Exhibit 10.4

 

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CREDIT AGREEMENT

 

among

 

BEA SYSTEMS, INC.,

as Borrower,

 

THE LENDERS NAMED HEREIN,

as Lenders,

 

and

 

KEYBANK NATIONAL ASSOCIATION,

as Lead Arranger and Administrative Agent,

 

WELLS FARGO BANK, N.A.,

as Syndication Agent,

 

ABN AMRO BANK N.V.,

as Co-Documentation Agent,

 

BANK OF AMERICA, N.A.,

as Co-Documentation Agent,

 

and

 

COMERICA BANK,

as Co-Documentation Agent

 

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dated as of

October 12, 2004

 

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TABLE OF CONTENTS

 

     Pages

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ARTICLE I. DEFINITIONS    1     Section 1.1.    Definitions    1     Section
1.2.    Accounting Terms    17     Section 1.3.    Terms Generally    17 ARTICLE
II. AMOUNT AND TERMS OF CREDIT    17     Section 2.1.    Amount and Nature of
Credit    17     Section 2.2.    Revolving Loans    18     Section 2.3.   
Interest    18     Section 2.4.    Evidence of Indebtedness    19     Section
2.5.    Notice of Credit Event; Funding of Loans    19     Section 2.6.   
Payment on Loans and Other Obligations    20     Section 2.7.    Prepayment   
21     Section 2.8.    Commitment and Other Fees; Reduction of Commitment    21
    Section 2.9.    Computation of Interest and Fees    22     Section 2.10.   
Mandatory Payment    22     Section 2.11.    Designated Senior Debt    22
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR LOANS; INCREASED
CAPITAL; TAXES    22     Section 3.1.    Requirements of Law    22     Section
3.2.    Taxes    23     Section 3.3.    Funding Losses    25     Section 3.4.   
Change of Lending Office    26     Section 3.5.    Eurodollar Rate Lending
Unlawful; Inability to Determine Rate    26 ARTICLE IV. CONDITIONS PRECEDENT   
27     Section 4.1.    Conditions to Each Credit Event    27     Section 4.2.   
Conditions to the First Credit Event    27     Section 4.3.    Post-Closing
Conditions    29 ARTICLE V. COVENANTS    29     Section 5.1.    Insurance    29
    Section 5.2.    Money Obligations    29     Section 5.3.    Financial
Statements and Information    30     Section 5.4.    Financial Records    31
    Section 5.5.    Franchises; Change in Business    31     Section 5.6.   
ERISA Compliance    31     Section 5.7.    Financial Covenants    32     Section
5.8.    Borrowing    32     Section 5.9.    Liens    33     Section 5.10.   
Regulations T, U and X    34     Section 5.11.    Investments and Loans    34
    Section 5.12.    Merger and Sale of Assets    35     Section 5.13.   
Acquisitions    36     Section 5.14.    Notice    37     Section 5.15.   
Restricted Payments    37

 

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     Pages

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    Section 5.16.    Environmental Compliance    37     Section 5.17.   
Affiliate Transactions    38     Section 5.18.    Use of Proceeds    38
    Section 5.19.    Subsidiary Guaranties    38     Section 5.20.   
Restrictive Agreements    40     Section 5.21.    Guaranty Under Material
Indebtedness Agreement    40     Section 5.22.    Pari Passu Ranking    40
    Section 5.23.    Convertible Subordinated Notes    40     Section 5.24.   
Amendment of Organizational Documents    40 ARTICLE VI. REPRESENTATIONS AND
WARRANTIES    41     Section 6.1.    Corporate Existence; Subsidiaries; Foreign
Qualification    41     Section 6.2.    Corporate Authority    41     Section
6.3.    Compliance with Laws and Contracts    41     Section 6.4.    Litigation
and Administrative Proceedings    42     Section 6.5.    Title to Assets    42
    Section 6.6.    Liens and Security Interests    42     Section 6.7.    Tax
Returns    42     Section 6.8.    Environmental Laws    42     Section 6.9.   
Continued Business    43     Section 6.10.    Employee Benefits Plans    43
    Section 6.11.    Consents or Approvals    44     Section 6.12.    Solvency
   44     Section 6.13.    Financial Statements    44     Section 6.14.   
Regulations    44     Section 6.15.    Intellectual Property    44     Section
6.16.    Insurance    44     Section 6.17.    Accurate and Complete Statements
   44     Section 6.18.    Convertible Subordinated Note Agreement    45
    Section 6.19.    Investment Company; Holding Company    45     Section 6.20.
   Defaults    45 ARTICLE VII. EVENTS OF DEFAULT    45     Section 7.1.   
Payments    45     Section 7.2.    Special Covenants    45     Section 7.3.   
Other Covenants    45     Section 7.4.    Representations and Warranties    46
    Section 7.5.    Cross Defaults    46     Section 7.6.    ERISA Default    46
    Section 7.7.    Change in Control    46     Section 7.8.    Money Judgment
   46     Section 7.9.    Material Adverse Change    46     Section 7.10.   
Validity of Loan Documents    46     Section 7.11.    Designated Senior Debt   
47     Section 7.12.    Solvency    47

 

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ARTICLE VIII. REMEDIES UPON DEFAULT         47     Section 8.1.    Optional
Defaults         47     Section 8.2.    Automatic Defaults         48
    Section 8.3.    Offsets         48     Section 8.4.    Equalization
Provision         48     Section 8.5.    Other Remedies         49 ARTICLE IX.
THE AGENT         49     Section 9.1.    Appointment and Authorization        
49     Section 9.2.    Note Holders         50     Section 9.3.    Consultation
With Counsel         50     Section 9.4.    Documents         50     Section
9.5.    Agent and Affiliates         50     Section 9.6.    Knowledge of Default
        50     Section 9.7.    Action by Agent         50     Section 9.8.   
Release of a Guarantor of Payment         50     Section 9.9.    Notice of
Default         50     Section 9.10.    Indemnification of Agent         51
    Section 9.11.    Successor Agent         51 ARTICLE X. MISCELLANEOUS        
51     Section 10.1.    Lenders’ Independent Investigation         51
    Section 10.2.    No Waiver; Cumulative Remedies         52     Section 10.3.
   Amendments, Consents         52     Section 10.4.    Notices         52
    Section 10.5.    Costs, Expenses and Taxes         53     Section 10.6.   
Indemnification         53     Section 10.7.    Obligations Several; No
Fiduciary Obligations         53     Section 10.8.    Execution in Counterparts
        54     Section 10.9.    Binding Effect; Borrower’s Assignment         54
    Section 10.10.    Lender Assignments         54     Section 10.11.    Sale
of Participations         56     Section 10.12.    Severability of Provisions;
Captions; Attachments         57     Section 10.13.    Investment Purpose     
   57     Section 10.14.    Entire Agreement         57     Section 10.15.   
Confidentiality         57     Section 10.16.    Legal Representation of Parties
        57     Section 10.17.    Governing Law; Submission to Jurisdiction     
   58     Section 10.18.    Jury Trial Waiver   

Signature Page 1

 

Exhibit A      Form of Revolving Credit Note Exhibit B      Form of Notice of
Loan Exhibit C      Form of Compliance Certificate Exhibit D      Form of
Assignment and Acceptance Agreement Exhibit E      Borrower Investment Policy
Exhibit F      Form of Guaranty of Payment Exhibit G      Form of Pledge
Agreement

 

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     Pages

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Schedule 1    Commitment of Lenders      Schedule 2    Guarantors of Payment   
  Schedule 3    Pledged Securities      Schedule 5.8    Indebtedness     
Schedule 5.9    Liens      Schedule 6.1    Subsidiaries     

 

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This CREDIT AGREEMENT (as the same may from time to time be amended, restated or
otherwise modified, this “Agreement”) is made effective as of the 12th day of
October, 2004, among:

 

(a) BEA SYSTEMS, INC., a Delaware corporation (“Borrower”);

 

(b) the lenders listed on Schedule 1 hereto and each other Eligible Transferee,
as hereinafter defined, that becomes a party hereto pursuant to Section 10.10
hereof (collectively, the “Lenders” and, individually, each a “Lender”);

 

(c) KEYBANK NATIONAL ASSOCIATION, as lead arranger and administrative agent for
the Lenders under this Agreement (“Agent”);

 

(d) WELLS FARGO BANK, N.A., as syndication agent;

 

(e) ABN AMRO BANK N.V., as co-documentation agent;

 

(f) BANK OF AMERICA, N.A., as co-documentation agent; and

 

(g) COMERICA BANK, as co-documentation agent.

 

WITNESSETH:

 

WHEREAS, Borrower, Agent and the Lenders desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to Borrower upon the terms and subject to the
conditions hereinafter set forth;

 

NOW, THEREFORE, it is mutually agreed as follows:

 

ARTICLE I. DEFINITIONS

 

Section 1.1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:

 

“Acquisition” shall mean any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of any Person (other than a Company), or
any business or division of any Person (other than a Company), (b) the
acquisition of in excess of fifty percent (50%) of the stock (or other equity
interest) of any Person (other than a Company), or (c) the acquisition of
another Person (other than a Company) by a merger, amalgamation or consolidation
or any other combination with such Person.

 

“Advantage” shall mean any payment (whether made voluntarily or involuntarily,
by offset of any deposit or other indebtedness or otherwise) received by any
Lender in respect of the Obligations, if such payment results in that Lender
having less than its pro rata share of the Obligations then outstanding.

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“Affiliate” shall mean any Person, directly or indirectly, controlling,
controlled by or under common control with a Company and “control” (including
the correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”) shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Company, whether through
the ownership of voting securities, by contract or otherwise.

 

“Agent Fee Letter” shall mean the Agent Fee Letter between Borrower and Agent,
dated as of the Closing Date, as the same may from time to time be amended,
restated or otherwise modified.

 

“Applicable Commitment Fee Rate” shall mean:

 

(a) for the period from the Closing Date through the date of Agent’s receipt of
the Compliance Certificate pursuant to Section 5.3(c) hereof for the fiscal
quarter of Borrower ending October 31, 2004, thirty (30) basis points; and

 

(b) commencing on the next Business Day after Agent’s receipt of the Compliance
Certificate for the fiscal quarter of Borrower ending October 31, 2004 and
thereafter, the number of basis points set forth in the following matrix, based
upon the Senior Leverage Ratio for the most recently completed fiscal quarter,
as computed in the Compliance Certificate for such fiscal quarter:

 

Senior Leverage Ratio

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Applicable Commitment Fee Rate

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Greater than or equal to 1.50 to 1.00

  45.00 basis points

Greater than or equal to 1.25 to 1.00 but less than 1.50 to 1.00

  40.00 basis points

Greater than or equal to 1.00 to 1.00 but less than 1.25 to 1.00

  35.00 basis points

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

  30.00 basis points

Less than 0.50 to 1.00

  25.00 basis points

 

Changes to the Applicable Commitment Fee Rate shall be effective on the next
Business Day after Agent receives, pursuant to Section 5.3(c) hereof, the
Compliance Certificate. The above matrix does not modify or waive, in any
respect, the requirements of Section 5.7 hereof, the rights of Agent and the
Lenders to charge the Default Rate, or the rights and remedies of Agent and the
Lenders pursuant to Articles VII and VIII hereof. Notwithstanding anything
herein to the contrary, during any period when Borrower shall have failed to
timely deliver the Compliance Certificate pursuant to Section 5.3(c) hereof,
until such time as the Compliance Certificate is delivered, the Applicable
Commitment Fee Rate shall be the highest rate per annum indicated in the above
pricing grid regardless of the Senior Leverage Ratio at such time.

 

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“Applicable Margin” shall mean:

 

(a) for the period from the Closing Date through the date of Agent’s receipt of
the Compliance Certificate pursuant to Section 5.3(c) hereof for the fiscal
quarter of Borrower ending October 31, 2004, one hundred twelve and one half
(112.50) basis points for Eurodollar Loans and zero (0.00) basis points for Base
Rate Loans; and

 

(b) commencing on the next Business Day after Agent’s receipt of the Compliance
Certificate for the fiscal quarter of Borrower ending October 31, 2004 and
thereafter, the number of basis points (depending upon whether Loans are
Eurodollar Loans or Base Rate Loans) set forth in the following matrix, based
upon the Senior Leverage Ratio for the most recently completed fiscal quarter,
as computed in the Compliance Certificate for such fiscal quarter:

 

Senior Leverage Ratio

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Applicable Basis

Points for

Eurodollar Loans

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Applicable Basis

Points for

Base Rate Loans

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Greater than or equal to 1.50 to 1.00

  225.00   37.50

Greater than or equal to 1.25 to 1.00 but less than 1.50 to 1.00

  150.00   0.00

Greater than or equal to 1.00 to 1.00 but less than 1.25 to 1.00

  125.00   0.00

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

  112.50   0.00

Less than 0.50 to 1.00

  100.00   0.00

 

Changes to the Applicable Margin shall be effective on the next Business Day
after Agent receives, pursuant to Section 5.3(c) hereof, the Compliance
Certificate. The above matrix does not modify or waive, in any respect, the
requirements of Section 5.7 hereof, the rights of Agent and the Lenders to
charge the Default Rate, or the rights and remedies of Agent and the Lenders
pursuant to Articles VII and VIII hereof. Notwithstanding anything herein to the
contrary, during any period when Borrower shall have failed to timely deliver
the Compliance Certificate pursuant to Section 5.3(c) hereof, until such time as
the Compliance Certificate is delivered, the Applicable Margin shall be the
highest rate per annum indicated in the above pricing grid regardless of the
Senior Leverage Ratio at such time.

 

“Assignment Agreement” shall mean an Assignment and Acceptance Agreement in the
form of the attached Exhibit D.

 

“Authorized Officer” shall mean a Financial Officer or other individual
authorized by a Financial Officer in writing (with a copy to Agent) to handle
certain administrative matters in connection with this Agreement.

 

“Base Rate” shall mean a rate per annum equal to the greater of (a) the Prime
Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds
Effective Rate. Any change in the Base Rate shall be effective immediately from
and after such change in the Base Rate.

 

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“Base Rate Loan” shall mean a Revolving Loan described in Section 2.2 hereof,
that shall be denominated in Dollars and on which Borrower shall pay interest at
a rate based on the Derived Base Rate.

 

“Borrower Investment Policy” shall mean the investment policy of Borrower
attached hereto as Exhibit E.

 

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on
which banks in Cleveland, Ohio are authorized or required to close, and, if the
applicable Business Day relates to a Eurodollar Loan, a day of the year on which
dealings in deposits are carried on in the London interbank Eurodollar market.

 

“Capital Distribution” shall mean a payment made, liability incurred or other
consideration given by a Company to any Person that is not a Company, for the
purchase, acquisition, redemption, repurchase or retirement of any capital stock
or other equity interest of such Company or as a dividend, return of capital or
other distribution (other than any stock dividend, stock split or other equity
distribution payable only in capital stock or other equity of such Company) in
respect of such Company’s capital stock or other equity interest.

 

“Capitalized Lease Obligations” shall mean obligations of the Companies for the
payment of rent for any real or personal property under leases or agreements to
lease that, in accordance with GAAP, have been or should be capitalized on the
books of the lessee and, for purposes hereof, the amount of any such obligation
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Cash Equivalent Investments” shall mean investments made by Borrower or a
Guarantor of Payment pursuant to the Borrower Investment Policy, as the same may
be amended from time to time to include other Cash Equivalents.

 

“Cash Equivalents” shall mean (a) securities issued by, or directly,
unconditionally and fully guaranteed or insured by, the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition by such Person; (b) securities issued
by, or directly, unconditionally and fully guaranteed or insured by, any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s or Moody’s; (c) time
deposits, certificates of deposit or bankers’ acceptances of any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
organized under the laws of the United States, any state thereof or the District
of Columbia or any United States branch of a foreign bank having, capital and
surplus aggregating in excess of Five Hundred Million Dollars ($500,000,000) and
a rating of “A” (or such other similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) with maturities of not more than one year from the
date of acquisition by such Person; (d) repurchase obligations with a term of
not more than thirty (30)

 

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days for underlying securities of the types described in subpart (a) above
entered into with any bank meeting the qualifications specified in subpart (c)
above, which repurchase obligations are secured by a valid perfected security
interest in the underlying securities; (e) commercial paper issued by any Person
incorporated in the United States rated at least A-2 or the equivalent thereof
by Standard & Poor’s or at least P-2 or the equivalent thereof by Moody’s, and
in each case maturing not more than one year after the date of acquisition by
such Person; (f) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in subparts (a)
through (e) above; and (g) demand deposit accounts maintained in the ordinary
course of business.

 

“Change in Control” shall mean (a) the acquisition of, or, if earlier, the
shareholder or director approval of the acquisition of, ownership or voting
control, directly or indirectly, beneficially or of record, on or after the
Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the
SEC under the Securities Exchange Act of 1934, as then in effect), of shares
representing more than twenty-five percent (25%) of the aggregate ordinary
Voting Power represented by the issued and outstanding capital stock of
Borrower; (b) during any period of twelve (12) consecutive months, the
occupation of a majority of the seats (other than vacant seats) on the board of
directors or other governing body of Borrower by Persons who were neither (i)
nominated by the board of directors or other governing body of Borrower nor (ii)
appointed by directors so nominated; or (c) the occurrence of a change in
control, or other similar provision, as defined in any Material Indebtedness
Agreement (triggering a default or mandatory prepayment, which default or
mandatory prepayment has not been waived in writing).

 

“Closing Date” shall mean the effective date of this Agreement as set forth in
the first paragraph of this Agreement.

 

“Closing Fee Letter” shall mean the Closing Fee Letter between Borrower and
Agent, dated as of the Closing Date.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, together with
the rules and regulations promulgated thereunder.

 

“Commitment” shall mean the obligation hereunder of the Lenders, during the
Commitment Period, to make Loans pursuant to the Revolving Credit Commitments,
up to the Total Commitment Amount.

 

“Commitment Percentage” shall mean, for each Lender, the percentage set forth
opposite such Lender’s name under the column headed “Commitment Percentage”, as
listed in Schedule 1 hereto.

 

“Commitment Period” shall mean the period from the Closing Date to October 12,
2008, or such earlier date on which the Commitment shall have been terminated
pursuant to Article VIII hereof.

 

“Companies” shall mean Borrower and all Subsidiaries.

 

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“Company” shall mean Borrower or a Subsidiary.

 

“Compliance Certificate” shall mean a certificate, substantially in the form of
the attached Exhibit C.

 

“Confidential Information” shall mean all confidential or proprietary
information about the Companies that has been furnished by any Company to Agent
or any Lender, whether furnished before or after the Closing Date and regardless
of the manner in which it is furnished, but does not include any such
information that (a) is or becomes generally available to the public other than
as a result of a disclosure by Agent or such Lender not permitted by this
Agreement, (b) was available to Agent or such Lender on a nonconfidential basis
prior to its disclosure to Agent or such Lender or (c) becomes available to
Agent or such Lender on a nonconfidential basis from a Person other than a
Company that is not, to the best knowledge of Agent or such Lender, acting in
violation of a confidentiality agreement with a Company or is not otherwise
prohibited from disclosing the information to Agent or such Lender.

 

“Consideration” shall mean, in connection with an Acquisition, the aggregate
consideration paid, including borrowed funds, cash, the issuance of securities
or notes, the assumption or incurring of liabilities (direct or contingent), the
payment of consulting fees or fees for a covenant not to compete and any other
consideration paid for such Acquisition.

 

“Consolidated” shall mean the resultant consolidation of the financial
statements of Borrower and its Subsidiaries in accordance with GAAP, including
principles of consolidation consistent with those applied in preparation of the
consolidated financial statements referred to in Section 6.13 hereof.

 

“Consolidated Current Liabilities” shall mean, at any date, the current
liabilities of Borrower, as determined on a Consolidated basis and in accordance
with GAAP.

 

“Consolidated Depreciation and Amortization Charges” shall mean, for any period,
the aggregate of all depreciation and amortization charges for fixed assets,
leasehold improvements and general intangibles (specifically including goodwill)
of Borrower for such period, as determined on a Consolidated basis and in
accordance with GAAP.

 

“Consolidated EBITDA” shall mean, for any period, as determined on a
Consolidated basis and in accordance with GAAP, Consolidated Net Earnings for
such period plus the aggregate amounts deducted in determining such Consolidated
Net Earnings in respect of (a) Consolidated Interest Expense, (b) Consolidated
Income Tax Expense, (c) Consolidated Depreciation and Amortization Charges, and
(d) (i) extraordinary or unusual losses or charges, expenses related to the
issuance of employee stock options, and any non-cash extraordinary items that do
not result in cash payments or accruals, that were included in the calculation
of Consolidated Net Earnings for such period, minus (ii) extraordinary or
unusual gains not incurred in the ordinary course of business but that were
included in the calculation of Consolidated Net Earnings for such period.

 

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“Consolidated Funded Indebtedness” shall mean, at any date, all Indebtedness
(including, but not limited to, current, long-term and Subordinated
Indebtedness) of Borrower, as determined on a Consolidated basis and in
accordance with GAAP.

 

“Consolidated Income Tax Expense” shall mean, for any period, all provisions for
taxes based on the gross or net income of Borrower (including, without
limitation, any additions to such taxes, and any penalties and interest with
respect thereto), and all franchise taxes of Borrower, as determined on a
Consolidated basis and in accordance with GAAP.

 

“Consolidated Interest Expense” shall mean, for any period, the interest expense
of Borrower for such period, as determined on a Consolidated basis and in
accordance with GAAP.

 

“Consolidated Net Earnings” shall mean, for any period, the net income (loss) of
Borrower for such period, as determined on a Consolidated basis and in
accordance with GAAP.

 

“Consolidated Net Worth” shall mean, at any date, the stockholders’ equity of
Borrower, determined as of such date on a Consolidated basis and in accordance
with GAAP.

 

“Consolidated Senior Funded Indebtedness” shall mean, at any date, Consolidated
Funded Indebtedness less Subordinated Indebtedness of the Companies.

 

“Consolidated Tangible Net Worth” shall mean, at any date, (a) all assets (other
than patents, goodwill, treasury stock and other intangibles) of Borrower, minus
(b) total liabilities (other than Subordinated Indebtedness) of Borrower, as
determined on a Consolidated basis and in accordance with GAAP.

 

“Controlled Group” shall mean a Company and each Person required to be
aggregated with a Company under Code Section 414(b), (c), (m) or (o).

 

“Convertible Subordinated Documents” shall mean the Convertible Subordinated
Note Agreement, the Convertible Subordinated Notes, and any other agreement
entered into or delivered in connection therewith.

 

“Convertible Subordinated Indebtedness” shall mean the Subordinated Indebtedness
under or in respect of the Convertible Subordinated Notes, in the original
principal amount of up to Five Hundred Fifty Million Dollars ($550,000,000).

 

“Convertible Subordinated Note Agreement” shall mean the Indenture dated as of
December 15, 1999 between Borrower and State Street Bank and Trust Company of
California, N.A., and any replacement or additional agreement, or amendment to
such agreement, provided that such any such replacement or additional agreement
or amendment shall be in compliance with Section 5.23 hereof and the other
provisions of this Agreement.

 

“Convertible Subordinated Noteholders” shall mean any Holder, as defined in the
Convertible Subordinated Note Agreement, of the Convertible Subordinated Notes.

 

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“Convertible Subordinated Notes” shall mean those certain four percent (4%)
Convertible Subordinated Notes due December 15, 2006, and any other promissory
notes issued pursuant to the Convertible Subordinated Note Agreement, as the
same may from time to time be amended, restated or otherwise modified as
permitted herein.

 

“Credit Event” shall mean the making by the Lenders of a Loan, the conversion by
the Lenders of a Base Rate Loan to a Eurodollar Loan or the continuation by the
Lenders of a Eurodollar Loan after the end of the applicable Interest Period.

 

“Credit Party” shall mean Borrower and any Subsidiary or other Affiliate that is
a Guarantor of Payment.

 

“Default” shall mean an event or condition that constitutes, or with the lapse
of any applicable grace period or the giving of notice or both would constitute,
an Event of Default, and that has not been waived by the Required Lenders (or,
if applicable, all of the Lenders) in writing.

 

“Default Rate” shall mean (a) with respect to any Loan, a rate per annum equal
to two percent (2%) in excess of the rate otherwise applicable thereto, and (b)
with respect to any other amount, if no rate is specified or available, a rate
per annum equal to two percent (2%) in excess of the Derived Base Rate from time
to time in effect.

 

“Derived Base Rate” shall mean a rate per annum equal to the sum of the
Applicable Margin (from time to time in effect) for Base Rate Loans plus the
Base Rate.

 

“Derived Eurodollar Rate” shall mean a rate per annum equal to the sum of the
Applicable Margin (from time to time in effect) for Eurodollar Loans plus the
Eurodollar Rate.

 

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

 

“Domestic Subsidiary” shall mean a Subsidiary that is not a Foreign Subsidiary.

 

“Dormant Subsidiary” shall mean a Company that (a) is not a Credit Party, (b)
has aggregate assets of less than Five Hundred Thousand Dollars ($500,000), and
(c) has no direct or indirect Subsidiaries with aggregate assets for all such
Subsidiaries of more than Five Hundred Thousand Dollars ($500,000).

