Exhibit 10.39

 

Where denoted by “[***]”, the confidential material contained herein has been
omitted and has been separately filed with the Staff of the Securities and
Exchange Commission.

 

REVOLVING CREDIT

 

AND

 

SECURITY AGREEMENT

 

Dated as of July 10, 2013

 

among

 

UNITEK GLOBAL SERVICES, INC., UNITEK ACQUISITION, INC., PINNACLE WIRELESS
USA, INC., UNITEK USA, LLC,
ADVANCED COMMUNICATIONS USA, INC.,
DIRECTSAT USA, LLC, FTS USA, LLC,

 

as Borrowers

 

and

 

APOLLO INVESTMENT CORPORATION,
as Agent for Lenders

 

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

 

TABLE OF CONTENTS

 

 

 

Page

I.

DEFINITIONS

1

 

 

 

 

1.1

Accounting Terms

1

 

1.2

General Terms

1

 

1.3

Uniform Commercial Code Terms

38

 

1.4

Certain Matters of Construction

38

 

1.5

Accounting Change

39

 

 

 

 

II.

REVOLVING CREDIT AND SWING LOAN FACILITIES

39

 

 

 

 

2.1

Revolving Advances

39

 

2.2

Procedure for Requesting Revolving Advances; Procedures for Selection of
Applicable Interest Rates

40

 

2.3

Disbursement of Advance Proceeds

42

 

2.4

Swing Loans

43

 

2.5

Maximum Advances

44

 

2.6

Repayment of Advances

44

 

2.7

Repayment of Excess Advances

45

 

2.8

Statement of Account

45

 

2.9

Letters of Credit

46

 

2.10

Issuance of Letters of Credit

46

 

2.11

Requirements For Issuance of Letters of Credit

47

 

2.12

Disbursements, Reimbursement

47

 

2.13

Repayment of Participation Advances

49

 

2.14

Documentation

49

 

2.15

Determination to Honor Drawing Request

49

 

2.16

Nature of Participation and Reimbursement Obligations

50

 

2.17

Indemnity

51

 

2.18

Liability for Acts and Omissions

51

 

2.19

Additional Payments

53

 

2.20

Manner of Borrowing and Payment

53

 

2.21

Voluntary Prepayments, Voluntary Commitment Reductions, Mandatory Prepayments

54

 

2.22

Use of Proceeds

57

 

2.23

Defaulting Lender

57

 

2.24

Increase of the Maximum Revolving Advance Amount by Borrowers

59

 

 

 

 

III.

INTEREST AND FEES

60

 

 

 

 

3.1

Interest

61

 

3.2

Letter of Credit Fees

61

 

3.3

Facility Fee

63

 

3.4

Collateral Evaluation Fee and Fee Letter

63

 

3.5

Computation of Interest and Fees

64

 

3.6

Maximum Charges

64

 

3.7

Increased Costs

64

 

3.8

Basis For Determining Interest Rate Inadequate or Unfair

65

 

3.9

Capital Adequacy

65

 

i

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3.10

Gross Up for Taxes

66

 

3.11

Withholding Tax Exemption

66

 

 

 

 

IV.

COLLATERAL: GENERAL TERMS

67

 

 

 

 

4.1

Security Interest in the Collateral

67

 

4.2

Perfection of Security Interest

67

 

4.3

Disposition of Collateral

68

 

4.4

Preservation of Collateral

68

 

4.5

Ownership of Collateral and Assets

69

 

4.6

Defense of Agent’s and Lenders’ Interests

70

 

4.7

Books and Records

70

 

4.8

Financial Disclosure

70

 

4.9

Compliance with Laws

71

 

4.10

Inspection of Premises and Inspections/Evaluation of Collateral

71

 

4.11

Insurance

71

 

4.12

Failure to Pay Insurance

72

 

4.13

Payment of Taxes

73

 

4.14

Payment of Leasehold Obligations

73

 

4.15

Receivables

73

 

4.16

Inventory

77

 

4.17

Maintenance of Equipment

77

 

4.18

Exculpation of Liability

77

 

4.19

Environmental Matters

78

 

4.20

Financing Statements

79

 

4.21

Special Provisions Regarding Term Debt Priority Collateral

80

 

 

 

 

V.

REPRESENTATIONS AND WARRANTIES

80

 

 

 

 

5.1

Authority

80

 

5.2

Formation and Qualification; Inactive Subsidiaries; Foreign Subsidiaries

81

 

5.3

Survival of Representations and Warranties

81

 

5.4

Tax Returns

82

 

5.5

Financial Statements

82

 

5.6

Entity Names

83

 

5.7

OSHA and Environmental Compliance

83

 

5.8

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

83

 

5.9

Patents, Trademarks, Copyrights and Licenses

85

 

5.10

Licenses and Permits

85

 

5.11

[RESERVED]

85

 

5.12

No Default

85

 

5.13

No Burdensome Restrictions

85

 

5.14

No Labor Disputes

85

 

5.15

Margin Regulations

86

 

5.16

Investment Company Act

86

 

5.17

Disclosure

86

 

5.18

Delivery of Term Debt Documents and Intercreditor Agreement

86

 

5.19

Swaps

86

 

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5.20

Conflicting Agreements

86

 

5.21

Application of Certain Laws and Regulations

86

 

5.22

Business and Property of Borrowers

87

 

5.23

[RESERVED]

87

 

5.24

Anti-Terrorism Laws

87

 

5.25

Trading with the Enemy

88

 

5.26

[RESERVED]

88

 

5.27

Equity Interests

88

 

5.28

Commercial Tort Claims

88

 

5.29

Letter of Credit Rights

88

 

5.30

Material Contracts

88

 

 

 

 

VI.

AFFIRMATIVE COVENANTS

88

 

 

 

 

6.1

Payment of Fees

88

 

6.2

Conduct of Business and Maintenance of Existence and Assets

89

 

6.3

Violations

89

 

6.4

Government Receivables

89

 

6.5

Financial Covenants

89

 

6.6

Execution of Supplemental Instruments

89

 

6.7

Payment of Indebtedness

89

 

6.8

Standards of Financial Statements

90

 

 

 

 

VII.

NEGATIVE COVENANTS

90

 

 

 

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets

90

 

7.2

Creation of Liens

90

 

7.3

Guarantees

90

 

7.4

Investments

91

 

7.5

Loans

91

 

7.6

[RESERVED]

91

 

7.7

Dividends

91

 

7.8

Indebtedness

92

 

7.9

Nature of Business

93

 

7.10

Transactions with Affiliates

93

 

7.11

Leases

94

 

7.12

Subsidiaries

94

 

7.13

Fiscal Year and Accounting Changes

95

 

7.14

Pledge of Credit

95

 

7.15

Amendment of Organizational Documents

95

 

7.16

Compliance with ERISA

96

 

7.17

Prepayment of Indebtedness; Earn-Outs

96

 

7.18

Anti-Terrorism Laws

97

 

7.19

Restrictive Agreements

97

 

7.20

Trading with the Enemy Act

97

 

7.21

Subordinated Debt

97

 

7.22

Amendments to Term Debt Documents

97

 

7.23

Amendment of DIRECTV Documents

98

 

iii

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VIII.

CONDITIONS PRECEDENT

98

 

 

 

 

8.1

Conditions to Initial Advances

99

 

8.2

Conditions to Each Advance

102

 

 

 

 

IX.

INFORMATION AS TO BORROWERS

103

 

 

 

 

9.1

Disclosure of Material Matters

103

 

9.2

Schedules

103

 

9.3

Environmental Reports

104

 

9.4

Litigation

104

 

9.5

Material Occurrences

104

 

9.6

Government Receivables

105

 

9.7

Annual Financial Statements

105

 

9.8

Quarterly Financial Statements

105

 

9.9

Monthly Financial Statements

105

 

9.10

Other Reports

106

 

9.11

Additional Information

106

 

9.12

Projected Operating Budget

106

 

9.13

2011 and 2012 Audits

106

 

9.14

Notice of Suits, Adverse Events

107

 

9.15

ERISA Notices and Requests

107

 

9.16

Additional Documents

108

 

 

 

 

X.

EVENTS OF DEFAULT

108

 

 

 

 

10.1

Nonpayment

108

 

10.2

Breach of Representation

108

 

10.3

Financial Information

108

 

10.4

Judicial Actions

108

 

10.5

Noncompliance

108

 

10.6

Judgments

108

 

10.7

Bankruptcy

109

 

10.8

Affiliate or Guarantor Bankruptcy

109

 

10.9

Material Adverse Effect

109

 

10.10

Lien Priority

109

 

10.11

Term Debt Indebtedness

109

 

10.12

Cross Default

110

 

10.13

Breach of Guaranty or Pledge Agreement

110

 

10.14

Change of Control

110

 

10.15

Invalidity

110

 

10.16

Licenses

110

 

10.17

Seizures

110

 

10.18

Operations

111

 

10.19

Pension Plans

111

 

10.20

DIRECTV Documents

111

 

 

 

 

XI.

LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT

111

 

 

 

 

11.1

Rights and Remedies

111

 

iv

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11.2

Agent’s Discretion

113

 

11.3

Setoff

113

 

11.4

Rights and Remedies not Exclusive

113

 

11.5

Allocation of Payments

113

 

 

 

 

XII.

WAIVERS AND JUDICIAL PROCEEDINGS

114

 

 

 

 

12.1

Waiver of Notice

114

 

12.2

Delay

114

 

12.3

Jury Waiver

114

 

 

 

 

XIII.

EFFECTIVE DATE AND TERMINATION

115

 

 

 

 

13.1

Term

115

 

13.2

Termination

115

 

 

 

 

XIV.

REGARDING AGENT

115

 

 

 

 

14.1

Appointment

116

 

14.2

Nature of Duties

116

 

14.3

Lack of Reliance on Agent and Resignation

116

 

14.4

Certain Rights of Agent

117

 

14.5

Reliance

118

 

14.6

Notice of Default

118

 

14.7

Indemnification

118

 

14.8

Agent in its Individual Capacity

118

 

14.9

Delivery of Documents

118

 

14.10

Borrowers’ Undertaking to Agent

119

 

14.11

No Reliance on Agent’s Customer Identification Program

119

 

14.12

Other Agreements

119

 

14.13

Lenders’ Agreements Regarding Intercreditor Agreement

119

 

 

 

 

XV.

BORROWING AGENCY

119

 

 

 

 

15.1

Borrowing Agency Provisions

119

 

15.2

Waiver of Subrogation

120

 

 

 

 

XVI.

MISCELLANEOUS

120

 

 

 

 

16.1

Governing Law

121

 

16.2

Entire Understanding

121

 

16.3

Successors and Assigns; Participations; New Lenders

123

 

16.4

Application of Payments

126

 

16.5

Indemnity

126

 

16.6

Notice

127

 

16.7

Survival

128

 

16.8

Severability

128

 

16.9

Expenses

129

 

16.10

Injunctive Relief

129

 

16.11

Consequential Damages

129

 

16.12

Captions

129

 

16.13

Counterparts; Facsimile Signatures

129

 

v

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16.14

Construction

129

 

16.15

Confidentiality; Sharing Information

130

 

16.16

Publicity

130

 

16.17

Certifications From Banks and Participants; USA PATRIOT Act

130

 

Exhibit 1.2

—

Form of Borrowing Base Certificate

 

Exhibit 1.2(a)

—

Form of Compliance Certificate

 

Exhibit 2.1(a)

—

Form of Revolving Credit Note

 

Exhibit 2.4(a)

—

Form of Swing Line Note

 

Exhibit 5.5(b)

—

Projections

 

Exhibit 8.1(j)

—

Form of Financial Condition Certificate

 

Exhibit 16.3

—

Form of Commitment Transfer Supplement

 

 

vi

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The Liens created by this Revolving Credit and Security Agreement and the Other
Documents (as defined herein) on the collateral described herein and therein,
and the rights and remedies of Agent and Lenders with respect to such Liens, are
subject to the provisions of the Intercreditor Agreement dated as of April 15,
2011, as amended from time to time, between FBR Capital Markets LT, Inc., as
Term Debt Representative (or any successor thereto in such capacity), and PNC
Bank, National Association, as ABL Representative (or any successor thereto in
such capacity).

 

REVOLVING CREDIT

 

AND

 

SECURITY AGREEMENT

 

Revolving Credit and Security Agreement dated as of July 10, 2013, among UNITEK
GLOBAL SERVICES, INC., a corporation organized under the laws of the State of
Delaware (“UniTek Parent”), UNITEK ACQUISITION, INC., a corporation organized
under the laws of the State of Delaware (“UniTek Acquisition”) PINNACLE WIRELESS
USA, INC., a corporation organized under the laws of the State of Delaware
(“Pinnacle”), UNITEK USA, LLC, a limited liability company organized under the
laws of the State of Delaware (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC.,
a corporation organized under the laws of the State of Delaware (“Advanced
Communications”), DIRECTSAT USA, LLC, a limited liability company organized
under the laws of the State of Delaware (“DirectSat”), FTS USA, LLC, a limited
liability company organized under the laws of the State of Delaware (“FTS”)
(UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced
Communication, DirectSat, FTS and each Person joined hereto as a borrower from
time to time, collectively, 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 APOLLO
INVESTMENT CORPORATION (“AIC”), as administrative and collateral agent for
Lenders (AIC, 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, notwithstanding anything to the contrary herein, all accounting
or financial terms used herein shall be construed, and all financial
computations pursuant hereto shall be made, without giving effect to any
election under Statement of Financial Accounting Standards 159 (or any other
Financial Accounting Standard having a similar effect) to value any Indebtedness
or other liabilities of any Borrower at “fair value,” as defined therein.

 

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

 

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

 

“ABL Priority Collateral” shall have the meaning given to such term in the
Intercreditor Agreement.

 

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

 

“Additional Borrowing Base Amount” shall mean (i) from the Closing Date through
and including October 31, 2013, an amount equal to $30,000,000, (ii) from
November 1, 2013 through and including November 30, 2013, an amount equal to
$25,000,000 and (iii) thereafter, an amount equal to $20,000,000; provided,
however, that in the event that any of the fees required to be paid pursuant to
the Fee Letter fail to be paid on or prior to the date when due, the Additional
Borrowing Base Amount immediately shall be deemed to be $0.

 

“Advance Rates” shall have the meaning set forth in Section 2.1(a)(y) hereof.

 

“Advances” shall mean and include the Revolving Advances, Swing Loans, Letters
of Credit and Out-of-Formula Loans.

 

“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 10% 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 it may
be amended, modified, supplemented, restated or replaced from time to time.

 

“AIC” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open
Rate in effect on such day plus one half of one-percent (0.50%), and (iii) the
sum of the Daily LIBOR Rate in effect on such day plus one percent (1.00%), so
long as a Daily LIBOR Rate is offered, ascertainable and not unlawful.

 

“Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the
Applicable Laws comprising or implementing the Bank Secrecy Act, and the
Applicable Laws administered by the United States Treasury Department’s Office
of Foreign Asset Control (as any of the foregoing Applicable Laws may from time
to time be amended, renewed, extended, or replaced).

 

2

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

 

“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.

 

“Applicable Margin”, for Revolving Advances and the Letter of Credit Fees, shall
mean, as of the Closing Date and through and including the date immediately
prior to the first Adjustment Date (as defined below), the applicable percentage
specified below:

 

APPLICABLE MARGINS FOR
DOMESTIC RATE LOANS

 

APPLICABLE MARGINS FOR
EURODOLLAR RATE LOANS

 

APPLICABLE MARGIN FOR
LETTERS OF CREDIT

 

4.00

%

5.00

%

4.75

%

 

Thereafter, effective as of the first Business Day following receipt by Agent of
the quarterly financial statements of Borrowers on a Consolidated Basis and
related Compliance Certificate for the fiscal quarter ending September 30, 2011
required under Section 9.8, and thereafter upon receipt of the quarterly
financial statements of Borrowers on a Consolidated Basis and related Compliance
Certificate required under Section 9.8 for the previous fiscal quarter (each day
of such delivery, an “Adjustment Date”), the Applicable Margin for each type of
Advance shall be adjusted, if necessary, to the applicable percent per annum set
forth in the pricing table set forth below corresponding to the Fixed Charge
Coverage Ratio for the trailing twelve month period ending on the last day of
the most recently completed fiscal quarter prior to the applicable Adjustment
Date (each such period, a “Calculation Period”):

 

FIXED CHARGE COVERAGE RATIO

 

APPLICABLE
MARGINS FOR
DOMESTIC
RATE LOANS

 

APPLICABLE
MARGINS FOR
EURODOLLAR
RATE LOANS

 

APPLICABLE
MARGIN FOR
LETTERS OF
CREDIT

 

Less than or equal to 3.00 to 1.00

 

4.25

%

5.25

%

5.00

%

Greater than 3.00 to 1.00 but equal to

 

 

 

 

 

 

 

or less than 5.00 to 1.00

 

4.00

%

5.00

%

4.75

%

Greater than 5.00 to 1.00

 

3.75

%

4.75

%

4.50

%

 

For so long as the Borrowers have available to them any Out-of-Formula Loans, or
if the Borrowers shall fail to deliver the financial statements, certificates
and/or other information required under Sections 9.7 or 9.8 by the dates
required pursuant to such sections, each Applicable Margin shall be conclusively
presumed to equal the highest Applicable Margin specified in the pricing table
set forth above until the date of delivery of such financial statements,
certificates and/or other information, at which time the rate will be adjusted
based upon the Fixed Charge Coverage Ratio reflected in such statements.
Notwithstanding anything to the contrary contained herein, no downward
adjustment in any Applicable Margin shall be made on any Adjustment Date on
which any Event of Default shall have occurred and be continuing. Any increase
in interest rates payable by Borrowers under this Agreement and the Other
Documents pursuant to the provisions of the foregoing sentence shall be in
addition to and independent of any increase in such interest rates resulting
from the occurrence of any Event of

 

3

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

 

Default (including, if applicable, any Event of Default arising from a breach of
Sections 9.7 or 9.8 hereof) and/or the effectiveness of the Default Rate
provisions of Section 3.1 hereof.

 

If, as a result of any restatement of, or other adjustment to, the financial
statements of Borrowers on a Consolidated Basis or for any other reason, the
Agent determines that (a) the Fixed Charge Coverage Ratio as previously
calculated as of any applicable date for any applicable period was inaccurate,
and (b) a proper calculation of the Fixed Charge Coverage Ratio for any such
period would have resulted in different pricing for any period, then (i) if the
proper calculation of the Fixed Charge Coverage Ratio would have resulted in
higher pricing as to any interest and/or fees (as applicable) for such period,
automatically and immediately without the necessity of any demand or notice by
the Agent or any other affirmative act of any party, the interest accrued on the
applicable Advances and/or the amount of the fees accruing for such period under
the provisions of this Agreement and the Other Documents shall be deemed to be
retroactively be deemed to be increased by, and Borrowers shall be obligated to
immediately pay to the Agent, for the ratable benefit of the Lenders an amount
equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such
period; and (ii) if the proper calculation of the Fixed Charge Coverage Ratio
would have resulted in lower pricing for such period, then the interest accrued
on the applicable Advances and the amount of the fees accruing for such period
under the provisions of this Agreement and the Other Documents shall be deemed
to remain unchanged, and Agent and Lenders shall have no obligation to repay
interest or fees to the Borrowers; provided, that, if as a result of any
restatement or other event or other determination by Agent a proper calculation
of the Fixed Charge Coverage Ratio would have resulted in higher pricing for one
or more periods and lower pricing for one or more other periods (due to the
shifting of income or expenses from one period to another period or any similar
reason), then the amount payable by the Borrowers pursuant to clause (i) above
shall be based upon the excess, if any, of the amount of interest and fees that
should have been paid for all applicable periods over the amounts of interest
and fees actually paid for such periods.

 

“Authority” shall have the meaning set forth in Section 4.19(d) hereof.

 

“BAML” shall mean Bank of America, N.A.

 

“Base Rate” shall mean the base commercial lending rate of BAML 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 BAML 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 BAML to any particular class or category of customers of
BAML.

 

“Benefited Lender” shall have the meaning set forth in Section 2.20(d) hereof.

 

“Billed Receivables Advance Rate” shall have the meaning set forth in
Section 2.1(a)(y) hereof.

 

“Blocked Accounts” shall have the meaning set forth in Section 4.15(h) hereof.

 

“Blocked Account Bank” shall have the meaning set forth in
Section 4.15(h) hereof.

 

4

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

 

“Blocked Person” shall have the meaning set forth in Section 5.24(b) 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 UniTek Parent.

 

“Borrowing Base Certificate” shall mean a certificate in substantially the form
of Exhibit 1.2 duly executed by the President, Chief Executive Officer, Chief
Financial Officer or Controller 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.

 

“Borrower Increase Date” shall have the meaning set forth in Section 2.24(a).

 

“Borrower Revolver Increase” shall have the meaning set forth in
Section 2.24(a).

 

“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 New York, New York and, if the applicable Business Day relates
to any Eurodollar 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, replacements, substitutions
or additions thereto which have a useful life of more than one year, which, in
accordance with GAAP, would be classified as capital expenditures.

 

“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 Collateral Account” shall mean account number 8026559714 at PNC in the
name “Unitek Global Services, Inc.”, which account is subject to the control of
Agent.

 

“Cash Equivalents” shall mean (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor’s Financial Services LLC (“S&P”) or P-1 by
Moody’s Investors Service, Inc. (“Moody’s”), or

 

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carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than 30 days, with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; (g) money market mutual or similar funds that
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Cash Management Obligations” shall have the meaning set forth in the definition
of Obligations.

 

“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 date of this Agreement, 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, interpretation or
application thereof by any Governmental Body or (c) the making or issuance of
any request, guideline or directive (whether or not having the force of law) by
any Governmental Body; provided however, for purposes of this Agreement, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
guidelines and directives in connection therewith are deemed to have gone into
effect and adopted after the date of this Agreement, and provided further, for
purposes of Section 3.9, all requests, rules, guidelines or directives
promulgated by the Bank of International Settlements, the Basel Committee on
Banking Regulations and Supervisory Practices (or any successor or similar
authority) or the United States financial regulatory authorities with respect to
capital adequacy shall be deemed to be a Change in Law regardless of the date
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 to a “person” or “group of
persons” (within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934) who is not an Original Owner of “beneficial ownership” (within the
meaning to Rule 13d-3 promulgated by the SEC under said Act) of or the power to
vote, directly or indirectly, more than thirty-five percent (35%) of the Equity
Interests of UniTek Parent with the power to vote for and elect members of the
board of directors of Unitek Parent (provided that a person or group shall be
deemed to have beneficial ownership of all securities that such person or group
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time or the satisfaction of other conditions

 

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and irrespective of the financial and other terms upon which such right may be
exercised), (b) the occurrence of any event (whether in one or more
transactions) which results in any Borrower other than UniTek Parent ceasing to
be a 100% wholly-owned direct or indirect Subsidiary of UniTek Parent (provided
that , in the case of any Borrower acquired after the Closing Date in a
Permitted Acquisition (a “Post-Closing Date Borrower”) where Borrowers acquired
less than 100% of the Equity Interests of such Post-Closing Date Borrower in
such Permitted Acquisition, a Change of Control shall not be deemed to occur
under this clause (b) so long as UniTek Parent and/or one or more of the other
Borrowers that are 100% wholly-owned direct or indirect Subsidiaries of UniTek
Parent shall continue to own the same percentage of all class of the Equity
Interests of such Post-Closing Date Borrower as was owned by Borrowers
immediately following the consummation of such Permitted Acquisition),
(c) occupation of a majority of the seats (other than vacant seats) on the board
of directors of UniTek Parent by Persons who are not continuing directors. For
purposes of this definition, “continuing directors” shall mean members of the
board of directors of each UniTek Parent on the Closing Date and any future
member of such board of directors that is nominated for election to such board
of directors by at least a majority of the then continuing directors.

 

“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.

 

“Closing Date” shall mean July 10, 2013, or such other date as may be agreed to
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 and each Guarantor in all of the following property and assets of such
Borrower and such Guarantor, 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 Equipment;

 

(c)           all General Intangibles and all supporting obligations relating
thereto;

 

(d)           all Inventory (excluding any DIRECTV Inventory);

 

(e)           all Investment Property and financial assets;

 

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(f)            the Cash Collateral Account and all monies on deposit therein;

 

(g)           all Subsidiary Stock;

 

(h)           all cash and related collateral used to secure any obligations
under Letters of Credit;

 

(i)            all of each Borrower’s and each Guarantor’s right, title and
interest in and to, whether now owned or hereafter acquired and wherever
located; (i) its respective goods and other property including, but not limited
to, all merchandise returned or rejected by Customers, relating to or securing
any of the Receivables; (ii) all of each Borrower’s and each Guarantor’s rights
as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other
lienor, including stoppage in transit, setoff, detinue, replevin, reclamation
and repurchase; (iii) all additional amounts due to any Borrower or Guarantor
from any Customer relating to the Receivables; other property, including
warranty claims, relating to any goods securing the Obligations; all of each
Borrower’s and each Guarantor’s contract rights, rights of payment which have
been earned under a contract right, instruments (including promissory notes),
documents, chattel paper (including electronic chattel paper), warehouse
receipts, deposit accounts, letters of credit and money; (vi) all commercial
tort claims (whether now existing or hereafter arising); (vii) if and when
obtained by any Borrower or any Guarantor, all real and personal property of
third parties in which such Borrower or such Guarantor has been granted a lien
or security interest as security for the payment or enforcement of Receivables;
(viii) all letter of credit rights (whether or not the respective letter of
credit is evidenced by a writing); (ix) all supporting obligations; any other
goods, personal property or real property now owned or hereafter acquired in
which any Borrower or any Guarantor has expressly granted a security interest or
may in the future grant a security interest to Agent hereunder, or in any
amendment or supplement hereto or thereto, or under any other agreement between
Agent and any Borrower and any Guarantor and any other goods, personal property
or real property now owned or hereafter acquired in which any Borrower or any
Guarantor has granted a security interest, or had been required to grant a
security interest, or may in the future grant a security interest, to the Term
Debt Agent;

 

(j)            all of each Borrower’s and each Guarantor’s ledger sheets, ledger
cards, files, correspondence, records, books of account, business papers,
computers, computer software (owned by any Borrower or any Guarantor or in which
it has an interest), computer programs, tapes, disks and documents relating to
(a), (b), (c), (d), (e), (f), (g), (h) or (i) of this paragraph; and

 

(k)           all proceeds and products of (a), (b), (c), (d), (e), (f), (g),
(h), (i) and (j) in whatever form, including, but not limited to: cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds. 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 or any Guarantor 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 or Guarantors, would be sufficient to create a perfected Lien in any
property

 

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or assets that such Borrower or such Guarantor 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.

 

“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.

 

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

 

“Compliance Certificate” shall mean a compliance certificate substantially in
the form attached hereto as Exhibit 1.2(a) to be signed by the Chief Financial
Officer or Controller of Borrowing Agent, which shall state that, based on an
examination sufficient to permit such officer to make an informed statement,
(a) no Default or Event of Default exists, or if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Borrowers with respect to
such default and, such certificate shall have appended thereto calculations
which set forth Borrowers’ compliance with the requirements or restrictions
imposed by Sections 6.5, 7.4, 7.5, 7.7, 7.8, 7.10 and 7.11; and (b) that to the
best of such officer’s knowledge, each Borrower is in compliance in all material
respects with all federal, state and local Environmental Laws, or if such is not
the case, specifying all areas of non-compliance and the proposed action such
Borrower will implement in order to achieve full compliance.

 

“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, and 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.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Advances), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) non-cash stock compensation
expense, (f) one-time transaction costs associated with Permitted Acquisitions
(whether or not consummated), (g) any non-cash impairment charges, (h) any
non-cash expenses based upon any write-off of contingent consideration related
to the Pinnacle Acquisition, (i) any costs and expenses incurred in 2013 in

 

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connection with the restatement of the Borrowers’ financial statements and
refinancing, (j) any restructuring related costs and expenses incurred in 2012
not exceeding $8,500,000 and any such costs and expenses not exceeding
$6,000,000 in any fiscal year thereafter and (k) any extraordinary or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), and minus, (a) to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (i) interest income,
(ii) any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business), (iii) income tax credits (to the extent not
netted from income tax expense) and (iv) any other non-cash income and (b) any
cash payments made during such period in respect of items described in clause
(e) above subsequent to the fiscal quarter in which the relevant non-cash
expenses or losses were reflected as a charge in the statement of Consolidated
Net Income, all as determined on a consolidated basis. For the purposes of
calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of the Fixed
Charge Coverage Ratio, (i) if at any time during such Reference Period any
Borrower or any Subsidiary shall have made any Disposition, the Consolidated
EBITDA for such Reference Period shall exclude the Consolidated EBITDA (whether
negative or positive) attributable to the property that is the subject of such
Disposition for the period from the date of such Disposition through the end of
such Reference Period and (ii) if during such Reference Period any Borrower or
any Subsidiary shall have made an Acquisition, the Consolidated EBITDA for such
Reference Period shall exclude the Consolidated EBITDA (whether negative or
positive) attributable to the Person or property that is the subject of such
Acquisition for the period from the first day of such Reference Period through
the date of such acquisition. As used in this definition, “Acquisition” means
any acquisition of property or series of related acquisitions of property that
constitutes assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock of a
Person; and “Disposition” means any sale or other disposition of property or
series of related dispositions of property that constitutes assets comprising
all or substantially all of an operating unit of a business or constitutes all
or substantially all of the common stock of a Person.

 

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

 

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

 

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“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.

 

“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 and include (a) all cash actually expended by any
Borrower to make interest payments on any Advances hereunder, plus (b) accrued
but unpaid interest on account of Eurodollar Rate Loans, plus (c) all cash
actually expended by any Borrower to make payments for all fees, commissions and
charges set forth herein and with respect to any Advances, plus (d) all cash
actually expended by any Borrower to make payments (including prepayments) on
Capitalized Lease Obligations, plus (e) all cash actually expended by any
Borrower to make payments (including prepayments) with respect to any other
Indebtedness for borrowed money, specifically including all Term Debt Payments
(excluding any prepayment of principal or payment of interest to the extent
funded through a Permitted Refinancing of the Term Debt).

