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Exhibit 10.11
EXECUTION ORIGINAL

REVOLVING CREDIT AND SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)
 
WITH
 
ANADIGICS, INC.
 
(BORROWER)
 
April 30, 2013
 
 
 

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TABLE OF CONTENTS
 

    Page       
I.
DEFINITIONS.
1
         
1.1.
Accounting Terms.
1
 
1.2.
General Terms.
1
 
1.3.
Uniform Commercial Code Terms.
25
 
1.4.
Certain Matters of Construction.
25
       
II.
ADVANCES, PAYMENTS.
26
         
2.1.
Revolving Advances.
26
 
2.2.
Procedures for Requesting Revolving Advances; Procedures for Selection of
Applicable Interest Rates for All Advances.
27
 
2.3.
Disbursement of Advance Proceeds
29
 
2.4.
Making and Settlement of Advances.
29
 
2.5.
Maximum Advances
31
 
2.6.
Manner and Repayment of Advances.
31
 
2.7.
Repayment of Excess Advances
32
 
2.8.
Statement of Account
32
 
2.9.
Letters of Credit
32
 
2.10.
Issuance of Letters of Credit.
33
 
2.11.
Requirements For Issuance of Letters of Credit.
33
 
2.12.
Disbursements, Reimbursement.
34
 
2.13.
Repayment of Participation Advances.
35
 
2.14.
Documentation
36
 
2.15.
Determination to Honor Drawing Request
36
 
2.16.
Nature of Participation and Reimbursement Obligations
36
 
2.17.
Liability for Acts and Omissions.
38
 
2.18.
Mandatory Prepayments.
39
 
2.19.
Use of Proceeds.
39
 
2.20.
Defaulting Lender.
40
 
2.21.
Payment of Obligations
42
       
III.
INTEREST AND FEES.
42
         
3.1.
Interest
43
 
3.2.
Letter of Credit Fees.
43
 
3.3.
Closing Fee and Facility Fee.
44
 
3.4.
Collateral Monitoring Fee and Collateral Evaluation Fee.
45
 
3.5.
Computation of Interest and Fees
45
 
3.6.
Maximum Charges
45
 
3.7.
Increased Costs
46
 
3.8.
Basis For Determining Interest Rate Inadequate or Unfair
46
 
3.9.
Capital Adequacy.
47
 
3.10.
Taxes.
48
 
3.11.
Replacement of Lenders
50

 
 
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IV.
COLLATERAL:  GENERAL TERMS
50
         
4.1.
Security Interest in the Collateral
51
 
4.2.
Perfection of Security Interest
51
 
4.3.
Preservation of Collateral
52
 
4.4.
Ownership and Location of Collateral.
52
 
4.5.
Defense of Agent’s and Lenders’ Interests
52
 
4.6.
Inspection of Premises
53
 
4.7.
Receivables; Deposit Accounts and Securities Accounts.
53
 
4.8.
Inventory
56
 
4.9.
Maintenance of Equipment
56
 
4.10.
Exculpation of Liability
56
 
4.11.
Financing Statements
56
       
V.
REPRESENTATIONS AND WARRANTIES.
56
         
5.1.
Authority
56
 
5.2.
Formation and Qualification.
57
 
5.3.
Survival of Representations and Warranties
57
 
5.4.
Tax Returns
57
 
5.5.
Financial Statements
57
 
5.6.
Entity Names
58
 
5.7.
O.S.H.A. Environmental Compliance and Flood Insurance.
58
 
5.8.
Solvency; No Litigation, Violation, Indebtedness or Default; ERISA Compliance.
59
 
5.9.
Patents, Trademarks, Copyrights and Licenses
60
 
5.10.
Licenses and Permits
60
 
5.11.
Default of Indebtedness
61
 
5.12.
No Default
61
 
5.13.
No Burdensome Restrictions
61
 
5.14.
No Labor Disputes
61
 
5.15.
Margin Regulations
61
 
5.16.
Investment Company Act
61
 
5.17.
Disclosure
61
 
5.18.
Swaps
61
 
5.19.
Business and Property of Borrowers
62
 
5.20.
Ineligible Securities
62
 
5.21.
Equity Interests
62
 
5.22.
Commercial Tort Claims
62
 
5.23.
Letter of Credit Rights
62
 
5.24.
Customer and Supplier Contracts
62
       
VI.
AFFIRMATIVE COVENANTS.
62
         
6.1.
Compliance with Laws
62
 
6.2.
Conduct of Business and Maintenance of Existence and Assets
63
 
6.3.
Books and Records
63
 
6.4.
Payment of Taxes
63
 
6.5.
Financial Covenants.
63

 
 
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6.6.
Insurance.
64
 
6.7.
Payment of Indebtedness and Leasehold Obligations
65
 
6.8.
Environmental Matters.
65
 
6.9.
Standards of Financial Statements
65
 
6.10.
Execution of Supplemental Instruments
66
 
6.11.
Government Receivables
66
       
VII.
NEGATIVE COVENANTS.
66
         
7.1.
Merger, Consolidation, Acquisition and Sale of Assets
66
 
7.2.
Creation of Liens
66
 
7.3.
Guarantees
66
 
7.4.
Investments
66
 
7.5.
Loans
66
 
7.6.
Capital Expenditures
67
 
7.7.
Dividends
67
 
7.8.
Indebtedness
67
 
7.9.
Nature of Business
67
 
7.10.
Transactions with Affiliates
67
 
7.11.
Subsidiaries.
67
 
7.12.
Fiscal Year and Accounting Changes
67
 
7.13.
Pledge of Credit
68
 
7.14.
Amendment of Organizational Documents
68
 
7.15.
Compliance with ERISA
68
 
7.16.
Prepayment of Indebtedness
68
 
7.17.
Membership / Partnership Interests
68
       
VIII.
CONDITIONS PRECEDENT.
69
         
8.1.
Conditions to Initial Advances
69
 
8.2.
Conditions to Each Advance
72
       
IX.
INFORMATION AS TO BORROWERS.
73
         
9.1.
Disclosure of Material Matters
73
 
9.2.
Schedules
73
 
9.3.
Environmental Reports.
74
 
9.4.
Litigation
74
 
9.5.
Material Occurrences
75
 
9.6.
Government Receivables
75
 
9.7.
Annual Financial Statements
75
 
9.8.
Quarterly Financial Statements
75
 
9.9.
Monthly Financial Statements
76
 
9.10.
Other Reports
76
 
9.11.
Additional Information
76
 
9.12.
Projected Operating Budget
76
 
9.13.
Variances From Operating Budget
76
 
9.14.
Notice of Suits, Adverse Events
77
 
9.15.
ERISA Notices and Requests
77
 
9.16.
Additional Documents
77

 
 
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9.17.
Updates to Certain Schedules
77
 
9.18.
Financial Disclosure
78
       
X.
EVENTS OF DEFAULT.
78
         
10.1.
Nonpayment
78
 
10.2.
Breach of Representation
78
 
10.3.
Financial Information
78
 
10.4.
Judicial Actions
78
 
10.5.
Noncompliance
78
 
10.6.
Judgments
79
 
10.7.
Bankruptcy
79
 
10.8.
Material Adverse Effect
79
 
10.9.
Lien Priority
79
 
10.10.
Cross Default
79
 
10.11.
Breach of Guaranty or Pledge Agreement
80
 
10.12.
Change of Control
80
 
10.13.
Invalidity
80
 
10.14.
Seizures
80
 
10.15.
Operations
80
 
10.16.
Pension Plans
80
 
10.17.
Reportable Compliance Event
80
       
XI.
LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
80
         
11.1.
Rights and Remedies.
81
 
11.2.
Agent’s Discretion
82
 
11.3.
Setoff
82
 
11.4.
Rights and Remedies not Exclusive
82
 
11.5.
Allocation of Payments After Event of Default
83
       
XII.
WAIVERS AND JUDICIAL PROCEEDINGS.
84
         
12.1.
Waiver of Notice
84
 
12.2.
Delay
84
 
12.3.
Jury Waiver
84
       
XIII.
EFFECTIVE DATE AND TERMINATION.
84
         
13.1.
Term
84
 
13.2.
Termination
85
       
XIV.
REGARDING AGENT.
85
         
14.1.
Appointment
85
 
14.2.
Nature of Duties
86
 
14.3.
Lack of Reliance on Agent
86
 
14.4.
Resignation of Agent; Successor Agent
86
 
14.5.
Certain Rights of Agent
87
 
14.6.
Reliance
87
 
14.7.
Notice of Default
87
 
14.8.
Indemnification
88

 
 
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14.9.
Agent in its Individual Capacity
88
 
14.10.
Delivery of Documents
88
 
14.11.
Borrowers’ Undertaking to Agent
88
 
14.12.
No Reliance on Agent’s Customer Identification Program
88
 
14.13.
Other Agreements
89
       
XV.
BORROWING AGENCY.
89
         
15.1.
Borrowing Agency Provisions.
89
 
15.2.
Waiver of Subrogation
90
       
XVI.
MISCELLANEOUS.
90
         
16.1.
Governing Law
90
 
16.2.
Entire Understanding.
91
 
16.3.
Successors and Assigns; Participations; New Lenders.
93
 
16.4.
Application of Payments
96
 
16.5.
Indemnity
96
 
16.6.
Notice
97
 
16.7.
Survival
99
 
16.8.
Severability
99
 
16.9.
Expenses
99
 
16.10.
Injunctive Relief
100
 
16.11.
Consequential Damages
100
 
16.12.
Captions
100
 
16.13.
Counterparts; Facsimile Signatures
100
 
16.14.
Construction
100
 
16.15.
Confidentiality; Sharing Information
100
 
16.16.
Publicity
101
 
16.17.
Certifications From Banks and Participants; USA PATRIOT Act.
101
 
16.18.
Anti-Money Laundering/International Trade Law Compliance
102

 
 
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LIST OF EXHIBITS AND SCHEDULES
 
Exhibits
     
Exhibit 1.2
Borrowing Base Certificate
Exhibit 1.2(a)
Compliance Certificate
Exhibit 2.1(a)
Revolving Credit Note
Exhibit 8.1(g)
Financial Condition Certificate
Exhibit 16.3
Commitment Transfer Supplement
       
SchedulesU
     
Schedule 1.2
Permitted Encumbrances
Schedule 4.4
Equipment and Inventory Locations; Place of Business, Chief Executive Office,
Real Property
Schedule 4.8(h)
Deposit and Investment Accounts
Schedule 5.1
Consents
Schedule 5.2(a)
States of Qualification and Good Standing
Schedule 5.2(b)
Subsidiaries
Schedule 5.4
Federal Tax Identification Number
Schedule 5.6
Prior Names
Schedule 5.7
Environmental
Schedule 5.8(b)(i)
Litigation
Schedule 5.8(b)(ii)
Indebtedness
Schedule 5.8(d)
Plans
Schedule 5.9
Intellectual Property, Source Code Escrow Agreements
Schedule 5.10
Licenses and Permits
Schedule 5.14
Labor Disputes
Schedule 5.24
Equity Interests
Schedule 5.25
Commercial Tort Claims
Schedule 5.26
Letter of Credit Rights
Schedule 5.27
Customer and Supplier Contracts
Schedule 7.3
Guarantees

 
 
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REVOLVING CREDIT AND SECURITY AGREEMENT
 
This Revolving Credit and Security Agreement dated April 30, 2013 among
ANADIGICS, INC., a corporation organized under the laws of the State of Delaware
(“Anadigics”), each Person joined hereto as a borrower from time to time
(collectively, with Anadigics, the “Borrowers”, and each a “Borrower”), the
financial institutions which are now or which hereafter become a party hereto
(collectively, the “Lenders” and each individually a “Lender”) and PNC BANK,
NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the
“Agent”).
 
IN CONSIDERATION of the mutual covenants and undertakings herein contained,
Borrowers, Lenders and Agent hereby agree as follows:
 
I.             DEFINITIONS.
 
1.1.           Accounting Terms.  As used in this Agreement, the Other Documents
or any certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined shall have the respective meanings given to them under GAAP; provided,
however that, whenever such accounting terms are used for the purposes of
determining compliance with financial covenants in this Agreement, such
accounting terms shall be defined in accordance with GAAP as applied in
preparation of the audited financial statements of Borrowers for the fiscal year
ended December 31, 2012.  If there occurs after the Closing Date any change in
GAAP that affects in any respect the calculation of any covenant contained in
this Agreement or the definition of any term defined under GAAP used in such
calculations, Agent, Lenders and Borrowers shall negotiate in good faith to
amend the provisions of this Agreement that relate to the calculation of such
covenants with the intent of having the respective positions of Agent, Lenders
and Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the Closing Date, provided, that, until any such
amendments have been agreed upon, the covenants in this Agreement shall be
calculated as if no such change in GAAP had occurred and Borrowers shall provide
additional financial statements or supplements thereto, attachments to
Compliance Certificates and/or calculations regarding financial covenants as
Agent may reasonably require in order to provide the appropriate financial
information required hereunder with respect to Borrowers both reflecting any
applicable changes in GAAP and as necessary to demonstrate compliance with the
financial covenants before giving effect to the applicable changes in GAAP.
 
1.2.           General Terms.  For purposes of this Agreement the following
terms shall have the following meanings:
 
“Accountants” shall have the meaning set forth in Section 9.7 hereof.
 
“Advance Rates” shall have the meaning set forth in Section 2.1(a)(y) hereof.
 
“Advances” shall mean and include the Revolving Advances and Letters of Credit.
 
“Affected Lender” shall have the meaning set forth in Section 3.11 hereof.
 
 
 

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“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, manager, member, managing
member, general partner or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above.  For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 50% or more of the Equity Interests having ordinary voting
power for the election of directors of such Person or other Persons performing
similar functions for any such Person, or (y) to direct or cause the direction
of the management and policies of such Person whether by ownership of Equity
Interests, contract or otherwise.
 
“Agent” shall have the meaning set forth in the preamble to this Agreement and
shall include its successors and assigns.
 
“Agreement” shall mean this Revolving Credit and Security Agreement, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
 
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (a) the Base Rate in effect on such day, (b) the sum of the Federal
Funds Open Rate in effect on such day plus one half of one percent (0.5%), and
(c) the sum of the Daily LIBOR Rate in effect on such day plus one percent
(1.0%), so long as a Daily LIBOR Rate is offered, ascertainable and not
unlawful.
 
“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering or bribery,
all as amended, supplemented or replaced from time to time.
 
“Applicable Law” shall mean all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Other Document or contract in question,
including all applicable common law and equitable principles, all provisions of
all applicable state, federal and foreign constitutions, statutes, rules,
regulations, treaties, directives and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.
 
“Application Date” shall have the meaning set forth in Section 2.6(b) hereof.
 
“Approvals” shall have the meaning set forth in Section 5.7(b) hereof.
 
“Approved Electronic Communication” shall mean each notice, demand,
communication, information, document and other material transmitted, posted or
otherwise made or communicated by e-mail, E-Fax, the StuckyNet System©, or any
other equivalent electronic service agreed to by Agent, whether owned, operated
or hosted by Agent, any Lender, any of their Affiliates or any other Person,
that any party is obligated to, or otherwise chooses to, provide to the Agent
pursuant to this Agreement or any Other Document, including any financial
statement, financial and other report, notice, request, certificate and other
information material; provided that Approved Electronic Communications shall not
include any notice, demand, communication, information, document or other
material that the Agent specifically instructs a Person to deliver in physical
form.
 
 
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“Base Rate” shall mean the base commercial lending rate of PNC as publicly
announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such
rate.  This rate of interest is determined from time to time by PNC as a means
of pricing some loans to its customers and is neither tied to any external rate
of interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.
 
“Benefited Lender” shall have the meaning set forth in Section 2.4(d) hereof.
 
“Blocked Account Bank” shall have the meaning set forth in Section 4.8(h)
hereof.
 
“Blocked Accounts” shall have the meaning set forth in Section 4.8(h) hereof.
 
“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such
Persons.
 
“Borrowers on a Consolidated Basis” shall mean the consolidation in accordance
with GAAP of the accounts or other items of the Borrowers and their respective
Subsidiaries.
 
“Borrowers’ Account” shall have the meaning set forth in Section 2.8 hereof.
 
“Borrowing Agent” shall mean Anadigics.
 
“Borrowing Base Certificate” shall mean a certificate in substantially the form
of Exhibit 1.2 hereto duly executed by the President, Vice President or
Treasurer of the Borrowing Agent and delivered to the Agent, appropriately
completed, by which such officer shall certify to Agent the Formula Amount and
calculation thereof as of the date of such certificate.
 
“Business Day” shall mean any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in East Brunswick, New Jersey and, if the applicable Business Day
relates to any LIBOR Rate Loans, such day must also be a day on which dealings
are carried on in the London interbank market.
 
“Capital Expenditures” shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements (or of any replacements or
substitutions thereof or additions thereto) which have a useful life of more
than one year and which, in accordance with GAAP, would be classified as capital
expenditures.  Capital Expenditures shall include the total principal portion of
Capitalized Lease Obligations.
 
“Capitalized Lease Obligation” shall mean any Indebtedness of any Borrower
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
 
“Cash Management Products and Services” shall mean agreements or other
arrangements under which Agent or any Lender or any Affiliate of Agent or a
Lender provides any of the following products or services to any of the
Borrowers:  (a) credit cards; (b) credit card processing services; (c) debit
cards and stored value cards; (d) purchase cards; (e) ACH transactions; (f) cash
management and treasury management services and products, including controlled
disbursement accounts or services, lockboxes, automated clearinghouse
transactions, overdrafts, interstate depository network services; or (g) foreign
currency exchange and foreign currency swaps and hedges.  The indebtedness,
obligations and liabilities of any Borrower to the provider of any Cash
Management Products and Services (including all obligations and liabilities
owing to such provider in respect of any returned items deposited with such
provider) (the “Cash Management Liabilities”) shall be “Obligations” hereunder
and otherwise treated as Obligations for purposes of each of the Other Documents
(other than any Lender-Provided Interest Rate Hedge).  The Liens securing the
Cash Management Products and Services shall be pari passu with the Liens
securing the all other Obligations under this Agreement and the Other Documents,
subject to the express provisions of Section 11.5.
 
 
3

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“Cash Management Liabilities” shall have the meaning provided in the definition
of “Cash Management Products and Services.”
 
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.
 
“Change in Law” shall mean the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any Applicable Law; (b) any
change in any Applicable Law or in the administration, implementation,
interpretation or application thereof by any Governmental Body; or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Body; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, regulations, guidelines,
interpretations or directives thereunder or issued in connection therewith
(whether or not having the force of Applicable Law) and (y) all requests, rules,
regulations, guidelines, interpretations or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or the United States or foreign regulatory
authorities (whether or not having the force of law), in each case pursuant to
Basel III, shall in each case be deemed to be a Change in Law regardless of the
date enacted, adopted, issued, promulgated or implemented.
 
“Change of Control” shall mean: (a) the occurrence of any event (whether in one
or more transactions) which results in a transfer of control of or the power to
vote more than fifty percent (50%) of the Equity Interests (on a fully diluted
basis) of any Borrower that is not a Subsidiary of another Borrower on the
Closing Date to a Person who is not one of the Original Owners, (b) the
occurrence of any event (whether in one or more transactions) which results in a
transfer of control of or the power to vote any of the Equity Interests of any
Borrower that is a Subsidiary of another Borrower on the Closing Date to a
Person who is not a Borrower; (c) without the prior written consent of the
Agent, any merger, consolidation or sale of substantially all of the property or
assets of any Borrower.  For purposes of this definition, “control of Borrower”
shall mean the power, direct or indirect (x) to vote more than 50% of the Equity
Interests having ordinary voting power for the election of directors (or the
individuals performing similar functions) of any Borrower or (y) to direct or
cause the direction of the management and policies of any Borrower by contract
or otherwise.
 
 
4

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“Charges” shall mean all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross income, gross receipts, sales, use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon the
Collateral, any Borrower or any of its Affiliates.
 
“CIP Regulations” shall have the meaning set forth in Section 14.12 hereof.
 
“Closing Date” shall mean April 30, 2013 or such other date as may be agreed to
in writing by the parties hereto.
 
“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended
or supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.
 
“Collateral” shall mean and include all right, title and interest of each
Borrower in all of the following property and assets of such Borrower, in each
case whether now existing or hereafter arising or created and whether now owned
or hereafter acquired and wherever located:
 
(a)           all Receivables and all supporting obligations relating thereto;
 
(b)           all general intangibles (including all payment intangibles and all
software) and all supporting obligations related thereto;
 
(c)           all contract rights, rights of payment which have been earned
under a contract rights, chattel paper (including electronic chattel paper and
tangible chattel paper), commercial tort claims (whether now existing or
hereafter arising); documents (including all warehouse receipts and bills of
lading), deposit accounts with the Agent, instruments (including promissory
notes), letters of credit (whether or not the respective letter of credit is
evidenced by a writing) and letter-of-credit rights, cash and all supporting
obligations;
 
(d)           all ledger sheets, ledger cards, files, correspondence, records,
books of account, business papers, computers, computer software (owned by any
Borrower or in which it has an interest), computer programs, tapes, disks and
documents, including all of such property relating to the property described in
clauses (a) through (c) of this definition; and
 
(e)           all proceeds and products of the property described in clauses (a)
through (d) of this definition, in whatever form.  It is the intention of the
parties that if Agent shall fail to have a perfected Lien in any particular
property or assets of any Borrower for any reason whatsoever, but the provisions
of this Agreement and/or of the Other Documents, together with all financing
statements and other public filings relating to Liens filed or recorded by Agent
against Borrowers, would be sufficient to create a perfected Lien in any
property or assets that such Borrower may receive upon the sale, lease, license,
exchange, transfer or disposition of such particular property or assets, then
all such “proceeds” of such particular property or assets shall be included in
the Collateral as original collateral that is the subject of a direct and
original grant of a security interest as provided for herein and in the Other
Documents (and not merely as proceeds (as defined in Article 9 of the Uniform
Commercial Code) in which a security interest is created or arises solely
pursuant to Section 9-315 of the Uniform Commercial Code).
 
 
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Notwithstanding the forgoing, Collateral shall not include any Excluded
Property.
 
“Collateral Assignment of Account” shall mean that certain Collateral Assignment
of Account executed by Anadigics in favor of Agent dated as of the Closing Date
and any other assignments and/or pledge agreements executed subsequent to the
Closing Date by any other Person to secure the Obligations.
 
“Compliance Authority” shall mean each and all of the (a) U.S. Treasury
Department/Office of Foreign Assets Control, (b) U.S. Treasury
Department/Financial Crimes Enforcement Network, (c) U.S. State
Department/Directorate of Defense Trade Controls, (d) U.S. Commerce
Department/Bureau of Industry and Security, (e) the U.S. Internal Revenue
Service, (f) the U.S. Justice Department, and (g) the U.S. Securities and
Exchange Commission.
 
“Commitment Transfer Supplement” shall mean a document in the form of Exhibit
16.3 hereto, properly completed and otherwise in form and substance satisfactory
to Agent by which the Purchasing Lender purchases and assumes a portion of the
obligation of Lenders to make Advances under this Agreement.
 
“Compliance Certificate” shall mean a compliance certificate substantially in
the form of Exhibit 1.2(a) hereto to be signed by the Chief Financial Officer or
Controller of Borrowing Agent.
 
“Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Borrower’s
business or necessary (including to avoid a conflict or breach under any
agreement, instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement, the Other
Documents, including any Consents required under all applicable federal, state
or other Applicable Law.
 
“Consigned Inventory” shall mean Inventory of any Borrower that is in the
possession of another Person on a consignment, sale or return, or other basis
that does not constitute a final sale and acceptance of such Inventory.
 
“Contract Rate” shall have the meaning set forth in Section 3.1 hereof.
 
“Controlled Group” shall mean, at any time, each Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Borrower, are treated as a single employer under Section 414 of the Code.
 
“Covered Entity” shall mean each Borrower, each Borrower’s Affiliates and
Subsidiaries, all Guarantors, pledgors of Collateral, all owners of the
foregoing, and all brokers or other agents of any Borrower acting in any
capacity in connection with the Obligations.
 
 
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“Customer” shall mean and include the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Borrower,
pursuant to which such Borrower is to deliver any personal property or perform
any services.
 
“Customs” shall have the meaning set forth in Section 2.11(b) hereof.
 
“Daily  LIBOR  Rate”  shall  mean,  for  any  day, the rate per annum
determined  by  the Agent by dividing (x) the Published Rate by (y) a number
equal to 1.00 minus the Reserve Percentage.
 
“Debt Payments” shall mean for any period, in each case, all cash actually
expended by any Borrower to make: (a) interest payments on any Advances
hereunder, plus (b) payments for all fees, commissions and charges set forth
herein, plus (e) payments on Capitalized Lease Obligations, plus (f) payments
with respect to any other Indebtedness for borrowed money.
 
“Default” shall mean an event, circumstance or condition which, with the giving
of notice or passage of time or both, would constitute an Event of Default.
 
“Default Rate” shall have the meaning set forth in Section 3.1 hereof.
 
“Defaulting Lender” shall mean any Lender that: (a) has failed, within two
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Revolving Commitment Percentage of Advances, (ii) if applicable, fund any
portion of its Participation Commitment in Letters of Credit or (iii) pay over
to the Agent, the Issuer or any Lender any other amount required to be paid by
it hereunder, unless, in the case of clause (i) above, such Lender notifies the
Agent in writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified and
including a particular Default or Event of Default, if any) has not been
satisfied; (b) has notified the Borrowers or the Agent in writing, or has made a
public statement to the effect, that it does not intend or expect to comply with
any of its funding obligations under this Agreement (unless such writing or
public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including a particular Default or Event of Default, if any) to funding a loan
under this Agreement cannot be satisfied) or generally under other agreements in
which it commits to extend credit; (c) has failed, within two Business Days
after request by the Agent, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Advances and, if applicable, participations in then outstanding
Letters of Credit under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon the Agent’s receipt of
such certification in form and substance satisfactory to the Agent; (d) has
become the subject of an Insolvency Event; or (e) has failed at any time to
comply with the provisions of Section 2.4(d) with respect to purchasing
participations from the other Lenders, whereby such Lender’s share of any
payment received, whether by setoff or otherwise, is in excess of its pro rata
share of such payments due and payable to all of the Lenders.
 
 
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“Depository Accounts” shall have the meaning set forth in Section 4.8(h) hereof.
 
“Designated Lender” shall have the meaning set forth in Section 16.2(d) hereof.
 
“Document” shall have the meaning given to the term “document” in the Uniform
Commercial Code.
 
“Dollar” and the sign “$” shall mean lawful money of the United States of
America.
 
“Domestic Rate Loan” shall mean any Advance that bears interest based upon the
Alternate Base Rate.
 
“Drawing Date” shall have the meaning set forth in Section 2.12(b) hereof.
 
“Early Termination Date” shall have the meaning set forth in Section 13.1
hereof.
 
“EBITDA” shall mean for any period with respect to Borrowers on a Consolidated
Basis, earnings before interest, taxes, depreciation, amortization and excluding
non-cash equity compensation charges and other extraordinary and non-recurring
items.
 
“Eligible Receivables” shall mean and include, each Receivable of a Borrower
arising in the Ordinary Course of Business and which Agent, in its sole credit
judgment, shall deem to be an Eligible Receivable, based on such considerations
as Agent may from time to time deem appropriate.  A Receivable shall not be
deemed eligible unless such Receivable is subject to Agent’s first priority
perfected security interest and no other Lien (other than Permitted
Encumbrances), and is evidenced by an invoice or other documentary evidence
satisfactory to Agent.  In addition, no Receivable shall be an Eligible
Receivable if:
 
(a)           it arises out of a sale made by any Borrower to an Affiliate of
any Borrower or to a Person controlled by an Affiliate of any Borrower;
 
(b)           it is due or unpaid more than sixty (60) days after the original
due date or ninety (90) days after the original invoice date;
 
(c)           fifty percent (50%) or more of the Receivables from such Customer
are not deemed Eligible Receivables hereunder.
 
(d)           any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
 
(e)           an Insolvency Event shall have occurred with respect to such
Customer;
 
(f)           the sale to the Customer is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
 
(g)           the Customer is the United States of America, any state or any
department, agency or instrumentality of any of them, unless the applicable
Borrower assigns its right to payment of such Receivable to Agent pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et
seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other
applicable statutes or ordinances;
 
 
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(h)           the goods giving rise to such Receivable have not been delivered
to and accepted by the Customer or the services giving rise to such Receivable
have not been performed by the applicable Borrower and accepted by the Customer
or the Receivable otherwise does not represent a final sale;
 
(i)            the Receivable is subject to any offset, deduction, defense,
dispute, credits or counterclaim (but such Receivable shall only be ineligible
to the extent of such offset, deduction, defense or counterclaim), the Customer
is also a creditor or supplier of a Borrower or the Receivable is contingent in
any respect or for any reason;
 
(j)            the applicable Borrower has made any agreement with any Customer
for any deduction therefrom, except for discounts or allowances made in the
Ordinary Course of Business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
 
(k)           any return, rejection or repossession of the merchandise has
occurred or the rendition of services has been disputed;
 
(l)            such Receivable is not payable to a Borrower; or
 
(m)          such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
 
“Environmental Complaint” shall have the meaning set forth in Section 9.3(b)
hereof.
 
“Environmental Laws” shall mean all federal, state and local environmental, land
use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes as well as common laws, relating to the protection of the
environment, human health and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Materials and the rules, regulations, policies, guidelines,
interpretations, decisions, orders and directives of federal, state,
international and local governmental agencies and authorities with respect
thereto.
 
“Equity Interests” shall mean, with respect to any Person, any and all shares,
rights to purchase, options, warrants, general, limited or limited liability
partnership interests, member interests, participation or other equivalents of
or interest in (regardless of how designated) equity of such Person, whether
voting or nonvoting, including common stock, preferred stock, convertible
securities or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Exchange Act), including in each case all of the following rights relating to
such Equity Interests, whether arising under the Organizational Documents of the
Person issuing such Equity Interests (the “issuer”) or under the applicable laws
of such issuer’s jurisdiction of organization relating to the formation,
existence and governance of corporations, limited liability companies or
partnerships or business trusts or other legal entities, as the case may be: (i)
all economic rights (including all rights to receive dividends and
distributions) relating to such Equity Interests; (ii) all voting rights and
rights to consent to any particular action(s) by the applicable issuer; (iii)
all management rights with respect to such issuer; (iv) in the case of any
Equity Interests consisting of a general partner interest in a partnership, all
powers and rights as a general partner with respect to the management,
operations and control of the business and affairs of the applicable issuer; (v)
in the case of any Equity Interests consisting of the membership/limited
liability company interests of a managing member in a limited liability company,
all powers and rights as a managing member with respect to the management,
operations and control of the business and affairs of the applicable issuer;
(vi) all rights to designate or appoint or vote for or remove any officers,
directors, manager(s), general partner(s) or managing member(s) of such issuer
and/or any members of any board of members/managers/partners/directors that may
at any time have any rights to manage and direct the business and affairs of the
applicable issuer under its Organizational Documents as in effect from time to
time or under Applicable Law; (vii) all rights to amend the Organizational
Documents of such issuer, (viii) in the case of any Equity Interests in a
partnership or limited liability company, the status of the holder of such
Equity Interests as a “partner”, general or limited, or “member” (as applicable)
under the applicable Organizational Documents and/or Applicable Law; and (ix)
all certificates evidencing such Equity Interests.
 
 
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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time and the rules and
regulations promulgated thereunder.
 
“Event of Default” shall have the meaning set forth in Article X hereof.
 
