrumentality thereof, provided, further, that such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” means Rand Worldwide, Inc., a Delaware corporation.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, and (b) a Term Loan made on the same date
and, in the case of Eurodollar Loans, as to which a single Interest Period is in
effect.

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“Borrowing Base” means, at any time, Eighty-Five Percent (85%) of the Borrower’s
Eligible Accounts at such time.

“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower, in substantially
the form of Exhibit C or another form which is acceptable to the Lender in its
sole discretion.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

“Canadian Subsidiary” means Rand A Technology Corporation, an Ontario
corporation.

“Capital Expenditures” means, without duplication, any expenditure or commitment
to expend money for any purchase or other acquisition of any asset which would
be classified as a fixed or capital asset on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP, excluding,
without duplication (a) expenditures made during such period in connection with
the replacement, substitution, or restoration of assets or properties pursuant
to Section 2.11(c) of the Agreement, and (b) with respect to the purchase price
of assets that are purchased substantially contemporaneously with the trade-in
of existing assets during such period, the amount that the gross amount of such
purchase price is reduced by the credit granted by the seller of such assets for
the assets being traded in at such time.

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

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted Daily One Month LIBOR Rate on such day (or
if such day is not a Business Day, the immediately preceding Business Day). Any
change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted
Daily One Month LIBOR Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Adjusted Daily One Month LIBOR
Rate, respectively.

“CBFR” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, is bearing interest at a rate
determined by reference to the CB Floating Rate.

“CBFR Loan” means a Loan bearing interest based upon the CB Floating Rate.

“Change in Control” means (i) at any time prior to consummation of a Qualified
Public Offering, and after giving effect to the use of proceeds of the Term
Loan, 3K and its Affiliates shall directly or indirectly cease to collectively
and beneficially own and control at least a majority on a fully diluted basis of
the voting power of the Equity Interests of Borrower; and (ii) at any time on or
after consummation of a Qualified Public Offering (a) any Person or “group”
(within the meaning of Rules 13d-3 and 13d-5

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under the Exchange Act) other than 3K and its Affiliates shall have acquired
beneficial ownership or control of 37.5% or more on a fully diluted basis of the
voting power of the Equity Interests of Borrower, (b) 3K and its Affiliates
shall have directly or indirectly ceased to beneficially own and control 37.5%
or more on a fully diluted basis of the voting power of the Equity Interests of
Borrower or (c) any Person or “group” (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act) shall have acquired beneficial ownership or
control of a greater percentage of the voting power of the Equity Interests of
Borrower on a fully diluted basis than 3K and its Affiliates, taken as a whole.

“Change in Law” means (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, rules, guideline,
requirement or directive (whether or not having the force of law) by any
Governmental Authority; provided however, that notwithstanding anything herein
to the contrary (i) the Dodd-Frank Wall Street Reform and Consumer Protection
Act, as amended, and all requests, rules, guidelines, requirements and
directives thereunder, issued in connection therewith or in implementation
thereof and (ii) all requests, rules, guidelines, requirements and directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case arising under clauses (i) or (ii) be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

“Charges” has the meaning assigned to such term in Section 8.16.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or a Term
Loan, and (b) any Commitment, refers to whether such Commitment is a Revolving
Commitment or a Term Loan Commitment.

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

“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be, become or
intended to be, subject to a security interest or Lien in favor of the Lender,
to secure the Secured Obligations.

“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreement.

“Collateral Documents” means, collectively, the Security Agreement and any other
documents pursuant to which a Person grants a Lien upon any real or personal
property as security for payment of the Secured Obligations.

“Commitment” means the sum of the Revolving Commitment and Term Loan Commitment.

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

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
Consolidated Net Income for such period, the sum of (i) Interest Expense for
such period, (ii) income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any
non-cash charges associated with common stock based incentive compensation for
such period, (v) compensation of Borrower’s former chief executive officer, Marc
Dulude, whether payable before or after the Closing, (vi) certain one-time
expenses arising from the Rand Secure Data Divestiture satisfactory to the
Lender in its reasonable credit judgment, (vii) certain one-time expenses
arising from the transactions contemplated by this Agreement, including the
Tender Offer, satisfactory to the Lender in its Permitted Discretion, and

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(viii) certain one-time expenses arising from Permitted Acquisitions,
satisfactory to the Lender in its Permitted Discretion, minus (b) without
duplication and to the extent included in Consolidated Net Income, any
extraordinary gains and any non-cash items of income for such period, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.

“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) determined for the Borrower and its Subsidiaries, on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary or
is merged into or consolidated with the Borrower or any of its Subsidiaries, and
(b) the income (or deficit) of any Person (other than a Subsidiary) in which the
Borrower or any of its Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary, to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

“Document” has the meaning set forth in the Security Agreement.

“dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary which is organized or created under
the laws of the United States or of any State thereof (including the District of
Columbia).

“ECP Rules” has the meaning assigned to the term in Section 9.13.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).

“Eligible Accounts” means, at any time, the Accounts of the Borrower which the
Lender determines in its Permitted Discretion are not excluded as ineligible as
the basis for the extension of Revolving Loans and the issuance of Letters of
Credit. Without limiting the Lender’s discretion provided herein, Eligible
Accounts shall not include any Account:

(a) which is not subject to a first priority perfected security interest in
favor of the Lender;

(b) which is subject to any Lien other than (i) a Lien in favor of the Lender
and (ii) a Permitted Encumbrance which does not have priority over the Lien in
favor of the Lender;

(c) (i) with respect to which the scheduled due date is more than thirty
(30) days after the date of the original invoice therefor other than Accounts of
any Account Debtor aggregating to less than $250,000 which, by the express terms
of the purchase order, invoice or other written contract governing such
Accounts, provide for terms of payment not exceeding

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forty-five (45) days after the date of the original invoice, (ii) which is
unpaid more than sixty (60) days after the due date therefor, or (iii) which has
been written off the books of the Borrower or otherwise designated as
uncollectible;

(d) which is owing by an Account Debtor for which more than thirty-five percent
(35%) of the Accounts owing from such Account Debtor and its Affiliates are
ineligible hereunder;

(e) which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to the Borrower
exceeds twenty percent (20%) of the aggregate Eligible Accounts;

(f) with respect to which any covenant, representation or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;

(g) which (i) does not arise from the sale of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Lender which has been sent to the Account
Debtor, (iii) represents a progress billing, (iv) is contingent upon the
Borrower’s completion of any further performance, (v) represents a sale on a
bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment,
cash-on-delivery or any other repurchase or return basis or (vi) relates to
payments of interest;

(h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been completely performed by the Borrower or if such Account was invoiced more
than once;

(i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;

(j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws,
(iv) admitted in writing its inability, or is generally unable to, pay its debts
as they become due, (v) become insolvent, or (vi) ceased operation of its
business;

(k) which is owed by any Account Debtor which has sold all or substantially all
of its assets;

(l) which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or (ii) is not organized under applicable law of
the U.S., any state of the U.S. or the District of Columbia unless, in either
case, such Account is backed by a Letter of Credit acceptable to the Lender
which is in the possession of, and is directly drawable by, the Lender;

(m) which is owed in any currency other than U.S. dollars;

(n) which is owed by (i) any Governmental Authority of any country other than
the U.S., unless such Account is backed by a Letter of Credit acceptable to the
Lender which is in the

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possession of, and is directly drawable by, the Lender, or (ii) any Governmental
Authority of the U.S., if the Lender has notified the Borrower that Lender
requires the Borrower to take all steps required to comply with the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41
U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the
Lender in such Account;

(o) which is owed by any Affiliate of any Loan Party or any employee, officer,
director, agent or stockholder of any Loan Party or any of its Affiliates;

(p) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which the Borrower is indebted, but only to the extent of such indebtedness,
or is subject to any security, deposit, progress payment, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to
the extent thereof;

(q) which is subject to any counterclaim, deduction, defense, setoff or dispute
(but only to the extent of such counterclaim, deduction, defense, setoff or
dispute);

(r) which is evidenced by any promissory note, chattel paper or instrument;

(s) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the Borrower to seek judicial enforcement in such
jurisdiction of payment of such Account, unless the Borrower has filed such
report or qualified to do business in such jurisdiction;

(t) with respect to which the Borrower has made any agreement with the Account
Debtor for any reduction thereof, other than discounts and adjustments given in
the ordinary course of business, or any Account which was partially paid and the
Borrower created a new receivable for the unpaid portion of such Account;

(u) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board, each as the same may be amended;

(v) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the Borrower has or has
had an ownership interest in such goods, or which indicates any party other than
the Borrower as payee or remittance party;

(w) which was created on cash on delivery terms; or

(x) which the Lender determines may not be paid by reason of the Account
Debtor’s inability to pay or which the Lender otherwise determines is
unacceptable for any reason whatsoever.

In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Borrower shall notify the Lender thereof
on and at the time of submission to the Lender of the next Borrowing Base
Certificate. In determining the amount of an Eligible Account, the face amount
of an Account may, in the Lender’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Borrower may be obligated to rebate to
an

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Account Debtor pursuant to the terms of any agreement or understanding (written
or oral)) and (ii) the aggregate amount of all cash received in respect of such
Account but not yet applied by the Borrower to reduce the amount of such
Account.

“Embargoed Person” has the meaning assigned to such term in Section 3.15.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equipment” has the meaning assigned to such term in the Security Agreement.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with a Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

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“Eurodollar”, when used in reference to any Loan or Borrowing (other than a CBFR
Loan or Borrowing), refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Cash Flow” means, for any fiscal year of the Borrower, (a) Consolidated
EBITDA for such fiscal year, minus to the extent included in Consolidated EBITDA
(b)(i) interest and Taxes actually paid in cash, minus (ii) Capital Expenditures
made or incurred during such fiscal year minus (iii) the aggregate amount of all
prepayments of Revolving Loans during such fiscal year to the extent of
accompanying permanent optional reductions of the Revolving Commitments, minus
(iv) all optional prepayments of the Term Loan during such fiscal year, minus
(v) the aggregate amount of all regularly scheduled principal payments of the
Term Loan made during such fiscal year; minus (vi) Restricted Payments permitted
by Section 6.08(a) actually paid in cash; minus transaction costs incurred in
connection with Permitted Acquisitions, minus (vii) items included in the
calculation of Consolidated EBITDA pursuant to clauses (v), (vi) and (vii) of
the definition of Consolidated EBITDA.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of or having its principal
office or its applicable lending office located in, the jurisdiction imposing
such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) U.S. Federal withholding Taxes imposed on amounts payable
to or for the account of such Recipient with respect to an applicable interest
in a Loan or Commitment pursuant to a law in effect on the date on which
(i) such Recipient acquires such interest in the Loan or Commitment or (ii) such
Recipient changes its lending office, except in each case to the extent that,
pursuant to Section 2.17, amounts with respect to such Taxes were payable either
to such Recipient’s assignor immediately before such Recipient acquired the
applicable interest in such Loan or Commitment or to such Recipient immediately
before it changed its lending office, (c) Taxes attributable to a Recipient’s
failure or inability to comply with Section 2.17(f) (d) Taxes attributable to
such Recipient’s grant of a participation, assignment, or transfer in any Loan
or Commitment, and (e) any U.S. Federal withholding Taxes imposed under FATCA.

“Executive Order” has the meaning assigned to it in Section 3.15.

“FATCA” means Sections 1471 through 1474 of the Code, any current or future
regulations or official interpretations thereof, any applicable agreement
entered into pursuant to Section 1471(b)(1) of the Tax Code, and any applicable
intergovernmental agreement with respect to the implementation of the foregoing.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

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“Financial Statements” has the meaning assigned to such term in Section 5.01(a).

“Fixed Charges” means, for any period, without duplication, cash Interest
Expense, plus scheduled principal payments on Indebtedness actually made, plus
Capital Lease Obligation payments, all calculated for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

“Fixed Charge Coverage Ratio” means, for any period, the ratio of
(a) Consolidated EBITDA minus (i) the unfinanced portion of Capital
Expenditures, minus (ii) Taxes actually paid in cash minus (iii) Restricted
Payments permitted by Section 6.08(a) actually paid in cash to (b) Fixed
Charges, all calculated for the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP.

“Fixtures” has the meaning assigned to such term in the Security Agreement.

“Foreign Assets Control Regulations” has the meaning assigned to such term in
Section 3.15.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Funding Account” has the meaning assigned to such term in Section 4.01(g).

“GAAP” means generally accepted accounting principles in the United States of
America.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.

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“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all indebtedness of
others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) obligations
under any liquidated earn-out (l) any other Off-Balance Sheet Liability, and
(m) the net obligations, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all Swap Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Swap Agreement transaction. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 8.03(b).

“Information” has the meaning assigned to such term in Section 8.12.

“Insignificant Subsidiary” means any Subsidiary that either (a) (i) does not
conduct any business operations, (ii) has assets with a total book value not in
excess of Fifty Thousand Dollars ($50,000) and (iii) does not have any
Indebtedness outstanding, or (b) is a Subsidiary of the Borrower formed for the
purposes of effecting an acquisition with the intention of meeting, and within
one (1) year after the consummation of such acquisition meets, the criteria set
forth in clause (a); provided that at no time shall this clause (b) include any
Subsidiary holding five percent (5%) or more individually and ten percent
(10%) in the aggregate of the consolidated assets, revenue or Consolidated
EBITDA of the Borrower and its Subsidiaries to be used for circumventing the
requirements of the Loan Documents.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08.

“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptances and net costs under Swap Agreements in respect of interest rates, to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated for the Borrower and its Subsidiaries on a consolidated basis for
such period in accordance with GAAP.

“Interest Payment Date” means (a) with respect to any CBFR Loan, the first
Business Day of each calendar quarter and the Revolving Credit Maturity Date or
the Term Loan Maturity Date, as applicable, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to

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the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three (3) months’ or ninety
(90) days duration, each on each successive date three (3) months’ or ninety
(90) days after the first day of such Interest Period and the Revolving Credit
Maturity Date or the Term Loan Maturity Date, as applicable.

“Interest Period” means (A) with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one (1), two (2),
three (3) or six (6) months thereafter, as the Borrower may elect; provided that
(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, in
the case of a Eurodollar Borrowing only, 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 and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Inventory” has the meaning assigned to such term in the Security Agreement.

“IRS” means the United States Internal Revenue Service.

“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit E.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(h).

“LC Disbursements” means any payment made by the Lender pursuant to a Letter of
Credit.

“LC Exposure” means, at any time, (a) the sum of the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.

“Lender” means JPMorgan Chase Bank, National Association, its successors and
assigns.

“Letters of Credit” means the letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page on such screen) at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate does not appear on such page (or on any successor or
substitute page on such screen or otherwise on such screen), the “LIBOR Rate”
shall be determined by reference to such other comparable publicly available
service for displaying interest rates for dollar deposits as may be selected by
the Lender or, in the absence of such availability, by reference to the rate at
which dollar deposits of Five Million Dollars ($5,000,000) and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Lender in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period. Notwithstanding the above, to the extent
that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with a CBFR
Borrowing, such rate shall be determined as modified by the definition of
Adjusted Daily One Month LIBOR Rate or Adjusted One Month LIBOR Rate, as
applicable depending on whether a Sweep Agreement is in effect for any given
day.

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“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” means this Agreement, any promissory notes issued pursuant to
the Agreement, any Letter of Credit applications, the Collateral Documents, the
Loan Guaranty, and all other agreements, instruments, documents and certificates
identified in Section 4.01 executed and delivered to, or in favor of, the Lender
and including all other pledges, powers of attorney, consents, assignments,
contracts, notices, letter of credit agreements and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any Loan Party,
or any employee of any Loan Party, and delivered to the Lender in connection
with this Agreement or the transactions contemplated hereby. Any reference in
this Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

“Loan Guarantor” means each Loan Party other than the Borrower.

“Loan Guaranty” means Article IX of this Agreement.

“Loan Parties” means the Borrower, the Borrower’s Domestic Subsidiaries (other
than any Insignificant Subsidiary and any Domestic Subsidiary that holds only
stock in one or more foreign corporations) and any other Person (other than a
Foreign Subsidiary) who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns.

“Loan Party” means any one of the Loan Parties.

“Loans” means the loans and advances made by the Lender pursuant to this
Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, (b) the validity or enforceability of any of the
Loan Documents, or (c) the rights of or remedies available to the Lender under
any of the Loan Documents.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $500,000. For purposes of determining Material Indebtedness, the
“obligations” of the Borrower or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.

“Maximum Liability” has the meaning assigned to such term in Section 9.10.

“Maximum Rate” has the meaning assigned to such term in Section 8.16.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

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“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) and the amount of any reserves established
to fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by a Financial Officer).

“Non-Paying Guarantor” has the meaning assigned to such term in Section 9.11.

“Obligated Party” has the meaning assigned to such term in Section 9.02.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lender or any indemnified party arising under the Loan Documents.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).

“Original Indebtedness” has the meaning assigned to the term in Section 6.01(f).

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

“Page” means Reuters Screen LIBOR01 Page (or any successor or substitute page).

“Participant” has the meaning assigned to such term in Section 8.04(c).

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“Participant Register” has the meaning assigned to such term in Section 8.04(c).