 

“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 Revolving 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 Loans, (ii) fund any portion of its participations in Letters of
Credit or Swing Loans or (iii) pay over to Agent, the Issuer, Swing Loan Lender
or any Lender any other amount required to be paid by it hereunder, unless, in
the case of clause (i) above, such Revolving Lender notifies the Administrative
Agent in writing that such failure is the result of such Revolving Lender’s good
faith determination that a condition precedent to funding (specifically
identified and including the particular default, if any) has not been satisfied,
(b) has notified Borrowers or Agent in writing, or has made a public statement
to the effect, that it does not intend or expect to comply with any of its
funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Revolving Lender’s good
faith determination that a condition precedent (specifically identified and
including the particular 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

 

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Agent, acting in good faith, to provide a certification in writing from an
authorized officer of such Revolving Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swing Loans under this Agreement, provided that such Revolving Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon the
Administrative Agent’s receipt of such certification in form and substance
satisfactory to the Administrative Agent, (d) has become the subject of a
Bankruptcy Event or (e) has failed at any time to comply with the provisions of
Section 2.22(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 ratable share of such payments due and payable
to all of the Lenders.

 

As used in this definition and in Section 2.23, the term “Bankruptcy Event”
means, with respect to any Person, such Person or such Person’s direct or
indirect parent company becomes the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator,
custodian, assignee for the benefit of creditors or similar Person charged with
the reorganization or liquidation of its business appointed for it, or, in the
good faith determination of Agent, has taken any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such proceeding
or appointment, provided that a Bankruptcy Event shall not result solely by
virtue of any ownership interest, or the acquisition of any ownership interest,
in such Person 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.

 

“Disqualified Capital Stock” with respect to any Person, shall mean any Equity
Interests of such Person which, by its terms, or by the terms of any security
into which it is convertible or for which it is putable or exchangeable, or upon
the happening of any event, matures or is mandatorily redeemable (other than
solely for Equity Interests which are not Disqualified Capital Stock) pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof (other than solely as a result of a change of control or asset
sale), in whole or in part, in each case prior to the date 91 days after the
expiration of the Term; provided, however, that if such Equity Interests are
issued to any plan for the benefit of employees of any Borrower or by any such
plan to such employees, such Equity Interests shall not constitute Disqualified
Capital Stock solely because it may be required to be repurchased in order to
satisfy applicable statutory or regulatory obligations.

 

“Depository Accounts” shall have the meaning set forth in
Section 4.15(h) hereof.

 

“Depository Account Bank” shall have the meaning set forth in
Section 4.15(h) hereof. “Designated Lender” shall have the meaning set forth in
Section 16.2(b) hereof.

 

“DIRECTV/DirectSat Contract” shall mean that certain DIRECTV, Inc. 2009 Home
Services Provider Agreement dated as of July 1, 2009 between DIRECTV, Inc. and
DirectSat, including all exhibits and schedules thereto, as such agreement may
have been or hereafter may be amended, modified, supplemented, restated or
replaced from time to time.

 

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“DIRECTV Inventory” shall mean all Inventory purchased by any Borrower pursuant
to and in connection with the DIRECTV/DirectSat Contract that is subject to a
Lien in favor of DIRECTV, Inc. created under the DIRECTV/DirectSat Contract and
in which, pursuant to the terms and conditions of the DIRECTV/DirectSat
Contract, no Liens may be created in favor of any Person other than
DIRECTV, Inc.

 

“DIRECTV Letter” shall mean the letter delivered to DirectSat by DIRECTV, LLC
dated on or about May 16, 2013 and the subject of a filing with the SEC on or
about May 16, 2013.

 

“Documents” shall have the meaning set forth in Section 8.1(c) hereof.

 

“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.

 

“Earn-Out Indebtedness” shall have the meaning set forth in the definition of
Indebtedness.

 

“Eligible Receivables” shall mean and include with respect to each Borrower,
each Receivable of such Borrower arising in the Ordinary Course of Business and
which Agent, in its sole credit judgment exercised in its Permitted Discretion,
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 (including electronic
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 ninety (90) days after the original
due date or one hundred twenty (120) days after the original invoice date;

 

(c)           fifty percent (50%) or more of the Receivables from such Customer
are not deemed Eligible Receivables hereunder (such percentage may, in Agent’s
sole discretion, be increased or decreased from time to time);

 

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

 

(e)           the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability,

 

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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 or proceeding under any state or
federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a
bankrupt or insolvent, (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, any petition which is 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;

 

(f)                                   the sale is to a Customer outside the
continental United States of America or Canada, unless the sale is on letter of
credit, guaranty or acceptance terms, in each case acceptable to Agent in its
sole discretion;

 

(g)                                  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;

 

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

 

(i)                                     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;

 

(j)                                    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 or the Receivable represents a “progress billing” or a billing for only a
portion or percentage of goods or services to be provided pursuant to the
applicable purchase order or contract between such Borrower and such Customer;

 

(k)                                 the Receivables of the Customer exceed a
credit limit determined by Agent, in its sole discretion, to the extent such
Receivable exceeds such limit; provided that none of (i) DIRECTV, (ii) Comcast,
(iii) Verizon, (iv) AT&T, (v) Time Warner, (vi) Rodgers Communications,
(vii) Bell Aliant and (viii) such other Account Debtors as Agent may from time
to time approve, in its sole credit judgment exercised in its Permitted
Discretion, shall be subject to the provisions of this clause (k);

 

(l)                                     the Receivable is subject to any offset,
deduction, defense, dispute, or counterclaim (but such Receivable shall only be
ineligible to the extent of such offset, deduction, defense or counterclaim) or
the Receivable is contingent in any respect or for any reason;

 

(m)                             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;

 

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(n)                                 any return, rejection or repossession of the
merchandise has occurred or the rendition of services has been disputed (but
only to the extent of such return, rejection or repossession);

 

(o)                                 such Receivable is not payable to a
Borrower; or

 

(p)                                 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.

 

“Eligible Unbilled Receivables” shall mean and include with respect to each
Borrower, each Receivable of such Borrower relating to completed projects and
arising in the Ordinary Course of Business which would be deemed an Eligible
Receivable except for the fact that such Receivable has not been billed and
invoiced to the Customer by such Borrower provided, however, such Receivable has
not remained unbilled and uninvoiced more than sixty (60) days from the date
such Receivable was generated and/or the date that the sale of goods or
performance of services giving rise to such Receivable occurred.

 

“Eligible Unbilled Receivables Sublimit” shall mean $15,000,000.

 

“Eligible Project Receivables” shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising in the Ordinary Course of
Business which would be deemed an Eligible Receivable except for the facts
(i) that the sale of goods and/or provision of services giving rise to such
Receivable represent only a portion or percentage of the goods and/or services
to be sold and provided to such Customer pursuant to the applicable purchase
order or contract between such Borrower and such Customer and (ii) such
Receivable has not been billed and invoiced to the Customer by such Borrower;
provided, however, that no such Receivables shall be deemed eligible hereunder
unless Borrowers shall be in full compliance with the requirements of the last
sentence of Section 9.2 hereof provided, however, such Receivable has not
remained unbilled and uninvoiced more than sixty (60) days from the date such
Receivable was generated and/or the date that the sale of goods or performance
of services giving rise to such Receivable occurred.

 

“Eligible Project Receivables Sublimit” shall mean $3,500,000.

 

“Environmental Complaint” shall have the meaning set forth in
Section 4.19(d) 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 relating to the protection of the environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.

 

“Equipment” shall mean and include as to each Borrower all of such Borrower’s
goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including all equipment, machinery, apparatus, motor vehicles,
fittings, furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions thereto.

 

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“Equity Interests” of any Person shall mean 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 applicable: (i) all economic rights
(including all rights to receive dividends and distributions), (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), managing
member(s) 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, (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 state law and (ix) all
certificates evidencing such Equity Interests.

 

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

 

“Eurodollar Rate” shall mean for any Eurodollar 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) (i) 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 (an
“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 Eurodollar 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 Alternate Source, a
comparable replacement rate determined by Agent at such time (which
determination shall be conclusive absent manifest error)), by (ii) a number
equal 1.00

 

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minus the Reserve Percentage. The Eurodollar Rate may also be expressed by the
following formula:

 

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

 

The Eurodollar Rate shall be adjusted with respect to any Eurodollar 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 prompt notice to the
Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
Notwithstanding any provision to the contrary in this Agreement, the Eurodollar
Rate shall at no time be less than 1.00% per annum.

 

“Eurodollar Rate Loan” shall mean an Advance at any time that bears interest
based on the Eurodollar Rate.

 

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

 

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

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any guarantee thereof) is or becomes illegal or
unlawful under the Commodity Exchange Act or any rule, regulation or order of
the Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act at the time the Guarantee of such Guarantor or the grant
of such security interest would otherwise have become effective with respect to
such related Swap Obligation but for such Guarantor’s failure to constitute an
“eligible contract participant” at such time.

 

“Excluded Taxes” shall mean, with respect to Agent, any Lender, Issuer or any
other recipient of any payment to be made by or on account of any obligation of
Borrowers hereunder, (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, 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 Borrowers is located
and (c) in the case of a Foreign Lender, any withholding tax that is imposed on
amounts payable to such Foreign Lender at the 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 3.11, except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower
with respect to such withholding tax pursuant to Section 3.10.

 

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

 

“Existing Revolving Credit Agreement” shall have the meaning set forth in
Section 5.5(a) hereof.

 

“Federal Funds Effective Rate” for any day shall mean 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” for any day shall mean 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 AIC (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 the AIC 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.

 

“Fee Letter” shall mean that certain letter agreement regarding fees, dated as
of June 28, 2013 between Borrowers and AIC, as it may be amended, modified,
supplemented, restated or replaced from time to time.

 

“Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal
period, the ratio of (a) Consolidated EBITDA for such period minus Unfunded
Capital Expenditures made during such period minus distributions (including tax
distributions) and dividends made during such period, minus cash taxes paid
during such period, to (b) all Debt Payments paid during such period plus an
amount equal to twenty-five percent (25%) of all cash actually paid during such
period in respect of any Permitted Earn-Out Obligations (other than any
Permitted Earn-Out Obligations in connection with the Skylink Acquisition); all
calculated for Borrowers on a Consolidated Basis in accordance with GAAP.

 

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“Foreign Lender” shall mean any Lender that is organized under the Laws of a
jurisdiction other than that in which 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” of any Person, shall mean any Subsidiary of such Person
that is not organized or incorporated in the United States or any State or
territory thereof.

 

“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.

 

“General Intangibles” shall mean and include as to each Borrower all of such
Borrower’s general intangibles, whether now owned or hereafter acquired,
including all payment intangibles, all choses in action, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, equipment formulations, manufacturing procedures, quality control
procedures, trademarks, trademark applications, service marks, trade secrets,
goodwill, copyrights, design rights, software, computer information, source
codes, codes, records and updates, registrations, licenses, franchises, customer
lists, tax refunds, tax refund claims, computer programs, all claims under
guaranties, security interests or other security held by or granted to such
Borrower to secure payment of any of the Receivables by a Customer (other than
to the extent covered by Receivables) all rights of indemnification and all
other intangible property of every kind and nature (other than Receivables).

 

“Governmental Acts” shall have the meaning set forth in Section 2.17 hereof.

 

“Governmental Body” shall mean the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

 

“Guarantee Obligation” as to any Person (the “guaranteeing person”), shall mean
any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing Person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of

 

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such primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be liable pursuant
to the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the applicable
Borrower in good faith.

 

“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.

 

“Guarantor Security Agreement” shall mean any security agreement executed by any
Guarantor in favor of Agent securing the Obligations or the Guaranty of such
Guarantor, in form and substance satisfactory to Agent, provided that the terms
and conditions thereof (including without limitation terms and conditions
concerning Term Debt Priority Collateral) shall be consistent with the terms and
conditions of this Agreement.

 

“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, provided that the terms and conditions
thereof (including without limitation terms and conditions concerning Term Debt
Priority Collateral) shall be consistent with the terms and conditions of this
Agreement.

 

“Hazardous Discharge” shall have the meaning set forth in
Section 4.19(d) hereof.

 

“Hazardous Substance” 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 CERCLA, the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 5101, et seq.), RCRA, Articles 15 and 27 of the New York State
Environmental Conservation Law or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.

 

“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”.

 

“Inactive Subsidiary” shall mean any Subsidiary of any Borrower that does not
(i) conduct any active business operations (including the operations of a
holding company), (ii) have

 

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assets with a fair market value of $500,000 or more or (iii) own any capital
stock of any Borrower or any other Subsidiary (except another Inactive
Subsidiary) of any Borrower; provided that , notwithstanding anything to the
contrary contained in any of the foregoing, no Subsidiary may be deemed to be an
Inactive Subsidiary for any purpose under this Agreement if the fair market
value of all of the assets of such Subsidiary, together with the fair market
value of the assets of all other Inactive Subsidiaries of Borrower, shall exceed
$1,000,000 at any one time in the aggregate.

 

“Indebtedness” of any Person at any date, shall mean, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services earned but
not paid (other than to the extent payable in common stock Equity Interests and
other than current trade payables incurred in the ordinary course of such
Person’s business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capitalized Lease Obligations
of such Person, (f) all obligations of such Person, contingent or otherwise, as
an account party or applicant under or in respect of acceptances, issued and
drawn letters of credit, surety bonds or similar arrangements, (g) all
obligations of such Person in respect of Disqualified Capital Stock, (h) 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 payable in
cash arising out of purchase and sale contracts (“Earn-Out Indebtedness”),
(i) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (h) above, and (j) all obligations of
the kind referred to in clauses (a) through (i) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Ineligible Security” 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.

 

“Intellectual Property” shall mean property constituting under any Applicable
Law a patent, patent application, copyright, trademark, service mark, trade
name, mask work, trade secret or license or other right to use any of the
foregoing.

 

“Intellectual Property Claim” shall mean the assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that
any Borrower’s ownership, use, marketing, sale or distribution of any Inventory,
Equipment, Intellectual Property or other

 

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property or asset is violative of any ownership of or right to use any
Intellectual Property of such Person.

 

“Intellectual Property Security Agreement” shall mean that certain Intellectual
Property Security Agreement dated as of the Closing Date by and among Borrowers
and Agent, as it may be amended, modified, supplemented, restated or replaced
from time to time.

 

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated
as April 15, 2011 by and between PNC and Term Debt Agent, as it may be amended,
modified, supplemented, restated or replaced from time to time.

 

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

 

“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
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
now owned or hereafter acquired 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 or other documents representing them.

 

“Investment Property” shall mean and include as to each Borrower, all of such
Borrower’s now owned or hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts, commodities
contracts and commodities accounts.

 

“Issuer” shall mean (i) Agent in its capacity as the issuer of Letters of Credit
under this Agreement and (ii) any other Person whom 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.

 

“Joint Venture” shall mean a corporation, partnership, limited liability company
or other entity in which Borrowers and their wholly-owned Subsidiaries hold,
directly or indirectly, less than 51 % of the Equity Interests therein.

 

“Leasehold Interests” shall mean all of each Borrower’s right, title and
interest in and to, and as lessee, of the premises identified on Schedule 4.5
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.

 

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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
meets the following requirements: such Interest Rate Hedge (i) is documented in
a standard International Swap Dealer Association Agreement, (ii) provides for
the method of calculating the reimbursable amount of the provider’s credit
exposure in a reasonable and customary manner, and (iii) 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 and secured obligations under any Guarantor Security Agreement 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.

 

“Letter of Credit Application” shall have the meaning set forth in Section 2.10
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 $35,000,000.

 

“Letters of Credit” shall have the meaning set forth in Section 2.9 hereof.

 

“Letters of Credit - Existing” shall have the meaning set forth in Section 2.9
hereof.

 

“Letters of Credit - AIC” shall have the meaning set forth in Section 2.9
hereof.

 

“Letters of Credit - Non-AIC” shall have the meaning set forth in Section 2.9
hereof.

 

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

 

“Lien Waiver Agreement” shall mean an agreement 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 and by which such Person shall waive any Lien that
such Person may ever have with respect to any of the Collateral and shall
authorize Agent from time to time to enter upon the premises to inspect or
remove (or temporarily store) the Collateral from such premises.

 

“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, (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

 

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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.

 

“Material Contract” shall mean any contract, agreement, instrument, permit,
lease or license, written or oral, of Borrowers, which are 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 Face Amount” shall mean, with respect to any outstanding Letter of
Credit, the face amount of such Letter of Credit at the time of its issuance
(subject to any later amendments increasing the same) including all automatic
increases provided for in such Letter of Credit, whether or not any such
automatic increase has become effective.

 

“Maximum Revolving Advance Amount” shall mean $75,000,000, as such amount may be
increased from time to time as a result of any Borrower Revolver Increase.

 

“Maximum Swing Loan Advance Amount” shall mean $0.

 

“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.

 

“Minimum Revolving Commitment Amount” shall mean $50,000,000.

 

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

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections
3(37) and 4001(a)(3) of ERISA to which contributions are 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.

 

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

 

“Note” shall mean collectively, the Revolving Credit Note and the Swing Loan
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 as provided for
herein), covenants and duties owing by any Borrower or any Guarantor to Issuer,
Lenders or Agent or to any other direct or indirect subsidiary or affiliate of
Agent, Issuer or any Lender 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 or any Guarantor and any indemnification

 

24

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obligations payable by any Borrower or any Guarantor 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 or
any Guarantor, whether or not a claim for post-filing or post-petition interest,
fees or other amounts is allowable or allowed in such proceeding), whether or
not evidenced by any note, guaranty or other instrument, 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 by
what agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument, in any such case to the extent advanced to any Borrower
or any Guarantor under, arising under or out of and/or related to (i) this
Agreement, the Other Documents and any amendments, extensions, renewals or
increases thereto, including all costs and expenses of Agent, Issuer 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 or any Guarantor to Agent, Issuer or Lenders to perform acts or
refrain from taking any action, (ii) all Hedge Liabilities and (iii) all cash
management and treasury management services provided to Borrowers, to Guarantors
and their Subsidiaries by Agent or any Lender or direct or indirect subsidiary
or affiliate of Agent or any Lender, including but not limited to all lockbox
services, controlled disbursement services, automated clearinghouse
transactions, return items, overdrafts, interstate depository network services,
credit cars, stored value cards and purchasing cards (or p-cards) (all such
obligations described in this clause (iii) owing to Agent, any Lender or any
Affiliate, the “Cash Management Obligations”); provided, that Excluded Swap
Obligations shall not constitute Obligations.

 

“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.

 

“Original Owner” shall mean HM Capital.

 

“Other Documents” shall mean the Note, the Perfection Certificates, the Fee
Letter, any Guaranty (if any), any Guarantor Security Agreement (if any), any
Pledge Agreement, any Lender-Provided Interest Rate Hedge, the Intercreditor
Agreement and any and all other agreements, instruments and documents,
subordination and/or intercreditor agreements, guaranties, pledges, powers of
attorney, 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.

 

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“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(b)
hereof.

 

“Overadvance Threshold Amount” shall have the meaning set forth in Section
16.2(b) hereof.

 

“Parent” of any Person shall mean a corporation or other entity owning, directly
or indirectly at least 50% of the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the directors of the 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 each Lender’s obligation to buy a
participation of the Letters of Credit issued hereunder.

 

“Payee” shall have the meaning set forth in Section 3.10 hereof.

 

“Payment Office” shall mean initially 9 West 57th Street, New York, New York
10019; 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
(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 Section 412 of the Code and either (i) is maintained or to which
contributions are required by any member of the Controlled Group for employees
of 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 any entity which was at such time a member of the Controlled Group
for employees of any entity which was at such time a member of the Controlled
Group.

 

“Perfection Certificates” shall mean collectively, the Perfection Certificates
and the responses thereto provided by each Borrower and delivered to Agent.

 

“Permitted Acquisitions” shall mean acquisitions of the assets or Equity
Interests of another Person so long as the Agent and Lenders shall have
consented (which consent may be

 

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given or withheld, reasonably or unreasonably, in their sole and absolute
discretion). The Agent and the Lenders may consider, among other things, the
following conditions:

 

(a)                                 at the time of and after giving effect to
such acquisition, Borrowers have Undrawn Availability and ten day average
Undrawn Availability of at least $10,000,000; provided that, in the case of any
such acquisition where the total consideration paid, costs and liabilities
(including without limitation, all assumed liabilities, all deferred payments,
the initial principal amount of all Subordinated Debt issued to the seller(s)
and the value of any other stock or assets transferred, assigned or encumbered
with respect to such acquisitions, but excluding all Earn-Out Indebtedness)
equals or exceeds $40,000,000, Borrowers must have Undrawn Availability and ten
day average Undrawn Availability of not less than the Undrawn Availability
Increased Minimum Amount;

 

(b)                                 the aggregate amount of all Revolving
Advance(s) requested by Borrowers hereunder and balance sheet cash of Borrowers
used to pay any portion of the cash consideration for and transactions costs
paid by Borrowers in connection with the closing of any such acquisition shall
not exceed $15,000,000 with respect to any particular acquisition or $40,000,000
in the aggregate for all such acquisitions throughout the Term,

 

(c)                                  no Earn-Out Indebtedness shall be incurred
by any Borrower and/or such acquired company in connection with such acquisition
other than Permitted Earn-Out Obligations;

 

(d)                                 with respect to the acquisition of Equity
Interests, (i) UniTek Parent and/or one or more of the other Borrowers that are
100% wholly-owned direct or indirect Subsidiaries of UniTek Parent shall be
acquiring not less than one hundred percent (100%) of the Equity Interests of
such acquired company (excluding any directors’ qualifying shares required
pursuant to applicable law), (ii) such acquired company shall either (x) have a
positive EBITDA (the components of which are calculated in accordance with GAAP)
for the period of four fiscal quarters ending with the fiscal quarter most
recently ended prior to such acquisition or (y) be projected by Borrowers to
have positive EBITDA (the components of which are calculated in accordance with
GAAP) for the period of four fiscal quarters following such acquisition as
demonstrated by written projections provided by Borrowers to Agent at least
fifteen (15) Business Days prior to such acquisition that have been prepared by
the Chief Financial Officer of Borrowers and certified by such Chief Financial
Officer as having been prepared based on underlying assumption which provide a
reasonable basis for the projections contained therein and reflecting Borrowers’
judgment based on then-present circumstances of the most likely set of
conditions and course of action for the projected period for such company (after
giving pro forma effect to the acquisition), which such assumptions are judged
to be reasonable by Agent in its discretion; provided that, notwithstanding
anything to the contrary provided for in this clause (ii), under no
circumstances shall an acquisition qualify as a Permitted Acquisition if the
acquired company EBITDA (the components of which are calculated in accordance
with GAAP) for the period of four fiscal quarters ending with the fiscal quarter
most recently ended prior to such acquisition shall be worse than ($5,000,000)
(i.e., negative $5,000,000), and (iii) Borrowers shall comply with the
provisions of Section 7.12 with respect to such acquired company and all of its
Subsidiaries;

 

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(e)                                  the acquired company or property is used or
useful in the same or a similar line of business as the Borrowers were engaged
in on the Closing Date (or any reasonable extensions or expansions thereof);

 

(f)                                   Agent shall have received a first-priority
(subject only to Permitted Encumbrances in favor of Term Debt Agent subject to
the Intercreditor Agreement in the case of any Term Debt Priority Collateral and
to any other Permitted Encumbrances which by operation of law (including the
priority granted under the Uniform Commercial Code to any purchase money
security interests that are Permitted Encumbrances) have senior priority)
security interest and Lien in all acquired assets or Equity Interests, subject
to documentation satisfactory to Agent;

 

(g)                                  the board of directors (or other comparable
governing body) of such company shall have duly approved the transaction;

 

(h)                                 the Borrowers shall have delivered to Agent
at least five (5) Business Days prior to such acquisition (i) a pro forma
balance sheet and pro forma financial statements and a Compliance Certificate
demonstrating that the Borrowers would be in compliance with the financial
covenants set forth in Section 6.5 and the Permitted Acquisitions Leverage Ratio
Requirement on a pro forma basis after giving effect to such acquisition as if
such acquisition had occurred on the first day of the most recent period of four
consecutive fiscal quarters in respect of which the financial covenants have
been tested in accordance with Section 6.5 (as to any Permitted Acquisition, the
“Permitted Acquisition Measurement Period”) and stating that all the conditions
provided for under this definition will be satisfied upon consummation of such
acquisition, and (ii) financial statements of the acquired entity for the most
recent fiscal year then ended, which such financial statements shall be audited
by an independent certified public accounting firm unless Agent in its sole
discretion exercised in its Permitted Discretion shall agree otherwise, plus any
interim financial statements for such acquired entity that may be available, all
in form and substance reasonably acceptable to Agent. For the avoidance of any
doubt, for purposes of this paragraph (h) and the pro forma calculation of the
financial covenants set forth in Section 6.5 and the Permitted Acquisitions
Leverage Ratio Requirement provided for herein, all calculations of Consolidated
EBITDA shall be made without giving effect to the provisions of the last two
sentences of the definition of Consolidated EBITDA or clause (a) of the
definition of Consolidated Net Income;

 

(i)                                     no assets acquired in any such
transaction(s) shall be included in the Formula Amount until Agent has received
a field examination and/or appraisal of such assets, in form and substance
acceptable to Agent;

 

(j)                                    no Default or Event of Default shall have
occurred or will occur after giving pro forma effect to such acquisition; and

 

(k)                                 all transactions in connection with such
acquisition shall be consummated, in all material respects, in accordance with
all applicable laws and in conformity with all applicable governmental
authorization For the purposes of calculating Undrawn Availability under this
definition, any assets being acquired in the proposed acquisition shall be
included in the Formula Amount on the date of closing so long as Agent has
received an audit or appraisal of

 

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such assets as set forth in clause (i) above and so long as such assets satisfy
the applicable eligibility criteria.

 

“Permitted Acquisitions Leverage Ratio Requirement” shall mean, in connection
with any Permitted Acquisition, that Borrowers shall have a pro forma
Consolidated Leverage Ratio (as defined below) as at the last day of any
applicable Permitted Acquisition Measurement Period (as defined in clause (h) of
the definition of Permitted Acquisitions) no greater than the ratio set forth
below opposite the last fiscal quarter in such Permitted Acquisition Measurement
Period:

 

Fiscal Quarter

 

Consolidated Leverage Ratio

 

 

 

 

 

September 30, 2013

 

3.25:1.00

 

December 31, 2013

 

3.25:1.00

 

March 31, 2014

 

3.25:1.00

 

June 30, 2014

 

3.25:1.00

 

September 30, 2014

 

3.25:1.00

 

December 31, 2014

 

3.25:1.00

 

March 31, 2015

 

3.25:1.00

 

June 30, 2015

 

3.25:1.00

 

September 30, 2015

 

3.25:1.00

 

December 31, 2015

 

3.25:1.00

 

March 31, 2016

 

3.00:1.00

 

June 30, 2016

 

3.00:1.00

 

September 30, 2016

 

3.00:1.00

 

December 31, 2016

 

3.00:1.00

 

March 31, 2017

 

3.00:1.00

 

June 30, 2017

 

3.00:1.00

 

September 30, 2017

 

3.00:1.00

 

December 31, 2017

 

3.00:1.00

 

March 31, 2018

 

3.00:1.00

 

 

For purposes of this definition,(i) “Consolidated Leverage Ratio” shall mean as
at the last day of any period, the ratio of (a) Consolidated Total Debt on such
day to (b) Consolidated EBITDA for such period; all calculated for Borrowers on
a Consolidated Basis in accordance with GAAP, and (ii) “Consolidated Total Debt”
shall mean, at any date, the aggregate principal amount of all Indebtedness
(excluding any Earn-Out Indebtedness obligations the payment of which are, as of
such date, subject to the satisfaction and/or occurrence of any conditions other
than the passage of time or giving of notice) at such date calculated for
Borrowers on a Consolidated Basis in accordance with GAAP.

 

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

 

“Permitted Earn-Out Obligations” shall mean, collectively, obligations under any
Earn-Out Indebtedness which are (i) incurred in connection with a Permitted
Acquisition, and (ii) are subject to terms pursuant to which payments in respect
thereof may accrue but shall not be payable in cash either (x) during the period
of the continuance of any Event of Default or (y)

 

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during any period when Borrowers shall have Undrawn Availability and five day
average Undrawn Availability of less than the Undrawn Availability Minimum
Amount either immediately prior to or after giving effect to any such payment,
provided that such payments may be payable in cash if and when all such periods
have ended.

 

“Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit
of Agent and Lenders; (b) Liens for taxes, assessments or other governmental
charges not delinquent or being Properly Contested; (c) [RESERVED]; (d) deposits
or pledges to secure obligations under worker’s compensation, social security or
similar laws, or under unemployment insurance; (e) deposits or pledges to secure
bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of like nature arising in the Ordinary Course of Business; (f)
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; (g) mechanics’, workers’, materialmen’s or
other like Liens arising in the Ordinary Course of Business with respect to
obligations which are not more than 30 days overdue or which are being Properly
Contested; (h) Liens placed upon fixed assets hereafter acquired to secure
Indebtedness incurred to pay any portion of the purchase price thereof, provided
that any such lien shall not encumber any other property of any Borrower and
such Indebtedness shall be permitted under the terms of Section 7.8(ii); (i)
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;
(j) 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; (k) Liens disclosed on Schedule 1.2
provided that such Liens shall secure only those obligations which they secure
on the Closing Date and any refinancing thereof 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, (l) Liens on the Collateral
securing the Term Debt Indebtedness and any Permitted Refinancing thereof to the
extent and only so long as such Liens are subject to and in accordance with the
terms and conditions of the Intercreditor Agreement, (m) Liens in favor of
DIRECTV on the DIRECTV Inventory created under the DIRECTV/DirectSat Contract,
(n) deposits or pledges to secure obligations under Letters of Credit - Existing
up to one hundred and five percent (105%) of the face amount of the Letter of
Credit - Existing and Letters of Credit - Non-AIC being secured; provided that
any such deposits or pledges shall be with the proceeds of Advances hereunder;
and (o) Liens on fixed assets of Borrowers securing Indebtedness permitted under
Section 7.8(viii) hereof, provided that under no circumstances shall any such
Indebtedness be secured by any Liens on any Receivables, Inventory, proceeds of
Receivables or Inventory, deposit accounts or any other ABL Priority Collateral
belonging to such Person being acquired and/or to any Borrower or Guarantor.

 

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“Permitted Foreign Operating Subsidiaries” shall mean, collectively, WireComm
Systems (2008), Inc., a corporation organized under the laws of the province of
Ontario, Canada, and UniTek Canada, Inc., a corporation organized under the laws
of the province of Ontario, Canada.

 

“Permitted Refinancing” shall mean any refinancing of the Term Debt Indebtedness
incurred in accordance with the Intercreditor Agreement and the restrictions of
clause (iv) of Section 7.8, provided that, (i) the amendments to the Term Debt
Documents pursuant to and in connection with such refinancing shall be in
compliance with the provisions of Section 7.22 and (ii) the lenders providing
such refinancing and/or agent or representative for such lenders have
acknowledged in writing (in form and substance reasonably satisfactory to Agent)
that such lenders and such agent/representative and all Liens securing such
refinancing shall be bound by and subject to the terms and conditions of the
Intercreditor Agreement.