“Excluded Property” shall mean any non-material lease, license, contract or
agreement to which any Borrower is a party, and any of its rights or interests
thereunder, if and to the extent that a security interest therein is prohibited
by or in violation of (x) any Applicable Law, or (y) a term, provision or
condition of any such lease, license, contract or agreement (unless in each
case, such Applicable Law, term, provision or condition would be rendered
ineffective with respect to the creation of such security interest pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any
successor provision or provisions) of any relevant jurisdiction or any other
Applicable Law or principles of equity), provided, however, that the foregoing
shall cease to be treated as “Excluded Property” (and shall constitute
Collateral) immediately at such time as the contractual or legal prohibition
shall no longer be applicable and to the extent severable, such security
interest shall attach immediately to any portion of such lease, license,
contract or agreement not subject to the prohibitions specified in (x) or (y)
above, provided, further that Excluded Property shall (i) include neither any
proceeds of any such lease, license, contract or agreement or any goodwill of
the Borrowers’ business associated therewith or attributable thereto, and (ii)
include all cash other than the cash assigned in favor of the Agent pursuant to
the Collateral Assignment of Account and any and all cash maintained in any of
the Borrowers’ collection and operating accounts maintained with the Agent.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Excluded Taxes” shall mean, with respect to the Agent, any Lender, Participant
or any other recipient of any payment to be made by or on account of any
Obligations, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, Participant or Issuer, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which
any Borrower is located, (c) in the case of a Foreign Lender, any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.10(e), except to the extent
that such Foreign Lender or Participant (or its assignor or seller of a
participation, if any) was entitled, at the time of designation of a new lending
office (or assignment or sale of a participation), to receive additional amounts
from the Borrowers with respect to such withholding tax pursuant to Section
3.10(a), or (d) any Taxes imposed on any “withholding payment” payable to such
recipient as a result of the failure of such recipient to satisfy the
requirements set forth in the FATCA after December 31, 2012.
 
 
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“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with) and any current or
future regulations or official interpretations thereof.
 
“Federal Funds Effective Rate” shall mean for any day the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) 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 date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
“Federal Funds Effective Rate” for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
 
“Federal Funds Open Rate” shall mean for any day the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by PNC (an “Alternate Source”) (or if such rate for such day
does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on
any Alternate Source, or if there shall at any time, for any reason, no longer
exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
Source, a comparable replacement rate determined by PNC at such time (which
determination shall be conclusive absent manifest error); provided however, that
if such day is not a Business Day, the Federal Funds Open Rate for such day
shall be the “open” rate on the immediately preceding Business Day.  If and when
the Federal Funds Open Rate changes, the rate of interest with respect to any
advance to which the Federal Funds Open Rate applies will change automatically
without notice to the Borrowers, effective on the date of any such change.
 
 
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“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrowers are resident for tax
purposes.  For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
 
“Foreign Subsidiary” shall mean any Subsidiary of any Person that is not
organized or incorporated in the United States, any State or territory thereof
or the District of Columbia.
 
“Formula Amount” shall have the meaning set forth in Section 2.1(a) hereof.
 
“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time.
 
“Governmental Acts” shall mean any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental Body.
 
“Governmental Body” shall mean any nation or government, any state or other
political subdivision thereof or any entity, authority, agency, division or
department exercising the executive, legislative, judicial, taxing, regulatory
or administrative powers or  functions of or pertaining to a government
(including any supra-national bodies such as the European Union or the European
Central Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing).
 
“Guarantor” shall mean any Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations and “Guarantors” means
collectively all such Persons.
 
“Guaranty” shall mean any guaranty of the Obligations executed by a Guarantor in
favor of Agent for its benefit and for the ratable benefit of Lenders, in form
and substance satisfactory to Agent.
 
“Hazardous Discharge” shall have the meaning set forth in Section 9.3(b) hereof.
 
“Hazardous Materials” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
as defined in or subject to regulation under Environmental Laws.
 
“Hazardous Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable Federal and state
laws now in force or hereafter enacted relating to hazardous waste disposal.
 
“Hedge Liabilities” shall have the meaning provided in the definition of
“Lender-Provided Interest Rate Hedge”.
 
 
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“Indebtedness” shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of:  (a) borrowed money;
(b) amounts received under or liabilities in respect of any note purchase or
acceptance credit facility, and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) all Capitalized Lease
Obligations; (d)  reimbursement obligations (contingent or otherwise) under any
letter of credit agreement, banker’s acceptance agreement or similar
arrangement; (e) obligations under any Interest Rate Hedge or other interest
rate management device, foreign currency exchange agreement, currency swap
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement; (f) any other advances of
credit made to or on behalf of such Person or other transaction (including
forward sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements including to
finance the purchase price of property or services and all obligations of such
Person to pay the deferred purchase price of property or services (but not
including trade payables and accrued expenses incurred in the Ordinary Course of
Business which are not represented by a promissory note or other evidence of
indebtedness and which are not more than thirty (30) days past due); (g) all
Equity Interests of such Person subject to repurchase or redemption rights or
obligations (excluding repurchases or redemptions at the sole option of such
Person); (h) all indebtedness, obligations or liabilities secured by a Lien on
any asset of such Person, whether or not such indebtedness, obligations or
liabilities are otherwise an obligation of such Person; (i) all obligations of
such Person for “earnouts”, purchase price adjustments, profit sharing
arrangements, deferred purchase money amounts and similar payment obligations or
continuing obligations of any nature of such Person arising out of purchase and
sale contracts; (j) off-balance sheet liabilities and/or pension plan
liabilities of such Person; (k) obligations arising under bonus, deferred
compensation, incentive compensation or similar arrangements, other than those
arising in the Ordinary Course of Business; and (l) any guaranty of any
indebtedness, obligations or liabilities of a type described in the foregoing
clauses (a) through (k).
 
“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.
 
“Ineligible Security(ies)” shall mean any security which may not be underwritten
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
 
“Insolvency Event” shall mean, with respect to any Person, including without
limitation any Lender,  such Person or such Person’s direct or indirect parent
company (a) becomes the subject of a bankruptcy or insolvency proceeding
(including any proceeding under Title 11 of the United States Code), or
regulatory restrictions, (b) has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it or has called a meeting of its creditors, (c) admits in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (d) with respect to a Lender, such Lender is
unable to perform hereunder due to the application of Applicable Law, or (e) in
the good faith determination of the Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment of a type described in clause(a) or (b), provided that
an Insolvency Event shall not result solely by virtue of any ownership interest,
or the acquisition of any ownership interest, in such Person or such Person’s
direct or indirect parent company by a Governmental Body or instrumentality
thereof if, and only if, such ownership interest does not result in or provide
such Person with immunity from the jurisdiction of courts within the United
States or from the enforcement of judgments or writs of attachment on its assets
or permit such Person (or such Governmental Body or instrumentality) to reject,
repudiate, disavow or disaffirm any contracts or agreements made by such Person.
 
 
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“Intellectual Property” shall mean property constituting a patent, copyright,
trademark (or any application in respect of the foregoing), service mark,
copyright, copyright application, trade name, mask work, trade secrets, design
right, assumed name or license or other right to use any of the foregoing under
Applicable Law.
 
“Interest Period” shall mean the period provided for any LIBOR Rate Loan
pursuant to Section 2.2(b) hereof.
 
“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
floor, adjustable strike cap, adjustable strike corridor or similar agreements
entered into by any Borrower or its Subsidiaries in order to provide protection
to, or minimize the impact upon, such Borrower, any Guarantor and/or their
respective Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.
 
“Inventory” shall mean and include as to each Borrower all of such Borrower’s
inventory (as defined in Article 9 of the Uniform Commercial Code) and all of
such Borrower’s goods, merchandise and other personal property, wherever
located, to be furnished under any consignment arrangement, contract of service
or held for sale or lease, all raw materials, work in process, finished goods
and materials and supplies of any kind, nature or description which are or might
be used or consumed in such Borrower’s business or used in selling or furnishing
such goods, merchandise and other personal property, and all Documents of Title.
 
“Issuer” shall mean (i) Agent in its capacity as the issuer of Letters of Credit
under this Agreement and (ii) any other Person which Agent in its discretion
shall designate as the issuer of and cause to issue any particular Letter of
Credit under this Agreement in place of Agent as issuer.
 
“Law(s)”  shall mean any law(s) (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, issued guidance, release, ruling,
order, executive order, injunction, writ, decree, bond judgment authorization or
approval, lien or award of or any settlement arrangement with any Governmental
Body, foreign or domestic.
 
“Leasehold Interests” shall mean all of each Borrower’s right, title and
interest in and to, and as lessee of, the premises identified as leased Real
Estate on Schedule 4.4 hereto.
 
“Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.  For the purpose of provision of
this Agreement or any Other Document which provides for the granting of a
security interest or other Lien to the Agent for the benefit of the Lenders as
security for the Obligations, "Lenders" shall include any Affiliate of a Lender
to which such Obligation (specifically including any Hedging Obligation and any
Cash Management Obligation) is owed.
 
 
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“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which the Agent confirms in writing
prior to the execution thereof: (a) is documented in a standard International
Swap Dealer Association Agreement; (b) provides for the method of calculating
the reimbursable amount of the provider’s credit exposure in a reasonable and
customary manner; and (c) is entered into for hedging (rather than speculative)
purposes.  The liabilities of any Borrower to the provider of any
Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be
“Obligations” hereunder, guaranteed obligations under the Guaranty, as
applicable, and otherwise treated as Obligations for purposes of each of the
Other Documents.  The Liens securing the Hedge Liabilities shall be pari passu
with the Liens securing all other Obligations under this Agreement and the Other
Documents, subject to the express provisions of Section 11.5 hereof.
 
“Letter of Credit Application” shall have the meaning set forth in Section
2.10(a) hereof.
 
“Letter of Credit Borrowing” shall have the meaning set forth in Section 2.12(d)
hereof.
 
“Letter of Credit Fees” shall have the meaning set forth in Section 3.2 hereof
 
“Letter of Credit Sublimit” shall mean $500,000.
 
“Letters of Credit” shall have the meaning set forth in Section 2.9 hereof.
 
“LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest
Period relating thereto, the interest rate per annum determined by Agent by
dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (a) the rate which appears on the Bloomberg Page BBAM1
(or on such other substitute Bloomberg page that displays rates at which US
dollar deposits are offered by leading banks in the London interbank deposit
market), or the rate which is quoted by another source selected by Agent which
has been approved by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying rates at which U.S. dollar
deposits are offered by leading banks in the London interbank deposit market (a
“LIBOR Alternate Source”), at approximately 11:00 a.m., London time, two (2)
Business Days prior to the commencement of such Interest Period as the London
interbank offered rate for U.S. Dollars for an amount comparable to such LIBOR
Rate Loan and having a borrowing date and a maturity comparable to such Interest
Period (or if there shall at any time, for any reason, no longer exist a
Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a
comparable replacement rate determined by Agent at such time (which
determination shall be conclusive absent manifest error)), by (b) a number equal
1.00 minus the Reserve Percentage.  The LIBOR Rate may also be expressed by the
following formula:
 

 
Average of London interbank offered rates  quoted by Bloomberg or  appropriate
Successor as shown on
 
LIBOR Rate =
Bloomberg Page BBAM1
1.00 – Reserve Percentage

 
 
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The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of
such effective date.  The Agent shall give reasonably prompt notice to the
Borrowing Agent of the LIBOR Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
 
“LIBOR Rate Loan” shall mean any Advance that bears interest based on the LIBOR
Rate.
 
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.
 
“Lien Waiver Agreement” shall mean an agreement which is executed in favor of
Agent by a Person who owns or occupies premises at which any Collateral may be
located from time to time in form and substance satisfactory to Agent.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the
condition (financial or otherwise), results of operations, assets, business,
properties or prospects of any Borrower or any Guarantor, (b) any Borrower’s
ability to duly and punctually pay or perform the Obligations in accordance with
the terms thereof, (c) the value of the Collateral, or Agent’s Liens on the
Collateral or the priority of any such Lien or (d) the practical realization of
the benefits of Agent’s and each Lender’s rights and remedies under this
Agreement and the Other Documents.
 
“Customer and Supplier Contract” shall mean any contract, agreement, instrument,
permit, lease or license, written or oral, of any Borrower, which is material to
any Borrower’s business or which the failure to comply with could reasonably be
expected to result in a Material Adverse Effect.
 
“Maximum Loan Amount” shall mean $11,000,000.
 
“Maximum Revolving Advance Amount” shall mean $11,000,000.
 
“Maximum Undrawn Amount” shall mean, with respect to any outstanding Letter of
Credit as of any date, the amount of such Letter of Credit that is or may become
available to be drawn, including all automatic increases provided for in such
Letter of Credit, whether or not any such automatic increase has become
effective.
 
“Modified Commitment Transfer Supplement” shall have the meaning set forth in
Section 16.3(d) hereof.
 
 
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“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections
3(37) or 4001(a)(3) of ERISA to which contributions are required or, within the
preceding five plan years, were required by any Borrower or any member of the
Controlled Group.
 
“Multiple Employer Plan” shall mean a Plan which has two or more contributing
sponsors (including any Borrower or any member of the Controlled Group) at least
two of whom are not under common control, as such a plan is described in Section
4064 of ERISA.
 
“Negotiable Document” shall mean a Document that is “negotiable” within the
meaning of Article 7 of the Uniform Commercial Code.
 
“Net Income” shall have the meaning ascribed to it by GAAP.
 
“Non-Defaulting Lender” shall mean, at any time, any Revolving Lender that is
not a Defaulting Lender at such time.
 
“Note” shall mean the Revolving Credit Note.
 
“Obligations” shall mean and include any and all loans (including without
limitation, all Advances), advances, debts, liabilities, obligations (including
without limitation all reimbursement obligations and cash collateralization
obligations with respect to Letters of Credit issued hereunder), covenants and
duties owing by any Borrower or Guarantor to Issuer, Lenders or Agent (or to any
other direct or indirect subsidiary or affiliate of Issuer, any Lender or Agent)
of any kind or nature, present or future (including any interest or other
amounts accruing thereon, any fees accruing under or in connection therewith,
any costs and expenses of any Person payable by any Borrower and any
indemnification obligations payable by any Borrower arising or payable after
maturity, or after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding relating to any Borrower,
whether or not a claim for post-filing or post-petition interest, fees or other
amounts is allowable or allowed in such proceeding), whether or not evidenced by
any note, guaranty or other instrument, whether arising under any agreement,
instrument or document. (including this Agreement, the Other Documents,
Lender-Provided Interest Rate Hedges and any Cash Management Products and
Services) whether or not for the payment of money, whether arising by reason of
an extension of credit, opening or issuance of a letter of credit, loan,
equipment lease, establishment of any purchase card or similar facility or
guarantee, under any interest or currency swap, future, option or other similar
agreement, or in any other manner, whether arising out of overdrafts or deposit
or other accounts or electronic funds transfers (whether through automated
clearing houses or otherwise) or out of the Agent’s or any Lender’s non-receipt
of or inability to collect funds or otherwise not being made whole in connection
with depository transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise or by what agreement or instrument they
may be evidenced or whether evidenced by any agreement or instrument, including,
but not limited to, (i) any and all of any Borrower’s or any Guarantor’s
Indebtedness and/or liabilities (and any and all indebtedness, obligations
and/or liabilities of any Subsidiary of any Borrower or any Guarantor) under
this Agreement, the Other Documents or under any other agreement between Issuer,
Agent or Lenders and any Borrower and any amendments, extensions, renewals or
increases and all costs and expenses of Issuer, Agent and any Lender incurred in
the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not limited to
reasonable attorneys’ fees and expenses and all obligations of any Borrower to
Issuer, Agent or Lenders to perform acts or refrain from taking any action, (ii)
all Hedge Liabilities and (iii) all Cash Management Liabilities.
 
 
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“Ordinary Course of Business” shall mean, with respect to any Borrower, the
ordinary course of such Borrower’s business as conducted on the Closing Date.
 
“Organizational Documents” shall mean, with respect to any Person, any charter,
articles or certificate of incorporation, certificate of organization,
registration or formation, certificate of partnership or limited partnership,
bylaws, operating agreement, limited liability company agreement, or partnership
agreement of such Person and any and all other applicable documents relating to
such Person’s formation, organization or entity governance matters (including
any shareholders’ or equity holders’ agreement or voting trust agreement) and
specifically includes, without limitation, any certificates of designation for
preferred stock or other forms of preferred equity.
 
“Other Documents” shall mean the Note, the Perfection Certificates, any
Guaranty, the Collateral Assignment of Account, any Lender-Provided Interest
Rate Hedge, and any and all other agreements, instruments and documents,
including intercreditor agreements, guaranties, pledges, powers of attorney,
landlord waivers, consents, interest or currency swap agreements or other
similar agreements and all other writings heretofore, now or hereafter executed
by any Borrower or any Guarantor and/or delivered to Agent or any Lender in
respect of the transactions contemplated by this Agreement, in each case
together with all extensions, renewals, amendments, supplements, modifications,
substitutions and replacements thereto and thereof.
 
“Other Taxes” shall mean all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any Other Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
Other Document.
 
“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(e)
hereof.
 
“Parent” of any Person shall mean a corporation or other entity owning, directly
or indirectly, 50% or more of the Equity Interests issued by such Person having
ordinary voting power to elect a majority of the directors of such Person, or
other Persons performing similar functions for any such Person.
 
“Participant” shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.
 
“Participation Advance” shall have the meaning set forth in Section 2.12(d)
hereof.
 
“Participation Commitment” shall mean the obligation hereunder of each Lender
holding a Revolving Commitment to buy a participation equal to its Revolving
Commitment Percentage (subject to any reallocation pursuant to Section
2.20(b)(iii) hereof) in the Letters of Credit issued hereunder as provided for
in Section 2.12(a) hereof.
 
 
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“Payment Office” shall mean initially Two Tower Center Boulevard, East
Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
 
“Pension Benefit Plan” shall mean at any time any “employee pension benefit
plan” as defined in Section 3(2) of ERISA (including a Multiple Employer Plan,
but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Sections 412, 430 or 436 of the
Code and either (i) is maintained or to which contributions are required by
Borrower or any member of the Controlled Group or (ii) has at any time within
the preceding five years been maintained or to which contributions have been
required by Borrower or any entity which was at such time a member of the
Controlled Group.
 
“Perfection Certificates” shall mean, collectively, the information
questionnaires and the responses thereto provided by each Borrower and delivered
to Agent.
 
“Permitted Discretion” means a determination made in good faith and in the
exercise (from the perspective of a secured asset-based lender) of commercially
reasonable business judgment.
 
“Permitted Encumbrances” shall mean: (a) Liens in favor of Agent for the benefit
of Agent and Lenders, including without limitation, Liens securing Hedge
Liabilities and Cash Management Products and Services; (b) Liens for taxes,
assessments or other governmental charges not delinquent or being Properly
Contested; (c) deposits or pledges to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance;
(d) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the Ordinary Course of
Business; (e) Liens arising by virtue of the rendition, entry or issuance
against any Borrower or any Subsidiary, or any property of any Borrower or any
Subsidiary, of any judgment, writ, order, or decree to the extent the rendition,
entry, issuance or continued existence of such judgment, writ, order or decree
(or any event or circumstance relating thereto) has not resulted in the
occurrence of an Event of Default under Section 10.6 hereof; (f) mechanics’,
workers’, materialmen’s or other like Liens arising in the Ordinary Course of
Business with respect to obligations which are not due or which are being
Properly Contested; (g) Liens placed upon fixed assets hereafter acquired to
secure a portion of the purchase price thereof, provided that (I) any such lien
shall not encumber any other property of any Borrower and (II) the aggregate
amount of Indebtedness secured by such Liens incurred as a result of such
purchases during any fiscal year shall not exceed the amount permitted in
Section 7.6 hereof; (h)other Liens incidental to the conduct of any Borrower’s
business or the ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and which do not in the aggregate materially detract from Agent’s or Lenders’
rights in and to the Collateral or the value of any Borrower’s property or
assets or which do not materially impair the use thereof in the operation of any
Borrower’s business; (i) easements, rights-of-way, zoning restrictions, minor
defects or irregularities in title and other charges or encumbrances, in each
case, which do not interfere in any material respect with the Ordinary Course of
Business of the Borrowers and their Subsidiaries; and (j) Liens disclosed on
Schedule 1.2; provided that such Liens shall secure only those obligations which
they secure on the Closing Date (and extensions, renewals and refinancing of
such obligations permitted by Section 7.8 hereof) and shall not subsequently
apply to any other property or assets of any Borrower other than the property
and assets to which they apply as of the Closing Date.
 
 
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“Permitted Indebtedness” shall mean: (a) the Obligations; (b) Indebtedness
incurred for Capital Expenditures permitted in Section 7.6 hereof; (c) any
guarantees of Indebtedness permitted under Section 7.3 hereof; (d) any
Indebtedness listed on Schedule 5.8(b)(ii) hereof; (e) Indebtedness consisting
of Permitted Loans made by one or more Borrower(s) to any other Borrower(s) and
(f) Interest Rate Hedges that are entered into by Borrowers to hedge their risks
with respect to outstanding Indebtedness of Borrowers and not for speculative or
investment purposes.
 
“Permitted Investments” shall mean investments made in accordance with
Borrower’s Investment Policy Guidelines dated October 17, 2012.
 
“Permitted Loans” shall mean: (a) the extension of trade credit by a Borrower to
its Customer(s), in the Ordinary Course of Business in connection with a sale of
Inventory or rendition of services, in each case on open account terms; and (b)
loans to employees in the Ordinary Course of Business not to exceed as to all
such loans the aggregate amount of $25,000 at any time outstanding.
 
“Person” shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
“Plan” shall mean any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Benefit Plan and a Multiemployer Plan, as defined
herein) maintained by any Borrower or any member of the Controlled Group or to
which any Borrower or any member of the Controlled Group is required to
contribute.
 
 “PNC” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.
 
“Properly Contested” shall mean, in the case of any Indebtedness, Lien or taxes,
as applicable, of any Person that are not paid as and when due or payable by
reason of such Person’s bona fide dispute concerning its liability to pay the
same or concerning the amount thereof: (a) such Indebtedness, Lien or taxes, as
applicable, are being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (b) such Person has
established appropriate reserves as shall be required in conformity with GAAP;
(c) the non-payment of such Indebtedness or taxes will not have a Material
Adverse Effect or will not result in the forfeiture of any assets of such
Person; (d) no Lien is imposed upon any of such Person’s assets with respect to
such Indebtedness or taxes unless such Lien (x) does not attach to any
Receivables or Inventory, (y) is at all times junior and subordinate in priority
to the Liens in favor of the Agent (except only with respect to property taxes
that have priority as a matter of applicable state law) and, (z) enforcement of
such Lien is stayed during the period prior to the final resolution or
disposition of such dispute; and (e) if such Indebtedness or Lien, as
applicable, results from, or is determined by the entry, rendition or issuance
against a Person or any of its assets of a judgment, writ, order or decree,
enforcement of such judgment, writ, order or decree is stayed pending a timely
appeal or other judicial review.
 
 
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“Protective Advances” shall have the meaning set forth in Section 16.2(f)
hereof.
 
“Published  Rate” shall mean the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the  caption  “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the LIBOR
Rate for a one month period as published in another publication selected by the
Agent).
 
“Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.
 
“Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.
 
“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.
 
“Real Property” shall mean all of the owned and leased premises identified on
Schedule 4.4 hereto or in and to any other premises or real property that are
hereafter owned or leased by any Borrower.
 
“Receivables” shall mean and include, as to each Borrower, all of such
Borrower’s accounts (as defined in Article 9 of the Uniform Commercial Code) and
all of such Borrower’s contract rights, instruments (including those evidencing
indebtedness owed to such Borrower by its Affiliates), documents, chattel paper
(including electronic chattel paper), general intangibles relating to accounts,
contract rights, instruments, documents and chattel paper, and drafts and
acceptances, credit card receivables and all other forms of obligations owing to
such Borrower arising out of or in connection with the sale or lease of
Inventory or the rendition of services, all supporting obligations, guarantees
and other security therefor, whether secured or unsecured, now existing or
hereafter created, and whether or not specifically sold or assigned to Agent
hereunder.
 
“Receivables Advance Rate” shall have the meaning set forth in Section
2.1(a)(y)(i) hereof.
 
“Register” shall have the meaning set forth in Section 16.3(e) hereof.
 
“Reimbursement Obligation” shall have the meaning set forth in Section 2.12(b)
hereof.
 
“Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.
 
 
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“Replacement Notice” shall have the meaning set forth in Section 3.11 hereof.
 
“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is indicted, arraigned, investigated or custodially
detained, or receives an inquiry from regulatory or law enforcement officials,
in connection with any Anti-Terrorism Law or any predicate crime to any
Anti-Terrorism Law, or self-discovers facts or circumstances implicating any
aspect of its operations with the actual or possible violation of any
Anti-Terrorism Law.
 
“Required Lenders” shall mean Lenders (not including any Defaulting Lender)
holding at least sixty-six and two-thirds percent (66-2/3%) of either (a) the
aggregate of (x) the Revolving Commitment Amounts of all Lenders (excluding any
Defaulting Lender) or (b) after the termination of all commitments of the
Lenders hereunder, the sum of (x) the outstanding Revolving Advances, and (y)
(i) the aggregate of the Maximum Undrawn Amount of all outstanding Letters of
Credit multiplied by (ii) the Revolving Commitments of all Lenders as most
recently in effect excluding any Defaulting Lender; provided, however, if there
are fewer than three (3) Lenders, Required Lenders shall mean all Lenders
(excluding any Defaulting Lender).
 
“Reserve Percentage” shall mean as of any day the maximum effective percentage
in effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”.
 
“Revolving Advances” shall mean Advances made other than Letters of Credit.
 
“Revolving Commitment” shall mean, as to any Lender, the obligation of such
Lender (if applicable), to make Revolving Advances and participate in Letters of
Credit, in an aggregate principal and/or face amount not to exceed the Revolving
Commitment Amount (if any) of such Lender.
 
“Revolving Commitment Percentage” shall mean, as to any Lender other than a New
Lender, the Revolving Commitment Percentage (if any) set forth below such
Lender’s name on the signature page hereof (or, in the case of any Lender that
became party to this Agreement after the Closing Date pursuant to Section
16.3(c) or (d) hereof, the Revolving Commitment Percentage (if any) of such
Lender as set forth in the applicable Commitment Transfer Supplement).
 
“Revolving Commitment Amount” shall mean, as to any Lender other than a New
Lender, the Revolving Commitment amount (if any) set forth below such Lender’s
name on the signature page hereto (or, in the case of any Lender that became
party to this Agreement after the Closing Date pursuant to Section 16.3(c) or
(d) hereof, the Revolving Commitment amount (if any) of such Lender as set forth
in the applicable Commitment Transfer Supplement).
 
“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof.
 
 
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“Revolving Interest Rate” shall mean (a) with respect to Revolving Advances that
are Domestic Rate Loans, an interest rate per annum equal to the sum of the
Alternate Base Rate plus one percent (1.00%) and (b) with respect to LIBOR Rate
Loans, the sum of the LIBOR Rate plus three and one quarter of one percent
(3.25%), provided, however, if the Borrowers provide to the Agent the annual
financial statements required pursuant to Section 9.7 herein for the fiscal year
ending December 31, 2013 and such annual financial statements reflect a positive
Net Income for the final six (6) month period of the 2013 fiscal year on a
cumulative basis from the Borrowers’ operations (specifically excluding any and
all gains from extraordinary and non-recurring items) in an amount acceptable to
the Agent, then the Revolving Interest Rate shall be modified to mean (y) with
respect to Revolving Advances that are Domestic Rate Loans, an interest rate per
annum equal to the sum of the Alternate Base Rate plus three quarters of one
percent (.75%) and (z) with respect to LIBOR Rate Loans, the sum of the LIBOR
Rate plus three percent (3.00%).
 
“Sanctioned Country” shall mean a country subject to a sanctions program
maintained by any Compliance Authority.
 
“Sanctioned Person” shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person or entity, or subject to any limitations or
prohibitions (including but not limited to the blocking of property or rejection
of transactions), under any order or directive of any Compliance Authority or
otherwise subject to, or specially designated under, any sanctions program
maintained by any Compliance Authority.
 
“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.
 
“Secured Parties” shall mean, collectively, Agent, Issuer and Lenders, together
with any affiliates of Agent or any Lender to whom any Hedging Obligations or
Cash Management Liabilities are owed and with each other holder of any of the
Obligations, and the respective successors and assigns of each of them.
 
“Securities Act” shall mean the Securities Act of 1933, as amended.
 
“Subsidiary” shall mean of any Person a corporation or other entity of whose
Equity Interests having ordinary voting power (other than Equity Interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.
 
“Subsidiary Stock” shall mean (a) with respect to the Equity Interests issued to
a Borrower by any Subsidiary, 100% of such issued and outstanding Equity
Interests, and (b) with respect to any Equity Interests issued to a Borrower by
any Foreign Subsidiary (i) 100% of such issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956(c)(2)) and
(ii) 66% (or such greater percentage that, due to a change in an Applicable Law
after the date hereof, (x) could not reasonably be expected to cause the
undistributed earnings of such  Subsidiary as determined for United States
federal income tax purposes to be treated as a deemed dividend to such Borrower
and (y) could not reasonably be expected to cause any material adverse tax
consequences) of such issued and outstanding Equity Interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)).
 
 
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“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Body, including any interest, additions to tax or penalties
applicable thereto.
 
“Term” shall have the meaning set forth in Section 13.1 hereof.
 
“Termination Date” shall mean April 30, 2016 or such other date as the Lenders
may agree in writing to extend the Termination Date until, without there being
any obligation on the part of the Lenders to extend the Termination Date.
 
“Termination Event” shall mean: (a) a Reportable Event with respect to any Plan;
(b) the withdrawal of any Borrower or any member of the Controlled Group from a
Plan during a plan year in which such entity was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) the providing
of notice of intent to terminate a Plan in a distress termination described in
Section 4041(c) of ERISA; (d) the commencement of proceedings by the PBGC to
terminate a Plan; (e) any event or condition (a) which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; (f) the partial or
complete withdrawal within the meaning of Section 4203 or 4205 of ERISA, of any
Borrower or any member of the Controlled Group from a Multiemployer Plan; (g)
notice that a Multiemployer Plan is subject to Section 4245 of ERISA; or (h) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not diligent, upon any Borrower or any member of the Controlled
Group.
 
“Toxic Substance” shall mean and include any material present on the Real
Property (including the Leasehold Interests) which has been shown to have
significant adverse effect on human health or which is subject to regulation
under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq.,
applicable state law, or any other applicable Federal or state laws now in force
or hereafter enacted relating to toxic substances.  “Toxic Substance” includes
but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based
paints.
 
“Transactions” shall mean the matters evidenced by this Agreement and the Other
Documents.
 
“Transferee” shall have the meaning set forth in Section 16.3(d) hereof.
 
“Undrawn Availability” at a particular date shall mean an amount equal to (a)
the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount minus the Maximum Undrawn Amount of all outstanding Letters of Credit,
minus (b) the sum of (i) the outstanding amount of Advances plus (ii) all
amounts due and owing to any Borrower’s trade creditors which are outstanding
sixty (60) days past their due date, plus (iii) fees and expenses incurred in
connection with the Transactions for which Borrowers are liable but which have
not been paid or charged to Borrowers’ Account.
 
 
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“Unfunded Capital Expenditures” shall mean, as to any Borrower, without
duplication, a Capital Expenditure funded (a) from such Borrower’s internally
generated cash flow or (b) with the proceeds of a Revolving Advance.
 
“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof.
 