 

“Eligible Transferee” shall mean a commercial bank, financial institution or
other “accredited investor” (as defined in SEC Regulation D) that is not
Borrower, a Subsidiary or an Affiliate.

 

“Environmental Laws” shall mean all provisions of law (including the common
law), statutes, ordinances, codes, rules, guidelines, policies, procedures,
orders-in-council, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by a Governmental
Authority or by any court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning environmental health or safety and
protection of, or regulation of the discharge of substances into, the
environment.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated pursuant thereto.

 

“ERISA Event” shall mean (a) the existence of a condition or event with respect
to an ERISA Plan that presents a risk of the imposition of an excise tax or any
other liability on a Company or of the imposition of a Lien on the assets of a
Company; (b) the engagement by a Controlled Group member in a non-exempt
“prohibited transaction” (as defined under ERISA Section 406 or Code Section
4975) or a breach of a fiduciary duty under ERISA that could result in liability
to a Company; (c) the application by a Controlled Group member for a waiver from
the minimum funding requirements of Code Section 412 or ERISA Section 302 or a
Controlled Group member is required to provide security under Code Section
401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with
respect to any Pension Plan as to which notice is required to be provided to the
PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan
in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined
in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or
occurrence or existence of any event or condition that makes likely the
involvement of, a Multiemployer Plan in any reorganization under ERISA Section
4241; (g) the failure of an ERISA Plan (and any related trust) that is intended
to be qualified under Code Sections 401 and 501 to be so qualified or the
failure of any “cash or deferred arrangement” under any such ERISA Plan to meet
the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps
to terminate a Pension Plan or appoint a trustee to administer a Pension Plan,
or the taking by a Controlled Group member of any steps to terminate a Pension
Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy
any requirements of law applicable to an ERISA Plan; (j) the commencement,
existence or threatening of a claim, action, suit, audit or investigation with
respect to an ERISA Plan, other than a routine claim for benefits; or (k) any
incurrence by or any expectation of the incurrence by a Controlled Group member
of any liability for post-retirement benefits under any Welfare Plan, other than
as required by ERISA Section 601, et. seq. or Code Section 4980B.

 

“ERISA Plan” shall mean an “employee benefit plan” (within the meaning of ERISA
Section 3(3)) that a Controlled Group member at any time sponsors, maintains,
contributes to, has liability with respect to or has an obligation to contribute
to such plan.

 

“Eurocurrency Liabilities” shall have the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

 

“Eurodollar Loan” shall mean a Revolving Loan described in Section 2.2 hereof,
that shall be denominated in Dollars and on which Borrower shall pay interest at
a rate based upon the Derived Eurodollar Rate.

 

“Eurodollar Rate” shall mean, with respect to a Eurodollar Loan, for any
Interest Period, a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the nearest 1/100th of 1%) by dividing (a) the rate of
interest, determined by Agent in accordance with its

 

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usual procedures (which determination shall be conclusive absent manifest error)
as of approximately 11:00 A.M. (London time) two Business Days prior to the
beginning of such Interest Period pertaining to such Eurodollar Loan, as listed
on British Bankers Association Interest Rate LIBOR 01 or 02 as provided by
Reuters (or, if for any reason such rate is unavailable from Reuters, from any
other similar company or service that provides rate quotations comparable to
those currently provided by Reuters) as the rate in the London interbank market
for Dollar deposits in immediately available funds with a maturity comparable to
such Interest Period, provided that, in the event that such rate quotation is
not available for any reason, then the Eurodollar Rate shall be the average
(rounded upward to the nearest 1/100th of 1%) of the per annum rates at which
deposits in immediately available funds in Dollars for the relevant Interest
Period and in the amount of the Eurodollar Loan to be disbursed or to remain
outstanding during such Interest Period, as the case may be, are offered to
Agent (or an affiliate of Agent, in Agent’s discretion) by prime banks in any
Eurodollar market reasonably selected by Agent, determined as of 11:00 A.M.
(London time) (or as soon thereafter as practicable), two Business Days prior to
the beginning of the relevant Interest Period pertaining to such Eurodollar Loan
hereunder; by (b) 1.00 minus the Reserve Percentage.

 

“Event of Default” shall mean an event or condition that shall constitute an
event of default as defined in Article VII hereof.

 

“Excluded Subsidiary” shall mean a Subsidiary that meets both of the following
requirements: (a) such Subsidiary has aggregate consolidated assets, based on
the book value of such assets, as determined at the time of Acquisition of such
Subsidiary or, if later, on the last day of the most recently completed fiscal
year of Borrower, of less than two percent (2%) of the book value of the
Consolidated assets of Borrower; and (b) such Subsidiary has aggregate
consolidated revenues for the most recently completed four fiscal quarters of
such Subsidiary, of less than five percent (5%) of the Consolidated revenues of
Borrower, for the most recently completed fiscal quarter of Borrower.

 

“Excluded Taxes” shall mean net income taxes (and franchise taxes imposed in
lieu of net income taxes) imposed on Agent or any Lender by the Governmental
Authority located in the jurisdiction where Agent or such Lender is organized
(other than any such connection arising solely from Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document).

 

“Federal Funds Effective Rate” shall mean, for any day, the rate per annum
(rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%))
announced by the Federal Reserve Bank of New York (or any successor) on such day
as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate” as of the Closing Date.

 

“Financial Officer” shall mean any of the following officers: Chief Executive
Officer, President, Chief Financial Officer, Senior Vice President of Finance or
Treasurer. Unless otherwise qualified, all references to a Financial Officer in
this Agreement shall refer to a Financial Officer of Borrower.

 

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“First-Tier Material Foreign Subsidiary” shall mean a direct Foreign Subsidiary
of Borrower or a Domestic Subsidiary (other than an Excluded Subsidiary).

 

“Foreign Subsidiary” shall mean a Subsidiary that is organized outside of the
United States.

 

“GAAP” shall mean generally accepted accounting principles in the United States
as then in effect, which shall include the official interpretations thereof by
the Financial Accounting Standards Board, applied on a basis consistent with the
past accounting practices and procedures of Borrower.

 

“Governmental Authority” shall mean any nation or government, any state,
province or territory or other political subdivision thereof, any governmental
agency, department, authority, instrumentality, regulatory body, court, central
bank or other governmental entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization.

 

“Guarantor” shall mean a Person that shall have pledged its credit or property
in any manner for the payment or other performance of the indebtedness, contract
or other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or Person that
shall have agreed conditionally or otherwise to make any purchase, loan or
investment in order thereby to enable another to prevent or correct a default of
any kind.

 

“Guarantor of Payment” shall mean each of the Companies set forth on Schedule 2
hereto, that are each executing and delivering a Guaranty of Payment, or any
other Person that shall deliver a Guaranty of Payment to Agent subsequent to the
Closing Date.

 

“Guaranty of Payment” shall mean each Guaranty of Payment, in substantially the
form of the attached Exhibit F, executed and delivered on or after the Closing
Date in connection with this Agreement by the Guarantors of Payment, as the same
may from time to time be amended, restated or otherwise modified.

 

“Hedge Agreement” shall mean any (a) hedge agreement, interest rate swap, basis
swap agreement, cap, collar or floor agreement, or other interest rate
management device (including forward rate agreements) entered into by a Company
with any Person in connection with any Indebtedness of such Company, or (b)
currency swap agreement, forward currency purchase agreement or similar
arrangement or agreement designed to protect against fluctuations in currency
exchange rates entered into by a Company with any Person.

 

“Indebtedness” shall mean, for any Company (excluding in all cases trade
payables payable in the ordinary course of business by such Company), without
duplication, (a) all obligations to repay borrowed money, direct or indirect,
incurred, assumed, or guaranteed, (b) all

 

11

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obligations for the deferred purchase price of capital assets, (c) all
obligations under conditional sales or other title retention agreements, (d) all
obligations (contingent or otherwise) under any letter of credit or banker’s
acceptance, (e) all net obligations under any currency swap agreement, interest
rate swap, cap, collar or floor agreement or other interest rate management
device or any Hedge Agreement, (f) all synthetic leases, (g) all lease
obligations that have been or should be capitalized on the books of such Company
in accordance with GAAP, (h) all obligations of such Company with respect to
asset securitization financing programs, (i) all obligations to advance funds
to, or to purchase assets, property or services from, any other Person in order
to maintain the financial condition of such Person, (j) all indebtedness of any
partnership in which such Company is a general partner and there is recourse
against such Company, (k) any other transaction (including forward sale or
purchase agreements) having the commercial effect of a borrowing of money
entered into by such Company to finance its operations or capital requirements,
and (l) any guaranty of any obligation described in subparts (a) through (k)
hereof.

 

“Interest Adjustment Date” shall mean the last day of each Interest Period.

 

“Interest Period” shall mean, with respect to a Eurodollar Loan, the period
commencing on the date such Eurodollar Loan is made and ending on the last day
of such period, as selected by Borrower pursuant to the provisions hereof, and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period, as selected
by Borrower pursuant to the provisions hereof. The duration of each Interest
Period for a Eurodollar Loan shall be one month, two months, three months or six
months, in each case as Borrower may select upon notice, as set forth in Section
2.5 hereof; provided that, if Borrower shall fail to so select the duration of
any Interest Period for a Eurodollar Loan at least three Business Days prior to
the Interest Adjustment Date applicable to such Eurodollar Loan, Borrower shall
be deemed to have continued, at the end of the then current Interest Period,
such Eurodollar Loan as a Eurodollar Loan with a one month Interest Period.

 

“Lien” shall mean any mortgage, deed of trust, security interest, lien
(statutory or other), charge, assignment, hypothecation, encumbrance on, pledge
or deposit of, or conditional sale, leasing (other than operating leases), sale
with a right of redemption or other title retention agreement and any
capitalized lease with respect to any property (real or personal) or asset.

 

“Liquidity Ratio” shall mean, as determined for the most recently completed
fiscal quarter of Borrower, on a Consolidated basis and in accordance with GAAP,
the ratio of (a) the sum, for the Companies, of (i) cash on hand, (ii) Cash
Equivalent Investments, and (iii) net accounts receivables (excluding accounts
receivable owing from any Affiliate, shareholder or employee of a Company); to
(b) Consolidated Current Liabilities.

 

“Loan” shall mean a Revolving Loan.

 

“Loan Documents” shall mean, collectively, this Agreement, each Note, each
Guaranty of Payment, each Pledge Agreement, the Agent Fee Letter and the Closing
Fee Letter, as any of the foregoing may from time to time be amended, restated
or otherwise modified or replaced, and any other document delivered pursuant
thereto.

 

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“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property or financial condition of the Companies taken as
a whole, (b) the ability of Borrower to perform its obligations under this
Agreement or any of the other Loan Documents, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights and remedies of Agent or the Lenders hereunder or thereunder.

 

“Material Indebtedness Agreement” shall mean any debt instrument, lease
(capital, operating or otherwise), guaranty, contract, commitment, agreement or
other arrangement evidencing any Indebtedness of any Company or the Companies in
excess of the amount of Twenty-Five Million Dollars ($25,000,000).

 

“Maximum Amount” shall mean, for each Lender, the amount set forth opposite such
Lender’s name under the column headed “Maximum Amount” as set forth on Schedule
1 hereto, subject to decreases determined pursuant to Section 2.8(c) hereof and
assignments of interests pursuant to Section 10.10 hereof.

 

“Minimum Cash Balance” shall mean cash and Cash Equivalent Investments of the
Companies not subject to any Lien or any other type of encumbrance or
restriction.

 

“Multiemployer Plan” shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.

 

“Note” shall mean a Revolving Credit Note or any other promissory note delivered
pursuant to this Agreement.

 

“Notice of Loan” shall mean a Notice of Loan in the form of the attached Exhibit
B.

 

“Obligations” shall mean, collectively, (a) all Indebtedness and other
obligations incurred by Borrower to Agent, or any Lender pursuant to this
Agreement and includes the principal of and interest on all Loans, (b) each
extension, renewal or refinancing of the foregoing, in whole or in part, and (c)
the commitment and other fees and any prepayment fees payable hereunder.

 

“Organizational Documents” shall mean, with respect to any Person (other than an
individual), such Person’s Articles (Certificate) of Incorporation, operating
agreement or equivalent formation documents, and Regulations (Bylaws), or
equivalent governing documents, and any amendments to any of the foregoing.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise, ad valorem or property taxes, goods and services
taxes, harmonized sales taxes and other sales taxes, use taxes, value added
taxes, charges or similar taxes or levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

 

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“PBGC” shall mean the Pension Benefit Guaranty Corporation, or its successor.

 

“Pension Plan” shall mean an ERISA Plan that is a “pension plan” (within the
meaning of ERISA Section 3(2)).

 

“Permitted Investment” shall mean an investment of a Company in the stock (or
other debt or equity instruments) of a Person (exclusive of investments in
Wholly-Owned Subsidiaries), so long as the aggregate amount of all such
investments of all Companies, after the Closing Date, does not exceed an
aggregate amount equal to twenty percent (20%) of Consolidated Tangible Net
Worth (as determined from time to time for the most recently completed fiscal
quarter of Borrower) during the Commitment Period.

 

“Permitted Receivables Facility” shall mean an accounts receivable facility
whereby the Companies sell or transfer the accounts receivables of the Companies
to the Receivables Subsidiary which in turn transfers to a buyer, purchaser or
lender undivided fractional interests in such accounts receivable, so long as
(a) no portion of the Indebtedness or any other obligation (contingent or
otherwise) under such Permitted Receivables Facility is guaranteed by any
Company, (b) there is no recourse or obligation to any Company (other than the
Receivables Subsidiary) whatsoever other than pursuant to customary
representations, warranties, covenants and indemnities entered into in the
ordinary course of business in connection with such Permitted Receivables
Subsidiary, and (c) no Company (other than the Receivables Subsidiary) provides,
either directly or indirectly, any other credit support of any kind in
connection with such Permitted Receivables Facility other than as set forth in
subpart (b) of this definition.

 

“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, corporation, limited liability company,
unlimited liability company, institution, trust, estate, government or other
agency or political subdivision thereof or any other entity.

 

“Pledge Agreement” shall mean a Pledge Agreement, in substantially the form of
the attached Exhibit G, relating to the Pledged Securities, executed and
delivered by Borrower in favor of Agent, for the benefit of the Lenders, dated
as of the Closing Date, and any other Pledge Agreement, in substantially the
form of the attached Exhibit G, executed by Borrower or any Domestic Subsidiary
on or after the Closing Date, as any of the foregoing may from time to time be
amended, restated or otherwise modified.

 

“Pledged Securities” shall mean sixty-five percent (65%) of the shares of
capital stock or other equity interest of a First-Tier Material Foreign
Subsidiary, whether now owned or hereafter acquired or created, and all proceeds
thereof (Schedule 3 hereto lists, as of the Closing Date, all of the Pledged
Securities).

 

“Prime Rate” shall mean the interest rate established from time to time by Agent
as Agent’s prime rate, whether or not such rate shall be publicly announced; the
Prime Rate may not be the lowest interest rate charged by Agent for commercial
or other extensions of credit. Each change in the Prime Rate shall be effective
immediately from and after such change.

 

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“Receivables Subsidiary” shall mean a Wholly-Owned Subsidiary of Borrower that
is established as a “bankruptcy remote” Subsidiary for the sole purpose of
acquiring accounts receivable under the Permitted Receivables Facility and that
shall not engage in any activities other than in connection with the Permitted
Receivables Facility.

 

“Regularly Scheduled Payment Date” shall mean the last day of each January,
April, July and October of each year.

 

“Related Writing” shall mean each Loan Document and any other assignment,
financial statement, audit report or other writing furnished by Borrower, or any
of its officers, to Agent or the Lenders pursuant to or otherwise in connection
with this Agreement.

 

“Reportable Event” shall mean a reportable event as that term is defined in
Title IV of ERISA, except actions of general applicability by the Secretary of
Labor under Section 110 of such Act.

 

“Required Lenders” shall mean the holders of at least fifty-one percent (51%) of
the Total Commitment Amount, or, if there is any borrowing hereunder, the
holders of at least fifty-one percent (51%) of the Revolving Credit Exposure;
provided, however, that, if there shall be two or more Lenders, Required Lenders
shall constitute at least two Lenders.

 

“Requirement of Law” shall mean, as to any Person, any law, treaty, rule or
regulation or determination or policy statement or interpretation 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.

 

“Reserve Percentage” shall mean for any day that percentage (expressed as a
decimal) that is in effect on such day, as prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, all basic, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) for a member bank of the
Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency
Liabilities. The Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the Reserve Percentage.

 

“Restricted Payment” shall mean, with respect to any Company, (a) any amount
paid in redemption (including any mandatory redemption or optional redemption),
retirement, repurchase, direct or indirect, of (i) any shares of any class of
capital stock or other equity interests of such Company, or (ii) the Convertible
Subordinated Notes or any other Subordinated Indebtedness; or (b) the exercise
by such Company of any right of defeasance or covenant defeasance or similar
right with respect to the Convertible Subordinated Notes or any other
Subordinated Indebtedness.

 

“Revolving Credit Commitment” shall mean the obligation hereunder, during the
Commitment Period, of each Lender to make Revolving Loans up to the Maximum
Amount for such Lender.

 

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“Revolving Credit Exposure” shall mean, at any time, the aggregate principal
amount of all Revolving Loans outstanding.

 

“Revolving Credit Note” shall mean a Revolving Credit Note executed and
delivered pursuant to Section 2.4 hereof.

 

“Revolving Loan” shall mean a Loan made to Borrower by the Lenders in accordance
with Section 2.2 hereof.

 

“SEC” shall mean the United States Securities and Exchange Commission, or any
governmental body or agency succeeding to any of its principal functions.

 

“Senior Leverage Ratio” shall mean as determined on a Consolidated basis and in
accordance with GAAP, the ratio of (a) Consolidated Senior Funded Indebtedness
(for the most recently completed fiscal quarter of Borrower) to (b) Consolidated
EBITDA (for the most recently completed four fiscal quarters of Borrower).

 

“Subordinated” shall mean, as applied to Indebtedness, Indebtedness that shall
have been subordinated (by written terms or written agreement being, in either
case, in form and substance reasonably satisfactory to Agent and the Required
Lenders) in favor of the prior payment in full of the Obligations.

 

“Subsidiary” of a Company shall mean (a) a corporation more than fifty percent
(50%) of the Voting Power of which is owned, directly or indirectly, by such
Company or by one or more other subsidiaries of such Company or by such Company
and one or more subsidiaries of such Company, (b) a partnership, limited
liability company or unlimited liability company of which such Company, one or
more other subsidiaries of such Company or such Company and one or more
subsidiaries of such Company, directly or indirectly, is a general partner or
managing member, as the case may be, or otherwise has an ownership interest
greater than fifty percent (50%) of all of the ownership interests in such
partnership, limited liability company or unlimited liability company, or (c)
any other Person (other than a corporation, partnership, limited liability
company or unlimited liability company) in which such Company, one or more other
subsidiaries of such Company or such Company and one or more subsidiaries of
such Company, directly or indirectly, has at least a majority interest in the
Voting Power or the power to elect or direct the election of a majority of
directors or other governing body of such Person.

 

“Taxes” shall mean any and all present or future taxes of any kind, including
but not limited to, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority (together with any interest, penalties, additions
to taxes or similar liabilities with respect thereto) other than Excluded Taxes.

 

“Total Commitment Amount” shall mean Two Hundred Fifteen Million Dollars
($215,000,000) (or such lesser amount as shall be determined pursuant to Section
2.8(c) hereof).

 

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“Voting Power” shall mean, with respect to any Person, the exclusive ability to
control, through the ownership of shares of capital stock, partnership
interests, membership interests or otherwise, the election of members of the
board of directors or other similar governing body of such Person. The holding
of a designated percentage of Voting Power of a Person means the ownership of
shares of capital stock, partnership interests, membership interests or other
interests of such Person sufficient to control exclusively the election of that
percentage of the members of the board of directors or similar governing body of
such Person.

 

“Welfare Plan” shall mean an ERISA Plan that is a “welfare plan” within the
meaning of ERISA Section 3(l).

 

“Wholly-Owned Subsidiary” shall mean, with respect to any Person, any
corporation, limited liability company or other entity, at least ninety-nine
percent (99%) of the securities or other ownership interest of which having
ordinary Voting Power to elect a majority of the board of directors, or other
persons performing similar functions (other than directors’ qualifying shares as
required by law), are at the time directly or indirectly owned by such Person.

 

Section 1.2. Accounting Terms. Any accounting term not specifically defined in
this Article I shall have the meaning ascribed thereto by GAAP.

 

Section 1.3. Terms Generally. The foregoing definitions shall be applicable to
the singular and plurals of the foregoing defined terms.

 

ARTICLE II. AMOUNT AND TERMS OF CREDIT

 

Section 2.1. Amount and Nature of Credit.

 

(a) Subject to the terms and conditions of this Agreement, the Lenders, during
the Commitment Period and to the extent hereinafter provided, shall make Loans
to Borrower in such aggregate amount as Borrower shall request pursuant to the
Commitment; provided, however, that in no event shall the Revolving Credit
Exposure be in excess of the Total Commitment Amount.

 

(b) Each Lender, for itself and not one for any other, agrees to make Loans,
during the Commitment Period, on such basis that, immediately after the
completion of any borrowing by Borrower:

 

(i) the aggregate outstanding principal amount of Loans made by such Lender
shall not be in excess of the Maximum Amount for such Lender; and

 

(ii) such aggregate outstanding principal amount of Loans made by such Lender
shall represent that percentage of the aggregate principal amount of all Loans
then outstanding that shall be such Lender’s Commitment Percentage. Each
borrowing from the Lenders shall be made pro rata according to the respective
Commitment Percentages of the Lenders.

 

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(c) The Loans may be made as Revolving Loans as described in Section 2.2 hereof.

 

Section 2.2. Revolving Loans. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Lenders shall make a Revolving Loan
or Revolving Loans to Borrower in such amount or amounts as Borrower may from
time to time request, but not exceeding in aggregate principal amount at any
time outstanding hereunder the Total Commitment Amount. Borrower shall have the
option, subject to the terms and conditions set forth herein, to borrow
Revolving Loans, maturing on the last day of the Commitment Period, by means of
any combination of Base Rate Loans or Eurodollar Loans. Subject to the
provisions of this Agreement, Borrower shall be entitled under this Section 2.2
to borrow funds, repay the same in whole or in part and re-borrow hereunder at
any time and from time to time during the Commitment Period.

 

Section 2.3. Interest.

 

(a) Revolving Loans.

 

(i) Base Rate Loan. Borrower shall pay interest on the unpaid principal amount
of a Base Rate Loan outstanding from time to time from the date thereof until
paid at the Derived Base Rate from time to time in effect. Interest on such Base
Rate Loan shall be payable, commencing October 31, 2004, and on each Regularly
Scheduled Payment Date thereafter and at the maturity thereof.

 

(ii) Eurodollar Loans. Borrower shall pay interest on the unpaid principal
amount of each Eurodollar Loan outstanding from time to time, fixed in advance
on the first day of the Interest Period applicable thereto through the last day
of the Interest Period applicable thereto (but subject to changes in the
Applicable Margin), at the Derived Eurodollar Rate. Interest on such Eurodollar
Loan shall be payable on each Interest Adjustment Date with respect to an
Interest Period (provided that if an Interest Period shall exceed three months,
the interest must be paid every three months, commencing three months from the
beginning of such Interest Period).

 

(b) Default Rate. Anything herein to the contrary notwithstanding, if an Event
of Default shall occur, upon the election of the Required Lenders, (i) the
principal of each Loan and the unpaid interest thereon shall bear interest,
until paid, at the Default Rate, and (ii) in the case of any other amount then
due and owing from Borrower hereunder or under any other Loan Document, such
amount shall bear interest at the Default Rate; provided that, during an Event
of Default under Section 7.1(b) or 7.12 hereof, the applicable Default Rate
shall apply without any election or action on the part of Agent or any Lender.

 

(c) Limitation on Interest. In no event shall the rate of interest hereunder
exceed the maximum rate allowable by law. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If Agent or any
Lender shall receive interest in an amount that exceeds the Maximum

 

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Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to Borrower. In determining whether
the interest contracted for, charged, or received by Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable law,
(i) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations.

 

Section 2.4. Evidence of Indebtedness. The obligation of Borrower to repay the
Revolving Loans made by each Lender and to pay interest thereon shall be
evidenced by a Revolving Credit Note of Borrower in the form of the attached
Exhibit A, payable to the order of such Lender in the principal amount of its
Revolving Credit Commitment, or, if less, the aggregate unpaid principal amount
of Revolving Loans made by such Lender.

 

Section 2.5. Notice of Credit Event; Funding of Loans.

 

(a) Notice of Credit Event. Borrower, through an Authorized Officer, shall
provide to Agent a Notice of Loan prior to (i) 1:00 P.M. (Eastern time) one
Business Day prior to the proposed date of borrowing or conversion of any Base
Rate Loan, (ii) 1:00 P.M. (Eastern time) three Business Days prior to the
proposed date of borrowing, conversion or continuation of any Eurodollar Loan.