 

“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).

 

“Pinnacle Acquisition” shall mean that certain asset acquisition by one or more
of the Borrowers pursuant to that certain Asset Purchase Agreement dated as of
March 30, 2011 between UniTek Parent as buyer and Pinnacle Wireless, Inc. and
certain others as sellers.

 

“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), maintained
for employees of any Borrower or any member of the Controlled Group or any such
Plan to which any Borrower or any member of the Controlled Group is required to
contribute.

 

“Pledge Agreement” shall mean, collectively, (i) that certain Collateral Pledge
Agreement executed by UniTek Parent, UniTek Acquisition and UniTek USA in favor
of Agent dated as of the Closing Date and (ii) any other pledge agreements
executed subsequent to the Closing Date by any other Person to secure the
Obligations, as any such agreement may be amended, modified, supplemented,
restated or replaced from time to time.

 

“PNC” means PNC Bank, National Association.

 

“Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a)
hereof.

 

“Pro Forma Financial Statements” shall have the meaning set forth in Section
5.5(b) hereof.

 

“Project Receivables” shall mean all Receivables of Borrowers arising out of the
sale of goods and/or provision of services which represent only a portion or
percentage of the goods and/or services to be sold and provided to the
applicable Customer pursuant to the applicable purchase order or contract
between such Borrower and such Customer and which have not yet been billed and
invoiced to the applicable Customer.

 

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“Project Receivables Advance Rate” shall have the meaning set forth in Section
2.1(a)(y) hereof.

 

“Properly Contested” shall mean, in the case of any Indebtedness or Lien, as
applicable, of any Person (including any taxes) that is not paid as and when due
or payable by reason of such Person’s bona fide dispute concerning its liability
to pay same or concerning the amount thereof: (i) such Indebtedness or Lien, as
applicable, is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) such Person has established
appropriate reserves as shall be required in conformity with GAAP; (iii) the
non-payment of such Indebtedness will not have a Material Adverse Effect and
will not result in the forfeiture of any assets of such Person; (iv) no Lien is
imposed upon any of such Person’s assets with respect to such Indebtedness
unless such Lien 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 enforcement of such Lien is
stayed during the period prior to the final resolution or disposition of such
dispute; (v) 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; and
(vi) if such contest is abandoned, settled or determined adversely (in whole or
in part) to such Person, such Person forthwith pays such Indebtedness and all
penalties, interest and other amounts due in connection therewith.

 

“Projections” shall have the meaning set forth in Section 5.5(b) 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
Eurodollar 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.

 

“Ratable Share” shall mean the proportion that a Lender’s Revolving Commitment
Percentage bears to the Revolving Commitment Percentages, provided that in the
case of Section 2.23 when a Defaulting Lender shall exist, “Ratable Share” shall
mean the percentage of the aggregate Revolving Commitment Percentages
(disregarding any Defaulting Lender’s Revolving Commitment Percentages)
represented by such Lender’s Revolving Commitment Percentage. If the Revolving
Commitment Percentages have terminated or expired, the Ratable Share shall be
determined based upon the Revolving Commitment Percentages most recently in
effect, giving effect to any assignments.

 

“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.

 

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“Real Property” shall mean all of each Borrower’s right, title and interest in
and to the owned and leased premises identified on Schedule 4.5 hereto or which
is hereafter owned or leased by any Borrower.

 

“Receivables” shall mean and include, as to each Borrower, all of such
Borrower’s accounts, 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,
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.

 

“Reference Period” shall have the meaning set forth in the definition of
“Consolidated EBITDA.”

 

“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.

 

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

 

“Required Lenders” shall mean Lenders (other than any Defaulting Lender) having
more than fifty percent (50.0%) of (a) the sum of the aggregate amount of the
Revolving Credit Commitments of the Lenders (excluding any Defaulting Lender)
or, (b) after the termination of the Revolving Credit Commitments, the sum of
(x) the outstanding Revolving Advances and (y) the Maximum Undrawn Amount of all
outstanding Letters of Credit multiplied by the Revolving Credit 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 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 Swing Loans and Letters
of Credit.

 

“Revolving Commitment Percentage” of any Lender shall mean the Revolving
Commitment Percentage set forth below such Lender’s name on the signature page
hereof as same may be adjusted upon any assignment by or to a Lender pursuant to
Section 16.3(c) or (d) hereof or upon any Borrower Revolver Increase pursuant to
Section 2.24.

 

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“Revolving Commitment Amount” of any Lender shall mean the Revolving Commitment
Amount set forth below such Lender’s name on the signature page hereof as same
may be adjusted upon any assignment by or to a Lender pursuant to Section
16.3(c) or (d) hereof or upon any Borrower Revolver Increase pursuant to Section
2.24 in which such Lender shall participate.

 

“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof, as any such note may be amended, modified,
supplemented, restated or replaced from time to time.

 

“Revolving Lender” shall mean each Lender who has a commitment to make Revolving
Advances (or who holds any outstanding Revolving Advances) and shall include
each Person which becomes a Transferee, successor or assign of any Revolving
Lender.

 

“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
appropriate Applicable Margin plus the Alternate Base Rate and (b) with respect
to Revolving Advances that are Eurodollar Rate Loans, an interest rate per annum
equal to the sum of the appropriate Applicable Margin plus the Eurodollar Rate.

 

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

 

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

 

“Securities Act” shall mean the Securities Act of 1933, as amended. “Settlement”
shall have the meaning set forth in Section 2.4(d).

 

“Settlement Date” shall have the meaning set forth in Section 2.4(d).

 

“Skylink Acquisition” shall mean that certain asset acquisition by one or more
of the Borrowers pursuant to that certain Asset Purchase Agreement dated as of
September 14, 2012 between UniTek Parent, DirectSat, Skylink, LTD and Mr. John
Larbus.

 

“Subsidiary” of any Person shall mean 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.

 

“Subordinated Debt” shall mean, collectively, any and all unsecured Indebtedness
for borrowed money incurred by any one or more Borrowers that is subordinated in
favor of the payment in full of all Obligations on terms and conditions
(including without limitation subordination terms (including any terms regarding
the cash payment of interest) and provisions regarding enforcement standstills)
acceptable to Agent in its discretion pursuant to a subordination agreement
executed and delivered by the holders of such Indebtedness that is satisfactory
in both form and substance to Agent in its discretion.

 

“Subsidiary Stock” shall mean all of the issued and outstanding Equity Interests
of any Subsidiary owned by any Borrower; provided that Subsidiary Stock with
respect to any Foreign

 

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Subsidiary shall be limited to sixty-five percent (65%) of the voting Equity
Interest and one hundred percent (100%) of non-voting Equity Interests of such
Foreign Subsidiary.

 

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swing Loan Facility” shall mean AIC’s right and option to make Swing Loans to
the Borrower pursuant to Section 2.4 hereof in an aggregate principal amount up
to the Maximum Swing Loan Amount.

 

“Swing Loan Lender” shall mean AIC, in its capacity as Lender of the Swing
Loans.

 

“Swing Loan Note” shall mean, collectively, the promissory notes referred to in
Section 2.4(a) hereof, as any such note may be amended, modified, supplemented,
restated or replaced from time to time.

 

“Swing Loan Request” shall mean a request for Swing Loans made in accordance
with in Section 2.4(a)(i) hereof.

 

“Swing Loans” shall mean collectively Advances made by AIC to Borrowers pursuant
to Section 2.4 and 2.20(c) hereof.

 

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

 

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

 

“Term Debt Agent” shall mean Cerberus Business Finance, LLC in its capacity as
the “Administrative Agent” under the Term Debt Documents, together with its
successors and assigns in such capacity including any and all successor
“Administrative Agent(s)” appointed in accordance with the Term Debt Credit
Agreement; provided that, upon and after any Permitted Refinancing of the Term
Debt Indebtedness, the term “Term Debt Agent” shall mean, collectively (if
applicable), the administrative and collateral agent(s) and/or lender
representative(s) under such Permitted Refinancing (together with their
successors and assigns in such capacity).

 

“Term Debt Credit Agreement” shall mean that certain Credit Agreement between
UniTek Parent, Term Debt Agent and Term Debt Lenders, as it may be amended,
modified, supplemented, restated or replaced from time to time; provided that,
upon and after any Permitted Refinancing of the Term Debt Indebtedness, the term
“Term Debt Credit Agreement” shall mean the credit agreement for such
refinancing (as it may be amended, modified, supplemented, restated or replaced
from time to time).

 

“Term Debt Creditors” shall mean, collectively, the Term Debt Agent and the Term
Debt Lenders.

 

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“Term Debt Documents” shall mean, collectively, the Term Debt Credit Agreement
and all other material instruments, agreements and documents executed in
connection therewith (specifically including the Guarantee and Collateral
Agreement (as defined in the Term Debt Credit Agreement)), as each such document
may be amended, modified, supplemented, restated or replaced from time to time,
but excluding any fee letters, engagement letters and similar agreements;
provided that, upon and after any Permitted Refinancing of the Term Debt
Indebtedness, the term “Term Debt Documents” shall mean the credit agreement for
such refinancing and all such other material instruments, agreements and
documents executed in connection therewith (as each such document may be
amended, modified, supplemented, restated or replaced from time to time).

 

“Term Debt Lenders” shall mean, collectively, each financial institution or
other Person that is a “Lender” under the Term Debt Documents and each other
Person to whom any “Obligation” (as defined in the Guarantee and Collateral
Agreement referred to in the Term Debt Credit Agreement) is owed, together with
the successors and assigns of each of them; provided that, upon and after any
Permitted Refinancing of the Term Debt Indebtedness, the term “Term Debt
Lenders” shall mean, collectively, the lenders providing such refinancing
(together with their successors and assigns in such capacity).

 

“Term Debt Indebtedness” shall mean the Indebtedness and other obligations and
liabilities of any Borrower (including guaranty Indebtedness and guarantee
obligations, reimbursement obligations, fees, costs, indemnification obligations
and post-petition amounts, whether or not allowed) evidenced by and/or arising
under the Term Debt Documents; provided that, upon and after any Permitted
Refinancing of such Indebtedness and other obligations and liabilities, the term
“Term Debt Indebtedness” shall mean such Indebtedness and other obligations and
liabilities as so refinanced.

 

“Term Debt Obligations Payment Date” shall have the meaning given to such term
in the Intercreditor Agreement.

 

“Term Debt Payments” shall mean and include all cash actually expended to make
payments of principal and interest on the Term Debt Indebtedness.

 

“Term Debt Priority Collateral” shall have the meaning given to such term in the
Intercreditor Agreement.

 

“Termination Event” shall mean: (i) a Reportable Event with respect to any Plan;
(ii) 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; (iii) the providing of notice of intent
to terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan; (v)
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; or (vi) 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.

 

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“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.

 

“Trading with the Enemy Act” shall mean the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any enabling legislation or executive order relating thereto.

 

“Transactions” shall have the meaning set forth in Section 5.5 hereof.

 

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

 

“Unbilled Receivables Advance Rate” shall have the meaning set forth in Section
2.1(a)(y) 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 (b) the sum of (i) the outstanding amount of Revolving Advances
and Swing Loans plus (ii) all amounts due and owing to any Borrower’s trade
creditors which are outstanding sixty (60) days past their due date (excluding
retentions payable to subcontractors and held pursuant to the terms of the
contract or agreement with such subcontractor or amounts withheld due to
disputes with vendors as to their performance), plus (iii) fees and expenses for
which Borrowers are liable but which have not been paid or charged to Borrowers’
Account.

 

“Undrawn Availability Increased Minimum Amount” shall mean, as of any date, an
amount equal to twenty-six and two-thirds percent (26.66%) of the Maximum
Revolving Advance Amount as in effect on such date.

 

“Undrawn Availability Minimum Amount” shall mean, as of any date, an amount
equal to twenty percent (20%) of the Maximum Revolving Advance Amount as in
effect on such date.

 

“Undrawn Collateral Availability” at a particular date shall mean an amount
equal to (a) the Formula Amount minus (b) the sum of (i) the outstanding amount
of Revolving Advances and Swing Loans plus (ii) all amounts due and owing to any
Borrower’s trade creditors which are outstanding sixty (60) days past their due
date (excluding retentions payable to subcontractors and held pursuant to the
terms of the contract or agreement with such subcontractor or amounts withheld
due to disputes with vendors as to their performance), plus (iii) fees and
expenses for which Borrowers are liable but which have not been paid or charged
to Borrowers’ Account.

 

“Unfunded Capital Expenditures” shall mean Capital Expenditures made through
Revolving Advances or out of Borrowers’ own funds other than through equity
contributed

 

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subsequent to the Closing Date or purchase money or other financing or lease
transactions permitted hereunder.

 

“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”, “commercial tort claims”, “instruments”,
“general intangibles”, “goods”, “payment intangibles”, “proceeds”, “supporting
obligations”, “securities”, “investment property”, “documents”, “deposit
accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and
“fixtures”, 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. 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 or all Lenders, as applicable. 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,

 

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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 had engaged in good faith and
diligent performance of his 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.

 

1.5                               Accounting Change. In the event that any
“Accounting Change” (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, negative covenants,
standards or terms in this Agreement, then Borrowers and the Agent agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating Borrower’s financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made. Until
such time as such an amendment shall have been executed and delivered by
Borrowers, the Agent and the Required Lenders, all financial covenants, negative
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. “Accounting
Changes” refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

 

II.                                   REVOLVING CREDIT AND SWING LOAN
FACILITIES.

 

2.1                               Revolving Advances.

 

(a)                                 Amount of Revolving Advances. Subject to the
terms and conditions set forth in this Agreement including Sections 2.1(b) and
relying on the representations and warranties herein set forth, each Revolving
Lender, severally and not jointly, will make Revolving Advances to Borrowers in
aggregate amounts outstanding at any time equal to such Revolving Lender’s
Revolving Commitment Percentage of the lesser of (x) the Maximum Revolving
Advance Amount less the aggregate Maximum Undrawn Amount of all outstanding
Letters of Credit and the aggregate principal balance of all outstanding Swing
Loans or (y) an amount equal to the sum of:

 

(i)                                     The sum of (x) up to eighty-five (85%),
subject to the provisions of Section 2.1(c) hereof (“Billed Receivables Advance
Rate”), of Eligible Receivables, plus (y) the

 

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lesser of (A) up to eighty percent (80%), subject to the provisions of Section
2.1(c) hereof (“Project Receivables Advance Rate”) of Eligible Project
Receivables or (B) the Eligible Project Receivables Sublimit, plus (z) the
lesser of (A) up to eighty percent (80%), subject to the provisions of Section
2.1(c) hereof (“Unbilled Receivables Advance Rate”, and together with the Billed
Receivables Advance Rate and the Project Receivables Advance Rate, collectively,
the “Advance Rates”), of Eligible Unbilled Receivables or (B) the Eligible
Unbilled Receivables Sublimit; provided that, notwithstanding anything to the
contrary provided for in the foregoing or in any other provision of this
Agreement, the sum of the amount under the foregoing clauses (y) and (z) shall
not under any circumstances exceed an amount equal to (I) the Eligible Project
Receivables Sublimit plus (II) the Eligible Unbilled Receivables Sublimit, 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, plus

 

(iv)                              an amount up to the Out-of-Formula Loans
subject to the provisions of Section 16.2.

 

The amount derived from the sum of (x) Sections 2.1(a)(y)(i) minus (y) Section
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).

 

(b)                                 Discretionary Rights. The Advance Rates may
be increased or decreased by Agent at any time and from time to time in the
exercise of its Permitted Discretion; provided that, Agent shall give Borrowing
Agent three (3) days prior written notice of its intention to decrease the
Advance Rates. 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                               Procedure for Requesting Revolving Advances;
Procedures for Selection of Applicable Interest Rates

 

(a)                                 Should any amount required to be paid as
interest hereunder, or as fees or other charges, costs or expenses under this
Agreement or any Other Document, or with respect to any other Obligation, become
due and payable, this, same shall be deemed a request for a Revolving Advance
maintained as a Domestic Rate Loan as of the date such payment is due and
payable, in the amount required to pay in full such interest, fee, charge,
costs, expenses or Obligation under this Agreement or any other agreement with
Agent or Lenders, and such request shall be irrevocable, and such deemed request
shall be deemed binding on Borrowers and Revolving Lenders shall be obliged to
fund their respective Revolving Commitment Percentages of the same regardless of
whether any of the conditions under Sections 8.2 or 2.2 shall not be

 

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satisfied at such time or whether the revolving credit commitments of the
Revolving Lenders hereunder shall have otherwise been terminated at such time.

 

(b)                                 In the event any Borrower desires to obtain
a Eurodollar Rate Loan or a Domestic Rate Loan for any Advance (other than a
Swing Loan), Borrowing Agent shall give Agent written notice by no later than
10:00 a.m. on the day which is four (4) Business Days prior to the date such
Eurodollar Rate Loan or Domestic 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 on the date of such Advance to be borrowed, which
amount shall be in a minimum amount of $500,000 and in integral multiples of
$100,000 thereafter, and (iii) if such Advance is a Eurodollar Rate Loan, the
duration of the first Interest Period therefor. Interest Periods for Eurodollar
Rate Loans shall be for one, two or three months; provided, 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 Eurodollar 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 Eurodollar Rate Loan, including those which are converted from a
Domestic Rate Loan under Section 2.2(d), there shall not be outstanding more
than five (5) Eurodollar Rate Loans, in the aggregate.

 

(c)                                  Each Interest Period of a Eurodollar Rate
Loan shall commence on the date such Eurodollar 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.

 

Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar 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(d), 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 four (4) Business Days
prior to the last day of the then current Interest Period applicable to such
Eurodollar 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 to a Domestic Rate Loan subject to Section 2.2(d) hereof.

 

(d)                                 Provided that no 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 Eurodollar 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 Eurodollar Rate Loan shall be made only on the last
Business Day of the then current Interest Period applicable to such Eurodollar
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
four (4) 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 Eurodollar Rate
Loan, or (ii) on the day which is four (4) Business Days prior to the date on
which such conversion is to occur with respect to a conversion from a Eurodollar
Rate Loan to a Domestic

 

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Rate Loan, specifying, in each case, the date of such conversion, the loans to
be converted and if the conversion is from a Domestic Rate Loan to any other
type of loan, the duration of the first Interest Period therefor.

 

(e)                                  At its option and upon written notice given
prior to 10:00 a.m. at least four (4) Business Days prior to the date of such
prepayment, any Borrower may prepay the Eurodollar 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 Eurodollar Rate Loans and the amount of such
prepayment. In the event that any prepayment of a Eurodollar 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(f) hereof.

 

(f)                                   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 Eurodollar Rate Loan or failure by any Borrower
to complete a borrowing of, a prepayment of or conversion of or to a Eurodollar
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 Eurodollar 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.

 

(g)                                  Notwithstanding any other provision hereof,
if any Applicable Law, treaty, regulation or directive, or any change therein or
in the interpretation or application thereof, shall make it unlawful for any
Lender (for purposes of this subsection (g), the term “Lender” shall include any
Lender and the office or branch where any Lender or any corporation or bank
controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or
maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar
Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any
affected Eurodollar Rate Loans are then outstanding, promptly upon request from
Agent, either pay all such affected Eurodollar Rate Loans or convert such
affected Eurodollar Rate Loans into loans of another type. If any such payment
or conversion of any Eurodollar Rate Loan is made on a day that is not the last
day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers
shall pay Agent, upon Agent’s request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Rate Loan as a result of such payment or
conversion, including (but not limited to) any interest or other amounts payable
by Lenders to lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Rate Loan. 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.

 

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.
During the Term, Borrowers may use the Revolving Advances and

 

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Swing Loans by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof. 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 Section 2.2(a) hereof shall, with respect to requested
Revolving Advances to the extent Revolving Lenders make such Revolving Advances,
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, 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. The proceeds of each Swing Loan advanced by Swing Loan Lender pursuant
to Section 2.4 hereof shall 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.

 

2.4                               Swing Loans.

 

(a)                                 Subject to the terms and conditions hereof
and relying upon the representations and warranties herein set forth, and in
order to minimize the transfer of funds between Lenders and Agent for
administrative convenience, Agent, Revolving Lenders and Swing Loan Lender agree
that in order to facilitate the administration of this Agreement, Swing Loan
Lender may, at its election and option made in its sole discretion cancelable at
any time for any reason whatsoever, make swing loan advances (“Swing Loans”)
available to Borrowers as provided for in this Section 2.4 at any time or from
time to time after the date hereof to, but not including, the expiration of the
Term, in an aggregate principal amount up to but not in excess of the Maximum
Swing Loan Advance Amount, provided that the outstanding aggregate principal
amount of Swing Loans and the Revolving Advances at any one time outstanding
shall not exceed an amount equal to the lesser of (i) the Maximum Revolving
Advance Amount less the Maximum Undrawn Amount of all outstanding Letters of
Credit or (ii) the Formula Amount. All Swing Loans shall be Domestic Rate Loans
only. Borrowers may borrow, repay and reborrow Swing Loans and Swing Loan Lender
may make Swing Loans as provided in this Section 2.4 during the period between
Settlement Dates. All Swing Loans shall be evidenced by a secured promissory
note (the “Swing Loan Note”) substantially in the form attached hereto as
Exhibit 2.4(a). Swing Loan Lender’s agreement to make Swing Loans under this
Agreement is cancelable at any time for any reason whatsoever and the making of
Swing Loans by Swing Loan Lender from time to time shall not create any duty or
obligation, or establish any course of conduct, pursuant to which Swing Loan
Lender shall thereafter be obligated to make Swing Loans in the future.

 

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

 

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in Section 8.2 of this Agreement have not been satisfied or the commitments of
Revolving Lenders to make Revolving Advances hereunder have been terminated for
any reasons.

 

(c)                                  Upon the making of a Swing Loan Advance
(whether before or after the occurrence of a Default or Event of Default and
regardless of whether a Settlement has been requested with respect to such Swing
Loan), each Revolving Lender shall be deemed, without further action by any
party hereto, to have unconditionally and irrevocably purchased from Swing Loan
Lender, without recourse or warranty, an undivided interest and participation in
such Swing Loan in proportion to its Revolving Commitment Percentage. Swing Loan
Lender or Agent may, at any time, require Revolving Lenders to fund their
participations. From and after the date, if any, on which any Revolving Lender
is required to fund, and funds, its participation in any Swing Loans purchased
hereunder, Agent shall promptly distribute to such Revolving Lender its
Revolving Credit Percentage of all payments of principal and interest and all
proceeds of Collateral received by Agent in respect of such Swing Loan; provided
that no Revolving Lender shall be obligated in any event to make Revolving
Advances in an amount in excess of its Revolving Commitment Amount minus its
Ratable Share of the Maximum Undrawn Amount of all outstanding Letters of
Credit.

 

Agent, on behalf of Swing Loan Lender, shall demand settlement (a “Settlement”)
with Revolving Lenders on at least a weekly basis or on any more frequent date
that Agent elects or Swing Loans Lender at its option exercisable for any reason
whatsoever may request, by notifying Revolving Lenders of such requested
Settlement by facsimile, telephone or electronic transmission no later than
12:00 Noon on the date of such requested Settlement (the “Settlement Date”).
Each Revolving Lender shall transfer the amount of such Revolving Lender’s
Ratable Share of the outstanding principal amount of the applicable Swing Loan
(plus, if Swing Loan Lender so requests, accrued interest thereon) with respect
to which Settlement is requested to Agent, to such account of Agent as Agent may
designate, not later than 3:00 p.m. on such Settlement Date. Revolving Advances
made pursuant to the preceding sentences shall bear interest at the interest
rate applicable to Revolving Advances consisting of Domestic Rate Loans and
shall be deemed to have been properly requested in accordance with Section
2.2(a) without regard to any of the requirements of that provision; provided
that , Settlements may occur during the existence of a Default or Event of
Default and whether or not the applicable conditions precedent set forth in
Section 8.2 have then been satisfied or the revolving credit commitments of the
Revolving Lenders hereunder shall have otherwise been terminated at such time.
Such amounts transferred to Agent shall be applied against the Swing Loans and
shall constitute Revolving Advances of such Revolving Lenders. If any such
amount is not transferred to Agent by any Revolving Lender on such Settlement
Date, Swing Loan Lender shall be entitled to recover such amount on demand
together with interest thereon as specified in Section 2.20(c)(ii).

 

2.5                               Maximum Advances. The aggregate balance of
Revolving Advances plus Swing Loans 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 plus the Additional Borrowing Base Amount.

 

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2.6                               Repayment of Advances.

 

(a)                                 The Revolving Advances and Swing Loans shall
be due and payable in full on the last day of the Term subject to earlier
prepayment and to acceleration upon an Event of Default as herein provided and,
in the case of Swing Loans, subject to Section 2.20(c)(iv).

 

(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. In consideration of Agent’s agreement to conditionally credit
Borrowers’ Account as of the next Business Day following Agent’s receipt of
those items of payment, each Borrower agrees that, in computing the charges
under this Agreement, all items of payment shall be deemed applied by Agent on
account of the Obligations one (1) Business Day after (i) the Business Day
following Agent’s receipt of such payments via wire transfer or electronic
depository check or (ii) in the case of payments received by Agent in any other
form, the Business Day such payment constitutes good funds in Agent’s account.
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 to
Agent unpaid.

 

(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 for the account of Swing Loan Lender with
respect to the Swing Loans and for the ratable accounts of the Lenders with
respect to the Revolving Advances not later than 1:00 P.M. on the due date
therefor in lawful money of the United States of America in federal funds or
other funds immediately available to Agent. Agent shall have the right to
effectuate payment on any and all Obligations due and owing hereunder by
charging Borrowers’ Account or by making Advances as provided in Section 2.2
hereof.

 

(d)                                 Borrowers shall pay principal, interest, and
all other amounts payable hereunder, or under any related agreement, without any
deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.

 

2.7                               Repayment of Excess Advances. The aggregate
balance of Revolving Advances, Swing Loans and/or Advances taken as a whole
outstanding at any time in excess of the maximum amount of Revolving Advances,
Swing Loans and/or Advances (as applicable) permitted hereunder 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 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 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

 

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respect to the loan 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. Subject to the terms and
conditions hereof, Issuer may issue or cause the issuance of standby letters of
credit (the “Letters of Credit - AIC”), or in the absence of Issuer issuing or
causing the issuance of, the Borrowing Agent may seek the issuance from a third
party reasonably acceptable to Agent of one or more standby letters of credit
(the “Letters of Credit - Non-AIC”) and shall be deemed to have sought the
issuance of letters of credit from a third party acceptable to Agent with
respect to those letters of credit listed on Schedule 2.9 (the “Letters of
Credit - Existing” and, together with the Letters of Credit - AIC and Letters of
Credit - Non-AIC, the “Letters of Credit”) for the account of any Borrower. The
Maximum Undrawn Amount of outstanding Letters of Credit shall not exceed in the
aggregate at any time the Letter of Credit Sublimit. The Maximum Undrawn Amount
of outstanding Letters of Credit - AIC may not cause the sum of (i) the
outstanding Revolving Advances and Swing Loans plus (ii) the Maximum Undrawn
Amount of all outstanding Letters of Credit to exceed the lesser of (x) the
Maximum Revolving Advance Amount or (y) the sum of the Formula Amount
(calculated without the deduction otherwise provided for under Section
2.1(a)(y)(iii)) plus the Additional Borrowing Base Amount. All disbursements or
payments related to Letters of Credit - AIC shall be deemed to be Domestic Rate
Loans consisting of Revolving Advances and shall bear interest at the applicable
Contract Rate; Letters of Credit - AIC 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).

 

2.10                        Issuance of Letters of Credit.

 

(a)                                 Borrowing Agent, on behalf of Borrowers, may
request Issuer to issue or cause the issuance of a Letter of Credit - AIC by
delivering to Agent at the Payment Office and to Issuer, prior to 10:00 a.m., at
least three (3) Business Days prior to the proposed date of issuance, 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 and Issuer may reasonably
request. Borrowing Agent, on behalf of Borrowers, also has the right to give
instructions and make agreements with respect to any application, any applicable
letter of credit and security agreement, any applicable letter of credit
reimbursement agreement and/or any other applicable agreement, any letter of
credit and the disposition of documents, disposition of any unutilized funds,
and to agree with Agent and Issuer upon any amendment, extension or renewal of
any Letter of Credit. 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, other written demands for
payment, or acceptances of usance drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than twelve (12) months
after such Letter of Credit’s date of issuance and in no event later than the
last day of the Term. Each standby Letter of Credit shall be subject either to
the Uniform

 

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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 (ISP98-International Chamber of
Commerce Publication Number 590) (the “ISP98 Rules”), and 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.

 

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

 

(d)                                 Borrowing Agent shall provide Agent with not
less than five (5) Business Days prior written notice of its request to obtain
one more Letters of Credit - Non-AIC and shall provide Agent with all reasonably
requested documentation relating to each such Letter of Credit and the
collateral to be posted to secure such Letter of Credit.

 

2.11                        Requirements For Issuance of Letters of Credit.

 

(a)                                 Borrowing Agent shall authorize and direct
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 - AIC,
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 - AIC and to accept and rely upon Agent’s
instructions and agreements with respect to all matters arising in connection
with the Letter of Credit - AIC, the application therefor or any acceptance
thereof.

 

(b)                                 In connection with all Letters of Credit -
AIC 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 and be continuing, (i) to
sign and/or endorse such Borrower’s name upon any warehouse or other receipts,
letter of credit applications 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 or Issuer’s name, 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 Issuer nor its attorneys
will be liable for any acts or omissions nor for any error of judgment or
mistakes of fact or law, except for Issuer’s or its attorney’s willful
misconduct or gross negligence. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit-AIC remain outstanding.

 

2.12                        Disbursements, Reimbursement.

 

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

 

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(b)                                 In the event of any request for a drawing
under a Letter of Credit - AIC by the beneficiary or transferee thereof, Issuer
will promptly notify 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 - AIC (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 each Revolving
Lender thereof, and Borrowers shall be deemed to have requested that a Revolving
Advance maintained as a Domestic Rate Loan be made by the Revolving Lenders to
be disbursed on the Drawing Date under such Letter of Credit, and Lenders shall
be unconditionally obligated to fund such Revolving Advance (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.