“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
 
1.3.          Uniform Commercial Code Terms.  All terms used herein and defined
in the Uniform Commercial Code as adopted in the State of New York from time to
time (the “Uniform Commercial Code”) shall have the meaning given therein unless
otherwise defined herein.  Without limiting the foregoing, the terms “accounts”,
“chattel paper” (and “electronic chattel paper” and “tangible chattel paper”),
“commercial tort claims”, “deposit accounts”, “documents”, “equipment”,
“financial asset”, “fixtures”, “general intangibles”, “goods”, “instruments”,
“inventory”, “investment property”, “letter-of-credit rights”,  “payment
intangibles”, “proceeds”, “promissory note” “securities”, “software” and
“supporting obligations” as and when used in the description of Collateral shall
have the meanings given to such terms in Articles 8 or 9 of the Uniform
Commercial Code.  To the extent the definition of any category or type of
collateral is expanded by any amendment, modification or revision to the Uniform
Commercial Code, such expanded definition will apply automatically as of the
date of such amendment, modification or revision.
 
1.4.          Certain Matters of Construction.  The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  All references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any
pronoun used shall be deemed to cover all genders.  Wherever appropriate in the
context, terms used herein in the singular also include the plural and vice
versa.  All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations.  Unless otherwise
provided, all references to any instruments or agreements to which Agent is a
party, including references to any of the Other Documents, shall include any and
all modifications, supplements or amendments thereto, any and all restatements
or replacements thereof and any and all extensions or renewals thereof.  Except
as otherwise expressly provided for herein, all references herein to the time of
day shall mean the time in New York, New York.  Unless otherwise provided, all
financial calculations shall be performed with Inventory valued on a first-in,
first-out basis.  Whenever the words “including” or “include” shall be used,
such words shall be understood to mean “including, without limitation” or
“include, without limitation”.  A Default or Event of Default shall be deemed to
exist at all times during the period commencing on the date that such Default or
Event of Default occurs to the date on which such Default or Event of Default is
waived in writing pursuant to this Agreement or, in the case of a Default, is
cured within any period of cure expressly provided for in this Agreement; and an
Event of Default shall “continue” or be “continuing” until such Event of Default
has been waived in writing by the Required Lenders.  Any Lien referred to in
this Agreement or any of the Other Documents as having been created in favor of
Agent, any agreement entered into by Agent pursuant to this Agreement or any of
the Other Documents, any payment made by or to or funds received by Agent
pursuant to or as contemplated by this Agreement or any of the Other Documents,
or any act taken or omitted to be taken by Agent, shall, unless otherwise
expressly provided, be created, entered into, made or received, or taken or
omitted, for the benefit or account of Agent and Lenders.  Wherever the phrase
“to the best of Borrowers’ knowledge” or words of similar import relating to the
knowledge or the awareness of any Borrower are used in this Agreement or Other
Documents, such phrase shall mean and refer to (i) the actual knowledge of a
senior officer of any Borrower or (ii) the knowledge that a senior officer would
have obtained if he/she had engaged in a good faith and diligent performance of
his/her duties, including the making of such reasonably specific inquiries as
may be necessary of the employees or agents of such Borrower and a good faith
attempt to ascertain the existence or accuracy of the matter to which such
phrase relates.  All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or otherwise
within the limitations of, another covenant shall not avoid the occurrence of a
default if such action is taken or condition exists.  In addition, all
representations and warranties hereunder shall be given independent effect so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of a breach of a representation or warranty hereunder.
 
 
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II.            ADVANCES, PAYMENTS.
 
2.1.          Revolving Advances.
 
(a)           Amount of Revolving Advances.  Subject to the terms and conditions
set forth in this Agreement specifically including Section 2.1(b), each Lender,
severally and not jointly, will make Revolving Advances to Borrowers in
aggregate amounts outstanding at any time equal to such Lender’s Revolving
Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount,
less the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit
or (y) an amount equal to the sum of:
 
(i)          up to 85% (the “Receivables Advance Rate” and the “Advance Rates”)
of Eligible Receivables, minus
 
(ii)         the aggregate Maximum Undrawn Amount of all outstanding Letters of
Credit, minus
 
(iii)        such reserves as Agent may reasonably deem proper and necessary
from time to time.
 
The amount derived from the sum of (x) Sections 2.1(a)(y)(i) minus (y) Sections
2.1 (a)(y)(ii) and (iii) at any time and from time to time shall be referred to
as the “Formula Amount”.  The Revolving Advances shall be evidenced by one or
more secured promissory notes (collectively, the “Revolving Credit Note”)
substantially in the form attached hereto as Exhibit 2.1(a).  Notwithstanding
anything to the contrary contained in the foregoing or otherwise in this
Agreement, the outstanding aggregate principal amount of Revolving Advances at
any one time outstanding shall not exceed an amount equal to the lesser of (i)
the Maximum Revolving Advance Amount less the Maximum Undrawn Amount of all
outstanding Letters of Credit or (ii) the Formula Amount.
 
 
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(b)           Discretionary Rights.  The Advance Rates may be increased or
decreased by Agent at any time and from time to time in the exercise of its
reasonable discretion.  Each Borrower consents to any such increases or
decreases and acknowledges that decreasing the Advance Rates or increasing or
imposing reserves may limit or restrict Advances requested by Borrowing
Agent.  The rights of Agent under this subsection are subject to the provisions
of Section 16.2(b).
 
2.2.          Procedures for Requesting Revolving Advances; Procedures for
Selection of Applicable Interest Rates for All Advances.
 
(a)           Borrowing Agent on behalf of any Borrower may notify Agent prior
to 10:00 a.m. on a Business Day of a Borrower’s request to incur, on that day, a
Revolving Advance hereunder.  Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other Obligation under
this Agreement, become due, same shall be deemed a request for a Revolving
Advance maintained as a Domestic Rate Loan as of the date such payment is due,
in the amount required to pay in full such interest, fee, charge or Obligation,
and such request shall be irrevocable.
 
(b)           Notwithstanding the provisions of subsection (a) above, in the
event any Borrower desires to obtain a LIBOR Rate Loan for any Advance,
Borrowing Agent shall give Agent written notice by no later than 10:00 a.m. on
the day which is three (3) Business Days prior to the date such LIBOR Rate Loan
is to be borrowed, specifying (i) the date of the proposed borrowing (which
shall be a Business Day), (ii) the type of borrowing and the amount of such
Advance to be borrowed, which amount shall be in a minimum amount of $500,000
and in integral multiples of $250,000 thereafter, and (iii) the duration of the
first Interest Period therefor.  Interest Periods for LIBOR Rate Loans shall be
for one, two or three months; provided that, if an Interest Period would end on
a day that is not a Business Day, it shall end on the next succeeding Business
Day unless such day falls in the next succeeding calendar month in which case
the Interest Period shall end on the next preceding Business Day.  No LIBOR Rate
Loan shall be made available to any Borrower during the continuance of a Default
or an Event of Default.  After giving effect to each requested LIBOR Rate Loan,
including those which are converted from a Domestic Rate Loan under Section
2.2(e), there shall not be outstanding more than five (5) LIBOR Rate Loans, in
the aggregate.
 
(c)           Each Interest Period of a LIBOR Rate Loan shall commence on the
date such LIBOR Rate Loan is made and shall end on such date as Borrowing Agent
may elect as set forth in subsection (b)(iii) above, provided that the exact
length of each Interest Period shall be determined in accordance with the
practice of the interbank market for offshore Dollar deposits and no Interest
Period shall end after the last day of the Term.
 
(d)           Borrowing Agent shall elect the initial Interest Period applicable
to a LIBOR Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(e), as the case may be.  Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not later than 10:00 a.m. on the day which is three (3) Business Days
prior to the last day of the then current Interest Period applicable to such
LIBOR Rate Loan.  If Agent does not receive timely notice of the Interest Period
elected by Borrowing Agent, Borrowing Agent shall be deemed to have elected to
convert such LIBOR Rate Loan to a Domestic Rate Loan subject to Section 2.2(e)
below.
 
 
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(e)           Provided that no Default or Event of Default shall have occurred
and be continuing, Borrowing Agent may, on the last Business Day of the then
current Interest Period applicable to any outstanding LIBOR Rate Loan, or on any
Business Day with respect to Domestic Rate Loans, convert any such loan into a
loan of another type in the same aggregate principal amount provided that any
conversion of a LIBOR Rate Loan shall be made only on the last Business Day of
the then current Interest Period applicable to such LIBOR Rate Loan.  If
Borrowing Agent desires to convert a loan, Borrowing Agent shall give Agent
written notice by no later than 10:00 a.m. (i) on the day which is three (3)
Business Days prior to the date on which such conversion is to occur with
respect to a conversion from a Domestic Rate Loan to a LIBOR Rate Loan, or (ii)
on the day which is one (1) Business Day prior to the date on which such
conversion is to occur (which date shall be the last Business Day of the
Interest Period for the applicable LIBOR Rate Loan) with respect to a conversion
from a LIBOR Rate Loan to a Domestic Rate Loan, specifying, in each case, the
date of such conversion, the loans to be converted and if the conversion is to a
LIBOR Rate Loan, the duration of the first Interest Period therefor.
 
(f)           At its option and upon written notice given prior to 10:00 a.m. at
least three (3) Business Days prior to the date of such prepayment, any Borrower
may, subject to Section 2.2(g) hereof, prepay the LIBOR Rate Loans in whole at
any time or in part from time to time with accrued interest on the principal
being prepaid to the date of such repayment.  Such Borrower shall specify the
date of prepayment of Advances which are LIBOR Rate Loans and the amount of such
prepayment.  In the event that any prepayment of a LIBOR Rate Loan is required
or permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, such Borrower shall indemnify Agent and
Lenders therefor in accordance with Section 2.2(g) hereof.
 
(g)           Each Borrower shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses that Agent and
Lenders may sustain or incur as a consequence of any prepayment, conversion of
or any default by any Borrower in the payment of the principal of or interest on
any LIBOR Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a LIBOR Rate Loan after notice thereof has
been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
LIBOR Rate Loans hereunder.  A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing
Agent shall be conclusive absent manifest error.
 
(h)           Notwithstanding any other provision hereof, if any Applicable Law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, including without limitation any Change in Law, shall
make it unlawful for Lenders or any Lender (for purposes of this subsection (h),
the term “Lender” shall include any Lender and the office or branch where any
Lender or any Person controlling such Lender makes or maintains any LIBOR Rate
Loans) to make or maintain its LIBOR Rate Loans, the obligation of Lenders (or
such affected Lender) to make LIBOR Rate Loans hereunder shall forthwith be
cancelled and Borrowers shall, if any affected LIBOR Rate Loans are then
outstanding, promptly upon request from Agent, either pay all such affected
LIBOR Rate Loans or convert such affected LIBOR Rate Loans into loans of another
type.  If any such payment or conversion of any LIBOR Rate Loan is made on a day
that is not the last day of the Interest Period applicable to such LIBOR Rate
Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts
set forth in clause (g) above.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Lenders to Borrowing
Agent shall be conclusive absent manifest error.
 
 
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2.3.          Disbursement of Advance Proceeds.  All Advances shall be disbursed
from whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers’ Account on Agent’s books.  The proceeds of each
Revolving Advance requested by Borrowing Agent on behalf of any Borrower or
deemed to have been requested by any Borrower under Sections 2.2(a), 2.4(b) or
2.12 hereof shall, (i) with respect to requested Revolving Advances, to the
extent Lenders make such Revolving Advances in accordance with Section 2.2(a),
2.4(b) or 2.12 hereof, be made available to the applicable Borrower on the day
so requested by way of credit to such Borrower’s operating account at PNC, or
such other bank as Borrowing Agent may designate following notification to
Agent, in immediately available federal funds or other immediately available
funds or, (ii) with respect to Revolving Advances deemed to have been requested
by any Borrower, be disbursed to Agent to be applied to the outstanding
Obligations giving rise to such deemed request.  During the Term, Borrowers may
use the Revolving Advances by borrowing, prepaying and reborrowing, all in
accordance with the terms and conditions hereof.
 
2.4.          Making and Settlement of Advances.
 
(a)           Each borrowing of Revolving Advances shall be advanced according
to the applicable Revolving Commitment Percentages of the Lenders holding the
Revolving Commitments (subject to any contrary terms of Section 2.21).
 
(b)           Promptly after receipt by Agent of a request or a deemed request
for a Revolving Advance pursuant to Section 2.2(a), Agent shall notify the
Lenders holding the Revolving Commitments of its receipt of such request
specifying the information provided by Borrowing Agent and the apportionment
among Lenders of the requested Revolving Advance as determined by Agent in
accordance with the terms hereof.  Each Lender shall remit the principal amount
of each Revolving Advance to Agent such that Agent is able to, and Agent shall,
to the extent the applicable Lenders have made funds available to it for such
purpose and subject to Section 8.2, fund such Revolving Advance to Borrowers in
U.S. Dollars and immediately available funds at the Payment Office prior to the
close of business, on the applicable borrowing date; provided that if any
applicable Lender fails to remit such funds to Agent in a timely manner, Agent
may elect in its sole discretion to fund with its own funds the Revolving
Advance of such Lender on such borrowing date, and such Lender shall be subject
to the repayment obligation in Section 2.4(c) hereof.
 
 
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(c)           Unless Agent shall have been notified by telephone, confirmed in
writing, by any Lender holding a Revolving Commitment that such Lender will not
make the amount which would constitute its applicable Revolving Commitment
Percentage of the requested Revolving Advance available to Agent, Agent may (but
shall not be obligated to) assume that such Lender has made such amount
available to Agent on such date in accordance with Section 2.4(b) and may, in
reliance upon such assumption, make available to Borrowers a corresponding
amount.  In such event, if a Lender has not in fact made its applicable
Revolving Commitment Percentage of the requested Revolving Advance available to
Agent, then the applicable Lender and Borrowers severally agree to pay to Agent
on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to Borrowers through but
excluding the date of payment to Agent, at (i) in the case of a payment to be
made by such Lender, the greater of (A) (x) the daily average Federal Funds
Effective Rate (computed on the basis of a year of 360 days) during such period
as quoted by Agent, times (y) such amount or (B) a rate determined by Agent in
accordance with banking industry rules on interbank compensation, and (ii) in
the case of a payment to be made by the Borrower, the Revolving Interest Rate
for Revolving Advances that are Domestic Rate Loans.  If such Lender pays its
share of the applicable Revolving Advance to Agent, then the amount so paid
shall constitute such Lender’s Revolving Advance.  Any payment by Borrowers
shall be without prejudice to any claim the Borrowers may have against a
Revolving Lender that shall have failed to make such payment to Agent.  A
certificate of Agent submitted to any Lender or Borrower with respect to any
amounts owing under this paragraph (c) shall be conclusive, in the absence of
manifest error.
 
(d)           If any Lender or Participant (a “Benefited Lender”) shall at any
time receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender’s
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such Benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender’s Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such Benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.  Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under Applicable Law, that each
Lender so purchasing a portion of another Lender’s Advances may exercise all
rights of payment (including rights of set-off) with respect to such portion as
fully as if such Lender were the direct holder of such portion, and the
obligations owing to each such purchasing Lender in respect of such
participation and such purchased portion of any other Lender’s Advances shall be
part of the Obligations secured by the Collateral, and the obligations owing to
each such purchasing Lender in respect of such participation and such purchased
portion of any other Lender’s Advances shall be part of the Obligations secured
by the Collateral.
 
 
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2.5.          Maximum Advances.  The aggregate balance of Revolving Advances
outstanding at any time shall not exceed the lesser of (a) the Maximum Revolving
Advance Amount less the aggregate Maximum Undrawn Amount of all issued and
outstanding Letters of Credit or (b) the Formula Amount.
 
2.6.          Manner and Repayment of Advances.
 
(a)           The Revolving Advances shall be due and payable in full on the
last day of the Term subject to earlier prepayment as herein
provided.  Notwithstanding the foregoing, all Advances shall be subject to
earlier repayment upon (x) acceleration upon the occurrence of an Event of
Default under this Agreement or (y) termination of this Agreement.  Each payment
(including each prepayment) by any Borrower on account of the principal of and
interest on the Advances shall be applied pro rata according to the applicable
Revolving Commitment Percentages of the Lenders, to the outstanding Revolving
Advances (subject to any contrary provisions of Section 2.21).
 
(b)           Each Borrower recognizes that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of
Collateral may not be collectible by Agent on the date received by Agent.  Agent
shall conditionally credit Borrowers’ Account for each item of payment on the
next Business Day after the Business Day on which such item of payment is
received by Agent (and the Business Day on which each such item of payment is so
credited shall be referred to, with respect to such item, as the “Application
Date”).  Agent is not, however, required to credit Borrowers’ Account for the
amount of any item of payment which is unsatisfactory to Agent and Agent may
charge Borrowers’ Account for the amount of any item of payment which is
returned, for any reason whatsoever, to Agent unpaid.  Subject to the foregoing,
Borrowers agree that for purposes of computing the interest charges under this
Agreement, each item of payment received by Agent shall be deemed applied by
Agent on account of the Obligations on its respective Application
Date.  Borrowers further agree that there is a monthly float charge payable to
Agent for Agent’s sole benefit, in an amount equal to (y) the face amount of all
items of payment received during the prior month (including items of payment
received by Agent as a wire transfer or electronic depository check) multiplied
by (z) the Revolving Interest Rate with respect to Domestic Rate Loans for one
(1) Business Day.  All proceeds received by Agent shall be applied to the
Obligations in accordance with Section 4.8(h).
 
(c)           All payments of principal, interest and other amounts payable
hereunder, or under any of the Other Documents shall be made to Agent at the
Payment Office not later than 1:00 P.M. on the due date therefor in Dollars in
federal funds or other funds immediately available to Agent.  Agent shall have
the right to effectuate payment of any and all Obligations due and owing
hereunder by charging Borrowers’ Account or by making Advances as provided in
Section 2.2 hereof.
 
(d)           Except as expressly provided herein, all payments (including
prepayments) to be made by any Borrower on account of principal, interest, fees
and other amounts payable hereunder shall be made without deduction, setoff or
counterclaim and shall be made to Agent on behalf of the Lenders to the Payment
Office, in each case on or prior to 1:00 P.M., in Dollars and in immediately
available funds.
 
 
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2.7.          Repayment of Excess Advances.  If at any time the aggregate
balance of  outstanding Revolving Advances and/or Advances taken as a whole
exceeds the maximum amount of such type of Advances and/or Advances taken as a
whole (as applicable) permitted hereunder, such excess Advances shall be
immediately due and payable without the necessity of any demand, at the Payment
Office, whether or not a Default or Event of Default has occurred.
 
2.8.           Statement of Account.  Agent shall maintain, in accordance with
its customary procedures, a loan account (“Borrowers’ Account”) in the name of
Borrowers in which shall be recorded the date and amount of each Advance made by
Agent or Lenders and the date and amount of each payment in respect thereof;
provided, however, the failure by Agent to record the date and amount of any
Advance shall not adversely affect Agent or any Lender.  Each month, Agent shall
send to Borrowing Agent a statement showing the accounting for the Advances
made, payments made or credited in respect thereof, and other transactions
between Agent, Lenders and Borrowers during such month.  The monthly statements
shall be deemed correct and binding upon Borrowers in the absence of manifest
error and shall constitute an account stated between Lenders and Borrowers
unless Agent receives a written statement of Borrowers’ specific exceptions
thereto within thirty (30) days after such statement is received by Borrowing
Agent.  The records of Agent with respect to the Borrowers’ Account shall be
conclusive evidence absent manifest error of the amounts of Advances and other
charges thereto and of payments applicable thereto.
 
2.9.          Letters of Credit.  (a) Subject to the terms and conditions
hereof, Issuer shall issue or cause the issuance of standby and/or trade letters
of credit denominated in Dollars (“Letters of Credit”) for the account of any
Borrower except to the extent that the issuance thereof would then cause the sum
of (i) the outstanding Revolving Advances plus (ii) the Maximum Undrawn Amount
of all outstanding Letters of Credit, plus (iii) the Maximum Undrawn Amount of
the Letter of Credit to be issued to exceed the lesser of (x) the Maximum
Revolving Advance Amount or (y) the Formula Amount (calculated without giving
effect to the deductions provided for in Section 2.1(a)(y)((iii) ).  The Maximum
Undrawn Amount of all outstanding Letters of Credit shall not exceed in the
aggregate at any time the Letter of Credit Sublimit.  All disbursements or
payments related to Letters of Credit shall be deemed to be Domestic Rate Loans
consisting of Revolving Advances and shall bear interest at the Revolving
Interest Rate for Domestic Rate Loans.  Letters of Credit that have not been
drawn upon shall not bear interest (but fees shall accrue in respect of
outstanding Letters of Credit as provided in Section 3.2 hereof).
 
(b)          Notwithstanding any provision of this Agreement, Issuer shall not
be under any obligation to issue any Letter of Credit if (i) any order, judgment
or decree of any Governmental Body or arbitrator shall by its terms purport to
enjoin or restrain  Issuer from issuing any Letter of Credit, or any Law
applicable to the Issuer or any request or directive (whether or not having the
force of law) from any Governmental Body with jurisdiction over Issuer shall
prohibit, or request that the Issuer refrain from, the issuance of letters of
credit generally or the Letter of Credit in particular or shall impose upon
Issuer with respect to the Letter of Credit any restriction, reserve or capital
requirement (for which Issuer is not otherwise compensated hereunder) not in
effect on the date of this Agreement, or shall impose upon Issuer any
unreimbursed loss, cost or expense which was not applicable on the date of this
Agreement, and which Issuer in good faith deems material to it, or (ii) the
issuance of the Letter of Credit would violate one or more policies of the
Issuer applicable to letters of credit generally.
 
 
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2.10.        Issuance of Letters of Credit.
 
(a)           Borrowing Agent, on behalf of any Borrower, may request Issuer to
issue or cause the issuance of a Letter of Credit by delivering to Issuer, with
a copy to Agent at the Payment Office, prior to 10:00 a.m., at least five (5)
Business Days prior to the proposed date of issuance, such Issuer’s form of
Letter of Credit Application (the “Letter of Credit Application”) completed to
the satisfaction of Agent and Issuer; and, such other certificates, documents
and other papers and information as Agent or Issuer may reasonably
request.  Issuer shall not issue any requested Letter of Credit if such Issuer
has received notice from Agent or any Lender that one or more of the applicable
conditions set forth in Section 8.2 of this Agreement have not been satisfied or
the commitments of Lenders to make Revolving Advances hereunder have been
terminated for any reason.
 
(b)           Each Letter of Credit shall, among other things, (i) provide for
the payment of sight drafts, or other written demands for payment, and (ii) have
an expiry date not later than twelve (12) months after such Letter of Credit’s
date of issuance and in no event later than the last day of the Term.  Each
standby Letter of Credit shall be subject either to the Uniform Customs and
Practice for Documentary Credits as most recently published by the International
Chamber of Commerce at the time a Letter of Credit is issued (the “UCP”) or the
International Standby Practices (International Chamber of Commerce Publication
Number 590) (the “ISP98 Rules”), or any subsequent revision thereof at the time
a standby Letter of Credit is issued, as determined by Issuer, and each trade
Letter of Credit shall be subject to the UCP.  In addition, no trade Letter of
Credit may permit the presentation of an ocean bill of lading that includes a
condition that the original bill of lading is not required to claim the goods
shipped thereunder.
 
(c)           Agent shall use its reasonable efforts to notify Lenders of the
request by Borrowing Agent for a Letter of Credit hereunder.
 
2.11.        Requirements For Issuance of Letters of Credit.
 
(a)           Borrowing Agent shall authorize and direct any Issuer to name the
applicable Borrower as the “Applicant” or “Account Party” of each Letter of
Credit.  If Agent is not the Issuer of any Letter of Credit, Borrowing Agent
shall authorize and direct the Issuer to deliver to Agent all instruments,
documents, and other writings and property received by the Issuer pursuant to
the Letter of Credit and to accept and rely upon Agent’s instructions and
agreements with respect to all matters arising in connection with the Letter of
Credit, the application therefor.
 
(b)           In connection with all trade Letters of Credit issued or caused to
be issued by Issuer under this Agreement, each Borrower hereby appoints Issuer,
or its designee, as its attorney, with full power and authority if an Event of
Default shall have occurred: (i) to sign and/or endorse such Borrower’s name
upon any warehouse or other receipts, and acceptances; (ii) to sign such
Borrower’s name on bills of lading; (iii) to clear Inventory through the United
States of America Customs Department (“Customs”) in the name of such Borrower or
Issuer or Issuer’s designee, and to sign and deliver to Customs officials powers
of attorney in the name of such Borrower for such purpose; and (iv) to complete
in such Borrower’s name or Issuer’s, or in the name of Issuer’s designee, any
order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof.  Neither Agent, Issuer nor their
attorneys will be liable for any acts or omissions nor for any error of judgment
or mistakes of fact or law, except for Agent’s, Issuer’s or their respective
attorney’s willful misconduct.  This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
 
 
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2.12.        Disbursements, Reimbursement.
 
(a)           Immediately upon the issuance of each Letter of Credit, each
Lender holding a Revolving Commitment shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from Issuer a participation in each
Letter of Credit and each drawing thereunder in an amount equal to such Lender’s
Revolving Commitment Percentage of the Maximum Undrawn Amount of such Letter of
Credit (as in effect from time to time) and the amount of such drawing,
respectively.
 
(b)           In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, Issuer will promptly notify Agent and
Borrowing Agent.  Regardless of whether Borrowing Agent shall have received such
notice, the Borrowers shall reimburse (such obligation to reimburse Issuer shall
sometimes be referred to as a “Reimbursement Obligation”) Issuer prior to 12:00
Noon, on each date that an amount is paid by Issuer under any Letter of Credit
(each such date, a “Drawing Date”) in an amount equal to the amount so paid by
Issuer.  In the event Borrowers fail to reimburse Issuer for the full amount of
any drawing under any Letter of Credit by 12:00 Noon, on the Drawing Date,
Issuer will promptly notify Agent and each Lender holding a Revolving Commitment
thereof, and Borrowers shall be automatically deemed to have requested that a
Revolving Advance maintained as a Domestic Rate Loan be made by the Lenders to
be disbursed on the Drawing Date under such Letter of Credit, and the Lenders
holding the Revolving Commitments shall be unconditionally obligated to fund
such Revolving Advance (all whether or not the conditions specified in Section
8.2 are then satisfied or the commitments of Lenders to make Revolving Advances
hereunder have been terminated for any reason) as provided for in Section
2.12(c) immediately below.  Any notice given by Issuer pursuant to this Section
2.12(b) may be oral if promptly confirmed in writing; provided that the lack of
such a confirmation shall not affect the conclusiveness or binding effect of
such notice.
 
 
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(c)           Each Lender holding a Revolving Commitment shall upon any notice
pursuant to Section 2.12(b) make available to Issuer through Agent at the
Payment Office an amount in immediately available funds equal to its Revolving
Commitment Percentage (subject to any contrary provisions of Section 2.21) of
the amount of the drawing, whereupon the participating Lenders shall (subject to
Section 2.12(d)) each be deemed to have made a Revolving Advance maintained as a
Domestic Rate Loan to Borrowers in that amount.  If any Lender holding a
Revolving Commitment so notified fails to make available to Agent, for the
benefit of Issuer, the amount of such Lender’s Revolving Commitment Percentage
of such amount by 2:00 p.m. on the Drawing Date, then interest shall accrue on
such Lender’s obligation to make such payment, from the Drawing Date to the date
on which such Lender makes such payment (i) at a rate per annum equal to the
Federal Funds Effective Rate during the first three days following the Drawing
Date and (ii) at a rate per annum equal to the rate applicable to Revolving
Advances maintained as a Domestic Rate Loans on and after the fourth day
following the Drawing Date.  Agent and Issuer will promptly give notice of the
occurrence of the Drawing Date, but failure of Agent or Issuer to give any such
notice on the Drawing Date or in sufficient time to enable any Lender holding a
Revolving Commitment to effect such payment on such date shall not relieve such
Lender from its obligations under this Section 2.12(c), provided that such
Lender shall not be obligated to pay interest as provided in Section 2.12(c)(i)
and (ii) until and commencing from the date of receipt of notice from Agent or
Issuer of a drawing.
 
(d)           With respect to any unreimbursed drawing that is not converted
into a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in
whole or in part as contemplated by Section 2.12(b), because of Borrowers’
failure to satisfy the conditions set forth in Section 8.2 hereof (other than
any notice requirements) or for any other reason, Borrowers shall be deemed to
have incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in
the amount of such drawing.  Such Letter of Credit Borrowing shall be due and
payable on demand (together with interest) and shall bear interest at the rate
per annum applicable to a Revolving Advance maintained as a Domestic Rate
Loan.  Each applicable Lender’s payment to Agent pursuant to Section 2.12(c)
shall be deemed to be a payment in respect of its participation in such Letter
of Credit Borrowing and shall constitute a “Participation Advance” from such
Lender in satisfaction of its Participation Commitment in respect of the
applicable Letter of Credit under this Section 2.12.
 
(e)           Each applicable Lender’s Participation Commitment in respect of
the Letters of Credit shall continue until the last to occur of any of the
following events: (x) Issuer ceases to be obligated to issue or cause to be
issued Letters of Credit hereunder; (y) no Letter of Credit issued or created
hereunder remains outstanding and uncancelled; and (z) all Persons (other than
Borrowers) have been fully reimbursed for all payments made under or relating to
Letters of Credit.
 
2.13.        Repayment of Participation Advances.
 
(a)           Upon (and only upon) receipt by Agent for the account of Issuer of
immediately available funds from Borrowers (i) in reimbursement of any payment
made by Issuer or Agent under the Letter of Credit with respect to which any
Lender has made a Participation Advance to Agent, or (ii) in payment of interest
on such a payment made by Issuer or Agent under such a Letter of Credit, Agent
will pay to each Lender holding a Revolving Commitment, in the same funds as
those received by Agent, the amount of such Lender’s Revolving Commitment
Percentage of such funds, except Agent shall retain the amount of the Revolving
Commitment Percentage of such funds of any Lender holding a Revolving Commitment
that did not make a Participation Advance in respect of such payment by Agent
(and, to the extent that any of the other Lender(s) holding the Revolving
Commitment have funded any portion such Defaulting Lender’s Participation
Advance in accordance with the provisions of Section 2.21, Agent will pay over
to such Non-Defaulting funding Lenders a pro rata portion of the funds so
withheld from such Defaulting Lender).
 
 
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(b)           If Issuer or Agent is required at any time to return to any
Borrower, or to a trustee, receiver, liquidator, custodian, or any official in
any insolvency proceeding, any portion of the payments made by Borrowers to
Issuer or Agent pursuant to Section 2.13(a) in reimbursement of a payment made
under the Letter of Credit or interest or fee thereon, each applicable Lender
shall, on demand of Agent, forthwith return to Issuer or Agent the amount of its
Commitment Percentage of any amounts so returned by Issuer or Agent plus
interest at the Federal Funds Effective Rate.
 
2.14.        Documentation.  Each Borrower agrees to be bound by the terms of
the Letter of Credit Application and by Issuer’s interpretations of any Letter
of Credit issued on behalf of such Borrower and by Issuer’s written regulations
and customary practices relating to letters of credit, though Issuer’s
interpretations may be different from such Borrower’s own.  In the event of a
conflict between the Letter of Credit Application and this Agreement, this
Agreement shall govern.  It is understood and agreed that, except in the case of
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), Issuer shall not be liable for
any error, negligence and/or mistakes, whether of omission or commission, in
following Borrowing Agent’s or any Borrower’s instructions or those contained in
the Letters of Credit or any modifications, amendments or supplements thereto.
 
2.15.        Determination to Honor Drawing Request.  In determining whether to
honor any request for drawing under any Letter of Credit by the beneficiary
thereof, Issuer shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit and that any other drawing condition appearing on the face of
such Letter of Credit has been satisfied in the manner so set forth.
 