 

(b) Funding of Loans. Agent shall notify each Lender of the date, amount and
Interest Period (if applicable) promptly upon the receipt of a Notice of Loan,
and, in any event, by 2:00 P.M. (Eastern time) on the date such Notice of Loan
is received. On the date that the Credit Event set forth in such Notice of Loan
is to occur, each such Lender shall provide to Agent, not later than 3:00 P.M.
(Eastern time), the amount in Dollars in federal or other immediately available
funds, required of it. If Agent shall elect to advance the proceeds of such Loan
prior to receiving funds from such Lender, Agent shall have the right, upon
prior notice to Borrower, to debit any account of Borrower or otherwise receive
such amount from Borrower, on demand, in the event that such Lender shall fail
to reimburse Agent in accordance with this subsection. Agent shall also have the
right to receive interest from such Lender at the Federal Funds Effective Rate
in the event that such Lender shall fail to provide its portion of the Loan on
the date requested and Agent shall elect to provide such funds.

 

(c) Conversion of Loans. At the request of Borrower to Agent, subject to the
notice and other provisions of this Section 2.5, the Lenders shall convert a
Base Rate Loan to one or more Eurodollar Loans at any time and shall convert a
Eurodollar Loan to a Base Rate Loan on any Interest Adjustment Date applicable
thereto.

 

(d) Minimum Amount. Each request for:

 

(i) a Base Rate Loan shall be in an amount of not less than One Million Dollars
($1,000,000), increased in increments of Five Hundred Thousand Dollars
($500,000); and

 

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(ii) a Eurodollar Loan shall be in an amount of not less than One Million
Dollars ($1,000,000), increased in increments of Five Hundred Thousand Dollars
($500,000).

 

(e) Interest Periods. At no time shall Borrower request that Eurodollar Loans be
outstanding for more than ten different Interest Periods, and, if a Base Rate
Loan is outstanding, then Eurodollar Loans shall be limited to nine different
Interest Periods at any time.

 

Section 2.6. Payment on Loans and Other Obligations.

 

(a) Payments Generally. Each payment made hereunder by a Credit Party shall be
made without any offset, abatement, recoupment, counterclaim, withholding or
reduction whatsoever.

 

(b) Payments from Borrower. All payments (including prepayments) to Agent of any
Loan or other payment, including but not limited to principal, interest, fees or
any other amount owed by Borrower under this Agreement, shall be made in
Dollars. All payments described in this subsection (b) shall be remitted to
Agent, at the address of Agent for notices referred to in Section 10.4 hereof,
for the account of the Lenders not later than 3:00 P.M. (Eastern time) on the
due date thereof in immediately available funds. Any such payments received by
Agent after 3:00 P.M. (Eastern time) shall be deemed to have been made and
received on the next Business Day.

 

(c) Payments to Lenders. Upon Agent’s receipt of payments hereunder, Agent shall
immediately distribute to each Lender its ratable share, if any, of the amount
of principal, interest, and commitment and other fees received by Agent for the
account of such Lender. Payments received by Agent shall be delivered to the
Lenders in immediately available funds. Each Lender shall record any principal,
interest or other payment, the principal amounts of Base Rate Loans and
Eurodollar Loans, all prepayments and the applicable dates, including Interest
Periods, with respect to the Loans made, and payments received by such Lender,
by such method as such Lender may generally employ; provided, however, that
failure to make any such entry shall in no way detract from the obligations of
Borrower under this Agreement or any Note. The aggregate unpaid amount of Loans,
types of Loans, Interest Periods and similar information with respect to the
Loans set forth on the records of Agent shall be rebuttably presumptive evidence
with respect to such information, including the amounts of principal and
interest owing to each Lender.

 

(d) Timing of Payments. Whenever any payment to be made hereunder, including,
without limitation, any payment to be made on any Loan, shall be stated to be
due on a day that is not a Business Day, such payment shall be made on the next
Business Day and such extension of time shall in each case be included in the
computation of the interest payable on such Loan; provided, however, that, with
respect to any Eurodollar Loan, if the next Business Day shall fall in the
succeeding calendar month, such payment shall be made on the preceding Business
Day and the relevant Interest Period shall be adjusted accordingly.

 

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Section 2.7. Prepayment.

 

(a) Right to Prepay. Borrower shall have the right at any time or from time to
time to prepay, on a pro rata basis for all of the Lenders, all or any part of
the principal amount of the Loans, as designated by Borrower. Such payment shall
include interest accrued on the amount so prepaid to the date of such prepayment
and any amount payable under Article III hereof with respect to the amount being
prepaid. Prepayments of Base Rate Loans shall be without any premium or penalty.

 

(b) Notice of Prepayment. Borrower shall give Agent notice of prepayment of a
Base Rate Loan not later than 1:00 P.M. (Eastern time) on the Business Day on
which such prepayment is to be made and written notice of the prepayment of any
Eurodollar Loan not later than 1:00 P.M. (Eastern time) three Business Days
before the Business Day on which such prepayment is to be made.

 

(c) Minimum Amount. Each prepayment of a Loan shall be in the principal amount
of not less than One Million Dollars ($1,000,000), increased by increments of
Five Hundred Thousand Dollars ($500,000), or if the outstanding balance is less,
the entire principal amount thereof then outstanding, except in the case of a
mandatory payment pursuant to Section 2.10 or Article III hereof.

 

Section 2.8. Commitment and Other Fees; Reduction of Commitment.

 

(a) Commitment Fee. Borrower shall pay to Agent, for the ratable account of the
Lenders, as a consideration for the Commitment, a commitment fee from the
Closing Date to and including the last day of the Commitment Period, payable
quarterly, at a rate per annum equal to (i) the Applicable Commitment Fee Rate
in effect on the payment date, multiplied by (ii) (A) the average daily Total
Commitment Amount in effect during such quarter minus (B) the average daily
Revolving Credit Exposure during such quarter. The commitment fee shall be
payable in arrears, on October 31, 2004 and on each Regularly Scheduled Payment
Date thereafter, and on the last day of the Commitment Period.

 

(b) Agent Fee. Borrower shall pay to Agent, for its sole benefit, the fees set
forth in the Agent Fee Letter.

 

(c) Optional Reduction of Commitment. Borrower may at any time and from time to
time permanently reduce in whole or ratably in part the Commitment to an amount
not less than the then existing Revolving Credit Exposure, by giving Agent not
fewer than three Business Days’ written notice of such reduction, provided that
any such partial reduction shall be in an aggregate amount, for all of the
Lenders, of not less than Five Million Dollars ($5,000,000), increased by
increments of One Million Dollars ($1,000,000). Agent shall promptly notify each
Lender of the date of each such reduction and such Lender’s proportionate share
thereof. After each such reduction, the commitment fees payable hereunder shall
be calculated upon the Total Commitment Amount as so reduced. If Borrower
reduces in whole the Commitment, on the effective date of such reduction
(Borrower having prepaid in full the unpaid principal balance, if any, of the
Loans, together with all interest and commitment and other fees accrued and
unpaid

 

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shall exist), all of the Notes shall be delivered to Agent marked “Canceled” and
Agent shall redeliver such Notes to Borrower. Any partial reduction in the
Commitment shall be effective during the remainder of the Commitment Period.

 

Section 2.9. Computation of Interest and Fees. Interest on Loans and commitment
and other fees and charges hereunder shall be computed on the basis of a year
having three hundred sixty (360) days and calculated for the actual number of
days elapsed.

 

Section 2.10. Mandatory Payment. If, at any time, the Revolving Credit Exposure
shall exceed the Total Commitment Amount, Borrower shall, as promptly as
practicable, but in no event later than the next Business Day, prepay an
aggregate principal amount of the Loans sufficient to bring the Revolving Credit
Exposure within the Total Commitment Amount. Any prepayment of a Eurodollar Loan
pursuant to this Section 2.10 shall be subject to the prepayment provisions set
forth in Article III hereof.

 

Section 2.11. Designated Senior Debt. Borrower hereby designates all Obligations
now or hereafter incurred or otherwise outstanding under the Loan Documents to
be “Designated Senior Debt”, as defined in the Convertible Subordinated Note
Agreement.

 

ARTICLE III. ADDITIONAL PROVISIONS RELATING

TO EURODOLLAR LOANS; INCREASED CAPITAL; TAXES

 

Section 3.1. Requirements of Law.

 

(a) If, after the Closing Date (i) the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or (ii) the
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority:

 

(A) shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Taxes and
Excluded Taxes which are governed by Section 3.2 hereof);

 

(B) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar Rate; or

 

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

 

and the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining Eurodollar Loans, or to
reduce any amount receivable hereunder in respect thereof, then, in any such
case, Borrower shall pay to such Lender, promptly after

 

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receipt of a written request therefor, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
subsection (a), such Lender shall promptly notify Borrower (with a copy to
Agent) of the event by reason of which it has become so entitled.

 

(b) If any Lender shall have determined that, after the Closing Date, the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority shall have the effect of reducing the rate of return on such Lender’s
or such corporation’s capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration the policies
of such Lender or corporation with respect to capital adequacy), then from time
to time, upon submission by such Lender to Borrower (with a copy to Agent) of a
written request therefor (which shall include the method for calculating such
amount), Borrower shall promptly pay or cause to be paid to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.

 

(c) A certificate as to any additional amounts payable pursuant to this Section
3.1 submitted by any Lender to Borrower (with a copy to Agent) shall be
conclusive absent manifest error. In determining any such additional amounts,
such Lender may use any method of averaging and attribution that it (in its sole
discretion) shall deem applicable. The obligations of Borrower pursuant to this
Section 3.1 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.

 

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to the foregoing provisions of this Section 3.1 shall not constitute a waiver of
such Lender’s right to demand such compensation, provided that Borrower shall
not be required to compensate a Lender pursuant to the foregoing provisions of
this Section 3.1 for any increased costs incurred or reductions suffered more
than one hundred eighty (180) days prior to the date that such Lender notifies
Borrower of the Requirement of Law giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor.

 

Section 3.2. Taxes.

 

(a) All payments made by any Credit Party under any Loan Document shall be made
free and clear of, and without deduction or withholding for or on account of any
Taxes or Other Taxes. If any Taxes or Other Taxes are required to be deducted or
withheld from any amounts payable to Agent or any Lender hereunder, the amounts
so payable to Agent or such Lender shall be increased to the extent necessary to
yield to Agent or such Lender (after deducting, withholding and payment of all
Taxes and Other Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in the Loan Documents.

 

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

 

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(c) Whenever any Taxes or Other Taxes are required to be withheld and paid by a
Credit Party, such Credit Party shall timely withhold and pay such taxes to the
relevant Governmental Authorities. As promptly as possible thereafter, such
Credit Party shall send to Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by such Credit Party showing payment thereof or other evidence
of payment reasonably acceptable to Agent or such Lender. If such Credit Party
shall fail to pay any Taxes or Other Taxes when due to the appropriate
Governmental Authority or fails to remit to Agent the required receipts or other
required documentary evidence, such Credit Party shall indemnify Agent and the
appropriate Lenders on demand for any incremental taxes, interest or penalties
that may become payable by Agent or such Lender as a result of any such failure.

 

(d) If any Lender shall be so indemnified by a Credit Party, such Lender shall
use reasonable efforts to obtain the benefits of any refund, deduction or credit
for any taxes or other amounts with respect to the amount paid by such Credit
Party and shall reimburse such Credit Party to the extent, but only to the
extent, that such Lender shall receive a refund with respect to the amount paid
by such Credit Party or an effective net reduction in taxes or other
governmental charges (including any taxes imposed on or measured by the total
net income of such Lender) of the United States or any state or subdivision or
any other Governmental Authority thereof by virtue of any such deduction or
credit, after first giving effect to all other deductions and credits otherwise
available to such Lender. If, at the time any audit of such Lender’s income tax
return is completed, such Lender determines, based on such audit, that it shall
not have been entitled to the full amount of any refund reimbursed to such
Credit Party as aforesaid or that its net income taxes shall not have been
reduced by a credit or deduction for the full amount reimbursed to such Credit
Party as aforesaid, such Credit Party, upon request of such Lender, shall
promptly pay to such Lender the amount so refunded to which such Lender shall
not have been so entitled, or the amount by which the net income taxes of such
Lender shall not have been so reduced, as the case may be.

 

(e) Each Lender that is not (i) a citizen or resident of the United States of
America, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States of America (or any jurisdiction thereof),
or (iii) an estate or trust that is subject to federal income taxation
regardless of the source of its income (any such Person, a “Non-U.S. Lender”)
shall deliver to Borrower and Agent two copies of either U.S. Internal Revenue
Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”, a statement
with respect to such interest and a Form W-8BEN, or any subsequent versions
thereof or successors thereto, properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by Credit Parties under this Agreement
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement or such other
Loan Document. In addition, each Non-U.S. Lender shall deliver such forms or
appropriate replacements promptly upon the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify Borrower at any time it determines that such Lender is no longer
in a position to provide any previously delivered certificate to Borrower (or
any other form of

 

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certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this subsection (e), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this subsection (e) that
such Non-U.S. Lender is not legally able to deliver.

 

(f) For any period with respect to which a Non-U.S. Lender (as defined in
subsection (e) above) has failed to provide Borrower with the appropriate form,
statement or other document described in subsection (e) above (other than if
such failure is due to a change in law, or in the interpretation or application
thereof, occurring subsequent to the date on which the form otherwise is not
required under subsection (e) above), such Non-U.S. Lender shall not be entitled
to indemnification under Section 3.2(a), (b) or (c) with respect to any
additional Taxes imposed by the United States solely by reason of such failure.

 

(g) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which a Credit Party is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under any Loan Document shall use reasonable efforts to deliver to
Borrower (with a copy to Agent), at the time or times prescribed by applicable
law or reasonably requested by Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate; provided, that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

 

(h) The agreements in this Section 3.2 shall survive the termination of the Loan
Documents and the payment of the Loans and all other amounts payable hereunder.

 

Section 3.3. Funding Losses. Borrower agrees to indemnify each Lender, promptly
after receipt of a written request therefor, and to hold each Lender harmless
from, any loss or expense that such Lender may sustain or incur as a consequence
of (a) default by Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after Borrower has given a notice requesting
the same in accordance with the provisions of this Agreement, (b) default by
Borrower in making any prepayment of or conversion from Eurodollar Loans after
Borrower has given a notice thereof in accordance with the provisions of this
Agreement, (c) the making of a prepayment of a Eurodollar Loan on a day that is
not the last day of an Interest Period applicable thereto, or (d) any conversion
of a Eurodollar Loan to a Base Rate Loan on a day that is not the last day of an
Interest Period applicable thereto. Such indemnification shall be in an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amounts so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the appropriate London interbank market. A certificate as to any amounts payable
pursuant to this Section 3.3 submitted to Borrower (with a copy to Agent) by

 

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any Lender shall be conclusive absent manifest error. The obligations of
Borrower pursuant to this Section 3.3 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

 

Section 3.4. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 3.1 or 3.2(a)
hereof with respect to such Lender, it will, if requested by Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office (or an affiliate of such Lender, if practical
for such Lender) for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage; and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of Borrower or the rights of any Lender pursuant to Section 3.1
or 3.2(a) hereof.

 

Section 3.5. Eurodollar Rate Lending Unlawful; Inability to Determine Rate.

 

(a) If any Lender shall determine (which determination shall, upon notice
thereof to Borrower and Agent, be conclusive and binding on Borrower) that,
after the Closing Date, (i) the introduction of or any change in or in the
interpretation of any law makes it unlawful, or (ii) any Governmental Authority
asserts that it is unlawful, for such Lender to make or continue any Loan as, or
to convert (if permitted pursuant to this Agreement) any Loan into, a Eurodollar
Loan, the obligations of such Lender to make, continue or convert any such
Eurodollar Loan shall, upon such determination, be suspended until such Lender
shall notify Agent that the circumstances causing such suspension no longer
exist, and all outstanding Eurodollar Loans payable to such Lender shall
automatically convert (if conversion is permitted under this Agreement) into a
Base Rate Loan, or be repaid (if no conversion is permitted) at the end of the
then current Interest Periods with respect thereto or sooner, if required by law
or such assertion.

 

(b) If Agent or the Required Lenders determine that for any reason adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Loan, or that
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, Agent will promptly so notify Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain such Eurodollar
Loan shall be suspended until Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, Borrower may revoke
any pending request for a borrowing of, conversion to or continuation of such
Eurodollar Loan or, failing that, will be deemed to have converted such request
into a request for a borrowing of a Base Rate Loan in the amount specified
therein.

 

Section 3.6. Replacement of Lenders. Borrower shall be permitted to replace any
Lender that requests reimbursement for amounts owing pursuant to Section 3.1 or
3.2(a), or asserts its inability to make a Eurodollar Loan pursuant to Section
3.5 hereof; provided that (a) such replacement does not conflict with any
Requirement of Law, (b) no Default or Event of Default shall have occurred and
be continuing at the time of such replacement, (c) prior to any such
replacement, such Lender shall have taken no action under Section 3.4 so as to
eliminate the

 

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continued need for payment of amounts owing pursuant to Section 3.1 or 3.2(a)
or, if it has taken any action, such request has still been made, (d) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement and
assume all commitments and obligations of such replaced Lender, (e) Borrower
shall be liable to such replaced Lender under Section 3.3 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (f) the replacement financial institution,
if not already a Lender, shall be satisfactory to Agent, (g) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.10 hereof (provided that Borrower (or the succeeding Lender, if such
Lender is willing) shall be obligated to pay the assignment fee referred to
therein), and (h) until such time as such replacement shall be consummated,
Borrower shall pay all additional amounts (if any) required pursuant to Section
3.1 or 3.2(a), as the case may be.

 

ARTICLE IV. CONDITIONS PRECEDENT

 

Section 4.1. Conditions to Each Credit Event. The obligation of the Lenders to
participate in any Credit Event shall be conditioned, in the case of each Credit
Event, upon the following:

 

(a) all conditions precedent as listed in Section 4.2 hereof required to be
satisfied prior to the first Credit Event shall have been satisfied prior to or
as of the first Credit Event;

 

(b) Borrower shall have submitted a Notice of Loan and otherwise complied with
Section 2.5 hereof;

 

(c) no Default or Event of Default shall then exist or immediately after such
Credit Event would exist; and

 

(d) each of the representations and warranties contained in Article VI hereof
shall be true in all material respects as if made on and as of the date of such
Credit Event, except to the extent that any thereof expressly relate to an
earlier date.

 

Each request by Borrower for a Credit Event shall be deemed to be a
representation and warranty by Borrower as of the date of such request as to the
satisfaction of the conditions precedent specified in subsections (c) and (d)
above.

 

Section 4.2. Conditions to the First Credit Event. The obligation of the Lenders
to participate in the first Credit Event is subject to Borrower satisfying each
of the following conditions prior to or concurrently with such Credit Event:

 

(a) Notes. Borrower shall have executed and delivered to each Lender a Revolving
Credit Note.

 

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(b) Guaranties of Payment. Each Guarantor of Payment shall have executed and
delivered to Agent a Guaranty of Payment.

 

(c) Pledge Agreement. Borrower and each Domestic Subsidiary that has a
First-Tier Material Foreign Subsidiary shall have executed and delivered to
Agent, for the benefit of the Lenders, a Pledge Agreement, in form and substance
satisfactory to Agent, that provides, among other things, for a pledge of
sixty-five percent (65%) of the capital stock of each First-Tier Material
Foreign Subsidiary of such Company.

 

(d) Officer’s Certificate, Resolutions, Organizational Documents. Each Credit
Party shall have delivered to Agent an officer’s certificate (or comparable
domestic or foreign documents) certifying the names of the officers of such
Credit Party authorized to sign the Loan Documents, together with the true
signatures of such officers and certified copies of (i) the resolutions of the
board of directors (or comparable domestic or foreign documents) of such Credit
Party evidencing approval of the execution and delivery of the Loan Documents
and the execution of other Related Writings to which such Credit Party is a
party, and (ii) the Organizational Documents of such Credit Party.

 

(e) Good Standing and Full Force and Effect Certificates. Borrower shall have
delivered to Agent a good standing certificate, full force and effect
certificate or similar certificate, as the case may be, for each Credit Party,
issued on or not more than five Business Days prior to the Closing Date by the
Secretary of State in the states of California and Delaware, that evidences such
Credit Party’s authority to engage in business in such states and a tax good
standing certificate issued by the State of California Franchise Tax Board.

 

(f) Legal Opinion. Borrower shall have delivered to Agent an opinion of counsel
for each Credit Party, in form and substance reasonably satisfactory to Agent
and the Lenders.

 

(g) Borrower Investment Policy. Borrower shall have delivered to Agent a copy of
the Borrower Investment Policy as in effect on the Closing Date.

 

(h) Agent Fee Letter, Closing Fee Letter and Legal Fees. Borrower shall have (i)
executed and delivered to Agent, the Agent Fee Letter and paid to Agent, for its
sole account, the fees stated therein, (ii) executed and delivered to Agent, the
Closing Fee Letter and paid to Agent, for the account of the Lenders, the fees
stated therein, and (iii) paid all reasonable legal fees and expenses of Agent
in connection with the preparation and negotiation of the Loan Documents.

 

(i) Lien Searches. With respect to the property owned or leased by Borrower and
each Guarantor of Payment, Borrower shall have caused to be delivered to Agent
(i) the results of Uniform Commercial Code lien searches for the states of
California and Delaware and any other state where a Guarantor of Payment is
organized or has its chief executive office, satisfactory to Agent and the
Lenders, and (ii) Uniform Commercial Code termination statements reflecting
termination of all financing statements previously filed by any Person and not
expressly permitted pursuant to Section 5.9 hereof.

 

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(j) Convertible Subordinated Note Agreement. Borrower shall have provided to
Agent copies of the Convertible Subordinated Note Agreement and amendments
thereto, and the other loan documents executed in connection therewith,
certified by a Financial Officer as complete.

 

(k) Closing Certificate. Borrower shall have delivered to Agent an officer’s
certificate certifying that, as of the Closing Date, (i) all conditions
precedent set forth in this Article IV have been satisfied, (ii) no Default or
Event of Default exists nor immediately after the making of the first Loan, and
(iii) each of the representations and warranties contained in Article VI hereof
are true and correct in all material respects as of the Closing Date.

 

(l) Letter of Direction. Borrower shall have delivered to Agent a letter of
direction authorizing Agent, on behalf of the Lenders, to disburse the proceeds
of the Loans, which includes the transfer of funds under this Agreement and wire
instructions setting forth the locations to which such funds shall be sent.

 

(m) No Material Adverse Change. No material adverse change, in the reasonable
opinion of Agent and the Required Lenders, shall have occurred in the
Consolidated financial condition or operations of the Companies since April 30,
2004.

 

(n) Miscellaneous. Borrower shall have provided to Agent such other items and
shall have satisfied such other conditions as may be reasonably required by
Agent or the Lenders.

 

Section 4.3. Post-Closing Condition. No later than thirty (30) days after the
Closing Date (unless a longer period is agreed to by Agent), with respect to any
foreign shares pledged to Agent, for the benefit of the Lenders, Borrower shall
deliver to Agent, for the benefit of the Lenders, the outstanding shares
certificates (or other evidence of equity) evidencing such pledged ownership
interest and cooperate with Agent in perfecting the interest taken under the
laws of the applicable foreign jurisdiction. In connection therewith, Borrower
shall pay, upon request therefor, any foreign counsel, or foreign notary,
filing, registration or similar, fees, costs or expenses.

 

ARTICLE V. COVENANTS

 

Section 5.1. Insurance. Each Company shall (a) maintain insurance to such extent
and against such hazards and liabilities as is commonly maintained by Persons
similarly situated; and (b) within ten days of Agent’s written request, furnish
to Agent such information about such Company’s insurance as Agent may from time
to time reasonably request.

 

Section 5.2. Money Obligations. Each Company shall pay in full (a) prior in each
case to the date when penalties would attach, all material taxes, assessments
and governmental charges and levies (except only those so long as and to the
extent that the same shall be contested in good faith by appropriate and timely
proceedings and for which adequate provisions have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; and (b) all of its other
obligations calling

 

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for the payment of money (except only those so long as and to the extent that
the same shall be contested in good faith and for which adequate provisions have
been established in accordance with GAAP or those the nonpayment of which are
not likely to have a Material Adverse Effect) before such payment becomes
overdue.

 

Section 5.3. Financial Statements and Information.

 

(a) Quarterly Financials. Borrower shall deliver to Agent, within fifty (50)
days after the end of each of the first three quarter-annual periods of each
fiscal year of Borrower, balance sheets of the Companies as of the end of such
period and statements of income (loss), stockholders’ equity and cash flow for
the quarter and fiscal year to date periods, all prepared on a Consolidated
basis, in accordance with GAAP, and in form and detail reasonably satisfactory
to Agent and the Lenders and certified by a Financial Officer of Borrower.

 

(b) Annual Audit Report. Borrower shall deliver to Agent, within ninety-five
(95) days after the end of each fiscal year of Borrower, an annual audit report
of the Companies for that year prepared on a Consolidated basis, in accordance
with GAAP, and in form and detail reasonably satisfactory to Agent and the
Lenders and certified by an unqualified opinion (or, if qualified, so long as
such qualification does not reference a material adverse condition, make
judgment of Borrower’s application of GAAP or question Borrower’s status as an
ongoing concern) of Ernst & Young LLP or other independent public accountants of
nationally recognized standing, which report shall include balance sheets and
statements of income (loss), stockholders’ equity, and cash-flow for that
period.