 

(c)                                  Each Revolving Lender shall upon any notice
pursuant to Section 2.12(b) make available to Issuer an amount in immediately
available funds equal to its Revolving Commitment Percentage of the amount of
the drawing, whereupon the participating Revolving 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 Revolving Lender so
notified fails to make available to Issuer the amount of such Revolving Lender’s
Revolving Commitment Percentage of such amount by no later than 2:00 p.m. on the
Drawing Date, then interest shall accrue on such Revolving Lender’s obligation
to make such payment, from the Drawing Date to the date on which such Revolving
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. Issuer will promptly give notice of the occurrence of the Drawing
Date, but failure of Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Revolving Lender from its obligation under this Section
2.12(c), provided that such Revolving 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 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 Revolving Lender’s payment to Agent pursuant to
Section 2.12(c) shall be deemed to be a payment in respect of its participation

 

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in such Letter of Credit Borrowing and shall constitute a “Participation
Advance” from such Revolving Lender in satisfaction of its Participation
Commitment under this Section 2.12.

 

(e)                                  Each Revolving Lender’s Participation
Commitment 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 the 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
its account of immediately available funds from Borrowers (i) in reimbursement
of any payment made by the Issuer as Issuer under the Letter of Credit - AIC
with respect to which any Revolving 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 - AIC, Agent will pay to each Revolving Lender, in
the same funds as those received by Agent, the amount of such Revolving Lender’s
Revolving Commitment Percentage of such funds, except Agent shall retain the
amount of the Revolving Commitment Percentage of such funds of any Revolving
Lender that did not make a Participation Advance in respect of such payment by
Agent.

 

(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 - AIC or interest or fee thereon, each
Revolving Lender shall, on demand of Agent, forthwith return to Issuer or Agent
the amount of its Revolving Commitment Percentage of any amounts so returned by
Issuer or Agent plus interest at the Federal Funds Effective Rate.

 

2.14                        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 - AIC 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 the 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
- AIC 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 - AIC have been delivered and that they comply on their face with the
requirements of such Letter of Credit - AIC and that any other drawing condition
appearing on the face of such Letter of Credit - AIC has been satisfied in the
manner so set forth.

 

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2.16                        Nature of Participation and Reimbursement
Obligations. Each Revolving Lender’s obligation in accordance with this
Agreement to make the Revolving Advances or Participation Advances as a result
of a drawing under a Letter of Credit - AIC, and the obligations of Borrowers to
reimburse Issuer upon a draw under a Letter of Credit - AIC, 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 may have against Issuer, Agent, any
Borrower or any other Person, or which Borrower may have against Agent, any
Lender or any other Person, or 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 Revolving Lenders to make
Participation Advances under Section 2.12;

 

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

 

(iv)                              any claim of breach of warranty that might be
made by Borrower or any Revolving Lender against the beneficiary of a Letter of
Credit - AIC, or the existence of any claim, set-off, recoupment, counterclaim,
cross-claim, defense or other right which any Borrower or any Revolving Lender
may have at any time against a beneficiary, any successor beneficiary or any
transferee of any Letter of Credit - AIC or the proceeds thereof (or any Persons
for whom any such transferee may be acting), Issuer, Agent or any Revolving
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 - AIC 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 - AIC, or any fraud or alleged fraud in
connection with any Letter of Credit - AIC, or the transport of any property or
provisions of services relating to a Letter of Credit - AIC, 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 -
AIC 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
- AIC (provided that the foregoing shall not excuse Issuer from any obligation
under the terms of any applicable Letter of Credit - AIC to require the
presentation of documents that on their face appear to satisfy any applicable
requirements for drawing under such Letter of Credit - AIC prior to honoring or
paying any such draw);

 

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

 

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

 

(ix)                              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;

 

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

 

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

 

2.17                        Indemnity. In addition to amounts payable as
provided in Section 16.5, each Borrower hereby agrees to protect, indemnify, pay
and save harmless Agent and any of Agent’s Affiliates that have issued a Letter
of Credit - AIC from and against any and all claims, demands, liabilities,
damages, taxes, penalties, interest, judgments, losses, costs, charges and
expenses (including reasonable fees, expenses and disbursements of counsel and
allocated costs of internal counsel) which the Agent or any of Agent’s
Affiliates may incur or be subject to as a consequence, direct or indirect, of
the issuance of any Letter of Credit - AIC, other than as a result of (a) the
gross negligence or willful misconduct of the Agent as determined by a final and
non- appealable judgment of a court of competent jurisdiction or (b) the
wrongful dishonor by the Agent or any of Agent’s Affiliates of a proper demand
for payment made under any Letter of Credit - AIC, except if such dishonor
resulted from any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto Governmental Body (all such acts or omissions
herein called “Governmental Acts”).

 

2.18                        Liability for Acts and Omissions. 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 respective 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

 

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fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if Issuer 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.

 

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 - AIC; (iii) may honor a
previously dishonored presentation under a Letter of Credit - AIC, 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 - AIC; (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 carrier or any similar document (each an “Order”) and honor any
drawing in connection with any Letter of Credit - AIC that is the subject of
such Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit - AIC fail to conform in any way with such
Letter of Credit - AIC.

 

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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-AIC issued by it or any documents and certificates
delivered thereunder, if taken or omitted in good faith and without willful
misconduct or 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 or any Lender.

 

2.19                        Additional Payments. 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 4.2, 4.4, 4.12, 4.13, 4.14 and 4.15(e) hereof, may be
charged to Borrowers’ Account as a Revolving Advance and added to the
Obligations, and Borrowers shall be deemed to have authorized such charge and
Lenders shall be obliged to fund their respective Revolving Commitment
Percentages of the same regardless of whether any of the conditions under
Sections 8.2 or 2.2 shall not be satisfied at the time such sum is expended or
whether the revolving credit commitments of the Lenders hereunder shall have
otherwise been terminated at such time.

 

2.20                        Manner of Borrowing and Payment.

 

(a)                                 Each borrowing of Revolving Advances shall
be advanced according to the applicable Ratable Shares of Revolving Lenders
(subject to the express provisions of Section 2.23). Each borrowing of a Swing
Loan shall be advanced by the Swing Loan Lender alone.

 

(b)                                 Each payment (including each prepayment) by
any Borrower on account of the principal of and interest on the Revolving
Advances, shall be applied to the Revolving Advances according to the applicable
Ratable Shares of Revolving Lenders (subject to the express provisions of
Section 2.23). Each payment by Borrowers on account of the principal and
interest on Swing Loans shall be applied to Swing Loans for the account of the
Swing Loan Lender. Except as expressly provided herein, all payments (including
prepayments) to be made by any Borrower on account of principal, interest and
fees shall be made without set off 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.

 

(c)                                  Funding of Revolving Advances.

 

(i)                                     Subject to Swing Loan Lender’s option to
fund all or any portion of any Revolving Advance as a Swing Loan under Section
2.4, promptly after receipt by Agent of a request for a Revolving Advance
pursuant to Section 2.2(a), Agent shall notify Revolving Lenders of its receipt
of such request specifying the information provided by Borrowing Agent and the
apportionment among Revolving Lenders of the requested Revolving Advance as
determined by Agent. Each Revolving Lender shall remit the principal amount of
each Revolving Advance to Agent such that Agent is able to, and Agent shall, to
the extent Revolving Lenders have made funds available to it for such purpose
and subject to Section 8.2, fund such Revolving Advance to Borrower in U.S.
Dollars and immediately available funds in accordance with Section 2.3 prior to
1:00 p.m., on the applicable borrowing date; provided that if any Revolving
Lender fails to remit such funds to Agent in a timely manner, Agent may elect in
its sole discretion to fund with its own funds the Revolving Advance of such
Revolving Lender on

 

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such borrowing date, and such Lender shall be subject to the repayment
obligation in Section 2.20(c)(ii).

 

(ii)                                  Unless Agent shall have received notice
from a Revolving Lender prior to the proposed date of any Revolving Advance that
such Revolving Lender will not make available to Agent such Lender’s Revolving
Commitment Percentage of such Revolving Advance, Agent may assume that such
Revolving Lender has made such share available on such date in accordance with
Section 2.20(c)(i) and may, in reliance upon such assumption, make available to
Borrower a corresponding amount. In such event, if a Revolving Lender has not in
fact made its share of the applicable Revolving Advance available to Agent, then
the applicable Revolving Lender and Borrowers severally agree to pay to Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to Borrowers to
but excluding the date of payment to Agent, at (i) in the case of a payment to
be made by such Revolving Lender, the greater of the Federal Funds Effective
Rate and 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
Borrower, the interest rate applicable to Revolving Advances consisting of
Domestic Rate Loans. If such Revolving Lender pays its share of the applicable
Revolving Advance to Agent, then the amount so paid shall constitute such
Revolving Lender’s Revolving Advance. Any 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.

 

(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 and
counterclaim) 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.

 

2.21                        Voluntary Prepayments, Voluntary Commitment
Reductions, Mandatory Prepayments.

 

(a)                                 Borrowers shall have the right at its option
from time to time to prepay the Advances in whole or part without premium or
penalty (except if and to the extent applicable

 

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under Section 2.2(f)). Whenever Borrowers desire to prepay any part of the
Advances, it shall provide a written prepayment notice to the Agent by 1:00 p.m.
at least four (4) Business Days prior to the date of prepayment of the Revolving
Advances or no later than 1:00 p.m. on the date of prepayment of Swing Loans,
setting forth the following information: (i) the date, which shall be a Business
Day, on which the proposed prepayment is to be made; (ii) a statement indicating
the application of the prepayment between the Revolving Advances and Swing
Loans; and (iii) a statement indicating the application of the prepayment
between Advances which are Domestic Rate Loans and Advances which are Eurodollar
Rate Loans. All prepayment notices shall be irrevocable. The principal amount of
the Advances for which a prepayment notice is given, together with interest on
such principal amount except with respect to Advances which are Domestic Rate
Loans, shall be due and payable on the date specified in such prepayment notice
as the date on which the proposed prepayment is to be made. If Borrowers prepay
Advances that are Eurodollar Rate Loans, the prepayment shall be applied to the
Interest Periods in direct order of maturity.

 

(b)                                 Borrowers shall have the right at its option
from time to time to reduce the Maximum Revolving Advance Amount without premium
or penalty (except, with respect to any voluntary prepayment of the Advances
made in connection with such reduction, if and to the extent applicable under
Section 2.2(f)), provided that (i) whenever Borrowers desire to effectuate any
such reduction, it shall provide a written notice to Agent of the effective date
and amount of such reduction by 1:00 p.m. at least four (4) Business Days prior
to such effective date, (ii) each such reduction must be in a minimum amount of
$5,000,000 and an integral multiple of $5,000,000, (iii) no such reduction may
reduce the Maximum Revolving Advance Amount to less than the Minimum Revolving
Commitment Amount and (iv) in the event the sum of the aggregate principal
balance of all outstanding Revolving Advances and Swing Loans plus the aggregate
Maximum Undrawn Amounts of all outstanding Letters of Credit on such effective
date shall exceed the Maximum Revolving Advance Amount as so reduced, Borrowers
shall make voluntary prepayments of the Revolving Advances and/or Swing Loans on
such effective date in at least the amount of such excess in accordance with the
provisions of Section 2.21(a). Each such reduction of the Maximum Revolving
Advance Amount shall be made by reducing the Revolving Commitment Amount of each
Revolving Lender on a pro rata basis according to their respective Revolving
Commitment Percentages prior to such reduction and without any resultant change
to such Revolving Commitment Percentages. All notices of a reduction to the
Maximum Revolving Advance Amount shall be irrevocable.

 

(c)                                  Subject to Section 4.3 hereof, when any
Borrower sells or otherwise disposes of any Collateral other than Inventory in
the Ordinary Course of Business, including receipt of the proceeds of any
condemnation or governmental taking with respect to any of the Collateral or any
proceeds of any property or casualty insurance upon any loss or destruction of
any of the Collateral, Borrowers shall repay the Advances in an amount equal to
one hundred percent (100%) of the net cash proceeds of such sale or disposition
(i.e., gross proceeds less the reasonable costs of such sales or other
dispositions), such repayments to be made without premium or penalty (except if
and to the extent applicable under Section 2.2(f)) and promptly but in no event
more than one (1) Business Day following receipt of such net cash 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
first, to the outstanding principal balance of

 

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the outstanding Swing Loans and second, 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)) in such order as
Agent may determine, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof and without any permanent reduction
of the Maximum Revolving Advance Amount. Any such prepayment applied to the
Revolver Advances shall be applied first to Domestic Rate Loans, then to
Eurodollar Rate Loans (subject to the provisions of Section 2.2(f)), and to the
extent so applied to any Eurodollar Rate Loans, the prepayment shall be applied
to the Interest Periods in direct order of maturity. Notwithstanding anything to
the contrary provided for in the foregoing, prior to the Term Debt Obligations
Payment Date, Borrowers shall not be required to make any prepayment of the
Obligations under this Section 2.21(c) with the net cash proceeds of any such
sale or disposition of any Collateral that is Term Debt Priority Collateral that
is permitted under the Term Debt Documents as in effect on the date hereof; but
further provided that, in the event that Borrowers shall be required under the
provisions of the Term Debt Documents to use some or all of such net cash
proceeds either (x) to make a mandatory prepayment of the Term Debt Indebtedness
or (y) as a reinvestment to acquire or repair assets useful in Borrower’s
business, any failure of Borrowers to make such required prepayment of the Term
Debt Indebtedness and/or such a reinvestment, in either such case in accordance
with such terms and conditions of the Term Debt Documents, shall be deemed to be
an Event of Default under Section 10.11.

 

(d)                                 If any Capital Stock or Indebtedness shall
be issued or incurred by any Group Member (excluding any Indebtedness incurred
in accordance with Section 7.8), Borrowers shall repay the Advances in an amount
equal to one hundred percent (100%) of the net cash proceeds of such issuance or
incurrence (i.e., gross proceeds less the reasonable costs of such issuance or
incurrence), excluding any net cash proceeds of a Capital Stock issuance used to
pay any part of the consideration or transaction costs in connection with a
Permitted Acquisition, such repayments to be made without premium or penalty
(except if and to the extent applicable under Section 2.2(f)) and promptly but
in no event more than one (1) Business Day following receipt of such net cash
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
issuance or incurrence otherwise prohibited by the terms and conditions hereof.
Such repayments shall be applied first, to the outstanding principal balance of
the outstanding Swing Loans and second, 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)) in such order as
Agent may determine, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof and without any permanent reduction
of the Maximum Revolving Advance Amount. Any such prepayment applied to the
Revolver Advances shall be applied first to Domestic Rate Loans, then to
Eurodollar Rate Loans (subject to the provisions of Section 2.2(f)), and to the
extent so applied to any Eurodollar Rate Loans, the prepayment shall be applied
to the Interest Periods in direct order of maturity. Notwithstanding anything to
the contrary provided for in the foregoing, prior to the Term Debt Obligations
Payment Date, to the extent all or any portion of such net cash proceeds of any
such issuance or incurrence are required to be applied as a mandatory prepayment
of the Term Debt Indebtedness under the terms and conditions of the Term Debt
Documents, Borrowers may, and shall be deemed to be in compliance with the
provision of this Section 2.21(d) if Borrowers shall, make such required
prepayment of the Term Debt Indebtedness in accordance with such terms and
conditions of the Term Debt Documents.

 

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2.22                        Use of Proceeds.

 

(a)                                 Borrowers shall apply the proceeds of
Advances to (i) repay Indebtedness outstanding under the Existing Revolving
Credit Agreement, (ii) pay fees and expenses relating to the Transactions, and
(iii) provide ongoing working capital financing for Borrowers (including to
reimburse drawings under Letters of Credit) and general corporate purposes.

 

(b)                                 Without limiting the generality of Section
2.22(a) above, neither the Borrowers, any 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 the Trading with the Enemy Act.

 

2.23                        Defaulting Lender. Notwithstanding any provision of
this Agreement to the contrary, if any Revolving Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is
a Defaulting Lender:

 

(a)                                 except as otherwise expressly provided for
in this Section 2.23, Revolving Advances shall be incurred pro rata from the
Non-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 becoming a Defaulting Lender. Amounts
received in respect of principal of any Revolving Advances shall be applied to
reduce the Revolving Advances of each Revolving Lender (other than any
Defaulting Lender) in accordance with their Revolving Commitment Percentages;
provided, that, Agent shall not be obligated to transfer to a Defaulting Lender
any payments received by Agent for 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;

 

(b)                                 Commitment Fees shall cease to accrue in
favor of such Defaulting Lender pursuant to Section 3.3;

 

(c)                                  the Revolving Commitment Percentage and
outstanding Advances of such Defaulting Lender shall not be included in
determining whether the Required Lenders have taken or may take any action
hereunder (including any consent to any amendment, waiver or other modification
pursuant to Section 16.2); 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 requiring the consent of such particular Lender and/or each Lender
directly affected thereby;

 

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

 

(i)                                     all or any part of the obligations of
such Defaulting Lenders to fund Revolving Advances in respect of Swing Loans and
the obligations of such Defaulting Lenders under its Participation Commitments
in respect of Letters of Credit (such Defaulting

 

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Lender’s “Letter of Credit Obligations”) shall be reallocated among the
Non-Defaulting Lenders in accordance with their respective Ratable Shares but
only to the extent that (x) the aggregate sum of outstanding Revolving Advances
plus outstanding Swing Loans plus the aggregate Maximum Undrawn Amount of all
outstanding Letters of Credit shall not exceed the aggregate of the Revolving
Commitment Amount of all Non-Defaulting Lenders, and (y) no Potential Default or
Event of Default has occurred and is continuing at such time;

 

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

 

(iii)                               if the Borrower cash collateralizes any
portion of such Defaulting Lender’s Letter of Credit Obligations (after giving
effect to any partial reallocation pursuant to clause (i) above) pursuant to
clause (ii) above, the Borrower shall not be required to pay any fees to such
Defaulting Lender pursuant to Section 3.2 with respect to such Defaulting
Lender’s Letter of Credit Obligations during the period such Defaulting Lender’s
Participation Commitments are cash collateralized;

 

(iv)                              if any portion of the Non-Defaulting Lender’s
Letter of Credit Obligations are reallocated pursuant to clause (i) above, then
the fees payable to the Revolving Lenders pursuant to Section 3.2 shall be
adjusted in accordance with such Non-Defaulting Lenders’ Ratable Share; and

 

(v)                                 if all or any portion of such Defaulting
Lender’s Letter of Credit Obligations are neither reallocated nor cash
collateralized pursuant to clause (i) or (ii) above, then, without prejudice to
any rights or remedies of Issuer or any other Lender hereunder, all Letter of
Credit Fees payable under Section 3.2 with respect to such Defaulting Lender’s
Letter of Credit Obligations shall be payable to Issuer (and not to such
Defaulting Lender) until and to the extent that such Letter of Credit
Obligations are reallocated and/or cash collateralized; and

 

(e)                                  so long as such Lender is a Defaulting
Lender, Swing Loan Lender shall not be required to fund any Swing Loans and
Issuer shall not be required to issue, amend or increase any Letter of Credit,
unless Issuer is satisfied that the related exposure and the Defaulting Lender’s
then outstanding Letter of Credit Obligations will be 100% covered by the
Revolving Credit Commitments of the Non-Defaulting Lenders and/or cash
collateral will be provided by the Borrower in accordance with Section
2.23(d)(iii), and participating interests in any newly made Swing Loan or any
newly issued or increased Letter of Credit shall be allocated among
Non-Defaulting Lenders in a manner consistent with Section 2.23(d)(i) (and such
Defaulting Lender shall not participate therein).

 

If (i) a Bankruptcy Event with respect to a parent company of any Revolving
Lender shall occur following the date hereof and for so long as such event shall
continue, or (ii) Swing Loan Lender or Issuer has a good faith belief that any
Revolving Lender has defaulted in fulfilling its

 

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obligations under one or more other agreements in which such Lender commits to
extend credit, Swing Loan Lender shall not be required to fund any Swing Loan
and Issuer shall not be required to issue, amend or increase any Letter of
Credit, unless Swing Loan Lender or Issuer, as the case may be, shall have
entered into arrangements with the Borrower or such Lender, satisfactory to
Swing Loan Lender or Issuer, as the case may be, to defease any risk to it in
respect of such Lender hereunder.

 

In the event that Agent, Borrowers, Swing Loan Lender and Issuer agree in
writing that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then Agent will so notify the parties
hereto, and the Ratable Share of the Swing Loans and Letter of Credit
Obligations of the Lenders shall be readjusted to reflect the inclusion of such
Lender’s Revolving Commitment Percentages and Revolving Commitment Amounts, and
on such date such Lender shall purchase at par such of the Revolving Advances of
the other Lenders (other than Swing Loans) as Agent shall determine may be
necessary in order for such Lender to hold such Revolving Advances in accordance
with its Ratable Share.

 

Other than as expressly set forth in this Section 2.23, 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
2.23 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.

 

2.24                        Increase of the Maximum Revolving Advance Amount by
Borrowers.

 

(a)                                 Borrowers may, by written notice to Agent
and following Agent’s consent (which may be given or withheld in its sole
discretion), request that Agent increase the Maximum Revolving Advance Amount
(each a “Borrower Revolver Increase”) by (i) adding one or more new lenders to
the revolving credit facility under this Agreement (each a “Section 2.24 New
Lender”) who wish to participate in such Borrower Revolver Increase and/or (ii)
increasing the Commitment Amount of one or more Revolving Lenders party to this
Agreement who wish to participate in such Borrower Revolver Increase; provided,
however, that (w) Borrowers may only add a Section 2.24 New Lender if, and only
to the extent, there is insufficient participation on behalf of the existing
Revolving Lenders, (x) no Default or Event of Default shall have occurred and be
continuing as of the date of such request or as of the effective date of such
Borrower Revolver Increase (each a “Borrower Increase Date”) or shall occur as a
result thereof, (y) any Section 2.24 New Lender that becomes party to this
Agreement pursuant to this Section 2.24 shall satisfy the requirements of
Section 16.3 hereof and shall be acceptable to Agent and consented to by
Borrowers and (z) the other conditions set forth in this Section 2.24 are
satisfied. Agent shall promptly inform the Revolving Lenders of any such request
made by Borrowers. The aggregate amount of Borrower Revolver Increases hereunder
shall not exceed $10,000,000 and no single Borrower Revolver Increase shall be
for an amount less than $5,000,000.

 

(b)                                 On a Borrower Increase Date, (i) each
Section 2.24 New Lender that has chosen to participate in such Borrower Revolver
Increase shall, subject to the conditions set forth in Section 2.24(a), become a
Revolving Lender party to this Agreement as of such Borrower

 

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Increase Date and shall have a Commitment Amount in an amount equal to its share
of such Borrower Revolver Increase (and its Revolving Commitment Percentage
shall be equal to the percentage equivalent of a fraction the numerator of which
shall be the Commitment Amount of such Section 2.24 New Lender and the
denominator of which shall be the Maximum Revolving Advance Amount after giving
effect to such Borrower Revolver Increase) and (ii) each Revolving Lender that
has chosen to increase its Commitment Amount pursuant to this Section 2.24 will
have its Commitment Amount increased by the amount of its share of the Borrower
Revolver Increase as of such Borrower Increase Date (and its Revolving
Commitment Percentage shall be adjusted as appropriate); provided, however, that
(x) Agent and each Lender participating in such Borrower Revolver Increase shall
have received from Borrowers payment of any fees and/or expenses then due with
respect to such Borrower Revolver Increase and Agent shall have received from
Borrowers payment of all out-of-pocket costs and expenses incurred by Agent in
connection with such Borrower Revolver Increase, and (y) Agent shall have
received on or before such Borrower Increase Date the following, each dated such
date: (i) an assumption agreement from each Section 2.24 New Lender
participating in such Borrower Revolver Increase, if any, in form and substance
satisfactory to Agent, duly executed by such Section 2.24 New Lender, Agent and
Borrowers; (ii) confirmation from each Revolving Lender participating in such
Borrower Revolver Increase of the increase in the amount of its Commitment
Amount and of any change in its Revolving Commitment Percentage, in form and
substance satisfactory to the Agent; (iii) a certificate of Borrowing Agent
certifying that no Default or Event of Default shall have occurred and be
continuing or shall occur as a result of such Borrower Revolver Increase; (iv) a
certificate of Borrowing Agent certifying that the representations and
warranties made by each Borrower herein and in the Other Documents are true and
complete in all respects with the same force and effect as if made on and as of
such date (or, to the extent any such representation or warranty specifically
relates to an earlier date, such representation or warranty is true and complete
in all respects as of such earlier date); (v) supplements or modifications to
this Agreement and the Other Documents and such additional Other Documents,
including any new Revolving Credit Notes to Section 2.24 New Lenders and
replacement Revolving Credit Notes to Revolving Lenders that agree to
participate in such Borrower Revolver Increase, that Agent reasonably deems
necessary in order to document such Borrower Revolver Increase and otherwise
assure and give effect to the rights of Agent and Revolving Lenders in this
Agreement and the Other Documents; (vi) such other documents, instruments and
information as Agent or its counsel shall reasonably deem necessary in
connection with such Borrower Revolver Increase; and (vii) additional fees
calculated on the amount of the Borrower Revolver Increase and payable to Agent
for the benefit of Lenders (including the Section 2.24 New Lenders)
participating therein, and to Agent, the amount of which shall be determined at
the time of the Borrower Revolver Increase based upon the market at such time
for similar transactions, which shall be mutually agreeable to Borrower and
Agent. On such Borrower Increase Date, upon fulfillment of the conditions set
forth in this Section 2.24, Agent shall (i) effect a settlement of all
outstanding Advances among the Revolving Lenders that will reflect the
adjustments to the Revolving Commitment Percentages of the Revolving Lenders as
a result of such Borrower Revolver Increase and (ii) notify Revolving Lenders
(including any Section 2.24 New Lenders) participating in such Borrower Revolver
Increase and the Borrowers, on or before 12:00 noon, by telecopier or e-mail, of
the occurrence of such Borrower Revolver Increase to be effected on such
Borrower Increase Date.

 

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III.                              INTEREST AND FEES.

 

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 Eurodollar Rate Loans, at each of (a) the end of each
Interest Period and (b) for Eurodollar Rate Loans with an Interest Period in
excess of three months, also at the end of each successive three month period
from the commencement of 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 (i) with respect to Revolving
Advances, the applicable Revolving Interest Rate and (ii) with respect to the
Swing Loans, the Revolving Interest Rate for Domestic Rate Loans (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, any applicable Contract Rate 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 Eurodollar Rate shall be adjusted with respect to Eurodollar 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 and with written notice
from Agent to Borrowers of the exercise of such option or direction (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 plus two (2.00%) percent per annum (as applicable, the
“Default Rate”).

 

3.2                               Letter of Credit Fees.

 

(a)                                 Borrowers shall pay (x) to Agent, for the
ratable benefit of Revolving Lenders, fees for each Letter of Credit - AIC 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 - AIC multiplied by the Applicable Margin per
annum, and (y) to the Issuer for its own account, a fronting fee equal to the
average daily face amount of each outstanding Letter of Credit multiplied by one
quarter of one percent (0.25%) per annum (all of the foregoing fees, the “Letter
of Credit Fees”), 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 quarter and on the last day of the Term. In addition,
Borrowers shall pay to Agent 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 the 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. All Letter of Credit Fees

 

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payable hereunder 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. 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 and with written notice from Agent
to Borrowers of the exercise of such option or direction (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 notice or
any other 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 (2.00%) per annum.

 

(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), and 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 2.21), 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/or
hold such cash collateral in a general ledger account of Agent and in such case
Agent shall have no obligation (and Borrowers hereby waive any claim) under
Article 9 of the UCC 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; provided that upon the expiration or termination of any
particular Letter of Credit, the Borrowers may withdraw and Agent shall release
to Borrowers an amount equal to one hundred and five percent (105%) of the
Maximum Undrawn Amount of such Letter of Credit at the time of such expiration
or termination. Borrowers hereby grant to Agent a Lien and security interest in
any such cash collateral and any right, title and interest of Borrowers in any
deposit account or investment account into which such cash collateral may be
deposited from time to time. 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. However, notwithstanding
anything to the contrary provided for in the foregoing, prior to the Term Debt
Obligations Payment Date: (x) in the absence of an Event of Default under
Section 10.7, the expiration of the Term or any other termination of this
Agreement or any mandatory prepayment under Section 2.21, Agent and Lenders
shall not exercise their rights to require cash collateralization of the Letters
of Credit under this Section 3.2(b) except in connection with

 

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either (I) acceleration of the Obligations pursuant to Section 11.1(a) hereof or
(II) commencement of the exercise of rights and remedies against a significant
portion of the ABL Collateral, and (y) Borrowers shall not use any cash proceeds
of any Term Debt Priority Collateral when fulfilling its obligations to provide
cash collateral under this Section 3.2(b).

 

3.3                               Facility Fee. If, for any calendar quarter
during the Term, the average daily unpaid balance of the 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 Revolving Lenders a fee
(the “Commitment Fee”) at a rate equal to two percent (2.0%) per annum on the
amount by which the Maximum Revolving Advance Amount exceeds such average daily
unpaid balance; provided, however, that any Commitment Fee accrued with respect
to the Revolving Commitment Amount of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such time
shall not be payable by Borrowers so long as such Lender shall be a Defaulting
Lender except to the extent that such Commitment Fee shall otherwise have been
due and payable by the Borrower prior to such time; and provided further that no
Commitment Fee shall accrue with respect to the Revolving Commitment of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. Subject
to the provisos in the directly preceding sentence, all Commitment Fees 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 Evaluation Fee and Fee Letter.

 

(a)                                 Borrowers shall pay to Agent on the first
day of each month following any month in which Agent performs any collateral
evaluation - 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 per diem collateral evaluation
fee in the amount specified in the Fee Letter for each person employed to
perform such evaluation, plus all costs and disbursements incurred by Agent in
the performance of such examination or analysis. Without in any way limiting
Agent’s rights under Section 4.10 to inspect and evaluate the Collateral and
Borrowers’ business records, the parties hereto hereby agree that Borrowers
shall not be liable to pay collateral evaluation fees and other costs and
disbursements pursuant to this Section 3.4 either (i) for more than four (4)
such collateral evaluations/field exams/analyses per calendar year or (ii) in
any event in an aggregate amount for any calendar year (exclusive any collateral
evaluation fees and costs and disbursements paid by Borrowers in connection with
Agent’s initial collateral evaluations/field exams/analyses conducted prior to
the Collateral) not to exceed an amount equal to $51,000 plus actual
out-of-pocket expenses; provided that (x) after the occurrence and during the
continuance of any Event of Default, Borrower shall be liable for the collateral
evaluation fees and other costs and disbursements for any and all collateral
evaluations/field exams/analyses that Agent shall elect in its sole discretion
to conduct (and no such collateral evaluations/field exams/analyses conducted
after the occurrence and during the continuance of any Event of Default shall be
counted against the number of collateral evaluations/field exams/analyses or
aggregate yearly amounts for which Borrowers shall otherwise be liable in the
absence of any Event of Default under the provisions of this Section 3.4(a)) and
(y) nothing in this Section 3.4(a) shall be construed under any

 

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circumstances to limit the number of collateral evaluations/field exams/analyses
which Agent may conduct at its own expense in accordance with its rights under
Section 4.10.