“Paying Guarantor” has the meaning assigned to such term in Section 9.11.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction
that satisfies each of the following requirements:

(a) such Acquisition is not a hostile or contested acquisition nor was it
preceded by an unsolicited tender offer or proxy contest initiated by Borrower
or any of its Subsidiaries;

(b) the business acquired in connection with such Acquisition is (i) a going
concern located in the U.S. (ii) organized under U.S. and applicable state or
province laws, and (iii) not engaged, directly or indirectly, in any line of
business other than the businesses in which the Loan Parties are engaged on the
Closing Date and any business activities that are substantially similar,
related, or incidental thereto;

(c) both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct in all material
respects (except (i) any such representation or warranty which relates to a
specified prior date and (ii) to the extent the Lender have been notified in
writing by the Loan Parties that any representation or warranty is not correct
and the Lender has explicitly waived in writing compliance with such
representation or warranty) and no Default exists, will exist, or would result
therefrom;

(d) after giving effect to such Acquisition, that portion of Borrower’s
Consolidated EBITDA attributable to such Acquisition on a pro forma basis as set
forth in Section 1.06 for the period of four fiscal quarters most recently ended
for which financial statements of the acquired business are available shall be
greater than $0;

(e) as soon as available, but not less than thirty days prior to such
Acquisition, the Borrower has provided the Lender (i) notice of such Acquisition
and (ii) a copy of all business and financial information reasonably requested
by the Lender including pro forma financial statements, statements of cash flow,
and Availability projections;

(f) if the Accounts acquired in connection with such Acquisition are proposed to
be included in the determination of the Borrowing Base, the Lender shall have
conducted an audit and field examination of such Accounts to its satisfaction;

(g) the purchase price of such Acquisition does not exceed $10,000,000 and any
cash consideration paid (i) in connection with any single Acquisition shall not
exceed $10,000,000 and (ii) for all Acquisitions made prior to the expiration or
termination of this Agreement shall not exceed $25,000,000;

(h) if such Acquisition is an acquisition of the Equity Interests of a Person,
the Acquisition is structured so that the acquired Person shall become a
wholly-owned Subsidiary of the Borrower and, a Loan Party pursuant to the terms
of this Agreement;

(i) if such Acquisition is an acquisition of assets, the Acquisition is
structured so that the Borrower shall acquire such assets;

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(j) if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;

(k) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect;

(l) in connection with an Acquisition of the Equity Interests of any Person, all
Liens on property of such Person shall be terminated unless the Lender in its
sole discretion consents otherwise, and in connection with an Acquisition of the
assets of any Person, all Liens on such assets shall be terminated;

(m) after giving effect to such Acquisition, Borrower’s Total Leverage Ratio on
a pro forma basis as set forth in Section 1.06 for the period of four fiscal
quarters most recently ended for which financial statements of the acquired
business are available shall be 0.25 to 1.00 less than the maximum Total
Leverage Ratio permitted at the time of the consummation of such Acquisition
pursuant to Section 6.12(c);

(n) the Borrower shall deliver a certificate of its chief financial officer to
Lender confirming compliance with all of the conditions of a Permitted
Acquisition set forth in this Agreement (and provide the Lender with a pro forma
calculation in form and substance reasonably satisfactory to the Lender) to the
Lender that, after giving effect to the completion of such Acquisition,
Availability will not be less than $5,000,000 on a pro forma basis as set forth
in Section 1.06 which includes all consideration given in connection with such
Acquisition, other than Equity Interests of the Borrower delivered to the
seller(s) in such Acquisition, as having been paid in cash at the time of making
such Acquisition.

“Permitted Discretion” means a determination made in the exercise of reasonable
business judgment from the perspective of a secured asset-based lender.

“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or are
being contested in compliance with Section 5.04;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;

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provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

(b) investments in commercial paper maturing within two hundred seventy
(270) days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c) investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within one hundred eighty (180) days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than
thirty (30) days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, as
each may be amended(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have
portfolio assets of at least $5,000,000,000.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prepayment Event” means:

(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of any Loan Party or any of its
Subsidiaries, other than dispositions described in Section 6.05(a);

(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party or any of its Subsidiaries with a fair value immediately
prior to such event equal to or greater than $500,000; or

(c) the issuance by the Borrower of any Equity Interests.

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“Prime Rate” means the rate of interest per annum publicly announced from time
to time by the Lender as its prime rate in effect at its principal offices in
New York City. Each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

“Prohibited Person” means any Person (a) listed in the Annex to the Executive
Order or identified pursuant to Section 1 of the Executive Order; (b) owned or
controlled by, or acting for or on behalf of, any Person listed in the Annex to
the Executive Order or identified pursuant to Section 1 of the Executive Order;
(c) with whom a Lender is prohibited from dealing or otherwise engaging in any
transaction by any terrorism or anti-laundering law, including the Executive
Order; (d) who commits, threatens, conspires to commit, or support “terrorism”
as defined in the Executive Order; (e) who is named as a “Specially designated
national or blocked person” on the most current list published by the OFAC at
its official website at
http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf or any replacement
website or other replacement official publication of such list; or (f) who is
owned or controlled by a Person listed above in clause (c) or (d).

“Projections” has the meaning assigned to such term in Section 5.01(f).

“Qualified Public Offering” means an underwritten public offering of common
stock of Borrower pursuant to an effective registration statement filed with the
SEC in accordance with the Securities Act of 1933, as amended, that results in
at least $30,000,000 of net cash proceeds to Borrower and results in the listing
of the common stock of Borrower on a national securities exchange.

“RAND Secure Data Divestiture” means (a) the contribution of assets comprising
the Rand Secure Data business unit, which provides data governance services
through a combination of search based archiving, data and application backup and
retrieval, ediscovery and email data migration by the Borrower, Rand Worldwide
Subsidiary, Inc., a Delaware corporation, and Rand A Technology Corporation, a
corporation organized under the laws of the Province of Ontario to SD Newco LLC,
a Delaware limited liability company (“SD Newco”) and (b) the sale of 100% of
the membership interests of SD Newco by the Borrower to AEP RSD Investors, LLC,
as more fully set forth in that certain Membership Interest Purchase Agreement
dated as of September 24, 2014, between AEP RSD Investors, LLC the Borrower,
which transactions closed on September 24, 2014.

“Real Property” means all real property that was, is now or may hereafter be
owned, occupied or otherwise controlled by any Loan Party pursuant to any
contract of sale, lease or other conveyance of any legal interest in any real
property to any Loan Party.

“Recipient” means (a) any Lender, (b) a Participant, or (c) an assignee, as
applicable.

“Refinance Indebtedness” has the meaning assigned to the term in
Section 6.01(f).

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

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

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing, or
dumping of any substance into the environment.

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“Rentals” means, with reference to any period, the aggregate fixed amounts
payable by the Borrower and its Subsidiaries under any operating leases,
calculated for the Borrower and its Subsidiaries on a consolidated basis for
such period in accordance with GAAP.

“Report” means reports prepared by the Lender or another Person showing the
results of appraisals, field examinations or audits pertaining to the Borrower’s
assets from information furnished by or on behalf of the Borrower, after the
Lender has exercised its rights of inspection pursuant to this Agreement.

“Requirement of Law” means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

“Reserve Requirement” means the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed under
Regulation D.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Borrower (other than in connection with the
Tender Offer) or any option, warrant or other right to acquire any such Equity
Interests in the Borrower.

“Revolving Borrowing” means Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.

“Revolving Commitment” means the commitment of the Lender to make Revolving
Loans and issue Letters of Credit hereunder. The initial amount of the Lender’s
Revolving Commitment is Ten Million Dollars ($10,000,000.00).

“Revolving Credit Maturity Date” means November 1, 2019 (if the same is a
Business Day, or if not then the immediately next succeeding Business Day), or
any earlier date on which the Revolving Commitments are reduced to zero or
otherwise terminated pursuant to the terms hereof.

“Revolving Exposure” means the sum of the aggregate outstanding principal amount
of the Lender’s Revolving Loans and its LC Exposure at such time.

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

“Sale and Leaseback Transaction” has the meaning assigned to it in Section 6.06.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Obligations owing to the Lender or its
Affiliates.

“Security Agreement” means that certain Pledge and Security Agreement, dated as
of the date hereof, between the Loan Parties and the Lender, and any other
pledge or security agreement securing the Secured Obligations entered into after
the date of this Agreement by any other Loan Party (as required by this
Agreement or any other Loan Document) or any other Person, as the same may be
amended, restated or otherwise modified from time to time.

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“Solvent” means that: (a) the fair value of the assets of the Borrower and its
Subsidiaries taken as a whole at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise of the Borrower and its
Subsidiaries taken as a whole, (b) each of Borrower and its Subsidiaries taken
as a whole will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured and (c) each of Borrower and its Subsidiaries will not have unreasonably
small capital with which to conduct the businesses in which it is engaged as
such businesses are now conducted and are proposed to be conducted following the
date hereof.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other
entity, the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a)of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent and/or one or more subsidiaries of
the parent, or (b) that is, as of such date, otherwise Controlled by the parent
and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Borrower or of any
other Loan Party.

“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or any option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

“Swap Obligations” of a Loan Party means any and all obligations of such Loan
Party, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.

“Sweep Agreement” means any investment and/ or borrowing sweep agreement entered
into between the Borrower and the Lender on or after the date hereof.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

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“Tender Offer” means that certain issuer self-tender offer commenced on
October 3, 2014 pursuant to which Borrower offered to purchase up to 27,530,816
shares of its common stock which Borrower has conducted in compliance with
applicable law.

“Term Loan” means a Loan made pursuant to Section 2.01(b).

“Term Loan Commitment” means the commitment of the Lender to make the Term Loan,
expressed as an amount representing the maximum principal amount of the Term
Loan to be made by the Lender. The initial amount of the Lender’s Term Loan
Commitment is Twenty-One Million Dollars ($21,000,000).

“Term Loan Maturity Date” means November 1, 2019.

“Term Loan” means the Loans extended by the Lender to the Borrower pursuant to
Section 2.01(b).

“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness determined for the Borrower and its Subsidiaries on a consolidated
basis at such date, in accordance with GAAP.

“Total Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness
on such date to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters ended on or most recently prior to such date, provided that
solely for purposes of Section 6.12(c), to the extent the Borrower or any
Subsidiary makes any acquisition permitted pursuant to Section 6.04 or
disposition of assets outside the ordinary course of business that is permitted
by Section 6.05 during the period of four (4) fiscal quarters of the Borrower
most recently ended, the Total Leverage Ratio shall be calculated after giving
pro forma effect thereto (including pro forma adjustments arising out of events
which are directly attributable to the acquisition or the disposition of assets,
are factually supportable and are expected to have a continuing impact, in each
case as determined on a basis consistent with Article 11 of Regulation S-X of
the Securities Act of 1933, as amended, as interpreted by the SEC, and as
certified by a Financial Officer of the Borrower), as if such acquisition or
such disposition (and any related incurrence, repayment or assumption of
Indebtedness) had occurred in the first day of such four (4) quarter period.

“Trading with the Enemy Act” has the meaning assigned to the term in
Section 3.15.

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans and other credit extensions, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the CB Floating Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or in any other state, the laws of which are required to be
applied in connection with the issue of perfection of security interests.

“U.S.” means the United States of America.

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
amended.

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“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

Section 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference in
any definition to the phrase “at any time” or “for any period” shall refer to
the same time or period for all calculations or determinations within such
definition, and (f) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof here occurs any change in GAAP or in the application thereof on
the operation of any provision hereof and the Borrower notifies the Lender that
the Borrower requests an amendment to any provision hereof to eliminate the
effect of such change in GAAP or in the application thereof (or if the Lender
notifies the Borrower that the Lender request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Financial Accounting Standards Board Accounting Standards Codification 825 (or
any other Financial Accounting Standard having a similar result or effect) to
value any Indebtedness or other liabilities of any Loan Party, the Borrower or
any Subsidiary at “fair value”, as defined therein.

Section 1.05. Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

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Section 1.06. Pro Forma Adjustments for Acquisitions and Dispositions. Solely
for purposes of Section 6.12(c), to the extent the Borrower or any Subsidiary
makes any acquisition permitted pursuant to Section 6.04 or disposition of
assets outside the ordinary course of business permitted by Section 6.05 during
the period of four (4) fiscal quarters of the Borrower most recently ended, the
Total Leverage Ratio shall be calculated after giving pro forma effect thereto
(including pro forma adjustments arising out of events which are directly
attributable to the acquisition or the disposition of assets, are factually
supportable and are expected to have a continuing impact, in each case as
determined on a basis consistent with Article 11 of Regulation S-X of the
Securities Act of 1933, as amended, as interpreted by the SEC, and as certified
by a Financial Officer of the Borrower), as if such acquisition or such
disposition (and any related incurrence, repayment or assumption of
Indebtedness) had occurred on the first day of such four-quarter period.

Article II

The Credits

Section 2.01. Commitments.

(a) Subject to the terms and conditions set forth herein, the Lender agrees to
make Revolving Loans in dollars to the Borrower from time to time during the
Availability Period in an aggregate principal amount that will not result in the
Revolving Exposure exceeding the lesser of (x) the Revolving Commitment or
(y) the Borrowing Base. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans. The Revolving Commitment may include an investment and/ or
borrowing sweep feature on the terms and conditions of the Sweep Agreement, the
terms of which Sweep Agreement are incorporated by reference as if fully set
forth herein. Such Sweep Agreement will remain in effect until the time (if any)
it is terminated in accordance with its terms.

(b) Subject to the terms and conditions set forth herein, the Lender agrees to
make the Term Loan in dollars to the Borrower, on the Effective Date, in a
principal amount not to exceed the Lender’s Term Loan Commitment. Amounts
prepaid or repaid in respect of the Term Loan may not be reborrowed. The Term
Loan Commitment shall not include any Sweep Agreement feature.

Section 2.02. Loans and Borrowings.

(a) Each Loan shall be made as part of a Borrowing consisting of Loans of the
same Class and Type.

(b) Subject to Section 2.14, each Borrowing shall be comprised entirely of CBFR
Loans or Eurodollar Loans as the Borrower may request in accordance herewith;
provided that all Borrowings made on the Effective Date must be made as CBFR
Borrowings but may be converted into Eurodollar Borrowings in accordance with
Section 2.08. The Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of the Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $500,000. CBFR Revolving Borrowings may
be in any amount. Borrowings of more than one Type and Class may be outstanding
at the same time; provided that there shall not at any time be more than a total
of five (5) Eurodollar Borrowings outstanding.

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(d) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Revolving
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Credit Maturity Date.

(e) The proceeds of Revolving Loans may be used for the general corporate
purposes of the Borrower, Permitted Acquisitions, and to pay fees in connection
with this Agreement.

Section 2.03. Borrowing Procedures; Requests for Revolving Borrowings. Except as
otherwise set forth in any applicable Sweep Agreement, to request a Revolving
Borrowing, the Borrower shall notify the Lender of such request either in
writing (delivered by hand or fax) in the form attached hereto as Exhibit B-1
and signed by the Borrower or by telephone (a) in the case of a Eurodollar
Revolving Borrowing, not later than 10:00 a.m., New York City time, three
(3) Business Days before the date of the proposed Borrowing or (b) in the case
of a CBFR Revolving Borrowing, not later than noon, New York City time, on the
date of the proposed Revolving Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or fax to
the Lender of a written Borrowing Request in a form approved by the Lender and
signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.01:

 

  (i) the aggregate amount of the requested Revolving Borrowing, and a breakdown
of the separate wires comprising such Revolving Borrowing;

 

  (ii) the date of such Revolving Borrowing, which shall be a Business Day;

 

  (iii) whether such Revolving Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and

 

  (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be a CBFR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one
(1) month’s duration.

At any time a Sweep Agreement is in effect with respect to any day, to request a
Revolving Borrowing, the Borrower shall comply with the borrowing request
procedures set forth in such Sweep Agreement.

Section 2.04. [Section Intentionally Omitted]

Section 2.05. [Section Intentionally Omitted]

Section 2.06. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit as the applicant thereof for the
support of its or a Loan Party’s obligations, in a form reasonably acceptable to
the Lender, at any time and from time to time from the Effective Date through
the date that is thirty (30) days prior to the Revolving Credit Maturity Date,
which, when issued, shall be a Revolving Loan and, in lieu of bearing interest
pursuant to Section 2.13, shall earn the letter of credit fee set forth in
Section 2.12(b). In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the

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Lender relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. The Borrower unconditionally and irrevocably agrees
that, in connection with any Letter of Credit issued for the support of any
Subsidiary’s obligations as provided in the first sentence of this paragraph,
the Borrower will be fully responsible for the reimbursement of LC Disbursements
in accordance with the terms hereof, including the payment of fees due under
Section 2.12(b) to the same extent as if it were the sole account party in
respect of such Letter of Credit (the Borrower hereby irrevocably waiving any
defenses that might otherwise be available to it as a guarantor or surety of the
obligations of such Subsidiary that is an account party in respect of any such
Letter of Credit).

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or fax (or transmit by electronic communication, if arrangements for doing so
have been approved by the Lender) to the Lender (reasonably in advance of the
requested date of issuance, amendment, renewal or extension, but in any event no
less than three (3) Business Days) a notice requesting the issuance of a Letter
of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof, and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Lender, the Borrower also shall submit a
letter of credit application on the Lender’s standard form in connection with
any request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed One Million Dollars ($1,000,000.00) and
(ii) the total Revolving Exposure shall not exceed the lesser of the total
Revolving Commitments and the Borrowing Base.