 

(c) Compliance Certificate. Borrower shall deliver to Agent, concurrently with
the delivery of the financial statements set forth in subsections (a) and (b)
above, a Compliance Certificate.

 

(d) Financial Information of Companies. Borrower shall deliver to Agent, within
ten (10) Business Days of the written request of Agent or any Lender, such other
information about the financial condition, properties and operations of any
Company as Agent or such Lender may from time to time reasonably request, which
information shall be submitted in form and detail reasonably satisfactory to
Agent or such Lender and certified by a Financial Officer of the Company or
Companies in question.

 

Provided that no Default or Event of Default shall exist, reports required to be
delivered pursuant to Sections 5.3(a) or 5.3(b) (to the extent any such
financial statements are included in materials otherwise filed with the SEC) may
be delivered electronically and, if so, shall be deemed to have been delivered
on the date Agent confirms, via telephone or e-mail, receipt of an email from
Borrower (i) containing such reports, or (ii) providing a valid direct link to
Borrower’s website page that shall contain such electronically posted reports;
provided that, in every instance, Borrower shall provide executed originals of
the Compliance Certificates required by Section 5.3(c) to Agent. Except for such
Compliance Certificates, Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any event shall
have no responsibility to monitor compliance by Borrower with any such request
for delivery, and each of the Lenders shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

 

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Section 5.4. Financial Records. Each Company shall at all times maintain true
and complete records and books of account, including, without limiting the
generality of the foregoing, appropriate provisions for possible losses and
liabilities, all in accordance with GAAP, and at all reasonable times (during
normal business hours and upon notice to such Company) permit Agent and any
Lender, or their respective representatives (provided that such Person shall be
subject to a nondisclosure agreement reasonably satisfactory to such Person and
Borrower), to examine such Company’s books and records and to make excerpts
therefrom and transcripts thereof.

 

Section 5.5. Franchises; Change in Business.

 

(a) Except as otherwise permitted pursuant to Section 5.12 hereof, each Company
(other than a Dormant Subsidiary) shall preserve and maintain at all times its
existence and its material rights and franchises.

 

(b) No Company shall engage in any business if, as a result thereof, the general
nature of the business of the Companies taken as a whole would be substantially
changed from the general nature of the business the Companies are engaged in on
the Closing Date.

 

Section 5.6. ERISA Compliance. No Company shall incur any material accumulated
funding deficiency within the meaning of ERISA, or any material liability to the
PBGC, established thereunder in connection with any ERISA Plan. Borrower shall
furnish to the Lenders (a) as soon as possible and in any event within thirty
(30) days after any Company knows or has reason to know that any Reportable
Event with respect to any Pension Plan has occurred, a statement of a Financial
Officer of such Company, setting forth details as to such Reportable Event and
the action that such Company proposes to take with respect thereto, together
with a copy of the notice of such Reportable Event given to the PBGC if a copy
of such notice is available to such Company, and (b) promptly after receipt
thereof a copy of any material notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any Pension Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service. Borrower shall promptly notify the
Lenders of any material taxes assessed, proposed to be assessed or that Borrower
has reason to believe may be assessed against a Company by the Internal Revenue
Service with respect to any ERISA Plan. As used in this Section 5.6, “material”
means the measure of a matter of significance that shall be determined as being
an amount equal to five percent (5%) of Consolidated Net Worth (as determined
for the most recently completed fiscal quarter of Borrower). As soon as
practicable, and in any event within twenty (20) days, after any Company shall
become aware that an ERISA Event shall have occurred that could reasonably be
expected to cause a Material Adverse Effect, such Company shall provide Agent
with notice of such ERISA Event with a certificate by a Financial Officer of
such Company setting forth the details of the event and the action such Company
or another Controlled Group member proposes to take with respect thereto.
Borrower shall, at the request of Agent, deliver or cause to be delivered to
Agent true and correct copies of any documents relating to the ERISA Plan of any
Company.

 

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Section 5.7. Financial Covenants.

 

(a) Senior Leverage Ratio. The Companies shall not suffer or permit at any time,
as determined for the most recently completed fiscal quarter of Borrower, the
Senior Leverage Ratio to exceed 2.50 to 1.00.

 

(b) Liquidity Ratio. The Companies shall not suffer or permit at any time, as
determined for the most recently completed fiscal quarter of Borrower, the
Liquidity Ratio to be less than 1.15 to 1.00.

 

(c) Minimum Cash Balance. The Companies shall not suffer or permit at any time
the Minimum Cash Balance to be less than the current minimum amount required,
which current minimum amount required shall be, as determined for the most
recently completed fiscal quarter of Borrower, (i) Two Hundred Seventy-Five
Million Dollars ($275,000,000) on the Closing Date through October 30, 2004,
(ii) Three Hundred Million Dollars ($300,000,000) on October 31, 2004 through
January 30, 2005, (iii) Three Hundred Twenty-Five Million Dollars ($325,000,000)
on January 31, 2005 through April 29, 2005, and (iv) thereafter such current
minimum amount shall be increased by an additional Twenty-Five Million Dollars
($25,000,000) on April 30, 2005 and by an additional Twenty-Five Million Dollars
($25,000,000) on the last day of each fiscal quarter thereafter.

 

Section 5.8. Borrowing. No Company shall create, incur or have outstanding any
Indebtedness of any kind; provided, that this Section 5.8 shall not apply to the
following:

 

(a) the Loans or any other Indebtedness under this Agreement;

 

(b) the Indebtedness existing on the Closing Date, in addition to the other
Indebtedness permitted to be incurred pursuant to this Section 5.8, as set forth
in Schedule 5.8 hereto (and any extension, renewal or refinancing thereof so
long as the principal amount thereof shall not be increased after the Closing
Date);

 

(c) loans to a Company from a Company;

 

(d) Indebtedness under any Hedge Agreement, so long as such Hedge Agreement
shall have been entered into in the ordinary course of business and not for
speculative purposes; and

 

(e) additional Indebtedness pursuant to the following subsections (i), (ii) and
(iii) so long as (A) no Default or Event of Default shall then exist or
immediately after incurring such Indebtedness will exist, (B) the Companies
shall be in compliance with the financial covenants set forth in Section 5.7
hereof both immediately before and after giving pro forma effect to the
incurrence of such Indebtedness, and (C) such Indebtedness does not exceed the
aggregate, for

 

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all such Indebtedness under all three such subsections, of Seventy-Five Million
Dollars ($75,000,000) at any time outstanding:

 

(i) any loans granted to or Capitalized Lease Obligations entered into by any
Company for the purchase or lease of fixed assets (and refinancings of such
loans or Capitalized Lease Obligations), which loans and Capitalized Lease
Obligations shall only be secured by the fixed assets being purchased or leased;

 

(ii) Indebtedness of the Receivables Subsidiary under the Permitted Receivables
Facility, so long as Borrower provides a copy of the documents evidencing such
transaction to Agent; and

 

(iii) additional unsecured Indebtedness of the Companies.

 

Section 5.9. Liens. No Company shall create, assume or suffer to exist (upon the
happening of a contingency or otherwise) any Lien upon any of its property or
assets, whether now owned or hereafter acquired; provided that this Section 5.9
shall not apply to the following:

 

(a) Liens for Taxes not yet due or that are being actively contested in good
faith by appropriate proceedings and for which adequate reserves shall have been
established in accordance with GAAP;

 

(b) carrier’s, warehousemen’s, mechanic’s, materialmen’s, repairmen’s, or other
statutory Liens incidental to the conduct of its business or the ownership of
its property and assets;

 

(c) purchase money Liens on fixed assets securing the loans and Capitalized
Lease Obligations pursuant to Section 5.8(e)(i) hereof, provided that such Lien
is limited to the purchase price and only attaches to the property being
acquired;

 

(d) the Liens existing on the Closing Date as set forth in Schedule 5.9 hereto
and replacements, extensions, renewals, replacements, refundings or refinancings
thereof, but only to the extent that the amount of Indebtedness secured thereby
shall not be increased;

 

(e) easements or other minor defects or irregularities in title of real property
not interfering in any material respect with the use of such property in the
business of any Company;

 

(f) any Lien granted to Agent, for the benefit of the Lenders;

 

(g) any Lien on fixed assets (which may include real property) owned by a
Company as a result of an Acquisition permitted pursuant to Section 5.13 hereof,
so long as (i) such Lien was not created at the time of or in contemplation of
such Acquisition, (ii) the amount that such Lien secures, when combined with all
other Liens permitted by this subpart (g), does not exceed Fifty Million Dollars
($50,000,000) at any time, and (iii) the sum of the Indebtedness secured by such
Liens and the Indebtedness otherwise permitted pursuant to Section 5.8(e) hereof
does not exceed the aggregate amount of Seventy-Five Million Dollars
($75,000,000) at any time;

 

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

 

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

 

(j) judgment or similar Liens, provided that (i) the amount that such Liens
secure does not in the aggregate, for all such Liens, exceed Ten Million Dollars
($10,000,000), and (ii) the execution or other enforcement of such Liens shall
have been and remain effectively stayed and the claims secured thereby are
currently being contested in good faith by appropriate proceedings;

 

(k) Liens arising by virtue of any contractual, statutory or common law
provision relating to banker’s liens, rights of set-off or similar rights and
remedies as to deposit accounts, other funds maintained with a creditor
depository institution, or investment or securities accounts; provided that (i)
such account is not a dedicated cash collateral account, and (ii) such account
is not intended by Borrower or any of its Subsidiaries to provide collateral to
the depository institution with respect to otherwise unrelated obligations of
Borrower or any such Subsidiary to such depository institution;

 

(l) customary Liens granted in favor of a trustee to secure fees and other
amounts owing to such trustee under an indenture or other agreement pursuant to
which Indebtedness permitted by Section 5.8 hereof is issued; or

 

(m) any Liens (in addition to those otherwise specified in this Section 5.9),
that in the aggregate do not secure obligations at any time outstanding in
excess of Twenty-Five Million Dollars ($25,000,000).

 

No Company shall enter into any contract or agreement (other than a contract or
agreement entered into in connection with the purchase or lease of fixed assets
that prohibits Liens on such fixed assets, a contract for the sale of assets or
a restriction in a joint venture or similar agreement where the entity is not a
Subsidiary) that would prohibit Agent or the Lenders from acquiring a security
interest, mortgage or other Lien on, or a collateral assignment of, any of the
property or assets of such Company.

 

Section 5.10. Regulations T, U and X. No Company shall take any action that
would result in any non-compliance of the Loans with Regulations T, U or X, or
any other applicable regulation, of the Board of Governors of the Federal
Reserve System.

 

Section 5.11. Investments and Loans. No Company shall (a) create, acquire or
hold any Subsidiary, (b) make or hold any investment in any stocks, bonds or
securities of any kind, (c) be or become a party to any joint venture or other
partnership, (d) make or keep outstanding any advance or loan to any Person, or
(e) be or become a Guarantor of any kind; provided that this Section 5.11 shall
not apply to the following:

 

(i) guaranties for Indebtedness of the Companies incurred or permitted pursuant
to this Agreement;

 

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(ii) any endorsement of a check or other medium of payment for deposit or
collection through normal banking channels or similar transaction in the normal
course of business;

 

(iii) any investment in Cash Equivalent Investments;

 

(iv) the holding of each of the Subsidiaries listed on Schedule 6.1 hereto, and
the creation, acquisition and holding of any new Subsidiary after the Closing
Date so long as such new Subsidiary shall have been created, acquired or held in
accordance with the terms and conditions of this Agreement and such Subsidiary
shall, if required, pursuant to Section 5.19 hereof, promptly become a Guarantor
of Payment;

 

(v) any investment by a Company in a Company, and any loan to a Company by a
Company;

 

(vi) any investment made in connection with any Hedge Agreement, so long as such
Hedge Agreement shall have been entered into in the ordinary course of business
and not for speculative purposes;

 

(vii) any Permitted Investment;

 

(viii) the receipt of a promissory note or stock or other equity interest in
connection with a sale of assets permitted under Section 5.12 hereof;

 

(ix) advances in the ordinary course of business to officers, directors and
employees of any Company at any time outstanding for travel, entertainment,
relocation and other ordinary business purposes; or

 

(x) any investments acquired by a Company (A) in exchange for any other
investment held by such Company in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
investment, or (B) as a result of a foreclosure by a Company with respect to any
secured investment or other transfer of title with respect to any secured
investment in default.

 

For purposes of this Section 5.11, the amount of any investment in equity
interests shall be based upon the initial amount invested and shall not include
any appreciation in value or return on such investment.

 

Section 5.12. Merger and Sale of Assets. No Company shall merge, amalgamate or
consolidate with any other Person, or sell, lease or transfer or otherwise
dispose of any assets to any Person other than in the ordinary course of
business, except that, if no Default or Event of Default shall then exist or
immediately thereafter shall begin to exist:

 

(a) any Company may merge or amalgamate with any other Company (provided that,
in a merger with Borrower, Borrower shall be the continuing or surviving
Person);

 

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(b) any Company may sell, lease, transfer or otherwise dispose of any of its
assets to any other Company;

 

(c) Borrower may liquidate or dissolve any Company that is not Borrower or a
Guarantor of Payment;

 

(d) any Company may sell, lease, transfer or otherwise dispose of any assets
that are obsolete or no longer useful in such Company’s business;

 

(e) Acquisitions may be effected in accordance with the provisions of Section
5.13 hereof; or

 

(f) up to Fifty Million Dollars ($50,000,000) of assets may be sold by the
Companies after the Closing Date, so long as the compensation received equals or
exceeds the fair market value of the assets sold; provided, however, that, if
such compensation includes non-cash compensation, the sum, without duplication,
of (i) all Permitted Investments (as calculated pursuant to Section 5.11(viii)
hereof) and (ii) the amount of such non-cash compensation do not exceed twenty
percent (20%) of Consolidated Net Worth (as determined from time to time for the
most recently completed fiscal quarter of Borrower).

 

Section 5.13. Acquisitions. No Company shall effect an Acquisition; provided,
however, that a Company may effect an Acquisition so long as:

 

(a) in the case of a merger, amalgamation or other combination including
Borrower, Borrower shall be the surviving entity;

 

(b) in the case of a merger, amalgamation or other combination including a
Credit Party (other than Borrower), a Credit Party shall be the surviving
entity;

 

(c) the business to be acquired shall be similar to the lines of business of the
Companies;

 

(d) no Default or Event of Default shall exist prior to or after giving effect
to such Acquisition;

 

(e) if the Consideration paid for such Acquisition is in excess of Fifty Million
Dollars ($50,000,000), Borrower shall have provided to Agent and the Lenders, at
least ten (10) Business Days prior to such Acquisition a certificate of a
Financial Officer of Borrower showing pro forma compliance with Section 5.7
hereof, both before and after the proposed Acquisition; and

 

(f) either (i) such Acquisition is not actively opposed by the board of
directors (or similar governing body) of the selling Persons or the Persons
whose equity interests are to be acquired, or (ii) the number of shares of the
target Person tendered in response to a tender offer by a Company shall
represent at least ninety percent (90%) of the Voting Power of such Person.

 

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Section 5.14. Notice.

 

(a) Borrower shall cause a Financial Officer of Borrower to promptly notify
Agent, in writing, whenever any Default or Event of Default may occur hereunder
or any representation or warranty made in Article VI hereof or elsewhere in this
Agreement or in any Related Writing may for any reason cease in any material
respect to be true and complete.

 

(b) Borrower shall provide written notice to Agent contemporaneously with
providing any material notice to the trustee or the Convertible Subordinated
Noteholders under any of the Convertible Subordinated Documents, or receiving
any material notice from the trustee or the Convertible Subordinated Noteholders
under any of the Convertible Subordinated Documents.

 

Section 5.15. Restricted Payments. Borrower shall not pay or commit itself to
pay any Restricted Payments at any time if a Default or Event of Default shall
then exist or immediately thereafter shall begin to exist; provided, however,
that nothing in this Section 5.15 shall restrict Borrower from making payments
under the Convertible Subordinated Notes to the extent that (a) a “standstill
period” has been put in place pursuant to the documents underlying such
Subordinated Indebtedness, (b) such “standstill period” shall have terminated,
and (c) a new “standstill period” shall not have commenced since such
termination.

 

Section 5.16. Environmental Compliance. Each Company shall comply in all
material respects with any and all Environmental Laws including, without
limitation, all Environmental Laws in jurisdictions in which such Company owns
or operates a facility or site, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous
substances, solid waste or other wastes or holds any interest in real property
or otherwise, except in such instances in which (a) such requirement of such
Environmental Law is being contested in good faith or a bona fide dispute exists
with respect thereto, or (b) the failure to comply therewith could not be
reasonably expected to have a Material Adverse Effect. Borrower shall furnish to
the Lenders, promptly after receipt thereof, a copy of any notice such Company
may receive from any Governmental Authority, private Person or otherwise that
any material litigation or proceeding pertaining to any environmental, health or
safety matter has been filed or is threatened against such Company, any real
property in which such Company holds any interest or any past or present
operation of such Company. No Company shall allow the release or disposal of
hazardous waste, solid waste or other wastes on, under or to any real property
in which any Company holds any ownership interest or performs any of its
operations, in violation of any Environmental Law that could reasonably be
expected to have a Material Adverse Effect. As used in this Section 5.16,
“litigation or proceeding” means any demand, claim, notice, suit, suit in equity
action, administrative action, investigation or inquiry whether brought by any
Governmental Authority, private Person or otherwise. Borrower shall defend,
indemnify and hold Agent and the Lenders harmless against all costs, expenses,
claims, damages, penalties and liabilities of every kind or nature whatsoever
(including reasonable attorneys’ fees) arising out of or resulting from the
noncompliance of any Company with any Environmental Law. Such indemnification
shall survive any termination of this Agreement.

 

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Section 5.17. Affiliate Transactions. No Company shall, directly or indirectly,
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate (other than another Company) on terms that shall be
less favorable to such Company than those that might be obtained at the time in
a transaction with a non-Affiliate; provided, however, that the foregoing shall
not prohibit the payment of customary and reasonable directors’ fees or other
compensation.

 

Section 5.18. Use of Proceeds. Borrower’s use of the proceeds of the Loans shall
be solely for working capital and other general corporate purposes of the
Companies, for the refinancing of existing Indebtedness and for Acquisitions.

 

Section 5.19. Subsidiary Guaranties and Pledge of Stock or Other Ownership
Interest.

 

(a) Guaranties. Each Domestic Subsidiary of a Company (that is not an Excluded
Subsidiary) created, acquired or held subsequent to the Closing Date, shall
within thirty (30) days execute and deliver to Agent, for the benefit of the
Lenders, a Guaranty of Payment of all of the Obligations, such agreements to be
in form and substance acceptable to Agent, along with any such other supporting
documentation, corporate governance and authorization documents, and an opinion
of counsel as may be deemed necessary or advisable by Agent. Notwithstanding
anything in this Section 5.19 to the contrary, Borrower shall not be required to
deliver a Guaranty of Payment from any Receivables Subsidiary.

 

(b) Release of Guarantor. Agent shall release a Subsidiary from its obligations
under a Guaranty of Payment in connection with a disposition permitted under
this Agreement in the event that (i) Agent shall have received a written request
from Borrower with respect to such release, (ii) no Default or Event of Default
shall then exist or immediately thereafter shall begin to exist, (iii) Borrower
certifies that, after such release, such Subsidiary either (A) will constitute
an Excluded Subsidiary, or (B) will no longer be a Subsidiary, (iv) the book
value of the assets of Borrower on a non-consolidated basis, when aggregated
with the aggregate consolidated assets of the remaining Guarantors of Payment
(but excluding the consolidated assets of any First-Tier Material Foreign
Subsidiary not subject to a pledge) exceeds eighty-five percent (85%) of the
book value of the aggregate Consolidated assets of Borrower, and (vi) the
revenues of Borrower on a non-consolidated basis, when aggregated with the
aggregate consolidated revenues of the remaining Guarantors of Payment (but
excluding the consolidated revenues of any First-Tier Material Foreign
Subsidiary not subject to a pledge) exceeds eighty-five percent (85%) of the
Consolidated revenues of Borrower (as determined for the most recently completed
fiscal quarter of Borrower). Any such release shall not be effective until Agent
shall have executed a written release.

 

(c) Pledge of Stock. With respect to the creation or acquisition of a First-Tier
Material Foreign Subsidiary, Borrower shall, within forty-five (45) days (unless
a longer period is agreed to by Agent), (i) pledge to Agent, for the benefit of
the Lenders, sixty-five percent

 

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(65%) of the ownership interest owned by a Credit Party pursuant to the terms of
a Pledge Agreement executed by the appropriate Credit Party, and (ii) deliver to
Agent, for the benefit of the Lenders, the outstanding shares certificates (or
other evidence of equity) evidencing such pledged ownership interest; provided,
however, that the shares of such First-Tier Material Foreign Subsidiary shall
not be required to be pledged to the extent the following two conditions are met
immediately following the creation or acquisition of such First-Tier Material
Foreign Subsidiary, (A) the book value of the assets of Borrower on a
non-consolidated basis, when aggregated with the aggregate consolidated assets
of the Guarantors of Payment (but excluding the consolidated assets of such
First-Tier Material Foreign Subsidiary and any other First-Tier Material Foreign
Subsidiary not subject to a pledge) exceeds eighty-five percent (85%) of the
book value of the aggregate Consolidated assets of Borrower (as determined for
the most recently completed fiscal quarter of Borrower), and (B) the revenues of
Borrower on a non-consolidated basis, when aggregated with the aggregate
consolidated revenues of the Guarantors of Payment (but excluding the
consolidated revenues of such First-Tier Material Foreign Subsidiary and any
other First-Tier Material Foreign Subsidiary not subject to a pledge) exceeds
eighty-five percent (85%) of the Consolidated revenues of Borrower (as
determined for the most recently completed fiscal quarter of Borrower). To the
extent any shares of a First-Tier Material Foreign Subsidiary are pledged under
this Agreement, Agent, for the benefit of the Lenders, shall at all times have
the right to perfect, at Borrower’s cost, payable upon request therefor
(including, without limitation, any foreign counsel, or foreign notary, filing,
registration or similar, fees, costs or expenses), its security interest in such
shares certificates in the respective foreign jurisdiction.

 

(d) Perfection or Registration of Interest in Foreign Shares. With respect to
any foreign shares pledged to Agent, for the benefit of the Lenders, on or after
the Closing Date, Agent shall at all times, in the discretion of Agent or the
Required Lenders, have the right to perfect, at Borrower’s cost, payable upon
request therefor (including, without limitation, any foreign counsel, or foreign
notary, filing, registration or similar, fees, costs or expenses), its security
interest in such shares in the respective foreign jurisdiction; provided,
however, that, if Agent, in its reasonable discretion after consultation with
Borrower, determines that the cost of perfecting, in a foreign jurisdiction, the
security interest of Agent, for the benefit of the Lenders, in the Pledged
Securities relating to any First-Tier Material Foreign Subsidiary is impractical
or cost-prohibitive, then Agent may agree to forego the foreign perfection of
such security interest.

 

(e) Release of Interest in Foreign Shares. At the written request of Borrower,
Agent shall release its security interest in the pledged ownership interests of
any First-Tier Material Foreign Subsidiary in the event that (i) no Default or
Event of Default shall then exist or immediately thereafter shall begin to
exist, (ii) the book value of the assets of Borrower on a non-consolidated
basis, when aggregated with the aggregate consolidated assets of the Guarantors
of Payment (but excluding the consolidated assets of such First-Tier Material
Foreign Subsidiary and any other First-Tier Material Foreign Subsidiary not
subject to a pledge) exceeds eighty-five percent (85%) of the book value of the
aggregate Consolidated assets of Borrower (as determined for the most recently
completed fiscal quarter of Borrower), and (iii) the revenues of Borrower on a
non-consolidated basis, when aggregated with the aggregate consolidated revenues
of the Guarantors of Payment (but excluding the consolidated revenues of such
First-Tier Material Foreign Subsidiary and any other First-Tier Material Foreign
Subsidiary not

 

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subject to a pledge) exceeds eighty-five percent (85%) of the Consolidated
revenues of Borrower (as determined for the most recently completed fiscal
quarter of Borrower). Any such release shall not be effective until Agent shall
have executed a written release.

 

Section 5.20. Restrictive Agreements. Except as set forth in this Agreement,
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary to (a) make,
directly or indirectly, any Capital Distribution to Borrower, (b) make, directly
or indirectly, loans or advances or capital contributions to Borrower or (c)
transfer, directly or indirectly, any of the properties or assets of such
Subsidiary to Borrower; except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) customary non-assignment
provisions in leases or other agreements entered in the ordinary course of
business and consistent with past practices, or (iii) customary restrictions in
security agreements or mortgages securing Indebtedness or capital leases, of a
Company to the extent such restrictions shall only restrict the transfer of the
property subject to such security agreement, mortgage or lease.