 

(b)                                 Borrowers shall pay the amounts required to
be paid in the Fee Letter in the manner and at the times required by the Fee
Letter.

 

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 during such extension.

 

3.6                               Maximum Charges. In no event whatsoever shall
interest and other charges charged hereunder exceed the highest rate permissible
under law. In the event interest and other charges as computed hereunder would
otherwise exceed the highest rate permitted under law, such excess amount shall
be first applied to any unpaid principal balance owed by Borrowers, and 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.

 

3.7                               Increased Costs. In the event that any
Applicable Law, treaty or governmental regulation, or any Change in Law or in
the interpretation or application thereof, or compliance by any Lender (for
purposes of this Section 3.7, the term “Lender” shall include Agent 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 Eurodollar Rate Loans) with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Body or financial,
monetary or other authority, shall:

 

(a)                                 subject Agent or any Lender to any tax of
any kind whatsoever with respect to this Agreement or any Other Document or
change the basis of taxation of payments to Agent or any Lender of principal,
fees, interest or any other amount payable hereunder or under any Other
Documents (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
such Lender or the Issuing Lender);

 

(b)                                 impose, modify or hold applicable any
reserve, special deposit, assessment 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 or any Lender, including pursuant to Regulation
D of the Board of Governors of the Federal Reserve System; or

 

(c)                                  impose on Agent or any Lender or the London
interbank Eurodollar market any other condition with respect to this Agreement
or any Other Document;

 

and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender 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 deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender,

 

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upon its demand, such additional amount as will compensate Agent or such Lender
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
Eurodollar Rate, as the case may be. Agent or such Lender 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 Eurodollar 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 Eurodollar
market, with respect to an outstanding Eurodollar Rate Loan, a proposed
Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a
Eurodollar Rate Loan, then Agent shall give Borrowing Agent prompt written or
telephonic notice of such determination. If such notice is given, (i) any such
requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless
Borrowing Agent shall notify Agent no later than 10:00 a.m. four (4) 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 Eurodollar Rate
Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have been
converted to an affected type of Eurodollar 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. four (4) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of Eurodollar Rate Loan,
and (iii) any outstanding affected Eurodollar Rate Loans shall be converted into
a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than
10:00 a.m. four (4) Business Days prior to the last Business Day of the then
current Interest Period applicable to such affected Eurodollar Rate Loan, shall
be converted into an unaffected type of Eurodollar Rate Loan, on the last
Business Day of the then current Interest Period for such affected Eurodollar
Rate Loans. Until such notice has been withdrawn, Lenders shall have no
obligation to make an affected type of Eurodollar Rate Loan or maintain
outstanding affected Eurodollar Rate Loans and no Borrower shall have the right
to convert a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan
into an affected type of Eurodollar Rate Loan.

 

3.9                               Capital Adequacy.

 

(a)                                 In the event that Agent or any Lender shall
have determined that 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 or any Lender (for purposes of this Section 3.9, the term “Lender”
shall include Agent 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 Eurodollar 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

 

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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,
regulation or condition.

 

(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                        Gross Up for Taxes. Any and all payments by or on
account of any obligation of Borrowers 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 Borrower shall be
required by Applicable Law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) Agent, Lender or
Issuer, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrowers shall make such
deductions and (iii) Borrowers shall timely pay the full amount deducted to the
relevant Governmental Body in accordance with Applicable Law. Without limiting
the provisions of the foregoing, Borrowers shall timely pay any Other Taxes to
the relevant Governmental Body in accordance with applicable Law.

 

3.11                        Withholding Tax Exemption.

 

(a)                                 Each Payee that is not incorporated under
the Laws of the United States of America or a state thereof (and, upon the
written request of Agent, each other Payee) agrees that it will deliver to
Borrowing Agent and Agent two (2) duly completed appropriate valid Withholding
Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations
(“Regulations”)) certifying its status (i.e., U.S. or foreign person) and, if
appropriate, making a claim of reduced, or exemption from, U.S. withholding tax
on the basis of an income tax treaty or an exemption provided by the Code. The
term “Withholding Certificate” means a Form W-9; a Form W-8BEN; a Form W-8ECI; a
Form W-8IMY and the related statements and certifications as required under §
1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in
§1.871-14(c)(2)(v) of the Regulations; or any other certificates under the Code
or Regulations that certify or establish the status of a payee or beneficial
owner as a U.S. or foreign person.

 

(b)                                 Each Payee required to deliver to Borrowing
Agent and Agent a valid Withholding Certificate pursuant to Section 3.11(a)
hereof shall deliver such valid Withholding Certificate as follows: (i) each
Payee which is a party hereto on the Closing Date shall deliver such valid
Withholding Certificate at least five (5) Business Days prior to the first date
on which any interest or fees are payable by any Borrower hereunder for the
account of such Payee; (ii) each Payee shall deliver such valid Withholding
Certificate at least five (5) Business Days before the effective date of such
assignment or participation (unless Agent in its sole discretion shall

 

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permit such Payee to deliver such Withholding Certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by Agent). Each Payee which so delivers a valid Withholding
Certificate further undertakes to deliver to Borrowing Agent and Agent two (2)
additional copies of such Withholding Certificate (or a successor form) on or
before the date that such Withholding Certificate expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent
Withholding Certificate so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by Borrowing Agent
or Agent.

 

(c)                                  Notwithstanding the submission of a
Withholding Certificate claiming a reduced rate of or exemption from U.S.
withholding tax required under Section 3.11(b) hereof, 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
Regulations. Further, Agent is indemnified under § 1.1461-1(e) of the
Regulations against any claims and demands of any Payee for the amount of any
tax it deducts and withholds in accordance with regulations under § 1441 of the
Code.

 

IV.                               COLLATERAL: GENERAL TERMS

 

4.1                               Security Interest in the Collateral. To secure
the prompt payment and performance of the Obligations to Agent and each Lender
and each other holder of any of the Obligations, each Borrower and each
Guarantor hereby assigns, pledges and grants to Agent for its benefit and for
the ratable benefit of each Lender, Issuer and each other holder of any of the
Obligations a continuing security interest in and to and Lien on all of its
Collateral, whether now owned or existing or hereafter acquired or arising and
wheresoever located. Each Borrower and each Guarantor 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 and each Guarantor 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. Upon delivery of each such notice, such
Borrower and such Guarantor shall be deemed to hereby grant to Agent a security
interest and lien in and to such commercial tort claims described therein and
all proceeds thereof. Each Borrower and each Guarantor 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
and each Guarantor 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

 

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Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements for Borrowers’
chief executive offices, locations where books and records regarding Receivables
are kept or other business locations of Borrowers at which a material portion of
the Collateral is located, (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 (provided that, prior to the Term Debt Obligations
Payment Date, Borrowers may, and shall be deemed to be in compliance with the
provision of this clause (iii) if Borrowers shall, deliver any such Collateral
consisting of Term Debt Priority Collateral otherwise covered by this clause
(iii) to Term Debt Agent to the extent required by and in accordance with such
terms and conditions of the Term Debt Documents), (iv) entering into
warehousing, lockbox 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 (which statements
may have a description of collateral which is broader than that set forth
herein, including without limitation a description of collateral as “all assets’
and/or “all personal property” of any Borrower). 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 to Agent for its benefit and for the ratable benefit of Lenders immediately
upon demand.

 

4.3                               Disposition of Collateral. Each Borrower will
safeguard and protect all Collateral and make no disposition of any Collateral
or any other property or assets of any Borrower whether by sale, lease or
otherwise except (a) the sale of Inventory in the Ordinary Course of Business,
(b) the disposition or transfer of obsolete and worn-out Equipment in the
Ordinary Course of Business during any fiscal year, and (c) prior to the Term
Debt Obligations Payment Date, other sales or dispositions of Collateral that is
part of the Term Debt Priority Collateral if and to the extent such sale or
disposition is permitted under the terms and conditions of the Term Debt
Documents, provided that any such sale or disposition under clauses (b) and (c)
shall be subject to the provisions of Section 2.21(c).

 

4.4                               Preservation of Collateral. Following the
occurrence and during the continuance of a Default or Event of Default, 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 or desirable to protect
Agent’s interest in and to preserve the Collateral, including the hiring of such
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’

 

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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, and such charge
shall be deemed authorized by Borrowers and Lenders shall be obliged to fund
their respective Revolving Commitment Percentages of the same regardless of
whether any of the conditions under Sections 8.2 or 2.2 shall not be satisfied
at such time or whether the revolving credit commitments of the Lenders
hereunder shall have otherwise been terminated at such time.

 

4.5                               Ownership of Collateral and Assets.

 

(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 (subject only to Permitted Encumbrances in
favor of Term Debt Agent subject to the Intercreditor Agreement in the case of
any Term Debt Priority Collateral and to any other Permitted Encumbrances which
by operation of law (including the priority granted under the Uniform Commercial
Code to any purchase money security interests that are Permitted Encumbrances)
have senior 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 and encumbrances 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; and
(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. Each Borrower’s Equipment and Inventory shall be
located as set forth on Schedule 4.5 (as such Schedule 4.5 may be updated at any
time upon at least thirty (30) days written notice to Agent) 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 and
other sales and dispositions to the extent permitted in Section 4.3 hereof.

 

(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 4.5 (as such Schedule 4.5 may be updated at any
time upon at least thirty (30) days written notice to Agent); (ii) Schedule 4.5
hereto (as such Schedule 4.5 may be updated at any time upon at least thirty
(30) days written notice to Agent) contains a correct and complete list 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 4.5 hereto (as such Schedule 4.5 may be updated at any time upon
at least thirty (30) days written notice to Agent) sets forth a correct and
complete list of (A) each place of business of each Borrower and (B) the chief
executive office of each Borrower; and (iv) Schedule 4.5 hereto (as such
Schedule 4.5 may be updated at any time upon at least thirty (30) days written
notice to Agent) 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.

 

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4.6                               Defense of Agent’s and Lenders’ Interests.

 

(a)                                 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 of Inventory in the Ordinary Course of Business and other sales and
dispositions to the extent permitted in Section 4.3 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 or any other property or assets of any Borrower. Each Borrower shall
defend Agent’s interests in the Collateral against any and all Persons
whatsoever.

 

(b)                                 At any time following demand by Agent for
payment of all Obligations pursuant to Section 11.1(a) following the occurrence
and during the existence of an Event of Default, 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 following the occurrence and during the existence of an Event of
Default, 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 (if and to the extent
included in the Collateral), 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. Notwithstanding anything to the contrary provided for in
the foregoing, until the Term Debt Payment Obligations Date, Agent shall not
take any actions nor require or request Borrowers to take any actions under this
Section 4.6(b) with respect to the Term Debt Priority Collateral except as may
be consented to in writing by Term Debt Agent.

 

4.7                               Books and Records. Each Borrower shall (a)
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; (b) set up on its books accruals with respect to all taxes,
assessments, charges, levies and claims; and (c) on a reasonably current basis
set up on its books, from its earnings, allowances against doubtful Receivables,
advances and investments and all other proper accruals (including by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made 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.

 

4.8                               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

 

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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.

 

4.9                               Compliance with Laws. Subject to any other
provisions of this Agreement or any Other Document which shall expressly require
more strict compliance by any Borrower with respect to any particular Applicable
Law, each Borrower shall comply in all material respects with all Applicable
Laws with respect to the Collateral and Borrowers’ other property and assets 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.

 

4.10                        Inspection of Premises and Inspections/Evaluation of
Collateral. At all reasonable times and from time to time as often as Agent as
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 Borrowers’ other property and assets 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 may elect in its sole
discretion, for the purpose of inspecting, auditing and evaluating the
Collateral and Borrowers’ other property and assets and any and all records
pertaining thereto and the operation of such Borrower’s business.

 

4.11                        Insurance. The assets and properties of each
Borrower at all times shall be maintained in accordance with the requirements of
all insurance carriers which provide insurance with respect to the assets and
properties of such Borrower so that such insurance shall remain in full force
and effect. Each Borrower shall bear the full risk of any loss of any nature
whatsoever with respect to the Collateral and Borrowers’ other property and
assets. At each Borrower’s own cost and expense in amounts and with carriers
acceptable to Agent, each Borrower shall (a) 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; (b)
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; (c) maintain
business interruption insurance for such amounts, as is customary in the case of
companies engaged in businesses similar to such Borrower’s and public and
product liability insurance against claims for personal injury, death or
property damage suffered by others; (d) 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; (e) [RESERVED]; (f)
furnish Agent with (i) copies of all policies and

 

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evidence of the maintenance of such policies by the renewal thereof at least
thirty (30) days before any expiration date, and (ii) appropriate loss payable
endorsements in form and substance satisfactory to Agent, naming Agent as a
co-insured and lender loss payee as its interests may appear with respect to all
insurance coverage referred to in clauses (a) and (c) above, and with respect to
the insurance coverage referred to in clause (a), providing (A) that all
proceeds of the insurance coverage referred to in clause (a) above shall be
payable to Agent to the extent of its interest in the applicable Collateral (and
subject to the interests of the Term Debt Agent with respect to any Term Debt
Priority Collateral and the interests of any holder of any other Permitted
Encumbrances as to any particular Collateral which by operation of law
(including the priority granted under the Uniform Commercial Code to any
purchase money security interests that are Permitted Encumbrances) have senior
priority), (B) no such insurance shall be affected by any act or neglect of the
insured or owner of the property described in such policy, and (C) 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. In the
event of any loss under the insurance coverage referred to in clause (a) above,
the carriers named therein hereby are directed by Agent and the applicable
Borrower to make payment for such loss to Agent as its interest may appear (and
subject to the interests of the Term Debt Agent with respect to any Term Debt
Priority Collateral and the interests of any holder of any other Permitted
Encumbrances as to any particular Collateral which by operation of law
(including the priority granted under the Uniform Commercial Code to any
purchase money security interests that are Permitted Encumbrances) have senior
priority) 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
(and, if applicable, to Term Debt Agent and/or the holder of any other Permitted
Encumbrances which by operation of law (including the priority granted under the
Uniform Commercial Code to any purchase money security interests that are
Permitted Encumbrances) have senior priority) jointly, Agent and Term Debt Agent
(if applicable) may endorse such Borrower’s name thereon and do such other
things as Agent and Term Debt Agent (if applicable) may deem advisable to reduce
the same to cash, and are hereby appointed as the attorney of each Borrower with
the full power and authority to do the same. Agent is hereby authorized to
adjust and compromise claims under insurance coverage referred to in clause (a)
above, provided that, prior to the Term Debt Obligations Payment Date, Agent
shall not exercise any of its rights under this sentence with respect to any
claims with respect to any the Term Debt Priority Collateral without the written
consent of the Term Debt Agent. All loss recoveries received by Agent upon any
such insurance shall be applied to the Obligations as a prepayment made and
applied in accordance with Section 2.21(c) (subject to the provisions of the
last sentence of such Section 2.21(c), and for the avoidance of doubt, prior to
the occurrence of the Term Debt Obligations Payment Date, to the extent Agent
shall receive loss recoveries with respect to any Term Debt Priority Collateral,
Agent shall promptly remit such loss receivables to the Term Debt Agent). Any
surplus shall be paid by Agent to Borrowers or applied as may be otherwise
required by law. Any deficiency thereon shall be paid by Borrowers to Agent, on
demand. For the avoidance of doubt, the rights and remedies of Agent with
respect to the insurance coverage referred to in clauses (a), (b) and (c) shall
be subject to the provisions of the Intercreditor Agreement.

 

4.12                        Failure to Pay Insurance. If any Borrower fails to
obtain insurance as hereinabove provided, or to keep the same in force, Agent,
if Agent so elects, may obtain such insurance and pay the premium therefor on
behalf of such Borrower, and charge Borrowers’ Account therefor as a Revolving
Advance of a Domestic Rate Loan and such expenses so paid shall be part of the

 

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Obligations, and such charge shall be deemed authorized by Borrowers and Lenders
shall be obliged to fund their respective Revolving Commitment Percentages of
the same regardless of whether any of the conditions under Sections 8.2 or 2.2
shall not be satisfied at such time or whether the revolving credit commitments
of the Lenders hereunder shall have otherwise been terminated at such time.

 

4.13                        Payment of Taxes. Each Borrower will pay, when due,
all material taxes, assessments and other Charges lawfully levied or assessed
upon such Borrower or any of the Collateral and Borrowers’ other property and
assets 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 or any of Borrowers’
other property and assets, 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 4.13 shall be charged to Borrowers’ Account as a
Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations (and such charge shall be deemed authorized by Borrowers and Lenders
shall be obliged to fund their respective Revolving Commitment Percentages of
the same regardless of whether any of the conditions under Sections 8.2 or 2.2
shall not be satisfied at such time or whether the revolving credit commitments
of the Lenders hereunder shall have otherwise been terminated at such time) 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.

 

4.14                        Payment of Leasehold Obligations. Each Borrower
shall at all times pay, when and as due, its rental obligations under all
material 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 and, at Agent’s request will provide evidence of having done
so.

 

4.15                        Receivables.

 

(a)                                 Nature of Receivables. 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.

 

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(b)                                 Solvency of Customers. Each Customer, to the
actual knowledge of each Borrower, 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 or with respect to such Customers of any Borrower, to
the actual knowledge of such 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)                                  Location of Borrowers. Each Borrower’s
chief executive office is located at the location specified on Schedule 4.5.
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.

 

(d)                                 Collection of Receivables. Borrowers shall
instruct their Customers to deliver all remittances upon Receivables to such
Blocked Accounts or Depository Accounts (and/or lockboxes associated therewith)
as Agent shall designate from time to time as contemplated by Section 4.15(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, as between Borrowers on the one hand and Agent on the other (and
without derogation of any rights (if any) of any third parties including the
Term Debt Creditors as between Borrowers on the one hand and such third parties
on the other, or as between Agent and/or Lenders on the one hand and such third
parties on the other): (i) such Borrower will, at such Borrower’s sole cost and
expense, but on Agent’s behalf and for Agent’s account, collect in trust for
Agent (pursuant to an express trust created hereby) 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 (ii) each Borrower shall deposit
as soon as reasonably possible and in any event within one (1) Business Day of
receipt thereof deposit any such amounts and collections in such Blocked
Accounts or Depository Accounts provided for in this Agreement or the Other
Documents 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)                                  Notification of Assignment of Receivables.
At any time, 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. At any time after the occurrence and during the continuance of an
Event of Default, Agent shall have the sole right to collect the Receivables,
take possession of the Collateral, or both (provided that, notwithstanding
anything to the contrary provided for in the foregoing, until the Term Debt
Payment Obligations Date, Agent shall not take any actions nor require or
request Borrowers to take any actions under this Section 4.15(e) with respect to
the Term Debt Priority Collateral except as may be consented to in writing by
Term Debt Agent). 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, and such charge
shall be deemed authorized by Borrowers and Lenders shall be obliged to fund
their respective Revolving Commitment Percentages of the same regardless of
whether any of the conditions under Sections 8.2 or 2.2 shall not be satisfied
at such time or

 

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whether the revolving credit commitments of the Lenders hereunder shall have
otherwise been terminated at such time.

 

(f)                                   Power of Agent to Act on Borrowers’
Behalf. 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 Receivables; (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; and (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 (ii) at any time following the
occurrence and during the continuance of an 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 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;
(IT) to receive, open and dispose of all mail addressed to any Borrower; (I) 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. Agent shall have the
right at any time following the occurrence and during the continuance of an
Event of Default to change the address for delivery of mail addressed to any
Borrower.

 

(g)                                  No Liability. 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. Following the occurrence
and during the continuance of an Event of Default, Agent may, without notice or
consent from any Borrower, sue upon or otherwise collect, extend the time of
payment of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any Supporting Obligations therefor and/or release any obligor
thereof. Agent is authorized and empowered to accept following the occurrence
and during the continuance of an Event of Default the return of the goods
represented by any of the Receivables, without notice to or consent by any
Borrower, all without discharging or in any way affecting any Borrower’s
liability hereunder.

 

(h)                                 Establishment of a Lockbox Account, Dominion
Account. All proceeds of the ABL Priority Collateral shall be deposited by
Borrowers into either (i) a lockbox account,

 

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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 selected by
Borrowing Agent and be acceptable to Agent or (ii) depository accounts
(“Depository Accounts”) established at a bank or banks for the deposit of such
proceeds (each such bank, a “Depository Account Bank”) or (iii) the Cash
Collateral Account. Each applicable Borrower, Agent and each Blocked Account
Bank or Depository Account Bank, as applicable, shall enter into a deposit
account control agreement in form and substance satisfactory to Agent directing
such Blocked Account Bank or Depository Account Bank, as applicable, to transfer
at the close of each Business Day such funds so deposited to the Cash Collateral
Account. As between Borrowers on the one hand and Agent on the other (and
without derogation of any rights (if any) of any third parties including the
Term Debt Creditors as between Borrowers on the one hand and such third parties
on the other, or as between Agent and/or Lenders on the one hand and such third
parties on the other), Borrowing Agent shall obtain the agreement by such
Blocked Account Bank or Depository Account Bank, as applicable, 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 or Depository Account Bank thereunder. All funds in the
Cash Collateral Account shall be retained in such account until the earliest of
(x) the Borrowers request that the account bank release such funds; provided,
that, any such release of funds (i) shall not be permitted (and the Borrowers
shall not be permitted to request such release) so long as a Default or Event of
Default shall have occurred and be continuing and (ii) shall constitute a
representation and warranty by each Borrower that as of the date of such release
the conditions contained in Section 8.2 have been satisfied (and Borrowing Agent
shall provide evidence as to such satisfaction promptly after Agent’s request
therefor), (y) the determination by Agent to apply any portion of the proceeds
on deposit in such account 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 first to the prepayment of the
principal amount of the Revolving Advances and the Swing Loans in accordance
with the provisions of Section 2.20(e) and (z) upon the occurrence of any Event
of Default under Section 10.7 or 10.8 of this Agreement, all funds on deposit in
such account shall, without any notice or action on the part of Agent, be
applied to prepay the Obligations.

 

Notwithstanding anything to the contrary provided for in this Agreement, (i) no
later than two (2) Business Days following the Closing Date, Borrowers shall
give all Account Debtors that remit payments and collections on Receivables by
wire transfer, ACH or other electronic transactions notice to remit such
payments and collections to the Blocked Account Bank or Depository Account Bank,
as applicable, and (ii) promptly upon notice to Borrowers from the Blocked
Account Bank that the lockbox services for the collection account(s) of
Borrowers established with such Blocked Account Bank are fully operational,
Borrowers shall give all Account Debtors that remit payments and collections
other than by wire transfer, ACH or other electronic transactions to remit such
payments and collections to such lockboxes.

 

(i)                                     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 4.15(i). No Borrower shall open any new deposit account,
securities account or investment account unless (i) Borrowers shall have given
at least

 

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thirty (30) days prior written notice to Agent and (ii) subject to the
provisions of the last sentence of Section 4.21 hereof, if such account is to be
maintained with a bank, depository institution or securities intermediary, that
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.

 

(j)                                    Notwithstanding anything to the contrary
provided for in this Agreement, no later than forty-five (45) days after the
Closing Date, with respect to any deposit account of any Borrower that is
maintained with a bank or financial institution other than the Blocked Account
Banks or the Depository Account Banks, Borrowers shall either (x) cause such
deposit account to be subject to an account control agreement among such bank or
financial institution, the applicable Borrowers and Agent that is sufficient to
give Agent “control” (for purposes of Articles 8 and 9 of the Uniform Commercial
Code) over such account and is otherwise satisfactory in form and substance to
Agent or (y) close such deposit account, provided that, Borrowers need not
comply with the foregoing requirements of this Section 4.15(j) with respect to
(1) any deposit accounts in which the total amount of funds on deposit therein
or credited thereto do not exceed at any one time either $100,000 as to any one
such deposit account or $250,000 as to all such deposit accounts taken together
or (2) any deposit accounts used exclusively for payroll purposes so long as
Borrowers shall not maintain funds on deposit therein or credited thereto at any
time in excess of the amounts necessary to fund payroll obligations and any
related payroll processing expenses routinely paid from such accounts on a
current basis.

 

(k)                                 Adjustments. 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.

 

4.16                        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.

 

4.17                        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 in all material respects. No Borrower shall use or operate the
Equipment in material violation of any law, statute, ordinance, code, rule or
regulation. Each Borrower shall have the right to sell Equipment to the extent
set forth in Section 4.3 hereof.

 

4.18                        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

 

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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.

 

4.19                        Environmental Matters.

 

(a)                                 Borrowers shall ensure that the Real
Property and all operations and businesses conducted thereon remains in
compliance in all material respects with all Environmental Laws and they shall
not place or permit to be placed any Hazardous Substances on any Real Property
except in compliance in all material respects with Applicable Law or appropriate
governmental authorities.

 

(b)                                 Borrowers shall establish and maintain a
system to assure and monitor continued compliance with all applicable
Environmental Laws which system shall include periodic reviews of such
compliance.

 

(c)                                  Borrowers shall (i) employ in connection
with the use of the Real Property appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any and
all Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws. Borrowers shall use their good faith efforts to obtain
certificates of disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators employed by
Borrowers in connection with the transport or disposal of any Hazardous Waste
generated at the Real Property.

 

(d)                                 In the event any Borrower obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity of
any Hazardous Substances 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 any 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 (any of the foregoing is
referred to herein as an “Environmental Complaint”) from any Person, including
any state agency responsible in whole or in part for environmental matters in
the state in which the Real Property is located or the United States
Environmental Protection Agency (any such person or entity hereinafter the
“Authority”), and the liabilities of such Borrower in connection therewith could
reasonably be expected to have a Material Adverse Effect, 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 Real
Property and the Collateral and is not intended to create nor shall it create
any obligation upon Agent or any Lender with respect thereto.

 

(e)                                  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 Substances at any other site owned,
operated or used by any Borrower to dispose of Hazardous Substances that could

 

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reasonably be expected to have a Material Adverse Effect 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 at the Real Property 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 Real Property and
the Collateral.

 

(f)                                   Borrowers shall 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 in all material respects 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 clean up, remove, mitigate or otherwise deal 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.

 

(g)                                  Borrowers shall defend and indemnify Agent
and Lenders and hold Agent, Lenders and their respective employees, agents,
directors and officers harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney’s fees, suffered
or incurred by Agent or Lenders under or on account of any Environmental Laws,
including the assertion of any Lien thereunder, with respect to 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 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 4.19
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. Borrowers’ obligation and the indemnifications hereunder
shall survive the termination of this Agreement.

 

(h)                                 For purposes of Section 4.19 and 5.7, all
references to Real Property shall be deemed to include all of each Borrower’s
right, title and interest in and to its owned and leased premises.

 

4.20                        Financing Statements. Except as respects the
financing statements filed by Agent and the financing statements described on
Schedule 1.2 or allowed as a Permitted Encumbrance,

 

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no financing statement covering any of the Collateral or any proceeds thereof is
on file in any public office.

 

4.21                        Special Provisions Regarding Term Debt Priority
Collateral. Until the Term Debt Obligations Payment Date, any obligation of
Borrowers hereunder or under any Other Document with respect to (i) the
delivery, possession or “control” (as defined in Articles 8 and 9 of the Uniform
Commercial Code) of any Term Debt Priority Collateral, (ii) the notation of any
lien on or endorsement (or negotiation) of any bill of lading or other document
(except to the extent such bill of lading or other document constitutes ABL
Priority Collateral), (iii) the notation of any Lien on any certificate of
title, (iv) the giving of any notice to any bailee or other Person (except with
respect to any ABL Priority Collateral), or (v) the provision of voting rights
or the obtaining of any consent of any Person, in any case under the foregoing
clauses (i) through (v) in connection with the Term Debt Priority Collateral,
shall be deemed to be satisfied if the Borrowers comply with the requirements of
the similar provision of the applicable Term Debt Document, but, with respect to
clauses (i) and (ii), only to the extent that the requirements of the applicable
Term Debt Documents are sufficient to protect the priority and perfection of the
Liens of Term Debt Creditors in and to the applicable Term Debt Priority
Collateral. Until the Term Debt Obligations Payment Date, delivery of possession
or “control” of any Term Debt Priority Collateral to the Term Debt Agent
pursuant to the Term Debt Documents shall satisfy any requirement hereunder or
under any Other Document to deliver such possession or “control” to Agent;
provided that, nothing in the foregoing provisions of this sentence or this
Section 4.21 shall be deemed to limit Borrowers’ obligations to comply fully
with the requirements of Section 4.15(i), except that, to the extent Borrowers
wish to establish any deposit account for the sole purpose of depositing and
holding the cash proceeds of any Term Debt Priority Collateral, or any
securities account or investment account, Borrowers need not comply with the
provisions of clause (ii) of the last sentence of Section 4.15(i) if and to the
extent that the applicable bank or depository institution, financial institution
or securities intermediary, each applicable Borrower and Term Debt Agent shall
have entered into an account control agreement sufficient to give Term Debt
Agent “control” over such account. To the extent that either Agent or Term Debt
Agent shall have possession of or “control” over any Collateral, then Borrowers
hereby agree that Agent or Term Debt Agent (as applicable) may (to the extent
provided for in the Intercreditor Agreement) hold possession of or “control”
over such Collateral for the benefit of Agent and Lenders (and all other holders
of the Obligations) and of the Term Debt Creditors for the purpose of perfecting
and/or protecting the priority of any Liens granted to Agent under this
Agreement and the Other Documents and to Term Debt Agent under the Term Debt
Documents.

 

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
and to perform all its respective Obligations hereunder and thereunder. This
Agreement and the Other Documents have been duly executed and delivered by each
Borrower, and this Agreement and the Other Documents 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 (a) are within such Borrower’s corporate or limited

 

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liability company powers, as applicable, have been duly authorized by all
necessary corporate or limited liability 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 material agreement or
undertaking to which such Borrower is a party or by which such Borrower is
bound, including the Term Debt Documents, (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
Material 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 Organizational Documents, agreement, instrument, or other instrument to
which such Borrower is a party or by which it or its property is a party or by
which it may be bound, including under the provisions of the Term Debt
Documents.