(c) Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the Issuing Bank to the beneficiary
thereof) at or prior to the close of business on the earlier of (i) the date one
(1) year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, including, without limitation, any
automatic renewal provision, one (1) year after such renewal or extension) or
(ii) the date that is five (5) Business Days prior to the Revolving Credit
Maturity Date; provided that in no event shall any renewal extend beyond the
time referred to in (ii) above unless the applicable Letter of Credit is cash
collateralized with the Lender in an amount in cash equal to one hundred five
percent (105)% of the LC Exposure plus accrued and unpaid interest thereon.

(d) Reimbursement. If the Lender shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to
the Lender an amount equal to such LC Disbursement not later than 11:00 a.m.,
New York City time, on (i) the Business Day that the Borrower receives notice of
such LC Disbursement, if such notice is received prior to 9:00 a.m., New York
City time, on the day of receipt, or (ii) the Business Day immediately following
the day that the Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that if the Borrower does not
reimburse any such LC Disbursement in accordance with this Section 2.06(d), such
LC Disbursement shall be deemed a request by the Borrower for the funding of a
Revolving Borrowing in such amount, provided all conditions set forth in
Section 4.02 have been satisfied.

(e) Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (d) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any

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Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Lender under a Letter
of Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. Neither
the Lender nor any of its Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit, any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Lender; provided that the foregoing shall not
be construed to excuse the Lender from liability to the Borrower to the extent
of any direct damages (as opposed to special, indirect, consequential or
punitive damages, claims in respect of which are hereby waived by the Borrower
to the extent permitted by applicable law) suffered by the Borrower that are
caused by the Lender’s failure to exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Lender (as finally
determined by a court of competent jurisdiction), the Lender shall be deemed to
have exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Lender may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(f) Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Lender shall promptly notify the Borrower by
telephone (confirmed by fax) of such demand for payment and whether the Lender
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Lender with respect to any such LC Disbursement.

(g) Interim Interest. If the Lender shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to Eurodollar Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(d) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Lender.

(h) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Lender demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Lender, in the name and for the
benefit of the Lender (the “LC Collateral Account”), an amount in cash equal to
one hundred five percent (105%) of the LC Exposure as of such date plus accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article VII. The Borrower also shall deposit cash
collateral in accordance with this paragraph as

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and to the extent required by Section 2.11(b), Section 2.11(c), Section 2.11(e)
or Section 2.18(b). Each such deposit shall be held by the Lender as collateral
for the payment and performance of the Secured Obligations. The Lender shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over the LC Collateral Account and the Borrower hereby grants the
Lender a security interest in the LC Collateral Account and all moneys or other
assets on deposit therein or credited thereto. Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Lender and at the Borrower’s risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Lender for LC Disbursements for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated, be applied to satisfy other
Secured Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three (3) Business Days after all such Events of Default have
been cured or waived.

Section 2.07. Funding of Borrowings. The Lender shall make each Loan to be made
by it hereunder on the proposed date thereof available to the Borrower by
promptly crediting the amounts in immediately available funds, to the Funding
Account.

Section 2.08. Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall notify the
Lender of such election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Borrowing of
the Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery or fax to the Lender of a
written Interest Election Request in a form approved by the Lender and signed by
the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

 

  (i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

 

  (ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

  (iii) whether the resulting Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and

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  (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one (1) month’s duration.

(d) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to a CBFR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Lender so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to a CBFR Borrowing at the end of the
Interest Period applicable thereto. The Lender may convert a Eurodollar
Borrowing to a CBFR Borrowing at any time if LIBO Rate funds are unavailable to
Lender or it is infeasible for Lender to make a Loan bearing interest at the
Adjusted LIBO Rate.

Section 2.09. Termination of Commitment.

(a) Unless previously terminated, (i) the Term Loan Commitment shall terminate
at 5:00 p.m., New York City time, on the Effective Date and (ii) all the
Revolving Commitments shall terminate on the Revolving Credit Maturity Date.

(b) The Borrower may at any time terminate the Revolving Commitment upon (i) the
payment in full of all outstanding Revolving Loans and LC Disbursements,
together with accrued and unpaid interest thereon, (ii) the cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Lender of a cash deposit (or
at the discretion of the Lender a backup standby letter of credit satisfactory
to the Lender) equal to 105% of the LC Exposure as of such date), (iii) the
payment in full of all accrued and unpaid fees, and (iv) the payment in full of
all reimbursable expenses and other Obligations together with all accrued and
unpaid interest thereon.

(c) The Borrower shall notify the Lender of any election to terminate the
Revolving Commitment under paragraph (b) of this Section at least three
(3) Business Days prior to the effective date of such termination, specifying
such election and the effective date thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitment delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Lender on or prior to the specified effective date) if such condition is
not satisfied. Any termination of the Revolving Commitment shall be permanent.

(d) Borrower may reduce the Revolving Commitment to an amount (not less than
$5,000,000) that is not less than the sum of (A) all outstanding Revolving Loans
as of the date of such reduction, plus (B) the principal amount of all Revolving
Loans not yet made as to which a request has been given by Borrower under
Section 2.03, plus (C) the amount of all Letters of Credit not yet issued as to
which a request has been given by Borrower pursuant to Section 2.06. Each such
reduction shall be in an amount which is not less than $1,000,000, shall be in
further increments of $1,000,000 and shall be made by providing not less than 7
Business Days prior written notice to Lender, and shall be irrevocable. Once
reduced, the Revolving Commitment may not be increased.

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Section 2.10. Repayment of Principal and Amortization of Term Loan; Evidence of
Debt.

(a) The Borrower hereby unconditionally promises to pay the Lender the then
unpaid principal amount of each Revolving Loan on the Revolving Credit Maturity
Date.

(b) The Borrower hereby unconditionally promises to pay to the Lender on the
first Business Day of the month following each date set forth below the
aggregate principal amount of the Term Loan set forth opposite such date (as
adjusted from time to time pursuant to Section 2.11(d) or Section 2.18(b)):

 

Date

   Amount  

December 31, 2014

   $ 787,500   

March 31, 2015

   $ 787,500   

June 30, 2015

   $ 787,500   

September 30, 2015

   $ 787,500   

December 31, 2015

   $ 787,500   

March 31, 2016

   $ 787,500   

June 30, 2016

   $ 787,500   

September 30, 2016

   $ 787,500   

December 31, 2016

   $ 1,050,000   

March 31, 2017

   $ 1,050,000   

June 30, 2017

   $ 1,050,000   

September 30, 2017

   $ 1,050,000   

December 31, 2017

   $ 1,312,500   

March 31, 2018

   $ 1,312,500   

June 30, 2018

   $ 1,312,500   

September 30, 2018

   $ 1,312,500   

December 31, 2018

   $ 1,312,500   

March 31, 2019

   $ 1,312,500   

June 30, 2019

   $ 1,312,500   

Term Loan Maturity Date

    
 
  The entire unpaid
principal amount
of the Term Loan   
  
  

To the extent not previously paid, any unpaid Term Loan principal shall be paid
in full in cash by the Borrower on the Term Loan Maturity Date.

(c) The Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan made by the Lender, including the amounts of principal and
interest payable and paid to the Lender from time to time hereunder.

(d) The Lender shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period
applicable thereto, if any, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to the Lender hereunder
and (iii) the amount of any sum received by the Lender hereunder.

(e) The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of the Lender to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

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(f) The Lender may request at any time that any Loan made by it shall be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to the Lender a promissory note payable to the order of the
Lender (or, if requested by the Lender, to such Lender and its registered
assigns) and in a form approved by the Lender. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

(g) If a Sweep Agreement is in effect with respect to any day, the repayment
provisions of such Sweep Agreement shall supplement this Section 2.10, and, to
the extent any such provision in such Sweep Agreement is inconsistent with this
Agreement, Lender shall determine which provision shall apply in Lender’s
Permitted Discretion.

Section 2.11. Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to
prepay voluntarily any Borrowing in whole or in part, without penalty or
premium, subject to prior notice in accordance with paragraph (f) of this
Section.

(b) In the event and on such occasion that the Revolving Exposure exceeds the
lesser of (A) the Revolving Commitment and (B) the Borrowing Base, the Borrower
shall prepay the Revolving Loans, and/or LC Exposure (or, if no such Borrowings
are outstanding, deposit cash collateral in the LC Collateral Account in an
aggregate amount equal to such excess, in accordance with Section 2.06(h)).

(c) In the event and on each occasion that any Net Proceeds are received by or
on behalf of any Loan Party or any of its Subsidiaries in respect of any
Prepayment Event, the Borrower shall, immediately after such Net Proceeds are
received by any Loan Party or any of its Subsidiaries, prepay the Obligations
and cash collateralize LC Exposure as set forth in Section 2.11(e) below in an
aggregate amount equal to one hundred percent (100%) of such Net Proceeds,
provided that, if the Borrower shall deliver to the Lender a certificate of a
Financial Officer to the effect that the Loan Parties intend to apply the Net
Proceeds from such event which is an asset sale outside the ordinary course of
business (or a portion thereof specified in such certificate), within one
hundred eighty (180) days after receipt of such Net Proceeds, to acquire (or
replace or rebuild) real property, equipment or other tangible assets (excluding
inventory) to be used in the business of the Loan Parties, and certifying that
no Event of Default has occurred and is continuing, then no prepayment shall be
required pursuant to this paragraph in respect of the Net Proceeds specified in
such certificate, provided that to the extent of any such Net Proceeds that have
not been so applied by the end of such one hundred eighty (180) day period, a
prepayment shall be required in an amount equal to such Net Proceeds that have
not been so applied; provided further that the Borrower shall not be permitted
to make elections to use Net Proceeds to acquire (or replace or rebuild) real
property, equipment or other tangible assets (excluding inventory) with respect
to Net Proceeds in any fiscal year in an aggregate amount in excess of $500,000.

(d) Until the later of the Revolving Credit Maturity Date or the Term Loan
Maturity Date, as the case may be, the Borrower shall prepay the Obligations as
set forth in Section 2.11(e) below on the date that is ten (10) days after the
earlier of (i) the date on which the Borrower’s annual audited financial
statements for the immediately preceding fiscal year are delivered pursuant to
Section 5.01 or (ii) the date on which such annual audited financial statements
were required to be delivered pursuant to

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Section 5.01, in an amount equal to fifty percent (50%) of the Borrower’s Excess
Cash Flow for the immediately preceding fiscal year; provided that no such
prepayment shall be required at any time when both (A) Borrower’s actual Total
Leverage is less than 1.50 to 1.00 and (B) the maximum Total Leverage Ratio
permitted pursuant to Section 6.12(c) is 2.25 to 1.00. Each Excess Cash Flow
prepayment shall be accompanied by a certificate signed by a Financial Officer
of the Borrower certifying the manner in which Excess Cash Flow and the
resulting prepayment were calculated, which certificate shall be in form and
substance satisfactory to Lender.

(e) All prepayments required to be made pursuant to Section 2.11(c) or
Section 2.11(d) shall be applied, first to prepay the Term Loan and shall be
applied to reduce the subsequent scheduled repayments of the Term Loan to be
made pursuant to Section 2.10 in inverse order of maturity and second to prepay
the Revolving Loans without a corresponding reduction in the Revolving
Commitments and third to cash collateralize outstanding LC Exposure; provided
that all prepayments required to be made pursuant to Section 2.11(c) (with
respect to Net Proceeds arising from any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding, to the extent they arise from casualties or losses to cash or
Inventory) shall be applied, first, to prepay the Revolving Loans with a
corresponding reduction in the Revolving Commitments and second, to cash
collateralize outstanding LC Exposure, and third, to prepay the Term Loans
applied to reduce the subsequent scheduled repayments of the Term Loan to be
made pursuant to Section 2.10 in inverse order of maturity.

(f) The Borrower shall notify the Lender by telephone (confirmed by fax) of any
prepayment under this Section: (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 10:00 a.m., New York City time, three (3) Business
Days before the date of prepayment, or (ii) in the case of prepayment of a CBFR
Borrowing, not later than 10:00 a.m., New York City time, one (1) Business Day
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that if a notice of prepayment is given
in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.09, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with
Section 2.09. Each partial prepayment of any Revolving Borrowing or Term Loan
shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided in Section 2.02, except as necessary to
apply fully the required amount of a mandatory prepayment. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13.

Section 2.12. Fees.

(a) The Borrower agrees to pay to the Lender a commitment fee which shall accrue
at a rate of 1/4 of 1% per annum on the average daily amount of the undrawn
portion of the Revolving Commitment of the Lender (with outstanding Letters of
Credit reducing such undrawn portion) during the period from and including the
Effective Date to but excluding the date on which the Lender’s Revolving
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Revolving Commitments terminate, commencing on the first such date
to occur after the date hereof. All commitment fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

(b) The Borrower agrees to pay (i) to the Lender a letter of credit fee with
respect to Letters of Credit, which shall accrue at a rate of one and one half
percent (1.5%) per annum of the face amount of the applicable Letter of Credit
during the period from and including the Effective Date to but excluding the
later of the date on which the Lender’s Revolving Commitment terminates and the
date on

--------------------------------------------------------------------------------

which the Lender ceases to have any LC Exposure, and (ii) the Lender’s standard
fees with respect to the issuance, amendment, cancellation, negotiation,
transfer, presentment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Letter of Credit fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third (3rd) Business Day following such last day, commencing
on the first such date to occur after the Effective Date; provided that all such
fees shall be payable on the date on which the Revolving Commitment terminates
and any such fees accruing after the date on which the Revolving Commitment
terminates shall be payable on demand. Any other fees payable to the Lender
pursuant to this paragraph shall be payable within 10 days after demand. All
letter of credit fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).

(c) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Lender. Fees paid shall not be refundable under any
circumstances.

Section 2.13. Interest.

(a) At Closing, the Term Loan and the Revolving Loan shall bear interest at the
CB Floating Rate.

(b) Thereafter, (i) the Borrower may elect pursuant to Section 2.08 of this
Agreement, for the Term Loan to be a CBFR Loan and bear interest at the CB
Floating Rate if a Sweep Agreement is in effect or to be a Eurodollar Loan and
bear interest at the Adjusted One Month LIBOR Rate (including the applicable
3.15% interest rate margin); and (ii) if a Sweep Agreement is in effect, any
Revolving Loan may, at Borrower’s election pursuant to the terms and conditions
of the applicable Sweep Agreement, be a Eurodollar Loan and may bear interest at
the Adjusted Daily One Month LIBOR Rate or a CBFR Loan and bear interest at the
CB Floating Rate. Whether a Sweep Agreement is in effect shall be determined by
the terms and conditions of such Sweep Agreement.

(c) Thereafter, if a Sweep Agreement is not in effect, Borrower may, pursuant to
Sections 2.03 and 2.08 elect that any Revolving Loan may be a Eurodollar Loan
and bear interest at the Adjusted LIBO Rate (including the applicable 2.50%
interest rate margin). At such a time as a Sweep Agreement is not in effect, if
such an election is not made or if an applicable Interest Period has expired
without renewal, any Loan for which an election is not made or for which an
applicable Interest Period has so expired shall be a CBFR Loan and shall bear
interest at the CB Floating Rate except that the CB Floating Rate floor shall be
the Adjusted One Month LIBOR Rate and not the Adjusted Daily One Month LIBOR
Rate.

(d) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default for nonpayment the Lender shall, and during the occurrence and
continuance of any other Event of Default, the Lender may, at its option, by
notice to the Borrower, declare that (i) all Loans shall bear interest at two
percent (2%) plus the rate otherwise applicable to such Loans as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount
outstanding hereunder, such amount shall accrue at two percent (2%) plus the
rate applicable to CBFR Loans as provided hereunder.

(e) Accrued interest on each Loan, whether a Term Loan or a Revolving Loan, (for
CBFR Loans, accrued through the last day of the prior calendar month) shall be
payable in arrears on each applicable Interest Payment Date for such Loan and
additionally shall be payable, in the case of Revolving Loans, upon termination
of the Commitment; provided that (i) interest accrued pursuant to paragraph
(d) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of a CBFR Revolving
Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the

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date of such repayment or prepayment and (iii) in the event of any conversion of
any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

(f) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the CB Floating Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed. The applicable
CB Floating Rate, Adjusted Daily One Month LIBOR Rate, Adjusted One Month LIBOR
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Lender, and
such determination shall be conclusive absent manifest error.

Section 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

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

(b) the Lender determines the Adjusted LIBO Rate for such Interest Period will
not adequately and fairly reflect the cost to the Lender of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;

then the Lender shall give notice thereof to the Borrower by telephone or fax as
promptly as practicable thereafter and, until the Lender notifies the Borrower
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as a CBFR Borrowing.

Section 2.15. Increased Costs.

(a) If any Change in Law shall:

 

  (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement (including any compulsory loan requirement, insurance charge or
other assessment) against assets of, deposits with or for the account of, or
credit extended by, the Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or

 

  (ii) impose on the Lender or the London interbank market any other condition
affecting this Agreement or Loans made by the Lender or any Letter of Credit or
participation therein; or

 

  (iii) subject Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes
described in clauses (b) through (e) of the definition of Excluded Taxes and
(C) Connection Income Taxes) any effectively connected income tax on its loans,
loan principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto;

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

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

(c) A certificate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay the Lender the
amount shown as due on any such certificate within ten (10) days after receipt
thereof.

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

Section 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(c) and is revoked in accordance therewith), then, in any such
event, the Borrower shall compensate the Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to the Lender shall be deemed to include an amount determined by the
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Eurodollar Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Eurodollar Loan, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which the
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of the Lender setting forth any amount or amounts that the
Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
the Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

Section 2.17. Taxes.