 

Section 5.21. Guaranty Under Material Indebtedness Agreement. No Company shall
be or become a Guarantor of the Indebtedness incurred pursuant to any
Convertible Subordinated Note Agreement or any other Material Indebtedness
Agreement unless such Company shall also be a Guarantor of Payment under this
Agreement prior to or concurrently therewith.

 

Section 5.22. Pari Passu Ranking. The Obligations shall, and Borrower shall take
all necessary action to ensure that the Obligations shall, at all times, rank at
least pari passu in right of payment with all other senior unsecured
Indebtedness of Borrower.

 

Section 5.23. Convertible Subordinated Notes.

 

(a) Convertible Subordinated Note Agreement. Borrower shall not, without the
prior written consent of Agent and the Required Lenders, amend, restate,
supplement or otherwise modify or replace the Convertible Subordinated Note
Agreement (i) to modify any provision such that a Default or Event of Default
will exist, (ii) to increase the interest rate, (iii) if the Subordinated
Indebtedness is refinanced or reissued, permit the Convertible Subordinated
Notes to be payable prior to one year after the last day of the Commitment
Period, or (iv) if the Subordinated Indebtedness is extended (without
refinancing or reissuance), permit the Convertible Subordinated Notes to be
payable (A) after one year before the last day of the Commitment Period or (B)
prior to one year after the last day of the Commitment Period.

 

(b) Subordinated Indebtedness. The Obligations shall at all times constitute
senior indebtedness and designated senior indebtedness which is entitled to the
benefits of the subordination provisions of all outstanding Subordinated
Indebtedness, including, but not limited to, the Convertible Subordinated
Indebtedness, and there shall be no other Designated Senior Debt, as defined in
the Convertible Subordinated Note Agreement.

 

Section 5.24. Amendment of Organizational Documents. No Company shall amend its
Organizational Documents to change its name or state of organization, or
otherwise amend its Organizational Documents in any manner materially adverse to
the Lenders, without the prior written consent of Agent.

 

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ARTICLE VI. REPRESENTATIONS AND WARRANTIES

 

Section 6.1. Corporate Existence; Subsidiaries; Foreign Qualification. Each
Company is duly organized, validly existing, and in good standing under the laws
of its state or jurisdiction of incorporation or organization and is duly
qualified and authorized to do business and is in good standing as a foreign
entity in the jurisdictions where the character of its property or its business
activities makes such qualification necessary, except where a failure to qualify
will not result in a Material Adverse Effect. Schedule 6.1 hereto sets forth, as
of the Closing Date, each Subsidiary of Borrower (and whether such Subsidiary is
a Dormant Subsidiary), its state of formation, its relationship to Borrower,
including the percentage of each class of stock or other equity interest owned
by a Company, the location of its chief executive office and its principal place
of business.

 

Section 6.2. Corporate Authority. Each Credit Party has the right and power and
is duly authorized and empowered to enter into, execute and deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which each Credit Party is a party
have been duly authorized and approved by such Credit Party’s board of directors
or other governing body, as applicable, and are the valid and binding
obligations of such Credit Party, enforceable against such Credit Party in
accordance with their respective terms. The execution, delivery and performance
of the Loan Documents will not conflict with nor result in any breach in any of
the provisions of, or constitute a default under, or result in the creation of
any Lien (other than Liens permitted under Section 5.9 hereof) upon any assets
or property of any Company under the provisions of, such Company’s
Organizational Documents or any material agreement.

 

Section 6.3. Compliance with Laws and Contracts. Each Company:

 

(a) holds permits, certificates, licenses, orders, registrations, franchises,
authorizations, and other approvals from any Governmental Authority necessary
for the conduct of its business and is in compliance with any and all applicable
laws relating thereto, except in such instances in which the failure to comply
therewith could not be reasonably expected to have a Material Adverse Effect;

 

(b) is in compliance with any and all federal, state, local, or foreign
applicable statutes, rules, regulations, and orders including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment practices, except in such instances in which the
failure to comply therewith could not be reasonably expected to have a Material
Adverse Effect; and

 

(c) is not in violation of or in default under any agreement to which it is a
party or by which its assets are subject or bound, except in such instances in
which the failure to comply therewith could not be reasonably expected to have a
Material Adverse Effect.

 

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Section 6.4. Litigation and Administrative Proceedings. There are (a) no
lawsuits, actions, investigations, or other proceedings pending or, to the
knowledge of each Company, threatened against such Company, or in respect of
which any Company may have any liability, in any court or before any
Governmental Authority, arbitration board, or other tribunal, if determined
adversely, could reasonably be expected to have a Material Adverse Effect, (b)
no orders, writs, injunctions, judgments, or decrees of any court or government
agency or instrumentality to which any Company is a party or by which the
property or assets of any Company are bound, or (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of any Company, or, to the knowledge of each Company, threats of work stoppage,
strike, or pending demands for collective bargaining, which could reasonably be
expected to cause or result in a Material Adverse Effect.

 

Section 6.5. Title to Assets. Each Company has good title to and ownership of
all material property it purports to own, which property is free and clear of
all Liens, except those permitted under Section 5.9 hereof.

 

Section 6.6. Liens and Security Interests. On and after the Closing Date, except
for Liens permitted pursuant to Section 5.9 hereof, (a) there is and will be no
financing statement or similar notice of Lien outstanding covering any personal
property of any Company; (b) there is and will be no mortgage outstanding
covering any real property of any Company; and (c) no real or personal property
of any Company is subject to any security interest or Lien of any kind. No
Company has entered into any contract or agreement (other than a contract or
agreement entered into in connection with the purchase or lease of fixed assets
that prohibits Liens on such fixed assets, a contract for the sale of assets or
a restriction in a joint venture or similar agreement where the entity is not a
Subsidiary) that exists on or after the Closing Date that would prohibit Agent
or the Lenders from acquiring a Lien on, or a collateral assignment of, any of
the property or assets of any Company.

 

Section 6.7. Tax Returns. All material federal, state and local tax returns and
other reports required by law to be filed in respect of the income, business,
properties and employees of each Company have been filed and all taxes,
assessments, fees and other governmental charges that are due and payable have
been paid, except as otherwise permitted herein. The provision for taxes on the
books of each Company is adequate for all years not closed by applicable
statutes and for the current fiscal year.

 

Section 6.8. Environmental Laws. Each Company is in compliance in all material
respects with any and all Environmental Laws, including, without limitation, all
Environmental Laws in all jurisdictions in which any Company owns or operates,
or has owned or operated, a facility or site, arranges or has arranged for
disposal or treatment of hazardous substances, solid waste or other wastes,
accepts or has accepted for transport any hazardous substances, solid waste or
other wastes or holds or has held any interest in real property or otherwise,
except in such instances in which (a) such requirement of such Environmental Law
is being contested in good faith or a bona fide dispute exists with respect
thereto, or (b) the failure to comply therewith could not be reasonably expected
to have a Material Adverse Effect. No litigation or proceeding arising under,
relating to or in connection with any Environmental Law is pending or,

 

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to the best knowledge of each Company, threatened, against any Company, any real
property in which any Company holds or has held an interest or any past or
present operation of any Company, or if determined adversely, could reasonably
be expected to have a Material Adverse Effect. No release, threatened release or
disposal of hazardous waste, solid waste or other wastes is occurring, or has
occurred (other than those that are currently being cleaned up in accordance
with Environmental Laws), on, under or to any real property in which any Company
holds any interest or performs any of its operations, in violation of any
Environmental Law that could reasonably be expected to have a Material Adverse
Effect. As used in this Section 6.8, “litigation or proceeding” means any
demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any Governmental Authority or
private Person, or otherwise.

 

Section 6.9. Continued Business. There exists no actual, pending, or, to
Borrower’s knowledge, any threatened termination, cancellation or limitation of,
or any modification or change in the business relationship of any Company and
any customer or supplier, or any group of customers or suppliers, whose
purchases or supplies, individually or in the aggregate, could reasonably be
expected to cause or result in a Material Adverse Effect, and there exists no
present condition or state of facts or circumstances that would have a Material
Adverse Effect or prevent a Company from conducting such business or the
transactions contemplated by this Agreement in substantially the same manner in
which it was previously conducted.

 

Section 6.10. Employee Benefits Plans. As of the Closing Date, neither Borrower
nor any member of the Controlled Group maintains or has maintained within the
last six (6) years a Pension Plan subject to Title IV of ERISA. No ERISA Event
has occurred or is expected to occur with respect to an ERISA Plan that could
reasonably be expected to have a Material Adverse Effect. Full payment has been
made of all amounts that a Controlled Group member is required, under applicable
law or under the governing documents, to have paid as a contribution to or a
benefit under each ERISA Plan. With respect to each ERISA Plan that is intended
to be qualified under Code Section 401(a), and except as would not cause a
Material Adverse Effect, (a) the ERISA Plan and any associated trust
substantially comply with the applicable requirements of Code Section 401(a);
(b) the ERISA Plan and any associated trust have been amended to comply with all
such requirements as currently in effect, other than those requirements for
which a retroactive amendment can be made within the “remedial amendment period”
available under Code Section 401(b) (as extended under Treasury Regulations and
other Treasury pronouncements upon which taxpayers may rely); (c) the ERISA Plan
and any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the ERISA Plan qualifies under Code
Section 401(a), that the associated trust qualifies under Code Section 501(a)
and, if applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at
a time for which the above-described “remedial amendment period” has not yet
expired; (d) the ERISA Plan currently satisfies the requirements of Code Section
410(b), subject to any retroactive amendment that may be made within the
above-described “remedial amendment period”; and (e) no contribution made to the
ERISA Plan is subject to an excise tax under Code Section 4972. With respect to
any Pension Plan, the “accumulated benefit obligation” of Controlled Group
members with respect to the Pension Plan (as determined in accordance with
Statement of Accounting Standards No. 87, “Employers’ Accounting for Pensions”)
does not exceed the fair market value of Pension Plan assets.

 

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Section 6.11. Consents or Approvals. No consent, approval or authorization of,
or filing, registration or qualification with, any Governmental Authority or any
other Person is required to be obtained or completed by any Company in
connection with the execution, delivery or performance of any of the Loan
Documents, that has not already been obtained or completed.

 

Section 6.12. Solvency. Borrower has received consideration that is the
reasonable equivalent value of the obligations and liabilities that Borrower has
incurred to Agent and the Lenders. Borrower is not insolvent as defined in any
applicable state, federal or relevant foreign statute, nor will Borrower be
rendered insolvent by the execution and delivery of the Loan Documents to Agent
and the Lenders. Borrower is not engaged or about to engage in any business or
transaction for which the assets retained by it are or will be an unreasonably
small amount of capital, taking into consideration the obligations to Agent and
the Lenders incurred hereunder. Borrower does not intend to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they mature.

 

Section 6.13. Financial Statements. The audited Consolidated financial
statements of Borrower, for the fiscal year ended January 31, 2004 and the
unaudited Consolidated financial statements of Borrower for the fiscal quarter
ended July 31, 2004, furnished to Agent, are true and complete in all material
respects, have been prepared in accordance with GAAP, and fairly present the
financial condition of the Companies as of the dates of such financial
statements and the results of their operations for the periods then ending.
Since the dates of such statements, there has been no material adverse change in
any Company’s financial condition, properties or business or any change in any
Company’s accounting procedures.

 

Section 6.14. Regulations. No Company 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” (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United States of
America). Neither the granting of any Loan (or any conversion thereof) nor the
use of the proceeds of any Loan will violate, or be inconsistent with, the
provisions of Regulation T, U or X or any other Regulation of such Board of
Governors.

 

Section 6.15. Intellectual Property. Each Company owns or has the right to use
all of its material patents, patent applications, industrial designs,
trademarks, service marks, copyrights, licenses, and rights with respect to the
foregoing necessary for the conduct of its business, without any known conflict
with the rights of others, except for such conflicts that could not reasonably
be expected to have a Material Adverse Effect.

 

Section 6.16. Insurance. Each Company maintains with financially sound and
reputable insurers insurance with coverage and limits as required by law and as
is customary with Persons engaged in the same businesses as the Companies.

 

Section 6.17. Accurate and Complete Statements. Neither the Loan Documents nor
any written statement made by any Company in connection with any of the Loan
Documents

 

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contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein or in the Loan Documents not
misleading, provided that, with respect to projected financial information, each
Company represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. After due inquiry by
Borrower, there is no known fact that any Company has not disclosed to Agent and
the Lenders that has or is reasonably likely to have a Material Adverse Effect.

 

Section 6.18. Convertible Subordinated Note Agreement. No event of default (as
defined in the Convertible Subordinated Note Agreement) or default (as defined
in the Convertible Subordinated Note Agreement) exists, nor will any such event
of default or default exist immediately after the making of any Loan under this
Agreement. Borrower has not incurred any Designated Senior Debt (as defined in
the Convertible Subordinated Note Agreement) other than the Obligations. All of
the Obligations constitute both Senior Indebtedness and Designated Senior Debt
(as each term is defined in the Convertible Subordinated Note Agreement).

 

Section 6.19. Investment Company; Holding Company. No Company is (a) an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, or (b) subject to
regulation under the Public Utility Holding Company Act of 1935 or the Federal
Power Act, each as amended, or any foreign, federal, state or local statute or
regulation limiting its ability to incur Indebtedness.

 

Section 6.20. Defaults. No Default or Event of Default exists hereunder, nor
will any begin to exist immediately after the execution and delivery hereof.

 

ARTICLE VII. EVENTS OF DEFAULT

 

Each of the following shall constitute an Event of Default hereunder:

 

Section 7.1. Payments. If (a) the interest on any Loan or any commitment or
other fee shall not be paid in full when due and payable or within five Business
Days thereafter, or (b) the principal of any Loan shall not be paid in full when
due and payable.

 

Section 7.2. Special Covenants. If any Company shall fail or omit to perform and
observe Section 5.7, 5.8, 5.9, 5.11, 5.12, 5.13, 5.15, 5.21, 5.22 or 5.23
hereof.

 

Section 7.3. Other Covenants. If any Company shall fail or omit to perform and
observe any agreement or other provision (other than those referred to in
Section 7.1 or 7.2 hereof) contained or referred to in this Agreement or any
Related Writing that is on such Company’s part to be complied with, and that
Default shall not have been fully corrected within thirty (30) days after the
earlier of (a) any Financial Officer of such Company becomes aware of the
occurrence thereof, or (b) the giving of written notice thereof to Borrower by
Agent or the Required Lenders that the specified Default is to be remedied.

 

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Section 7.4. Representations and Warranties. If any representation, warranty or
statement made in or pursuant to this Agreement or any Related Writing or any
other material information furnished by any Company to the Lenders or any
thereof or any other holder of any Note, shall be false or erroneous in any
material aspect when made or deemed made.

 

Section 7.5. Cross Defaults.

 

(a) Convertible Subordinated Indebtedness. If (i) any event of default (as such
term or similar term is defined in any Convertible Subordinated Document) shall
occur under any Convertible Subordinated Document or any agreement executed in
connection therewith, or (ii) the Indebtedness incurred in connection with any
Convertible Subordinated Note shall be accelerated for any reason.

 

(b) Other Cross Defaults. If any Company shall default in the payment of
principal or interest due and owing under any Material Indebtedness Agreement
beyond any period of grace provided with respect thereto or in the performance
or observance of any other agreement, term or condition contained in any
agreement under which such obligation is created, and, if not waived in writing,
the effect of such default is to allow the acceleration of the maturity of such
Indebtedness or to permit the holder thereof to cause such Indebtedness to
become due prior to its stated maturity.

 

Section 7.6. ERISA Default. The occurrence of one or more ERISA Events that (a)
the Required Lenders, in their reasonable opinion, determine could have a
Material Adverse Effect, or (b) results in a material Lien on any of the assets
of any Company.

 

Section 7.7. Change in Control. If any Change in Control shall occur.

 

Section 7.8. Money Judgment. A final judgment or final order for the payment of
money shall be rendered against any Company by a court of competent
jurisdiction, that remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of thirty (30) days
after the date on which the right to appeal has expired; provided that the
aggregate amount of all such judgments for all such Companies shall exceed
Twenty-Five Million Dollars ($25,000,000) or shall otherwise create an Event of
Default under Section 7.5 hereof.

 

Section 7.9. Material Adverse Change. There shall have occurred any condition or
event that Agent or the Required Lenders reasonably determine has or has had a
Material Adverse Effect.

 

Section 7.10. Validity of Loan Documents. (a) Any material provision of any Loan
Document shall at any time for any reason cease to be valid, binding and
enforceable against any Credit Party; (b) the validity, binding effect or
enforceability of any Loan Document against any Credit Party shall be contested
by any Credit Party; (c) any Credit Party shall deny that it has any or further
liability or obligation under any Loan Document; or (d) any Loan Document shall
be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to Agent and the Lenders the
benefits purported to be created thereby. In addition to any other material Loan
Documents, this Agreement, each Note and each Guaranty of Payment shall be
deemed to be “material”.

 

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Section 7.11. Designated Senior Debt. If (a) any of the Obligations shall at any
time cease to constitute both Senior Debt and Designated Senior Debt, as each
term is defined in the Convertible Subordinated Note Agreement, or (b) any other
Indebtedness of Borrower shall constitute Designated Senior Debt, as defined in
the Convertible Subordinated Note Agreement.

 

Section 7.12. Solvency. If any Company (other than a Dormant Subsidiary) shall
(a) except as permitted pursuant to Section 5.12 hereof, discontinue business,
(b) generally not pay its debts as such debts become due, (c) make a general
assignment for the benefit of creditors, (d) apply for or consent to the
appointment of an interim receiver, a receiver and manager, an administrator,
sequestrator, monitor, a custodian, a trustee, an interim trustee, liquidator,
agent or other similar official of all or a substantial part of its assets or of
such Company, (e) be adjudicated a debtor or insolvent or have entered against
it an order for relief under Title 11 of the United States Code, as the same may
be amended from time to time, or under any other bankruptcy insolvency,
liquidation, winding-up, corporate or similar statute or law, foreign, federal,
state or provincial, in any applicable jurisdiction, now or hereafter existing,
as any of the foregoing the same may be amended from time to time, or other
applicable statute for jurisdictions outside of the United States, as the case
may be, (f) file a voluntary petition in bankruptcy, or file a proposal or
notice of intention to file a proposal or have an involuntary proceeding filed
against it and the same shall continue undismissed for a period of thirty (30)
days from commencement of such proceeding or case, or file a petition or an
answer or an application or a proposal seeking reorganization or an arrangement
with creditors or seeking to take advantage of any other law (whether federal,
provincial or state, or, if applicable, other jurisdiction) relating to relief
of debtors, or admit (by answer, by default or otherwise) the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal, provincial or state, or, if
applicable, other jurisdiction) relating to relief of debtors, (g) suffer or
permit or to continue unstayed and in effect for thirty (30) consecutive days
any judgment, decree or order entered by a court of competent jurisdiction, that
approves a petition or an application or a proposal seeking its reorganization
or appoints an interim receiver, a receiver and manager, an administrator,
custodian, trustee, interim trustee or liquidator of all or a substantial part
of its assets, or of such Company, (h) have assets, the value of which is less
than its liabilities (taking into account prospective and contingent
liabilities), (i) have a moratorium declared in respect of any of its
Indebtedness, or any analogous procedure or step is taken in any jurisdiction,
or (j) take, or omit to take, any action in order thereby to effect any of the
foregoing.

 

ARTICLE VIII. REMEDIES UPON DEFAULT

 

Notwithstanding any contrary provision or inference herein or elsewhere:

 

Section 8.1. Optional Defaults. If any Event of Default referred to in Section
7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10 or 7.11 hereof shall occur,
Agent may, with the consent of

 

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the Required Lenders, and shall, at the written request of the Required Lenders,
give written notice to Borrower, to:

 

(a) terminate the Commitment, if not previously terminated, and, immediately
upon such election, the obligations of the Lenders, and each thereof, to make
any further Loan immediately shall be terminated; and/or

 

(b) accelerate the maturity of all of the Obligations (if the Obligations are
not already due and payable), whereupon all of the Obligations shall become and
thereafter be immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind, all of which are
hereby waived by Borrower.

 

Section 8.2. Automatic Defaults. If any Event of Default referred to in Section
7.12 hereof shall occur:

 

(a) all of the Commitment shall automatically and immediately terminate, if not
previously terminated, and no Lender thereafter shall be under any obligation to
grant any further Loan; and

 

(b) the principal of and interest then outstanding on all of the Loans, and all
of the other Obligations, shall thereupon become and thereafter be immediately
due and payable in full (if the Obligations are not already due and payable),
all without any presentment, demand or notice of any kind, which are hereby
waived by Borrower.

 

Section 8.3. Offsets. If there shall occur or exist any Event of Default
referred to in Section 7.12 hereof or if the maturity of the Obligations is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Lender shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all of the Obligations then owing by Borrower or a Guarantor
of Payment to such Lender (including, without limitation, any participation
purchased or to be purchased pursuant to Section 8.4 hereof), whether or not the
same shall then have matured, any and all deposit (general or special) balances
and all other indebtedness then held or owing by such Lender (including, without
limitation, by branches and agencies or any affiliate of such Lender, wherever
located) to or for the credit or account of Borrower or any Guarantor of
Payment, all without notice to or demand upon Borrower or any other Person, all
such notices and demands being hereby expressly waived by Borrower. Provided
that an Event of Default has not occurred under Section 7.12 hereof, each of the
Lenders agrees promptly to notify Borrower and Agent after any such set-off and
application made by such Lender. The failure to give such notice shall not
affect the validity of such set-off and application.

 

Section 8.4. Equalization Provision. Each Lender agrees with the other Lenders
that if it, at any time, shall obtain any Advantage over the other Lenders or
any thereof in respect of the Obligations (except under Article III hereof), it
shall purchase from the other Lenders, for cash and at par, such additional
participation in the Obligations as shall be necessary to nullify the Advantage.
If any such Advantage resulting in the purchase of an additional participation
as aforesaid shall be recovered in whole or in part from the Lender receiving
the Advantage, each such purchase shall be rescinded, and the purchase price
restored (but without interest unless the

 

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Lender receiving the Advantage is required to pay interest on the Advantage to
the Person recovering the Advantage from such Lender) ratably to the extent of
the recovery. Each Lender further agrees with the other Lenders that if it at
any time shall receive any payment for or on behalf of Borrower on any
Indebtedness owing by Borrower to that Lender (whether by voluntary payment, by
realization upon security, by reason of offset of any deposit or other
indebtedness, by counterclaim or cross-action, by the enforcement of any right
under any Loan Document, or otherwise), it will apply such payment first to any
and all Obligations owing by Borrower to that Lender (including, without
limitation, any participation purchased or to be purchased pursuant to this
Section 8.4 or any other Section of this Agreement). Each Credit Party agrees
that any Lender so purchasing a participation from the other Lenders or any
thereof pursuant to this Section 8.4 may exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were a direct creditor of such Credit Party in the amount of such
participation.

 

Section 8.5. Other Remedies. The remedies in this Article VIII are in addition
to, not in limitation of, any other right, power, privilege, or remedy, either
in law, in equity, or otherwise, to which the Lenders may be entitled. Agent
shall exercise the rights under this Article VIII and all other collection
efforts on behalf of the Lenders and no Lender shall act independently with
respect thereto, except as otherwise specifically set forth in this Agreement.

 

ARTICLE IX. THE AGENT

 

The Lenders authorize KeyBank National Association and KeyBank National
Association hereby agrees to act as agent for the Lenders in respect of this
Agreement upon the terms and conditions set forth elsewhere in this Agreement,
and upon the following terms and conditions:

 

Section 9.1. Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers hereunder as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither Agent
nor any of its affiliates, directors, officers, attorneys or employees shall (a)
be liable for any action taken or omitted to be taken by it or them hereunder or
in connection herewith, except for its or their own gross negligence or willful
misconduct (as determined by a court of competent jurisdiction), or be
responsible in any manner to any of the Lenders for the effectiveness,
enforceability, genuineness, validity or due execution of this Agreement or any
other Loan Documents, (b) be under any obligation to any Lender to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of Borrower or any other Company, or
the financial condition of Borrower or any other Company, or (c) be liable to
any of the Companies for consequential damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation, documentation,
administration or collection of the Loans or any of the Loan Documents.

 

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Section 9.2. Note Holders. Agent may treat the payee of any Note as the holder
thereof until written notice of transfer shall have been filed with Agent,
signed by such payee and in form satisfactory to Agent.

 

Section 9.3. Consultation With Counsel. Agent may consult with legal counsel
selected by Agent and shall not be liable for any action taken or suffered in
good faith by Agent in accordance with the opinion of such counsel.

 

Section 9.4. Documents. Agent shall not be under any duty to examine into or
pass upon the validity, effectiveness, genuineness or value of any Loan Document
or any other Related Writing furnished pursuant hereto or in connection herewith
or the value of any collateral obtained hereunder, and Agent shall be entitled
to assume that the same are valid, effective and genuine and what they purport
to be.

 

Section 9.5. Agent and Affiliates. With respect to the Loans, Agent shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not Agent, and Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Company or any Affiliate.