2.16.        Nature of Participation and Reimbursement Obligations.  The
obligation of each Lender holding a Revolving Commitment in accordance with this
Agreement to make the Revolving Advances or Participation Advances as a result
of a drawing under a Letter of Credit, and the obligations of Borrowers to
reimburse Issuer upon a draw under a Letter of Credit, shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Section 2.16 under all circumstances, including the
following circumstances:
 
(i)          any set-off, counterclaim, recoupment, defense or other right which
such Lender or any Borrower, as the case may be, may have against Issuer, Agent,
any Borrower or Lender, as the case may be, or any other Person for any reason
whatsoever;
 
(ii)         the failure of any Borrower or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set forth in
this Agreement for the making of a Revolving Advance, it being acknowledged that
such conditions are not required for the making of a Letter of Credit Borrowing
and the obligation of the Lenders to make Participation Advances under Section
2.13;
 
(iii)        any lack of validity or enforceability of any Letter of Credit;
 
 
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(iv)        any claim of breach of warranty that might be made by any Borrower,
Agent, Issuer or any Lender against the beneficiary of a Letter of Credit, or
the existence of any claim, set-off, recoupment, counterclaim, cross-claim,
defense or other right which any Borrower, Agent, Issuer or any Lender may have
at any time against a beneficiary, any successor beneficiary or any transferee
of any Letter of Credit or assignee of the proceeds thereof (or any Persons for
whom any such transferee or assignee may be acting), Issuer, Agent or any Lender
or any other Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Borrower or any Subsidiaries of such Borrower and the
beneficiary for which any Letter of Credit was procured);
 
(v)        the lack of power or authority of any signer of (or any defect in or
forgery of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provision of services
relating to a Letter of Credit, in each case even if Issuer or any of Issuer’s
Affiliates has been notified thereof;
 
(vi)        payment by Issuer under any Letter of Credit against presentation of
a demand, draft or certificate or other document which is forged or does not
fully comply with the terms of such Letter of Credit (provided that the
foregoing shall not excuse Issuer from any obligation under the terms of any
applicable Letter of Credit to require the presentation of documents that on
their face appear to satisfy any applicable requirements for drawing under such
Letter of Credit prior to honoring or paying any such draw);
 
(vii)       the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;
 
(viii)      any failure by Issuer or any of Issuer’s Affiliates to issue any
Letter of Credit in the form requested by Borrowing Agent, unless the Agent and
Issuer have each received written notice from Borrowing Agent of such failure
within three (3) Business Days after the Issuer shall have furnished Agent and
Borrowing Agent a copy of such Letter of Credit and such error is material and
no drawing has been made thereon prior to receipt of such notice;
 
(ix)        the occurrence of any Material Adverse Effect;
 
(x)         any breach of this Agreement or any Other Document by any party
thereto;
 
(xi)        the occurrence or continuance of an insolvency proceeding with
respect to any Borrower or any Guarantor;
 
(xii)       the fact that a Default or Event of Default shall have occurred and
be continuing;
 
 
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(xiii)      the fact that the Term shall have expired or this Agreement or the
obligations of the Lenders to make Advances have been terminated; and
 
(xiv)      any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
 
2.17.        Liability for Acts and Omissions.
 
(a)           As between Borrowers and Issuer, Agent and Lenders, each Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit.  In
furtherance and not in limitation of the foregoing, Issuer shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if Issuer or any of its Affiliates shall have been
notified thereof); (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) the
failure of the beneficiary of any such Letter of Credit, or any other party to
which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other
claim of any Borrower against any beneficiary of such Letter of Credit, or any
such transferee, or any dispute between or among any Borrower and any
beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, facsimile, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Issuer, including any Governmental Acts, and
none of the above shall affect or impair, or prevent the vesting of, any of
Issuer’s rights or powers hereunder.  Nothing in the preceding sentence shall
relieve Issuer from liability for Issuer’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment) in connection with actions or omissions described in
such clauses (i) through (viii) of such sentence.  In no event shall Issuer or
Issuer’s Affiliates be liable to any Borrower for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.
 
(b)           Without limiting the generality of the foregoing, Issuer and each
of its Affiliates:  (i) may rely on any oral or other communication believed in
good faith by Issuer or such Affiliate to have been authorized or given by or on
behalf of the applicant for a Letter of Credit; (ii) may honor any presentation
if the documents presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit; (iii) may honor a
previously dishonored presentation under a Letter of Credit, whether such
dishonor was pursuant to a court order, to settle or compromise any claim of
wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the
same extent as if such presentation had initially been honored, together with
any interest paid by Issuer or its Affiliates; (iv) may honor any drawing that
is payable upon presentation of a statement advising negotiation or payment,
upon receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on Issuer or its Affiliate in any way related to any order issued at the
applicant’s request to an air carrier, a letter of guarantee or of indemnity
issued to a steamship agent or carrier or any document or instrument of like
import (each an “Order”) and honor any drawing in connection with any Letter of
Credit that is the subject of such Order, notwithstanding that any drafts or
other documents presented in connection with such Letter of Credit fail to
conform in any way with such Letter of Credit.
 
 
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(c)           In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Issuer under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment), shall not put Issuer under any resulting liability to
any Borrower, Agent or any Lender.
 
2.18.        Mandatory Prepayments.
 
Subject to Section 7.1 hereof, when any Borrower sells or otherwise disposes of
any Collateral other than Inventory in the Ordinary Course of Business,
Borrowers shall repay the Advances in an amount equal to the net proceeds of
such sale (i.e., gross proceeds less the reasonable direct costs of such sales
or other dispositions), such repayments to be made promptly but in no event more
than one (1) Business Day following receipt of such net proceeds, and until the
date of payment, such proceeds shall be held in trust for Agent.  The foregoing
shall not be deemed to be implied consent to any such sale otherwise prohibited
by the terms and conditions hereof.  Such repayments shall be applied to the
remaining Advances (including cash collateralization of all Obligations relating
to any outstanding Letters of Credit in accordance with the provisions of
Section 3.2(b); provided however that if no Default or Event of Default has
occurred and is continuing, such repayments shall be applied to cash
collateralize any Obligations related to outstanding Letters of Credit last) in
such order as Agent may determine, subject to Borrowers’ ability to reborrow
Revolving Advances in accordance with the terms hereof.
 
2.19.        Use of Proceeds.
 
(a)           Borrowers shall apply the proceeds of Advances to (i) pay fees and
expenses relating to this transaction, and (ii) provide for its working capital
needs and reimburse drawings under Letters of Credit.
 
(b)           Without limiting the generality of Section 2.19(a) above, neither
the Borrowers, the Guarantors nor any other Person which may in the future
become party to this Agreement or the Other Documents as a Borrower or
Guarantor, intends to use nor shall they use any portion of the proceeds of the
Advances, directly or indirectly, for any purpose in violation of Applicable
Law.
 
 
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2.20.        Defaulting Lender.
 
(a)           Notwithstanding anything to the contrary contained herein, in the
event any Lender is a Defaulting Lender, all rights and obligations hereunder of
such Defaulting Lender and of the other parties hereto shall be modified to the
extent of the express provisions of this Section 2.20 so long as such Lender is
a Defaulting Lender.
 
(b)           (i)  except as otherwise expressly provided for in this Section
2.20, Revolving Advances shall be made pro rata from Lenders holding Revolving
Commitments which are not Defaulting Lenders based on their respective Revolving
Commitment Percentages, and no Revolving Commitment Percentage of any Lender or
any pro rata share of any Revolving Advances required to be advanced by any
Lender shall be increased as a result of any Lender being a Defaulting
Lender.  Amounts received in respect of principal of any type of Revolving
Advances shall be applied to reduce such type of Revolving Advances of each
Lender (other than any Defaulting Lender) holding a Revolving Commitment in
accordance with their Revolving Commitment Percentages; provided, that, Agent
shall not be obligated to transfer to a Defaulting Lender any payments received
by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal,
interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent.  Agent may hold and, in its discretion, re-lend to a
Borrower the amount of such payments received or retained by it for the account
of such Defaulting Lender.
 
(ii)        fees pursuant to Section 3.3(b) hereof shall cease to accrue in
favor of such Defaulting Lender.
 
(iii)       if any Letter of Credit Obligations (or drawings under any Letter of
Credit for which the Issuer has not been reimbursed) are outstanding or exist at
the time any such Lender holding a Revolving Commitment becomes a Defaulting
Lender, then:
 
(A)           the Defaulting Lender’s Participation Commitment in the Maximum
Undrawn Amount of all outstanding Letters of Credit shall be reallocated among
the Non-Defaulting Lenders holding Revolving Commitments in proportion to the
respective Revolving Commitment Percentages of such Non-Defaulting Lenders to
the extent (but only to the extent) that (x) such reallocation does not cause
the aggregate sum of outstanding Revolving Advances made by any such
Non-Defaulting Lender holding a Revolving Commitment plus such Lender’s
reallocated Participation Commitment in the aggregate Maximum Undrawn Amount of
all outstanding Letters of Credit to exceed the Revolving Commitment Amount of
any such Non-Defaulting Lender, and (y) no Default or Event of Default has
occurred and is continuing at such time;
 
(B)            if the reallocation described in clause (A) above cannot, or can
only partially, be effected, the Borrowers shall within one Business Day
following notice by the Agent cash collateralize for the benefit of the Issuer
the Borrowers’ obligations corresponding to such Defaulting Lender’s
Participation Commitment in the Maximum Undrawn Amount of all Letters of Credit
(after giving effect to any partial reallocation pursuant to clause (A) above)
in accordance with Section 3.2(b) for so long as such Obligations are
outstanding;
 
 
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(C)            if the Borrowers cash collateralize any portion of such
Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of
all Letters of Credit pursuant to clause (B) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 3.2(a)
with respect to such Defaulting Lender’s Revolving Commitment Percentage of
Maximum Undrawn Amount of all Letters of Credit during the period such
Defaulting Lender’s Participation Commitment in the  Maximum Undrawn Amount of
all Letters of Credit are cash collateralized;
 
(D)            if the Defaulting Lender’s Participation Commitment in the
Maximum Undrawn Amount of all Letters of Credit is reallocated pursuant to
clause (A) above, then the fees payable to the Lenders holding Revolving
Commitments pursuant to Section 3.2(a) shall be adjusted and reallocated to the
Non-Defaulting Lenders holding Revolving Commitments in accordance with such
reallocation; and
 
(E)            if all or any portion of such Defaulting Lender’s Participation
Commitment in the Maximum Undrawn Amount of all Letters of Credit is neither
reallocated nor cash collateralized pursuant to clause (A) or (B) above, then,
without prejudice to any rights or remedies of the Issuer or any other Lender
hereunder, all Letter of Credit Fees payable under Section 3.2(a) with respect
to such Defaulting Lender’s Revolving Commitment Percentage of the Maximum
Undrawn Amount of all Letters of Credit shall be payable to the Issuer (and not
to such Defaulting Lender) until (and then only to the extent that) such
Revolving Participation Commitment in the Maximum Undrawn Amount of all Letters
of Credit is reallocated and/or cash collateralized; and
 
(iv)        so long as any Lender holding a Revolving Commitment is a Defaulting
Lender, the Issuer shall not be required to issue, amend or increase any Letter
of Credit, unless such Issuer is satisfied that the related exposure and the
Defaulting Lender’s Participation Commitment in the Maximum Undrawn Amount of
all Letters of Credit cash collateral for such Letters of Credit will be
provided by the Borrowers in accordance with clause (A) and (B) above, and
participating interests in any newly issued or increased Letter of Credit shall
be allocated among the Non-Defaulting Lenders in a manner consistent with
Section 2.20(b)(ii)(A) above (and such Defaulting Lender shall not participate
therein).
 
(c)           A Defaulting Lender shall not be entitled to give instructions to
Agent or to approve, disapprove, consent to or vote on any matters relating to
this Agreement and the Other Documents, and all amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of “Required
Lenders”, a Defaulting Lender shall not be deemed to be a Lender, to have any
outstanding Advances or a Commitment Percentage provided, that this clause
(c) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification described in clauses (i) or (ii) of
Section 16.2(b).
 
 
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(d)           Other than as expressly set forth in this Section 2.20, the rights
and obligations of a Defaulting Lender (including the obligation to indemnify
Agent) and the other parties hereto shall remain unchanged.  Nothing in this
Section 2.20 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender
may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.
 
(e)           In the event that the Agent, the Borrowers and the Issuer agree in
writing that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the Agent will so notify the parties
hereto, and, if such cured Defaulting Lender is a Lender holding a Revolver
Commitment, then Participation Commitments of the Lenders holding Revolving
Commitments (including such cured Defaulting Lender) of the Maximum Undrawn
Amount of all outstanding Letters of Credit shall be reallocated to reflect the
inclusion of such Lender’s Revolving Commitment, and on such date such Lender
shall purchase at par such of the Revolving Advances of the other Lenders as the
Agent shall determine may be necessary in order for such Lender to hold such
Revolving Advances in accordance with its Revolving Commitment Percentage.
 
(f)           If  Issuer has a good faith belief that any Lender holding a
Revolver Commitment has defaulted in fulfilling its obligations under one or
more other agreements in which such Lender commits to extend credit, Issuer
shall not be required to issue, amend or increase any Letter of Credit, unless
Issuer, as the case may be, shall have entered into arrangements with the
Borrower or such Lender, satisfactory to Issuer to defease any risk to it in
respect of such Lender hereunder.
 
2.21.        Payment of Obligations.  Agent may charge to Borrowers’ Account as
a Revolving Advance (i) all payments with respect to any of the Obligations
required hereunder (including without limitation principal payments, payments of
interest, payments of Letter of Credit Fees and all other fees provided for
hereunder and payments under Sections 16.5 and 16.9) as and when each such
payment shall become due and payable (whether as regularly scheduled, upon or
after acceleration, upon maturity or otherwise), (ii) without limiting the
generality of the foregoing clause (i), (a) all amounts expended by Agent or any
Lender pursuant to Sections 4.2 or 4.3 hereof and (b) all expenses which Agent
incurs in connection with the forwarding of Advance proceeds and the
establishment and maintenance of any Blocked Accounts or Depository Accounts as
provided for in Section 4.8(h), and (iii) any sums expended by Agent or any
Lender due to any Borrower’s failure to perform or comply with its obligations
under this Agreement or any Other Document including any Borrower’s obligations
under Sections 3.3, 3.4, 4.4, 4.7, 6.4, 6.6, 6.7 and 6.8 hereof, and all amounts
so charged shall be added to the Obligations and shall be secured by the
Collateral.  To the extent Revolving Advances are not actually funded by the
other Lenders in respect of any such amounts so charged, all such amounts so
charged shall be deemed to be Revolving Advances made by and owing to Agent and
Agent shall be entitled to all rights (including accrual of interest) and
remedies of a Lender under this Agreement and the Other Documents with respect
to such Revolving Advances.
 
III.           INTEREST AND FEES.
 
 
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3.1.          Interest.  Interest on Advances shall be payable in arrears on the
first day of each month with respect to Domestic Rate Loans and, with respect to
LIBOR Rate Loans, at (a) the end of each Interest Period, and (b) for LIBOR Rate
Loans with an Interest Period in excess of three months, at the end of each
three month period during such Interest Period, provided further that all
accrued and unpaid interest shall be due and payable at the end of the
Term.  Interest charges shall be computed on the actual principal amount of
Advances outstanding during the month at a rate per annum equal to with respect
to Revolving Advances, the applicable Revolving Interest Rate (as applicable,
the “Contract Rate”).  Except as expressly provided otherwise in this Agreement,
any Obligations other than the Advances that are not paid when due shall accrue
interest at the Revolving Interest Rate for Domestic Rate Loans, subject to the
provision of the final sentence of this Section 3.1 regarding the Default
Rate.  Whenever, subsequent to the date of this Agreement, the Alternate Base
Rate is increased or decreased, the applicable Contract Rate for Domestic Rate
Loans shall be similarly changed without notice or demand of any kind by an
amount equal to the amount of such change in the Alternate Base Rate during the
time such change or changes remain in effect.  The LIBOR Rate shall be adjusted
with respect to LIBOR Rate Loans without notice or demand of any kind on the
effective date of any change in the Reserve Percentage as of such effective
date.  Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent or at the direction of Required
Lenders (or, in the case of any Event of Default under Section 10.7, immediately
and automatically upon the occurrence of any such Event of Default without the
requirement of any affirmative action by any party), the Obligations shall bear
interest at the applicable Contract Rate for Domestic Rate Loans plus two (2%)
percent per annum (the “Default Rate”).
 
3.2.          Letter of Credit Fees.
 
(a)           Borrowers shall pay (x) to Agent, for the ratable benefit of the
Lenders holding Revolving Commitments, fees for each Letter of Credit for the
period from and excluding the date of issuance of same to and including the date
of expiration or termination, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by three and one quarter of one percent
(3.25%), such fees to be calculated on the basis of a 360-day year for the
actual number of days elapsed and to be payable quarterly in arrears on the
first day of each calendar quarter and on the last day of the Term, and (y) to
the Issuer, a fronting fee of one quarter of one percent (0.25%) per annum times
the average daily face amount of each outstanding Letter of Credit for the
period from and excluding the date of issuance of same to and including the date
of expiration or termination, to be payable quarterly in arrears on the first
day of each calendar quarter and on the last day of the Term. (all of the
foregoing fees, the “Letter of Credit Fees”).  In addition, Borrowers shall pay
to Agent, for the benefit of Issuer, any and all administrative, issuance,
amendment, payment and negotiation charges with respect to Letters of Credit and
all fees and expenses as agreed upon by Issuer and the Borrowing Agent in
connection with any Letter of Credit, including in connection with the opening,
amendment or renewal of any such Letter of Credit and any acceptances created
thereunder, all such charges, fees and expenses, if any, to be payable on
demand.  All such charges shall be deemed earned in full on the date when the
same are due and payable hereunder and shall not be subject to rebate or
pro-ration upon the termination of this Agreement for any reason.  Any such
charge in effect at the time of a particular transaction shall be the charge for
that transaction, notwithstanding any subsequent change in the Issuer’s
prevailing charges for that type of transaction.  Upon and after the occurrence
of an Event of Default, and during the continuation thereof, at the option of
Agent or at the direction of Required Lenders (or, in the case of any Event of
Default under Section 10.7, immediately and automatically upon the occurrence of
any such Event of Default without the requirement of any affirmative action by
any party), the Letter of Credit Fees described in clause (x) of this Section
3.2(a) shall be increased by an additional two percent (2.0%) per annum.
 
 
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(b)           At any time following the occurrence of an Event of Default, at
the option of Agent or at the direction of Required Lenders (or, in the case of
any Event of Default under Section 10.7, immediately and automatically upon the
occurrence of such Event of Default, without the requirement of any affirmative
action by any party), or upon the expiration of the Term or any other
termination of this Agreement (and also, if applicable, in connection with any
mandatory prepayment under Section 2.18), Borrowers will cause cash to be
deposited and maintained in an account with Agent, as cash collateral, in an
amount equal to one hundred and five percent (105%) of the Maximum Undrawn
Amount of all outstanding Letters of Credit, and each Borrower hereby
irrevocably authorizes Agent, in its discretion, on such Borrower’s behalf and
in such Borrower’s name, to open such an account and to make and maintain
deposits therein, or in an account opened by such Borrower, in the amounts
required to be made by such Borrower, out of the proceeds of Receivables or
other Collateral or out of any other funds of such Borrower coming into any
Lender’s possession at any time.  Agent may, in its discretion, invest such cash
collateral (less applicable reserves) in such short-term money-market items as
to which Agent and such Borrower mutually agree (or, in the absence of such
agreement, as Agent may reasonably select) and the net return on such
investments shall be credited to such account and constitute additional cash
collateral, or Agent may (notwithstanding the foregoing) establish the account
provided for under this Section 3.2(b) as a non-interest bearing account and in
such case Agent shall have no obligation (and Borrowers hereby waive any claim)
under Article 9 of the Uniform Commercial Code or under any other Applicable Law
to pay interest on such cash collateral being held by Agent.  No Borrower may
withdraw amounts credited to any such account except upon the occurrence of all
of the following: (x) payment and performance in full of all Obligations; (y)
expiration of all Letters of Credit; and (z) termination of this
Agreement.  Borrowers hereby assign, pledge and grant to Agent, for its benefit
and the ratable benefit of Issuer, Lenders and each other Secured Party, a
continuing security interest in and to and Lien on any such cash collateral and
any right, title and interest of Borrowers in any deposit account, securities
account or investment account into which such cash collateral may be deposited
from time to time to secure the Obligations, specifically including all
Obligations with respect to any Letters of Credit.  Borrowers agree that upon
the coming due of any Reimbursement Obligations (or any other Obligations,
including Obligations for Letter of Credit Fees) with respect to the Letters of
Credit, Agent may use such cash collateral to pay and satisfy such Obligations.
 
3.3.          Closing Fee and Facility Fee.
 
(a)           Upon the execution of this Agreement, Borrowers shall pay to Agent
for the ratable benefit of Lenders a closing fee of $110,000 less that portion
of the commitment fee of $35,000 heretofore paid by Borrowers to Agent and the
deposit of $25,000 heretofore paid by Borrowers to Agent, in each case,
remaining after application of such fees to out of pocket costs and expenses,
which closing fee shall be payable as follows:  (i) fifty percent (50%) on the
Closing Date and (ii) fifty percent (50%) on the first anniversary of the
Closing Date.
 
 
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(b)           If, for any calendar quarter during the Term, the average daily
unpaid balance of the sum of Revolving Advances plus the Maximum Undrawn Amount
of all outstanding Letters of Credit for each day of such calendar quarter does
not equal the Maximum Revolving Advance Amount, then Borrowers shall pay to
Agent, for the ratable benefit of the Lenders holding the Revolving Commitments
based on their Revolving Commitment Percentages, a fee at a rate equal to one
half of one percent (0.50%) per annum on the amount by which the Maximum
Revolving Advance Amount exceeds such average daily unpaid balance.  Such fee
shall be payable to Agent in arrears on the first day of each calendar quarter
with respect to the previous calendar quarter.
 
3.4.          Collateral Monitoring Fee and Collateral Evaluation Fee.
 
(a)           Borrowers shall pay Agent a collateral monitoring fee equal to
$1,500 per month commencing on the first day of the month following the Closing
Date and on the first day of each month thereafter during the Term.  The
collateral monitoring fee shall be deemed earned in full on the date when same
is due and payable hereunder and shall not be subject to rebate or proration
upon termination of this Agreement for any reason.
 
(b)           Borrowers shall pay to Agent promptly at the conclusion of any
collateral monitoring performed by or for the benefit of Agent - namely any
field examination, collateral analysis or other business analysis, the need for
which is to be determined by Agent and which evaluation is undertaken by Agent
or for Agent’s benefit - a collateral evaluation fee in an amount equal to $850
(or such other amount customarily charged by Agent to its customers) per day for
each person employed to perform such evaluation, plus all costs and
disbursements incurred by Agent in the performance of such examination or
analysis, and further provided that if third parties are retained to perform
such collateral evaluations, either at the request of another Lender or for
extenuating reasons determined by Agent in its sole discretion, then such fees
charged by such third parties plus all costs and disbursements incurred by such
third party,  shall be the responsibility of Borrower and shall not be subject
to the foregoing limits.
 
(c)           All of the fees and out-of-pocket costs and expenses of any
appraisals conducted pursuant to Section 4.7 hereof shall be paid for when due,
in full and without deduction, off-set or counterclaim by Borrowers.
 
3.5.          Computation of Interest and Fees.  Interest and fees hereunder
shall be computed on the basis of a year of 360 days and for the actual number
of days elapsed.  If any payment to be made hereunder becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest thereon shall be payable at the
applicable Contract Rate for Domestic Rate Loans during such extension.
 
3.6.          Maximum Charges.  In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under Applicable
Law.  In the event interest and other charges as computed hereunder would
otherwise exceed the highest rate permitted under Applicable Law: (i) the
interest rates hereunder will be reduced to the maximum rate permitted under
Applicable Law; (ii) such excess amount shall be first applied to any unpaid
principal balance owed by Borrowers; and (iii) if the then remaining excess
amount is greater than the previously unpaid principal balance, Lenders shall
promptly refund such excess amount to Borrowers and the provisions hereof shall
be deemed amended to provide for such permissible rate.
 
 
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3.7.          Increased Costs.  In the event that any Applicable Law or any
Change in Law or compliance by any Lender  (for purposes of this Section 3.7,
the term “Lender” shall include Agent, any Issuer or Lender and any corporation
or bank controlling Agent, any Lender or Issuer and the office or branch where
Agent, any Lender or Issuer (as so defined) makes or maintains any LIBOR Rate
Loans) with any request or directive (whether or not having the force of law)
from any central bank or other financial, monetary or other authority, shall:
 
(a)           subject Agent, any Lender or Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Rate Loan, or change the basis
of taxation of payments to Agent, such Lender or Issuer in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 3.10 and the
imposition of, or any change in the rate of, any Excluded Tax payable by Agent,
such Lender or the Issuing Lender);
 
(b)           impose, modify or deem applicable any reserve, special deposit,
assessment, special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits in or for the account of,
advances or loans by, or other credit extended by, any office of Agent, Issuer
or any Lender, including pursuant to Regulation D of the Board of Governors of
the Federal Reserve System; or
 
(c)           impose on Agent, any Lender or Issuer or the London interbank
LIBOR market any other condition, loss or expense (other than Taxes) affecting
this Agreement or any Other Document or any Advance made by any Lender, or any
Letter of Credit or participation therein;
 
and the result of any of the foregoing is to increase the cost to Agent, any
Lender or Issuer of making, converting to, continuing, renewing or maintaining
its Advances hereunder by an amount that Agent or such Lender or Issuer deems to
be material or to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of the Advances by an amount that Agent
or such Lender or Issuer deems to be material, then, in any case Borrowers shall
promptly pay Agent or such Lender or Issuer, upon its demand, such additional
amount as will compensate Agent or such Lender or Issuer for such additional
cost or such reduction, as the case may be, provided that the foregoing shall
not apply to increased costs which are reflected in the LIBOR Rate, as the case
may be.  Agent or such Lender or Issuer shall certify the amount of such
additional cost or reduced amount to Borrowing Agent, and such certification
shall be conclusive absent manifest error.
 
3.8.          Basis For Determining Interest Rate Inadequate or Unfair.  In the
event that Agent or any Lender shall have determined that:
 
(a)           reasonable means do not exist for ascertaining the LIBOR Rate
applicable pursuant to Section 2.2 hereof for any Interest Period; or
 
(b)           Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank LIBOR market, with respect to
an outstanding LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a LIBOR Rate Loan; or
 
 
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(c)           the making, maintenance or funding of any LIBOR Rate Loan has been
made impracticable or unlawful by compliance by Agent or such Lender in good
faith with any Applicable Law or any interpretation or application thereof by
any Governmental Body or with any request or directive of any such Governmental
Body (whether or not having the force of law),
 
then Agent shall give Borrowing Agent prompt written or telephonic notice of
such determination.  If such notice is given, (i) any such requested LIBOR Rate
Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall notify
Agent no later than 10:00 a.m. two (2) Business Days prior to the date of such
proposed borrowing, that its request for such borrowing shall be cancelled or
made as an unaffected type of LIBOR Rate Loan, (ii) any Domestic Rate Loan or
LIBOR Rate Loan which was to have been converted to an affected type of LIBOR
Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if
Borrowing Agent shall notify Agent, no later than 10:00 a.m. two (2) Business
Days prior to the proposed conversion, shall be maintained as an unaffected type
of LIBOR Rate Loan, and (iii) any outstanding affected LIBOR Rate Loans shall be
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent,
no later than 10:00 a.m. two (2) Business Days prior to the last Business Day of
the then current Interest Period applicable to such affected LIBOR Rate Loan,
shall be converted into an unaffected type of LIBOR Rate Loan, on the last
Business Day of the then current Interest Period for such affected LIBOR Rate
Loans (or sooner, if any Lender cannot continue to lawfully maintain such
affected LIBOR Rate Loan).  Until such notice has been withdrawn, Lenders shall
have no obligation to make an affected type of LIBOR Rate Loan or maintain
outstanding affected LIBOR Rate Loans and no Borrower shall have the right to
convert a Domestic Rate Loan or an unaffected type of LIBOR Rate Loan into an
affected type of LIBOR Rate Loan.
 
3.9.          Capital Adequacy.
 
(a)           In the event that Agent or any Lender shall have determined that
any Applicable Law or guideline regarding capital adequacy, or any Change in Law
or any change in the interpretation or administration thereof by any
Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent, Issuer or any
Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent,
Issuer or any Lender and any corporation or bank controlling Agent or any Lender
and the office or branch where Agent or any Lender (as so defined) makes or
maintains any LIBOR Rate Loans) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent or any Lender’s capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent’s
and each Lender’s policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction.  In determining such
amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods.  The protection of this Section 3.9 shall be available to
Agent and each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the Applicable Law, rule, regulation, guideline
or condition.
 
 
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(b)           A certificate of Agent or such Lender setting forth such amount or
amounts as shall be necessary to compensate Agent or such Lender with respect to
Section 3.9(a) hereof when delivered to Borrowing Agent shall be conclusive
absent manifest error.
 
3.10.        Taxes.
 
(a)           Any and all payments by or on account of any Obligations hereunder
or under any Other Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes; provided that
if the Borrowers shall be required by Applicable Law to deduct any Indemnified
Taxes (including any Other Taxes) from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Agent, Lender, Issuer or Participant, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions and (iii) the Borrowers shall
timely pay the full amount deducted to the relevant Governmental Body in
accordance with Applicable Law.
 
(b)           Without limiting the provisions of Section 3.10(a) above, the
Borrowers shall timely pay any Other Taxes to the relevant Governmental Body in
accordance with Applicable Law.
 
(c)           Each Borrower shall indemnify Agent, each Lender, Issuer and any
Participant, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by Agent, such Lender, Issuer, or such Participant, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Body.  A
certificate as to the amount of such payment or liability delivered to the
Borrowers by any Lender, Participant, or the Issuer (with a copy to Agent), or
by Agent on its own behalf or on behalf of a Lender or the Issuer, shall be
conclusive absent manifest error.
 
(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Borrower to a Governmental Body, the Borrowers shall deliver
to Agent the original or a certified copy of a receipt issued by such
Governmental Body evidencing such payment, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to Agent.
 
(e)           Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any
Borrower is resident for tax purposes, or under any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any Other
Document shall deliver to the Borrowers (with a copy to Agent), at the time or
times prescribed by Applicable Law or reasonably requested by the Borrowers or
Agent, such properly completed and executed documentation prescribed by
Applicable Law as will permit such payments to be made without withholding or at
a reduced rate of withholding.  Notwithstanding the submission of such
documentation claiming a reduced rate of or exemption from U.S. withholding tax,
Agent shall be entitled to withhold United States federal income taxes at the
full 30% withholding rate if in its reasonable judgment it is required to do so
under the due diligence requirements imposed upon a withholding agent under §
1.1441-7(b) of the United States Income Tax Regulations or other Applicable
Law.  Further, Agent is indemnified under § 1.1461-1(e) of the United States
Income Tax Regulations against any claims and demands of any Lender, Issuer or
assignee or participant of a Lender or Issuer for the amount of any tax it
deducts and withholds in accordance with regulations under § 1441 of the
Code.  In addition, any Lender, if requested by the Borrowers or Agent, shall
deliver such other documentation prescribed by Applicable Law or reasonably
requested by the Borrowers or Agent as will enable the Borrowers or Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.  Without limiting the generality of the
foregoing, in the event that any Borrower is resident for tax purposes in the
United States of America, any Foreign Lender (or other Lender) shall deliver to
the Borrowers and Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender (or other
Lender) becomes a Lender under this Agreement (and from time to time thereafter
upon the request of the Borrowers or the Agent, but only if such Foreign Lender
(or other Lender) is legally entitled to do so), whichever of the following is
applicable: two (2) duly completed valid originals of IRS Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,
 
 
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(i)          two (2) duly completed valid originals of IRS Form W-8ECI,
 
(ii)         in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank” within
the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder”
of the Borrowers within the meaning of section 881(c)(3)(B) of the Code, or (C)
a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (y) two duly completed valid originals of IRS Form W-8BEN,
 
(iii)        any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrowers to determine the withholding or deduction
required to be made, or
 
(iv)       To the extent that any Lender is not a Foreign Lender, such Lender
shall submit to Agent two (2) originals of an IRS Form W-9 or any other form
prescribed by Applicable Law demonstrating that such Lender is not a Foreign
Lender.
 