(a) Withholding Taxes; Gross-Up; Payments Free of Taxes. Any and all payments by
or on account of any obligation of the Borrower under any Loan Document shall be
made without

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deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by a withholding agent, then the applicable withholding agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.17), each Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Governmental Authority all Taxes applicable to it in accordance with
applicable law.

(c) Evidence of Payment. As soon as practicable after any payment of Taxes by
the Borrower to a Governmental Authority pursuant to this Section 2.17, the
Borrower shall deliver to the applicable Recipient the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment, or other evidence of such payment
reasonably satisfactory to such Recipient.

(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient
for any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Government Authority. A certificate as to the amount of
such payment or liability delivered to the Borrower by a Recipient shall be
conclusive absent manifest error.

(e) Treatment of Certain Refunds. If a Recipient determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such Recipient and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of a Recipient, shall repay to such Recipient the amount
paid to the indemnifying party (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event such Recipient is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (e), in no event will a Recipient be
required to pay any amount to any indemnifying party pursuant to this paragraph
(e), the payment of which would place such Recipient in a less favorable net
after-Tax position than such Recipient would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require a Recipient to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower, at the time or times reasonably requested by the Borrower, such
properly completed and executed documentation reasonably requested by the
Borrower as will

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permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Borrower,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower as will enable the Borrower to determine
whether or not such Lender is subject to withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in Section 2.17(f)(ii)(A), (B) and (D)) shall
not be required if in the Lender’s judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense (or, in the case of a Change in Law, any incremental material
unreimbursed cost or expense) or would materially prejudice the legal or
commercial position of such Lender. Upon the reasonable request of the Borrower,
any Lender shall update any form or certification previously delivered pursuant
to this Section 2.17(f).

(ii) Without limiting the generality of the foregoing:

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

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

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

(2) in the case of a Foreign lender for whom payments under this Agreement
constitute income that is effectively connected with such Lender’s conduct of a
trade or business in the United States, executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Tax Code, (x) a certificate in
the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Tax Code, a “10 percent
shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Tax
Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Tax Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of
IRS Form W-8BEN-E; or

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(4) to the extent a Foreign Lender is not the beneficial owner of payments under
this Agreement, executed copies of IRS Form W-8IMY, accompanied by IRS Form
W-8ECI, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in
the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit F-4 on behalf of each such direct and indirect partner;

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

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Tax Code, as applicable), such
Lender shall deliver to the Borrower at the time or times prescribed by law and
at such time or times reasonably requested by the Borrower such documentation
prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower as may be necessary for the Borrower to
comply with its obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

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

(g) Survival. Each party’s obligations under this Section 2.17 shall survive the
resignation or replacement of the Lender or any assignment of rights by, or the
replacement of, a Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all obligations under any Loan Document.

(h) For purposes of this Section 2.17, the term “Lender” shall include any
assignee

Section 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, Section 2.16 or Section 2.17, or
otherwise) prior to 2:00 p.m., New York City time, on the

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date when due, in immediately available funds, without set-off or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Lender, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Lender at its offices at 695 Route 46 West, Suite 101, Fairfield, NJ 07004. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in dollars.

(b) Any proceeds of Collateral received by the Lender (i) not constituting
either (A) a specific payment of principal, interest, fees or other sum payable
under the Loan Documents (which shall be applied as specified by the Borrower),
or (B) a mandatory prepayment (which shall be applied in accordance with
Section 2.10) or (ii) after an Event of Default has occurred and is continuing
and the Lender so elects such funds shall be applied ratably first, to pay any
fees, indemnities, or expense reimbursements including amounts then due to the
Lender from the Borrower, second, to pay interest then due and payable on the
Loans ratably, third, to prepay principal on the Loans and unreimbursed LC
Disbursements and to pay any amounts owing with respect to Swap Obligations and
Banking Services Obligations, ratably (with amounts allocated to the Term Loan
applied to reduce the subsequent scheduled repayments of the Term Loan to be
made pursuant to Section 2.10 in inverse order of maturity), fourth, to pay an
amount to the Lender equal to one hundred five percent (105%) of the aggregate
LC Exposure, to be held as cash collateral for such Obligations, and fifth, to
the payment of any amounts owing with respect to Banking Services and Swap
Obligations, and sixth, to the payment of any other Secured Obligation due to
the Lender by the Borrower or any other Loan Party. Notwithstanding anything to
the contrary contained in this Agreement, unless so directed by the Borrower, or
unless a Default is in existence, the Lender shall not apply any payment which
it receives to any Eurodollar Loan of a Class, except (i) on the expiration date
of the Interest Period applicable thereto, or (ii) in the event, and only to the
extent, that there are no outstanding CBFR Loans of the same Class and, in any
such event, the Borrower shall pay the break funding payment required in
accordance with Section 2.15. The Lender shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.

(c) At the election of the Lender, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including, without
limitation, all reimbursement for fees and expenses pursuant to Section 8.03),
and other sums payable under the Loan Documents, may be paid from the proceeds
of Borrowings made hereunder, whether made following a request by the Borrower
pursuant to Section 2.03 or a deemed request as provided in this Section or may
be deducted from any deposit account of the Borrower maintained with the Lender.
The Borrower hereby irrevocably authorizes (i) the Lender to make a Borrowing
for the purpose of paying each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents and
agrees that all such amounts charged shall constitute Loans, and that all such
Borrowings shall be deemed to have been requested pursuant to Section 2.03, as
applicable, and (ii) the Lender to charge any deposit account of the Borrower
maintained with the Lender for each payment of principal, interest and fees as
it becomes due hereunder or any other amount due under the Loan Documents.

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

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Section 2.20. Condition Subsequent. The obligation of the Lender to continue to
make Revolving Loans (or otherwise extend credit hereunder) is subject to the
fulfillment, on or before the date applicable thereto, of the conditions
subsequent set forth on Schedule 2.20 (the failure by Borrower to so perform or
cause to be performed such conditions subsequent as and when required by the
terms thereof, unless such date is extended in writing by Lender, shall
constitute an Event of Default).

Article III

Representations and Warranties

Each Loan Party represents and warrants to the Lender that (and where
applicable, agrees):

Section 3.01. Organization; Powers. Each Loan Party and each of its Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required except
to the extent that the failure to qualify in such jurisdiction could not
reasonably be expected to have a Material Adverse Effect.

Section 3.02. Authorization; Enforceability. The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
Each Loan Document to which a Loan Party is a party has been duly executed and
delivered by such Loan Party and constitutes a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents and such filings with the SEC as
shall be timely made, (b) will not violate any Requirement of Law applicable to
any Loan Party or any of its Subsidiaries, (c) will not violate the charter,
by-laws or other organizational documents of any Loan Party or any of its
Subsidiaries, (d) will not violate or result in a default under any indenture,
material agreement or other material instrument binding upon any Loan Party or
any of its Subsidiaries or the assets of any Loan Party or any of its
Subsidiaries, or give rise to a right thereunder to require any payment to be
made by any Loan Party or any of its Subsidiaries, and (e) will not result in
the creation or imposition of any Lien on any asset of any Loan Party or any of
its Subsidiaries, except Liens created pursuant to the Loan Documents.

Section 3.04. Financial Condition; No Material Adverse Change.

(a) The Borrower has heretofore furnished to the Lender its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended June 30, 2014, reported on by Stegman & Company,
independent public accountants, and (ii) as of and for the fiscal month and the
portion of the fiscal year ended September 30, 2014, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to normal year-end audit adjustments all of
which, when taken as a whole, would not be materially adverse and the absence of
footnotes in the case of the statements referred to in clause (ii) above.

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(b) No event, change or condition has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect, since June 30, 2014.

Section 3.05. Properties and Trademarks.

(a) As of the date of this Agreement, Schedule 3.05(a) sets forth the address of
each parcel of real property that is owned or leased by any Loan Party. Each of
such leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and no default by any party to any such lease
or sublease exists except as could not reasonably be expected to result in a
Material Adverse Effect. Each of the Loan Parties and each of its Subsidiaries
has good, sufficient and legal title to, or valid leasehold interests in, all of
its real and personal property, free of all Liens other than those permitted by
Section 6.02.

(b) Each of the Loan Parties and its Subsidiaries has good and marketable title
to all of their respective assets including those reflected in their most recent
financial statements delivered pursuant to Section 5.01, in each case except for
assets disposed of since the date of such financial statements (to the extent
permitted hereby with respect to dispositions after the Closing Date) and except
for those assets, the failure of which to have such interests or title therein,
could not reasonably be expected to have a Material Adverse Effect. All of such
assets are free and clear of Liens other than those permitted by Section 6.02.

(c) Each Loan Party and each of its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
necessary for the conduct of its business as currently conducted, a correct and
complete list of all registrations and applications for registration of which
owned by the Loan Parties, as of the date of this Agreement, is set forth on
Schedule 3.05(c)(i), and the use thereof by each Loan Party and, except as set
forth on Schedule 3.05(c)(ii), each of its Subsidiaries does not infringe in any
material respect upon the rights of any other Person and each Loan Party’s and
each of its Subsidiaries’ rights thereto are not subject to any licensing
agreement or similar arrangement.

(d) ASJ owns no assets. Rand Worldwide Foreign Holdings, Inc. owns no assets
other than directly 100% of all of the Equity Interests of the Canadian
Subsidiary and indirectly 100% of all of the Equity Interests of ASJ.

Section 3.06. Litigation and Environmental Matters.

(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of any Loan Party,
threatened against any Loan Party or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters set forth on Schedule 3.06) or (ii) that involve any Loan Document or
the Transactions.

(b) Except for the Disclosed Matters, (i) no Loan Party or any of its
Subsidiaries has received notice of any claim with respect to any Environmental
Liability or knows of any basis for any Environmental Liability and (ii) except
with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, no Loan Party or
any of its Subsidiaries (1) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law or (2) has become subject to any
Environmental Liability.

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(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, would be
reasonably expected to result in, or materially increase the likelihood of, a
Material Adverse Effect.

Section 3.07. Compliance with Laws and Agreements. Except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, each Loan Party and each of its
Subsidiaries is in compliance with (a) its charter, by-laws or other
organizational documents, (b) all Requirements of Law applicable to it or its
property and (c) all indentures, agreements and other instruments binding upon
it or its property. No Default has occurred and is continuing.

Section 3.08. Investment Company Status. None of the Borrower or any of its
Subsidiaries is an “investment company” as defined in the Investment Company Act
of 1940.

Section 3.09. Taxes. Each Loan Party and each of its Subsidiaries has timely
filed or caused to be filed all income and all other material non-income Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except Taxes that are being
contested in good faith by appropriate proceedings and for which such Loan Party
or such Subsidiary, as applicable, has set aside on its books adequate reserves.
No tax liens have been filed and no written claims are being asserted with
respect to any such Taxes.

Section 3.10. ERISA. Except as would not be reasonably expected to have a
Material Adverse Effect, no ERISA Event has occurred or is reasonably expected
to occur. The present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of
the assets of such Plan , and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans.

Section 3.11. Disclosure. None of the reports, financial statements,
certificates or other written information furnished by or on behalf of any Loan
Party or any of its Subsidiaries to the Lender in connection with the
negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished), when taken as a whole,
contained, as of the date such report, financial statement, certificate or other
information was furnished, any material misstatement of fact or omitted to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Loan Parties represent only that
such information was prepared in good faith based upon assumptions believed by
the Loan Parties to be reasonable at the time delivered and, if such projected
financial information was delivered prior to the Effective Date, as of the
Effective Date.

Section 3.12. Capitalization and Subsidiaries.

Schedule 3.12 sets forth (a) a correct and complete list of the name and
relationship to the Borrower of each Subsidiary of the Borrower, (b) a true and
complete listing of each class of each of the Borrower’s authorized Equity
Interests, and (c) the type of entity of the Borrower and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any
Loan Party have been (to the extent such concepts are relevant with respect to
such ownership interests) duly authorized and validly

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issued and are fully paid and non-assessable. The Borrower has caused its stock
transfer agent to deliver to Lender at the Closing a true, correct and complete
list in all material respects of the holders of record of the Borrower’s common
stock as of the day immediately preceding the Closing Date. Schedule 3.12 sets
forth the name and address of each holder of record of the Borrower’s Equity
Interests other than the Borrower’s common stock, as of the Closing Date.

Section 3.13. Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Lender, enforceable against the applicable Loan Party and all
third parties, and having priority over all other Liens on the Collateral except
in the case of (a) Permitted Encumbrances, to the extent any such Permitted
Encumbrances would have priority over the Liens in favor of the Lender pursuant
to any applicable law or agreement and (b) Liens perfected only by possession
(including possession of any certificate of title) or control, to the extent the
Lender has not obtained or does not maintain possession or control of such
Collateral.

Section 3.14. Employment Matters. As of the Effective Date, except as, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
(a) there are no strikes, lockouts or slowdowns against any Loan Party or any
Subsidiary pending or, to the knowledge of the Loan Parties, threatened; (b) the
hours worked by and payments made to employees of the Loan Parties and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters;
and (c) all payments due from any Loan Party or any Subsidiary, or for which any
claim may be made against any Loan Party or any Subsidiary, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Loan Party or such Subsidiary.

Section 3.15. Embargoed Person.

(a) No Loan Party’s, nor any of their Subsidiaries’, assets constitute property
of, or are beneficially owned, directly or indirectly, by any Prohibited Person
or any Person targeted by economic or trade sanctions under U.S. law, including
but not limited to the International Emergency Economic Powers Act, 50 U.S.C. §§
1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., as
amended (the “Trading With the Enemy Act”), any of the foreign assets control
regulations of the Treasury (31 C.F.R., Subtitle B, Chapter V, as amended) (the
“Foreign Assets Control Regulations”) or any enabling legislation or regulations
promulgated thereunder or executive order relating thereto (which includes,
without limitation, (i) Executive Order No. 13224, effective as of September 24,
2001, relating to Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) (the “Executive Order”) and (ii) the USA PATRIOT Act, if the result of
such ownership would be that any Loan made by any Lender would be in violation
of law (“Embargoed Person”); (b) to the knowledge of the Loan Parties, no
Embargoed Person has any interest of any nature whatsoever in any Loan Party if
the result of such interest would be that any Loan would be in violation of law;
(c) to the knowledge of the Loan Parties, no Loan Party has engaged in business
with Embargoed Persons if the result of such business would be that any Loan
made by any Lender would be in violation of law; and (d) neither any Loan Party
nor any Controlled Affiliate (i) is a “blocked person” as described in the
Executive Order, the Trading With the Enemy Act or the Foreign Assets Control
Regulations or (ii) engages in any dealings or transactions, or be otherwise
associated, with any such “blocked person”. No proceeds of any Loan made
hereunder will be used to fund any operations in, finance any investments or
activities in, or make any payments to, any Embargoed Person or Prohibited
Person. For purposes of determining whether or not a representation is true or a
covenant is being complied with under this Section 3.15, the Loan Parties shall
not be required to make any investigation into (i) the ownership of publicly
traded stock or other publicly traded securities or (ii) the beneficial
ownership of any collective investment fund.

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Section 3.16. Solvency.

(a) Borrower and its Subsidiaries are and, upon the incurrence of any Obligation
by Borrower or any of its Subsidiaries on any date on which this representation
and warranty is made, will be, on a consolidated basis, Solvent.

(b) No transfer of property is being made by any Loan Party and no obligation is
being incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of such Loan Party.

Section 3.17. Margin Stock. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans made to Borrower will be used for any purpose that
violates the provisions of Regulation T, U or X of the Board.

Article IV

Conditions

Section 4.01. Effective Date. The obligations of the Lender to make Loans and to
issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance
with Section 8.02):

(a) Credit Agreement and Loan Documents. The Lender (or its counsel) shall have
received (i) from each party hereto either (A) a counterpart of this Agreement
signed on behalf of such party or (B) written evidence satisfactory to the
Lender (which may include fax or other electronic transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and (ii) duly executed copies of the Loan Documents and such
other certificates, documents, instruments and agreements as the Lender shall
reasonably request in connection with the transactions contemplated by this
Agreement and the other Loan Documents, including a written opinion of the Loan
Parties’ counsel, addressed to the Lender in substantially the form of Exhibit
B.

(b) Financial Statements. The Lender shall have received (i) audited
consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal year ended June 30, 2014 (to the extent delivered to the Borrower by its
auditors before the Closing Date), and (ii) unaudited interim consolidated
financial statements of the Borrower and its Subsidiaries for each fiscal month
and quarter ended after the date of the latest applicable financial statements
delivered pursuant to clause (i) of this paragraph as to which such financial
statements are available, and such financial statements shall not, in the
reasonable judgment of the Lender, reflect any material adverse change in the
consolidated financial condition of the Borrower and its Subsidiaries as
reflected in the audited, consolidated financial statements described in clause
(i) of this paragraph.

(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Lender shall have received (i) a certificate of each Loan
Party, dated the Effective Date and executed by its Secretary or Assistant
Secretary, which shall (A) certify the resolutions of its Board of Directors,
members or other body authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, (B) identify by name and title and bear
the signatures of the Financial Officers and any other officers of such Loan
Party authorized to sign the Loan Documents to which it is a party, and
(C) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant
authority of the jurisdiction of organization of such Loan Party and a true and
correct copy of its by-laws or operating, management or partnership agreement,
and (ii) a long form good standing certificate for each Loan Party from its
jurisdiction of organization.