 

Section 9.6. Knowledge of Default. It is expressly understood and agreed that
Agent shall be entitled to assume that no Default or Event of Default has
occurred, unless Agent has been notified by a Lender in writing that such Lender
believes that a Default or Event of Default has occurred and is continuing and
specifying the nature thereof or has been notified by Borrower pursuant to
Section 5.14 hereof.

 

Section 9.7. Action by Agent. Subject to the other terms and conditions hereof,
so long as Agent shall be entitled, pursuant to Section 9.6 hereof, to assume
that no Default or Event of Default shall have occurred and be continuing, Agent
shall be entitled to use its discretion with respect to exercising or refraining
from exercising any rights that may be vested in it by, or with respect to
taking or refraining from taking any action or actions that it may be able to
take under or in respect of, this Agreement. Agent shall incur no liability
under or in respect of this Agreement by acting upon any notice, certificate,
warranty or other paper or instrument believed by it to be genuine or authentic
or to be signed by the proper party or parties, or with respect to anything that
it may do or refrain from doing in the reasonable exercise of its judgment, or
that may seem to it to be necessary or desirable in the premises.

 

Section 9.8. Release of a Guarantor of Payment. In the event of a merger, sale
of assets or other transaction permitted pursuant to this Agreement or pursuant
to Section 5.19 hereof and so long as there is no Event of Default existing,
Agent, at the request and expense of Borrower, is hereby authorized by the
Lenders to release, in connection therewith, one or more Guarantors of Payment
or pledge of pledged securities upon the written request of Borrower.

 

Section 9.9. Notice of Default. In the event that Agent shall have acquired
actual knowledge of any Default or Event of Default, Agent shall promptly notify
the Lenders and shall take such action and assert such rights under this
Agreement as the Required Lenders shall direct and Agent shall inform the other
Lenders in writing of the action taken. Agent may take such action and assert
such rights as it deems to be advisable, in its discretion, for the protection
of the interests of the holders of the Obligations.

 

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Section 9.10. Indemnification of Agent. The Lenders agree to indemnify Agent (to
the extent not reimbursed by Borrower) ratably, according to their respective
Commitment Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys’ fees) or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by or asserted against Agent in its capacity as
agent in any way relating to or arising out of this Agreement or any Loan
Document or any action taken or omitted by Agent with respect to this Agreement
or any Loan Document, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys’ fees) or disbursements resulting
from Agent’s gross negligence or willful misconduct as determined by a court of
competent jurisdiction, or from any action taken or omitted by Agent in any
capacity other than as agent under this Agreement or any other Loan Document.

 

Section 9.11. Successor Agent. Agent may resign as agent hereunder by giving not
fewer than thirty (30) days prior written notice to Borrower and the Lenders. If
Agent shall resign under this Agreement, then either (a) the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders (with the
consent of Borrower so long as an Event of Default has not occurred and which
consent shall not be unreasonably withheld), or (b) if a successor agent shall
not be so appointed and approved within the thirty (30) day period following
Agent’s notice to the Lenders of its resignation, then Agent shall appoint a
successor agent that shall serve as agent until such time as the Required
Lenders appoint a successor agent. Upon its appointment, such successor agent
shall succeed to the rights, powers and duties as agent, and the term “Agent”
shall mean such successor effective upon its appointment, and the former agent’s
rights, powers and duties as agent shall be terminated without any other or
further act or deed on the part of such former agent or any of the parties to
this Agreement.

 

Section 9.12. Other Agents. As used in this Agreement, the term “Agent” shall
only include Agent. Neither the Co-Documentation Agents nor the Syndication
Agent shall have any rights, obligations or responsibilities hereunder in such
capacity.

 

ARTICLE X. MISCELLANEOUS

 

Section 10.1. Lenders’ Independent Investigation. Each Lender, by its signature
to this Agreement, acknowledges and agrees that Agent has made no representation
or warranty, express or implied, with respect to the creditworthiness, financial
condition, or any other condition of any Company or with respect to the
statements contained in any information memorandum furnished in connection
herewith or in any other oral or written communication between Agent and such
Lender. Each Lender represents that it has made and shall continue to make its
own independent investigation of the creditworthiness, financial condition and
affairs of the Companies in connection with the extension of credit hereunder,
and agrees that Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto (other than such notices as may be expressly

 

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required to be given by Agent to the Lenders hereunder), whether coming into its
possession before the first Credit Event hereunder or at any time or times
thereafter. Each Lender further represents that it has reviewed each of the Loan
Documents, and has received copies of and reviewed the Convertible Subordinated
Documents, including but not limited to, the conditions relating to the status
of the Obligations as Designated Senior Debt (as defined in the Convertible
Subordinated Notes).

 

Section 10.2. No Waiver; Cumulative Remedies. No omission or course of dealing
on the part of Agent, any Lender or the holder of any Note in exercising any
right, power or remedy hereunder or under any of the Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder or under any of the
Loan Documents. The remedies herein provided are cumulative and in addition to
any other rights, powers or privileges held by operation of law, by contract or
otherwise.

 

Section 10.3. Amendments, Consents. No amendment, modification, termination, or
waiver of any provision of any Loan Document nor consent to any variance
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. Anything
herein to the contrary notwithstanding, unanimous consent of the Lenders shall
be required with respect to (a) any increase in the Commitment, (b) the
extension of maturity of the Loans, the payment date of interest or scheduled
principal thereunder, or the payment date of commitment or other fees or amounts
payable hereunder, (c) any reduction in the rate of interest on the Loans
(provided that the institution of the Default Rate and a subsequent removal of
the Default Rate shall not constitute a decrease in interest rate pursuant to
this Section 10.3), or in any amount of scheduled principal or interest due on
any Loan, or the payment of commitment or other fees hereunder or any change in
the manner of pro rata application of any payments made by Borrower to the
Lenders hereunder, (d) any change in any percentage voting requirement, voting
rights, or the Required Lenders definition in this Agreement, (e) the release of
any Guarantor of Payment or pledge of Pledged Securities except as specifically
permitted hereunder, or (f) any amendment to this Section 10.3 or Section 8.4
hereof; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of Borrower to pay interest at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
to reduce any fee payable hereunder. Notice of amendments or consents ratified
by the Lenders hereunder shall be forwarded by Agent to all of the Lenders. Each
Lender or other holder of a Note (or interest in any Loan) shall be bound by any
amendment, waiver or consent obtained as authorized by this Section, regardless
of its failure to agree thereto.

 

Section 10.4. Notices. All notices, requests, demands and other communications
provided for hereunder shall be in writing and, if to Borrower, mailed or
delivered to it, addressed to it at the address specified on the signature pages
of this Agreement (with a courtesy copy to Borrower at 2315 North First Street,
San Jose, California 95131, Attn: General Counsel), if to a Lender, mailed or
delivered to it, addressed to the address of such Lender specified on the
signature pages of this Agreement, or, as to each party, at such other address
as shall be

 

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designated by such party in a written notice to each of the other parties. All
notices, statements, requests, demands and other communications provided for
hereunder shall be given by overnight delivery or first class mail with postage
prepaid by registered or certified mail, addressed as aforesaid, or sent by
facsimile or e-mail (with telephonic or e-mail confirmation of receipt of such
facsimile or e-mail), except that all notices hereunder shall not be effective
until received.

 

Section 10.5. Costs, Expenses and Taxes. Borrower agrees to pay within thirty
(30) days of demand all costs and expenses of Agent, including, but not limited
to, (a) syndication, administration, travel and out-of-pocket expenses,
including but not limited to reasonable attorneys’ fees and expenses, of Agent
in connection with the preparation, negotiation and closing of the Loan
Documents and the administration of the Loan Documents, the collection and
disbursement of all funds hereunder and the other instruments and documents to
be delivered hereunder, (b) extraordinary expenses of Agent in connection with
the administration of the Loan Documents and the other instruments and documents
to be delivered hereunder, and (c) the reasonable fees and out-of-pocket
expenses of special counsel for Agent, with respect to the foregoing, and of
local counsel, if any, who may be retained by said special counsel with respect
thereto. Borrower also agrees to pay on demand all costs and expenses of Agent
and the Lenders, including reasonable attorneys’ fees and expenses, in
connection with the restructuring or enforcement of the Obligations, this
Agreement or any Related Writing. In addition, Borrower shall pay any and all
stamp, transfer, documentary and other taxes, assessments, charges and fees
payable or determined to be payable in connection with the execution and
delivery of the Loan Documents, and the other instruments and documents to be
delivered hereunder, and agrees to hold Agent and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or failure to pay such taxes or fees.

 

Section 10.6. Indemnification. Borrower agrees to defend, indemnify and hold
harmless Agent and the Lenders (and their respective affiliates, officers,
directors, attorneys, agents and employees) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys’ fees) or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against Agent
or any Lender in connection with any investigative, administrative or judicial
proceeding (whether or not such Lender or Agent shall be designated a party
thereto) or any other claim by any Person relating to or arising out of any Loan
Document or any actual or proposed use of proceeds of the Loans or any of the
Obligations, or any activities of any Company or its Affiliates; provided that
no Lender nor Agent shall have the right to be indemnified under this Section
10.6 for its own gross negligence or willful misconduct as determined by a court
of competent jurisdiction. All obligations provided for in this Section 10.6
shall survive any termination of this Agreement. All amounts due under this
Section 10.6 shall be payable not later than thirty (30) days after demand
therefor.

 

Section 10.7. Obligations Several; No Fiduciary Obligations. The obligations of
the Lenders hereunder are several and not joint. Nothing contained in this
Agreement and no action taken by Agent or the Lenders pursuant hereto shall be
deemed to constitute Agent or the Lenders a partnership, association, joint
venture or other entity. No default by any Lender hereunder shall excuse the
other Lenders from any obligation under this Agreement; but no

 

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Lender shall have or acquire any additional obligation of any kind by reason of
such default. The relationship between Borrower and the Lenders with respect to
the Loan Documents and the Related Writings is and shall be solely that of
debtor and creditors, respectively, and neither Agent nor any Lender shall have
any fiduciary obligation toward any Credit Party with respect to any such
documents or the transactions contemplated thereby.

 

Section 10.8. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts
and by facsimile signature, each of which counterparts when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement.

 

Section 10.9. Binding Effect; Borrower’s Assignment. This Agreement shall become
effective when it shall have been executed by Borrower, Agent and each Lender
and thereafter shall be binding upon and inure to the benefit of Borrower, Agent
and each of the Lenders and their respective successors and assigns, except that
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of Agent and all of the Lenders.

 

Section 10.10. Lender Assignments.

 

(a) Assignments of Commitments. Each Lender shall have the right at any time or
times to assign to an Eligible Transferee (other than to a Lender that shall not
be in compliance with this Agreement), without recourse, all or a percentage of
all of the following: (i) such Lender’s Revolving Credit Commitment, (ii) all
Loans made by that Lender, and (iii) such Lender’s Notes, and any participation
purchased pursuant to Section 8.4 hereof.

 

(b) Prior Consent. No assignment may be consummated pursuant to this Section
10.10 without the prior written consent of Borrower and Agent (other than an
assignment by any Lender to any affiliate of such Lender which affiliate is an
Eligible Transferee and either wholly-owned by a Lender or is wholly-owned by a
Person that wholly owns, either directly or indirectly, such Lender, or to
another Lender), which consent of Borrower and Agent shall not be unreasonably
withheld; provided, however, that Borrower’s consent shall not be required if,
at the time of the proposed assignment, any Default or Event of Default shall
then exist. Anything herein to the contrary notwithstanding, any Lender may at
any time make a collateral assignment of all or any portion of its rights under
the Loan Documents to a Federal Reserve Bank, and no such assignment shall
release such assigning Lender from its obligations hereunder.

 

(c) Minimum Amount. Each such assignment shall be in a minimum amount of the
lesser of Five Million Dollars ($5,000,000) of the assignor’s Commitment and
interest herein or the entire amount of the assignor’s Commitment and interest
herein.

 

(d) Assignment Fee. Unless the assignment shall be to an affiliate of the
assignor or the assignment shall be due to merger of the assignor or for
regulatory purposes, either the assignor or the assignee shall remit to Agent,
for its own account, an administrative fee of Three Thousand Five Hundred
Dollars ($3,500).

 

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(e) Assignment Agreement. Unless the assignment shall be due to merger of the
assignor or a collateral assignment for regulatory purposes, the assignor shall
(i) cause the assignee to execute and deliver to Borrower and Agent an
Assignment Agreement, and (ii) execute and deliver, or cause the assignee to
execute and deliver, as the case may be, to Agent such additional amendments,
assurances and other writings as Agent may reasonably require.

 

(f) Non-U.S. Assignee. If the assignment is to be made to an assignee that is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the assignor Lender shall cause such assignee, at least five
Business Days prior to the effective date of such assignment, (i) to represent
to the assignor Lender (for the benefit of the assignor Lender, Agent and
Borrower) that under applicable law and treaties no taxes will be required to be
withheld by Agent, Borrower or the assignor with respect to any payments to be
made to such assignee in respect of the Loans hereunder, (ii) to furnish to the
assignor Lender (and, in the case of any assignee registered in the Register (as
defined below), Agent and Borrower) either U.S. Internal Revenue Service Form
W-8ECI or U.S. Internal Revenue Service Form W-8BEN, as applicable (wherein such
assignee claims entitlement to complete exemption from U.S. federal withholding
tax on all payments hereunder), and (iii) to agree (for the benefit of the
assignor, Agent and Borrower) to provide to the assignor Lender (and, in the
case of any assignee registered in the Register, to Agent and Borrower) a new
Form W-8ECI or Form W-8BEN, as applicable, upon the expiration or obsolescence
of any previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such assignee, and to comply from time to time with all applicable U.S. laws
and regulations with regard to such withholding tax exemption.

 

(g) Deliveries by Borrower. Upon satisfaction of all applicable requirements
specified in subsections (a) through (f) above, Borrower shall execute and
deliver (i) to Agent, the assignor and the assignee, any consent or release (of
all or a portion of the obligations of the assignor) required to be delivered by
Borrower in connection with the Assignment Agreement, and (ii) to the assignee
and the assignor, if applicable, an appropriate Note or Notes. After delivery of
the new Note or Notes, the assignor’s Note or Notes being replaced shall be
returned to Borrower marked “replaced”.

 

(h) Effect of Assignment. Upon satisfaction of all applicable requirements set
forth in subsections (a) through (g) above, and any other condition contained in
this Section 10.10, (i) the assignee shall become and thereafter be deemed to be
a “Lender” for the purposes of this Agreement, (ii) the assignor shall be
released from its obligations hereunder to the extent that its interest has been
assigned, (iii) in the event that the assignor’s entire interest has been
assigned, the assignor shall cease to be and thereafter shall no longer be
deemed to be a “Lender” and (iv) the signature pages hereto and Schedule 1
hereto shall be automatically amended, without further action, to reflect the
result of any such assignment.

 

(i) Agent to Maintain Register. Agent shall maintain at the address for notices
referred to in Section 10.4 hereof a copy of each Assignment Agreement delivered
to it and a register (the “Register”) for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and Borrower,

 

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Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

Section 10.11. Sale of Participations. Any Lender may, in the ordinary course of
its commercial banking business and in accordance with applicable law, at any
time sell participations to one or more Eligible Transferees (each a
“Participant”) in all or a portion of its rights or obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Commitment and the Loans and participations owing to it and the
Note held by it); provided, that:

 

(a) any such Lender’s obligations under this Agreement and the other Loan
Documents shall remain unchanged;

 

(b) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations;

 

(c) the parties hereto shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and each of the other Loan Documents;

 

(d) such Participant shall be bound by the provisions of Section 8.4 hereof, and
the Lender selling such participation shall obtain from such Participant a
written confirmation of its agreement to be so bound; and

 

(e) no Participant (unless such Participant is itself a Lender) shall be
entitled to require such Lender to take or refrain from taking action under this
Agreement or under any other Loan Document, except that such Lender may agree
with such Participant that such Lender will not, without such Participant’s
consent, take action of the type described as follows:

 

(i) increase the portion of the participation amount of any Participant over the
amount thereof then in effect, or extend the Commitment Period, without the
written consent of each Participant affected thereby; or

 

(ii) reduce the principal amount of or extend the time for any payment of
principal of any Loan, or reduce the rate of interest or extend the time for
payment of interest on any Loan, or reduce the commitment fee, without the
written consent of each Participant affected thereby.

 

Borrower agrees that any Lender that sells participations pursuant to this
Section 10.11 shall still be entitled to the benefits of Article III hereof,
notwithstanding any such transfer; provided, however, that the obligations of
Borrower shall not increase as a result of such transfer and Borrower shall have
no obligation to any Participant.

 

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Section 10.12. Severability of Provisions; Captions; Attachments. Any provision
of this Agreement that shall be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement. Each schedule or exhibit attached to this
Agreement shall be incorporated herein and shall be deemed to be a part hereof.

 

Section 10.13. Investment Purpose. Each of the Lenders represents and warrants
to Borrower that it is entering into this Agreement with the present intention
of acquiring any Note issued pursuant hereto for investment purposes only and
not for the purpose of distribution or resale, it being understood, however,
that each Lender shall at all times retain full control over the disposition of
its assets.

 

Section 10.14. Entire Agreement. This Agreement, any Note and any other Loan
Document or other agreement, document or instrument attached hereto or executed
on or as of the Closing Date integrate all of the terms and conditions mentioned
herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter hereof.

 

Section 10.15. Confidentiality. Agent and each Lender shall hold all
Confidential Information in accordance with the customary procedures of Agent or
such Lender for handling confidential information of this nature, and in
accordance with safe and sound banking practices. Notwithstanding the foregoing,
Agent or any Lender may in any event make disclosures of, and furnish copies of
Confidential Information (a) to another agent under this Agreement or another
Lender; (b) when reasonably required by any bona fide transferee or participant
in connection with the contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective transferee or
participant shall execute an agreement for the benefit of Borrower with such
prospective transferor Lender or participant containing provisions substantially
identical to those contained in this Section 10.15); (c) to the parent
corporation or other affiliates of Agent or such Lender, and to their respective
auditors and attorneys; and (d) as required or requested by any Governmental
Authority or representative thereof, or pursuant to legal process, provided,
that, unless specifically prohibited by applicable law or court order, Agent or
such Lender, as applicable, shall notify the chief financial officer of Borrower
of any request by any Governmental Authority or representative thereof (other
than any such request in connection with an examination of the financial
condition of Agent or such Lender by such Governmental Authority), and of any
other request pursuant to legal process, for disclosure of any such non-public
information prior to disclosure of such Confidential Information. In no event
shall Agent or any Lender be obligated or required to return any materials
furnished by or on behalf of any Company. Borrower hereby agrees that the
failure of Agent or any Lender to comply with the provisions of this Section
10.15 shall not relieve Borrower of any of the obligations to Agent and the
Lenders under this Agreement and the other Loan Documents.

 

Section 10.16. Legal Representation of Parties. The Loan Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or

 

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interpretation otherwise requiring this Agreement or any other Loan Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.

 

Section 10.17. Governing Law; Submission to Jurisdiction. This Agreement, each
of the Notes and any Related Writing shall be governed by and construed in
accordance with the laws of the State of Ohio and the respective rights and
obligations of Borrower, Agent, and the Lenders shall be governed by Ohio law,
without regard to principles of conflicts of laws. Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any Ohio state or federal court
sitting in Cleveland, Ohio, over any action or proceeding arising out of or
relating to this Agreement, the Obligations or any Related Writing, and Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such Ohio state or federal court.
Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to the laying of venue in any action or proceeding in any such court as
well as any right it may now or hereafter have to remove such action or
proceeding, once commenced, to another court on the grounds of FORUM NON
CONVENIENS or otherwise. Borrower agrees that a final, nonappealable 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.

 

[Remainder of page left intentionally blank]

 

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Section 10.18. JURY TRIAL WAIVER. TO THE EXTENT PERMITTED BY LAW, BORROWER,
AGENT AND EACH LENDER WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER,
AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Credit
Agreement as of the date first set forth above.

 

Address:

  

2315 North First Street

San Jose, California 95131

Attn: Treasurer

   BEA SYSTEMS, INC.                       By:  

 

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

          Name:  

 

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

     For informational purposes only:    Title:  

 

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     Email: tknight@bea.com               Website: www.bea.com         

 

Address:

   601 108th Avenue, N.E., 5th Floor    KEYBANK NATIONAL ASSOCIATION,     
Bellevue, Washington 98004        as Agent and as a Lender      Attn:
Institutional Banking                By:  

 

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              Robert W. Boswell               Vice President

Address:

   121 Park Center Plaza, 3rd Floor    WELLS FARGO BANK, N.A.,      San Jose,
California 95113        as Syndication Agent and as a Lender      Attn: Karen
Byler                By:  

 

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Karen Byler

              Vice President

Address:

   540 West Madison Street,    ABN AMRO BANK N.V.,      Suite 2621        as
Co-Documentation Agent and as a Lender     

Chicago, Illinois 60661-2591

Attn: Credit Administration

               By:  

 

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          Name:  

 

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          Title:  

 

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          By:  

 

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          Name:  

 

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          Title:  

 

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Signature Page

1 of 2 of the Credit Agreement

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Address:

   315 Montgomery Street, 6th Floor    BANK OF AMERICA, N.A.,      San
Francisco, California 94104        as Co-Documentation Agent and as a Lender  
  

Attn: Aileen B. Supena

Mail Code: CA5-704-06-37

               By:  

 

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              Kevin McMahon               Managing Director

Address:

   226 Airport Parkway, Suite 100    COMERICA BANK,      San Jose, California
95110        as Co-Documentation Agent and as a Lender      Attn: Robert Shutt
               By:  

 

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          Name:  

 

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          Title:  

 

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Address:

   277 Park Avenue    SUMITOMO MITSUI BANKING CORP.,      New York, New York
10172        NEW YORK      Attn: David Kee                By:  

 

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              Leo Pagarigan               Senior Vice President

 

Signature Page

2 of 2 of the Credit Agreement

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EXHIBIT A

FORM OF

REVOLVING CREDIT NOTE

 

$                    

October 12, 2004

 

FOR VALUE RECEIVED, the undersigned, BEA SYSTEMS, INC., a Delaware corporation
(“Borrower”), promises to pay, on the last day of the Commitment Period, as
defined in the Credit Agreement (as hereinafter defined), to the order of
                     (“Lender”) at the main office of KEYBANK NATIONAL
ASSOCIATION, as Agent, as hereinafter defined, 127 Public Square, Cleveland,
Ohio 44114-1306 the principal sum of

 

_________________________________________________________________________________________________DOLLARS

 

or the aggregate unpaid principal amount of all Revolving Loans, as defined in
the Credit Agreement made by Lender to Borrower pursuant to Section 2.2 of the
Credit Agreement, whichever is less, in lawful money of the United States of
America.

 

As used herein, “Credit Agreement” means the Credit Agreement dated as of
October 12, 2004, among Borrower, the Lenders, as defined therein, KeyBank
National Association, as lead arranger and administrative agent for the Lenders
(“Agent”), Wells Fargo Bank, N.A., as syndication agent, and ABN AMRO Bank N.V.,
Bank of America, N.A., and Comerica Bank, as co-documentation agents, as the
same may from time to time be amended, restated or otherwise modified. Each
capitalized term used herein that is defined in the Credit Agreement and not
otherwise defined herein shall have the meaning ascribed to it in the Credit
Agreement.

 

Borrower also promises to pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Revolving
Loan until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.3(a) of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.3(a); provided, however, that interest on any principal portion that
is not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base
Rate Loans and Eurodollar Loans, and payments of principal of any thereof, shall
be shown on the records of Lender by such method as Lender may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrower under this Note.

 

If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds.

 

This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.

 

E-1

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Except as expressly provided in the Credit Agreement, Borrower expressly waives
presentment, demand, protest and notice of any kind. This Note shall be governed
by and construed in accordance with the laws of the State of Ohio, without
regard to conflicts of laws provisions.

 

JURY TRIAL WAIVER. BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE LENDERS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

BEA SYSTEMS, INC.

By:

 

 

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Name:

 

 

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Title:

 

 

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E-2

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EXHIBIT B

FORM OF

NOTICE OF LOAN

 

[Date]                , 20        

 

KeyBank National Association, as Agent

601 108th Avenue, N.E., 5th Floor

Bellevue, Washington 98004

Attention: Institutional Banking

 

Ladies and Gentlemen:

 

The undersigned, BEA SYSTEMS, INC., refers to the Credit Agreement, dated as of
October 12, 2004 (“Credit Agreement”, the terms defined therein being used
herein as therein defined), among the undersigned, the Lenders, as defined in
the Credit Agreement, and KeyBank National Association, as Agent, and hereby
gives you notice, pursuant to Section 2.5 of the Credit Agreement that the
undersigned hereby requests a Loan under the Credit Agreement, and in connection
therewith sets forth below the information relating to the Loan (the “Proposed
Loan”) as required by Section 2.5 of the Credit Agreement:

 

  (a) The Business Day of the Proposed Loan is                 , 20        .

 

  (b) The amount of the Proposed Loan is $                    .

 

  (c) The Proposed Loan is a Base Rate Loan         , Eurodollar Loan         .
(Check one.)

 

  (d) If the Proposed Loan is a Eurodollar Loan, the Interest Period requested
is one month         , two months         , three months         , six months
        . (Check one.)