(f)            If a payment made to a Lender, Participant, Issuer, or Agent
under any Document would be subject to U.S. Federal withholding Tax imposed by
FATCA if such Person fails to comply with the applicable reporting requirements
of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code,
as applicable), such Lender, Participant, Issuer, or Agent shall deliver to the
Agent (in the case of a Lender, Participant or Issuer) and the Borrowers (A) a
certification signed by the chief financial officer, principal accounting
officer, treasurer or controller of such Person, and (B) other documentation
reasonably requested by the Agent or any Borrower sufficient for Agent and the
Borrowers to comply with their obligations under FATCA and to determine that
such Lender, Participant, Issuer, or Agent has complied with such applicable
reporting requirements.
 
 
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(g)           If the Agent, a Lender, a Participant or the Issuer determines, in
its sole discretion, that it has received a refund of any Indemnified Taxes or
Other Taxes as to which it has been indemnified by the Borrowers or with respect
to which the Borrowers have paid additional amounts pursuant to this Section, it
shall pay to the Borrowers an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrowers
under this Section with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund); net of all out-of-pocket expenses of the Agent, such
Lender, Participant, or the Issuer, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Body with respect to
such refund), provided that the Borrowers, upon the request of the Agent, such
Lender, Participant, or the Issuer, agrees to repay the amount paid over to the
Borrowers (plus any penalties, interest or other charges imposed by the relevant
Governmental Body) to the Agent, such Lender, Participant or the Issuer in the
event the Agent, such Lender, Participant or the Issuer is required to repay
such refund to such Governmental Body.  This Section shall not be construed to
require the Agent, any Lender, Participant, or the Issuer to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrowers or any other Person.
 
3.11.        Replacement of Lenders.  If any Lender (an “Affected Lender”) (a)
makes demand upon Borrowers for (or if Borrowers are otherwise required to pay)
amounts pursuant to Section 3.7 or 3.9 hereof, (b) is unable to make or maintain
LIBOR Rate Loans as a result of a condition described in Section 2.2(h) hereof,
(c) is a Defaulting Lender, or (d) denies any consent requested by the Agent
pursuant to Section 16.2(b) hereof, Borrowers may, within ninety (90) days of
receipt of such demand, notice (or the occurrence of such other event causing
Borrowers to be required to pay such compensation or causing Section 2.2(h)
hereof to be applicable), or such Lender becoming a Defaulting Lender or denial
of a request by the Agent pursuant to Section 16.2(b) hereof, as the case may
be, by notice (a “Replacement Notice”) in writing to the Agent and such Affected
Lender (i) request the Affected Lender to cooperate with Borrowers in obtaining
a replacement Lender satisfactory to the Agent and Borrowers (the “Replacement
Lender”); (ii) request the non-Affected Lenders to acquire and assume all of the
Affected Lender’s Advances and its Revolving Commitment Percentage, as provided
herein, but none of such Lenders shall be under any obligation to do so; or
(iii) propose a Replacement Lender subject to approval by the Agent in its good
faith business judgment.  If any satisfactory Replacement Lender shall be
obtained, and/or if any one or more of the non-Affected Lenders shall agree to
acquire and assume all of the Affected Lender’s Advances and its Revolving
Commitment Percentage, then such Affected Lender shall assign, in accordance
with Section 16.3 hereof, all of its Advances and its Revolving Commitment
Percentage, and other rights and obligations under this Loan Agreement and the
Other Documents to such Replacement Lender or non-Affected Lenders, as the case
may be, in exchange for payment of the principal amount so assigned and all
interest and fees accrued on the amount so assigned, plus all other Obligations
then due and payable to the Affected Lender.
 
IV.           COLLATERAL:  GENERAL TERMS
 
 
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4.1.          Security Interest in the Collateral.  To secure the prompt payment
and performance to Agent, Issuer and each Lender (and each other holder of any
Obligations) of the Obligations, each Borrower hereby assigns, pledges and
grants to Agent for its benefit and for the ratable benefit of each Lender,
Issuer and each other Secured Party, a continuing security interest in and to
and Lien on all of its Collateral, whether now owned or existing or hereafter
created, acquired or arising and wheresoever located.  Each Borrower shall mark
its books and records as may be necessary or appropriate to evidence, protect
and perfect Agent’s security interest and shall cause its financial statements
to reflect such security interest.  Each Borrower shall provide Agent with
written notice of all commercial tort claims promptly upon the occurrence of any
events giving rise to any such claim(s) (regardless of whether legal proceedings
have yet been commenced), such notice to contain a brief description of the
claim(s), the events out of which such claim(s) arose and the parties against
which such claims may be asserted and, if applicable in any case where legal
proceedings regarding such claim(s) have been commenced, the case title together
with the applicable court and docket number.  Upon delivery of each such notice,
such Borrower shall be deemed to thereby grant to Agent a security interest and
lien in and to such commercial tort claims described therein and all proceeds
thereof.  Each Borrower shall provide Agent with written notice promptly upon
becoming the beneficiary under any letter of credit or otherwise obtaining any
right, title or interest in any letter of credit rights, and at Agent’s request
shall take such actions as Agent may reasonably request for the perfection of
Agent’s security interest therein.
 
4.2.          Perfection of Security Interest.  Each Borrower shall take all
action that may be necessary or desirable, or that Agent may request, so as at
all times to maintain the validity, perfection, enforceability and priority of
Agent’s security interest in and Lien on the Collateral or to enable Agent to
protect, exercise or enforce its rights hereunder and in the Collateral,
including, but not limited to, (i) immediately discharging all Liens other than
Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements, (iii) delivering
to Agent, endorsed or accompanied by such instruments of assignment as Agent may
specify, and stamping or marking, in such manner as Agent may specify, any and
all chattel paper, instruments, letters of credits and advices thereof and
documents evidencing or forming a part of the Collateral, (iv) entering into
warehousing, lockbox, customs and freight agreements and other custodial
arrangements satisfactory to Agent, and (v) executing and delivering financing
statements, control agreements, instruments of pledge, mortgages, notices and
assignments, in each case in form and substance satisfactory to Agent, relating
to the creation, validity, perfection, maintenance or continuation of Agent’s
security interest and Lien under the Uniform Commercial Code or other Applicable
Law.  By its signature hereto, each Borrower hereby authorizes Agent to file
against such Borrower, one or more financing, continuation or amendment
statements pursuant to the Uniform Commercial Code in form and substance
satisfactory to Agent.  All charges, expenses and fees Agent may incur in doing
any of the foregoing, and any local taxes relating thereto, shall be charged to
Borrowers’ Account as a Revolving Advance of a Domestic Rate Loan and added to
the Obligations, or, at Agent’s option, shall be paid by Borrowers to Agent for
its benefit and for the ratable benefit of Lenders immediately upon demand.
 
 
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4.3.          Preservation of Collateral.  In addition to the rights and
remedies set forth in Section 11.1 hereof, Agent: (a) may at any time take such
steps as Agent deems necessary to protect Agent’s interest in and to preserve
the Collateral, including the hiring of security guards or the placing of other
security protection measures as Agent may deem appropriate; (b) may employ and
maintain at any of any Borrower’s premises a custodian who shall have full
authority to do all acts necessary to protect Agent’s interests in the
Collateral; (c) may lease warehouse facilities to which Agent may move all or
part of the Collateral; (d) may use any Borrower’s owned or leased lifts,
hoists, trucks and other facilities or equipment for handling or removing the
Collateral; and (e) shall have, and is hereby granted, a right of ingress and
egress to the places where the Collateral is located, and may proceed over and
through any of Borrowers’ owned or leased property.  Each Borrower shall
cooperate fully with all of Agent’s efforts to preserve the Collateral and will
take such actions to preserve the Collateral as Agent may direct.  All of
Agent’s expenses of preserving the Collateral, including any expenses relating
to the bonding of a custodian, shall be charged to Borrowers’ Account as a
Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations.
 
4.4.          Ownership and Location of Collateral.
 
(a)           With respect to the Collateral, at the time the Collateral becomes
subject to Agent’s security interest:  (i) each Borrower shall be the sole owner
of and fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of  its respective Collateral
to Agent; and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens whatsoever; (ii) each document and agreement executed by
each Borrower or delivered to Agent or any Lender in connection with this
Agreement shall be true and correct in all respects; (iii) all signatures and
endorsements of each Borrower that appear on such documents and agreements shall
be genuine and each Borrower shall have full capacity to execute same; and (iv)
each Borrower’s Inventory shall be located as set forth on Schedule 4.4 and
shall not be removed from such location(s) without the prior written consent of
Agent except with respect to the sale of Inventory in the Ordinary Course of
Business.
 
(b)           (i) There is no location at which any Borrower has any Inventory
(except for Inventory in transit) other than those locations listed on Schedule
4.4(b)(i); (ii) Schedule 4.4(b)(ii) hereto contains a correct and complete list,
as of the Closing Date, of the legal names and addresses of each warehouse at
which Inventory of any Borrower is stored;  none of the receipts received by any
Borrower from any warehouse states that the goods covered thereby are to be
delivered to bearer or to the order of a named Person or to a named Person and
such named Person’s assigns;  (iii) Schedule 4.4(b)(iii) hereto sets forth a
correct and complete list as of the Closing Date of (A) each place of business
of each Borrower and (B) the chief executive office of each Borrower; and (iv)
Schedule 4.4(b)(iv) hereto sets forth a correct and complete list as of the
Closing Date of the location, by state and street address, of all Real Property
owned or leased by each Borrower, together with the names and addresses of any
landlords.
 
4.5.          Defense of Agent’s and Lenders’ Interests.  Until (a) payment and
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent’s interests in the Collateral shall continue in full force and
effect.  During such period no Borrower shall, without Agent’s prior written
consent, pledge, sell (except for sales or other dispositions otherwise
permitted in Section 7.1(b) hereof), assign, transfer, create or suffer to exist
a Lien upon or encumber or allow or suffer to be encumbered in any way except
for Permitted Encumbrances, any part of the Collateral.  Each Borrower shall
defend Agent’s interests in the Collateral against any and all Persons
whatsoever.  At any time following demand by Agent for payment of all
Obligations, Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained,
including:  labels, stationery, documents, instruments and advertising
materials.  If Agent exercises this right to take possession of the Collateral,
Borrowers shall, upon demand, assemble it in the best manner possible and make
it available to Agent at a place reasonably convenient to Agent.  In addition,
with respect to all Collateral, Agent and Lenders shall be entitled to all of
the rights and remedies set forth herein and further provided by the Uniform
Commercial Code or other Applicable Law.  Each Borrower shall, and Agent may, at
its option, instruct all suppliers, carriers, forwarders, warehousers or others
receiving or holding cash, checks, Inventory, documents or instruments in which
Agent holds a security interest to deliver same to Agent and/or subject to
Agent’s order and if they shall come into any Borrower’s possession, they, and
each of them, shall be held by such Borrower in trust as Agent’s trustee, and
such Borrower will immediately deliver them to Agent in their original form
together with any necessary endorsement.
 
 
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4.6.          Inspection of Premises.  At all reasonable times and from time to
time as often as Agent shall elect in its sole discretion, Agent and each Lender
shall have full access to and the right to audit, check, inspect and make
abstracts and copies from each Borrower’s books, records, audits, correspondence
and all other papers relating to the Collateral and the operation of each
Borrower’s business.  Agent, any Lender and their agents may enter upon any
premises of any Borrower at any time during business hours and at any other
reasonable time, and from time to time as often as Agent shall elect in its sole
discretion, for the purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of such Borrower’s
business.  Notwithstanding anything to the contrary herein and so long as a
Default and/or Event of Default has not occurred, the Agent shall not perform
more than (i) one (1) full scope field examination at the sole cost and expense
of the Borrowers each fiscal year and (ii) one (i) limited scope compliance
examination at the sole cost and expense of the Borrowers each fiscal quarter.
 
4.7.          Receivables; Deposit Accounts and Securities Accounts.
 
(a)           Each of the Receivables shall be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to be a breach
hereof) with respect to an absolute sale or lease and delivery of goods upon
stated terms of a Borrower, or work, labor or services theretofore rendered by a
Borrower as of the date each Receivable is created.  Same shall be due and owing
in accordance with the applicable Borrower’s standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
 
(b)           Each Customer, to the best of each Borrower’s knowledge, as of the
date each Receivable is created, is and will be solvent and able to pay all
Receivables on which the Customer is obligated in full when due.  With respect
to such Customers of any Borrower who are not solvent, such Borrower has set up
on its books and in its financial records bad debt reserves adequate to cover
such Receivables.
 
(c)           Each Borrower’s chief executive office is located as set forth on
Schedule 4.4(b)(iii).  Until written notice is given to Agent by Borrowing Agent
of any other office at which any Borrower keeps its records pertaining to
Receivables, all such records shall be kept at such executive office.
 
 
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(d)           Borrowers shall instruct their Customers to deliver all
remittances upon Receivables (whether paid by check or by wire transfer of
funds) to such Blocked Account(s) and/or Depository Accounts (and any associated
lockboxes) as Agent shall designate from time to time as contemplated by Section
4.7(h) or as otherwise agreed to from time to time by Agent.  Notwithstanding
the foregoing, to the extent any Borrower directly receives any remittances upon
Receivables, such Borrower shall, at such Borrower’s sole cost and expense, but
on Agent’s behalf and for Agent’s account, collect as Agent’s property and in
trust for Agent all amounts received on Receivables, and shall not commingle
such collections with any Borrower’s funds or use the same except to pay
Obligations, and shall as soon as possible and in any event no later than one
(1) Business Day after the receipt thereof (i) in the case of remittances paid
by check, deposit all such remittances in their original form (after supplying
any necessary endorsements) and (ii) in the case of remittances paid by wire
transfer of funds, transfer all such remittances, in each case, into such
Blocked Accounts(s) and/or Depository Account(s).  Each Borrower shall deposit
in the Blocked Account and/or Depository Account or, upon request by Agent,
deliver to Agent, in original form and on the date of receipt thereof, all
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.
 
(e)           At any time following the occurrence of an Event of Default or a
Default, Agent shall have the right to send notice of the assignment of, and
Agent’s security interest in and Lien on, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral.  Thereafter, Agent shall have the sole right to collect the
Receivables, take possession of the Collateral, or both.  Agent’s actual
collection expenses, including, but not limited to, stationery and postage,
telephone and telegraph, secretarial and clerical expenses and the salaries of
any collection personnel used for collection, may be charged to Borrowers’
Account and added to the Obligations.
 
(f)           Agent shall have the right to receive, endorse, assign and/or
deliver in the name of Agent or any Borrower any and all checks, drafts and
other instruments for the payment of money relating to the Receivables, and each
Borrower hereby waives notice of presentment, protest and non-payment of any
instrument so endorsed.  Each Borrower hereby constitutes Agent or Agent’s
designee as such Borrower’s attorney with power (i) at any time: (A) to endorse
such Borrower’s name upon any notes, acceptances, checks, drafts, money orders
or other evidences of payment or Collateral; (B) to sign such Borrower’s name on
any invoice or bill of lading relating to any of the Receivables, drafts against
Customers, assignments and verifications of Receivables; (C) to send
verifications of Receivables to any Customer; (D) to sign such Borrower’s name
on all financing statements or any other documents or instruments deemed
necessary or appropriate by Agent to preserve, protect, or perfect Agent’s
interest in the Collateral and to file same; and (E) to receive, open and
dispose of all mail addressed to any Borrower at any post office box/lockbox
maintained by Agent for Borrowers or at any other business premises of Agent;
and (ii) at any time following the occurrence of a Default or Event of Default:
(A) to demand payment of the Receivables; (B) to enforce payment of the
Receivables by legal proceedings or otherwise; (C) to exercise all of such
Borrower’s rights and remedies with respect to the collection of the Receivables
and any other Collateral; (D) to sue upon or otherwise collect, extend the time
of payment of, settle, adjust, compromise, extend or renew the Receivables; (E)
to settle, adjust or compromise any legal proceedings brought to collect
Receivables; (F) to prepare, file and sign such Borrower’s name on a proof of
claim in bankruptcy or similar document against any Customer; (G) to prepare,
file and sign such Borrower’s name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Receivables; (H)
to accept the return of goods represented by any of the Receivables; (I) to
change the address for delivery of mail addressed to any Borrower to such
address as Agent may designate; and (J) to do all other acts and things
necessary to carry out this Agreement.  All acts of said attorney or designee
are hereby ratified and approved, and said attorney or designee shall not be
liable for any acts of omission or commission nor for any error of judgment or
mistake of fact or of law, unless done maliciously or with gross (not mere)
negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment); this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid.
 
 
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(g)           Neither Agent nor any Lender shall, under any circumstances or in
any event whatsoever, have any liability for any error or omission or delay of
any kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for any damage
resulting therefrom.
 
(h)           All proceeds of Collateral shall be deposited by Borrowers into
either (i) a lockbox account, dominion account or such other “blocked account”
(“Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked
Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may
be acceptable to Agent or (ii) depository accounts (“Depository Accounts”)
established at the Agent for the deposit of such proceeds.  Each applicable
Borrower, Agent and each Blocked Account Bank shall enter into a deposit account
control agreement in form and substance satisfactory to Agent that is sufficient
to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform
Commercial Code) over such account and which directs such Blocked Account Bank
to transfer such funds so deposited on a daily basis or at other times
acceptable to Agent to Agent, either to any account maintained by Agent at said
Blocked Account Bank or by wire transfer to appropriate account(s) at
Agent.  All funds deposited in such Blocked Accounts or Depository Accounts
shall immediately become subject to the security interest of Agent for its own
benefit and the ratable benefit of Issuer, Lenders and all other holders of the
Obligations, and Borrowing Agent shall obtain the agreement by such Blocked
Account Bank to waive any offset rights against the funds so deposited.  Neither
Agent nor any Lender assumes any responsibility for such blocked account
arrangement, including any claim of accord and satisfaction or release with
respect to deposits accepted by any Blocked Account Bank thereunder.  Agent
shall apply all funds received by it from the Blocked Accounts and/or Depository
Accounts to the satisfaction of the Obligations (including the cash
collateralization of the Letters of Credit) in such order as Agent shall
determine in its sole discretion, provided that, in the absence of any Event of
Default, Agent shall apply all such funds representing collection of Receivables
to the prepayment of the principal amount of the Revolving
Advances.  Notwithstanding anything to the contrary herein, the Borrowers shall
only be obligated to utilize a Blocked Account as set forth in this Subsection
4.8(h) if the aggregate amount of outstanding Revolving Advances is greater than
$7,500,000.
 
(i)           No Borrower will, without Agent’s consent, compromise or adjust
any Receivables (or extend the time for payment thereof) or accept any returns
of merchandise or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts, credits and
allowances as have been heretofore customary in the Ordinary Course of Business
of such Borrower.
 
 
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(j)            All deposit accounts (including all Blocked Accounts and
Depository Accounts), securities accounts and investment accounts of each
Borrower and its Subsidiaries as of the Closing Date are set forth on Schedule
4.8(j).  No Borrower shall open any new deposit account, securities account or
investment account unless (i) Borrowers shall have given at least thirty (30)
days prior written notice to Agent and (ii) if such account is to be maintained
with a bank, depository institution or securities intermediary that is not the
Agent, such bank, depository institution or securities intermediary, each
applicable Borrower and Agent shall first have entered into an account control
agreement in form and substance satisfactory to Agent sufficient to give Agent
“control” (for purposes of Articles 8 and 9 of the Uniform Commercial Code) over
such account.
 
4.8.          Inventory.  To the extent Inventory held for sale or lease has
been produced by any Borrower, it has been and will be produced by such Borrower
in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.
 
4.9.          Maintenance of Equipment.  The equipment shall be maintained in
good operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the equipment shall be maintained and preserved.  No
Borrower shall use or operate the equipment in violation of any law, statute,
ordinance, code, rule or regulation.
 
4.10.        Exculpation of Liability.  Nothing herein contained shall be
construed to constitute Agent or any Lender as any Borrower’s agent for any
purpose whatsoever, nor shall Agent or any Lender be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause
thereof.  Neither Agent nor any Lender, whether by anything herein or in any
assignment or otherwise, assume any of any Borrower’s obligations under any
contract or agreement assigned to Agent or such Lender, and neither Agent nor
any Lender shall be responsible in any way for the performance by any Borrower
of any of the terms and conditions thereof.
 
4.11.        Financing Statements.  Except as respects the financing statements
filed by Agent, financing statements described on Schedule 1.2, and financing
statements filed in connection with Permitted Encumbrances, no financing
statement covering any of the Collateral or any proceeds thereof is or will be
on file in any public office.
 
V.            REPRESENTATIONS AND WARRANTIES.
 
Each Borrower represents and warrants as follows:
 
5.1.          Authority.  Each Borrower has full power, authority and legal
right to enter into this Agreement and the Other Documents to which it is a
party and to perform all its respective Obligations hereunder and
thereunder.  This Agreement and the Other Documents to which it is a party have
been duly executed and delivered by each Borrower, and this Agreement and the
Other Documents to which it is a party constitute the legal, valid and binding
obligation of such Borrower enforceable in accordance with their terms, except
as such enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally.  The
execution, delivery and performance of this Agreement and of the Other Documents
to which it is a party (a) are within such Borrower’s corporate or company
powers, as applicable, have been duly authorized by all necessary corporate or
company action, as applicable, are not in contravention of law or the terms of
such Borrower’s Organizational Documents or to the conduct of such Borrower’s
business or of any Customer and Supplier Contract or undertaking to which such
Borrower is a party or by which such Borrower is bound, (b) will not conflict
with or violate any law or regulation, or any judgment, order or decree of any
Governmental Body, (c) will not require the Consent of any Governmental Body,
any party to a Customer and Supplier Contract or any other Person, except those
Consents set forth on Schedule 5.1 hereto, all of which will have been duly
obtained, made or compiled prior to the Closing Date and which are in full force
and effect and (d) 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 except Permitted Encumbrances upon any asset of such Borrower under the
provisions of any agreement, instrument, or other document to which such
Borrower is a party or by which it or its property is a party or by which it may
be bound.
 
 
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5.2.          Formation and Qualification.
 
(a)           Each Borrower is duly incorporated or formed, as applicable, and
in good standing under the laws of the state listed on Schedule 5.2(a) and is
qualified to do business and is in good standing in the states listed on
Schedule 5.2(a) which constitute all states in which qualification and good
standing are necessary for such Borrower to conduct its business and own its
property and where the failure to so qualify could reasonably be expected to
have a Material Adverse Effect on such Borrower.  Each Borrower has delivered to
Agent true and complete copies of its Organizational Documents and will promptly
notify Agent of any amendment or changes thereto.
 
(b)           The only Subsidiaries of each Borrower are listed on Schedule
5.2(b).
 
5.3.          Survival of Representations and Warranties.  All representations
and warranties of such Borrower contained in this Agreement and the Other
Documents to which it is a party shall be true at the time of such Borrower’s
execution of this Agreement and the Other Documents to which it is a party, and
shall survive the execution, delivery and acceptance thereof by the parties
thereto and the closing of the transactions described therein or related
thereto.
 
5.4.          Tax Returns.  Each Borrower’s federal tax identification number is
set forth on Schedule 5.4.  Each Borrower has filed all federal, state and local
tax returns and other reports each is required by law to file and has paid all
taxes, assessments, fees and other governmental charges that are due and
payable.  The provision for taxes on the books of each Borrower is adequate for
all years not closed by applicable statutes, and for its current fiscal year,
and no Borrower has any knowledge of any deficiency or additional assessment in
connection therewith not provided for on its books.
 
5.5.          Financial Statements.  The consolidated and consolidating balance
sheets of Borrowers, and such other Persons described therein, as of December
31, 2012, and the related statements of income, changes in stockholder’s equity,
and changes in cash flow for the period ended on such date, all accompanied by
reports thereon containing opinions without qualification by independent
certified public accountants, copies of which have been delivered to Agent, have
been prepared in accordance with GAAP, consistently applied (except for changes
in application to which such accountants concur and present fairly the financial
position of Borrowers at such date and the results of their operations for such
period.  Since December 31, 2012, there has been no change in the condition,
financial or otherwise, of Borrowers as shown on the consolidated balance sheet
as of such date and no change in the aggregate value of machinery, equipment and
Real Property owned by Borrowers, except changes in the Ordinary Course of
Business, none of which individually or in the aggregate has been materially
adverse.
 
 
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5.6.          Entity Names.  No Borrower has been known by any other company or
corporate name, as applicable, in the past five years and does not sell
Inventory under any other name except as set forth on Schedule 5.6, nor has any
Borrower been the surviving corporation or company, as applicable, of a merger
or consolidation or acquired all or substantially all of the assets of any
Person during the preceding five (5) years.
 
5.7.           O.S.H.A. Environmental Compliance and Flood Insurance.
 
(a)           Except as set forth on Schedule 5.7 hereto, each Borrower is in
compliance with, and its facilities, business, assets, property, leaseholds,
Real Property and Equipment are in compliance with the Federal Occupational
Safety and Health Act, Environmental Laws and there are no outstanding
citations, notices or orders of non-compliance issued to any Borrower or
relating to its business, assets, property, leaseholds or Equipment under any
such laws, rules or regulations.
 
(b)           Except as set forth on Schedule 5.7 hereto, each Borrower has been
issued all required federal, state and local licenses, certificates or permits
(collectively, “Approvals”) relating to all applicable Environmental Laws and
all such Approvals are current and in full force and effect.
 
(c)           Except as set forth on Schedule 5.7: (i) there have been no
releases, spills, discharges, leaks or disposal (collectively referred to as
“Releases”) of Hazardous Materials at, upon, under or migrating from or onto any
Real Property owned, leased or occupied by any Borrower, except for those
Releases which are in full compliance with Environmental Laws; (ii) there are no
underground storage tanks or polychlorinated biphenyls on any Real Property
owned, leased or occupied by any Borrower, except for such underground storage
tanks or polychlorinated biphenyls that are present in compliance with
Environmental Laws; (iii) the Real Property including any premises owned, leased
or occupied by any Borrower has never been used by any Borrower to dispose of
Hazardous Materials, except as authorized by Environmental Laws; and (iv) no
Hazardous Materials are managed  by Borrower on any Real Property including any
premises owned, leased or occupied  by any Borrower, excepting such quantities
as are managed in accordance with all applicable manufacturer’s instructions and
compliance with Environmental Laws and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.
 
 
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(d)            All Real Property owned by Borrowers is insured pursuant to
policies and other bonds which are valid and in full force and effect and which
provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each such Borrower in
accordance with prudent business practice in the industry of such
Borrower.  Each Borrower has taken all actions required under the Flood Laws
and/or requested by Agent to assist in ensuring that each Lender is in
compliance with the Flood Laws applicable to the Collateral, including, but not
limited to, providing Agent with the address and/or GPS coordinates of each
structure located upon any Real Property that will be subject to a Mortgage in
favor of Agent, for the benefit of the Lenders, and, to the extent required,
obtaining flood insurance for such property, structures and contents prior to
such property, structures and contents becoming Collateral.
 
5.8.          Solvency; No Litigation, Violation, Indebtedness or Default; ERISA
Compliance.
 
(a)           (i) Each Borrower is solvent, able to pay its debts as they
mature, has capital sufficient to carry on its business and all businesses in
which it is about to engage, (ii) as of the Closing Date, the fair present
saleable value of its assets, calculated on a going concern basis, is in excess
of the amount of its liabilities, and (iii) subsequent to the Closing Date, the
fair saleable value of its assets (calculated on a going concern basis) will be
in excess of the amount of its liabilities.
 
(b)           Except as disclosed in Schedule 5.8(b)(i), no Borrower has any
pending or threatened litigation, arbitration, actions or proceedings.  No
Borrower has any outstanding Indebtedness other than the Obligations, except for
(i) Indebtedness disclosed in Schedule 5.8(b)(ii) and (ii) Indebtedness
otherwise permitted under Section 7.8 hereof.
 
(c)           To the best of its knowledge, Borrower is not in violation of any
applicable statute, law, rule, regulation or ordinance in any respect which
could reasonably be expected to have a Material Adverse Effect, nor is any
Borrower in violation of any order of any court, Governmental Body or
arbitration board or tribunal.  Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state laws.
 
(d)           No Borrower or any member of the Controlled Group maintains or is
required to contribute to any Plan other than those listed on Schedule 5.8(d)
hereto.  (i) Each Borrower and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA and Section
412 of the Code in respect of each Plan, and each Plan is in compliance with
Sections 412, 430 and 436 of the Code and Sections 206(g), 302 and 303 of ERISA,
without regard to waivers and variances; (ii) each Plan which is intended to be
a qualified plan under Section 401(a) of the Code as currently in effect has
been determined by the Internal Revenue Service to be qualified under Section
401(a) of the Code and the trust related thereto is exempt from federal income
tax under Section 501(a) of the Code or an application for such a determination
is currently being processed by the Internal Revenue Code; (iii) neither any
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid; (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan; (v) the current value of the assets of each Plan
exceeds the present value of the accrued benefits and other liabilities of such
Plan and neither any Borrower nor any member of the Controlled Group knows of
any facts or circumstances which would materially change the value of such
assets and accrued benefits and other liabilities; (vi) neither any Borrower nor
any member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan; (vii)
neither any Borrower nor any member of a Controlled Group has incurred any
liability for any excise tax arising under Section 4971, 4972 or 4980B of the
Code, and no fact exists which could give rise to any such liability; (viii)
neither any Borrower nor any member of the Controlled Group nor any fiduciary
of, nor any trustee to, any Plan, has engaged in a “prohibited transaction”
described in Section 406 of the ERISA or Section 4975 of the Code nor taken any
action which would constitute or result in a Termination Event with respect to
any such Plan which is subject to ERISA; (ix) no Termination Event has occurred
or is reasonably expected to occur; (x) there exists no event described in
Section 4043 of ERISA, for which the thirty (30) day notice period has not been
waived; (xi) neither any Borrower nor any member of the Controlled Group has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA; (xii) neither any Borrower nor any member of the Controlled Group
maintains or is required to contribute to any Plan which provides health,
accident or life insurance benefits to former employees, their spouses or
dependents, other than in accordance with Section 4980B of the Code; (xiii)
neither any Borrower nor any member of the Controlled Group has withdrawn,
completely or partially, within the meaning of Section 4203 or 4205 of ERISA,
from any Multiemployer Plan so as to incur liability under the Multiemployer
Pension Plan Amendments Act of 1980 and there exists no fact which would
reasonably be expected to result in any such liability; and (xiv) no Plan
fiduciary (as defined in Section 3(21) of ERISA) has any liability for breach of
fiduciary duty or for any failure in connection with the administration or
investment of the assets of a Plan.
 
 
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5.9.          Patents, Trademarks, Copyrights and Licenses.  All Intellectual
Property owned or utilized by any Borrower: (i) is valid and has been duly
registered or filed with all appropriate Governmental Bodies; (ii) constitutes
all of the intellectual property rights which are necessary for the operation of
its business.  There is no objection to or pending challenge to the validity of,
or proceedings by any Governmental Body to suspend, revoke, terminate or
adversely modify, any such Intellectual Property and no Borrower is aware of any
grounds for any challenge or proceedings, except as set forth in Schedule 5.9
hereto.  All Intellectual Property  owned or held by any Borrower consists of
original material or property developed by such Borrower or was lawfully
acquired by such Borrower from the proper and lawful owner thereof.  Each of
such items has been maintained so as to preserve the value thereof from the date
of creation or acquisition thereof.
 