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(d) No Default Certificate. The Lender shall have received a certificate, signed
by the chief financial officer of the Borrower, on the initial Borrowing date
(i) stating that no Event of Default has occurred and is continuing,
(ii) stating that the representations and warranties contained in the Loan
Documents are true and correct as of such date, and (iii) certifying as to any
other factual matters as may be reasonably requested by the Lender.

(e) Fees. The Lender shall have received all fees required to be paid, and all
expenses required to be reimbursed for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Effective Date. All such amounts will be paid with proceeds of Loans made on the
Effective Date and will be reflected in the funding instructions given by the
Borrower to the Lender on or before the Effective Date.

(f) Lien Searches. The Lender shall have received the results of a recent lien
search in each of the jurisdictions where assets of the Loan Parties are
located, and such search shall reveal no liens on any of the assets of the Loan
Parties except for liens permitted by Section 6.02 or discharged on or prior to
the Effective Date pursuant to a payoff letter or other documentation
satisfactory to the Lender.

(g) Payoff Letter. The Lender shall have received satisfactory payoff letters
for all existing Indebtedness required to be repaid and which confirms that all
Liens upon any of the property of the Loan Parties constituting Collateral will
be terminated concurrently with such payment and all letters of credit issued or
Guaranteed as part of such Indebtedness shall have been cash collateralized or
supported by a Letter of Credit.

(h) Funding Account. The Lender shall have received a notice setting forth the
deposit account of the Borrower (the “Funding Account”) to which the Lender is
authorized by the Borrower to transfer the proceeds of any Borrowings requested
or authorized pursuant to this Agreement.

(i) Collateral Access Agreement. The Lender shall have received a Collateral
Access Agreement from the lessor of that certain property located at 161
Worcester Rd., Framingham, MA.

(j) Solvency. The Lender shall have received a solvency certificate signed by a
Financial Officer dated the Effective Date in form and substance reasonably
satisfactory to the Lender.

(k) Borrowing Base Certificate. The Lender shall have received a Borrowing Base
Certificate which calculates the Borrowing Base as of the end of the Business
Day immediately preceding the Effective Date.

(l) Pledged Stock; Stock Powers; Pledged Notes. The Lender shall have received
(i) the certificates representing the Equity Interests pledged pursuant to the
Security Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof and (ii) each promissory note (if any) pledged to the Lender pursuant to
the Security Agreement endorsed (without recourse) in blank (or accompanied by
an executed transfer form in blank) by the pledgor thereof.

(m) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably

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requested by the Lender to be filed, registered or recorded in order to create
in favor of the Lender, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to
Liens expressly permitted by Section 6.02), shall be in proper form for filing,
registration or recordation.

(n) Letter of Credit Application. The Lender shall have received a properly
completed letter of credit application (whether standalone or pursuant to a
master agreement, as applicable) if the issuance of a Letter of Credit will be
required on the Effective Date.

(o) USA PATRIOT Act, Etc. The Lender shall have received all documentation and
other information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including USA
PATRIOT Act, and a properly completed and signed IRS Form W-8 or W-9, as
applicable, for each Loan Party.

(p) Insurance. The Lender shall have received evidence of insurance coverage in
form, scope, and substance reasonably satisfactory to the Lender and otherwise
in compliance with the terms of the Security Agreement.

(q) Approvals. The Lender shall have received evidence reasonably satisfactory
to it of all approvals and consents of all Governmental Authorities and third
parties necessary in connection with the Transactions and the continuing
operations of the Borrower and its Subsidiaries except those which the failure
to so obtain would not result in a Material Adverse Effect on the Borrower and
its Subsidiaries taken as a whole. Each such consent or approval shall be in
full force and effect.

(r) Consolidated EBITDA. The Borrower shall have maintained a trailing twelve
(12) month Consolidated EBITDA of no less than $11,800,000 for the period ended
August 30, 2014.

(s) [reserved]

(t) Indebtedness. The Borrower and its Subsidiaries shall have incurred no
Indebtedness (i) other than in connection with the loans contemplated by the
Loan Documents and (ii) Indebtedness permitted pursuant to Section 6.01.

(u) Tender Offer. All conditions to the consummation of the Tender Offer, other
than the funding of the Loans and use of proceeds contemplated hereby, shall
have been satisfied or waived. The purchase price in connection with such
repurchase shall not exceed $1.20 per share. The Borrower shall have not
effected any restructuring to its capital structure including any stock splits,
other than as described in this clause (u). 3K or its Affiliates shall have
purchased no less than 9,000,000 shares of Borrower’s common stock from
Ampersand Capital Partners or its Affiliates.

(v) Other Documents. The Lender shall have received such other documents as the
Lender or its counsel may have reasonably requested.

The Lender shall notify the Borrower of the Effective Date, and such notice
shall be conclusive and binding. Notwithstanding the foregoing, the obligations
of the Lender to make Loans and to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 8.02) at or prior to 2:00 p.m., New York City time, on
November 3, 2014 (and, in the event such conditions are not so satisfied or
waived, the Commitment shall terminate at such time).

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

(a) The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date); and

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

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

Article V

Affirmative Covenants

Until the Commitment has expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated, in each case
without any pending draw, and all LC Disbursements shall have been reimbursed,
each Loan Party executing this Agreement, jointly and severally with all of the
Loan Parties, covenants and agrees with the Lender that:

Section 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrower will furnish to the Lender:

(a) within the earlier of (i) ninety (90) days after the end of each fiscal year
of the Borrower and (ii) the date filed with the SEC, its audited consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
Stegman & Company or other independent public accountants reasonably acceptable
to Lender (without a “going concern” or like qualification, commentary or
exception, and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, accompanied by any management letter
prepared by said accountants;

(b) within the earlier of (i) forty-five (45) days after the end of each of the
first three (3) fiscal quarters of the Borrower and (ii) the date filed with the
SEC, its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of the Financial Officers of the Borrower as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

(c) [reserved];

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(d) concurrently with any delivery of financial statements under clause (a) or
(b) above (collectively or individually, as the context requires, the “Financial
Statements”), a certificate of a Financial Officer of the Borrower in
substantially the form of Exhibit D (i) certifying, in the case of the Financial
Statements delivered under clause (b) above, as presenting fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes, (ii) certifying as to whether an Event of Default has
occurred and, if an Event of Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(iii) setting forth reasonably detailed calculations demonstrating compliance
with Section 6.12 and (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the Financial Statements accompanying
such certificate;

(e) promptly after the receipt thereof by the Borrower or any Subsidiary, a copy
of any “management letter” received by any such person from its certified public
accountants and the management’s response thereto;

(f) as soon as available, but in any event no later than the end of, and no
earlier than thirty (30) days prior to the end of, each fiscal year of the
Borrower, a copy of the plan and forecast (including a projected consolidated
and consolidating balance sheet, income statement and cash flow statement) of
the Borrower for each month of the upcoming fiscal year (the “Projections”) in
form reasonably satisfactory to the Lender;

(g) as soon as available but in any event within twenty (20) days after the end
of each calendar month, and at such other times as may be requested by the
Lender, as of the month then ended, a Borrowing Base Certificate and supporting
information in connection therewith, together with any additional reports with
respect to the Borrowing Base as the Lender may reasonably request;

(h) [reserved];

(i) as soon as possible and in any event within ten (10) days after the end of
each calendar month, a detailed listing of all intercompany loans made by the
Borrower to any Affiliate during such calendar month;

(j) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Loan Party
or any of its Subsidiaries 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 by the Borrower to its shareholders
generally, as the case may be;

(k) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Loan Party, or
compliance with the terms of this Agreement, as the Lender may reasonably
request; and

(l) promptly after any request therefor by the Lender, copies of (i) any
documents described in Section 101(k)(1) of ERISA that the Borrower or any of
its ERISA Affiliates may request with respect to any Multiemployer Plan and
(ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or
any of its ERISA Affiliates may request with respect to any Multiemployer Plan;
provided that if the Borrower or any of its ERISA Affiliates has not requested
such documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall
promptly make a request for such documents and notices from such administrator
or sponsor and shall provide copies of such documents and notices promptly after
receipt thereof.

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Section 5.02. Notices of Material Events. The Borrower will furnish to the
Lender prompt (but in any event within any time period that may be specified
below) written notice of the following:

(a) the occurrence of any Default or Event of Default;

(b) receipt of any notice of any investigation by a Governmental Authority or
any litigation or proceeding commenced or threatened against any Loan Party or
any of its Subsidiaries that (i) seeks damages in excess of $500,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or
any of its Subsidiaries, (v) alleges the violation of, or seeks to impose
remedies under any, any Environmental Law or related Requirement of Law, or
seeks to impose Environmental Liability, (vi) asserts liability on the part of
any Loan Party or any of its Subsidiaries in excess of $500,000 in respect of
any tax, fee, assessment, or other governmental charge, or (vii) involves any
product recall;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, would reasonably be expected to result in
liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $500,000;

(d) within two (2) Business Days after the occurrence thereof, any Loan Party
entering into a Swap Agreement or an amendment to a Swap Agreement, together
with copies of all agreements evidencing such Swap Agreement or amendment; and

(e) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

Section 5.03. Existence; Conduct of Business. Each Loan Party will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect (i) its legal existence and
(ii) its rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits necessary to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, except, as to
each case in this clause (ii), where the failure to do so would not reasonably
be expected to result in a Material Adverse Effect; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under and (b) carry on and conduct its business in substantially the
same manner as it is presently conducted.

Section 5.04. Payment of Obligations. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material
liabilities and obligations, including Taxes, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect; provided,
however, that each Loan Party will, and will cause each Subsidiary to, remit
withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.

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Section 5.05. Maintenance of Properties. Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property necessary to the conduct of
its business in good working order and condition, casualty, condemnation and
ordinary wear and tear excepted.

Section 5.06. Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (b) permit any representatives
designated by the Lender (including employees of the Lender or any consultants,
accountants, lawyers, agents and appraisers retained by the Lender), upon
reasonable prior notice, to visit and inspect its properties, conduct at the
Loan Party’s premises field examinations of the Loan Party’s assets,
liabilities, books and records, including examining and making extracts from its
books and records, environmental assessment reports and Phase I or Phase II
studies, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested; provided that such inspections shall occur no more than
once per year and at the Borrower’s expense so long as no Event of Default has
occurred and is continuing. The Loan Parties acknowledge that the Lender, after
exercising its rights of inspection, may prepare certain Reports pertaining to
the Loan Parties’ assets for internal use by the Lender.

Section 5.07. Compliance with Laws. Each Loan Party will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its
property.

Section 5.08. Use of Proceeds. The proceeds of the Term Loan will be used only
to repurchase the equity securities of the Borrower in connection with the
Tender Offer. The proceeds of the Revolving Loans will be used only for general
corporate purposes of the Borrower and its Subsidiaries (who are Loan Parties)
or the Canadian Subsidiary and to pay fees in connection with the closing of the
Transactions and this Agreement. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X. All
Letters of Credit will be issued only to support the Loan Parties’ or the
Canadian Subsidiary’s obligations.

Section 5.09. Accuracy of Information. The Borrower will ensure that any
information, including financial statements or other documents, furnished to the
Lender in connection with this Agreement or any amendment or modification hereof
or waiver hereunder contains no material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and the furnishing of
such information shall be deemed to be a representation and warranty by the
Borrower on the date thereof as to the matters specified in this Section 5.09;
provided that, with respect to the Projections, the Borrower will cause the
Projections to be prepared in good faith based upon assumptions believed to be
reasonable at the time.

Section 5.10. Insurance. Each Loan Party will, and will cause each Subsidiary
to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company (a) insurance in such
amounts (with no greater risk retention) and against such risks (including loss
or damage by fire and loss in transit; theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; business interruption; and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required pursuant to the
Collateral Documents. Upon the request of the Lender, the Borrower will furnish
to the Lender information in reasonable detail as to the insurance so
maintained.

Section 5.11. Casualty and Condemnation. The Borrower (a) will furnish to the
Lender prompt written notice of any casualty or other insured damage to any
material portion of the Collateral or the

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commencement of any action or proceeding for the taking of any material portion
of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents

Section 5.12. Depository Banks. The Borrower and each Subsidiary will maintain
the Lender as its principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.

Section 5.13. Additional Collateral; Further Assurances.

(a) Subject to applicable Requirements of Law, each Loan Party will cause each
of its Domestic Subsidiaries formed or acquired after the date of this Agreement
(other than Insignificant Subsidiaries) to become a Loan Party by executing a
Joinder Agreement. Upon execution and delivery thereof, each such Person
(i) shall automatically become a Loan Guarantor hereunder and thereupon shall
have all of the rights, benefits, duties, and obligations in such capacity under
the Loan Documents and (ii) will grant Liens to the Lender, in any property of
such Loan Party which constitutes Collateral, including any parcel of real
property located in the U.S. owned by any Loan Party. For the avoidance of
doubt, no Foreign Subsidiary of Borrower or of any other Loan Party shall be
required to become a Loan Party under this Agreement, a “Grantor” under the
Security Agreement or a “Maker” under the Notes.

(b) Each Loan Party will cause (i) 100% of the issued and outstanding Equity
Interests of each of its Domestic Subsidiaries (other than Insignificant
Subsidiaries and/or any Domestic Subsidiary that holds only stock in one or more
foreign corporations) and (ii) 65% of the issued and outstanding Equity
Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
in each Foreign Subsidiary (other than Insignificant Subsidiaries) directly
owned by the Borrower and each Domestic Subsidiary that holds only stock in one
or more foreign corporations to be subject at all times to a first priority,
perfected Lien in favor of the Lender pursuant to the terms and conditions of
the Loan Documents or other security documents as the Lender shall reasonably
request and, except with respect to Insignificant Subsidiaries, to guaranty the
Guaranteed Obligations on and subject to the terms and conditions of Article 9
hereof. For the avoidance of doubt, no Foreign Subsidiary of a Guarantor shall
be required to become a Guarantor under this Agreement or a “Grantor” under the
Security Agreement.

(c) Without limiting the foregoing, but subject to the limitations set forth in
Sections 5.13(a) and (b), each Loan Party will, and will cause each Subsidiary
to, execute and deliver, or cause to be executed and delivered, to the Lender
such documents, agreements and instruments, and will take or cause to be taken
such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents and
such other actions or deliveries of the type required by Section 4.01, as
applicable), which may be required by law or which the Lender may, from time to
time, reasonably request to carry out the terms and conditions of this Agreement
and the other Loan Documents and to ensure perfection and priority of the Liens
created or intended to be created by the Collateral Documents, all at the
expense of the Loan Parties.

(d) If any material assets (including any real property or improvements thereto
or any interest therein) are acquired by any Loan Party after the Effective Date
(other than assets constituting Collateral under the Security Agreement that
become subject to the Lien in favor of the Security Agreement upon acquisition
thereof), the Borrower will (i) notify the Lender and, if requested by the
Lender, cause such assets to be subjected to a Lien securing the Secured
Obligations and (ii) take, and cause each applicable Loan Party to take, such
actions as shall be necessary or reasonably requested by the Lender to grant and
perfect such Liens, including actions described in paragraph (c) of this
Section, all at the expense of the Loan Parties.

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Article VI

Negative Covenants

Until the Commitment has expired or terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan
Document have been paid in full and all Letters of Credit have expired or
terminated, in each case without any pending draw, and all LC Disbursements
shall have been reimbursed, each Loan Party executing this Agreement, jointly
and severally with all of the other Loan Parties, covenants and agrees with the
Lender that:

Section 6.01. Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except:

(a) the Secured Obligations;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01
(excluding, however, following the making of the initial Loan hereunder, the
Indebtedness to be repaid with the proceeds of such Loans) and any extensions,
renewals, refinancings and replacements of any such Indebtedness in accordance
with clause (f) hereof;

(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to the Borrower or any other Loan Party
shall be subject to Section 6.03 and (ii) Indebtedness of any Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Lender;

(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by the Borrower or other Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.03 and
(iii) Guarantees permitted under this clause (d) shall be subordinated to the
Secured Obligations on the same terms as the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;

(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (f) below; provided that (i) such Indebtedness is (or, in
the case of any Refinance Indebtedness, originally was) incurred prior to or
within ninety (90) days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) below, shall not exceed
$1,000,000 at any time outstanding;

(f) Indebtedness which represents extensions, renewals, refinancing and
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b) and (e) and (i) and (j) hereof (such
Indebtedness being referred to herein as the “Original Indebtedness”); provided

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that (i) such Refinance Indebtedness does not increase the principal amount or
interest rate of the Original Indebtedness, (ii) any Liens securing such
Refinance Indebtedness are not extended to any additional property of any Loan
Party or any of its Subsidiaries, (iii) no Loan Party or any of its Subsidiaries
that is not originally obligated with respect to repayment of such Original
Indebtedness is required to become obligated with respect to such Refinance
Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening
of the average weighted maturity of such Original Indebtedness, (v) the terms of
such Refinance Indebtedness are not less favorable to the obligor thereunder
than the original terms of such Original Indebtedness and (vi) if such Original
Indebtedness was subordinated in right of payment to the Secured Obligations,
then the terms and conditions of such Refinance Indebtedness must include
subordination terms and conditions that are at least as favorable to the Lender
as those that were applicable to such Original Indebtedness;

(g) Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;

(i) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (j) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) above, shall not exceed
$500,000 at any time outstanding;

(j) unsecured Indebtedness to trade creditors in the ordinary course of
business;

(k) Indebtedness representing any unpaid Taxes, assessments, or government
charges to the extent the same are being contested in good faith;

(l) Indebtedness representing deferred compensation or similar obligations to
employees of any Loan Party or Subsidiary incurred in the ordinary course of
business;

(m) Unsecured Indebtedness with respect to any Swap Agreement permitted
hereunder; and

(n) other unsecured Indebtedness in an aggregate principal amount not exceeding
$500,000 at any time outstanding; provided that the aggregate principal amount
of Indebtedness of the Borrower’s Subsidiaries permitted by this clause
(j) shall not exceed $500,000 at any time outstanding.