 

5.2                               Formation and Qualification; Inactive
Subsidiaries; Foreign Subsidiaries.

 

(a)                                 Each Borrower is duly incorporated or formed
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)                                 Schedule 5.2(b) sets forth, as of the
Closing Date, (i) a complete list of all Subsidiaries of each Borrower, (ii) a
complete list of all such Subsidiaries which are Inactive Subsidiaries and (iii)
a complete list of all such Subsidiaries which are Foreign Subsidiaries.

 

(c)                                  No Subsidiary of any Borrower that has been
designated as an Inactive Subsidiary (either on the Closing Date or on the date
such Subsidiary was acquired by any Borrower) (i) conducts any active business
operations (including the operations of a holding company), (ii) has assets with
a fair market value of $500,000 or more or (iii) owns any capital stock of any
Borrower or any other Subsidiary (except another Inactive Subsidiary) of any
Borrower, and no entity that was originally designated as an Inactive Subsidiary
(either on the Closing Date or on the date such Subsidiary was acquired by any
Borrower) has ceased to satisfy all the requirements for an Inactive Subsidiary
(excluding any such Subsidiaries which have complied with the requirements of
Section 7.12 hereof and are no longer designated as Inactive Subsidiaries). The
fair market value of all assets of all Inactive Subsidiaries does not exceed
$1,000,000 at any one time in the aggregate.

 

5.3                               Survival of Representations and Warranties.
All representations and warranties of such Borrower contained in this Agreement
and the Other Documents shall be true at the time of such Borrower’s execution
of this Agreement and the Other Documents, and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.

 

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5.4                               Tax Returns. Each Borrower’s federal tax
identification number is set forth on Schedule 5.4. Each Borrower has filed all
material federal, state and local tax returns and other reports each is required
by law to file and has paid all material 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.

 

(a)                                 The pro forma balance sheet of Borrowers on
a Consolidated Basis (the “Pro Forma Balance Sheet”) furnished to Agent on the
Closing Date was prepared as of December 31, 2012, but reflects the consummation
of the transactions contemplated this Agreement and the Other Documents,
including the funding of the initial Advances hereunder and repayment of all
Indebtedness of Borrowers outstanding on the Closing Date other than the
Indebtedness permitted under Section 7.8 (specifically including the repayment
of Borrowers’ existing revolving credit facility with PNC, as agent (the
“Existing Revolving Credit Agreement”)) (collectively, the “Transactions”) and
is accurate, complete and correct in all material respects and fairly reflects
the financial condition of Borrowers on a Consolidated Basis as of the Closing
Date after giving effect to the Transactions, and has been prepared in
accordance with GAAP, applied consistently with Borrowers’ audited annual
financial statements for the fiscal year ended December 31, 2010. The Pro Forma
Balance Sheet has been certified as accurate, complete and correct in all
material respects by the Chief Financial Officer of Borrowers. All financial
statements referred to in this subsection 5.5(a), including the related
schedules and notes thereto, have been prepared, in accordance with GAAP, except
as may be disclosed in such financial statements and subject to year-end
adjustments and the absence of footnotes.

 

(b)                                 The five year EBITDA and working capital
projections of Borrowers on a Consolidated Basis, copies of which are annexed
hereto as Exhibit 5.5(b) (the “Projections”) were prepared by the management of
Borrowers are based on underlying assumptions which provide a reasonable basis
for the projections contained therein and reflect Borrowers’ judgment based on
present circumstances of the most likely set of conditions and course of action
for the projected period. The cash flow Projections together with the Pro Forma
Balance Sheet, are referred to as the “Pro Forma Financial Statements”.

 

(c)                                  The audited consolidated balance sheets of
UniTek Holdings and its consolidated Subsidiaries as at December 31, 2009 and
December 31, 2010, and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by and accompanied
by an unqualified report from Ernst & Young LLP, copies of which have been
delivered to Agent, have been prepared in accordance with GAAP, consistently
applied (except for changes in application in which such accountants concur),
are accurate, complete and correct in all material respects and present fairly
the financial position of Borrowers and their Subsidiaries and such other
Persons at such dates and the results of their operations for such periods. The
unaudited consolidated balance sheet of Borrowers and their consolidated
Subsidiaries as at December 31, 2012 has been prepared in accordance with GAAP,
consistently applied (except for changes in application in which such
accountants concur), are

 

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accurate, complete and correct in all material respects and present fairly the
financial position of Borrowers and their Subsidiaries and such other Persons at
such dates and the results of their operations for such period (subject to
normal year-end audit adjustments and the absence of footnotes).

 

5.6                               Entity Names. As of the date hereof, no
Borrower has been known by any other corporate name 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 entity 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                               OSHA and Environmental Compliance.

 

(a)                                 Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, each
Borrower has duly complied with, and its facilities, business, assets, property,
leaseholds, Real Property and Equipment are in compliance in all material
respects with, the provisions of the Federal Occupational Safety and Health Act,
the Environmental Protection Act, RCRA and all other Environmental Laws; there
have been 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 could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, each
Borrower has been issued all required federal, state and local licenses,
certificates or permits relating to all applicable Environmental Laws.

 

(c)                                  (i) There are no visible signs of material
releases, spills, discharges, leaks or disposal (collectively referred to as
“Releases”) of Hazardous Substances at, upon, under or within any Real Property
including any premises leased by any Borrower; (ii) to the best knowledge of
Borrowers, there are no underground storage tanks or polychlorinated biphenyls
on the Real Property including any premises leased by any Borrower, (iii) to the
best knowledge of Borrowers, the Real Property including any premises leased by
any Borrower has never been used as a treatment, storage or disposal facility of
Hazardous Waste; and (iv) to the best knowledge of Borrowers, no Hazardous
Substances are present on the Real Property including any premises leased by any
Borrower, excepting such quantities as are handled in accordance with all
applicable manufacturer’s instructions and governmental regulations and in
proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.

 

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

 

(a)                                 Both before and after giving effect to the
Transactions, each Borrower is and will be solvent, able to pay its debts as
they mature, has and will have capital sufficient to carry on its business and
all businesses in which it is about to engage, and (i) as of the Closing Date,
the fair present saleable value of its assets, calculated on a going concern
basis, is and will be in excess of the amount of its liabilities and (ii)
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.

 

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(b)           Except as disclosed in Schedule 5.8(b), no Borrower has (i) any
pending or, to the best knowledge of any Borrower, threatened litigation,
arbitration, actions or proceedings which could reasonably be expected to have a
Material Adverse Effect, and (ii) any liabilities or Indebtedness for borrowed
money other than the Obligations or any other Indebtedness permitted by
Section 7.8.

 

(c)           No Borrower is 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 naming such
Borrower which could reasonably be expected to have a Material Adverse Effect.

 

(d)           No Borrower nor 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) No Plan has incurred any “accumulated funding deficiency,” as
defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or
not waived, 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; (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) at
this time, 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; 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; (vi) 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) each Borrower and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan; (x) there exists no
event described in Section 4043(b) 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 any fiduciary responsibility for investments with
respect to any plan existing for the benefit of persons other than employees or
former employees of any Borrower or any member of the Controlled Group;
(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

 

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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.

 

5.9          Patents, Trademarks, Copyrights and Licenses. All registered
patents, patent applications, trademarks, trademark applications, service marks,
service mark applications, copyrights, copyright applications and tradenames
owned or utilized by any Borrower are set forth on Schedule 5.9 (as such
Schedule 5.9 may be updated at any time upon written notice to Agent to reflect
any such Intellectual Property acquired after the Closing Date). There is no
objection to or pending challenge to the validity of any such patent, trademark,
copyright or tradename, and no Borrower is aware of any grounds for any
challenge, except as set forth in Schedule 5.9 hereto. Each patent, patent
application, patent license, trademark, trademark application, trademark
license, service mark, service mark application, service mark license, design
rights, copyright, copyright application and copyright license owned or held by
any Borrower and material to its business and all trade secrets used by any
Borrower and material to its business consist 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
materially 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 have a Material
Adverse Effect.

 

5.11        [RESERVED].

 

5.12        No Default. 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 have a Material Adverse Effect. Each
Borrower has heretofore delivered to Agent true and complete copies of all
Material 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. As of the Closing Date, no Borrower is involved
in any material labor dispute; there are no strikes or walkouts or union
organization of any Borrower’s

 

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employees threatened (to the best knowledge of Borrowers) 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, any Other Documents, the Term Debt Documents or in any financial
statement, report, certificate or any other document furnished in connection
herewith or therewith contains any untrue statement of a material fact or omits
to state any material 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 which could reasonably be expected
to have a Material Adverse Effect.

 

5.18        Delivery of Term Debt Documents and Intercreditor Agreement. Agent
has received complete copies of the Term Debt Documents and the Intercreditor
Agreement (including all exhibits, schedules and disclosure letters referred to
therein or delivered pursuant thereto, if any) and all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the
terms thereof. None of such documents and agreements has been amended or
supplemented, nor have any of the provisions thereof been waived, except
pursuant to a written agreement or instrument which was entered into in
accordance with the Intercreditor Agreement and has heretofore been delivered to
Agent.

 

5.19        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.

 

5.20        Conflicting Agreements. No provision of any mortgage, indenture,
contract, agreement, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent which has not
already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.

 

5.21        Application of Certain Laws and Regulations. Neither any Borrower
nor any Affiliate of any Borrower is subject to any law, statute, rule or
regulation which regulates the incurrence of any Indebtedness, including laws,
statutes, rules or regulations relative to common

 

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or interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.

 

5.22        Business and Property of Borrowers. Upon and after the Closing Date,
Borrowers do not propose to engage in any business other than those business in
which the Borrowers are engaged on the date of this Agreement or that are
reasonably related thereto 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.

 

5.23        [RESERVED].

 

5.24        Anti-Terrorism Laws.

 

(a)           General. Neither any Borrower nor any Affiliate of any Borrower is
in violation of any Anti-Terrorism Law or engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

 

(b)           Executive Order No. 13224. Neither any Borrower nor any Affiliate
of any Borrower or their respective agents acting or benefiting in any capacity
in connection with the Advances or other transactions hereunder, is any of the
following (each a “Blocked Person”):

 

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

 

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

 

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

 

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

 

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

 

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

 

Neither any Borrower nor to the knowledge of any Borrower, any of its agents
acting in any capacity in connection with the Advances or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction

 

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relating to, any property or interests in property blocked pursuant to the
Executive Order No. 13224.

 

5.25        Trading with the Enemy. No Borrower has engaged, nor does it intend
to engage, in any business or activity prohibited by the Trading with the Enemy
Act.

 

5.26        [RESERVED].

 

5.27        Equity Interests. The authorized and outstanding Equity Interests of
each Borrower, and each legal and beneficial holder thereof as of the Closing
Date, is as set forth on Schedule 5.27 hereto (provided that for any Borrower
that is a publicly traded company, such Schedule 5.27 shall list only the five
largest shareholders thereof). All of the Equity Interests of each Borrower have
been duly and validly authorized and issued and are fully paid and, in the case
of Equity Interests evidencing corporate interests, 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 5.27, 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. Except as set forth on Schedule 5.27, Borrowers have not issued any
securities convertible into or exchangeable for shares of its Equity Interests
or any options, warrants or other rights to acquire such shares or securities
convertible into or exchangeable for such shares.

 

5.28        Commercial Tort Claims. No Borrower is a party to any commercial
tort claims except as set forth on Schedule 5.28 hereto (which Schedule 5.28 may
be updated at any time upon written notice to Agent).

 

5.29        Letter of Credit Rights. No Borrower has any letter of credit
rights, except as set forth on Schedule 5.29 hereto (which Schedule 5.29 may be
updated at any time upon written notice to Agent).

 

5.30        Material Contracts. Schedule 5.30 sets forth all Material Contracts
of the Borrowers (which Schedule 5.30 may be updated at any time upon written
notice to Agent). All Material 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          Payment of Fees. Pay to Agent on demand all usual and customary
fees and expenses which Agent incurs in connection with (a) the forwarding of
Advance proceeds and (b) the establishment and maintenance of any Blocked
Accounts or Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge Borrowers’ Account for all such fees and expenses.

 

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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 licenses, patents, copyrights, design rights,
tradenames, trade secrets and trademarks and take all actions necessary to
enforce and protect the validity of any intellectual property right or other
right included in the Collateral, expect to the extent that the failure to
comply therewith could not reasonably be expected to have a Material Adverse
Effect; (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          Violations. Promptly notify Agent in writing of any violation of
any law, statute, regulation or ordinance of any Governmental Body, or of any
agency thereof, applicable to any Borrower which could reasonably be expected to
have a Material Adverse Effect.

 

6.4          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 contracts between any
Borrower and the United States, any state or any department, agency or
instrumentality of any of them.

 

6.5          Financial Covenants.

 

(a)           Fixed Charge Coverage Ratio. Cause to be maintained a Fixed Charge
Coverage Ratio, measured as of the end of each fiscal quarter for the trailing
twelve (12) fiscal month period, of not less than 1.20 to 1.0 for any fiscal
quarter ending from and after the fiscal quarter ending March 31, 2014.

 

6.6          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.

 

6.7          Payment of Indebtedness. Pay, discharge or otherwise satisfy at or
before maturity (subject, where applicable, to specified grace periods and, in
the case of the trade payables, to normal payment practices) all its obligations
and liabilities of whatever nature, 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.

 

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6.8          Standards of Financial Statements. Cause all financial statements
referred to in Sections 9.7, 9.8, 9.9 and 9.10 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 the
absence of footnotes) and to be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein (except
as concurred in by such reporting accountants or officer, as the case may be,
and disclosed therein).

 

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.

 

(a)           Enter into any merger, consolidation or other reorganization with
or into any other Person or permit any other Person to consolidate with or merge
with it; provided that, any Borrower entity may (i) merge into any other
Borrower entity (but provided further that in any such merger involving UniTek
Parent, UniTek Parent shall be the surviving entity of such merger) and
(ii) enter into any Permitted Acquisition.

 

(b)           Acquire all or a substantial portion of the assets or Equity
Interests of any Person (or any division or business line of any Person) except
for any Permitted Acquisition; provided that if any Borrower shall acquire any
new Subsidiary as a result of any Permitted Acquisition, Borrowers shall comply
with the requirements of Section 7.12. Notwithstanding anything to the contrary
contained in any provision of this Agreement, no Borrower shall purchase any
Equity Interests in or become or agree to become party to a Joint Venture except
as an Investment permitted under Section 7.4(i) hereof.

 

(c)           Sell, lease, transfer or otherwise dispose of any of its
properties or assets, except dispositions of Inventory and Equipment, and
dispositions of other property or assets that is Term Debt Priority Collateral,
to the extent expressly permitted by Section 4.3.

 

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 acquired,
except Permitted Encumbrances. Without limiting the generality of the foregoing,
no Borrower shall create or suffer to exist any Lien or transfer upon or against
any of its DIRECTV Inventory in favor of any Person other than DIRECTV (other
than Permitted Encumbrances arising under clauses (b), (f), (g) or (l) to the
extent such Permitted Encumbrances would not violate the provisions of the
DIRECTV/DirectSat Contract).

 

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 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,
(c) the endorsement of checks in the Ordinary Course of Business and
(d) guarantee obligations with respect to the Term Debt Obligations owing to the
Term Debt Creditors.

 

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7.4          Investments. Purchase or acquire obligations or Equity Interests
of, or any other interest in, any Person, except (a) investments in cash and
Cash Equivalents, (b) Permitted Acquisitions, (c) intercompany investments by
any Borrower in another Borrower, (d) investments in any Subsidiary (valued at
cost) that is not a Borrower hereunder (excluding any Inactive Subsidiary) in an
aggregate amount not to exceed (x) $2,700,000 at any time outstanding minus
(y) the then-outstanding principal balance of all intercompany loans and
advances to Permitted Foreign Operating Subsidiaries made pursuant to
Section 7.10 hereof and (e) additional investments in an aggregate amount
(valued at cost) not to exceed $800,000 during the term hereof.

 

7.5          Loans. Make advances, loans or extensions of credit to any Person,
including any Parent, Subsidiary or Affiliate except with respect to (a) loans
or extension of credit in connection with the extension of commercial trade
credit in connection with the sale of Inventory in the Ordinary Course of
Business, (b) intercompany loans between and among Borrowers, so long as each
such intercompany loan is evidenced by a promissory note (including, if
applicable, any master intercompany note executed by Borrowers) on terms and
conditions (including terms subordinating payment of the indebtedness evidenced
by such note to the prior payment in full of all Obligations) acceptable to
Agent in its sole discretion that has been delivered to Agent either endorsed in
blank or together with an undated instrument of transfer executed in blank by
the applicable Borrower(s) that are the payee(s) on such note, (c) loans and
advances to employees of any Borrower in the Ordinary Course of Business
(including payroll advances and advances for travel, entertainment and
relocation expenses) in an aggregate amount for all Borrowers not to exceed
$250,000 at any one time outstanding, (d) promissory notes and other non-cash
consideration received by any Borrower pursuant to any sale or disposition
permitted by Section 7.1(c) hereof (provided that all payments received in
respect of such are immediately remitted by Borrowers to Agent to be applied as
a mandatory prepayment of the Obligations pursuant to Section 2.21(c) hereof
(subject to the provisions of the last sentence thereof)), (e) advances, loans
and extensions existing on the date hereof and described on Schedule
7.5(e) hereto with any modifications, replacements, renewals or extensions
thereof; provided that the amount of the original Investment is not increased
except by the terms of such Investment or as otherwise permitted by this
Section 7.5(e), and (f) in addition to advances, loans and extensions otherwise
expressly permitted by this Section 7.5, advances, loans or extensions by
Borrowers in an aggregate amount (valued at cost) not to exceed $250,000 during
the Term.

 

7.6          [RESERVED].

 

7.7          Dividends. (i) 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
(ii) 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 or (iii) make any payments of
management fees except that: so long as (a) a notice of termination with regard
to this Agreement shall not be outstanding, and (b) no Event of Default or
Default shall have occurred after giving pro forma effect to such dividends,
(a) Borrowers other than UniTek Parent shall be permitted to pay dividends to
any other Borrower; (b) UniTek Parent may purchase the common stock or common
stock options of UniTek Parent from present or former officers or employees of
any Borrower or any Subsidiary of Borrowers upon the death or disability of such
officer or employee; provided that the

 

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aggregate amount of payments under this paragraph (b) in any fiscal year (net of
any proceeds received by the Borrower after the date hereof in connection with
resales of any common stock or common stock options so purchased) shall not
exceed $1,000,000 and, after giving effect to such purchase or repurchase, the
Undrawn Availability is not less than $10,000,000; and (y) UniTek Parent may
make a cashless repurchase of its Equity Interests which is deemed to occur upon
the exercise of options, rights or warrants to the extent such Equity Interests
represents a portion of the exercise price of those options, rights or warrants.

 

7.8          Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness (exclusive of trade debt) except in respect of (i) Indebtedness to
Lenders and the other Obligations; (ii) Indebtedness of Borrowers consisting of
Capitalized Lease Obligations and purchase money indebtedness for the Capital
Expenditures in an aggregate outstanding principal amount not to exceed
$20,000,000 at any one time, so long as such Indebtedness is not secured by any
Collateral or other assets or property of Borrowers other than the assets
purchased with the initial proceeds of such Indebtedness; (iii) any guarantees
constituting Indebtedness that are permitted under Section 7.3 above, (iv) Term
Debt Indebtedness (including any Permitted Refinancing thereof) in an aggregate
principal amount not to exceed $100,000,000, provided that, Borrowers may incur
(and may refinance pursuant to the Permitted Refinancing) additional Term Debt
Indebtedness in excess of such limitation not to exceed an additional aggregate
principal amount of not more than $50,000,000 either pursuant to a Permitted
Refinancing or under the “Incremental Term Facility” (as defined and provided
for in the Term Debt Credit Agreement as in effect on the date hereof) but only
to the extent that no later than five (5) Business Days prior to the incurrence
of any such additional Term Debt Indebtedness, Borrowers shall have delivered to
Agent a pro forma balance sheet and pro forma financial statements and a
Compliance Certificate demonstrating that the Borrowers would be in compliance
with the financial covenants set forth in Section 6.5 on a pro forma basis after
giving effect to such incurrence as if such incurrence had occurred on the first
day of the most recent period of four consecutive fiscal quarters in respect of
which the financial covenants have been tested in accordance with Section 6.5,
(v) Indebtedness consisting of intercompany loans made by one or more
Borrower(s) to any other Borrower(s) in accordance with the provisions of
Section 7.5(c); (vi) Subordinated Debt incurred in connection with Permitted
Acquisitions in an aggregate outstanding principal amount not to exceed
$5,000,000 at any one time; (vii) 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; (viii) Indebtedness of
a Person or Indebtedness secured by assets of a Person that, in either case,
becomes a Subsidiary or Indebtedness attaching to assets that are acquired by
the Borrowers, in each case after the Closing Date, provided that (A) such
Indebtedness existed at the time such Person became a Subsidiary or at the time
such assets were acquired and, in each case, was not created in anticipation
thereof, (B) such Indebtedness is not guaranteed in any respect by any Borrower
(other than by any such Person that so becomes a Subsidiary and existing
Subsidiaries of such Person), (C) the aggregate principal amount of all such
Indebtedness does not exceed $3,000,000 at any one time outstanding and
(D) under no circumstances shall any such Indebtedness be secured by any Liens
on any Receivables, Inventory, proceeds of Receivables or Inventory, deposit
accounts or any other ABL Priority Collateral belonging to such Person being
acquired and/or to any Borrower or Guarantor; and any refinancing thereof
(provided that no such refinancing shall increase the principal balance
outstanding under such Indebtedness as of the date of such refinancing or
shorten the maturity date thereof or expand the collateral pledged to secure
such Indebtedness at the time of such

 

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Permitted Acquisition), but only so long as Borrowers would be in compliance
with the financial covenants set forth in Section 6.5 on a pro forma basis after
giving effect to such acquisition as if such acquisition had occurred on the
first day of the most recent period of four consecutive fiscal quarters in
respect of which the Fixed Charge Coverage Ratio has been tested in accordance
with Section 6.5, (ix) Indebtedness in respect of performance, surety, bid,
appeal bonds, completion guarantees or other similar obligations provided in the
ordinary course of business, including guarantees or obligations of the Borrower
and its Subsidiaries with respect to letters of credit supporting such
performance, surety, bid, appeal bonds, completion guarantees or other similar
obligations but excluding Indebtedness incurred through the borrowing of money,
Capitalized Lease Obligations and purchase money obligations; (x) Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business;
(xi) the incurrence by any Borrower of contingent obligations in respect of
purchase price adjustments or indemnification obligations set forth in
agreements providing for the Permitted Acquisition or disposition of any asset
of the Borrowers so long as all such contingent obligations are discharged
within 30 days of the date the amount thereof becomes due under the terms of
such Permitted Acquisition and the Permitted Acquisition or subject disposition
is otherwise permitted hereby; (xii) cash management obligations and other
Indebtedness in respect of netting services, overdraft protections and similar
arrangements in each case in connection with cash management and deposit
accounts in the ordinary course of business; (xiii) Indebtedness consisting of
the financing of insurance premiums, so long as the aggregate amount payable
pursuant to such Indebtedness does not materially exceed the amount of the
premium for such insurance; (xiv) Indebtedness arising in connection with
endorsement of instruments for deposit in the Ordinary Course of Business;
(xv) Indebtedness consisting of Permitted Earn-Out Obligations; (xvi) any other
Indebtedness not otherwise permitted under the preceding clauses (i) through
(xiv) that is existing on the Closing Date and listed on Schedule 7.8 hereto and
any refinancing thereof (provided that no such refinancing shall increase the
principal balance outstanding under such Indebtedness as of the date of such
refinancing or shorten the maturity date thereof); and (xvii) additional
unsecured Indebtedness of the Borrowers in an aggregate principal amount not to
exceed $1,500,000 at any one time outstanding.

 

7.9          Nature of Business. Substantially change the nature of the business
in which it is presently engaged, except as may be reasonably related thereto,
nor except as otherwise 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, (ii) payment by Borrowers of dividends and distributions
permitted under Section 7.7 hereof, and (iii) 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. Notwithstanding anything to the contrary provided for in the
foregoing or in any other provision of this Agreement, no Borrower shall,
directly or indirectly, purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or

 

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otherwise enter into any transaction or deal with, any Subsidiary of any
Borrower that is not a Borrower under this Agreement or a Guarantor of the
Obligations, specifically including any Inactive Subsidiary or any Foreign
Subsidiary, except that, Borrowers may make intercompany loans and advances to
Permitted Foreign Operating Subsidiaries in an aggregate amount not to exceed
(x) $2,700,000 at any time outstanding minus (y) the then-outstanding amount
(valued at cost) of all Investments in non-Borrower Subsidiaries made pursuant
to Section 7.4(h) hereof; so long as each such intercompany loan or advance is
evidenced by a promissory note (including, if applicable, any master
intercompany note executed by the Permitted Foreign Operating Subsidiaries) on
terms and conditions (including terms subordinating payment of the indebtedness
evidenced by such note to the prior payment in full of all Obligations)
acceptable to Agent in its sole discretion that has been delivered to Agent
either endorsed in blank or together with an undated instrument of transfer
executed in blank by the applicable Borrower(s) that are the payee(s) on such
note.

 

7.11        Leases. Enter as lessee into any lease arrangement for real or
personal property (unless capitalized and permitted under Section 7.6 hereof) if
after giving effect thereto, aggregate annual rental payments for all leased
property would exceed $25,000,000 in any one fiscal year in the aggregate for
all Borrowers.

 

7.12        Subsidiaries.

 

(a)           Subject to the provisions of Sections 7.12(b) and 7.12(c), hold
any Equity Interests in or form or acquire any Subsidiary unless (i) such
Subsidiary either (x) expressly joins in this Agreement and the Other Document
as a borrower and becomes jointly and severally liable for the Obligations or
(y) if Agent shall agree in its sole discretion, becomes a Guarantor of the
Obligations and executes a Guarantor Security Agreement, and in either case
(x) or (y), such Subsidiary shall grant first priority (subject only to
Permitted Encumbrances in favor of Term Debt Agent subject to the Intercreditor
Agreement in the case of any Term Debt Priority Collateral of such Subsidiary
and to any other Permitted Encumbrances which by operation of law (including the
priority granted under the Uniform Commercial Code to any purchase money
security interests that are Permitted Encumbrances) have senior priority) Liens
on substantially all of its assets to secure its liabilities for the
Obligations, (ii) both prior to and after giving effect to such acquisition or
formation, (x) no Default or Event of Default shall exist and (y) each of the
representations and warranties made by any Borrower in or pursuant to this
Agreement, any Other Document and any related agreements to which it is a party,
or 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, any Other Document 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
was expressly made only as of a specified date, in which case such
representation or warranty was true and correct as of such date) 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)           Notwithstanding anything to the contrary provided for in paragraph
(a) above, if any Subsidiary shall constitute an Inactive Subsidiary as of the
Closing Date and be designated by Borrowers as an Inactive Subsidiary (either by
listing such Subsidiary as an Inactive Subsidiary on Schedule 5.2(b) on the
Closing Date or by designating any Subsidiary

 

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acquired in a Permitted Acquisition as an Inactive Subsidiary in writing to
Agent at the time of such Permitted Acquisition), Borrowers shall be deemed to
be in compliance with the provisions of this Section 7.12 without otherwise
satisfying the requirements set forth in paragraph (a) above so long as Borrower
shall take all actions requested by Agent to create a first priority (subject
only to Permitted Encumbrances in favor of Term Debt Agent subject to the
Intercreditor Agreement) pledge and Lien over one hundred percent of the Equity
Interests of such Inactive Subsidiary. If at any time any Subsidiary that has
previously been designated as an Inactive Subsidiary in accordance with this
Section 7.12(b) shall cease to satisfy any of the requirements for an Inactive
Subsidiary, Borrowers shall promptly give written notice of such occurrence to
Agent and promptly take all steps necessary to comply fully with all the
requirements of paragraph (a) above with respect to such Subsidiary.

 

(c)           Notwithstanding anything to the contrary provided for in paragraph
(a) above, with respect to any Foreign Subsidiary, Borrowers shall be deemed to
be in compliance with the provisions of this Section 7.12 without otherwise
satisfying the requirements set forth in paragraph (a) above so long as Borrower
shall take all actions requested by Agent to create a first priority (subject
only to Permitted Encumbrances in favor of Term Debt Agent subject to the
Intercreditor Agreement) pledge and Lien over at least sixty-five percent (65%)
of the voting Equity Interest and one hundred percent of non-voting Equity
Interests of such Foreign Subsidiary under the laws of New York and/or the laws
of the foreign jurisdiction in which such Foreign Subsidiary is organized
(including delivery of any applicable foreign law legal opinions requested by
Agent).

 

(d)           Enter into any partnership, Joint Venture or similar arrangement,
except as permitted by Section 7.1(b) and 7.4(i) above.

 

7.13        Fiscal Year and Accounting Changes. Change its fiscal year ending
date from December 31st or make any significant change (i) in accounting
treatment and reporting practices except as required by GAAP or (ii) in tax
reporting treatment except as required by law.

 

7.14        Pledge of Credit. Now or hereafter pledge Agent’s or any Lender’s
credit on any purchases or for any purpose whatsoever or use any portion of any
Advance in or for any business other than such Borrower’s business as conducted
on the date of this Agreement.

 

7.15        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, 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 shall have taken all
steps necessary for Agent to continue the perfections 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), such amendment, modification or waiver could not reasonably be
expected to have a materially adverse effect on the rights or interests of
Agent, Issuer and Lenders.

 

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7.16        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) incur, or permit any Plan to incur, any
“accumulated funding deficiency”, as that term is defined in Section 302 of
ERISA or Section 412 of the Code, (iv) 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, (v) assume, or permit any
member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on Schedule 5.8(d), (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any
Termination Event, (viii) 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, (ix) fail to meet, or permit any member
of the Controlled Group 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 (x) 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.