5.10.        Licenses and Permits.  Except as set forth in Schedule 5.10, each
Borrower (a) is in compliance with and (b) has procured and is now in possession
of, all material licenses or permits required by any applicable federal, state,
provincial or local law, rule or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits could reasonably be
expected to have a Material Adverse Effect.
 
 
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5.11.        Default of Indebtedness.  No Borrower is in default in the payment
of the principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.
 
5.12.        No Default.  No Borrower is in default in the payment or
performance of any of its contractual obligations and no Default or Event of
Default has occurred.
 
5.13.        No Burdensome Restrictions.  No Borrower is party to any contract
or agreement the performance of which could reasonably be expected to have a
Material Adverse Effect.  Each Borrower has heretofore delivered to Agent true
and complete copies of all Customer and Supplier Contracts to which it is a
party or to which it or any of its properties is subject.  No Borrower has
agreed or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien which is not a Permitted Encumbrance.
 
5.14.        No Labor Disputes.  No Borrower is involved in any labor dispute;
there are no strikes or walkouts or union organization of any Borrower’s
employees threatened or in existence and no labor contract is scheduled to
expire during the Term other than as set forth on Schedule 5.14 hereto.
 
5.15.        Margin Regulations.  No Borrower is engaged, nor will it engage,
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 respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect.  No part of the proceeds of any Advance will be used for
“purchasing” or “carrying” “margin stock” as defined in Regulation U of such
Board of Governors.
 
5.16.        Investment Company Act.  No Borrower is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
 
5.17.        Disclosure.  No representation or warranty made by any Borrower in
this Agreement or in any financial statement, report, certificate or any other
document furnished in connection herewith contains any untrue statement of fact
or omits to state any fact necessary to make the statements herein or therein
not misleading.  There is no fact known to any Borrower or which reasonably
should be known to such Borrower which such Borrower has not disclosed to Agent
in writing with respect to the transactions contemplated by this Agreement which
could reasonably be expected to have a Material Adverse Effect.
 
5.18.        Swaps.  No Borrower is a party to, nor will it be a party to, any
swap agreement whereby such Borrower has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited “two-way basis”
without regard to fault on the part of either party.
 
 
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5.19.        Business and Property of Borrowers.  Upon and after the Closing
Date, Borrowers do not propose to engage in any business other than the
manufacturing and supplying of radio frequency integrated circuit solutions for
the communications industry, automobile industry, and any other industry, and
activities necessary to conduct the foregoing.  On the Closing Date, each
Borrower will own all the property and possess all of the rights and Consents
necessary for the conduct of the business of such Borrower.
 
5.20.        Ineligible Securities.  Borrowers do not intend to use and shall
not use any portion of the proceeds of the Advances, directly or indirectly, to
purchase during the underwriting period, or for 30 days thereafter, Ineligible
Securities being underwritten by a securities Affiliate of Agent or any Lender.
 
5.21.        Equity Interests.  The authorized and outstanding Equity Interests
of each Borrower, and each legal and beneficial holder thereof as of the Closing
Date, are as set forth on Schedule 5.24(a) hereto.  All of the Equity Interests
of each Borrower have been duly and validly authorized and issued and are fully
paid and non-assessable and have been sold and delivered to the holders hereof
in compliance with, or under valid exemption from, all federal and state laws
and the rules and regulations of each Governmental Body governing the sale and
delivery of securities.  Except for the rights and obligations set forth on
Schedule 5.24(b), there are no subscriptions, warrants, options, calls,
commitments, rights or agreement by which any Borrower or any of the
shareholders of any Borrower is bound relating to the issuance, transfer, voting
or redemption of shares of its Equity Interests or any pre-emptive rights held
by any Person with respect to the Equity Interests of Borrowers.
 
5.22.        Commercial Tort Claims.  No Borrower has any commercial tort
claims.
 
5.23.        Letter of Credit Rights:  As of the Closing Date, no Borrower has
any letter of credit rights.
 
5.24.        Customer and Supplier Contracts.  Schedule 5.27 sets forth all
Customer and Supplier Contracts of the Borrowers.  All Customer and Supplier
Contracts are in full force and effect and no material defaults currently exist
thereunder.
 
VI.           AFFIRMATIVE COVENANTS.
 
Each Borrower shall, until payment in full of the Obligations and termination of
this Agreement:
 
6.1.          Compliance with Laws.  Comply with all Applicable Laws with
respect to the Collateral or any part thereof or to the operation of such
Borrower’s business the non-compliance with which could reasonably be expected
to have a Material Adverse Effect (except to the extent any separate provision
of this Agreement shall expressly require compliance with any particular
Applicable Law(s) pursuant to another standard).  Each Borrower may, however,
contest or dispute any Applicable Laws in any reasonable manner, provided that
any related Lien is inchoate or stayed and sufficient reserves are established
to the reasonable satisfaction of Agent to protect Agent’s Lien on or security
interest in the Collateral.
 
 
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6.2.           Conduct of Business and Maintenance of Existence and Assets.  (a)
Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
and except as may be disposed of in accordance with the terms of this
Agreement), including all Intellectual Property and take all actions necessary
to enforce and protect the validity of any intellectual property right or other
right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all such
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof where the failure to do so could reasonably be
expected to have a Material Adverse Effect.
 
6.3.          Books and Records.  Keep proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs (including without
limitation accruals for taxes, assessments, Charges, levies and claims,
allowances against doubtful Receivables and accruals for depreciation,
obsolescence or amortization of assets), all in accordance with, or as required
by, GAAP consistently applied in the opinion of such independent public
accountant as shall then be regularly engaged by Borrowers.
 
6.4.          Payment of Taxes.  Pay, when due, all taxes, assessments and other
Charges lawfully levied or assessed upon such Borrower or any of the Collateral,
including real and personal property taxes, assessments and charges and all
franchise, income, employment, social security benefits, withholding, and sales
taxes.  If any tax by any Governmental Body is or may be imposed on or as a
result of any transaction between any Borrower and Agent or any Lender which
Agent or any Lender may be required to withhold or pay or if any taxes,
assessments, or other Charges remain unpaid after the date fixed for their
payment, or if any claim shall be made which, in Agent’s or any Lender’s
opinion, may possibly create a valid Lien on the Collateral, Agent may without
notice to Borrowers pay the taxes, assessments or other Charges and each
Borrower hereby indemnifies and holds Agent and each Lender harmless in respect
thereof.  Agent will not pay any taxes, assessments or Charges to the extent
that any applicable Borrower has Properly Contested those taxes, assessments or
Charges.  The amount of any payment by Agent under this Section 6.4 shall be
charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic
Rate Loan and added to the Obligations and, until Borrowers shall furnish Agent
with an indemnity therefor (or supply Agent with evidence satisfactory to Agent
that due provision for the payment thereof has been made), Agent may hold
without interest any balance standing to Borrowers’ credit and Agent shall
retain its security interest in and Lien on any and all Collateral held by
Agent.
 
6.5.          Financial Covenants.
 
(a)           Minimum EBITDA Covenant.  Cause to be maintained as of the end of
each fiscal quarter, an EBITDA of not less than (i) negative (-) $22,000,000 for
the fiscal quarter ending June 30, 2013 tested on a trailing six (6) month
basis, (ii) negative (-) $27,000,000 for the fiscal quarter ending September 30,
2013 tested on a trailing nine (9) month basis, (iii) negative (-) $29,500,000
for the fiscal quarter ending December 31, 2013 tested on a trailing twelve (12)
month basis, (iv) negative (-) $19,000,000 for the fiscal quarter ending March
31, 2014 tested on a trailing twelve (12) month basis, (v) $0.00 for the fiscal
quarter ending June 30, 2014 tested on a trailing three (3) month basis, (vi)
$0.00 for the fiscal quarter ending September 30, 2014 tested on a trailing six
(6) month basis, (vii) $0.00 for the fiscal quarter ending December 31, 2014
tested on a trailing nine (9) month basis and (viii) $0.00 for the fiscal
quarter ending March 31, 2015 and each fiscal quarter thereafter tested on a
trailing twelve (12) month basis.
 
 
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6.6.          Insurance. 
 
(a)           (i) Keep all its insurable properties and properties in which such
Borrower has an interest insured against the hazards of fire, flood, sprinkler
leakage, those hazards covered by extended coverage insurance and such other
hazards, and for such amounts, as is customary in the case of companies engaged
in businesses similar to such Borrower’s including business interruption
insurance; (ii) maintain a bond in such amounts as is customary in the case of
companies engaged in businesses similar to such Borrower insuring against
larceny, embezzlement or other criminal misappropriation of insured’s officers
and employees who may either singly or jointly with others at any time have
access to the assets or funds of such Borrower either directly or through
authority to draw upon such funds or to direct generally the disposition of such
assets; (iii) maintain public and product liability insurance against claims for
personal injury, death or property damage suffered by others; (iv) maintain all
such worker’s compensation or similar insurance as may be required under the
laws of any state or jurisdiction in which such Borrower is engaged in business;
(v) furnish Agent with (A) copies of all policies and evidence of the
maintenance of such policies by the renewal thereof at least thirty (30) days
before any expiration date, and (B) appropriate loss payable endorsements in
form and substance satisfactory to Agent, naming Agent as an additional insured
and mortgagee and/or lender loss payee (as applicable) as its interests may
appear with respect to all insurance coverage referred to in clauses (i), and
(iii) above, and providing (I) that all proceeds thereunder shall be payable to
Agent, (II) no such insurance shall be affected by any act or neglect of the
insured or owner of the property described in such policy, and (III) that such
policy and loss payable clauses may not be cancelled, amended or terminated
unless at least thirty (30) days prior written notice is given to Agent (or in
the case of non-payment, at least ten (10) days prior written notice).  In the
event of any loss thereunder, the carriers named therein hereby are directed by
Agent and the applicable Borrower to make payment for such loss to Agent and not
to such Borrower and Agent jointly.  If any insurance losses are paid by check,
draft or other instrument payable to any Borrower and Agent jointly, Agent may
endorse such Borrower’s name thereon and do such other things as Agent may deem
advisable to reduce the same to cash.
 
(b)           Each Borrower shall take all actions required under the Flood Laws
and/or requested by Agent to assist in ensuring that each Lender is in
compliance with the Flood Laws applicable to the Collateral, including, but not
limited to, providing Agent with the address and/or GPS coordinates of each
structure on any real property that will be subject to a mortgage in favor of
Agent, for the benefit of the Lenders, and, to the extent required, obtaining
flood insurance for such property, structures and contents prior to such
property, structures and contents becoming Collateral, and thereafter
maintaining such flood insurance in full force and effect for so long as
required by the Flood Laws.
 
 
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6.7.          Payment of Indebtedness and Leasehold Obligations.  Pay, discharge
or otherwise satisfy (i) at or before maturity (subject, where applicable, to
specified grace periods) all its Indebtedness, except when the failure to do so
could not reasonably be expected to have a Material Adverse Effect or when the
amount or validity thereof is currently being Properly Contested, subject at all
times to any applicable subordination arrangement in favor of Lenders and (ii)
when due its rental obligations under all leases under which it is a tenant, and
shall otherwise comply, in all material respects, with all other terms of such
leases and keep them in full force and effect.
 
6.8.          Environmental Matters.
 
(a)           Ensure that the Real Property and all operations and businesses
conducted thereon are in compliance and remain in compliance with all
Environmental Laws and it shall manage any and all Hazardous Materials on any
Real Property in compliance with Environmental Laws.
 
(b)           Establish and maintain an environmental management and compliance
system to assure and monitor continued compliance with all applicable
Environmental Laws which system shall include periodic environmental compliance
audits to be conducted by knowledgeable environmental professionals.  All
potential violations and violations of Environmental Laws shall be reviewed with
legal counsel to determine any required reporting to applicable Governmental
Authorities and any required corrective actions to address such potential
violations or violations.
 
(c)           Respond promptly to any Hazardous Discharge or Environmental
Complaint and take all necessary action in order to safeguard the health of any
Person and to avoid subjecting the Collateral or Real Property to any Lien.  If
any Borrower shall fail to respond promptly to any Hazardous Discharge or
Environmental Complaint or any Borrower shall fail to comply with any of the
requirements of any Environmental Laws, Agent on behalf of Lenders may, but
without the obligation to do so, for the sole purpose of protecting Agent’s
interest in the Collateral:  (i) give such notices or (ii) enter onto the Real
Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to remediate, remove, mitigate or otherwise
manage with any such Hazardous Discharge or Environmental Complaint.  All
reasonable costs and expenses incurred by Agent and Lenders (or such third
parties) in the exercise of any such rights, including any sums paid in
connection with any judicial or administrative investigation or proceedings,
fines and penalties, together with interest thereon from the date expended at
the Default Rate for Domestic Rate Loans constituting Revolving Advances shall
be paid upon demand by Borrowers, and until paid shall be added to and become a
part of the Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any Borrower.
 
6.9.          Standards of Financial Statements.  Cause all financial statements
referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, and 9.13 as to which
GAAP is applicable to be complete and correct in all material respects (subject,
in the case of interim financial statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
disclosed therein and agreed to by such reporting accountants or officer, as
applicable).
 
 
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6.10.        Execution of Supplemental Instruments.  Execute and deliver to
Agent from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the
Collateral, and such other instruments as Agent may request, in order that the
full intent of this Agreement may be carried into effect.
 
6.11.        Government Receivables.  Take all steps necessary to protect
Agent’s interest in the Collateral under the Federal Assignment of Claims Act,
the Uniform Commercial Code and all other applicable state or local statutes or
ordinances and deliver to Agent appropriately endorsed, any instrument or
chattel paper connected with any Receivable arising out of any contract between
any Borrower and the United States, any state or any department, agency or
instrumentality of any of them.
 
VII.          NEGATIVE COVENANTS.
 
No Borrower shall, until satisfaction in full of the Obligations and termination
of this Agreement:
 
7.1.          Merger, Consolidation, Acquisition and Sale of Assets.  Enter into
any merger, consolidation or other reorganization with or into any other Person
or acquire all or a substantial portion of the assets or Equity Interests of any
Person or permit any other Person to consolidate with or merge with it, except
any Borrower may merge, consolidate or reorganize with another Borrower or
acquire the assets or Equity Interest of another Borrower so long a such
Borrower provides Agent with ten (10) days prior written notice of such merger,
consolidation or reorganization and delivers all of the relevant documents and
due diligence evidencing such merger, consolidation or reorganization, all in
form and substance satisfactory to the Agent.
 
7.2.          Creation of Liens.  Create or suffer to exist any Lien or transfer
upon or against any of its property or assets now owned or hereafter created or
acquired, except Permitted Encumbrances.
 
7.3.          Guarantees.  Become liable upon the obligations or liabilities of
any Person by assumption, endorsement or guaranty thereof or otherwise (other
than to Lenders) except (a) as disclosed on Schedule 7.3, (b) guarantees made in
the Ordinary Course of Business up to an aggregate amount of $5,000,000, (c)
guarantees by one or more Borrower(s) of the Indebtedness or obligations of any
other Borrower(s) to the extent such Indebtedness or obligations are permitted
to be incurred and/or outstanding pursuant to the provisions of this Agreement
and (d) the endorsement of checks in the Ordinary Course of Business.
 
7.4.          Investments.  Purchase or acquire obligations or Equity Interests
of, or any other interest in, any Person, other than Permitted Investments.
 
7.5.          Loans.  Make advances, loans or extensions of credit to any
Person, including any Parent, Subsidiary or Affiliate other than Permitted
Loans.
 
 
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7.6.          Capital Expenditures.  Contract for, purchase or make any
expenditure or commitments for Capital Expenditures in any fiscal year in an
aggregate amount for all Borrowers in excess of $8,000,000.
 
7.7.          Dividends.  Declare, pay or make any dividend or distribution on
any Equity Interests of any Borrower (other than dividends or distributions
payable in its stock, or split-ups or reclassifications of its stock) or apply
any of its funds, property or assets to the purchase, redemption or other
retirement of any Equity Interest, or of any options to purchase or acquire any
Equity Interest of any Borrower.
 
7.8.          Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness other than Permitted Indebtedness.
 
7.9.          Nature of Business.  Substantially change the nature of the
business in which it is presently engaged, nor except as specifically permitted
hereby purchase or invest, directly or indirectly, in any assets or property
other than in the Ordinary Course of Business for assets or property which are
useful in, necessary for and are to be used in its business as presently
conducted.
 
7.10.        Transactions with Affiliates.  Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise enter into any transaction or deal with, any Affiliate, except for
(i) transactions among Borrowers which are not expressly prohibited by the terms
of this Agreement and which are in the Ordinary Course of Business, (ii) payment
by Borrowers of dividends and distributions permitted under Section 7.7 hereof,
(iii) payments to Affiliates located in Canada and/or Japan so long as (a) the
Borrowers’ average daily Undrawn Availability for the immediately proceeding
thirty (30) day period is equal to or greater than $4,000,000 immediately prior
to making and after giving effect to each such payment, (b) the aggregate amount
of such payments does not exceed $1,500,000 in any fiscal year, and (c) no
Default and/or Event of Default shall exist at the time of or be caused by such
payment, and (iv) transactions disclosed to the Agent in writing, which are in
the Ordinary Course of Business, on an arm’s-length basis on terms and
conditions no less favorable than terms and conditions which would have been
obtainable from a Person other than an Affiliate.
 
7.11.        Subsidiaries.
 
(a)           Form any Subsidiary unless such Subsidiary (i) is not a Foreign
Subsidiary, (ii) at Agent’s discretion, (x) expressly joins in this Agreement as
a borrower and becomes jointly and severally liable for the obligations of
Borrowers hereunder, under the Note, and under any other agreement between any
Borrower and Lenders, or (y) becomes a Guarantor with respect to the Obligations
and executes a Guaranty in favor of Agent, and (iii) Agent shall have received
all documents, including legal opinions, it may reasonably require to establish
compliance with each of the foregoing conditions.
 
(b)           Enter into any partnership, joint venture or similar arrangement.
 
7.12.        Fiscal Year and Accounting Changes.  Change its fiscal year from
December 31st or make any change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as required by law.
 
 
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7.13.        Pledge of Credit.  Now or hereafter pledge Agent’s or any Lender’s
credit on any purchases, commitments or contracts or for any purpose whatsoever
or use any portion of any Advance in or for any business other than such
Borrower’s business operations as conducted on the Closing Date.
 
7.14.        Amendment of Organizational Documents.  (i) Change its legal name,
(ii) change its form of legal entity (e.g., converting from a corporation to a
limited liability company or vice versa), (iii) change its jurisdiction of
organization or become (or attempt or purport to become) organized in more than
one jurisdiction, or (iv) otherwise amend, modify or waive any term or material
provision of its Organizational Documents unless required by law, in any such
case without (x) giving at least thirty (30) days prior written notice of such
intended change to Agent, (y) having received from Agent confirmation that Agent
has taken all steps necessary for Agent to continue the perfection of and
protect the enforceability and priority of its Liens in the Collateral belonging
to such Borrower and in the Equity Interests of such Borrower and (z) in any
case under clause (iv), having received the prior written consent of Agent and
Required Lenders to such amendment, modification or waiver.
 
7.15.        Compliance with ERISA.  (i) (x) Maintain, or permit any member of
the Controlled Group to maintain, or (y) become obligated to contribute, or
permit any member of the Controlled Group to become obligated to contribute, to
any Plan, other than those Plans disclosed on Schedule 5.8(d), (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
“prohibited transaction”, as that term is defined in Section 406 of ERISA or
Section 4975 of the Code, (iii) terminate, or permit any member of the
Controlled Group to terminate, any Plan where such event could result in any
liability of any Borrower or any member of the Controlled Group or the
imposition of a lien on the property of any Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (iv) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (v) fail promptly to notify Agent of the occurrence of any
Termination Event, (vi) fail to comply, or permit a member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
Applicable Laws in respect of any Plan, (vii) fail to meet, permit any member of
the Controlled Group to fail to meet, or permit any Plan to fail to meet all
minimum funding requirements under ERISA and the Code, without regard to any
waivers or variances, or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan, or
(viii) cause, or permit any member of the Controlled Group to cause, a
representation or warranty in Section 5.8(d) to cease to be true and correct.
 
7.16.        Prepayment of Indebtedness.  At any time, directly or indirectly,
prepay any Indebtedness (other than to Lenders), or repurchase, redeem, retire
or otherwise acquire any Indebtedness of any Borrower.
 
7.17.        Membership / Partnership Interests.  Designate or permit any of
their Subsidiaries to (a) treat their limited liability company membership
interests or partnership interests, as the case may be, as securities as
contemplated by the definition of “security” in Section 8-102(15) and by Section
8-103 of Article 8 of the Uniform Commercial Code or (b) certificate their
limited liability membership interests or partnership interests, as applicable.
 
 
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VIII.        CONDITIONS PRECEDENT.
 
8.1.           Conditions to Initial Advances.  The agreement of Lenders to make
the initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or waiver by Agent, immediately prior to or concurrently with the
making of such Advances, of the following conditions precedent:
 
(a)           Note.  Agent shall have received the Note duly executed and
delivered by an authorized officer of each Borrower;
 
(b)           Other Documents.  Agent shall have received each of the executed
Other Documents, as applicable;
 
(c)           Financial Condition Certificates.  Agent shall have received an
executed Financial Condition Certificate in the form of Exhibit 8.1(g).
 
(d)           Closing Certificate.  Agent shall have received a closing
certificate signed by the Chief Financial Officer of each Borrower dated as of
the date hereof, stating that (i) all representations and warranties set forth
in this Agreement and the Other Documents are true and correct on and as of such
date, and (ii) on such date no Default or Event of Default has occurred or is
continuing;
 
(e)           Borrowing Base.  Agent shall have received a Borrowing Base
Certificate from Borrowers evidencing that the Borrowers will have a minimum
aggregate Undrawn Availability of at least $10,000,000 at closing (after all
fees and expenses and subtraction of trade payables 60 days or more past due);
 
(f)           Searches.  Agent shall have received UCC searches, Federal and
State Litigation searches, Upper Court and Local Judgment searches, franchise
tax searches, bankruptcy searches, Federal and State Tax Lien searches and any
other Lien searches run against the names of the Borrowers and Guarantors as
well as any previous, alternate and fictitious names, and against the names of
all entities which were acquired by or merged into the Borrowers, or orders of
applicable bankruptcy courts reflecting lien releases (as applicable), showing
no existing security interests in or Liens on the Collateral other than
Permitted Encumbrances and other Liens permitted by the Agent;
 
(g)           Contract Review.  Agent shall have received copies of all material
contracts of Borrowers including, without limitation, leases, union contracts,
labor contracts, vendor supply contracts, management agreements, option
agreements, warrant agreements, royalty agreements, member agreements, purchase
agreements, warranty agreements, employment agreements, license agreements and
distributorship agreements and such contracts and agreements shall be
satisfactory in all reasonable respects to Agent;
 
(h)           Blocked Accounts.  Borrowers shall have opened the Depository
Accounts with Agent or Agent shall have received duly executed agreements
establishing the Blocked Accounts with financial institutions acceptable to
Agent for the collection or servicing of the Receivables and proceeds of the
Collateral and Agent shall have entered into control agreements with the
applicable financial institutions in form and substance satisfactory to Agent
with respect to such Blocked Accounts;
 
 
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(i)            Filings, Registrations and Recordings.  Each document (including
any Uniform Commercial Code financing statement) required by this Agreement, any
related agreement or under law or reasonably requested by the Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected
security interest in or lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required  or requested, and Agent shall have received
an acknowledgment copy, or other evidence satisfactory to it, of each such
filing, registration or recordation and satisfactory evidence of the payment of
any necessary fee, tax or expense relating thereto;
 
(j)            Lien Waiver Agreements.  Agent shall have received Lien Waiver
Agreements with respect to all locations or places at which Inventory, Equipment
and books and records are located;
 
(k)           Secretary’s Certificates, Authorizing Resolutions and Good
Standings of Borrowers.  Agent shall have received a certificate of the
Secretary or Assistant Secretary (or other equivalent officer, partner or
manager) of each Borrower in form and substance satisfactory to Agent dated as
of the Closing Date which shall certify (i) copies of resolutions in form and
substance reasonably satisfactory to Agent, of the board of directors (or other
equivalent governing body, member or partner) of such Borrower authorizing (x)
the execution, delivery and performance of this Agreement, the Notes and each
Other Document to which such Borrower is a party (including authorization of the
incurrence of indebtedness, borrowing of Revolving Advances and requesting of
Letters of Credit on a joint and several basis with all Borrowers as provided
for herein), and (y) the granting by such Borrower of the security interests in
and liens upon the Collateral to secure all of the joint and several Obligations
of the Borrowers (and such certificate shall state that such resolutions have
not been amended, modified, revoked or rescinded as of the date of such
certificate), (ii) the incumbency and signature of the officers of such Borrower
authorized to execute this Agreement and the Other Documents, (iii) copies of
the Organizational Documents of such Borrower as in effect on such date,
complete with all amendments thereto, and (iv) the good standing (or equivalent
status) of such Borrower in its jurisdiction of organization and each applicable
jurisdiction where the conduct of such Borrower’s  business activities or the
ownership of its properties necessitates qualification, as evidenced by good
standing certificate(s) (or the equivalent thereof issued by any applicable
jurisdiction) dated not more than 30 days prior to the Closing Date, issued by
the Secretary of State or other appropriate official of each such jurisdiction;
 
(l)            Operating Accounts.  Agent shall have received evidence that the
Borrowers have established and is maintaining operating accounts with the Agent;
 
 
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(m)           Legal Opinion.  Agent shall have received the executed legal
opinion of  Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, P.C. in
form and substance satisfactory to Agent which shall cover such matters incident
to the transactions contemplated by this Agreement, the Notes, the Other
Documents, and related agreements as Agent may reasonably require and each
Borrower hereby authorizes and directs such counsel to deliver such opinions to
Agent and Lenders;
 
(n)           No Litigation.  No litigation, investigation or proceeding before
or by any arbitrator or Governmental Body shall be continuing or threatened
against any Borrower or against the officers or directors of any Borrower (A) in
connection with this Agreement, the Other Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order
of any nature materially adverse to any Borrower or the conduct of its business
or inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body.  Agent shall have received a summary of all
existing litigation regarding the Borrowers;
 
(o)           Collateral Examination.  Agent shall have completed Collateral
examinations and received appraisals, the results of which shall be satisfactory
in form and substance to Agent, of the Receivables, Inventory, General
Intangibles, Real Property, Leasehold Interest and equipment of each Borrower
and all books and records in connection therewith;
 
(p)           Fees.  Agent shall have received all fees payable to Agent and
Lenders on or prior to the Closing Date hereunder, including pursuant to Article
III hereof;
 
(q)           Pro Forma Financial Statements.  Agent shall have received a copy
of the Pro Forma Financial Statements which shall be satisfactory in all
respects to Agent;
 
(r)           Insurance.  Agent shall have received in form and substance
satisfactory to Agent, (i) evidence that adequate insurance, including without
limitation, casualty and liability insurance, required to be maintained under
this Agreement is in full force and effect, (ii) insurance certificates issued
by Borrowers’ insurance broker containing such information regarding Borrowers’
casualty and liability insurance policies as Agent shall request and naming
Agent as an additional insured, lenders loss payee and/or mortgagee, as
applicable, and (iii) loss payable endorsements issued by Borrowers’ insurer
naming Agent as lenders loss payee and mortgagee, as applicable;
 
(s)           Fictitious, Assumed or Alternate Names.  Agent shall have received
certified copies of any fictitious, assumed or alternate names of the Borrowers;
 
(t)           Payment Instructions.  Agent shall have received written
instructions from Borrowing Agent directing the application of proceeds of the
initial Advances made pursuant to this Agreement;
 
(u)           Consents.  Agent shall have received any and all Consents
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and, Agent shall have received such Consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
 
 
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(v)           No Adverse Material Change.  (i) Since December 31, 2012, there
shall not have occurred any event, condition or state of facts which could
reasonably be expected to have a Material Adverse Effect and (ii) no
representations made or information supplied to Agent or Lenders shall have been
proven to be inaccurate or misleading in any material respect;
 
(w)           ERISA Compliance.  Agent shall have received in form and substance
satisfactory to Agent evidence that Borrowers are in compliance with ERISA as
required in Section 7.16 herein along with a certificate from Borrowing Agent
delineating all existing pension and/or profit sharing plans, if any;
 
(x)           Financial Statements.  Agent shall have received a copy of the
Borrowers’ most recent internally prepared interim consolidated financial
statements as of December 31, 2012 evidencing that the Borrowers are tracking to
plan, the most recent federal and state tax returns of the Borrowers and the
Borrowers’ most recent fiscal year end audited financial statements;
 
(y)           Trade References.  Receipt and satisfactory review by Agent of
trade references with regard to the Borrowers;
 
(z)           Review of Records.  Agent shall have reviewed to its reasonable
satisfaction all of Borrowers’ books and records;
 
(aa)         Field Audit.  Agent shall complete an asset based field audit as
well as a pre-fund examination, both to the satisfaction of the Agent;
 
(bb)         Shareholder Debt.  Delivery to Agent of all documentation
evidencing existing Indebtedness payable by any Borrower to any shareholder
and/or officer of any Borrower;
 
(cc)         Compliance with OFAC and AML.  Agent shall receive and review to
its satisfaction searches evidencing that the Borrowers are in compliance with
OFAC and AML;
 
(dd)         Compliance with Laws.  Agent shall be reasonably satisfied that
each Borrower is in compliance with all pertinent federal, state, local or
territorial regulations, including those with respect to the Federal
Occupational Safety and Health Act, the Environmental Protection Act, ERISA and
the Anti-Terrorism Laws; and
 
(ee)         Other.  All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
 
8.2.          Conditions to Each Advance.  The agreement of Lenders to make any
Advance requested to be made on any date (including the initial Advance), is
subject to the satisfaction of the following conditions precedent as of the date
such Advance is made:
 
(a)           Representations and Warranties.  Each of the representations and
warranties made by any Borrower in or pursuant to this Agreement, the Other
Documents and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement, the Other Documents or any related agreement shall be true and
correct in all respects on and as of such date as if made on and as of such date
(except to the extent any such representation or warranty expressly relates only
to any earlier and/or specified date);
 
 
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(b)           No Default.  No Event of Default or Default shall have occurred
and be continuing on such date, or would exist after giving effect to the
Advances requested to be made, on such date; provided, however that Agent, in
its sole discretion, may continue to make Advances notwithstanding the existence
of an Event of Default or Default and that any Advances so made shall not be
deemed a waiver of any such Event of Default or Default; and
 
(c)           Maximum Advances.  In the case of any type of Advance requested to
be made, after giving effect thereto, the aggregate amount of such type of
Advance shall not exceed the maximum amount of such type of Advance permitted
under this Agreement.
 
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
 
IX.           INFORMATION AS TO BORROWERS.
 
Each Borrower shall, or (except with respect to Section 9.11) shall cause
Borrowing Agent on its behalf to, until satisfaction in full of the Obligations
and the termination of this Agreement:
 
9.1.          Disclosure of Material Matters.  Immediately upon learning
thereof, report to Agent all matters materially affecting the value,
enforceability or collectability of any portion of the Collateral, including any
Borrower’s reclamation or repossession of, or the return to any Borrower of, a
material amount of goods or claims or disputes asserted by any Customer or other
obligor.
 