Section 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including Accounts) or rights in respect of any thereof, except:

(a) Liens created pursuant to any Loan Document;

(b) Permitted Encumbrances;

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(c) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(d) Liens of an amount not exceeding $1,000,000 at any one time existing on
fixed or capital assets acquired, constructed or improved by the Borrower or any
Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause
(e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvement, and (iii) such Liens shall not
apply to any other property or assets of the Borrower or any Subsidiary;

(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

(f) Liens of a collecting bank arising in the ordinary course of business under
Section 4-210 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon;

(g) Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06; and

(h) Liens granted by a Subsidiary that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrances and
clause (a) above.

Section 6.03. Fundamental Changes.

(a) No Loan Party will, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, retire any of its Equity
Interests or other Instruments or Securities evidencing ownership, or reduce its
capital, nor vote its Equity Interests in favor of doing any of the foregoing,
except that, if at the time thereof and immediately after giving effect thereto
no Event of Default shall have occurred and be continuing, (i) any Subsidiary of
the Borrower may merge into the Borrower in a transaction in which the Borrower
is the surviving corporation, (ii) any Subsidiary (other than the Borrower) may
merge into any other Subsidiary in a transaction in which the surviving entity
is the Subsidiary (and, if any party to such merger is a Loan Party) and
(iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lender; provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.03.

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(b) No Loan Party will, nor will it permit any Subsidiary to, engage in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date hereof and businesses reasonably related thereto.

(c) No Loan Party will, nor will it permit any Subsidiary to change its fiscal
year or any fiscal quarter.

(d) No Loan Party will change the accounting basis upon which its financial
statements are prepared.

(e) No Loan Party will change the tax filing elections it has made under the
Code.

(f) No Loan Party shall sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all the assets
(whether now owned or hereafter acquired) of such Loan Party or less than all
the Equity Interests of any Subsidiary.

(g) No Loan Party will permit or suffer to the issuer of any Equity Interests it
owns in another Person which constitutes “Pledged Collateral” (as defined and
pursuant to the Security Agreement) to issue any additional Equity Interests of
such Person and grant any right to receive the same or any right to receive
earnings from such Person except to a Loan Party.

Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Subsidiary to, form any subsidiary after the
Effective Date, or purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Loan Party and a wholly owned Subsidiary prior to
such merger) any Equity Interests, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit
(whether through purchase of assets, merger or otherwise), except:

(a) Permitted Investments, subject to control agreements in favor of the Lender
or otherwise subject to a perfected security interest in favor of the Lender;

(b) investments in existence on the date hereof and described in Schedule 6.04;

(c) investments by the Borrower and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (i) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Security Agreement (subject to
the limitations applicable to common stock of a foreign Subsidiary referred to
in Section 5.13) and (ii) the aggregate amount of investments by Loan Parties in
Subsidiaries that are not Loan Parties (together with outstanding intercompany
loans permitted under Section 6.03(d) and outstanding Guarantees permitted under
Section 6.03(e)) shall not exceed $500,000 at any time outstanding (in each case
determined without regard to any write-downs or write-offs);

(d) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary, provided that (i) any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Security Agreement and (ii) the amount of such loans and
advances made by Loan Parties to Subsidiaries that are not Loan Parties
(together with outstanding investments permitted under Section 6.04(c) and
outstanding Guarantees permitted under Section 6.03(e)) shall not exceed
$500,000 at any time outstanding (in each case determined without regard to any
write-downs or write-offs);

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(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party shall (together with
outstanding investments permitted under clause (ii) to the proviso to
Section 6.03(c)) and outstanding intercompany loans permitted under clause
(ii) to the proviso to Section 6.03(d)) shall not exceed $500,000 at any time
outstanding (in each case determined without regard to any write-downs or
write-offs);

(f) loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $500,000 in the aggregate at any one time outstanding;

(g) notes payable, or stock or other securities issued by Account Debtors to a
Loan Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor’s Accounts in the ordinary course of business, consistent with
past practices;

(h) investments in the form of Swap Agreements permitted by Section 6.07;

(i) investments of any Person existing at the time such Person becomes a
Subsidiary of the Borrower or consolidates or merges with the Borrower or any of
the Subsidiaries (including in connection with a Permitted Acquisition), so long
as such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;

(j) investments received in connection with the disposition of assets permitted
by Section 6.05;

(k) investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”; and

(l) Permitted Acquisitions.

Section 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will the Borrower permit any Subsidiary to
issue any additional Equity Interest in such Subsidiary (other than to the
Borrower or another Subsidiary in compliance with Section 6.03), except:

(a) sales, transfers and dispositions of (i) inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property in
the ordinary course of business;

(b) sales, transfers and dispositions of assets to the Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with
Section 6.09;

(c) sales, transfers and dispositions of accounts receivable (excluding sales or
dispositions in a factoring arrangement) in connection with the compromise,
settlement or collection thereof;

(d) sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (k) of Section 6.03;

(e) Sale and Leaseback Transactions permitted by Section 6.06;

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(f) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Subsidiary; and

(g) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $500,000 during
any fiscal year of the Borrower;

provided that all sales, transfers, leases and other dispositions permitted
under this Section 6.05 (other than those permitted by paragraphs (b), (d) and
(f) above) shall be made for fair value and for at least 75% cash consideration.

Section 6.06. Sale and Leaseback Transactions. No Loan Party will enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred (a “Sale and Leaseback Transaction”), except for
any such sale of any fixed or capital assets by the Borrower or any Subsidiary
that is made for cash consideration in an amount not less than the fair value of
such fixed or capital asset and is consummated within 90 days after such
Borrower or such Subsidiary acquires or completes the construction of such fixed
or capital asset.

Section 6.07. Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which the Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of the Borrower
or any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from floating to fixed
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower or any
Subsidiary.

Section 6.08. Restricted Payments; Certain Payments of Indebtedness.

(a) No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except (i) the Borrower
may declare and pay dividends with respect to its common stock payable solely in
additional shares of its common stock, and, with respect to its preferred stock,
payable solely in additional shares of such preferred stock or in shares of its
common stock, (ii) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (iii) the Borrower may make Restricted
Payments with respect to the Borrower’s preferred stock not exceeding $125,000
during any fiscal year and (iv) the Borrower may make Restricted Payments to
consummate the Tender Offer.

(b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to
pay or make, directly or indirectly, any payment or other distribution (whether
in cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:

 

  (i) payment of Indebtedness created under the Loan Documents;

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  (ii) payment of regularly scheduled interest and principal payments as and
when due in respect of any Material Indebtedness permitted under Section 6.01;

 

  (iii) refinancings of Indebtedness to the extent permitted by Section 6.01;
and

 

  (iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
in accordance with this Agreement.

Section 6.09. Transactions with Affiliates. No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to the Loan
Party or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Loan Parties not
involving any other Affiliate, (c) any investment permitted by Section 6.04(c)
or Section 6.04(d), (d) any Indebtedness permitted under Section 6.01(c),
(e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to
employees permitted under Section 6.04(f), (g) the payment of fees to directors
of the Borrower or any Subsidiary who are not employees of the Borrower or any
Subsidiary not exceeding $250,000, and employee benefit arrangements paid to,
and indemnities provided for the benefit of, directors, officers or employees of
the Borrower or its Subsidiaries in the ordinary course of business,
(h) management fees payable to Affiliates of the Loan Parties not to exceed, in
the aggregate, $200,000 per fiscal year of the Loan Parties, and (i) any
issuances of securities or other payments, awards or grants in securities or
otherwise pursuant to stock options and stock ownership plans, and the payment
of compensation pursuant to employment agreements, approved by the Borrower’s
board of directors.

Section 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any of its Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any Equity Interests or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by any Requirement of Law or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

Section 6.11. Amendment of Material Documents. No Loan Party will, nor will it
permit any Subsidiary to, amend, modify or waive any of its rights under (a) its
certificate or articles of incorporation, by-laws, operating, management or
partnership agreement or other organizational documents or (b) other agreements,
to the extent any such amendment, modification or waiver would be materially
adverse to the Lender as determined by the Lender in its Permitted Discretion.

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Section 6.12. Financial Covenants.

(a) Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge
Coverage Ratio, for any period of four consecutive fiscal quarters, taken as one
accounting period, ending on the last day of any fiscal quarter to be less than
1.25 to 1.0.

(b) Minimum Consolidated EBITDA. The Borrower shall have, Consolidated EBITDA
for each period of four consecutive fiscal quarters, taken as one accounting
period, ending during any period set forth below of not less than the amount set
forth below opposite such period:

 

Period

   Consolidated EBITDA  

Effective Date through quarter ended 6/30/2015

   $ 10,000,000   

Quarter ended 9/30/2015 and thereafter

   $ 11,000,000;   

provided that for any time on and after 9/30/2016, if the actual Total Leverage
Ratio is less than 1.50 to 1.00, such minimum Consolidated EBITDA requirement
shall be suspended until such time as actual Total Leverage Ratio equals or
exceeds 1.50 to 1.00.

(c) Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio,
on the last day of any fiscal quarter ending during any period set forth below,
to be greater than the ratio set forth below opposite such period:

 

Period

   Ratio  

Effective Date through 9/30/2015

     2.75 to 1.0   

9/30/2015 through 9/30/2016

     2.50 to 1.0   

From 9/30/2016

     2.25 to 1.0   

Section 6.13. Environmental Covenant. No Loan Party shall use nor permit any
third party to use, generate, manufacture, produce, store or Release on, under
or about any Real Property, or transfer to or from any Real Property, any
Hazardous Materials other than in compliance with all applicable Environmental
Laws, provided that if any third party, by act or omission, by intent or by
accident, allows any foregoing action to occur, the Loan Party shall promptly
remedy such condition, at its sole expense and responsibility in accordance with
Section 9.03(b)(iii). Furthermore, no Loan Party shall permit any Liens under
any Environmental Laws to be placed on any portion of the Real Property.

Article VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;

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(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;

(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), Section 5.03 (with respect to a Loan
Party’s existence) or Section 5.08 or in Article VI;

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than
those specified in clause (a), (b) or (d)), and such failure shall continue
unremedied for a period of (i) five (5) days after the earlier of any Loan
Party’s knowledge of such breach or notice thereof from the Lender if such
breach relates to terms or provisions of Section 5.01, Section 5.02 (other than
Section 5.02(a)), Section 5.03 through Section 5.07, Section 5.10, Section 5.11
or Section 5.13 of this Agreement or (ii) fifteen (15) days after the earlier of
any Loan Party’s knowledge of such breach or notice thereof from the Lender if
such breach relates to terms or provisions of any other Section of this
Agreement or of any other Loan Document;

(f) any Loan Party or any Subsidiary of a Loan Party shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or any Subsidiary (other than an Insignificant
Subsidiary) of any Loan Party or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Loan
Party or any Subsidiary (other than an Insignificant Subsidiary) of any Loan
Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be entered;

(i) any Loan Party or any Subsidiary (other than an Insignificant Subsidiary) of
any Loan Party shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
such Loan Party or Subsidiary (other than an

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Insignificant Subsidiary) of any Loan Party or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

(j) any Loan Party or any Subsidiary (other than an Insignificant Subsidiary) of
any Loan Party shall become unable, admit in writing its inability, or publicly
declare its intention not to, or fail generally, to pay its debts as they become
due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $500,000 shall be rendered against any Loan Party, any Subsidiary of
any Loan Party or any combination thereof and the same shall remain undischarged
for a period of sixty (60) consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of any Loan Party or any Subsidiary of any
Loan Party to enforce any such judgment or any Loan Party or any Subsidiary of
any Loan Party shall fail within sixty (60) days to discharge one or more
non-monetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal and being appropriately
contested in good faith by proper proceedings diligently pursued;

(l) an ERISA Event shall have occurred that, in the opinion of the Lender, when
taken together with all other ERISA Events that have occurred, would reasonably
be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the
terms or provisions of the Loan Guaranty to which it is a party, or any Loan
Guarantor shall deny that it has any further liability under the Loan Guaranty
to which it is a party, or shall give notice to such effect, including, but not
limited to notice of termination delivered pursuant to Section 9.08;

(o) except as permitted by the terms of any Collateral Document, (i) any
Collateral Document shall for any reason fail to create a valid security
interest in any Collateral purported to be covered thereby, or (ii) any Lien
securing any Secured Obligation shall cease to be a perfected, first priority
Lien;

(p) any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document;

(q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction that evidences its assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms); or

(r) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan
Party having a fair market value in excess of $500,000;

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then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitment, thereupon the Commitment shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, but ratably as among the Classes of Loans and the Loans of
each Class at the time outstanding, in which case any principal not so declared
to be due and payable may thereafter be declared to be due and payable), and
whereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, in each case
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Commitment shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, in each
case without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower. Upon the occurrence and during the
continuance of an Event of Default, the Lender may increase the rate of interest
applicable to the Loans and other Obligations as set forth in this Agreement and
exercise any rights and remedies provided to the Lender under the Loan Documents
or at law or equity, including all remedies provided under the UCC.

Article VIII

Miscellaneous

Section 8.01. Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:

(i) if to any Loan Party, to it in care of the Borrower at:

Rand Worldwide, Inc.

11201 Dolfield Boulevard

Suites 112-115

Owings Mills, Maryland 21117

Attention: Lawrence Rychlak, President

Fax No:                     

With a copy to:

Matthew V. P. McTygue, Esq.

Edwards Wildman Palmer LLP

111 Huntington Avenue

Boston, MA 02199

Fax No: (617) 316-8287

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(ii) if to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

1750 Tysons Boulevard

McLean, Virginia 22102

Attention: Morgan Higgins

Fax No: (703) 655-0272

With a copy to:

David S. Cole, Esq.

Holland & Knight LLP

1600 Tysons Boulevard

McLean, Virginia 22102

Fax No: (703) 720-8610

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, (ii) sent by fax shall be deemed to have been given when
sent, provided that if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, or (iii) delivered through electronic
communication to the extent provided in paragraph (b) below shall be effective
as provided in such paragraph.

(b) Notices and other communications to the Lender hereunder may be delivered or
furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Lender; provided that
the foregoing shall not apply to notices pursuant to Article II or to compliance
and no Event of Default certificates delivered pursuant to Section 5.01(d) and
Section 5.01(e) unless otherwise agreed by the Lender. The Lender or the
Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications. All such notices and
other communications (i) sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient, and (ii) posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (b)(i) of notification that such notice or communication is available and
identifying the website address therefor.

(c) Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto.

Section 8.02. Waivers; Amendments.

(a) No failure or delay by the Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder and under any other Loan Document are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without

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limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Lender may have had notice or knowledge of such Default at the
time.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Lender or (ii) in the case of any other Loan Document, pursuant
to an agreement or agreements in writing entered into by the Lender and the Loan
Party or Loan Parties that are parties thereto.

Section 8.03. Expenses; Indemnity; Damage Waiver.

(a) The Loan Parties, jointly and severally, shall pay all (i) reasonable
out-of-pocket expenses incurred by the Lender and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Lender (whether
outside counsel or the allocated costs of its internal legal department), in
connection with the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers of the provisions of the Loan Documents (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) reasonable
out-of-pocket expenses incurred by the Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) reasonable out-of-pocket expenses incurred by the
Lender, including the fees, charges and disbursements of any counsel for the
Lender (whether outside counsel or the allocated costs of its internal legal
department), in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit. Expenses being reimbursed by the Loan Parties under this Section
include, without limiting the generality of the foregoing, costs and expenses
incurred in connection with:

(A) appraisals and insurance reviews;

(B) field examinations and the preparation of Reports based on the fees charged
by a third party retained by the Lender or the internally allocated fees for
each Person employed by the Lender with respect to each field examination;

(C) background checks regarding senior management and/or key investors, as
deemed necessary or appropriate in the sole discretion of the Lender;

(D) taxes, fees and other charges for (i) lien and title searches and title
insurance and (ii) filing financing statements and continuations, and other
actions to perfect, protect, and continue the Lender’s Liens;

(E) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and

(F) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrower as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).

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(b) The Borrower shall indemnify the Lender, and each Related Party of the
Lender (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, penalties,
incremental taxes, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of the Loan Documents or any agreement or
instrument contemplated thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by the Lender to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, (iv) the failure of the Borrower to deliver
to the Lender the required receipts or other required documentary evidence with
respect to a payment made by the Borrower for Taxes pursuant to Section 2.17, or
(v) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, penalties, liabilities or related expenses
resulted from the gross negligence or willful misconduct of such Indemnitee.
This Section 8.03(b) shall not apply with respect to Taxes other than any Taxes
that represent losses or damages arising from any non-Tax claim.

(c) The relationship between any Loan Party on the one hand and the Lender on
the other hand shall be solely that of debtor and creditor. The Lender (i) shall
not have any fiduciary responsibilities to any Loan Party or (ii) does not
undertake any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party’s business or
operations.

(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each hereby waives, any claim against any Indemnitee, (i) for any damages
arising from the use by others of information or other materials obtained
through telecommunications, electronic or other information transmission systems
(including the Internet), or (ii) on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document, or any agreement or instrument contemplated hereby or
thereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.