 

7.17        Prepayment of Indebtedness; Earn-Outs.

 

(a)           At any time, directly or indirectly, prepay or repurchase, redeem,
retire or otherwise acquire prior to the scheduled maturity thereof (i) any
Subordinated Debt or (ii) any other Indebtedness of any Borrower except for:
(x) prepayments of the Obligations, (y) mandatory prepayment of the Term Debt
Obligations under the terms and conditions of the Term Debt Documents as in
effect on the date hereof or as amended in accordance with the provisions of
Section 7.22 hereof and (z) voluntary prepayments of any such Indebtedness other
than Subordinated Debt (including but not limited to trade debt and the Term
Debt Indebtedness) to the extent that and only so long as any such voluntary
prepayment under this clause (z) is made by Borrowers in the Ordinary Course of
Business and no Default or Event or Default shall exist either before or after
giving effect to such voluntary prepayment; provided that, nothing contained in
the foregoing shall prohibit any Permitted Refinancing of the Term Debt
Indebtedness. However, notwithstanding anything to the contrary contained in the
foregoing or in any other provision of this Agreement or any Other Document, in
the event that, after giving effect to any mandatory prepayment of the Term Debt
Indebtedness required under the Term Debt Documents in respect of the “Excess
Cash Flow” (as defined in the Term Debt Documents) of Borrowers and their
consolidated Subsidiaries that would otherwise be permitted under the provisions
of this Section 7.17, Borrowers would have Undrawn Availability and five day
average Undrawn Availability of less than the greater of (i) $5,000,000 and
(ii) the minimum availability required under the DIRECTV Letter and any related
agreements, then the maximum amount of the prepayment of the Term Debt
Indebtedness which Borrowers shall be permitted to make under this Section 7.17
shall not exceed the maximum amount which, if paid by Borrowers, would leave
Borrowers with an Undrawn Availability of at least the greater of (i)

 

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$5,000,000 and (ii) the minimum availability required under the DIRECTV Letter
and any related agreements.

 

(b)           Make any payment in respect of any Earn-Out Indebtedness; provided
that payments in respect of Permitted Earn-Out Obligations may be made so long
as, both immediately prior to and after giving effect to the making of such
payment, (x) no Event of Default shall have occurred and remain continuing and
(y) Borrowers shall have Undrawn Availability and five day average Undrawn
Availability of at least the Undrawn Availability Minimum Amount either
immediately prior to or after giving effect to any such payment.

 

7.18        Anti-Terrorism Laws. No Borrower shall, until satisfaction in full
of the Obligations and termination of this Agreement, nor shall it permit any
Affiliate or agent to:

 

(a)           Conduct any business or engage in any transaction or dealing with
any Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person.

 

(b)           Deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order
No. 13224.

 

(c)           Engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT
Act or any other Anti-Terrorism Law. Borrower shall deliver to Lenders any
certification or other evidence requested from time to time by any Lender in its
sole discretion, confirming Borrower’s compliance with this Section.

 

7.19        Restrictive Agreements. Enter into or otherwise permit itself or its
assets to become bound by any contract, instrument or other agreement (other
than the Term Debt Documents) which would prohibit or limit the ability of any
Borrower other than UniTek Parent to make any dividend or other distribution of
any nature (whether in cash, property, securities or otherwise) on account of or
in respect of its Equity Interests.

 

7.20        Trading with the Enemy Act. Engage in any business or activity in
violation of the Trading with the Enemy Act.

 

7.21        Subordinated Debt. At any time, directly or indirectly, pay, prepay,
repurchase, redeem, retire or otherwise acquire, or make any payment on account
of any principal of, interest on or premium payable in connection with the
repayment or redemption of any Subordinated Debt, except as expressly permitted
in applicable subordination agreement.

 

7.22        Amendments to Term Debt Documents. Enter into any amendment, waiver
or modification of the Term Debt Documents the effect of which is (i) to
increase any applicable interest rate on the Term Debt Indebtedness by more than
300 basis points, except in connection with (1) the imposition of a default rate
of interest in accordance with the terms of the Term Debt Documents (provided
that the incremental increase resulting solely from the imposition of such
default rate of interest shall not at any time exceed the greater of (x) 200
basis points and (y) the difference between “LIBOR”, the “Eurodollar Rate”, the
“Adjusted Eurodollar Rate” (in each case, or any equivalent term) at such time,
on the one hand, and the “Alternate Base Rate” or the

 

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“Base Rate” (in each case, or any equivalent term) at such time, on the other
hand, plus 200 basis points), (2) the imposition of fees for forbearance,
amendments, waivers and other modifications and supplements or (3) any increase
in “LIBOR”, the “Eurodollar Rate”, the “Adjusted Eurodollar Rate”, the
“Alternate Base Rate” or the “Base Rate” (in each case, or any equivalent term)
(it being understood that, in the case of a pricing matrix or grid based upon a
measure of financial performance provided for in the Term Debt Documents as in
effect on the date hereof, (x) any change in rate due to the operation thereof
shall not constitute an increase and (y) each of the interest rates specified in
such matrix or grid may be increased by an amount up to 300 basis points),
(ii) to provide for any incurrence of additional or increased Term Debt
Indebtedness after the Closing Date, except for any such incurrence and increase
of the Term Debt Indebtedness, whether pursuant to “Incremental Term Facility”
(as defined and provided for in the Term Debt Credit Agreement as in effect on
the date hereof) or otherwise, permitted under the provisions of
Section 7.8(iv) hereof and which does not otherwise violate the provisions of
this Section 7.22, (iii) to change the final maturity date (except in connection
with an acceleration of the Term Debt Indebtedness following an event of
default) for any of the Term Debt Indebtedness to a date that is earlier than
the expiration of the Term as in effect hereunder on the Closing Date, or
(iv) to increase or accelerate any amortization payments or mandatory
prepayments provided for under the Term Debt Documents as in effect on the date
hereof (except for any amendments to provide for amortization with respect to
any exercise by Borrowers of their rights to incur additional Term Debt
Indebtedness pursuant to the “Incremental Term Facility” (as defined and
provided for in the Term Debt Credit Agreement as in effect on the date hereof),
in which case the amortization terms and final maturity date of any applicable
“Incremental Term Loans” (as defined and provided for in the Term Debt Credit
Agreement as in effect on the date hereof) shall not be materially less
favorable to Borrowers as compared to such amortization and maturity terms of
the term loans under the Term Debt Credit Agreement as in effect on the date
hereof) or otherwise make a change to the terms and conditions of the
amortization payments or mandatory prepayments under the Term Debt Documents as
in effect on the date hereof in a manner that is materially adverse to the
interests of Borrowers and/or Agent and Lenders; provided that , Borrowers shall
deliver to Agent a copy of any amendment, waiver or modification of the Term
Debt Documents entered into in compliance with this Section 7.22 within five
(5) Business Days of the execution thereof. For the avoidance of doubt,
Borrowers may enter into Permitted Refinancings of the Term Debt Indebtedness
that are consistent with the provisions of this Section 7.22, subject to certain
amendments to the Intercreditor Agreement to be negotiated and acceptable to
Agent in its sole and absolute discretion.

 

7.23        Amendment of DIRECTV Documents. Amend, modify or waive, or permit
any amendment, modification or waiver of, any term or provision of the
DIRECTV/DirectSat Contract or the DIRECTV Letter in any manner materially
adverse to Agent or Lenders; terminate the DIRECTV/DirectSat Contract or the
DIRECTV Letter; permit a modification of the DIRECTV/DirectSat Contract or the
DIRECTV Letter that results in such contract or letter allowing termination of
the DIRECTV/DirectSat Contract earlier than that in effect on the date hereof;
or receive a notice of termination of the DIRECTV/DirectSat Contract and permit
such notice to remain in effect and not be withdrawn for a period of 90 days.

 

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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)           Agreement and Note. Agent shall have received this Agreement and
the Notes duly executed and delivered by an authorized officer of each Borrower;

 

(b)           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;

 

(c)           Leasehold Agreements. Agent shall have received landlord,
mortgagee or warehouseman agreements satisfactory to Agent with respect to all
premises leased by Borrowers where the chief executive office of any Borrower
and/or the books and records of any Borrower regarding Receivables are located;

 

(d)           Pledge Agreements and Other Documents. Agent shall have received
(i) the Pledge Agreements, along with certificates evidencing all of the Equity
Interests pledged pursuant thereto together with appropriate undated instruments
of transfer executed in blank (if required to be delivered hereunder or under
the Pledge Agreements), and (ii) the executed Other Documents, all in form and
substance satisfactory to Agent and all duly executed and delivered by an
authorized officer of each applicable Borrower;

 

(e)           Term Debt Documents and Intercreditor Agreement. Agent shall have
received final executed copies of the Term Debt Credit Agreement and all other
material Term Debt Documents and the Intercreditor Agreement as in effect on the
Closing Date, all of which shall be satisfactory in form and substance to Agent
and the transactions contemplated by such documentation shall be consummated
prior to or simultaneously with the making of the initial Advance;

 

(f)            [RESERVED];

 

(g)           [RESERVED];

 

(h)           [RESERVED];

 

(i)            Account Control Agreements. Agent shall have received duly
executed account control agreements, each in form and substance satisfactory to
Agent and sufficient to give Agent “control” (for purposes of Articles 8 and 9
of the Uniform Commercial Code) over all accounts, including the Cash Collateral
Account.

 

(j)            Financial Condition Certificates. Agent shall have received an
executed Financial Condition Certificate in the form of Exhibit 8.1(j).

 

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(k)           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, (ii) Borrowers are on such date in compliance with all the terms and
provisions set forth in this Agreement and the Other Documents and (iii) on such
date no Default or Event of Default has occurred and is continuing;

 

(l)            Borrowing Base. Agent (x) shall have received evidence from
Borrowers including delivery of any initial Borrowing Base Certificate, that
(i) the aggregate amount of Eligible Receivables, Eligible Unbilled Receivables
and Eligible Project Receivables are sufficient in value and amount to support
Advances in the amount requested by Borrowers on the Closing Date and (ii) after
giving effect to the Transactions on the Closing Date (including the initial
Advances to be made hereunder), Borrower shall have (i) Undrawn Collateral
Availability plus (ii) the Additional Borrowing Base Amount plus
(iii) unrestricted cash of at least $15,000,000 and (y) shall be satisfied with
the form and substance of such initial Borrowing Base Certificate;

 

(m)          Blocked Accounts. Agent shall have received duly executed
agreements establishing the Blocked Accounts or Depository Accounts with
financial institutions acceptable to Agent for the collection or servicing of
the Receivables and proceeds of the Collateral, and duly executed deposit
account control agreements in form and substance satisfactory to Agent and
relating to each account into which ABL Priority Collateral is or may be
deposited;

 

(n)           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 Swing Loans 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 thirty (30) days prior to the Closing Date,
issued by the Secretary of State or other appropriate official of each such
jurisdiction as attached to such certificate;

 

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(o)           Legal Opinion. Agent shall have received an executed legal opinion
of Morgan, Lewis & Bockius LLP, in form and substance satisfactory to Agent
which shall cover such matters incident to the transactions contemplated by this
Agreement and the Other Documents as Agent may reasonably require and each
Borrower hereby authorizes and directs such counsel to deliver such opinions to
Agent and Lenders;

 

(p)           No Litigation. (i) 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, the Term
Debt Documents or any of the Transactions or (B) which could, in the reasonable
opinion of Agent, reasonably be expected to have a Material Adverse Effect; and
(ii) no injunction, writ, restraining order or other order of any nature either
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;

 

(q)           Collateral Examination. Agent shall have completed Collateral
examinations and received appraisals of the Receivables, Inventory, General
Intangibles and Equipment of each Borrower and all books and records in
connection therewith;

 

(r)            Fees and Expenses. Agent shall have received (i) all fees payable
to Agent and Lenders and any other applicable Persons on or prior to the Closing
Date hereunder, including pursuant to Article III hereof and (ii) all costs and
expenses of Agent payable under Section 11.9 hereof;

 

(s)            Pro Forma Financial Statements. Agent shall have received a copy
of the Pro Forma Financial Statements which shall be satisfactory in all
respects to Lenders;

 

(t)            Insurance. Agent shall have received in form and substance
satisfactory to Agent, (i) certified copies of Borrowers’ casualty insurance
policies, together with (x) lender loss payable endorsements on the applicable
insurers’ standard form of loss payee endorsement reasonably acceptable to Agent
naming Agent as a lenders’ loss payee and (y) certificates of insurance on
appropriate ACORD insurance industry forms naming Agent as a certificate holder,
and (ii) certified copies of Borrowers’ liability insurance policies, together
with (x) endorsements naming Agent as a co-insured on the applicable insurers’
standard form of additional endorsement reasonably acceptable to Agent and
(y) certificates of insurance on appropriate ACORD insurance industry forms
naming Agent as a certificate holder;

 

(u)           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;

 

(v)           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;

 

(w)          No Material Adverse 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

 

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a Material Adverse Effect other than those events, conditions or states of facts
that have been disclosed by filing of a Form 8-K and (ii) no representations
made or information supplied to Agent or Lenders shall have proven to be
inaccurate or misleading in any material respect or fail to state any material
fact necessary to make the statements therein not misleading;

 

(x)           Contract Review. Agent shall have reviewed all Material Contracts
of Borrowers including leases, union contracts, labor contracts, vendor supply
contracts, license agreements and distributorship agreements and such contracts
and agreements shall be satisfactory in all respects to Agent;

 

(y)           Compliance with Laws. Agent shall be reasonably satisfied that
each Borrower is in compliance with all pertinent federal, state, local or
territorial regulations with respect to which the failure to comply could
reasonably be expected to have a Material Adverse Effect, including those with
respect to the Federal Occupational Safety and Health Act, the Environmental
Protection Act, ERISA and the Trading with the Enemy Act; and

 

(z)           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, in which case such representation or
warranty shall have been true and correct in all respects on such date);

 

(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 and, in the case of the initial Advances,
after giving effect to the consummation of the Transactions; provided, however
that Agent, in its sole discretion, may continue to make Advances
notwithstanding the existence of an Event of Default or Default as otherwise
provided for in this Agreement and that any Advances so made shall not be deemed
a waiver of any such Event of Default or Default;

 

(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; and

 

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(d)           Out-of-Formula Loans. In the case of any Advance constituting an
Out-of-Formula Loan, the Borrowing Base Certificate delivered pursuant to
Section 16.2 shall be true and correct in all material respects as of the date
of such Advance.

 

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. Subject to the provisions of the following sentence,
deliver to Agent on or before the fifteenth (15th) day of each fiscal month as
and for the prior month (a) accounts receivable ageings inclusive of
reconciliations to the general ledger, (b) accounts payable 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 fiscal month); provided
that, (x) if so requested by Agent in its discretion, Borrowers shall deliver
Borrowing Base Certificates at more frequent intervals calculated as of such
interim dates as Agent may require and (y) regardless of whether Agent shall
have exercised its rights under the preceding clause (x), Borrowers shall
deliver to Agent on the first Business Day of each week a weekly report update
to the Borrowing Base Certificate reflecting sales, receipts of cash and
collections during the preceding week. Notwithstanding anything to the contrary
contained in the foregoing sentence, Borrowers shall deliver to Agent on or
before the twentieth (20th) day of each fiscal month as and for the prior month
(I) accounts receivable ageing inclusive of reconciliations to the general
ledger for all Eligible Project Receivables and other Project Receivables and
(II) to the extent the Borrowing Base Certificate delivered under clause (d) of
the preceding sentence did not include reporting of Eligible Project Receivables
of Borrowers for the applicable fiscal month, an updated Borrowing Base
Certificate providing such information (subject to Agent’s rights under clause
(x) of the preceding sentence to require more frequent delivery of Borrowing
Base Certificates with complete information). 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. Notwithstanding anything to the contrary contained in this
Section, Borrowers shall deliver to Agent a weekly roll-forward of accounts
receivable. The items to be provided under

 

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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. Without limiting the
generality of the foregoing, Borrowers shall deliver such additional information
at such intervals as may be required by Agent from time to time in its sole
credit judgment exercised in its Permitted Discretion with respect to any and/or
all Eligible Project Receivables.

 

9.3                               Environmental Reports. 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 federal, state and local 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.

 

9.4                               Litigation. Promptly notify Agent in writing
of (a) 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 a material portion of the Collateral or which could reasonably be
expected to have a Material Adverse Effect and (b) periodic updates (no less
frequently than once every two weeks) and any material developments with respect
to the litigation in connection with the Pinnacle Acquisition.

 

9.5                               Material Occurrences. Promptly notify Agent in
writing upon the occurrence of: (a) any Event of Default or Default, including
the occurrence of any “Default” or “Event of Default under the Term Debt
Documents (or the receipt of any notice from Term Debt Creditors alleging the
occurrence of any such event), (b) any event of default under any Subordinated
Debt (or the receipt of any notice from the holder of any such Subordinated Debt
alleging the occurrence of any such event); (c) 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; (d) 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; (e) each and every
default by any Borrower which might result in the acceleration of the maturity
of any Indebtedness, if such acceleration could reasonably be expected to have a
Material Adverse Effect, 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; (f) any Borrower becomes involved in any material labor
dispute, or any strikes or walkouts or union organization of any Borrower’s
employees is threatened (to the best knowledge of Borrowers) or occurs or any
labor contract is entered into which is scheduled to expire during the Term,
(g) any communications received from DIRECTV asserting the termination of the
DIRECTV/DirectSat Contract or the DIRECTV Letter and (h) any other development
in the business or affairs of any Borrower or any Guarantor, which could
reasonably be expected to have a Material Adverse

 

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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 ninety (90) days after the end of each fiscal year of Borrowers,
(i) financial statements of Borrowers on a 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 complete and correct in all material respects, and reported upon
without qualification by an independent certified public accounting firm
selected by Borrowers and satisfactory to Agent (the “Accountants”) and
(ii) management prepared financial statements of Borrowers on a consolidating
basis, including, but not limited to, statements of income and stockholders’
equity 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 complete and correct in all material respects. The report
of the Accountants with respect to the audited financial statements described in
clause (i) of the foregoing sentence shall be accompanied by a statement of the
Accountants certifying that (x) they have caused this Agreement to be reviewed,
and (y) 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 Sections 6.5 hereof 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 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, (i) an
unaudited balance sheet of Borrowers on a consolidated basis as at the end of
such quarter and unaudited statements of income and stockholders’ equity and
cash flow of Borrowers on a consolidated basis reflecting results of operations
from the beginning of the fiscal year to the end of such quarter and for such
quarter, all prepared in accordance with GAAP applied on a basis consistent with
prior practices, and in reasonable detail 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 and
(ii) management-prepared financial statements on a consolidating basis
(exclusive of cash flows) for the business divisions of Borrowers as have been
prepared by Borrowers consistent with past practice. The reports shall be
accompanied by a Compliance Certificate.

 

9.9                               Monthly Financial Statements. Furnish Agent
within thirty (30) days after the end of each fiscal month, an unaudited balance
sheet of Borrowers on a consolidated basis as at the end of such month and
unaudited statements of income of Borrowers on a consolidated reflecting results
of operations from the beginning of the fiscal year to the end of such month and
for such month, all prepared in accordance with GAAP applied on a basis
consistent with prior practices,

 

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and in reasonable detail 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. The reports shall be
accompanied by a Compliance Certificate.

 

9.10                        Other Reports. Furnish Agent (i) as soon as
available, but in any event within ten (10) days after the issuance thereof,
(x) with copies of such financial statements, reports and returns as UniTek
Parent shall send to its stockholders and (y) copies of all notices, reports,
financial statements and other materials sent pursuant to the Term Debt
Documents and (ii) as soon as available, but in any event within three
(3) Business Days after the filing thereof, any and all reports , including
Forms 10-K, 10-Q and 8-K, registration statements and prospectuses and other
shareholder communications, filed by any Borrower with the SEC.

 

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 Other Documents 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, in each case which
could reasonably be expected to have a Material Adverse Effect.

 

9.12                        Projected Operating Budget. Furnish Agent, no later
than sixty (60) days following the beginning of each Borrower’s fiscal years,
commencing with fiscal year 2012, a month by month projected operating budget
and cash flow of Borrowers on a consolidated 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 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                        2011 and 2012 Audits. Furnish Agent, no later than
thirty (30) days after the Closing Date, financial statements of Borrowers on a
consolidated basis including, but not limited to, statements of income and
stockholders’ equity and cash flow for each of fiscal years 2011 and 2012, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and complete and correct in all material
respects, and, as to the 2012 audit, reported upon without qualification by
Accountants (other than a going concern or impairment qualification relating to
matters disclosed by the Borrower in a Form 8-K prior to the date hereof). The
report of the Accountants with respect to the audited financial statements
described in this Section 9.13 shall be accompanied by a statement of the
Accountants certifying that (x) they have caused this Agreement to be reviewed,
and (y) 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 Sections 6.5 hereof or, if such information
came to their attention, specifying any such Default or Event of Default, its
nature,

 

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when it occurred and whether it is continuing. Together with such reports,
Borrowers shall furnish Agent with a Compliance Certificate and certification to
the effect that the financial information presented in the audit reports does
not evidence deviation by more than 10% as to the level of accounts receivable
in an adverse manner from such financial information presented to Agent in the
Deloitte & Touche report dated as of June 26, 2013 and provided to Agent prior
to the Closing Date.

 

9.14                        Notice of Suits, Adverse Events. Furnish Agent with
prompt written notice of (i) any lapse or other termination of any material
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 material
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 Section 412 of the Code 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, or (c) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.

 

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9.16                        Additional Documents. Execute and deliver to Agent,
upon request, such documents and agreements as Agent may, from time to time,
reasonably request regarding Borrowers, their Subsidiaries, their businesses and
assets and properties and/or to carry out the purposes, terms or conditions of
this Agreement.

 

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 any
principal on the Obligations when due or within the period of grace, if any,
provided in the instrument or agreement under which such Obligation was created,
whether at maturity or by reason of acceleration pursuant to the terms of this
Agreement or by notice of intention to prepay, or by required prepayment
(including pursuant to Section 2.7), or failure to pay when due any interest on
the Obligations or other liabilities or make any other payment, fee or charge
provided for herein or in any Other Document when due, which failure continues
for a period of three (3) Business Days (but further provided that such grace
period under this Section 10.1 may not be exercised more than three (3) times
during the Term);

 

10.2                        Breach of Representation. Any 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 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 hereunder which is
unremedied for a period of fifteen (15) days, or (ii) permit the inspection of
its books or records or access for appraisals in accordance with the terms
hereof;

 

10.4                        Judicial Actions. Issuance of a notice of Lien,
levy, assessment, injunction or attachment against any Borrower’s Inventory or
Receivables or 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 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 4.6, 4.7, 4.9, 4.13,
4.14, 6.3, 6.4, 9.4 or 9.6 hereof which is not cured within twenty (20) days
from the occurrence of such failure or neglect;

 

10.6                        Judgments. Any 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 aggregate amount in excess of $1,000,000 or against all
Borrowers or Guarantors for an aggregate amount in excess of $1,000,000 and
(i) action shall be legally taken by any judgment creditor to levy upon

 

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assets or properties of any Borrower or any Guarantor to enforce any such
judgment, or, (ii) there shall be any 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, or (iii) 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 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 sixty (60)
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                        Affiliate or Guarantor Bankruptcy. Any Affiliate or
any Subsidiary of any Borrower, or any Guarantor, 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 sixty (60) 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;

 

10.9                        Material Adverse Effect. The occurrence of any
Material Adverse Effect;

 

10.10                 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 in favor of Term Debt Agent subject to the Intercreditor
Agreement in the case of any Term Debt Priority Collateral and to any other
Permitted Encumbrances which by operation of law (including the priority granted
under the Uniform Commercial Code to any purchase money security interests that
are Permitted Encumbrances) have senior priority;

 

10.11                 Term Debt Indebtedness. Acceleration or other exercise of
rights or remedies under the Term Debt Documents or the existence of an “event
of default” thereunder due to the failure to timely pay principal or interest
thereunder.

 

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10.12                 Cross Default. Either (x) any specified “event of default”
under any other Indebtedness 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 or total amount potentially due and
payable by any Borrower(s)) of $1,500,000 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), in any such case after giving effect to any applicable
notice, grace or cure periods, provided, however, that this clause (x) shall not
include any such events under the Term Debt, or (y) a default of the obligations
of any Borrower under any other agreement to which it is a party shall occur
which causes a Material Adverse Effect which default is not cured within any
applicable grace period;

 

10.13                 Breach of Guaranty or Pledge Agreement. Termination or
breach of any Guaranty, Guaranty Security Agreement, Pledge Agreement or similar
agreement executed and delivered to Agent in connection with the Obligations of
any Borrower, or if any Guarantor attempts to terminate, challenges the validity
of, or its liability under, any such Guaranty, Guaranty Security Agreement,
Pledge Agreement or similar agreement;

 

10.14                 Change of Control. Any Change of Control shall occur;

 

10.15                 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;

 

10.16                 Licenses. To the extent it could reasonably be expected to
have a Material Adverse Effect: (i) Any Governmental Body shall (a) revoke,
terminate, suspend or adversely modify any license, permit, patent trademark or
tradename of any Borrower or any Guarantor, the continuation of which is
material to the continuation of any Borrower’s or Guarantor’s business, or
(b) commence proceedings to suspend, revoke, terminate or adversely modify any
such license, permit, trademark, tradename or patent and such proceedings shall
not be dismissed or discharged within sixty (60) days, or (c) schedule or
conduct a hearing on the renewal of any license, permit, trademark, tradename or
patent necessary for the continuation of any Borrower’s or Guarantor’s business
and the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such
license, permit, trademark, tradename or patent; (ii) any agreement which is
necessary or material to the operation of any Borrower’s or any Guarantor’s
business shall be revoked or terminated and not replaced by a substitute
acceptable to Agent within thirty (30) days after the date of such revocation or
termination, and such revocation or termination and non-replacement would
reasonably be expected to have a Material Adverse Effect;

 

10.17                 Seizures. Other than with respect to de minimis items of
Collateral not exceeding $250,000 in the aggregate, any portion of the
Collateral shall be seized or taken by a Governmental Body, or any Borrower or
any Guarantor or 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 or other
proceeding

 

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which could reasonably be expected to, in the opinion of Agent, upon final
determination, result in impairment or loss of the security provided by this
Agreement or the Other Documents;

 

10.18                 Operations. The business operations of any Borrowers are
interrupted at any time for more than 7 consecutive calendar 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 shall be receiving the
proceeds of business interruption insurance for a period of thirty (30)
consecutive days;

 

10.19                 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; or

 

10.20                 DIRECTV Documents. The DIRECTV/DirectSat Contract shall be
amended, modified or waived in any manner materially adverse to Agent or Lenders
or the ABL Priority Collateral, or the DIRECTV/DirectSat Contract shall be
terminated or shall be subject of a notice of termination (other than the
DIRECTV Letter as in effect on July 1, 2013 or any modification thereof
extending the date of termination) that is not withdrawn within 90 days.

 

XI.                              LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

 

11.1                        Rights and Remedies.

 

(a)                                 Upon the occurrence of: (i) an Event of
Default pursuant to Section 10.7 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated; and, (ii) any of the other Events of Default and at any
time thereafter, at the option of Required Lenders all Obligations shall be
immediately due and payable and 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
Section 10.7(vii) hereof arising from a filing of a petition against any
Borrower in any involuntary case under any state or federal bankruptcy laws, the
obligation of Lenders to make Advances hereunder shall be suspended until such
time as such involuntary petition shall be dismissed or an Event of Default
under Section 10.7(vii) shall occur. 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

 

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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 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) trademarks, trademark
applications, trade styles, trade names, patents, patent applications,
copyrights, copyright applications, service marks, licenses, franchises and
other proprietary rights which are 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.

 

(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

 

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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 or to
take any other action with respect thereto and such determination will not in
any way modify or affect any of Agent’s or Lenders’ rights hereunder.

 

11.3                        Setoff. Subject to Section 14.12, 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 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.

 

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 outstanding under any of the Other Documents), 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 protective advances made 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;

 

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FOURTH, to the payment of all of the Obligations consisting of accrued interest
on account of the Swing Loans;

 

FIFTH, to the payment of the outstanding principal amount of the Obligations
consisting of Swing Loans;

 

SIXTH, to the payment of all of the Obligations consisting of accrued fees and
interest with respect to the Advances (other than interest on the Swing Loans)
or otherwise provided for in this Agreement or the Other Documents;

 

SEVENTH, to the payment of the outstanding principal amount of the Advances
(other than the Swing Loans), including the payment or cash collateralization of
any outstanding Letters of Credit in accordance with Section 3.2(b) hereof, and
all Hedge Liabilities;

 

EIGHTH, to all other Obligations provided for in this Agreement or the Other
Documents or otherwise which shall have become due and payable and not repaid
pursuant to clauses “FIRST” through “SEVENTH” above, and

 

NINTH, 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 an amount equal to
its Ratable Share of amounts available to be applied pursuant to clauses
“SIXTH”, “SEVENTH” and “EIGHTH” 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 as provided for in
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” and “EIGHTH” above in the manner provided in this
Section 11.5.

 

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, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT, ANY OTHER

 

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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, 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 April 15, 2016
(the “Term”) unless sooner terminated as herein provided. Borrowers may
terminate this Agreement at any time upon thirty (30) days’ prior written notice
(which notice shall be revocable) upon payment in full of the Obligations.

 

13.2                        Termination. The termination of the Agreement shall
not affect Agent’s, Issuer’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, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or 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.

 

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XIV.                     REGARDING AGENT.

 

14.1                        Appointment. Each Lender hereby designates AIC 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 3.4(a) and the Fee Letter), charges and collections (without giving
effect to any collection days) 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 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.

 

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 except as expressly set forth
herein.

 

14.3                        Lack of Reliance on Agent and Resignation.
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

 

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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 of any Borrower, or the existence of
any Event of Default or any Default.

 

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 to 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 Pledge Agreement and 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 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 shall inure to its benefit a to any actions taken
or omitted to be taken by it in connection with such Liens).

 

14.4                        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.

 

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14.5                        Reliance. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, 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.

 

14.6                        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.

 

14.7                        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 Advances (or, if
no Advances are outstanding, according to its Revolving Commitment Percentage),
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).

 

14.8                        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.

 

14.9                        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.

 

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14.10                 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.

 

14.11                 No Reliance on Agent’s Customer Identification Program.
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 Borrower, its Affiliates
or its agents, this Agreement, the Other Documents or the transactions hereunder
or contemplated hereby: (1) any identity verification procedures, (2) any
record-keeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other laws.

 

14.12                 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.

 

14.13                 Lenders’ Agreements Regarding Intercreditor Agreement. As
between Agent on the one hand and Lenders on the other (and without creating any
third party beneficiary rights in favor of any Borrower or any Subsidiary of any
Borrower), (i) each Lender hereby acknowledges that it has received and reviewed
the Intercreditor Agreement and agrees to be bound by the terms thereof,
(ii) each Lender (and each Person that becomes a Lender hereunder pursuant to
Section 16.3) hereby authorizes and directs Agent to enter into the
Intercreditor Agreement on behalf of such Lender and agrees that Agent may take
such action on its behalf as is contemplated by the terms of the Intercreditor
Agreement, (iii) each Lender hereby agrees that, notwithstanding anything herein
to the contrary, prior to the Term Debt Obligations Payment Date, all rights and
remedies of the Agent and the Lenders with respect to the Collateral including
the Term Debt Priority Collateral shall be subject to the terms of the
Intercreditor Agreement

 

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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).