9.2.          Schedules.  Deliver to Agent (i) on or before the fifteenth (15th)
day of each month as and for the prior month (a) system-generated accounts
receivable ageings inclusive of reconciliations to the general ledger on an
invoice-date basis, (b) accounts payable ageings and schedules inclusive of
reconciliations to the general ledger, (c) Inventory reports and (d) a Borrowing
Base Certificate in form and substance satisfactory to Agent (which shall be
calculated as of the last day of the prior month and which shall not be binding
upon Agent or restrictive of Agent’s rights under this Agreement), and (ii) on
or before Tuesday of each week, a sales report, credits report and collections
report for the prior week.  In addition, each Borrower will deliver to Agent at
such intervals as Agent may require: (i) confirmatory assignment schedules; (ii)
copies of Customer’s invoices; (iii) evidence of shipment or delivery; and (iv)
such further schedules, documents and/or information regarding the Collateral as
Agent may require including trial balances and test verifications.  Agent shall
have the right to confirm and verify all Receivables by any manner and through
any medium it considers advisable and do whatever it may deem reasonably
necessary to protect its interests hereunder.  The items to be provided under
this Section are to be in form satisfactory to Agent and executed by each
Borrower and delivered to Agent from time to time solely for Agent’s convenience
in maintaining records of the Collateral, and any Borrower’s failure to deliver
any of such items to Agent shall not affect, terminate, modify or otherwise
limit Agent’s Lien with respect to the Collateral.  Unless otherwise agreed to
by Agent, the items to be provided under this Section 9.2 shall be delivered to
the Agent by the specific method of Approved Electronic Communication designated
by Agent.  Notwithstanding anything to the contrary herein, the Borrowers shall
only be obligated to provide the accounts payable ageings and schedules set
forth in subsection (i)(b) of this section 9.2 if the aggregate amount of
outstanding Revolving Advances is greater than $7,500,000.
 
 
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9.3.          Environmental Reports.
 
(a)           Furnish Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.7 and 9.8, with a certificate signed by the
President of Borrowing Agent stating, to the best of his knowledge, that each
Borrower is in compliance in all material respects with all applicable
Environmental Laws.  To the extent any Borrower is not in compliance with the
foregoing laws, the certificate shall set forth with specificity all areas of
non-compliance and the proposed action such Borrower will implement in order to
achieve full compliance.
 
(b)           In the event any Borrower obtains, gives or receives notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Materials  at the Real Property (any such event being hereinafter referred to as
a “Hazardous Discharge”) or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting the Real Property or any
Borrower’s interest therein or the operations or the business (any of the
foregoing is referred to herein as an “Environmental Complaint”) from any
Person, including any Governmental Body, then Borrowing Agent shall, within five
(5) Business Days, give written notice of same to Agent detailing facts and
circumstances of which any Borrower is aware giving rise to the Hazardous
Discharge or Environmental Complaint.  Such information is to be provided to
allow Agent to protect its security interest in and Lien on the Collateral and
is not intended to create nor shall it create any obligation upon Agent or any
Lender with respect thereto.
 
(c)           Borrowing Agent shall promptly forward to Agent copies of any
request for information, notification of potential liability, demand letter
relating to potential responsibility with respect to the investigation or
cleanup of Hazardous Materials  at any other site owned, operated or used by any
Borrower to manage  of Hazardous Materials  and shall continue to forward copies
of correspondence between any Borrower and the Authority regarding such claims
to Agent until the claim is settled.  Borrowing Agent shall promptly forward to
Agent copies of all documents and reports concerning a Hazardous Discharge or
Environmental Complaint at the Real Property, operations or business that any
Borrower is required to file under any Environmental Laws.  Such information is
to be provided solely to allow Agent to protect Agent’s security interest in and
Lien on the Collateral.
 
9.4.          Litigation.  Promptly notify Agent in writing of any claim,
litigation, suit or administrative proceeding affecting any Borrower or any
Guarantor, whether or not the claim is covered by insurance, and of any
litigation, suit or administrative proceeding, which in any such case affects
the Collateral or which could reasonably be expected to have a Material Adverse
Effect.
 
 
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9.5.          Material Occurrences.  Immediately notify Agent in writing upon
the occurrence of: (a) any Event of Default or Default; (b) any event,
development or circumstance whereby any financial statements or other reports
furnished to Agent fail in any material respect to present fairly, in accordance
with GAAP consistently applied, the financial condition or operating results of
any Borrower as of the date of such statements; (c) any accumulated retirement
plan funding deficiency which, if such deficiency continued for two plan years
and was not corrected as provided in Section 4971 of the Code, could subject any
Borrower to a tax imposed by Section 4971 of the Code; (d) each and every
default by any Borrower which might result in the acceleration of the maturity
of any Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; and (e) any other development in the business or affairs of any
Borrower or any Guarantor, which could reasonably be expected to have a Material
Adverse Effect; in each case describing the nature thereof and the action
Borrowers propose to take with respect thereto.
 
9.6.          Government Receivables.  Notify Agent immediately if any of its
Receivables arise out of contracts between any Borrower and the United States,
any state, or any department, agency or instrumentality of any of them.
 
9.7.          Annual Financial Statements.  Furnish Agent within one hundred
twenty (120) days after the end of each fiscal year of Borrowers, audited
financial statements of Borrowers on a consolidating and consolidated basis
including, but not limited to, statements of income and stockholders’ equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon without qualification by
an independent certified public accounting firm selected by Borrowers and
satisfactory to Agent (the “Accountants”).  The report of the Accountants shall
be accompanied by a statement of the Accountants certifying that (i) they have
caused this Agreement to be reviewed, (ii) in making the examination upon which
such report was based either no information came to their attention which to
their knowledge constituted an Event of Default or a Default under this
Agreement or any related agreement or, if such information came to their
attention, specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or have
appended thereto calculations which set forth Borrowers’ compliance with the
requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8
and 7.11 hereof.  In addition, the reports shall be accompanied by a Compliance
Certificate.
 
9.8.          Quarterly Financial Statements.  Furnish Agent within forty five
(45) days after the end of each fiscal quarter, an unaudited balance sheet of
Borrowers on a consolidated and consolidating basis and unaudited statements of
income and stockholders’ equity and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that individually
and in the aggregate are not material to Borrowers’ business operations and
setting forth in comparative form the respective financial statements for the
corresponding date and period in the previous fiscal year.  The reports shall be
accompanied by a Compliance Certificate.
 
 
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9.9.          Monthly Financial Statements.  Furnish Agent within thirty (30)
days after the end of each month (other than for the months of April, June,
September and December which shall be delivered in accordance with Sections 9.7
and 9.8 as applicable), an unaudited balance sheet of Borrowers on a
consolidated and consolidating basis and unaudited statements of income and
stockholders’ equity and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such month and for such month, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that individually
and in the aggregate are not material to Borrowers’ business operations and
setting forth in comparative form the respective financial statements for the
corresponding date and period in the previous fiscal year.
 
9.10.        Other Reports.  Furnish Agent, upon Agent’s reasonable request, as
soon as available, but in any event within ten (10) days after the issuance
thereof, with copies of such financial statements, reports and returns as each
Borrower shall send to its stockholders.
 
9.11.        Additional Information.  Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Note have been complied with by Borrowers including, without
the necessity of any request by Agent, (a) copies of all environmental audits
and reviews, (b) at least thirty (30) days prior thereto, notice of any
Borrower’s opening of any new office or place of business or any Borrower’s
closing of any existing office or place of business, and (c) promptly upon any
Borrower’s learning thereof, notice of any labor dispute to which any Borrower
may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which any Borrower
is a party or by which any Borrower is bound.
 
9.12.        Projected Operating Budget.  Furnish Agent, no later than thirty
(30) days after the beginning of each Borrower’s fiscal years commencing with
fiscal year 2014, a month by month projected operating budget and cash flow of
Borrowers on a consolidated and consolidating basis for such fiscal year
(including an income statement for each month and a balance sheet as at the end
of the last month in each fiscal quarter), such projections to be accompanied by
a certificate signed by the President or Chief Financial Officer of each
Borrower to the effect that such projections have been prepared on the basis of
sound financial planning practice consistent with past budgets and financial
statements and that such officer has no reason to question the reasonableness of
any material assumptions on which such projections were prepared.
 
9.13.        Variances From Operating Budget.  Furnish Agent, concurrently with
the delivery of the financial statements referred to in Sections 9.7, 9.8 and
9.9, a written report summarizing all material variances from budgets submitted
by Borrowers pursuant to Section 9.12 and a discussion and analysis by
management with respect to such variances.
 
 
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9.14.        Notice of Suits, Adverse Events.  Furnish Agent with prompt written
notice of (i) any lapse or other termination of any Consent issued to any
Borrower by any Governmental Body or any other Person that is material to the
operation of any Borrower’s business, (ii) any refusal by any Governmental Body
or any other Person to renew or extend any such Consent; and (iii) copies of any
periodic or special reports filed by any Borrower or any Guarantor with any
Governmental Body or Person, if such reports indicate any material change in the
business, operations, affairs or condition of any Borrower or any Guarantor, or
if copies thereof are requested by Lender, and (iv) copies of any material
notices and other communications from any Governmental Body or Person which
specifically relate to any Borrower or any Guarantor.
 
9.15.        ERISA Notices and Requests.  Furnish Agent with immediate written
notice in the event that (i) any Borrower or any member of the Controlled Group
knows or has reason to know that a Termination Event has occurred, together with
a written statement describing such Termination Event and the action, if any,
which such Borrower or any member of the Controlled Group has taken, is taking,
or proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) any  Borrower or any member of the Controlled Group knows
or has reason to know that a prohibited transaction (as defined in Sections 406
of ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which such Borrower or any member of
the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Borrower or any member of the
Controlled Group with respect to such request, (iv) any increase in the benefits
of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) any Borrower or any
member of the Controlled Group shall receive from the PBGC a notice of intention
to terminate a Plan or to have a trustee appointed to administer a Plan,
together with copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall receive any favorable or unfavorable determination letter
from the Internal Revenue Service regarding the qualification of a Plan under
Section 401(a) of the Code, together with copies of each such letter; (vii) any
Borrower or any member of the Controlled Group shall receive a notice regarding
the imposition of withdrawal liability, together with copies of each such
notice; (viii) any Borrower or any member of the Controlled Group shall fail to
make a required installment or any other required payment under the Code or
ERISA on or before the due date for such installment or payment; or (ix) any
Borrower or any member of the Controlled Group knows that (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, (c) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan or (d) a Multiemployer Plan is subject to Section
432 of the Code or Section 305 of ERISA.
 
9.16.        Additional Documents.  Execute and deliver to Agent, upon request,
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement.
 
9.17.        Updates to Certain Schedules.  Deliver to Agent promptly as shall
be required to maintain the related representations and warranties as true and
correct, updates to Schedules 4.5 (Locations of equipment and Inventory), 5.24
(Equity Interests), 5.25 (Commercial Tort Claims), and 5.26 (Letter-of-Credit
Rights); provided, that absent the occurrence and continuance of any Event of
Default, Borrower shall only be required to provide such updates on a monthly
basis in connection with delivery of a Compliance Certificate with respect to
the applicable month.  Any such updated Schedules delivered by Borrowers to
Agent in accordance with this Section 9.17 shall automatically and immediately
be deemed to amend and restate the prior version of such Schedule previously
delivered to Agent and attached to and made part of this Agreement.
 
 
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9.18.        Financial Disclosure.  Each Borrower hereby irrevocably authorizes
and directs all accountants and auditors employed by such Borrower at any time
during the Term to exhibit and deliver to Agent and each Lender copies of any of
such Borrower’s financial statements, trial balances or other accounting records
of any sort in the accountant’s or auditor’s possession, and to disclose to
Agent and each Lender any information such accountants may have concerning such
Borrower’s financial status and business operations.  Each Borrower hereby
authorizes all Governmental Bodies to furnish to Agent and each Lender copies of
reports or examinations relating to such Borrower, whether made by such Borrower
or otherwise; however, Agent and each Lender will attempt to obtain such
information or materials directly from such Borrower prior to obtaining such
information or materials from such accountants or Governmental Bodies.
 
X.            EVENTS OF DEFAULT.
 
The occurrence of any one or more of the following events shall constitute an
“Event of Default”:
 
10.1.        Nonpayment.  Failure by any Borrower to pay when due (a) any
principal or interest on the Obligations (including without limitation pursuant
to Section 2.9), or (b) any other fee, charge, amount or liability provided for
herein or in any Other Document, in each case whether at maturity, by reason of
acceleration pursuant to the terms of this Agreement, by notice of intention to
prepay or by required prepayment.
 
10.2.        Breach of Representation.  Any material representation or warranty
made or deemed made by any Borrower or any Guarantor in this Agreement, any
Other Document or any related agreement or in any certificate, document or
financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been incorrect or misleading in any material
respect on the date when made or deemed to have been made;
 
10.3.        Financial Information.  Failure by any Borrower to (i) furnish
financial information when due or when requested which is unremedied for a
period of fifteen (15) days, or (ii) permit the inspection of its books or
records or access to its premises for audits and appraisals in accordance with
the terms hereof;
 
10.4.        Judicial Actions.  Issuance of a notice of Lien, levy, assessment,
injunction or attachment (a) against any Borrower’s Inventory or Receivables or
(b) against a material portion of any Borrower’s other property which is not
stayed or lifted within thirty (30) days;
 
10.5.        Noncompliance.  Except as otherwise provided for in Sections 10.1,
10.3 and 10.5(ii), (i) failure or neglect of any Borrower or any Guarantor or
any Person to perform, keep or observe any material term, provision, condition,
covenant herein contained, or contained in any Other Document or any other
agreement or arrangement, now or hereafter entered into between any Borrower or
any Guarantor or such Person, and Agent or any Lender, or (ii) failure or
neglect of any Borrower to perform, keep or observe any term, provision,
condition or covenant, contained in Sections 4.5, 6.1, 6.3, 6.11, 9.4 or 9.6
hereof which is not cured within ten (10) days from the occurrence of such
failure or neglect;
 
 
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10.6.        Judgments.  Any (a) judgment or judgments, writ(s), order(s) or
decree(s) for the payment of money are rendered against any Borrower or any
Guarantor for an amount in excess of $250,000 or against all Borrowers or
Guarantors for an aggregate amount in excess of $250,000 and (b) (i) action
shall be legally taken by any judgment creditor to levy upon assets or
properties of any Borrower or any Guarantor to enforce any such judgment, (ii)
such judgment shall remain undischarged for a period of thirty (30) consecutive
days during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, shall not be in effect, (iii) the Borrowers do not contest
such judgment in good faith and establish reserves with regard thereto in
amounts satisfactory to the Agent, or (iv any Liens arising by virtue of the
rendition, entry or issuance of such judgment upon assets or properties of any
Borrower or any Guarantor shall be senior to any Liens in favor of Agent on such
assets or properties;
 
10.7.        Bankruptcy.  Any Borrower, any Guarantor, any Subsidiary or
Affiliate of any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property,  (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business, (iii)
make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy or receivership laws (as
now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent
(including by entry of any order for relief in any involuntary bankruptcy or
insolvency proceeding commenced against it), (vi) file a petition seeking to
take advantage of any other law providing for the relief of debtors, (vii)
acquiesce to, or fail to have dismissed, within thirty (30) days, any petition
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
 
10.8.        Material Adverse Effect.  The occurrence of any event or
development which could reasonably be expected to have a Material Adverse
Effect;
 
10.9.        Lien Priority.  Any Lien created hereunder or provided for hereby
or under any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest (subject only to Permitted
Encumbrances that have priority a matter of Applicable Law to the extent such
Liens only attach to Collateral other than Receivables or Inventory);
 
10.10.      Cross Default.  Either (x) any specified “event of default” under
any Indebtedness  (other than the Obligations) of any Borrower with a
then-outstanding principal balance (or, in the case of any Indebtedness not so
denominated, with a then-outstanding total obligation amount) of $5,000,000 or
more, or any other event or circumstance which would permit the holder of any
such Indebtedness of any Borrower to accelerate such Indebtedness (and/or the
obligations of Borrower thereunder) prior to the scheduled maturity or
termination thereof, shall occur (regardless of whether the holder of such
Indebtedness shall actually accelerate, terminate or otherwise exercise any
rights or remedies with respect to such Indebtedness) or (y) a default of the
obligations of any Borrower under any other agreement to which it is a party
shall occur which has or is reasonably likely to have a Material Adverse Effect;
 
 
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10.11.      Breach of Guaranty or Pledge Agreement.  Termination or breach of
any Guaranty, Pledge Agreement or similar agreement executed and delivered to
Agent in connection with the Obligations of any Borrower, or if any Guarantor or
pledgor attempts to terminate, challenges the validity of, or its liability
under, any such Guaranty, Pledge Agreement or similar agreement;
 
10.12.      Change of Control.  Any Change of Control shall occur;
 
10.13.      Invalidity.  Any material provision of this Agreement or any Other
Document shall, for any reason, cease to be valid and binding on any Borrower or
any Guarantor, or any Borrower or any Guarantor shall so claim in writing to
Agent or any Lender or any Borrower challenges the validity of or its liability
under this Agreement or any other Document;
 
10.14.      Seizures.  Any (a) portion of the Collateral shall be seized,
subject to garnishment or taken by a Governmental Body, or any Borrower or any
Guarantor, or (b) the title and rights of any Borrower, any Guarantor or any
Original Owner which is the owner of any material portion of the Collateral
shall have become the subject matter of claim, litigation, suit, garnishment or
other proceeding which might, in the opinion of Agent, upon final determination,
result in impairment or loss of the security provided by this Agreement or the
Other Documents;
 
10.15.      Operations.  The operations of any Borrower’s or any Guarantor’s
manufacturing facility are interrupted (other than in connection with any
regularly scheduled shutdown for employee vacations and/or maintenance in the
Ordinary Course of Business) at any time for more than thirty (30) Business
Days, unless such Borrower or Guarantor shall (i) be entitled to receive for
such period of interruption, proceeds of business interruption insurance
sufficient to assure that its per diem cash needs during such period is at least
equal to its average per diem cash needs for the consecutive three month period
immediately preceding the initial date of interruption and (ii) receive such
proceeds in the amount described in clause (i) preceding not later than thirty
(30) days following the initial date of any such interruption; provided,
however, that notwithstanding the provisions of clauses (i) and (ii) of this
section, an Event of Default shall be deemed to have occurred if such Borrower
or Guarantor shall be receiving the proceeds of business interruption insurance
for a period of thirty (30) Business Days;
 
10.16.      Pension Plans.  An event or condition specified in Sections 7.16 or
9.15 hereof shall occur or exist with respect to any Plan and, as a result of
such event or condition, together with all other such events or conditions, any
Borrower or any member of the Controlled Group shall incur, or in the opinion of
Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Agent, would have a Material Adverse
Effect; and/or
 
10.17.       Reportable Compliance Event.  The occurrence of any Reportable
Compliance Event, or any Borrower’s failure to immediately report a Reportable
Compliance Event.
 
XI.           LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
 
 
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11.1.        Rights and Remedies.
 
(a)           Upon the occurrence of: (i) an Event of Default pursuant to
Section 10.7 (other than Section 10.7(vii)), all Obligations shall be
immediately due and payable and this Agreement and the obligation of Lenders to
make Advances shall be deemed terminated, (ii) any of the other Events of
Default and at any time thereafter, at the option of Agent or at the direction
of Required Lenders all Obligations shall be immediately due and payable and
Agent or Required Lenders shall have the right to terminate this Agreement and
to terminate the obligation of Lenders to make Advances; and (iii) without
limiting Section 8.2 hereof, any Default under Sections 10.7(vii) hereof, the
obligation of Lenders to make Advances hereunder shall be suspended until such
time as such involuntary petition shall be dismissed.  Upon the occurrence of
any Event of Default, Agent shall have the right to exercise any and all rights
and remedies provided for herein, under the Other Documents, under the Uniform
Commercial Code and at law or equity generally, including the right to foreclose
the security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of
the Collateral with or without judicial process.  Agent may enter any of any
Borrower’s premises or other premises without legal process and without
incurring liability to any Borrower therefor, and Agent may thereupon, or at any
time thereafter, in its discretion without notice or demand, take the Collateral
and remove the same to such place as Agent may deem advisable and Agent may
require Borrowers to make the Collateral available to Agent at a convenient
place.  With or without having the Collateral at the time or place of sale,
Agent may sell the Collateral, or any part thereof, at public or private sale,
at any time or place, in one or more sales, at such price or prices, and upon
such terms, either for cash, credit or future delivery, as Agent may
elect.  Except as to that part of the Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Agent shall give Borrowers reasonable notification of such
sale or sales, it being agreed that in all events written notice mailed to
Borrowing Agent at least ten (10) days prior to such sale or sales is reasonable
notification.  At any public sale Agent or any Lender may bid (including credit
bid) for and become the purchaser, and Agent, any Lender or any other purchaser
at any such sale thereafter shall hold the Collateral sold absolutely free from
any claim or right of whatsoever kind, including any equity of redemption and
all such claims, rights and equities are hereby expressly waived and released by
each Borrower.  In connection with the exercise of the foregoing remedies,
including the sale of Inventory, Agent is granted a perpetual nonrevocable,
royalty free, nonexclusive license and Agent is granted permission to use all of
each Borrower’s (a) Intellectual Property which is used or useful in connection
with Inventory for the purpose of marketing, advertising for sale and selling or
otherwise disposing of such Inventory and (b) equipment for the purpose of
completing the manufacture of unfinished goods.  The cash proceeds realized from
the sale of any Collateral shall be applied to the Obligations in the order set
forth in Section 11.5 hereof.  Noncash proceeds will only be applied to the
Obligations as they are converted into cash.  If any deficiency shall arise,
Borrowers shall remain liable to Agent and Lenders therefor.
 
 
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(b)           To the extent that Applicable Law imposes duties on the Agent to
exercise remedies in a commercially reasonable manner, each Borrower
acknowledges and agrees that it is not commercially unreasonable for the Agent:
(i) to fail to incur expenses reasonably deemed significant by the Agent to
prepare Collateral for disposition or otherwise to complete raw material or work
in process into finished goods or other finished products for disposition; (ii)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of; (iii) to fail to exercise collection
remedies against Customers or other Persons obligated on Collateral or to remove
Liens on or any adverse claims against Collateral; (iv) to exercise collection
remedies against Customers and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists; (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature; (vi) to
contact other Persons, whether or not in the same business as any Borrower, for
expressions of interest in acquiring all or any portion of such Collateral;
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature; (viii)
to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets;
(ix) to dispose of assets in wholesale rather than retail markets; (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Agent against
risks of loss, collection or disposition of Collateral or to provide to the
Agent a guaranteed return from the collection or disposition of Collateral; or
(xii) to the extent deemed appropriate by the Agent, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
the Agent in the collection or disposition of any of the Collateral.  Each
Borrower acknowledges that the purpose of this Section 11.1(b) is to provide
non-exhaustive indications of what actions or omissions by the Agent would not
be commercially unreasonable in the Agent’s exercise of remedies against the
Collateral and that other actions or omissions by the Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 11.1(b).  Without limitation upon the foregoing, nothing contained in
this Section 11.1(b) shall be construed to grant any rights to any Borrower or
to impose any duties on Agent that would not have been granted or imposed by
this Agreement or by Applicable Law in the absence of this Section 11.1(b).
 
11.2.        Agent’s Discretion.  Agent shall have the right in its sole
discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify, which
procedures, timing and methodologies to employ, and what any other action to
take with respect to any or all of the collateral and in what order, thereto and
such determination will not in any way modify or affect any of Agent’s or
Lenders’ rights hereunder as against Borrowers or each other.
 
11.3.        Setoff.  Subject to Section 14.13, in addition to any other rights
which Agent or any Lender may have under Applicable Law, upon the occurrence of
an Event of Default hereunder, Agent and such Lender shall have a right,
immediately and without notice of any kind, to apply any Borrower’s property
held by Agent and such Lender or any of their affiliates to reduce the
Obligations and to exercise any and all rights of setoff which may be available
to Agent and such Lender with respect to any deposits held by Agent or such
Lender.
 
11.4.        Rights and Remedies not Exclusive.  The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any rights or remedy shall not preclude the exercise of any other right or
remedies provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.
 
 
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11.5.        Allocation of Payments After Event of Default.  Notwithstanding any
other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received
by the Agent on account of the Obligations (including without limitation any
amounts on account of any of Cash Management Liabilities or Hedge Liabilities),
or in respect of the Collateral may, at Agent’s discretion, be paid over or
delivered as follows:
 
FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Agent in connection with enforcing
its rights and the rights of the Lenders under this Agreement and the Other
Documents, and any Out-of-Formula Loans and Protective Advances funded by the
Agent with respect to the Collateral under or pursuant to the terms of this
Agreement;
 
SECOND, to payment of any fees owed to the Agent;
 
THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each of the Lenders to the extent
owing to such Lender pursuant to the terms of this Agreement;
 
FOURTH, to the payment of all Obligations arising under this Agreement and the
Other Documents consisting of accrued fees and interest;
 
SEVENTH, to the payment of the outstanding principal amount of the Obligations
arising under this Agreement (other than Cash Management Liabilities and Hedge
Liabilities) (including the payment or cash collateralization of any outstanding
Letters of Credit in accordance with Section 3.2(b) hereof).
 
EIGHTH, to all other Obligations arising under this Agreement (other than Cash
Management Liabilities and Hedge Liabilities) which shall have become due and
payable (hereunder, under the Other Documents or otherwise) and not repaid
pursuant to clauses “FIRST” through “SEVENTH” above;
 
NINTH, to any Cash Management Liabilities and Hedge Liabilities which shall have
become due and payable or otherwise and not repaid pursuant to Clauses “FIRST”
through “EIGHTH” above; and
 
TENTH, to all other Obligations which shall have become due and payable and not
repaid pursuant to clauses “FIRST” through “NINTH”; and
 
ELEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
 
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses “SIXTH”, “SEVENTH”, “EIGHTH” and “TENTH” above; and (iii) to the
extent that any amounts available for distribution pursuant to clause “SEVENTH”
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Agent as cash collateral for the
Letters of Credit pursuant to Section 3.2(b) hereof and applied (A) first, to
reimburse the Issuer from time to time for any drawings under such Letters of
Credit and (B) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses “SEVENTH,” “EIGHTH”,
“NINTH”, and “TENTH” above in the manner provided in this Section 11.5.
 
 
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XII.         WAIVERS AND JUDICIAL PROCEEDINGS.
 
12.1.        Waiver of Notice.  Each Borrower hereby waives notice of
non-payment of any of the Receivables, demand, presentment, protest and notice
thereof with respect to any and all instruments, notice of acceptance hereof,
notice of loans or advances made, credit extended, Collateral received or
delivered, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
 
12.2.        Delay.  No delay or omission on Agent’s or any Lender’s part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any Default or Event of Default.
 
12.3.        Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, DEMAND, ACTION OR CAUSE
OF ACTION (A) ARISING UNDER THIS AGREEMENT, ANY OTHER DOCUMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY OTHER DOCUMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM,
COUNTERCLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
XIII.        EFFECTIVE DATE AND TERMINATION.
 
13.1.        Term.  This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until the Termination Date (the “Term”)
unless sooner terminated as herein provided.  Borrowers may terminate this
Agreement at any time upon forty-five (45) days prior written notice to Agent
upon payment in full of the Obligations.  In the event the Obligations are
prepaid in full (whether voluntary or involuntary, including after acceleration
thereof) and this Agreement is terminated prior to the last day of the Term (the
date of such prepayment hereinafter referred to as the “Early Termination
Date”), Borrowers shall concurrently pay to Agent for the benefit of Lenders an
early termination fee in an amount equal to one percent (1.00%) of the Maximum
Loan Amount if the Early Termination Date occurs on or after the Closing Date to
and including the date immediately preceding the first anniversary of the
Closing Date.
 
 
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13.2.        Termination.  The termination of the Agreement shall not affect
Agent’s or any Lender’s rights, or any of the Obligations having their inception
prior to the effective date of such termination or any Obligations which
pursuant to the terms hereof continue to accrue after such date, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created and Obligations have been fully and
indefeasibly paid, disposed of, concluded or liquidated.  The security
interests, Liens and rights granted to Agent and Lenders hereunder and the
financing statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers’
Account may from time to time be temporarily in a zero or credit position, until
all of the Obligations of each Borrower have been indefeasibly paid and
performed in full after the termination of this Agreement or each Borrower has
furnished Agent and Lenders with an indemnification satisfactory to Agent and
Lenders with respect thereto.  Accordingly, each Borrower waives any rights
which it may have under the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be
required to send such termination statements to each Borrower, or to file them
with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations have been
indefeasibly paid in full in immediately available funds.  All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until all Obligations are indefeasibly paid and performed in
full.
 
XIV.        REGARDING AGENT.
 
14.1.        Appointment.  Each Lender hereby designates PNC to act as Agent for
such Lender under this Agreement and the Other Documents.  Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
2.6(b), 3.3(a) and 3.4), charges and collections received pursuant to this
Agreement, for the ratable benefit of Lenders.  Agent may perform any of its
duties hereunder by or through its agents or employees.  As to any matters not
expressly provided for by this Agreement (including collection of the Note)
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding; provided, however, that Agent
shall not be required to take any action which, in Agent’s discretion, exposes
Agent to liability or which is contrary to this Agreement or the Other Documents
or Applicable Law unless Agent is furnished with an indemnification reasonably
satisfactory to Agent with respect thereto.
 
 
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14.2.        Nature of Duties.  Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Other
Documents.  Neither Agent nor any of its officers, directors, employees or
agents shall be (i) liable for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their gross (not mere)
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), or (ii) responsible in any
manner for any recitals, statements, representations or warranties made by any
Borrower or any officer thereof contained in this Agreement, or in any of the
Other Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any of the Other Documents or for the value, validity,
effectiveness, genuineness, due execution, enforceability or sufficiency of this
Agreement, or any of the Other Documents or for any failure of any Borrower to
perform its obligations hereunder.  Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any of the
Other Documents, or to inspect the properties, books or records of any
Borrower.  The duties of Agent as respects the Advances to Borrowers shall be
mechanical and administrative in nature; Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement or the
transactions described herein except as expressly set forth herein.
 
14.3.        Lack of Reliance on Agent.  Independently and without reliance upon
Agent or any other Lender, each Lender has made and shall continue to make (i)
its own independent investigation of the financial condition and affairs of each
Borrower and each Guarantor in connection with the making and the continuance of
the Advances hereunder and the taking or not taking of any action in connection
herewith, and (ii) its own appraisal of the creditworthiness of each Borrower
and each Guarantor.  Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before making of the Advances or at any time or times thereafter except as shall
be provided by any Borrower pursuant to the terms hereof.  Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectability or sufficiency of this
Agreement or any Other Document, or of the financial condition of any Borrower
or any Guarantor, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement, the Note, the Other Documents or the financial condition or prospects
of any Borrower, or the existence of any Event of Default or any Default.
 
14.4.        Resignation of Agent; Successor Agent.  Agent may resign on sixty
(60) days written notice to each of Lenders and Borrowing Agent and upon such
resignation, the Required Lenders will promptly designate a successor Agent
reasonably satisfactory to Borrowers (provided that no such approval by
Borrowers shall be required (i) in any case where the successor Agent is one of
the Lenders or (ii) after the occurrence and during the continuance of any Event
of Default).  Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and shall in particular succeed to all of Agent’s right, title
and interest in and to all of the Liens in the Collateral securing the
Obligations created hereunder or any Other Document (including all account
control agreements), and the term “Agent” shall mean such successor agent
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.  However, notwithstanding the foregoing, if at the
time of the effectiveness of the new Agent’s appointment, any further actions
need to be taken in order to provide for the legally binding and valid transfer
of any Liens in the Collateral from former Agent to new Agent and/or for the
perfection of any Liens in the Collateral as held by new Agent or it is
otherwise not then possible for new Agent to become the holder of a fully valid,
enforceable and perfected Lien as to any of the Collateral, former Agent shall
continue to hold such Liens solely as agent for perfection of such Liens on
behalf of new Agent until such time as new Agent can obtain a fully valid,
enforceable and perfected Lien on all Collateral, provided that Agent shall not
be required to or have any liability or responsibility to take any further
actions after such date as such agent for perfection to continue the perfection
of any such Liens (other than to forego from taking any affirmative action to
release any such Liens).  After any Agent’s resignation as Agent, the provisions
of this Article XIV, and any indemnification rights under this Agreement,
including without limitation, rights arising under Section 16.5 hereof, shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement (and in the event resigning Agent continues to
hold any Liens pursuant to the provisions of the immediately preceding sentence,
the provisions of this Article XIV and any indemnification rights under this
Agreement, including without limitation, rights arising under Section 16.5
hereof, shall inure to its benefit as to any actions taken or omitted to be
taken by it in connection with such Liens).
 