(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

Section 8.04. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of the Lender) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b) The Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of the Borrower, provided that
the Borrower shall be deemed to have consented to any such assignment unless it
shall object thereto by written notice to the Lender within five (5) Business
Days after having received notice thereof, and provided further that no consent
of the Borrower shall be required for an assignment to a Lender, an Affiliate of
a Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee. For the purposes of this Section 8.04(b), the
term “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) the Lender, (b) an Affiliate of the Lender or
(c) an entity or an Affiliate of an entity that administers or manages the
Lender. The Lender, acting solely for this purpose as an agent of the Borrower,
shall maintain at its offices, a register for the recordation of the name and
address of Lender (and additional lenders, if any), and the Commitments of, and
principal amounts of the Loans owing to, Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Borrower and the Lenders shall 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. This section 8.04(b) shall
be construed so that the Loans are at all times maintained in “registered form”
within the meanings of Section 163(f), 871(h)(2) and 881(c)(2) of the Code.

(c) The Lender may, without the consent of the Borrower, sell participations to
one or more banks or other entities (a “Participant”) in all or a portion of the
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) the Lender’s
obligations under this Agreement shall remain unchanged; (ii) the Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations; and (iii) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender’s rights and obligations
under this Agreement. The Borrower agrees that each Participant shall be
entitled to the benefits of Section 2.15, Section 2.16 and Section 2.17 (subject
to the requirements and limitations therein, including the requirements under
Section 2.17(f) (it being understood that the documentation required under
Section 2.17(f) shall be delivered to the participating Lender)) to the same
extent as if it were the Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant
(A) agrees to be subject to the provisions of Section 2.17 and Section 2.18 as
if it were an assignee under paragraph (b) of this Section; and (B) shall not be
entitled to receive any greater payment under Section 2.14, Section 2.16 or
Section 2.17, with respect to any participation, than its participating Lender
would have been entitled to receive, except to the extent such entitlement to
receive a greater payment results from a Change in Law that occurs after the
Participant acquired the applicable participation. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 8.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender. Any Lender that sells a
participation pursuant to this Section shall maintain a register on which it
records the name and address of each participant and the principal amounts of
each participant’s participation interest with respect to the Loans and the
Commitments (each, a “Participant Register”). The entries in the Participant
Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of a
participation with respect to such Loans or Commitments for all purposes under
this Agreement, notwithstanding any notice to the contrary. In maintaining the
Participant Register, such Lender shall be acting as the agent of the Borrower
solely for purposes of applicable U.S. federal income tax law and undertakes no
duty, responsibility or obligation to the Borrower (without limitation, in no
event shall such Lender be a fiduciary of the Borrower for any purpose, except
that such Lender shall maintain the Participant Register); provided, no Lender
shall have any obligation to disclose all or any portion of the Participant
Register to any Person (including the identity of any participant or

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any information relating to a participant’s interest in any Commitments, Loans,
or its other obligations under this Agreement) except to the extent that such
disclosure is necessary to establish in connection with a Tax audit that such
Commitment, Loan, or other obligation is in registered form under
Section 5f.103(c) of the United States Treasury Regulations or, if different,
under Sections 871(h) or 881(c) of the Code.

(d) The Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of the
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

Section 8.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitment has not expired or
terminated. The provisions of Section 2.14, Section 2.15, Section 2.16,
Section 2.17 and Section 8.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitment or the termination of this Agreement or any provision hereof.

Section 8.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Lender constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Lender and when the Lender shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
fax, emailed pdf. or any other electronic means that reproduces an image of the
actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 8.07. Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

Section 8.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, any Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate

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to or for the credit or the account of any Loan Party against any of and all the
Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The rights of any Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.

Section 8.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) The Loan Documents (other than those containing a contrary express choice of
law provision) shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York, but
giving effect to federal laws applicable to national banks.

(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any U.S. Federal or New
York State court sitting in New York, New York in any action or proceeding
arising out of or relating to any Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such State court or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.

(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 8.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

Section 8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY
ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

Section 8.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, nor be taken into
consideration in interpreting, this Agreement.

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Section 8.12. Confidentiality. The Lender agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by any Requirement of Law or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (x) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (y) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Loan Parties and their obligations, (g) with the
consent of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Lender on a non-confidential basis from a source
other than the Borrower. For the purposes of this Section, “Information” means
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the Lender on a
non-confidential basis prior to disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Section 8.13. Nonreliance; Violation of Law. The Lender hereby represents that
it is not relying on or looking to any margin stock (as defined in Regulation U
of the Board) for the repayment of the Borrowings provided for herein. Anything
contained in this Agreement to the contrary notwithstanding, the Lender shall
not be obligated to extend credit to the Borrower in violation of any
Requirement of Law.

Section 8.14. USA PATRIOT Act. The Lender is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) and hereby notifies the Borrower that pursuant to the requirements
of the Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.

Section 8.15. Disclosure. Each Loan Party hereby acknowledges and agrees that
the Lender and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with, any of the Loan Parties and
their respective Affiliates.

Section 8.16. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

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Article IX

Loan Guaranty

Section 9.01. Guaranty. Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and absolutely and unconditionally and irrevocably guarantees to the
Lender, the prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of the Secured
Obligations and all costs and expenses including, without limitation, all court
costs and reasonable attorneys’ and paralegals’ fees (including allocated costs
of in-house counsel and paralegals) and expenses paid or incurred by the Lender
in endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, the Borrower, any Loan Guarantor or any other
guarantor of all or any part of the Secured Obligations (such costs and
expenses, together with the Secured Obligations, collectively the “Guaranteed
Obligations”). Each Loan Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal. All terms of this Loan Guaranty
apply to and may be enforced by or on behalf of any domestic or foreign branch
or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations. For the avoidance of doubt, no Foreign Subsidiary of the Borrower
shall be required to become a Loan Guarantor under this Agreement, a “Grantor”
under the Security Agreement or a “Maker” under the Notes and no Foreign
Subsidiary of a Loan Guarantor shall be required to become a Loan Guarantor
under this Agreement or a “Grantor” under the Security Agreement.

Section 9.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Loan Guarantor waives any right to require the
Lender to sue the Borrower, any Loan Guarantor, any other guarantor, or any
other Person obligated for all or any part of the Guaranteed Obligations (each,
an “Obligated Party”), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.

Section 9.03. No Discharge or Diminishment of Loan Guaranty.

(a) Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of the Borrower or any other Obligated Party liable for any of the
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or
(iv) the existence of any claim, setoff or other rights which any Loan Guarantor
may have at any time against any Obligated Party, the Lender or any other
Person, whether in connection herewith or in any unrelated transactions.

(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

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(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Lender to assert
any claim or demand or to enforce any remedy with respect to all or any part of
the Guaranteed Obligations; (ii) any waiver or modification of or supplement to
any provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection, or invalidity of any indirect or direct security for
the obligations of the Borrower for all or any part of the Guaranteed
Obligations or any obligations of any other Obligated Party liable for any of
the Guaranteed Obligations; (iv) any action or failure to act by the Lender with
respect to any collateral securing any part of the Guaranteed Obligations; or
(v) any default, failure or delay, willful or otherwise, in the payment or
performance of any of the Guaranteed Obligations, or any other circumstance,
act, omission or delay that might in any manner or to any extent vary the risk
of such Loan Guarantor or that would otherwise operate as a discharge of any
Loan Guarantor as a matter of law or equity (other than the indefeasible payment
in full in cash of the Guaranteed Obligations).

Section 9.04. Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of the Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of the Borrower or any Loan Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Loan Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any Person against any Obligated Party,
or any other Person. Each Loan Guarantor confirms that it is not a surety under
any state law and shall not raise any such law as a defense to its obligations
hereunder. The Lender may, at its election, foreclose on any Collateral held by
it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or otherwise act or fail to act with
respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Obligated Party or exercise any other right or remedy
available to it against any Obligated Party, without affecting or impairing in
any way the liability of such Loan Guarantor under this Loan Guaranty, except to
the extent the Guaranteed Obligations have been fully and indefeasibly paid in
cash. To the fullest extent permitted by applicable law, each Loan Guarantor
waives any defense arising out of any such election even though that election
may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Loan Guarantor
against any Obligated Party or any security.

Section 9.05. Rights of Subrogation. No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Lender.

Section 9.06. Reinstatement; Stay of Acceleration. If at any time any payment of
any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of the
Borrower or otherwise, each Loan Guarantor’s obligations under this Loan
Guaranty with respect to that payment shall be reinstated at such time as though
the payment had not been made and whether or not the Lender is in possession of
this Loan Guaranty. If acceleration of the time for payment of any of the
Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Lender.

Section 9.07. Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of

--------------------------------------------------------------------------------

the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that the Lender shall not have any duty to advise any Loan Guarantor
of information known to it regarding those circumstances or risks.

Section 9.08. Termination. The Lender may continue to make loans or extend
credit to the Borrower based on this Loan Guaranty until five days after it
receives written notice of termination from any Loan Guarantor. Notwithstanding
receipt of any such notice, each Loan Guarantor will continue to be liable to
the Lender for any Guaranteed Obligations created, assumed or committed to prior
to the fifteenth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of that Guaranteed Obligations.

Section 9.09. Taxes. Each payment of the Guaranteed Obligations will be made by
each Loan Guarantor subject to the same provisions as set forth in Section 2.17
hereof.

Section 9.10. Maximum Liability. The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any state corporate law, or
any state, federal or foreign bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obligations of any Loan
Guarantor under this Loan Guaranty would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other
provision of this Loan Guaranty to the contrary, the amount of such liability
shall, without any further action by the Loan Guarantors or the Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”).
This Section with respect to the Maximum Liability of each Loan Guarantor is
intended solely to preserve the rights of the Lender to the maximum extent not
subject to avoidance under applicable law, and no Loan Guarantor nor any other
Person shall have any right or claim under this Section with respect to such
Maximum Liability, except to the extent necessary so that the obligations of any
Loan Guarantor hereunder shall not be rendered voidable under applicable law.
Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of each Loan Guarantor without
impairing this Loan Guaranty or affecting the rights and remedies of the Lender
hereunder, provided that nothing in this sentence shall be construed to increase
any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.

Section 9.11. Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Contribution Percentage”
of such payment or payments made, or losses suffered, by such Paying Guarantor.
For purposes of this Article X, each Non-Paying Guarantor’s “Applicable
Contribution Percentage” with respect to any such payment or loss by a Paying
Guarantor shall be determined as of the date on which such payment or loss was
made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum
Liability as of such date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder) or, if such Non-Paying
Guarantor’s Maximum Liability has not been determined, the aggregate amount of
all monies received by such Non-Paying Guarantor from the Borrower after the
date hereof (whether by loan, capital infusion or by other means) to (ii) the
aggregate Maximum Liability of all Loan Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Loan Guarantor, the
aggregate amount of all monies received by such Loan Guarantors from the
Borrower after the date hereof (whether by loan, capital infusion or by other
means). Nothing in this provision shall affect any Loan Guarantor’s several
liability for the entire amount of the Guaranteed Obligations (up to such Loan
Guarantor’s Maximum Liability). Each of the Loan Guarantors

--------------------------------------------------------------------------------

covenants and agrees that its right to receive any contribution under this Loan
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to the payment in full in cash of the Guaranteed Obligations. This
provision is for the benefit of the Lender and the Loan Guarantors and may be
enforced by any one, or more, or all of them in accordance with the terms
hereof.

Section 9.12. Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Lender under this Agreement and the
other Loan Documents to which such Loan Party is a party or in respect of any
obligations or liabilities of the other Loan Parties, without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

Section 9.13. Liability for Swap Obligations. No Loan Guarantor hereunder shall
be deemed to be a guarantor of any Swap Obligations if such Loan Guarantor is
not an “Eligible Contract Participant” as defined in § 1(a)(18) of the Commodity
Exchange Act, as amended, and the applicable rules issued by the Commodity
Futures Trading Commission and/or the Securities and Exchange Commission
(collectively, and as now or hereafter in effect, the “ECP Rules”) to the extent
that the providing of such guaranty by such Loan Guarantor would violate the ECP
Rules or any other applicable law or regulation.

[Signature Page Follows]

 

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

 

RAND WORLDWIDE, INC. By:   /s/ Lawrence Rychlak Name:   Lawrence Rychlak Title:
  President RAND WORLDWIDE FOREIGN HOLDINGS, INC. By:   /s/ Lawrence Rychlak
Name:   Lawrence Rychlak Title:   President RAND WORLDWIDE SUBSIDIARY, INC. By:
  /s/ Lawrence Rychlak Name:   Lawrence Rychlak Title:   President

Signature Page to Credit Agreement

 

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JPMORGAN CHASE BANK, NATIONAL ASSOCIATION By:   /s/ Morgan Higgins Name:  
Morgan Higgins Title:   Vice President

Signature Page to Credit Agreement

 

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SCHEDULE 2.20

1. Dissolution of ASJ. On or prior to the date that is thirty (30) days after
the date of this Agreement (the “Closing Date”), or such later date as may be
agreed by the Lender, the Borrower shall deliver to the Lender evidence
satisfactory to Lender in its Permitted Discretion that ASJ has filed with all
appropriate Governmental Authorities all documents necessary or advisable to
dissolve and terminate ASJ’s legal existence.

2. ASJ Stock Certificate. On the day that is thirty (30) days after the Closing
Date, if ASJ is not completely dissolved and its legal existence terminated, the
Borrower shall deliver to the Lender a stock certificate of ASJ issued as of
record to the Canadian Subsidiary representing 65% of the issued and outstanding
Equity Interests of ASJ.

3. PNC Bank Accounts and Deposit Account Control Agreement. On and after the
Closing Date, Borrower shall use commercially reasonable efforts to close all of
its deposit accounts at any financial institution other than Lender, establish
deposit accounts with Lender as Borrower and Lender may agree and transfer
substantially all of Borrower’s money into such deposit accounts maintained by
Lender. Borrower shall use commercially reasonable efforts to complete the
transfer of substantially all of its funds to accounts maintained by Lender, or
an affiliate of Lender, no more than ninety (90) days after the Closing Date. No
later than the ninetieth (90th) day after the Closing Date, if Borrower has any
deposit accounts with any financial institution other than Lender, Borrower
shall cause such financial institution maintaining such accounts to enter into a
deposit account control agreement with Lender reasonably satisfactory to Lender.

4 Collateral Access Agreement. As soon as practicable after the Closing Date,
but no later than thirty (30) days thereafter, Borrower shall use its
commercially reasonable efforts to cause the landlord for its new Owings Mills,
MD headquarters to enter into a collateral access agreement in form and
substance reasonably satisfactory to Lender.

 

1

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EXECUTION VERSION

SCHEDULE 3.05 (a)

REAL PROPERTY

 

Name of Loan
Party

  

Address of Property

  

Type of
Interest
(Owned,
Leased,
or Other
Interest)

  

Name of
Landlord/Owner
(if Leased or Other
Interest)

  

Description of
Lease or Other
Documents
Evidencing
Interest

Rand Worldwide Subsidiary, Inc.

  

5000 Birch St

Suite 4500

Newport Beach, CA 92660

   Leased    Cornerstone Partners IV, LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

8101 East Prentice Ave.

Suite 725

Greenwood Village, CO 80111

   Leased    GPIPM LTD    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

555 Winderley Place

Suite 225

Maitland, FL 32751

   Leased    FCA Fund LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

7880 Woodland Center

Blvd.

Tampa, FL 33614

   Leased    Liberty Property Limited Partnership    Standard Office Building
Lease

Rand Worldwide Subsidiary, Inc.

  

35 E. Wacker Drive

Suite 1960

Chicago, IL 60601

   Leased    DUS Management, Inc.    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

3601 Algonquin Rd

Suite 220

Rolling Meadows, IL 60008

   Leased    3601 Crossroads, LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

8604 Allisonville Road

Suite 370

Indianapolis, IN 46250

   Leased    Castle Creek Office LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

11156 Aurora Ave

Urbandale,

IA 50322

   Leased    R&R Realty Group LTD    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

11201 Dolfield Blvd

Suite 112

Owings Mills, MD 21117

   Leased    Merritt Properties    Standard Office Building Lease

Rand Worldwide, Inc.

  

161 Worcester Rd

Suite 401

Framingham, MA 01701

   Leased    CRP-3 the Meadows, LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

1228 Kirts Blvd

Suite 400

Troy, MI 48084

   Leased    Ari-El Enterprises    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

4445 Wilson South West

Grandville, MI 49418

   Leased    Wilson Street Management    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

860 Blue Gentian Road

Suite 145

Eagan, MN 55121

   Leased    BPG GRAND OAK BUILDING I INVESTORS, LLC    Standard Office Building
Lease

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Rand Worldwide Subsidiary, Inc.