 

The undersigned hereby certifies on behalf of Borrower that the following
statements are true on the date hereof, and will be true on the date of the
Proposed Loan:

 

(i) the representations and warranties contained in each Loan Document are
correct in all material respects, before and after giving effect to the Proposed
Loan and the application of the proceeds therefrom, as though made on and as of
such date;

 

(ii) no event has occurred and is continuing, or would result from such Proposed
Loan, or the application of proceeds therefrom, that constitutes a Default or
Event of Default; and

 

E-3

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(iii) the conditions set forth in Section 2.5 and Article IV of the Credit
Agreement have been satisfied.

 

BEA SYSTEMS, INC.

By:

 

 

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Name:

 

 

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Title:

 

 

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E-4

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EXHIBIT C

FORM OF

COMPLIANCE CERTIFICATE

 

For Fiscal Quarter ended                     

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

(1) I am the duly elected President, Chief Financial Officer, Senior Vice
President of Finance or Treasurer of BEA SYSTEMS, INC., a Delaware corporation
(“Borrower”);

 

(2) I am familiar with the terms of that certain Credit Agreement, dated as of
October 12, 2004, among the undersigned, the lenders named on Schedule 1 thereto
(together with their respective successors and assigns, collectively, the
“Lenders”), as defined in the Credit Agreement, and KeyBank National
Association, as Agent (as the same may from time to time be amended, restated or
otherwise modified, the “Credit Agreement”, the terms defined therein being used
herein as therein defined), and the terms of the other Loan Documents, and I
have made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of Borrower and its
Subsidiaries during the accounting period covered by the attached financial
statements;

 

(3) The review described in paragraph (2) above did not disclose, and I have no
knowledge of, the existence of any condition or event that constitutes or
constituted a Default or Event of Default, at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate;

 

(4) The representations and warranties made by Borrower contained in each Loan
Document are true and correct in all material respects as though made on and as
of the date hereof; and

 

(5) Set forth on Attachment I hereto are calculations of the financial covenants
set forth in Sections 5.7 of the Credit Agreement, which calculations show
compliance with the terms thereof.

 

IN WITNESS WHEREOF, I have signed this certificate the          day of
                , 20        .

 

BEA SYSTEMS, INC.

By:

 

 

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Name:

 

 

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Title:

 

 

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E-5

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For the Quarter ended                          (“Statement Date”)

 

ATTACHMENT I

($ in 000’s)

 

I. Section 5.7(a) – Senior Leverage Ratio.

 

A.     Consolidated Senior Funded Indebtedness as of the Statement Date:

   $                

Consolidated EBITDA measured on the last day of any fiscal quarter of Borrower,
in accordance with the Credit Agreement definition:    

Number of Quarters Prior to Statement Date:

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

   Three Prior

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

   Two Prior

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

   One Prior

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

   Statement Date

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

   

1.      Consolidated Net Income:

   $                     $                     $                     $
                    

2.      Consolidated Interest Charges:

   $                     $                     $                     $
                    

3.      The amount of taxes, based on or measured by income, used or included in
the determination of such Consolidated Net Income:

   $                     $                     $                     $
                    

4.      The amount of depreciation and amortization expense deducted in
determining such Consolidated Net Income:

   $                     $                     $                     $
                    

5.      The amount of extraordinary or unusual losses or charges, and expenses
related to the issuance of employee stock options, deducted in determining such
Consolidated Net Income:

   $                     $                     $                     $
                    

6.      The amount of extraordinary or unusual gains deducted in determining
such Consolidated Net Income:

   $                     $                     $                     $
                     Quarterly Consolidated EBIDTA (sum of Lines 1-5, less Line
6)     
  Q1=
$                     
  Q2=
$                     
  Q3=
$                     
  Q4=
$                

B. Consolidated Trailing Four Quarter EBITDA as of the Statement Date (sum of Q1
through Q4):

   $                 

Senior Leverage Ratio (A. divided by B.)

                      to 1.00

Maximum Permitted:

     2.50 to 1.00

Compliance?

     Yes:             No:            

 

E-6

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II. Section 5.7(b) – Liquidity Ratio.

 

A.     Quick Assets

           

1.      Amount of cash and cash equivalents of Borrower and its Subsidiaries
(excluding restricted cash) as of the Statement Date:

   $                              

2.      Amount of all accounts receivable of Borrower and its Subsidiaries, less
all reserves or amounts owing from any Affiliate, shareholder, or employee
therefore, as of the Statement Date:

   $                              

3.      Amount of Quick Assets as of Statement Date (sum of Lines 1 and 2):

   $                         

B.     Current Liabilities

            Amount of current liabilities of Borrower and its Subsidiaries as of
the Statement Date:    $                               Liquidity Ratio (A.
divided by B.)                   to 1.00      Minimum Required:          1.15 to
1.00      Compliance?      Yes:     No:    

 

III. Section 5.7(c) – Minimum Cash Balance.

 

Cash Balance as of the Statement Date

   $                         

Minimum Required:

      

From the Closing Date through October 30, 2004:

   $ 275,000

From October 31, 2004 through January 30, 2005:

   $ 300,000

From January 31, 2005 through April 29, 2005:

   $ 325,000

From April 30, 2005 through July 30, 2005:

   $ 350,000

From July 31, 2005 through October 30, 2005:

   $ 375,000

Thereafter, increasing by an additional $25,000,000 on the last day of each
fiscal quarter.

            $                          Compliance?      Yes:     No:    

 

E-7

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EXHIBIT D

FORM OF

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This Assignment and Acceptance Agreement (this “Assignment Agreement”) between
                                 (the “Assignor”) and
                                 (the “Assignee”) is dated as of             ,
20    . The parties hereto agree as follows:

 

1. Preliminary Statement. Assignor is a party to a Credit Agreement, dated as of
October 12, 2004 (as the same may from time to time be amended, restated or
otherwise modified, the “Credit Agreement”), among BEA SYSTEMS, INC., a Delaware
corporation (“Borrower”), the lenders named on Schedule 1 thereto (together with
their respective successors and assigns, collectively, the “Lenders” and,
individually, each a “Lender”), and KEYBANK NATIONAL ASSOCIATION, as lead
arranger and administrative agent for the Lenders (“Agent”). Capitalized terms
used herein and not otherwise defined herein shall have the meanings attributed
to them in the Credit Agreement.

 

2. Assignment and Assumption. Assignor hereby sells and assigns to Assignee, and
Assignee hereby purchases and assumes from Assignor, an interest in and to
Assignor’s rights and obligations under the Credit Agreement, effective as of
the Assignment Effective Date (as hereinafter defined), equal to the percentage
interest specified on Annex 1 hereto (hereinafter, “Assignee’s Percentage”) of
Assignor’s right, title and interest in and to (a) the Commitment of Assignor as
set forth on Annex 1 hereto (hereinafter, the “Assigned Amount”), (b) any Loan
made by Assignor that is outstanding on the Assignment Effective Date, (c) any
Note delivered to Assignor pursuant to the Credit Agreement, and (d) the Credit
Agreement and the other Related Writings. After giving effect to such sale and
assignment and on and after the Assignment Effective Date, Assignee shall be
deemed to have a “Commitment Percentage” under the Credit Agreement equal to the
Commitment Percentage set forth in subpart II.A on Annex 1 hereto.

 

3. Assignment Effective Date. The Assignment Effective Date (the “Assignment
Effective Date”) shall be [                         ,             ] (or such
other date agreed to by Agent). On or prior to the Assignment Effective Date,
Assignor shall satisfy the following conditions:

 

(a) receipt by Agent of this Assignment Agreement, including Annex 1 hereto,
properly executed by Assignor and Assignee and accepted and consented to by
Agent and, if necessary pursuant to the provisions of Section 10.10(a) of the
Credit Agreement, by Borrower;

 

(b) receipt by Agent from Assignor of a fee of Three Thousand Five Hundred
Dollars ($3,500), if required by Section 10.10 of the Credit Agreement;

 

(c) receipt by Agent from Assignee of an administrative questionnaire, or other
similar document, which shall include (i) the address for notices under the
Credit Agreement, (ii) the address of its Lending Office, (iii) wire transfer
instructions for delivery of funds by Agent, (iv) and such other information as
Agent shall request; and

 

E-8

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(d) receipt by Agent from Assignor or Assignee of any other information required
pursuant to Section 10.10 of the Credit Agreement or otherwise necessary to
complete the transaction contemplated hereby.

 

4. Payment Obligations. In consideration for the sale and assignment of Loans
hereunder, Assignee shall pay to Assignor, on the Assignment Effective Date, the
amount agreed to by Assignee and Assignor. Any interest, fees and other payments
accrued prior to the Assignment Effective Date with respect to the Assigned
Amount shall be for the account of Assignor. Any interest, fees and other
payments accrued on and after the Assignment Effective Date with respect to the
Assigned Amount shall be for the account of Assignee. Each of Assignor and
Assignee agrees that it will hold in trust for the other part any interest, fees
or other amounts which it may receive to which the other party is entitled
pursuant to the preceding sentence and to pay the other party any such amounts
which it may receive promptly upon receipt thereof.

 

5. Credit Determination; Limitations on Assignor’s Liability. Assignee
represents and warrants to Assignor, Borrower, Agent and the Lenders (a) that it
is capable of making and has made and shall continue to make its own credit
determinations and analysis based upon such information as Assignee deemed
sufficient to enter into the transaction contemplated hereby and not based on
any statements or representations by Assignor, (b) Assignee confirms that it
meets the requirements to be an assignee as set forth in Section 10.10 of the
Credit Agreement; (c) Assignee confirms that it is able to fund the Loans as
required by the Credit Agreement; (d) Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement and the Related Writings are required to be performed by it as
a Lender thereunder; and (e) Assignee represents that it has reviewed each of
the Loan Documents. It is understood and agreed that the assignment and
assumption hereunder are made without recourse to Assignor and that Assignor
makes no representation or warranty of any kind to Assignee and shall not be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of the Credit Agreement or any
Related Writings, (ii) any representation, warranty or statement made in or in
connection with the Credit Agreement or any of the Related Writings, (iii) the
financial condition or creditworthiness of Borrower or Guarantor of Payment,
(iv) the performance of or compliance with any of the terms or provisions of the
Credit Agreement or any of the Related Writings, (v) the inspection of any of
the property, books or records of Borrower, or (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans. Neither Assignor nor any
of its officers, directors, employees, agents or attorneys shall be liable for
any mistake, error of judgment, or action taken or omitted to be taken in
connection with the Loans, the Credit Agreement or the Related Writings, except
for its or their own bad faith or willful misconduct. Assignee appoints Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to Agent by the terms thereof.

 

6. Indemnity. Assignee agrees to indemnify and hold Assignor harmless against
any and all losses, cost and expenses (including, without limitation, attorneys’
fees) and liabilities incurred by Assignor in connection with or arising in any
manner from Assignee’s performance or non-performance of obligations assumed
under this Assignment Agreement.

 

E-9

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7. Subsequent Assignments. After the Assignment Effective Date, Assignee shall
have the right pursuant to Section 10.10 of the Credit Agreement to assign the
rights which are assigned to Assignee hereunder, provided that (a) any such
subsequent assignment does not violate any of the terms and conditions of the
Credit Agreement, any of the Related Writings, or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under
the terms of the Credit Agreement or any of the Related Writings has been
obtained, (b) the assignee under such assignment from Assignee shall agree to
assume all of Assignee’s obligations hereunder in a manner satisfactory to
Assignor and (c) Assignee is not thereby released from any of its obligations to
Assignor hereunder.

 

8. Reductions of Aggregate Amount of Commitments. If any reduction in the Total
Commitment Amount occurs between the date of this Assignment Agreement and the
Assignment Effective Date, the percentage of the Total Commitment Amount
assigned to Assignee shall remain the percentage specified in Section 1 hereof
and the dollar amount of the Commitment of Assignee shall be recalculated based
on the reduced Total Commitment Amount.

 

9. Acceptance of Agent; Notice by Assignor. This Assignment Agreement is
conditioned upon the acceptance and consent of Agent and, if necessary pursuant
to Section 10.10 of the Credit Agreement, upon the acceptance and consent of
Borrower; provided, that the execution of this Assignment Agreement by Agent
and, if necessary, by Borrower is evidence of such acceptance and consent.

 

10. Entire Agreement. This Assignment Agreement embodies the entire agreement
and understanding between the parties hereto and supersedes all prior agreements
and understandings between the parties hereto relating to the subject matter
hereof.

 

11. Governing Law. This Assignment Agreement shall be governed by the laws of
the State of Ohio, without regard to conflicts of laws.

 

12. Notices. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth under each party’s name on the signature pages hereof.

 

[Remainder of page intentionally left blank.]

 

E-10

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13. JURY TRIAL WAIVER. EACH OF THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW,
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, ANY OF THE LENDERS, AND
BORROWER, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
INSTRUMENT OR ANY NOTE OR OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED HERETO.

 

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

 

             ASSIGNOR:               

Address:

   _________________________________  

___________________________________________________________

     _________________________________              Attn:  
_________________________  

By:

 

 

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

     Phone:   _________________________  

Name:

 

 

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

     Fax:   _________________________  

Title:

 

 

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

Address:

   _________________________________  

ASSIGNEE:

     _________________________________  
___________________________________________________________      Attn:  
_________________________  

By:

 

 

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

     Phone:   _________________________  

Name:

 

 

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

     Fax:   _________________________  

Title:

 

 

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Accepted and Consented to this      day of     , 20    :

 

KEYBANK NATIONAL ASSOCIATION,
as Agent

By:

 

 

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

Name:

 

 

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

Title:

 

 

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Accepted and Consented to this      day of             , 20    :

BEA SYSTEMS, INC.

By:

 

 

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Name:

 

 

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Title:

 

 

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E-11

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ANNEX 1

TO

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

On and after the Assignment Effective Date, the Commitment of Assignee, and, if
this is less than an assignment of all of Assignor’s interest, Assignor, shall
be as follows:

 

I.       INTEREST OF ASSIGNOR BEING ASSIGNED TO ASSIGNEE

    

A.     Assignee’s Percentage

                       %

B.     Assigned Amount

   $                    

II.     ASSIGNEE’S COMMITMENT (as of the Assignment Effective Date)

    

A.     Assignee’s Commitment Percentage under the Credit Agreement

                       %

B.     Assignee’s Commitment Amount under the Credit Agreement

   $                    

III.    ASSIGNOR’S COMMITMENT (as of the Assignment Effective Date)

    

A.     Assignor’s Commitment Percentage under the Credit Agreement

                       %

B.     Assignor’s Commitment Amount under the Credit Agreement

   $                    

 

E-12

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EXHIBIT E

 

BORROWER INVESTMENT POLICY

 

E-13

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EXHIBIT F

FORM OF

GUARANTY OF PAYMENT

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

FORM OF

GUARANTY OF PAYMENT

 

This GUARANTY OF PAYMENT (as the same may from time to time be amended, restated
or otherwise modified, this “Agreement”) is made as of the 12th day of October,
2004, by [                                         ], a [                    ]
[corporation][limited partnership] [limited liability company] (“Guarantor”) in
favor of KEYBANK NATIONAL ASSOCIATION, as the lead arranger and administrative
agent under the Credit Agreement, as hereinafter defined (“Agent”), for the
benefit of the Lenders, as hereinafter defined.

 

1. Recitals.

 

BEA SYSTEMS, INC., a Delaware corporation (together with its successors and
assigns, “Borrower”) is entering into that certain Credit Agreement, dated as of
October 12, 2004 with the lenders listed on Schedule 1 thereto (together with
their respective successors and assigns, collectively, the “Lenders” and,
individually, each a “Lender”) and Agent (as the same may from time to time be
amended, restated or otherwise modified, the “Credit Agreement”). Guarantor
desires that the Lenders grant the financial accommodations to Borrower as
described in the Credit Agreement.

 

Guarantor, an affiliate of Borrower whose financing is provided by the Loans, as
defined in the Credit Agreement, deems it to be in the direct pecuniary and
business interests of Guarantor that Borrower obtain from the Lenders the
Commitment, as defined in the Credit Agreement, and the Loans provided for in
the Credit Agreement.

 

Guarantor understands that the Lenders are willing to enter into the Credit
Agreement only upon certain terms and conditions, one of which is that Guarantor
guarantee the payment of the Obligations, as hereinafter defined, and this
Agreement is being executed and delivered in consideration of each financial
accommodation granted to Borrower by the Lenders and for other valuable
considerations.

 

2. Definitions. Except as specifically defined herein, capitalized terms used
herein that are defined in the Credit Agreement shall have their respective
meanings ascribed to them in the Credit Agreement. As used in this Agreement,
the following terms shall have the following meanings:

 

“Collateral” shall mean, collectively, all property, if any, securing the
Obligations or any part thereof at the time in question.

 

“Obligations” shall mean, collectively, (a) all Indebtedness and other
obligations incurred by Borrower to Agent or any Lender pursuant to the Credit
Agreement, and includes the principal of and interest on all Loans; (b) each
extension, renewal or refinancing of any of the foregoing, in whole or in part;
(c) the commitment fees, any prepayment fees and any other fees payable pursuant
to the Credit Agreement; and (d) every other liability, now or hereafter owing
to Agent or any Lender by any Company pursuant to the Credit Agreement or any
other Loan Document.

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“Obligor” shall mean any Person that, or any of whose property, is or shall be
obligated on the Obligations or any part thereof in any manner and includes,
without limiting the generality of the foregoing, Borrower or Guarantor, and any
other co-maker, endorser, guarantor of payment, subordinating creditor,
assignor, grantor of a security interest, pledgor, mortgagor or any hypothecator
of property, if any.

 

3. Guaranty of the Obligations. Guarantor hereby absolutely and unconditionally
guarantees (as a guaranty of payment and not merely a guaranty of collection)
the prompt payment in full of all of the Obligations as and when the respective
parts thereof become due and payable. If the Obligations, or any part thereof,
shall not be paid in full when due and payable, Agent, on behalf of the Lenders,
in each case, shall have the right to proceed directly against Guarantor under
this Agreement to collect the payment in full of the Obligations, regardless of
whether or not Agent, on behalf of the Lenders, shall have theretofore proceeded
or shall then be proceeding against Borrower or any other Obligor or Collateral,
if any, or any of the foregoing, it being understood that Agent, on behalf of
the Lenders, in its sole discretion, may proceed against any Obligor and any
Collateral, and may exercise each right, power or privilege that Agent or the
Lenders may then have, either simultaneously or separately, and, in any event,
at such time or times and as often and in such order as Agent, on behalf of the
Lenders, in its sole discretion, may from time to time deem expedient to collect
the payment in full of the Obligations. Guarantor agrees that all payments made
by Guarantor under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of any Taxes or Other Taxes, in
accordance with Section 3.2 of the Credit Agreement.

 

4. Payments Conditional. Whenever Agent or any Lender shall credit any payment
to the Obligations or any part thereof, whatever the source or form of payment,
the credit shall be conditional as to Guarantor unless and until the payment
shall be final and valid as to all the world. Without limiting the generality of
the foregoing, Guarantor agrees that if any check or other instrument so applied
shall be dishonored by the drawer or any party thereto, or if any proceeds of
Collateral or payment so applied shall thereafter be recovered by any trustee in
bankruptcy or any other Person, each Lender, in each case, may reverse any entry
relating thereto on its books and Guarantor shall remain liable therefor, even
if such Lender may no longer have in its possession any instrument evidencing
the Obligations to which the payment in question was applied.

 

5. Guarantor’s Obligations Absolute and Unconditional. Regardless of the
duration of time, regardless of whether Borrower may from time to time cease to
be indebted to the Lenders and irrespective of any act, omission or course of
dealing whatever on the part of Agent or any Lender, Guarantor’s liabilities and
other obligations under this Agreement shall remain in full effect until the
payment in full of the Obligations. Without limiting the generality of the
foregoing:

 

5.1. Lenders Have No Duty to Make Advances. Without limiting the obligations of
Agent and the Lenders under the Credit Agreement, no Lender shall at any time be
under any duty to Guarantor to grant any financial accommodation to Borrower,
irrespective of any duty or commitment of any of the Lenders to Borrower, or to
follow or direct the application of the proceeds of any such financial
accommodation;

 

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5.2. Guarantor’s Waiver of Notice, Presentment. Guarantor waives (a) notice of
the granting of any Loan to Borrower or the incurring of any other Indebtedness
by Borrower or the terms and conditions thereof, (b) presentment, demand for
payment and notice of dishonor of the Obligations or any part thereof, or any
other Indebtedness incurred by Borrower to any of the Lenders, (c) notice of any
indulgence granted to any Obligor, and (d) any other notice to which Guarantor
might, but for this waiver, be entitled;

 

5.2.1. Guarantor waives and agrees not to assert to the fullest extent permitted
by law, any defenses or benefits that may be derived from or afforded by
applicable California law limiting the ability of or exonerating guarantors or
sureties, or which may conflict with the terms of this Agreement, including any
rights and defenses which are or may become available to Guarantor by reason of
California Civil Code §§2787 through 2855, 2899 and 3433. Notwithstanding
anything contained in this Agreement, such waivers by Guarantor with respect to
Sections 2847, 2848 and 2849 of the California Civil Code shall only be
effective until all Obligations (other than inchoate indemnity obligations) have
been paid in full. As provided below, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio. The foregoing is
included solely out of an abundance of caution, and shall not be construed to
mean that any of the above referenced provisions of California law are in any
way applicable to this Agreement or the Obligations.

 

5.2.2. Guarantor shall not have any right to require Agent or the Lenders to
obtain or disclose any information with respect to (a) the financial condition
or character of Borrower or the ability of Borrower to pay and perform the
Obligations; (b) the Obligations; (c) the Collateral; (d) the existence or
nonexistence of any other guarantees of all or any part of the Obligations; (e)
any action or inaction on the part of Agent or the Lenders or any other Person;
or (f) any other matter, fact or occurrence whatsoever.

 

5.3. Lenders’ Rights Not Prejudiced by Action or Omission. Agent and the
Lenders, in their sole discretion, may, pursuant to the Credit Agreement,
without any prejudice to their rights under this Agreement, at any time or
times, without notice to or the consent of Guarantor, (a) grant Borrower
whatever financial accommodations that Agent and the Lenders may from time to
time deem advisable, even if Borrower might be in default in any respect and
even if those financial accommodations might not constitute Indebtedness the
payment of which is guaranteed hereunder, (b) assent to any renewal, extension,
consolidation or refinancing of the Obligations, or any part thereof, (c)
forbear from demanding security, if Agent and the Lenders shall have the right
to do so, (d) release any Obligor or Collateral or assent to any exchange of
Collateral, if any, irrespective of the consideration, if any, received
therefor, (e) grant any waiver or consent or forbear from exercising any right,
power or privilege that Agent and the Lenders may have or acquire, (f) assent to
any amendment, deletion, addition, supplement or other modification in, to or of
any writing evidencing or securing any of the Obligations or pursuant to which
any of the Obligations are created, (g) grant any other indulgence to any
Obligor, (h) accept any Collateral for, or any other Obligor upon, the
Obligations or any part thereof, and (i) fail, neglect or omit in any way to
realize upon any Collateral, to perfect any security interest with respect to
Collateral, or to protect the Obligations or any part thereof or any Collateral
therefor;

 

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5.4. Liabilities Survive Guarantor’s Dissolution. Guarantor’s liabilities and
other obligations under this Agreement shall survive any dissolution of
Guarantor; and

 

5.5. Liabilities Absolute and Unconditional. Guarantor’s liabilities and other
obligations under this Agreement shall be absolute and unconditional
irrespective of any lack of validity or enforceability of the Credit Agreement,
any Note, any Loan Document or any other agreement, instrument or document
evidencing the Loans or related thereto, or any other defense available to
Guarantor in respect of this Agreement (other than the payment in full of the
Obligations).

 

6. Representations and Warranties. Guarantor represents and warrants to Agent
and each of the Lenders that (a) Guarantor is a duly [organized][formed] and
validly existing [corporation][limited partnership][limited liability company],
in [good standing][full force and effect] under the laws of the state of its
[incorporation][formation] (as referenced in the first paragraph of this
Agreement), and is qualified to do business in each state where a failure to so
qualify would have a Material Adverse Effect; (b) Guarantor has legal power and
right to execute and deliver this Agreement and to perform and observe the
provisions hereof; (c) the [officers][general partner[s]][members] executing and
delivering this Agreement on behalf of Guarantor have been duly authorized to do
so, and this Agreement, when executed, is legal and binding upon Guarantor in
every respect; (d) except for matters described or referenced in the Credit
Agreement or any Schedule thereto, no litigation or proceeding is pending or
threatened against Guarantor before any court or any administrative agency that,
in Guarantor’s opinion is reasonably expected to have a Material Adverse Effect
on Guarantor; (e) Guarantor has received consideration that is the reasonable
equivalent value of the obligations and liabilities that Guarantor has incurred
to Agent, for the benefit of the Lenders; (f) Guarantor is not insolvent, as
defined in any applicable state or federal statute, nor will Guarantor be
rendered insolvent by the execution and delivery of this Agreement to Agent and
the Lenders; (g) Guarantor is not engaged or about to engage in any business or
transaction for which the assets retained by Guarantor are or will be an
unreasonably small amount of capital, taking into consideration the obligations
to the Lenders incurred hereunder; and (h) Guarantor does not intend to, nor
does Guarantor believe that Guarantor will, incur debts beyond Guarantor’s
ability to pay such debts as they mature.