 

(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 to 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 other Person directly or contingently liable for
the Obligations hereunder, or against or with respect to the 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.

 

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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 by or 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.

 

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 (or 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

 

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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 Revolving Credit Commitment Amount of any Lender without the
consent of such Lender or, except in connection with any Borrower Revolver
Increase, increase the Maximum Revolving Advance Amount without the consent of
all Lenders (other than Defaulting Lenders);

 

(ii)                                  extend the Term or the maturity of any
Note or the due date for any amount payable hereunder, or decrease the rate of
interest or reduce any fee payable by Borrowers to Lenders pursuant to this
Agreement without the consent of each Lender directly affected thereby other
than any waiver of the application of the Default Rate hereunder;

 

(iii)                               alter, amend or modify the definition of the
term Required Lenders, Section 2.20(a), Section 2.20(b), any provision regarding
the pro rata treatment of or sharing of payments by the Lenders or requiring all
Lenders to authorize the taking of any action or this Section 16.2(b);

 

(iv)                              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 of the
Lenders (other than Defaulting Lenders) (except for any release of Liens with
respect to Collateral that is part of the Term Debt Priority Collateral if and
to the extent required under the Intercreditor Agreement);

 

(v)                                 change the rights and duties of Agent or
Issuer without the consent of Agent or each Issuer (as applicable);

 

(vi)                              [RESERVED];

 

(vii)                           either (x) increase the Advance Rates above the
Advance Rates in effect on the Closing Date, or (y) make any modification to the
definitions of Eligible Receivable, Eligible Unbilled Receivables Sublimit or
Eligible Project Receivables, in any such case without the consent of all of the
Lenders (other than Defaulting Lenders); or

 

(viii)                        release any Borrower or Guarantor without the
consent of all of the Lenders (other than Defaulting Lenders).

 

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.

 

Subject to the terms and conditions herein, including the conditions precedent
set forth in Section 8.2 hereof, Agent and Lenders shall permit Revolving
Advances at any time to exceed

 

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the Formula Amount by up to the Additional Borrowing Base Amount (the
“Out-of-Formula Loans”). A request for an Advance of an Out-of-Formula Loan
shall be made in accordance with, and subject to the same terms and conditions
as, a Revolving Advance, including notice as required by Section 2.2; provided,
however, that together with any request for an Out-of-Formula Loan, Borrowing
Agent also shall certify that there have been no material changes in the
information or the extent or value of the Accounts as specified in the most
recently delivered Borrowing Base Certificate; and provided further, that the
most recently delivered monthly report as to the aging of account receivables
shall evidence Accounts in an amount that exceeds $80,000,000; and provided
further, that to the extent that the amount of Accounts is less than
$80,000,000, the Additional Borrowing Base Amount then available shall be
reduced on a dollar for dollar basis to the extent such amount is less than
$80,000,000. Notwithstanding anything herein to the contrary, Out-of-Formula
Loans shall be deemed Revolving Advances, and part of the Obligations, for all
purposes.

 

In addition to (and not in substitution of) the Revolving Advances permitted
above in this Section 16.2, the Agent is hereby authorized by Borrowers and the
Lenders, from time to time in the Agent’s sole discretion, (A) after the
occurrence and during the continuation of a Default or an Event of Default, or
(B) at any time that any of the other applicable conditions precedent set forth
in Section 8.2 hereof have not been satisfied, to make Revolving Advances to
Borrowers on behalf of the Lenders which the 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; provided, that at any time after giving effect to any such
Revolving Advances the outstanding Revolving Advances do not exceed one hundred
and five percent (105%) of the Formula Amount.

 

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.

 

(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
financial institutions (each such transferee or purchaser of a participating
interest, a “Participant”); provided that no Lender may grant any such
Participant any rights to consent with respect to any amendments, supplement,
modification or waiver with respect to this Agreement or any Other Documents
except that such Participant may be granted consent rights with respect to any
amendments, supplement, modification or waiver requiring the consent of such
Lender or of all Lenders under Section 16.2(b)(i), (ii) or (iv) (but provided
further that if the Lender granting such participation is or at any time becomes
a Defaulting Lender, no such Participant of any such Lender shall have any
rights to consent greater than the voting rights of such Lender under such
circumstances). 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

 

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provided that 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 and 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 which
shall not be unreasonably withheld or delayed, and with the consent of Borrowing
Agent which shall not be unreasonably withheld or delayed (provided that no
consent of the Borrowers shall be required for an assignment to a Lender, an
affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of
Default has occurred and is continuing, any other Person; and provided, further,
that the Borrowing Agent shall be deemed to have consented to any such
assignment unless the Borrowing Agent shall object thereto by written notice to
Agent within five Business Days after having received notice thereof) may sell,
assign or transfer all or any part of its rights and obligations under or
relating to Advances under this Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks or
financial institutions may commit to make Advances hereunder (each a “Purchasing
Lender”), in minimum amounts of not less than $5,000,000, 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. For the purposes of this Section 16.3 (c), “Approved Fund” means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an
entity that administers or manages a Lender

 

(d)                                 Any Lender, with the consent of Agent which
shall not be unreasonably withheld or delayed, may directly or indirectly sell,
assign or transfer all or any portion of its

 

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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)                                  In the event that any Lender (i) gives
notice under Section 3.8, (ii) requests compensation under Section 3.7, or
requires the Borrower to pay any additional amount to any Lender or any Official
Body for the account of any Lender pursuant to Section 3.10, (iii) is a
Defaulting Lender, (iv) becomes subject to the control of an Governmental Body
(other than normal and customary supervision), or (v) Agent requests the consent
of a Lender pursuant to Section 16.2 and such consent is denied, then either
Borrower, at its sole expense upon notice to such Lender and the Administrative
Agent, or Agent, at its option, may require such Lender to

 

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assign, without recourse (in accordance with the otherwise applicable
requirements of this Section 16.3), its Revolving Commitment and interest in the
Advances to Agent or to another Lender or to any other Person designated by the
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;
provided that in the case of any assignment resulting from a claim for increased
compensation or amounts payable under Section 3.7 or 3.10, the assignment to the
Designated Lenders must result in a reduction in such compensation or amounts
payable. In the event Borrower or Agent elects to require any Lender to assign
its interest to Agent or to the Designated Lender in accordance with this
paragraph, Agent will so notify such Lender 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; provided
that a Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower or Agent to require such assignment and
delegation cease to apply.

 

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 indemnify
Agent, Issuer, each Lender and each of their respective officers, directors,
Affiliates, attorneys, employees and agents from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including
fees and disbursements of counsel) which may be imposed on, incurred by, or
asserted against Agent, Issuer or any Lender in 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, Issuer or any Lender is
a party thereto, except to the extent that any of the foregoing arises out of
the willful misconduct or gross negligence of the party being indemnified (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 indemnitees described above in this Section 16.5 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 (other than
Excluded Taxes but including any Other Taxes) shall be payable by Agent, Lenders
or Borrowers on account of the execution or delivery of this

 

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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
indemnitees described above in this Section 16.5 harmless from and against all
liability in connection therewith.

 

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 site on
the World Wide Web (a “Website Posting”) if Notice of such Website 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 Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);

 

(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 a Website 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.

 

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(A)                               If to Agent, Swing Loan Lender or AIC at:

 

Apollo Investment Corporation

c/o Apollo Capital Management, L.P.

9 West 57th Street

New York NY 10019

Attention: Joseph D. Glatt and Gregory W. Hunt

Telephone: (212) 515-3450

Facsimile: (646) 417-6605

 

with an additional copy to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attn: Leonard Klingbaum

Telephone: (212) 446-4792

Facsimile: (212) 446-6460

 

(B)                               If to a Lender other than Agent, as specified
on the signature pages hereof

 

(C)                               If to Borrowing Agent or any Borrower:

 

UniTek Global Services, Inc.

1777 Sentry Parkway West

Gwynedd Hall, Suite 202

Blue Bell, Pennsylvania 19422

Attention: Andrew J. Herning, Chief Financial Officer

Telephone: 267-464-1700

Facsimile: 484-493-1613

 

with a copy to:

 

Morgan, Lewis & Bockius LLP 1701 Market Street

Philadelphia, PA 19103-2921

Attention: Michael J. Pedrick

Telephone: (215) 963-4808

Facsimile: (215) 963-5001

 

16.7                        Survival. The obligations of Borrowers under
Sections 2.2(f), 3.7, 3.8, 3.9, 4.19(h), 16.5 and 16.9 and the obligations of
Lenders under Sections 2.2, 2.16, 2.20(c) and 14.7, 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 or
regulations, 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.

 

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16.9                        Expenses. All costs and expenses including
attorneys’ fees (including the allocated costs of in house counsel) and
disbursements incurred by Agent on its behalf or on behalf of Issuer, Lenders
and the other holders of the Obligations (a) in all efforts made to enforce
payment of any Obligation or effect collection of any Collateral or enforcement
of this Agreement or any of the Other Documents, or (b) in connection with the
preparation, negotiation, execution, delivery, entering into, syndication,
modification, amendment and administration of this Agreement or any of the Other
Documents or any consents or waivers hereunder or thereunder and all related
agreements, documents and instruments, or (c) in instituting, maintaining,
preserving, enforcing and foreclosing on Agent’s security interest in or Lien on
any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or
any Lender’s rights hereunder or under any of the Other Documents and under all
related agreements, documents and instruments, whether through judicial
proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent’s or any Lender’s transactions
with any Borrower or any Guarantor or (e) in connection with any advice given to
Agent or any Lender with respect to its rights and obligations under this
Agreement or any of the Other Documents and all related agreements, documents
and instruments, may be charged to Borrowers’ Account and shall be part of the
Obligations.

 

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 copy) 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.

 

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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.

 

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. 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.

 

130

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

 

Each of the parties has signed this Agreement as of the day and year first above
written.

 

 

UNITEK GLOBAL SERVICES, INC.,

 

UNITEK ACQUISITION, INC.,

 

as Borrowers

 

 

 

By:

/s/ Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Chief Financial Officer

 

 

 

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS

 

USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC,

 

as Borrowers

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:

Andrew Herring

 

Title:

Treasurer

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

 

APOLLO INVESTMENT

 

CORPORATION, as Revolving Lender,

 

Swing Loan Lender and as Agent

 

 

 

By: Apollo Investment Management, L.P.,

 

as Advisor

 

 

 

By: ACC Management, LLC, as its General

 

Partner

 

 

 

By:

/s/ Ted Goldthorpe

 

Name:

Ted Goldthorpe

 

Title:

Authorized Signatory

 

 

 

Revolving Commitment Percentage: 100%

 

Revolving Commitment Amount: $75,000,000

 

Swing Loan Commitment Percentage: 100%

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

EXHIBIT 1.2

 

BORROWING BASE CERTIFICATE

 

[***]

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

EXHIBIT 1.2(a)

 

COMPLIANCE CERTIFICATE

 

[***]

 

2

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

 

EXHIBIT 2.1(a)

 

REVOLVING CREDIT NOTE

 

$75,000,000

 

July 10, 2013

 

FOR VALUE RECEIVED, UNITEK GLOBAL SERVICES, INC., a corporation organized under
the laws of the State of Delaware (“UniTek Parent”), UNITEK ACQUISITION, INC., a
corporation organized under the laws of the State of Delaware (“UniTek
Acquisition”) PINNACLE WIRELESS USA, INC., a corporation organized under the
laws of the State of Delaware (“Pinnacle”), UNITEK USA, LLC, a limited liability
company organized under the laws of the State of Delaware (“UniTek USA”),
ADVANCED COMMUNICATIONS USA, INC., a corporation organized under the laws of the
State of Delaware (“Advanced Communications”), DIRECTSAT USA, LLC, a limited
liability company organized under the laws of the State of Delaware
(“DirectSat”) and FTS USA, LLC, a limited liability company organized under the
laws of the State of Delaware (“FTS”; UniTek Parent, UniTek Acquisition,
Pinnacle, UniTek USA, Advanced Communications, DirectSat and FTS collectively,
the “Borrowers”, and each a “Borrower”), hereby promise, jointly and severally,
to pay, to APOLLO INVESTMENT CORPORATION (“Revolving Lender”), at the Payment
Office of Agent at the address set forth in the Credit Agreement referenced
below or at such other place as Agent may from time to time designate to
Borrowers in writing: (i) at the end of the Term and/or (ii) earlier as provided
in the Credit Agreement, the principal sum of SEVENTY-FIVE MILLION DOLLARS
($75,000,000) or such greater or lesser sum which then represents Revolving
Lender’s Revolving Commitment Percentage of the aggregate unpaid principal
amount of all Revolving Advances made or extended to any Borrower by Revolving
Lenders pursuant to Section 2.1(a) (or any other applicable provision) of the
Credit Agreement, in lawful money of the United States of America in immediately
available funds, together with interest on the principal hereunder remaining
unpaid from time to time at the rate or rates from time to time in effect, as
calculated as provided for in, and due and payable on the dates provided for
under, the Credit Agreement.

 

THIS REVOLVING CREDIT NOTE is executed and delivered under and pursuant to the
terms of that certain Revolving Credit and Security Agreement, dated as of the
date hereof (as the same may be amended, modified, supplemented, restated or
replaced from time to time, the “Credit Agreement”), by and among the Borrowers
named herein, each other Person hereafter joined thereto as a borrower from time
to time, the various financial institutions named therein or which hereafter
become a party thereto as lenders (collectively, the “Lenders”), and Apollo
Investment Corporation, as agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity (including any successor
“Agent” appointed under the Credit Agreement), the “Agent”). Capitalized terms
used herein and not otherwise defined herein shall have the meanings provided in
the Credit Agreement.

 

Borrower hereby waives diligence, presentment, demand, protest and notice of any
kind whatsoever as further set forth in the Credit Agreement.

 

This Revolving Credit Note is one of the Notes referred to in the Credit
Agreement, which among other things, contains provisions for the acceleration of
the maturity hereof upon

 

3

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

 

the happening of certain events, for optional and mandatory prepayments of the
principal hereof prior to the maturity hereof and for the amendment or waiver of
certain terms and conditions therein specified. Such provisions, and all other
provisions of the Credit Agreement, are hereby incorporated by reference. This
Revolving Credit Note is secured by certain Liens in the property and assets of
Borrowers granted by Borrowers pursuant to the Credit Agreement and the Other
Documents in favor of Agent, for its benefit and for the ratable benefit of each
Lender, Issuer and each other holder of the Obligations, which such Liens are
subject to the provisions of the Intercreditor Agreement.

 

THIS REVOLVING CREDIT NOTE, AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM
(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. This Revolving
Credit Note shall be binding upon and inure to the benefit of Borrowers, Agent
and Revolving Lender and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Revolving Credit Note without the prior written consent of Agent and each
Lender. Without limiting the generality of the general incorporation of the
Credit Agreement herein provided for above, the provisions of Section 16.1 of
the Credit Agreement regarding consents to and waivers regarding jurisdiction
and venue, Section 16.5 of the Credit Agreement regarding indemnities,
Section 16.6 of the Credit Agreement regarding notices, Section 16.7 of the
Credit Agreement regarding survival of certain provisions and obligations,
Section 16.9 of the Credit Agreement regarding expenses, Section 16.10 of the
Credit Agreement regarding injunctive relief and Article XII of the Credit
Agreement regarding certain waivers including waivers of the rights of jury
trial are hereby specifically incorporated by reference. If any part of this
Revolving Credit Note is contrary to, prohibited by, or deemed invalid under
Applicable Laws or regulations, 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.

 

[Remainder of Page Intentionally Left Blank]

 

4

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

 

IN WITNESS WHEREOF, the undersigned have executed this Revolving Credit Note the
day and year first written above intending to be legally bound hereby.

 

 

UNITEK GLOBAL SERVICES, INC.

 

 

 

UNITEK ACQUISITION, INC.

 

 

 

PINNACLE WIRELESS USA, INC.

 

 

 

UNITEK USA, LLC

 

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

 

DIRECTSAT USA, LLC

 

 

 

FTS USA, LLC

 

 

 

BY:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT 2.4(a)

 

SWING LOAN NOTE

 

$[        ]

 

[                      ], 20[      ]

 

FOR VALUE RECEIVED, UNITEK GLOBAL SERVICES, INC., a corporation organized under
the laws of the State of Delaware (“UniTek Parent”), UNITEK ACQUISITION, INC., a
corporation organized under the laws of the State of Delaware (“UniTek
Acquisition”) PINNACLE WIRELESS USA, INC., a corporation organized under the
laws of the State of Delaware (“Pinnacle”), UNITEK USA, LLC, a limited liability
company organized under the laws of the State of Delaware (“UniTek USA”),
ADVANCED COMMUNICATIONS USA, INC., a corporation organized under the laws of the
State of Delaware (“Advanced Communications”), DIRECTSAT USA, LLC, a limited
liability company organized under the laws of the State of Delaware
(“DirectSat”) and FTS USA, LLC, a limited liability company organized under the
laws of the State of Delaware (“FTS”; UniTek Parent, UniTek Acquisition,
Pinnacle, UniTek USA, Advanced Communications, DirectSat and FTS collectively,
the “Borrowers”, and each a “Borrower”), hereby promise, jointly and severally,
to pay, to APOLLO INVESTMENT CORPORATION (“Swing Loan Lender”), at the Payment
Office of Agent at the address set forth in the Credit Agreement referenced
below or at such other place as Agent may from time to time designate to
Borrowers in writing: (i) at the end of the Term and/or (ii) earlier as provided
in the Credit Agreement, the principal sum of [          ] ($[         ]) or
such greater or lesser sum which then represents the aggregate unpaid principal
amount of all Swing Loans made or extended to any Borrower by Swing Loan Lender
pursuant to Section 2.4 (or any other applicable provision) of the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, together with interest on the principal hereunder remaining
unpaid from time to time at the rate or rates from time to time in effect, as
calculated as provided for in, and due and payable on the dates provided for
under, the Credit Agreement.

 

THIS SWING LOAN NOTE is executed and delivered under and pursuant to the terms
of that certain Revolving Credit and Security Agreement, dated as of July 10,
2013 (as the same may be amended, modified, supplemented, restated or replaced
from time to time, the “Credit Agreement”), by and among the Borrowers named
herein, each other Person hereafter joined thereto as a borrower from time to
time, the various financial institutions named therein or which hereafter become
a party thereto as lenders (collectively, the “Lenders”), and Apollo Investment
Corporation, as agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity (including any successor “Agent”
appointed under the Credit Agreement), the “Agent”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings provided in the
Credit Agreement.

 

Borrower hereby waives diligence, presentment, demand, protest and notice of any
kind whatsoever as further set forth in the Credit Agreement.

 

This Swing Loan Note is one of the Notes referred to in the Credit Agreement,
which among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory
prepayments of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain terms and conditions

 

[Signature Page to Revolving Credit and Security Agreement]

 

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

 

therein specified. Such provisions, and all other provisions of the Credit
Agreement, are hereby incorporated by reference. This Swing Loan Note is secured
by certain Liens in the property and assets of Borrowers granted by Borrowers
pursuant to the Credit Agreement and the Other Documents in favor of Agent, for
its benefit and for the ratable benefit of each Lender, Issuer and each other
holder of the Obligations, which such Liens are subject to the provisions of the
Intercreditor Agreement.

 

THIS SWING LOAN NOTE, AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM
(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. This Swing Loan
Note shall be binding upon and inure to the benefit of Borrowers, Agent and
Swing Loan Lender and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Swing Loan Note without the prior written consent of Agent and each Lender.
Without limiting the generality of the general incorporation of the Credit
Agreement herein provided for above, the provisions of Section 16.1 of the
Credit Agreement regarding consents to and waivers regarding jurisdiction and
venue, Section 16.5 of the Credit Agreement regarding indemnities, Section 16.6
of the Credit Agreement regarding notices, Section 16.7 of the Credit Agreement
regarding survival of certain provisions and obligations, Section 16.9 of the
Credit Agreement regarding expenses, Section 16.10 of the Credit Agreement
regarding injunctive relief and Article XII of the Credit Agreement regarding
certain waivers including waivers of the rights of jury trial are hereby
specifically incorporated by reference. If any part of this Swing Loan Note is
contrary to, prohibited by, or deemed invalid under Applicable Laws or
regulations, 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.

 

[Remainder of Page Intentionally Left Blank]

 

2

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

 

IN WITNESS WHEREOF, the undersigned have executed this Swing Loan Note the day
and year first written above intending to be legally bound hereby.

 

 

UNITEK GLOBAL SERVICES, INC.

 

 

 

UNITEK ACQUISITION, INC.

 

 

 

PINNACLE WIRELESS USA, INC.

 

 

 

UNITEK USA, LLC

 

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

 

DIRECTSAT USA, LLC

 

 

 

FTS USA, LLC

 

 

 

BY:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT 5.5(b)

 

FINANCIAL PROJECTIONS

 

[***]

 

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

 

EXHIBIT 8.1(j)

 

FINANCIAL CONDITION CERTIFICATE

 

[***]

 

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

 

EXHIBIT 16.3

 

FORM OF COMMITMENT TRANSFER SUPPLEMENT

 

[***]

 

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

 

Schedule 1.2

 

Permitted Encumbrances

 

[***]

 

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

 

Schedule 2.9

 

Letters of Credit

 

[***]

 

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

 

Schedule 4.5

 

Equipment and Inventory Locations; Place of Business,

Chief Executive Office, Real Property

 

[***]

 

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

 

Schedule 4.15

 

Deposit and Investment Accounts

 

[***]

 

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

 

Schedule 5.1

 

Consents

 

None.

 

1

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

 

Schedule 5.2(a)

 

States of Qualification and Good Standing

 

Exact Legal Name of Each
Loan Party

 

State of
Incorporation/Formation

 

Foreign Qualifications*

 

 

 

 

 

UniTek Global Services, Inc.

 

DE

 

NJ, OK, PA

 

 

 

 

 

UniTek Acquisition, Inc.

 

DE

 

AL, PA (application pending)

 

 

 

 

 

Pinnacle Wireless USA, Inc.

 

DE

 

AL, AR, AZ, CA, CT, DC, FL, GA, HI, IA, IL, IN, KS, LA, MA, MD, ME, MI, MN, MO,
MS, MT, NC, NE, NJ, NM, NV, NY, OK, OR, PA, RI, SC, TX, UT, VA, VT, WA, WV, WI

 

 

 

 

 

UniTek USA, LLC

 

DE

 

NY, PA

 

 

 

 

 

Advanced Communications USA, Inc.

 

DE

 

AZ, CA, DC, FL, GA, IL, IN, KS, LA, MD, MN, MO, MS, NC, NE, NJ, NM, NV, OH, PA,
RI, TN, TX, VA

 

 

 

 

 

DirectSat USA, LLC

 

DE

 

AZ, CA, CO, DC, IA, ID, IL, IN, KS, KY, MD, MI, MN, MO, MT, ND, NE, NV, NY, OH,
OR, PA, SD, TX, UT, VA, WA, WI, WV, WY

 

 

 

 

 

FTS USA, LLC

 

DE

 

AL, AR, CT, FL, GA, LA, MA, MD, MI, MS, NC, NY, OH, OK, SC, TN, TX, VA, VT

 

2

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

 

Schedule 5.2(b)

 

Subsidiaries

 

Subsidiaries

 

Loan Party

 

Name of Subsidiary

 

Jursidiction

 

% Ownership

 

 

 

 

 

 

 

 

 

UniTek Global Services, Inc.

 

UniTek Acquisition, Inc.

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek Acquisition, Inc.

 

Pinnacle Wireless USA, Inc.

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek Acquisition, Inc

 

UniTek USA, LLC

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek Acquisition, Inc

 

Nex-Link USA Communications, Inc.

 

CA

 

100

%

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

Advanced Communications USA, Inc.

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

DirectSat USA, LLC

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

FTS USA, LLC

 

DE

 

100

%

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

Wirecomm Systems (2008), Inc.

 

Ontario CN

 

100

%

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

UniTek Canada, Inc.

 

Ontario CN

 

100

%

 

Inactive Subsidiaries

 

Nex-Link USA Communications, Inc.

 

Foreign Subsidiaries

 

Wirecomm Systems (2008), Inc.

UniTek Canada, Inc.

 

3

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

 

Schedule 5.4

 

Federal Tax Identification Number

 

[***]

 

4

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

 

Schedule 5.6

 

Prior Names

 

Name

 

Change

 

Date

 

 

 

 

 

1. UniTek Global Services, Inc.

 

Previous Name — Berliner Communications, Inc.

 

6/04/2010

 

 

 

 

 

2. Berliner Communications, Inc.

 

Previous Name — Novo Networks, Inc.

 

9/16/2005

 

 

 

 

 

3. Advanced Communications USA, Inc.

 

Converted from limited liability company to corporation; previously Advanced
Communications USA, LLC

 

10/22/2010

 

 

 

 

 

4. Nexlink Global Services, Inc.

 

Previous Name — BCI Communications, Inc.

 

9/19/2011

 

 

 

 

 

5. Pinnacle Wireless USA, Inc.

 

Previous Name — Nexlink Global Services, Inc.

 

12/17/2012

 

Unitek Global Services, Inc., merged with Berliner Communications, Inc. on
January 27, 2010, an Amended and Restated Certificate of Incorporation was filed
with the State of Delaware on June 4, 2010 changing the name from Berliner
Communications, Inc. to UniTek Global Services, Inc.

 

On February 18, 2005, Berliner Communications, Inc. entered into an asset
purchase agreement with Novo Networks, Inc., a company shell with no operations
and Novo’s newly-formed, wholly-owned subsidiary, BCI Communications, Inc. As
part of the transaction, BCI acquired the operations and substantially all of
the assets and liabilities of Berliner Communications, Inc. Berliner
Communications, Inc. changed its name to Old Berliner, Inc. As part of that
transaction, Old Berliner received Novo network shares which ultimately amounted
to approximately 80% of the ownership of Berliner Communications, Inc. On
September 16, 2005, Novo changed its name to Berliner Communications, Inc.

 

Due to the licensing requirements in the states Advanced Communications USA, LLC
operates in, a change in corporate structure was made from the limited liability
company to that of an S corporation effective October 22, 2010, filed with the
state of Delaware.

 

In an effort to both market and consolidate the wireline construction and
wireless divisions, a business name change was made from BCI
Communications, Inc. to Nexlink Global Services, Inc. effective September 19,
2011, filed with the State of Delaware.

 

In the effort to rebrand and combine its integrated carrier and specialty
wireless business unit into one customer-facing organization, a business name
change was made from Nexlink Global Services, Inc. to Pinnacle Wireless
USA, Inc. effective December 17, 2012, filed with the State of Delaware.

 

Advanced Communications USA, Inc. sometimes does business under the following
“d/b/a” name:  NexLink Communications.

 

5

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

 

Schedule 5.8(b)

 

Litigation

 

The following three class action law suits have been filed in the United States
District Court for the Eastern District of Pennsylvania against UniTek Global
Services, Inc. and certain current and former officers of UniTek Global
Services, Inc.: Robert Strougo vs. Unitek Global Services, Inc, et al., Civil
Action NO. 13-cv-2580; Alfred Minotti vs.Unitek Global Services, Inc, et al.,
Civil Action NO.: 13-cv-2119 and Robert Harvey vs. Unitek Global Services, Inc,
et al., Civil Action NO.: 13-cv-2514. Motions to consolidate the cases, appoint
lead plaintiff and counsel are pending. The cases allege that defendants made
misstatements and omissions regarding the company’s business, its financial
condition, and its internal controls and systems in violation of section
10(b) and section 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder.

 

6

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

 

Schedule 5.8(d)

 

Plans

 

[***]

 

7

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

 

Schedule 5.9

 

Intellectual Property, Source Code Escrow Agreements

 

[***]

 

8

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

 

Schedule 5.10

 

Licenses and Permits

 

None.

 

9

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

 

Schedule 5.14

 

Labor Disputes

 

None.

 

10

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

 

Schedule 5.27

 

Equity Interests

 

Loan Party

 

Interest Issued

 

Record and
Beneficial Owner

 

Percentage
Ownership

 

Certificate
Numbers

UniTek Global Services, Inc.(1)

 

4,686,196 common shares

 

Unitek Interposed LP

 

25.06

%

—

 

 

1,155,860 common shares

 

Waterfield Asset Management

 

6.18

%

—

 

 

965,059 common shares

 

Eubel Brady & Suttman Asset Management

 

5.16

%

—

 

 

945,000 common shares

 

Red Oak Partners

 

5.05

%

—

 

 

821,890 common shares

 

North Star Advisors

 

4.39

%

—

 

 

 

 

 

 

 

 

 

UniTek Acquisition, Inc.

 

1,000 common shares

 

UniTek Global Services, Inc.

 

100

%

01

 

 

 

 

 

 

 

 

 

Pinnacle Wireless USA, Inc.

 

1,000 common shares

 

UniTek Acquisition, Inc.

 

100

%

C-3

 

 

 

 

 

 

 

 

 

UniTek USA, LLC

 

100% membership interest

 

UniTek Acquisition, Inc.

 

100

%

N/A

 

 

 

 

 

 

 

 

 

Advanced Communications USA, Inc.

 

5,000 common shares

 

UniTek USA, LLC

 

100

%

1

 

 

 

 

 

 

 

 

 

DirectSat USA, LLC

 

100% membership interest

 

UniTek USA, LLC

 

100

%

N/A

 

 

 

 

 

 

 

 

 

FTS USA, LLC

 

100% membership interest

 

UniTek USA, LLC

 

100

%

N/A

 

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

(1)  The list of the top five shareholders of UniTek Global Services, Inc. is
based on available data from filings with the Securities and Exchange
Commission.

 

11

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

 

Schedule 5.28

 

Commercial Tort Claims

 

None.

 

12

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

 

Schedule 5.29

 

Letter of Credit Rights

 

None.

 

13

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

 

Schedule 5.30

 

Material Contracts

 

[***]

 

14

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

 

Schedule 7.3

 

Existing Guarantees

 

None.

 

15

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

 

Schedule 7.5(e)

 

Advances, Loans, Extensions

 

None.

 

16

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

 

Schedule 7.8

 

Existing Indebtedness

 

Earnout payments pursuant to that certain Asset Purchase Agreement, dated as of
September 14, 2012, by and between UniTek Global Services, Inc., DirectSat USA,
LLC, Skylink, LTD and Mr. John Larbus.

 

17

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