  

11422 Miracle Hills Drive

Suite 420

Omaha, NE 68154

   Leased    IRET Properties    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

2 Commerce Drive

Suite 203

Bedford, NH 03110

   Leased    2 Commerce Drive, LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

4600- A Montgomery Blvd NE

Suite 205

Albuquerque, NM 87109

   Leased    Monroe HBC LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

1 Computer Drive South

Albany, NY 12205

   Leased    Willard T Anderson Properties    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

6225 Sheridan Dr

Suite 202

Buffalo, NY 14221

   Leased    Univest II Corp    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

61 Broadway

Suite 2004

New York, NY 10006

   Leased    RXR 61 Broadway Owner LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

Donwood Office Park 101-135 Old Cove Rd, Suite 109

Liverpool, NY 13090

   Leased    Donwood Office Park Associate    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

217 N Washington Street

Rome, NY 13440

   Leased    Persistence Realty, LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

2201 Water Ridge Pkwy

Suite 330

Charlotte, NC 28217

   Leased    FRDGS II REO LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

13420 Reese Blvd West

Huntersville, NC 28078

   Leased    Max Daetwyler Corporation    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

One Copley Parkway

Suite 104 Concourse Building

Morrisville, NC 27560

   Leased    Highwoods Properties, Inc.    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

6155 Rockside Rd

Suite 201

Independence, OH 44131

   Leased    Rockside Square I    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

2545 Farmers Drive

Suite 100

Columbus, OH 43235

   Leased    S F & E Associates, Ltd.    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

6640 Poe Avenue

Suite 4500

Dayton, OH 45414

   Leased    Poe Park Center LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

1446 S Reynolds Road

Suite 320

Maumee, OH 43537

   Leased    Reynolds Investment Group, Ltd    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

421 SW 6th Ave

Suite 975

Portland, OR 97204

   Leased    UPI Commonwealth LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

1255 Corporate Drive

Suite 175

Irving, TX 75038

   Leased    NNN Westpoint, LLC    Standard Office Building Lease

--------------------------------------------------------------------------------

Rand Worldwide Subsidiary, Inc.

  

10700 Richmond

Ste 131

Houston, TX 77042

   Leased    Gupta Richmond Avenue, LP    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

488 East 6400 South

Suite 350

Murray City, UT 84107

   Leased    Commerce Park Owners I LLC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

630 Peter Jefferson Parkway

Suite 175

Charlottesville, VA 22911

   Leased    PJP Building II LC    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

8100 Three Chopt Road

Suite 119

Richmond, VA 23229

   Leased    KR Augst & Otis Poole    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

5700 Cleveland Street

Suite 410

Virginia Beach, VA 23462

   Leased    Chartway Federal Credit Union    Standard Office Building Lease

Rand Worldwide Subsidiary, Inc.

  

2101 Fourth Ave

Suite 1160

Seattle, WA 98121

   Leased    Selig Real Estate holding Five LLC    Standard Office Building
Lease

Rand Worldwide Subsidiary, Inc.

  

1110 North Old World

Third Street

Suite 412

Milwaukee, WI 53203

   Leased    RFP Office, LLC    Standard Office Building Lease

--------------------------------------------------------------------------------

SCHEDULE 3.05 (c)(i)

PATENTS

None.

TRADEMARKS

 

Name of Loan Party

  

Trademark

  

Serial Number

  

Registration Date

Rand Worldwide, Inc.

   Avatech Solutions    75269511    1998-09-22

COPYRIGHTS

 

Name of Loan Party

  

Copyright

  

Document
Number

  

Date of Recordation

Rand Worldwide, Inc.

   3ds max version 4 and user’s guides & 218 other titles    V3566D647   
2007-09-06

Rand Worldwide, Inc.

   3ds max version 6 & 16 other titles    V3517D331    2004-10-15

Rand Worldwide, Inc.

   AutoCAD 2002 & 53 other titles    V3516D450    2004-10-20

Rand Worldwide, Inc.

   AutoCAD 2009 and user assistance cue cards & 83 other titles    V3580D696   
2009-05-11

Rand Worldwide, Inc.

   AutocCAD 2002 & 18 other titles    V3493D454    2002-08-19

Rand Worldwide, Inc.

   AutocCAD 2002 & 18 other titles    V3493D455    2002-08-19

Rand Worldwide, Inc.

   AutocCAD 2002 & 18 other titles    V3493D456    2002-08-19

Rand Worldwide, Inc.

   AutocCAD 2002 & 18 other titles    V3493D457    2002-08-19

Rand Worldwide, Inc.

   AutocCAD 2002 & 18 other titles    V3493D458    2002-08-19

Rand Worldwide, Inc.

   Civil design in-depth courseware    TXu001114171    2003-07-08

Rand Worldwide, Inc.

   Discreet education reseller agreement (United States)    V3516D938   
2004-09-08

Rand Worldwide, Inc.

   Land desktop fundamentals    TXu001095845    2003-02-04

Rand Worldwide Subsidiary, Inc.

   AutoCAD 2002 & 23 other titles.    V3516D132    2004-05-12

DOMAIN NAMES

 

Name of Loan Party

  

Domain Name

  

Registration No.

    

Registration
Date

Rand Worldwide Subsidiary, Inc.

   ASCENTECK.COM    39664843_DOMAIN_C OM-VRSN      11/2/2000

Rand Worldwide Subsidiary, Inc.

   ASCENTED.COM    90687598_DOMAIN_C OM-VRSN      9/27/2002

Rand Worldwide Subsidiary, Inc.

   ASCENTESTORE.COM    83858285_DOMAIN_C OM-VRSN      2/21/2002

Rand Worldwide Subsidiary, Inc.

   AVATECHLEARNING.COM    90576267_DOMAIN_C OM-VRSN      9/24/2002

--------------------------------------------------------------------------------

Rand Worldwide Subsidiary, Inc.

   AVATECHSOLUTIONS.COM    4483586_DOMAIN_CO M-VRSN      3/23/1998

Rand Worldwide Subsidiary, Inc.

   AVATECHSOLUTIONS.NET    4980312_DOMAIN_NE T-VRSN      4/4/1999

Rand Worldwide Subsidiary, Inc.

   BIMREVIEW.COM    1526818440_DOMAIN_ COM-VRSN      11/3/2008

Rand Worldwide Subsidiary, Inc.

   BIMREVIEW.NET    1526818441_DOMAIN_ NET-VRSN      11/3/2008

Rand Worldwide Subsidiary, Inc.

   BIMREVIEWER.COM    1526818438_DOMAIN_ COM-VRSN      11/3/2008

Rand Worldwide Subsidiary, Inc.

   BIMREVIEWER.NET    1526818439_DOMAIN_ NET-VRSN      11/3/2008

Rand Worldwide Subsidiary, Inc.

   BIMSPECTRUM.COM    1656947455_DOMAIN_ COM-VRSN      5/19/2011

Rand Worldwide Subsidiary, Inc.

   BIMTRANSFORMATION.COM    1673941707_DOMAIN_ COM-VRSN      8/26/2011

Rand Worldwide Subsidiary, Inc.

   BIMTRANSFORMATIONPARTNERS.COM    1673941708_DOMAIN_ COM-VRSN      8/26/2011

Rand Worldwide Subsidiary, Inc.

   BIMWORKSHOP.COM    1527510114_DOMAIN_ COM-VRSN      11/7/2008

Rand Worldwide Subsidiary, Inc.

   BIMWORKSHOPS.COM    1677932697_DOMAIN_ COM-VRSN      9/19/2011

Rand Worldwide Subsidiary, Inc.

   CADUSERSGROUP.COM    1775592195_DOMAIN_ COM-VRSN      1/23/2013

Rand Worldwide Subsidiary, Inc.

   CADUSERSGROUP.NET    1325120815_DOMAIN_ NET-VRSN      11/7/2007

Rand Worldwide Subsidiary, Inc.

   CADUSERSGROUP.ORG    D149684442-LROR      11/7/2007

Rand Worldwide Subsidiary, Inc.

   CFD-ANALYSIS.COM    1669889569_DOMAIN_ COM-VRSN      8/1/2011

Rand Worldwide Subsidiary, Inc.

   CFD-CONSULTANTS.COM    1669890501_DOMAIN_ COM-VRSN      8/1/2011

Rand Worldwide Subsidiary, Inc.

   IMAGINIT-TECH.COM    69873337_DOMAIN_C OM-VRSN      4/24/2001

Rand Worldwide Subsidiary, Inc.

   IMAGINIT.BIZ    D31194879-BIZ      4/27/2009

Rand Worldwide Subsidiary, Inc.

   IMAGINIT.CA    N/A      5/4/2001

Rand Worldwide Subsidiary, Inc.

   IMAGINIT.COM    32720703_DOMAIN_C OM-VRSN      8/10/2000

Rand Worldwide Subsidiary, Inc.

   IMAGINIT.MOBI    D4703789-MOBI      4/27/2009

Rand Worldwide Subsidiary, Inc.

   IMAGINIT.ORG    D156000597-LROR      4/27/2009

Rand Worldwide Subsidiary, Inc.

   IMAGINITBIGIDEAS.COM    1659302006_DOMAIN_ COM-VRSN      6/1/2011

Rand Worldwide Subsidiary, Inc.

   IMAGINITCLARITY.COM    1703831740_DOMAIN_ COM-VRSN      2/24/2012

--------------------------------------------------------------------------------

Rand Worldwide Subsidiary, Inc.

   IMAGINITRWW.COM    148299689_DOMAIN_C OM-VRSN      3/28/2005

RAND Worldwide

   IMGN.IT    N/A      1/21/2014

Rand Worldwide Subsidiary, Inc.

   INFORMATIVEDP.COM    1645465167_DOMAIN_ COM-VRSN      3/14/2011

Rand Worldwide Subsidiary, Inc.

   INLETTECHNOLOGY.COM    110346618_DOMAIN_C OM-VRSN      1/21/2004

Rand Worldwide Subsidiary, Inc.

   MYPRODUCTIVITYNOW.BIZ    D37949464-BIZ      1/25/2010

Rand Worldwide Subsidiary, Inc.

   MYPRODUCTIVITYNOW.COM    1397798625_DOMAIN_ COM-VRSN      2/7/2008

Rand Worldwide Subsidiary, Inc.

   MYPRODUCTIVITYNOW.INFO    D31279724-LRMS      1/25/2010

Rand Worldwide Subsidiary, Inc.

   MYPRODUCTIVITYNOW.NET    1583048889_DOMAIN_ NET-VRSN      1/25/2010

Rand Worldwide Subsidiary, Inc.

   MYRANDWW.COM    1583050962_DOMAIN_ COM-VRSN      1/25/2010

Rand Worldwide Subsidiary, Inc.

   PLANETCAD.COM    8841730_DOMAIN_CO M-VRSN      8/4/1999

Rand Worldwide Subsidiary, Inc.

   PLANETCAD.NET    8841960_DOMAIN_NE T-VRSN      8/4/1999

Rand Worldwide Subsidiary, Inc.

   PLANETCAD.ORG    D8842778-LROR      8/5/1999

Rand Worldwide Subsidiary, Inc.

   PLANETRAND.COM    D8842778-LROR      5/27/2005

Rand Worldwide Subsidiary, Inc.

   PROCISION.COM    916252_DOMAIN_COM -VRSN      2/25/1998

Rand Worldwide Subsidiary, Inc.

   PRODUCTIVITYNOW.COM    1631375369_DOMAIN_ COM-VRSN      12/21/2010

Rand Worldwide Subsidiary, Inc.

   PRODUCTIVITYNOW.INFO    D36134326-LRMS      12/30/2010

Rand Worldwide Subsidiary, Inc.

   PRODUCTIVITYNOW.NET    1632644250_DOMAIN_ NET-VRSN      12/30/2010

Rand Worldwide Subsidiary, Inc.

   PRODUCTIVITYNOW.US    D31427592-US      12/30/2010

Rand Worldwide Subsidiary, Inc.

   RAND-3D.COM    1749211385_DOMAIN_ COM-VRSN      10/1/2012

Rand Worldwide Subsidiary, Inc.

   RAND-FM.COM    1749211371_DOMAIN_ COM-VRSN      10/1/2012

Rand Worldwide Subsidiary, Inc.

   RAND.COM    1070151_DOMAIN_CO M-VRSN      5/26/1994

Rand Worldwide Subsidiary, Inc.

   RAND3D.COM    1749211387_DOMAIN_ COM-VRSN      10/1/2012

Rand Worldwide Subsidiary, Inc.

   RANDITSOLUTIONS.COM    34118844_DOMAIN_C OM-VRSN      9/6/2000

Rand Worldwide Subsidiary, Inc.

   RANDWORLDWIDE.COM    4381183_DOMAIN_CO M-VRSN      3/16/1999

Rand Worldwide Subsidiary, Inc.

   RANDWW.COM    1583050963_DOMAIN_ COM-VRSN      1/25/2010

--------------------------------------------------------------------------------

Rand Worldwide Subsidiary, Inc.

   TRANSFORMINGBIM.COM    1673941710_DOMAIN_ COM-VRSN      8/26/2011

Rand Worldwide Subsidiary, Inc.

   YOURBIMPARTNER.COM    1673941704_DOMAIN_ COM-VRSN      8/26/2011

Rand Worldwide Subsidiary, Inc.

   RAND.MY    ABN 11084940492      11/30/2012

Rand Worldwide Subsidiary, Inc.

   RAND.SG    ABN 11084940492      5/15/2013

--------------------------------------------------------------------------------

SCHEDULE 3.05 (c)(ii)

None.

--------------------------------------------------------------------------------

SCHEDULE 3.06

Disclosed Matters

1. On July 23, 2007 Rand Worldwide and City of Quebec signed a $273,521.02 (tax
included) purchase agreement for 3500 licenses of EAS. This was done through the
standard EAS reseller agreement between Zantaz (since acquired by Autonomy and
HP) and Rand. That agreement included the software, support for 5 years, and
implementation services. Selection of the product was done after a Request For
Proposal (RFP) and subsequent quotation for archiving services. After pilot
rollout in 2007-08 the City of Quebec (COQ) decided to put a hold on the project
due to functionality that they decided was then necessary but had not been
listed in the RFP. Due to the on-premise nature of the product, Rand could do no
further implementation without customer permission. In 2011 the COQ contacted
Rand asking for an update to these perceived functional deficiencies and Rand
agreed to change the product from EAS to ACA, a Rand SD product, and deliver a
pilot to show the new functionality of the product. At the conclusion of the
pilot and completion of all the terms in the RFP and agreed to functional
modifications, the COQ decided that they no longer wanted to archive and filed a
claim to get a full product refund, services refund, and refund for COQ
purchased hardware for a total of approx. $400K. In the two years since that
claim was filed there have been no substantive changes with only discovery and
depositions having taken place.

--------------------------------------------------------------------------------

SCHEDULE 3.12

Capitalization and Subsidiaries

 

Name of Borrower and Subsidiary

   Type of
Entity    Jurisdiction   

Relationship to Borrower

Rand Worldwide, Inc.

   Corporation    Delaware    Borrower

Rand Worldwide Subsidiary, Inc.

   Corporation    Delaware    100% wholly owned subsidiary of Rand Worldwide,
Inc.

Rand Worldwide Foreign Holdings, Inc.

   Corporation    Delaware    100% wholly owned subsidiary of Rand Worldwide,
Inc.

Rand A Technology Corporation

   Corporation    Canada    100% wholly owned subsidiary of Rand Worldwide
Foreign Holdings, Inc.

ASJ Computer Graphics of Canada Ltd.

   Corporation    Canada    100% wholly owned subsidiary of Rand A Technology
Corporation

Borrower’s authorized Equity Interests

Common Stock

Series D Convertible Preferred Stock

Series E Convertible Preferred Stock

--------------------------------------------------------------------------------

SCHEDULE 6.01

Existing Indebtedness

Pledge Agreement, dated as of October 31, 2014, between the Borrower and PNC
Bank (relating to the cash collateralization of the below listed outstanding
letters of credit).

 

Outstanding Letters of Credit

Number

   Amount      Maturity    Beneficiary

18112356

   $ 12,389.34       6/30/2015    61 Broadway Owner LLC

18112620

   $ 100,000.00       12/31/2014    CRP-3 The Meadows, LLC

--------------------------------------------------------------------------------

SCHEDULE 6.02

Existing Liens

 

Debtor

   Secured Party    Jurisdiction      UCC File Number  

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         21608649   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         30785439   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         41283318   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         41536426   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         43012889   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         43013556   

Rand Worldwide, Inc.

   DELL FINANCIAL SERVICES L.L.C.      Delaware Secretary of State        
20082732194   

Rand Worldwide, Inc.

   DELL FINANCIAL SERVICES L.L.C.      Delaware Secretary of State        
20104306779   

Rand Worldwide, Inc.

   HEWLETT-PACKARD
FINANCIAL SERVICES COMPANY      Delaware Secretary of State         20113632182
  

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         20121342767   

Rand Worldwide, Inc.

   AUTODESK, INC.      Delaware Secretary of State         20122960831   

Rand Worldwide, Inc.

   HEWLETT-PACKARD FINANCIAL
SERVICES COMPANY      Delaware Secretary of State         20143085974   

Rand Worldwide Subsidiary, Inc.

   AUTODESK, INC.      Delaware Secretary of State         21608649   

Rand Worldwide Subsidiary, Inc.

   AUTODESK, INC.      Delaware Secretary of State         43013556   

Rand Worldwide Subsidiary, Inc.

   AUTODESK, INC.      Delaware Secretary of State         20121342767   

Pledge Agreement, dated as of October 31, 2014, between the Borrower and PNC
Bank (relating to the cash collateralization of the below listed outstanding
letters of credit).

 

Outstanding Letters of Credit

Number

   Amount      Maturity    Beneficiary

18112356

   $ 12,389.34       6/30/2015    61 Broadway Owner LLC

18112620

   $ 100,000.00       12/31/2014    CRP-3 The Meadows, LLC

--------------------------------------------------------------------------------

SCHEDULE 6.04

Existing Investments

 

1. Blackrock Liquidity Fund FedFund Dollar through PNC Bank. Balance of
$8,852,614 as of 10/19/14

--------------------------------------------------------------------------------

SCHEDULE 6.10

Existing Restrictions

None.