 

7. Disability of Obligor. Without limiting the generality of any of the other
provisions hereof, Guarantor specifically agrees that upon the occurrence and
during the continuance of an Event of Default, Agent and the Required Lenders,
in their sole discretion (but subject to the terms of the Credit Agreement), may
declare the unpaid principal balance of and accrued interest on the Obligations
to be forthwith due and payable in full without notice. Upon the occurrence and
during the continuance of any of the events enumerated in the immediately
preceding sentence, Guarantor shall, upon demand of Agent, on behalf of the
Lenders, whenever made, pay to Agent, for the benefit of the Lenders, an amount
equal to the then unpaid principal balance of and accrued interest on the
Obligations.

 

4

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8. Subordination of Guarantor’s Rights Against Borrower and Collateral. To the
extent permitted by law, Guarantor hereby subordinates to payment in full of the
Obligations (other than inchoate indemnity obligations) any claim or other right
that Guarantor might now have or hereafter acquire against Borrower or any other
Obligor that arises from the existence or performance of Guarantor’s liabilities
or other obligations under this Agreement, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution, indemnification,
and any right to participate in any claim or remedy of Agent or any Lender
against Borrower or any Collateral that Agent or any Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law.

 

9. Maximum Liability of Guarantor. Anything in this Agreement to the contrary
notwithstanding, in no event shall the amount of Guarantor’s liability hereunder
exceed the maximum amount that (after giving effect to the incurring of the
obligations hereunder and to any rights to contribution of Guarantor from other
affiliates of Borrower) would not render the rights to payment of Agent and the
Lenders hereunder void, voidable or avoidable under any applicable fraudulent
transfer law.

 

10. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Obligations is stayed, upon the insolvency, bankruptcy or
reorganization of Borrower or any other Person, or otherwise, all such amounts
shall nonetheless be payable by Guarantor immediately upon demand by Agent.

 

11. Notice. All notices, requests, demands and other communications provided for
hereunder shall be in writing and, if to Guarantor, mailed or delivered to it,
addressed to it at the address specified on the signature page of this
Agreement, if to Agent or any Lender, mailed or delivered to it, addressed to
the address of Agent or such Lender specified on the signature pages of the
Credit Agreement, or, as to each party, at such other address as shall be
designated by such party in written notice to each of the other parties. All
notices, statements, requests, demands and other communications provided for
hereunder shall be deemed to be given or made when delivered or two Business
Days after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt, except that notices from Guarantor to Agent or any
Lender pursuant to any of the provisions hereof shall not be effective until
received by Agent or such Lender.

 

12. Successors and Assigns. This Agreement shall bind Guarantor and Guarantor’s
successors and assigns and shall inure to the benefit of Agent and each Lender
and their respective successors and assigns, including (without limitation) each
holder of any Note evidencing any of the Obligations.

 

13. Invalidity. If, at any time, one or more provisions of this Agreement is or
becomes invalid, illegal or unenforceable in whole or in part, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

14. Entire Agreement. This Agreement constitutes a final written expression of
all of the terms of this Agreement, is a complete and exclusive statement of
those terms and supersedes all oral representations, negotiations and prior
writings, if any, with respect to the subject matter hereof.

 

5

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15. Relationship of Parties; Setoffs. The relationship between (a) Guarantor and
(b) Agent and the Lenders with respect to this Agreement is and shall be solely
that of debtor and creditors, respectively, and Agent and the Lenders shall have
no fiduciary obligation toward Guarantor with respect to this Agreement or the
transactions contemplated hereby. If and to the extent any payment is not made
when due hereunder, Agent and each Lender may setoff and charge from time to
time any amount so due against any and all of Guarantor’s accounts or deposits
with Agent or such Lender. Provided that no Event of Default has occurred under
Section 7.12 of the Credit Agreement, each of the Lenders agrees promptly to
notify Guarantor and Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.

 

16. Headings. The headings and subheadings used herein are for convenience of
reference only and shall be ignored in interpreting the provisions of this
Agreement.

 

17. Governing Law; Submission to Jurisdiction. The provisions of this Agreement
and the respective rights and duties of Guarantor, Agent and the Lenders
hereunder shall be governed by and construed in accordance with Ohio law,
without regard to principles of conflicts of laws which would result in the
application of the law of any other state. Guarantor hereby irrevocably submits
to the non-exclusive jurisdiction of any Ohio state or federal court sitting in
Cleveland, Ohio, over any action or proceeding arising out of or relating to
this Agreement, any Loan Document or any Related Writing, and Guarantor hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court. Guarantor, on
behalf of itself and its Subsidiaries, hereby irrevocably waives, to the fullest
extent permitted by law, any objection it may now or hereafter have to the
laying of venue in any such action or proceeding in any such court as well as
any right it may now or hereafter have to remove such action or proceeding, once
commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise.
Guarantor agrees that a final, nonappealable judgment in any such action or
proceeding in any state or federal court in the State of Ohio shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

 

[Remainder of page intentionally left blank.]

 

6

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18. JURY TRIAL WAIVER. GUARANTOR, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, THE LENDERS, BORROWER AND
GUARANTOR, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY NOTE OR OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Guaranty of
Payment as of the date first set forth above.

 

Address:

 

 

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[__________________________________________________________]

   

 

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By:

 

 

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Name:

 

 

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Title:

 

 

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Signature Page to

Guaranty of Payment

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EXHIBIT G

FORM OF

PLEDGE AGREEMENT

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FORM OF

PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT (as the same may from time to time be amended, restated or
otherwise modified, this “Agreement”) is made as of the 12th day of October,
2004, by [                                         ], a [                    ]
[corporation] [limited partnership] [limited liability company] (“Pledgor”), in
favor of KEYBANK NATIONAL ASSOCIATION, as the administrative agent under the
Credit Agreement, as hereinafter defined (“Agent”), for the benefit of the
Lenders, as hereinafter defined.

 

1. Recitals.

 

[BEA SYSTEMS, INC., a Delaware corporation (together with its successors and
assigns, “Borrower”)][Pledgor] is entering into that certain Credit Agreement,
dated as of October 12, 2004, with the lenders listed on Schedule 1 to the
Credit Agreement (together with their respective successors and assigns,
collectively, the “Lenders” and, individually, each a “Lender”), and Agent (as
the same may from time to time be amended, restated or otherwise modified, the
“Credit Agreement”). Pledgor desires that the Lenders grant the financial
accommodations to [Borrower][Pledgor] as described in the Credit Agreement.

 

[Pledgor, a subsidiary of Borrower whose financing is provided by the Loans, as
defined in the Credit Agreement, deems it to be in the direct pecuniary and
business interests of Pledgor that Borrower obtain from the Lenders the
Commitment, as defined in the Credit Agreement, and the Loans provided for in
the Credit Agreement.]

 

Pledgor understands that the Lenders are willing to grant such financial
accommodations to Borrower only upon certain terms and conditions, one of which
is that Pledgor grant to Agent, for the benefit of the Lenders, a security
interest in and an assignment of the Collateral, as hereinafter defined, and
this Agreement is being executed and delivered in consideration of each
financial accommodation granted to [Borrower][Pledgor] by the Lenders and for
other valuable considerations.

 

2. Definitions. Except as specifically defined herein, (a) capitalized terms
used herein that are defined in the Credit Agreement shall have their respective
meanings ascribed to them in the Credit Agreement and (b) unless otherwise
defined in the Credit Agreement, terms that are defined in the Uniform
Commercial Code, as in effect from time to time in the State of Ohio (“UCC”),
are used herein as so defined. As used in this Agreement, the following terms
shall have the following meanings:

 

“Collateral” shall mean, collectively, (a) the Pledged Securities and each
addition, if any, thereto and each substitution, if any, therefor, in whole or
in part, (b) the certificates representing the Pledged Securities, and (c) the
dividends, cash, instruments and other property distributed in respect of and
other proceeds of any of the foregoing.

 

“Event of Default” shall mean an event or condition that constitutes an Event of
Default, as defined in Section 7 hereof.

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“Obligations” shall mean, collectively, (a) all Indebtedness and other
obligations incurred by Borrower to Agent or any Lender pursuant to the Credit
Agreement, and includes the principal of and interest on all Loans; (b) each
extension, renewal or refinancing of any of the foregoing, in whole or in part;
(c) the commitment fees, any prepayment fees and any other fees payable pursuant
to the Credit Agreement; and (d) every other liability, now or hereafter owing
to Agent or any Lender by any Company pursuant to the Credit Agreement or any
other Loan Document.

 

“Pledged Securities” shall mean, subject to Section 5 hereof, all of the shares
of stock or other equity interest of each First-Tier Material Foreign Subsidiary
of Pledgor owned by Pledgor, as listed on Exhibit A hereto, and all additional
shares of stock or other equity interest of any other First-Tier Material
Foreign Subsidiary of Pledgor owned by Pledgor from time to time or acquired by
Pledgor in any manner.

 

3. Security Interest. Pledgor hereby grants to Agent, for the benefit of the
Lenders, a security interest in the Collateral as security for the Obligations.
For the better protection of Agent and the Lenders hereunder, Pledgor has
executed appropriate transfer powers, in the form of Exhibit B hereto, with
respect to the Pledged Securities and, concurrently herewith, is depositing the
Pledged Securities and the aforesaid transfer powers with Agent, for the benefit
of the Lenders. Pledgor authorizes Agent, on behalf of the Lenders, at any time
after the occurrence and during the continuation of an Event of Default, to
transfer the Pledged Securities into the name of Agent or Agent’s nominee, but
Agent shall be under no duty to do so. Notwithstanding any provision or
inference herein or elsewhere to the contrary, Agent shall have no right to vote
the Pledged Securities at any time unless and until the occurrence and during
the continuation of an Event of Default.

 

4. Representations and Warranties. Pledgor hereby represents and warrants to
Agent and each Lender as follows:

 

4.1. Pledgor is the legal record and beneficial owner of, and has good and
marketable title to, the Pledged Securities, and the Pledged Securities are not
subject to any pledge, lien, mortgage, hypothecation, security interest, charge,
option, warrant or other encumbrance whatsoever, nor to any agreement purporting
to grant to any third party a security interest in the property or assets of
Pledgor that would include such Pledged Securities, except the security interest
created by this Agreement or otherwise securing only Agent and the Lenders.

 

4.2. All of the Pledged Securities have been duly authorized and validly issued,
and are fully paid and non-assessable.

 

4.3. Pledgor has full power, authority and legal right to pledge all of the
Pledged Securities pursuant to the terms of this Agreement.

 

4.4. No consent, license, permit, approval or authorization, filing or
declaration with any Governmental Authority, and no consent of any other Person,
is required to be obtained by Pledgor in connection with the pledge of the
Pledged Securities hereunder, that has not been

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obtained or made, and is not in full force and effect, except as may be required
in connection with the perfection of the security interests hereunder pursuant
to the UCC, in connection with any disposition by applicable laws governing the
offering and sale of securities generally and except, with respect to any
Pledged Securities of a First-Tier Material Foreign Subsidiary, compliance with
any applicable laws of the jurisdiction of incorporation or formation of such
First-Tier Material Foreign Subsidiary.

 

4.5. The pledge and delivery of the Pledged Securities hereunder creates a valid
first lien on, and a first perfected security interest in, the Pledged
Securities and the proceeds thereof under the UCC.

 

4.6. The Pledged Securities, on the effective date of this Agreement, or at any
time thereafter while this Agreement is in effect, shall constitute no more than
sixty-five percent (65%) of the outstanding shares of stock or other equity
interests of each First-Tier Material Foreign Subsidiary’s stock or other equity
interest pledged in accordance with Section 5 hereof. For this purpose, the
amount of stock or equity interests pledged shall be measured by reference to
the total combined voting power of all classes of stock entitled to vote and
issued by such First-Tier Material Foreign Subsidiary.

 

4.7. Pledgor fully anticipates that the Obligations will be repaid without the
necessity of selling the Pledged Securities.

 

4.8. Pledgor has received consideration that is the reasonable equivalent value
of the obligations and liabilities that Pledgor has incurred to Agent and the
Lenders. Pledgor is not insolvent, as defined in any applicable state or federal
statute, nor will Pledgor be rendered insolvent by the execution and delivery of
this Agreement to Agent, for the benefit of the Lenders. Pledgor is not engaged
or about to engage in any business or transaction for which the assets retained
by Pledgor are or will be an unreasonably small amount of capital, taking into
consideration the obligations to Agent and the Lenders incurred hereunder.
Pledgor does not intend to incur debts beyond Pledgor’s ability to pay them as
they mature.

 

5. Foreign Subsidiaries. Notwithstanding anything in this Agreement to the
contrary, Pledgor shall not be required to pledge more than, and the pledge
contemplated hereby shall be limited to, sixty-five percent (65%) of the
outstanding shares of stock or other equity interest of any First-Tier Material
Foreign Subsidiary if Pledgor is not required to do so pursuant to Section 5.19
of the Credit Agreement.

 

6. Additional Covenants of Pledgor.

 

6.1. Pledgor covenants and agrees to defend the right, title and security
interest of Agent and the Lenders in and to the Pledged Securities and the
proceeds thereof, and to maintain and preserve the lien and security interest
provided for by this Agreement against the claim and demands of all Persons, so
long as this Agreement shall remain in effect.

 

6.2. Pledgor covenants and agrees not to sell, assign, transfer, exchange or
otherwise dispose of or grant any option with respect to, or create, incur or
permit to exist any pledge, lien,

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mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Pledged Securities, or any interest
therein, or any proceeds thereof, except for the lien and security interest
provided for by this Agreement and any security agreement securing only Agent
and the Lenders, except as permitted under the Credit Agreement.

 

6.3. Pledgor covenants and agrees (a) to cooperate, in good faith, with Agent
and the Lenders and to do or cause to be done all such other acts as may be
reasonably necessary to enforce the rights of Agent and the Lenders under this
Agreement, (b) not to take any action, or to fail to take any action that would
be materially adverse to the interest of Agent and the Lenders in the Collateral
and hereunder, and (c) to make any sale or sales of any portion or all of the
Pledged Securities valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales at Pledgor’s expense.

 

6.4. Pledgor waives and agrees not to assert to the fullest extent permitted by
law, any defenses or benefits that may be derived from or afforded by applicable
California law limiting the ability of or exonerating guarantors or sureties, or
which may conflict with the terms of this Agreement, including any rights and
defenses which are or may become available to Pledgor by reason of California
Civil Code §§2787 through 2855, 2899 and 3433. Notwithstanding anything
contained in this Agreement, such waivers by Pledgor with respect to Sections
2847, 2848 and 2849 of the California Civil Code shall only be effective until
all Obligations (other than inchoate indemnity obligations) have been paid in
full. As provided below, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio. The foregoing is included solely
out of an abundance of caution, and shall not be construed to mean that any of
the above referenced provisions of California law are in any way applicable to
this Agreement or the Obligations.

 

[6.5. Pledgor shall not have any right to require Agent or the Lenders to obtain
or disclose any information with respect to (a) the financial condition or
character of Borrower or the ability of Borrower to pay and perform the
Obligations; (b) the Obligations; (c) the Collateral; (d) the existence or
nonexistence of any guarantees of all or any part of the Obligations; (e) any
action or inaction on the part of Agent or the Lenders or any other Person; or
(f) any other matter, fact or occurrence whatsoever.]

 

7. Events of Default.

 

7.1. The occurrence of an Event of Default, as defined in the Credit Agreement,
shall constitute an Event of Default.

 

7.2. Upon the occurrence and during the continuation of an Event of Default
hereunder, and at all times thereafter, to the maximum extent permitted by
applicable law, Agent may, with the consent of the Required Lenders, sell,
assign, transfer and deliver any of the Collateral, at any time, or from time to
time and exercise the other rights and remedies set forth in this Section 7.2.
No prior notice need be given to Pledgor or to any other Person in the case of
any sale of Collateral that Agent determines to be declining speedily in value
or that is

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customarily sold in any securities exchange, over-the-counter market or other
recognized market, but in any other case Agent shall give Pledgor no fewer than
ten days prior notice of either the time and place of any public sale of the
Collateral or of the time after which any private sale or other intended
disposition thereof is to be made. Pledgor waives advertisement of any such sale
and (except to the extent specifically required by the preceding sentence)
waives notice of any kind in respect of any such sale. At any such public sale,
Agent or any Lender may purchase the Collateral, or any part thereof, free from
any right of redemption, all of which rights Pledgor hereby waives and releases.
After deducting all costs and expenses, and after paying all claims, if any,
secured by liens having precedence over this Agreement, Agent may apply the net
proceeds of each such sale to or toward the payment of the Obligations, whether
or not then due, in such order and by such division as Agent in its sole
discretion may deem advisable. Any excess, to the extent permitted by law, shall
be paid to Pledgor, and the obligors on the Obligations shall remain liable for
any deficiency. In addition, Agent shall at all times have the right to obtain
new appraisals of Pledgor or the Collateral, the cost of which shall be paid by
Pledgor.

 

8. Attorney-In-Fact. Pledgor hereby authorizes and empowers Agent, on behalf of
the Lenders, to make, constitute and appoint any officer or agent of Agent as
Agent may select, in its exclusive discretion, as Pledgor’s true and lawful
attorney-in-fact, with the power to endorse Pledgor’s name on all applications,
documents, papers and instruments necessary for Agent to take actions with
respect to the Collateral after the occurrence and during the continuation of an
Event of Default, including, without limitation, actions necessary for Agent to
assign, pledge, convey or otherwise transfer title in or dispose of the
Collateral to any Person. Pledgor ratifies all that such attorney shall lawfully
do or cause to be done by virtue hereof. This power of attorney shall be
irrevocable for the life of this Agreement.

 

[9. Maximum Liability of Pledgor. Anything in this Agreement to the contrary
notwithstanding, in no event shall the amount of the Obligations secured by this
Agreement exceed the maximum amount that (after giving effect to the incurring
of the obligations hereunder and to any rights to contribution of Pledgor from
other affiliates of Borrower) would not render the rights to payment of Agent
and the Lenders hereunder void, voidable or avoidable under any applicable
fraudulent transfer law.]

 

10. Costs and Expenses. If Pledgor fails to comply with any of its obligations
hereunder, Agent may do so in Pledgor’s name or in Agent’s name, but at
Pledgor’s expense, and Pledgor hereby agrees to reimburse Agent and the Lenders
in full for all expenses, including reasonable attorneys’ fees, incurred by
Agent and the Lenders in protecting, defending and maintaining the Collateral.
Without limiting the foregoing, any and all fees, costs and expenses, of
whatever kind or nature, including the reasonable attorneys’ fees and expenses
incurred in connection with the filing or recording of any documents (including
all taxes in connection therewith) in public offices, the payment or discharge
of any taxes, maintenance fees, encumbrances or otherwise protecting,
maintaining or preserving the Collateral, or in defending or prosecuting any
actions or proceedings arising out of or related to the Collateral, shall be
borne and paid by Pledgor promptly upon request of Agent.

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11. Notice. All notices, requests, demands and other communications provided for
hereunder shall be in writing and, if to Pledgor, mailed or delivered to it,
addressed to it at the address specified on the signature page of this
Agreement, if to Agent or any Lender, mailed or delivered to it, addressed to
the address of Agent or any such Lender specified on the signature pages of the
Credit Agreement or, as to each party, at such other address as shall be
designated by such party in a written notice to each of the other parties. All
notices, statements, requests, demands and other communications provided for
hereunder shall be deemed to be given or made when delivered or two Business
Days after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt, except that notices pursuant to any of the provisions
hereof shall not be effective until received.

 

12. Interpretation. Each right, power or privilege specified or referred to in
this Agreement is in addition to any other rights, powers and privileges that
Agent or the Lenders may have or acquire by operation of law, by other contract
or otherwise. No course of dealing in respect of, nor any omission or delay in
the exercise of, any right, power or privilege by Agent and the Lenders shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any further or other exercise thereof or of any other, as each right,
power or privilege may be exercised by Agent and the Lenders either
independently or concurrently with other rights, powers and privileges and as
often and in such order as Agent and the Lenders may deem expedient. No waiver
or consent granted by Agent and the Lenders in respect of this Agreement shall
be binding upon Agent and the Lenders unless specifically granted in writing,
which writing shall be strictly construed.

 

13. Successors and Assigns. This Agreement shall be binding upon Pledgor and
Pledgor’s successors and assigns and shall inure to the benefit of and be
enforceable and exercisable by Agent on behalf of and for the benefit of Agent
and the Lenders and their respective successors and assigns.

 

14. Severability. If, at any time, one or more provisions of this Agreement is
or becomes invalid, illegal or unenforceable in whole or in part, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

15. Termination. At such time as the Obligations shall have been irrevocably
paid in full (other than inchoate indemnity obligations), the Commitment
terminated, and the Credit Agreement terminated and not replaced by any other
credit facility with Agent and the Lenders, Pledgor shall have the right to
terminate this Agreement. Upon written request of Pledgor, Agent shall promptly
execute and deliver to Pledgor appropriate releases with respect to the
Collateral and return all of the Pledged Securities to Pledgor and shall execute
and deliver to Pledgor such other documents and instruments reasonably requested
by Pledgor as shall be necessary to evidence termination of all security
interests given by Pledgor to Agent hereunder.

 

16. Governing Law; Submission to Jurisdiction. The provisions of this Agreement
and the respective rights and duties of Pledgor, Agent and the Lenders hereunder
shall be governed by and construed in accordance with Ohio law, without regard
to principles of conflict of laws. Pledgor hereby irrevocably submits to the
non-exclusive jurisdiction of any Ohio state

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or federal court sitting in Cleveland, Ohio, over any action or proceeding
arising out of or relating to this Agreement, any Loan Document or any Related
Writing, and Pledgor hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such Ohio state or
federal court. Pledgor hereby irrevocably waives, to the fullest extent
permitted by law, any objection it may now or hereafter have to the laying of
venue in any such action or proceeding in any such court as well as any right it
may now or hereafter have to remove such action or proceeding, once commenced,
to another court on the grounds of FORUM NON CONVENIENS or otherwise. Pledgor
agrees that a final, nonappealable 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.

 

[Remainder of page intentionally left blank.]

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17. JURY TRIAL WAIVER. PLEDGOR, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, PLEDGOR, AGENT AND THE LENDERS,
OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Pledge
Agreement.

 

Address:

 

 

[______________________________________________]

 

[__________________________________________________]

    [______________________________________________]        

Attention:

 

 

_______________________________________________

 

By:

 

 

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

       

Name:

 

 

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

       

Title:

 

 

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Signature Page to

Pledge Agreement

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EXHIBIT A

 

PLEDGED SECURITIES

 

Name of Subsidiary

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

   Jurisdiction

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

   Shares

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

   Certificate
Number

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

   Ownership
Percentage

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

          [______]    [______]     

 

E-1

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EXHIBIT B

 

FORM OF STOCK TRANSFER POWER

 

FOR VALUE RECEIVED,                                          hereby sells,
assigns and transfers unto                      (             ) Shares of the
             Capital Stock of                                          standing
in                      name on the books of said corporation and represented by
Certificate No.              herewith and does hereby irrevocably constitute and
appoint                          attorney to transfer the said stock on the
books of the within named corporation with full power of substitution in the
premises.

 

   

__________________________________________________________________

Dated                    

 

By:

 

 

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Name:

 

 

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

   

Title:

 

 

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E-2

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Schedule 1

 

LENDERS

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

  

COMMITMENT

PERCENTAGE

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

   

REVOLVING

CREDIT

COMMITMENT

AMOUNT

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

   MAXIMUM AMOUNT

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

KeyBank National Association

   25.58 %   $ 55,000,000    $ 55,000,000

Wells Fargo Bank, N.A.

   18.60 %   $ 40,000,000    $ 40,000,000

ABN AMRO Bank N.V.

   16.28 %   $ 35,000,000    $ 35,000,000

Bank of America, N.A.

   16.28 %   $ 35,000,000    $ 35,000,000

Comerica Bank

   16.28 %   $ 35,000,000    $ 35,000,000

Sumitomo Mitsui Banking Corp., New York

   6.98 %   $ 15,000,000    $ 15,000,000     

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

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

  

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Total Commitment Amount

   100.00 %   $ 215,000,000    $ 215,000,000     

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S-1

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Schedule 2

 

BEA SYSTEMS, INC.

Guarantors of Payment

 

None

 

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Schedule 3

 

BEA SYSTEMS, INC.

Pledged Securities

 

BEA Systems Ireland Holding Ltd. (Ireland)

 

BEA Systems Limited (UK)

 

BEA Systems Europe GmbH (Germany)

 

2

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Schedule 5.8

 

BEA SYSTEMS, INC.

Indebtedness

(000’s)

 

4% Convertible Notes Due 12/15/2006

   $ 550,000

Long-term debt and accrued liabilities related to land lease(1)

     211,657

Letters of Credit outstanding

     6,552     

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Total Indebtedness

   $ 768,209     

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(1) Debt to be paid off as of closing date of this Agreement

 

3