 
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14.5.        Certain Rights of Agent.  If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining.  Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders.
 
14.6.        Reliance.  Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, email, facsimile, telex, teletype or telecopier message, cablegram,
order or other document or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity,
and, with respect to all legal matters pertaining to this Agreement and the
Other Documents and its duties hereunder, upon advice of counsel selected by
it.  Agent may employ agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
Agent with reasonable care.
 
14.7.        Notice of Default.  Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder or under
the Other Documents, unless Agent has received notice from a Lender or Borrowing
Agent referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders.  Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, that, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.
 
 
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14.8.        Indemnification.  To the extent Agent is not reimbursed and
indemnified by Borrowers, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the outstanding Advances and its
respective Participation Commitments in the  outstanding Letters of Credit (or,
if no Advances are outstanding, pro rata according to the percentage that its
Revolving Commitment Amount constitutes of the total aggregate Revolving
Commitment Amounts, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in performing its duties hereunder, or in any way
relating to or arising out of this Agreement or any Other Document; provided
that Lenders shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent’s gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment).
 
14.9.        Agent in its Individual Capacity.  With respect to the obligation
of Agent to lend under this Agreement, the Advances made by it shall have the
same rights and powers hereunder as any other Lender and as if it were not
performing the duties as Agent specified herein; and the term “Lender” or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender.  Agent may engage in business with
any Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.
 
14.10.      Delivery of Documents.  To the extent Agent receives financial
statements required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing
Base Certificates from any Borrower pursuant to the terms of this Agreement
which any Borrower is not obligated to deliver to each Lender, Agent will
promptly furnish such documents and information to Lenders.
 
14.11.      Borrowers’ Undertaking to Agent.  Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid.  Any payment made pursuant to any such demand shall pro tanto
satisfy the relevant Borrower’s obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.
 
14.12.      No Reliance on Agent’s Customer Identification Program.  To the
extent the Advances or this Agreement is, or becomes, syndicated in cooperation
with other Lenders, each Lender acknowledges and agrees that neither such
Lender, nor any of its Affiliates, participants or assignees, may rely on the
Agent to carry out such Lender's, Affiliate's, participant's or assignee's
customer identification program, or other obligations required or imposed under
or pursuant to the USA PATRIOT Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
the Borrowers, their Affiliates or their agents, the Other Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such Anti-Terrorism Laws.
 
 
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14.13.      Other Agreements.  Each of the Lenders agrees that it shall not,
without the express consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of Agent, set off against the
Obligations, any amounts owing by such Lender to any Borrower or any deposit
accounts of any Borrower now or hereafter maintained with such Lender.  Anything
in this Agreement to the contrary notwithstanding, each of the Lenders further
agrees that it shall not, unless specifically requested to do so by Agent, take
any action to protect or enforce its rights arising out of this Agreement or the
Other Documents, it being the intent of Lenders that any such action to protect
or enforce rights under this Agreement and the Other Documents shall be taken in
concert and at the direction or with the consent of Agent or Required Lenders.
 
XV.         BORROWING AGENCY.
 
15.1.        Borrowing Agency Provisions.
 
(a)           Each Borrower hereby irrevocably designates Borrowing Agent to be
its attorney and agent and in such capacity to (i) borrow, (ii) request
advances, (iii) request the issuance of Letters of Credit, (iv) sign and endorse
notes, (v) execute and deliver all instruments, documents, applications,
security agreements, reimbursement agreements and letter of credit agreements
for Letters of Credit and all other certificates, notice, writings and further
assurances now or hereafter required hereunder, (vi) make elections regarding
interest rates, (vii) give instructions regarding Letters of Credit and agree
with Issuer upon any amendment, extension or renewal of any Letter of Credit and
(viii) otherwise take action under and in connection with this Agreement and the
Other Documents, all on behalf of and in the name such Borrower or Borrowers,
and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in
accordance with the request of Borrowing Agent.
 
(b)           The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request.  Neither Agent nor any Lender
shall incur liability to Borrowers as a result thereof.  To induce Agent and
Lenders to do so and in consideration thereof, each Borrower hereby indemnifies
Agent and each Lender and holds Agent and each Lender harmless from and against
any and all liabilities, expenses, losses, damages and claims of damage or
injury asserted against Agent or any Lender by any Person arising from or
incurred by reason of the handling of the financing arrangements of Borrowers as
provided herein, reliance by Agent or any Lender on any request or instruction
from Borrowing Agent or any other action taken by Agent or any Lender with
respect to this Section 15.1 except due to willful misconduct or gross (not
mere) negligence by the indemnified party (as determined by a court of competent
jurisdiction in a final and non-appealable judgment).
 
 
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(c)           All Obligations shall be joint and several, and each Borrower
shall make payment upon the maturity of the Obligations by acceleration or
otherwise, and such obligation and liability on the part of each Borrower shall
in no way be affected by any extensions, renewals and forbearance granted by
Agent or any Lender to any Borrower, failure of Agent or any Lender to give any
Borrower notice of borrowing or any other notice, any failure of Agent or any
Lender to pursue or preserve its rights against any Borrower, the release by
Agent or any Lender of any Collateral now or thereafter acquired from any
Borrower, and such agreement by each Borrower to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by Agent or
any Lender to the other Borrowers or any Collateral for such Borrower’s
Obligations or the lack thereof.  Each Borrower waives all suretyship defenses.
 
15.2.        Waiver of Subrogation.  Each Borrower expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Borrower may now or hereafter have against the other
Borrowers or any other Person directly or contingently liable for the
Obligations hereunder, or against or with respect to any other Borrowers’
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until termination of this Agreement and repayment in full of the Obligations.
 
XVI.        MISCELLANEOUS.
 
16.1.        Governing Law.  This Agreement and each Other Document (unless and
except to the extent expressly provided otherwise in any such Other Document),
and all matters relating hereto or thereto or arising herefrom or therefrom
(whether arising under contract law, tort law or otherwise) shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York.  Any judicial
proceeding brought against any Borrower with respect to any of the Obligations,
this Agreement, the Other Documents or any related agreement may be brought in
any court of competent jurisdiction in the State of New York, United States of
America, and, by execution and delivery of this Agreement, each Borrower accepts
for itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this
Agreement.  Each Borrower hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
or registered mail (return receipt requested) directed to Borrowing Agent at its
address set forth in Section 16.6 and service so made shall be deemed completed
five (5) days after the same shall have been so deposited in the mails of the
United States of America, or, at the Agent’s option, by service upon Borrowing
Agent which each Borrower irrevocably appoints as such Borrower’s Agent for the
purpose of accepting service within the State of New York.  Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of Agent or any Lender to bring proceedings against any Borrower in
the courts of any other jurisdiction.  Each Borrower waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  Each Borrower waives the right to remove any judicial proceeding
brought against such Borrower in any state court to any federal court.  Any
judicial proceeding by any Borrower against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in the County of New York, State of New
York.
 
 
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16.2.        Entire Understanding.
 
(a)           This Agreement and the documents executed concurrently herewith
contain the entire understanding between each Borrower, Agent and each Lender
and supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof.  Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by each Borrower’s, Agent’s and each Lender’s respective
officers.  Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.  Each Borrower
acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
 
(b)           The Required Lenders, Agent with the consent in writing of the
Required Lenders, and Borrowers may, subject to the provisions of this Section
16.2(b), from time to time enter into written supplemental agreements to this
Agreement or the Other Documents executed by Borrowers, for the purpose of
adding or deleting any provisions or otherwise changing, varying or waiving in
any manner the rights of Lenders, Agent or Borrowers thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that no such supplemental agreement shall:
 
(i)          increase the Revolving Commitment Percentage or the maximum dollar
amount of the Revolving Commitment Amount of any Lender without the consent of
such Lender directly affected thereby;
 
(ii)         whether or not any Advances are outstanding, extend the Term or the
time for payment of principal or interest of any Advance (excluding the due date
of any mandatory prepayment of an Advance), or any fee payable to any Lender, or
reduce the principal amount of or the rate of interest borne by any Advances or
reduce any fee payable to any Lender, without the consent of each Lender
directly affected thereby (except that Required Lenders may elect to waive or
rescind any imposition of the Default Rate under Section 3.1 or of default rates
of Letter of Credit fees under Section 3.2 (unless imposed by Agent));
 
(iii)        increase the Maximum Revolving Advance Amount without the consent
of all Lenders holding a Revolving Commitment;
 
(iv)       alter the definition of the term Required Lenders or alter, amend or
modify this Section 16.2(b) without the consent of all Lenders;
 
(v)        alter, amend or modify the provisions of Section 11.5 without the
consent of all Lenders;
 
(vi)       release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement) having an aggregate value in
excess of $1,000,000 without the consent of all Lenders;
 
 
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(vii)      change the rights and duties of Agent without the consent of all
Lenders;
 
(viii)     subject to clause (e) below, permit any Revolving Advance to be made
if after giving effect thereto the total of Revolving Advances outstanding
hereunder would exceed the Formula Amount for more than sixty (60) consecutive
Business Days or exceed one hundred and ten percent (110%) of the Formula Amount
without the consent of all Lenders without the consent of all Lenders holding a
Revolving Commitment;
 
(ix)        increase the Advance Rates above the Advance Rates in effect on the
Closing Date without the consent of all Lenders holding a Revolving Commitment;
or
 
(x)         release any Guarantor or Borrower without the consent of all
Lenders.
 
(c)           Any such supplemental agreement shall apply equally to each Lender
and shall be binding upon Borrowers, Lenders and Agent and all future holders of
the Obligations.  In the case of any waiver, Borrowers, Agent and Lenders shall
be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
 
(d)           In the event that Agent requests the consent of a Lender pursuant
to this Section 16.2 and such consent is denied, then Agent may, at its option,
require such Lender to assign its interest in the Advances to Agent or to
another Lender or to any other Person designated by Agent (the “Designated
Lender”), for a price equal to (i) the then outstanding principal amount thereof
plus (ii) accrued and unpaid interest and fees due such Lender, which interest
and fees shall be paid when collected from Borrowers.  In the event Agent elects
to require any Lender to assign its interest to Agent or to the Designated
Lender, Agent will so notify such Lender in writing within forty five (45) days
following such Lender’s denial, and such Lender will assign its interest to
Agent or the Designated Lender no later than five (5) days following receipt of
such notice pursuant to a Commitment Transfer Supplement executed by such
Lender, Agent or the Designated Lender, as appropriate, and Agent.
 
(e)           Notwithstanding (i) the existence of a Default or an Event of
Default, (ii) that any of the other applicable conditions precedent set forth in
Section 8.2 hereof have not been satisfied or the commitments of Lenders to make
Revolving Advances hereunder have been terminated for any reason, or (iii) any
other contrary provision of this Agreement, Agent may at its discretion and
without the consent of any Lender, voluntarily permit the outstanding Revolving
Advances at any time to exceed the Formula Amount by up to ten percent (10%) of
the Formula Amount for up to sixty (60) consecutive Business Days (the
“Out-of-Formula Loans”).  If Agent is willing in its sole and absolute
discretion to permit such Out-of-Formula Loans, the Lenders holding the
Revolving Commitments shall be obligated to fund such Out-of-Formula Loans in
accordance with their respective Revolving Commitment Percentages, and such
Out-of-Formula Loans shall be payable on demand and shall bear interest at the
Default Rate for Revolving Advances consisting of Domestic Rate Loans; provided
that, if Agent does permit Out-of-Formula Loans, neither Agent nor Lenders shall
be deemed thereby to have changed the limits of Section 2.1(a) nor shall any
Lender be obligated to fund Revolving Advances in excess of its Revolving
Commitment Amount.  For purposes of this paragraph, the discretion granted to
Agent hereunder shall not preclude involuntary overadvances that may result from
time to time due to the fact that the Formula Amount was unintentionally
exceeded for any reason, including, but not limited to, Collateral previously
deemed to be “Eligible Receivables” becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral.  In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount by more than ten percent (10%),
Agent shall use its efforts to have Borrowers decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess.  Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances and shall be decreased in accordance with the
preceding sentence.  To the extent any Out-of-Formula Loans are not actually
funded by the other Lenders as provided for in this Section 16.2(e), Agent may
elect in its discretion to fund such Out-of-Formula Loans and any such
Out-of-Formula Loans so funded by Agent shall be deemed to be Revolving Advances
made by and owing to Agent, and Agent shall be entitled to all rights (including
accrual of interest) and remedies of a Lender holding a Revolving Commitment
under this Agreement and the Other Documents with respect to such Revolving
Advances.
 
 
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(f)           In addition to (and not in substitution of) the discretionary
Revolving Advances permitted above in this Section 16.2, the Agent is hereby
authorized by Borrowers and the Lenders, at any time in the Agent’s sole
discretion, regardless of (i) the existence of a Default or an Event of Default,
(ii) whether any of the other applicable conditions precedent set forth in
Section 8.2 hereof have not been satisfied or the commitments of Lenders to make
Revolving Advances hereunder have been terminated for any reason, or (iii) any
other contrary provision of this Agreement, to make Revolving Advances
(“Protective Advances”) to Borrowers on behalf of the Lenders which Agent, in
its reasonable business judgment, deems necessary or desirable (a) to preserve
or protect the Collateral, or any portion thereof, (b) to enhance the likelihood
of, or maximize the amount of, repayment of the Advances and other Obligations,
or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of
this Agreement (the “Protective Advances”).  The Lenders holding the Revolving
Commitments shall be obligated to fund such Protective Advances and effect a
settlement with Agent therefore upon demand of Agent in accordance with their
respective Revolving Commitment Percentages.  To the extent any Protective
Advances are not actually funded by the other Lenders as provided for in this
Section 16.2(f), any such Protective Advances funded by Agent shall be deemed to
be Revolving Advances made by and owing to Agent, and Agent shall be entitled to
all rights (including accrual of interest) and remedies of a Lender holding a
Revolving Commitment under this Agreement and the Other Documents with respect
to such Revolving Advances.
 
16.3.        Successors and Assigns; Participations; New Lenders.
 
(a)           This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agent, each Lender, all future holders of the Obligations and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Agent and each Lender.
 
 
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(b)           Each Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other Persons (each such
transferee or purchaser of a participating interest, a “Participant”).  Each
Participant may exercise all rights of payment (including rights of set-off)
with respect to the portion of such Advances held by it or other Obligations
payable hereunder as fully as if such Participant were the direct holder thereof
provided that (i) Borrowers shall not be required to pay to any Participant more
than the amount which it would have been required to pay to Lender which granted
an interest in its Advances or other Obligations payable hereunder to such
Participant had such Lender retained such interest in the Advances hereunder or
other Obligations payable hereunder unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent, and (ii) in no
event shall Borrowers be required to pay any such amount arising from the same
circumstances and with respect to the same Advances or other Obligations payable
hereunder to both such Lender and such Participant.  Each Borrower hereby grants
to any Participant a continuing security interest in any deposits, moneys or
other property actually or constructively held by such Participant as security
for the Participant’s interest in the Advances.
 
(c)           Any Lender, with the consent of Agent and the Borrower, may sell,
assign or transfer all or any part of its rights and obligations under or
relating to Revolving Advances under this Agreement and the Other Documents to
one or more additional Persons and one or more additional Persons may commit to
make Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not
less than $1,000,000, pursuant to a Commitment Transfer Supplement, executed by
a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for
recording. Upon such execution, delivery, acceptance and recording, from and
after the transfer effective date determined pursuant to such Commitment
Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have the
rights and obligations of a Lender thereunder with a Revolving Commitment
Percentage as set forth therein, and (ii) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement, the Commitment Transfer
Supplement creating a novation for that purpose.  Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Revolving Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents.  Each Borrower hereby consents to the addition of such Purchasing
Lender and the resulting adjustment of the Revolving Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents.  Borrowers shall execute and deliver such further documents and
do such further acts and things in order to effectuate the foregoing.
 
 
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(d)           Any Lender, with the consent of Agent and the Borrower, which
shall not be unreasonably withheld or delayed, may directly or indirectly sell,
assign or transfer all or any portion of its rights and obligations under or
relating to Revolving Advances under this Agreement and the Other Documents to
an entity, whether a corporation, partnership, trust, limited liability company
or other entity that (i) is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each
Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned (“Modified Commitment
Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose.  Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO.  Each Borrower hereby consents to the addition of such
Purchasing CLO.  Borrowers shall execute and deliver such further documents and
do such further acts and things in order to effectuate the foregoing.
 
(e)           Agent shall maintain at its address a copy of each Commitment
Transfer Supplement and Modified Commitment Transfer Supplement delivered to it
and a register (the “Register”) for the recordation of the names and addresses
of each Lender and the outstanding principal, accrued and unpaid interest and
other fees due hereunder.  The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, Agent and Lenders may treat
each Person whose name is recorded in the Register as the owner of the Advance
recorded therein for the purposes of this Agreement.  The Register shall be
available for inspection by Borrowing Agent or any Lender at any reasonable time
and from time to time upon reasonable prior notice.  Agent shall receive a fee
in the amount of $3,500 payable by the applicable Purchasing Lender and/or
Purchasing CLO upon the effective date of each transfer or assignment (other
than to an intermediate purchaser) to such Purchasing Lender and/or Purchasing
CLO.
 
(f)           Each Borrower authorizes each Lender to disclose to any Transferee
and any prospective Transferee any and all financial information in such
Lender’s possession concerning such Borrower which has been delivered to such
Lender by or on behalf of such Borrower pursuant to this Agreement or in
connection with such Lender’s credit evaluation of such Borrower.
 
(g)           Notwithstanding anything to the contrary contained in this
Agreement, any Lender may at any time and from time to time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
 
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16.4.        Application of Payments.  Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion of the Obligations.  To the extent that
any Borrower makes a payment or Agent or any Lender receives any payment or
proceeds of the Collateral for any Borrower’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver, custodian or any other
party under any bankruptcy law, common law or equitable cause, then, to such
extent, the Obligations or part thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Agent or such Lender.
 
16.5.        Indemnity.  Each Borrower shall defend, protect, indemnify, pay and
save harmless Agent, Issuer, each Lender and each of their respective officers,
directors, Affiliates, attorneys, employees and agents (each an “Indemnified
Party”) for and from and against any and all claims, demands, liabilities,
obligations, losses, damages, penalties, fines, actions, judgments, suits,
costs, charges, expenses and disbursements of any kind or nature whatsoever
(including fees and disbursements of counsel (including allocated costs of
internal counsel)) (collectively, “Claims”) which may be imposed on, incurred
by, or asserted against any Indemnified Party in arising out of or in any way
relating to or as a consequence, direct or indirect, of: (i) this Agreement, the
Other Documents, the Advances and other Obligations and/or the transactions
contemplated hereby including the Transactions, (ii) any action or failure to
act or action taken only after delay or the satisfaction of any conditions by
any Indemnified Party in connection with and/or relating to the negotiation,
execution, delivery or administration of the Agreement and the Other Documents,
the credit facilities established hereunder and thereunder and/or the
transactions contemplated hereby including the Transactions, (iii) any
Borrower’s or any Guarantor’s failure to observe, perform or discharge any of
its covenants, obligations, agreements or duties under or breach of any of the
representations or warranties made in this Agreement and the Other Documents,
(iv) the enforcement of any of the rights and remedies of Agent, Issuer or any
Lender under the Agreement and the Other Documents, (v) any threatened or actual
imposition of fines or penalties, or disgorgement of benefits, for violation of
any Anti-Terrorism Law by any Borrower, any Affiliate or Subsidiary of any
Borrowers, or any Guarantor, and (vi) any claim, litigation, proceeding or
investigation instituted or conducted by any Governmental Body or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Agent or any Lender is a party
thereto.  Without limiting the generality of any of the foregoing, each Borrower
shall defend, protect, indemnify, pay and save harmless each Indemnified Party
from (x) any Claims which may be imposed on, incurred by, or asserted against
any Indemnified Party arising out of or in any way relating to or as a
consequence, direct or indirect, of the issuance of any Letter of Credit
hereunder and (y) any Claims which may be imposed on, incurred by, or asserted
against any Indemnified Party under any Environmental Laws with respect to or in
connection with the Real Property, any Hazardous Discharge, the presence of any
Hazardous Substances affecting the Real Property (whether or not the same
originates or emerges from the Real Property or any contiguous real estate),
including any Claims consisting of or relating to the imposition or assertion of
any Lien on any of the Real Property under any Environmental Laws and any loss
of value of the Real Property as a result of the foregoing except to the extent
such loss, liability, damage and expense is attributable to any Hazardous
Discharge resulting from actions on the part of Agent or any Lender.  Borrowers’
obligations under this Section 16.5 shall arise upon the discovery of the
presence of any Hazardous Substances at the Real Property, whether or not any
federal, state, or local environmental agency has taken or threatened any action
in connection with the presence of any Hazardous Substances, in each such case
except to the extent that any of the foregoing arises out of the willful
misconduct of the Indemnified Party (as determined by a court of competent
jurisdiction in a final and non-appealable judgment).  Without limiting the
generality of the foregoing, this indemnity shall extend to any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including fees and
disbursements of counsel) asserted against or incurred by any of the Indemnified
Parties by any Person under any Environmental Laws or similar laws by reason of
any Borrower’s or any other Person’s failure to comply with laws applicable to
solid or hazardous waste materials, including Hazardous Substances and Hazardous
Waste, or other Toxic Substances.  Additionally, if any taxes (excluding taxes
imposed upon or measured solely by the net income of Agent and Lenders, but
including any intangibles taxes, stamp tax, recording tax or franchise tax)
shall be payable by Agent, Lenders or Borrowers on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of
any of the Other Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Borrowers will pay (or will promptly reimburse Agent and Lenders for
payment of) all such taxes, including interest and penalties thereon, and will
indemnify and hold the Indemnified Parties harmless from and against all
liability in connection therewith.
 
 
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16.6.        Notice.  Any notice or request hereunder may be given to Borrowing
Agent or any Borrower or to Agent or any Lender at their respective addresses
set forth below or at such other address as may hereafter be specified in a
notice designated as a notice of change of address under this Section.  Any
notice, request, demand, direction or other communication (for purposes of this
Section 16.6 only, a “Notice”) to be given to or made upon any party hereto
under any provision of this Loan Agreement shall be given or made by telephone
or in writing (which includes by means of electronic transmission (i.e.,
“e-mail”) or facsimile transmission or by setting forth such Notice on a website
to which Borrowers are directed (an “Internet Posting”) if Notice of such
Internet Posting (including the information necessary to access such site) has
previously been delivered to the applicable parties hereto by another means set
forth in this Section 16.6) in accordance with this Section 16.6.  Any such
Notice must be delivered to the applicable parties hereto at the addresses and
numbers set forth under their respective names on Section 16.6 hereof or in
accordance with any subsequent unrevoked Notice from any such party that is
given in accordance with this Section 16.6.  Any Notice shall be effective:
 
(a)           In the case of hand-delivery, when delivered;
 
(b)           If given by mail, four days after such Notice is deposited with
the United States Postal Service, with first-class postage prepaid, return
receipt requested;
 
(c)           In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Internet Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);
 
 
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(d)           In the case of a facsimile transmission, when sent to the
applicable party’s facsimile machine’s telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
 
(e)           In the case of electronic transmission, when actually received;
 
(f)            In the case of an Internet Posting, upon delivery of a Notice of
such posting (including the information necessary to access such site) by
another means set forth in this Section 16.6; and
 
(g)           If given by any other means (including by overnight courier), when
actually received.
 
Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently
send a copy thereof to the Agent, and the Agent shall promptly notify the other
Lenders of its receipt of such Notice.
 
(A)           If to Agent or PNC at:
 
PNC Bank, National Association
PNC Business Credit
Two Tower Center Blvd.
J3-JTTC-08-3
East Brunswick, NJ 08816
Attention:            Devron Robinson
Telephone:          (732) 220-4319
Facsimile:             (732) 220-4581
 
with a copy to:
 
PNC Bank, National Association
PNC Agency Services
PNC Firstside Center
500 First Avenue, 4th Floor
Pittsburgh, Pennsylvania 15219
Attention: Lisa Pierce
Telephone: (412) 762-6442
Facsimile: (412) 762-8672
 
with an additional copy to:
 
Wilentz, Goldman & Spitzer, P.A.
90 Woodbridge Center Drive
Woodbridge, New Jersey 07095
Attention: Stuart A. Hoberman, Esq.
Telephone: (732) 855-6052
Facsimile: (732) 726-6518
 
 
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(B)           If to a Lender other than Agent, as specified on the signature
pages hereof
 
(C)           If to Borrowing Agent or any Borrower:
 
Anadigics, Inc.
141 Mt. Bethel Road
Warren, New Jersey  07059
Attention: Ronald Michels, President and Chief Executive Officer
Telephone: (908) 668-5000, Ext. 5214
Facsimile: (908) 791-6008

with a copy to:

Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, P.C.
One Riverfront Plaza – The Legal Center
Newark, New Jersey 07102
Attention: Robert L. Podvey, Esq.
Telephone: (973) 623-1000
Facsimile: (973) 623-9131
 
16.7.        Survival.  The obligations of Borrowers under Sections 2.2(f),
2.2(g), 2.2(h), 3.7, 3.8, 3.9, 3.10, 16.5 and 16.9 and the obligations of
Lenders under Sections 2.2, 2.13(b), 2.14, 2.16, 2.17, 14.8 and 16.5, shall
survive termination of this Agreement and the Other Documents and payment in
full of the Obligations.
 
16.8.        Severability.  If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under Applicable Laws, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
 
16.9.        Expenses.  The Borrowers shall pay (i) all out-of-pocket expenses
incurred by the Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Agent), and shall pay all fees and time
charges and disbursements for attorneys who may be employees of the Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the Other Documents or any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all out-of-pocket expenses
incurred by the Issuer in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder,
(iii) all out-of-pocket expenses incurred by the Agent, any Lender or the Issuer
(including the fees, charges and disbursements of any counsel for the Agent, any
Lender or the Issuer), and shall pay all fees and time charges for attorneys who
may be employees of the Agent, any Lender or the Issuer, in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the Other Documents, including its rights under this Section, or (B) in
connection with the Advances made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit, and
(iv) all reasonable out-of-pocket expenses of the Agent’s regular employees and
agents engaged periodically to perform audits of the Loan Parties’ books,
records and business properties.
 
 
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16.10.      Injunctive Relief.  Each Borrower recognizes that, in the event any
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.
 
16.11.      Consequential Damages.  Neither Agent nor any Lender, nor any agent
or attorney for any of them, shall be liable to any Borrower, or any Guarantor
(or any Affiliate of any such Person) for indirect, punitive, exemplary or
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other
Document.
 
16.12.      Captions.  The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.
 
16.13.      Counterparts; Facsimile Signatures.  This Agreement may be executed
in any number of and by different parties hereto on separate counterparts, all
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute one and the same agreement.  Any signature
delivered by a party by facsimile or electronic transmission (including email
transmission of a PDF image) shall be deemed to be an original signature hereto.
 
16.14.      Construction.  The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
 
16.15.      Confidentiality; Sharing Information.  Agent, each Lender and each
Transferee shall hold all non-public information obtained by Agent, such Lender
or such Transferee pursuant to the requirements of this Agreement in accordance
with Agent’s, such Lender’s and such Transferee’s customary procedures for
handling confidential information of this nature; provided, however, Agent, each
Lender and each Transferee may disclose such confidential information (a) to its
examiners, Affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees, and (c) as
required or requested by any Governmental Body or representative thereof or
pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, Agent, each Lender and each Transferee shall use
its reasonable best efforts prior to disclosure thereof, to notify the
applicable Borrower of the applicable request for disclosure of such non-public
information (A) by a Governmental Body or representative thereof (other than any
such request in connection with an examination of the financial condition of a
Lender or a Transferee by such Governmental Body) or (B) pursuant to legal
process and (ii) in no event shall Agent, any Lender or any Transferee be
obligated to return any materials furnished by any Borrower other than those
documents and instruments in possession of Agent or any Lender in order to
perfect its Lien on the Collateral once the Obligations have been paid in full
and this Agreement has been terminated.  Each Borrower acknowledges that from
time to time financial advisory, investment banking and other services may be
offered or provided to such Borrower or one or more of its Affiliates (in
connection with this Agreement or otherwise) by any Lender or by one or more
Subsidiaries or Affiliates of such Lender and each Borrower hereby authorizes
each Lender to share any information delivered to such Lender by such Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such Subsidiary or
Affiliate of such Lender, it being understood that any such Subsidiary or
Affiliate of any Lender receiving such information shall be bound by the
provisions of this Section 16.15 as if it were a Lender hereunder.  Such
authorization shall survive the repayment of the other Obligations and the
termination of this Agreement.  Notwithstanding any non-disclosure agreement or
similar document executed by Agent in favor of any Borrower or any of any
Borrower’s affiliates, the provisions of this Agreement shall supersede such
agreements.
 
 
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16.16.      Publicity.  Each Borrower and each Lender hereby authorizes Agent to
make appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including announcements which are commonly known
as tombstones, in such publications and to such selected parties as Agent shall
in its sole and absolute discretion deem appropriate.
 
16.17.      Certifications From Banks and Participants; USA PATRIOT Act.
 
(a)           Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA PATRIOT Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country, and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to the Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA PATRIOT Act
and the applicable regulations: (1) within 10 days after the Closing Date, and
(2) as such other times as are required under the USA PATRIOT Act.
 
(b)           The USA PATRIOT Act requires all financial institutions to obtain,
verify and record certain information that identifies individuals or business
entities which open an "account" with such financial institution. Consequently,
Lender may from time to time request, and Borrower shall provide to Lender,
Borrower's name, address, tax identification number and/or such other
identifying information as shall be necessary for Lender to comply with the USA
PATRIOT Act and any other Anti-Terrorism Law.
 
 
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16.18.      Anti-Money Laundering/International Trade Law Compliance.  Each
Borrower represents and warrants to the Agent, as of the date of this Agreement,
the date of each Advance, the date of any renewal, extension or modification of
this Agreement, and at all times until this Agreement has been terminated and
all Obligations have been indefeasibly paid in full, that: (a) no Covered
Entity  (i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned
Country or in the possession, custody or control of a Sanctioned Person; or
(iii) does business in or with, or derives any of its operating income from
investments in or transactions with, any Sanctioned Country or Sanctioned Person
in violation of any law, regulation, order or directive enforced by any
Compliance Authority; (b) the Advances will not be used to fund any operations
in, finance any investments or activities in, or, make any payments to, a
Sanctioned Country or Sanctioned Person in violation of any law, regulation,
order or directive enforced by any Compliance Authority; (c) the funds used to
repay the Obligations are not derived from any unlawful activity; and (d) each
Covered Entity is in compliance with, and no Covered Entity  engages in any
dealings or transactions prohibited by, any laws of the United States, including
but not limited to any Anti-Terrorism Laws.  The Borrowers covenant and agree
that they shall immediately notify the Agent in writing upon the occurrence of a
Reportable Compliance Event.
 
 
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Each of the parties has signed this Agreement as of the day and year first above
written.
 
ATTEST:
 
ANADIGICS, INC.
       
By:
 
 
Name:
TERRENCE G. GALLAGHER
 
Name:
RONALD MICHELS
 
Title:
Vice President and
 
Title:
President and Chief Executive Officer
 
 Chief Financial Officer
              PNC BANK, NATIONAL ASSOCIATION, As Lender and as Agent            
 
By:
         
Name:
DEVRON M. ROBINSON
       
Title:
Senior Vice President
                    Commitment Percentage:  100%  

 
 

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