Exhibit 10.1

 

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CREDIT AGREEMENT

 

by and among

 

RADIANT SYSTEMS, INC.

 

and

 

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

 

as Borrowers,

 

THE LENDERS THAT ARE SIGNATORIES HERETO

 

as the Lenders,

 

and

 

WELLS FARGO FOOTHILL, INC.

 

as the Arranger and Administrative Agent

 

Dated as of March 31, 2005

 

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TABLE OF CONTENTS

 

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1.

   DEFINITIONS AND CONSTRUCTION    1      1.1    Definitions    1      1.2   
Accounting Terms    1      1.3    Code    1      1.4    Construction    1     
1.5    Schedules and Exhibits    2

2.

   LOAN AND TERMS OF PAYMENT    2      2.1    Revolver Advances    2      2.2   
Term Loan    2      2.3    Borrowing Procedures and Settlements    3      2.4   
Payments    7      2.5    Overadvances    9      2.6    Interest Rates and
Letter of Credit Fee: Rates, Payments, and Calculations    9      2.7    Cash
Management    10      2.8    Crediting Payments    11      2.9    Designated
Account    11      2.10    Maintenance of Loan Account; Statements of
Obligations    12      2.11    Fees    12      2.12    Letters of Credit    12  
   2.13    LIBOR Option    15      2.14    Capital Requirements    16      2.15
   Joint and Several Liability of Borrowers    17

3.

   CONDITIONS; TERM OF AGREEMENT    18      3.1    Conditions Precedent to the
Initial Extension of Credit    18      3.2    Conditions Precedent to all
Extensions of Credit    19      3.3    Term    19      3.4    Effect of
Termination    19      3.5    Early Termination by Borrowers    19      3.6   
Conditions Subsequent to the Initial Extension of Credit    20

4.

   REPRESENTATIONS AND WARRANTIES    21      4.1    No Encumbrances    21     
4.2    Eligible Accounts    21      4.3    Software    21

 

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     4.4    Equipment    23      4.5    Location of Inventory and Equipment   
23      4.6    Inventory Records    23      4.7    State of Incorporation;
Location of Chief Executive Office; Organizational Identification Number;
Commercial Tort Claims    23      4.8    Due Organization and Qualification;
Subsidiaries    23      4.9    Due Authorization; No Conflict    24      4.10   
Litigation    25      4.11    No Material Adverse Change    25      4.12   
Fraudulent Transfer    25      4.13    Employee Benefits    25      4.14   
Environmental Condition    26      4.15    Intellectual Property    26      4.16
   Leases    26      4.17    Deposit Accounts and Securities Accounts    26     
4.18    Complete Disclosure    26      4.19    Indebtedness    27      4.20   
Real Property    27

5.

   AFFIRMATIVE COVENANTS    27      5.1    Accounting System    27      5.2   
Collateral Reporting    27      5.3    Financial Statements, Reports,
Certificates    27      5.4    [Intentionally omitted].    27      5.5   
Inspection    27      5.6    Maintenance of Properties    27      5.7    Taxes
   28      5.8    Insurance    28      5.9    Location of Inventory and
Equipment    28      5.10    Compliance with Laws    29      5.11    Leases   
29      5.12    Existence    29      5.13    Environmental    29      5.14   
Disclosure Updates    29      5.16    Formation of Subsidiaries    29

 

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TABLE OF CONTENTS

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     5.17    Change of Maintenance Billing Practices    30      5.18    License
Agreements    30      5.19    Pass Through Revenues    30

6.

   NEGATIVE COVENANTS    30      6.1    Indebtedness    30      6.2    Liens   
31      6.3    Restrictions on Fundamental Changes    31      6.4    Disposal of
Assets    32      6.5    Change Name    32      6.6    Nature of Business    32
     6.7    Prepayments and Amendments    32      6.8    Change of Control    32
     6.9    Consignments    33      6.10    Distributions    33      6.11   
Accounting Methods    33      6.12    Investments    33      6.13   
Transactions with Affiliates    33      6.14    Use of Proceeds    34      6.15
   Inventory and Equipment with Bailees    34      6.16    Financial Covenants
   34      6.17    Collections    35

7.

   EVENTS OF DEFAULT    35

8.

   THE LENDER GROUP’S RIGHTS AND REMEDIES    37      8.1    Rights and Remedies
   37      8.2    Remedies Cumulative    37

9.

   TAXES AND EXPENSES    38

10.

   WAIVERS; INDEMNIFICATION    38      10.1    Demand; Protest; etc    38     
10.2    The Lender Group’s Liability for Collateral    38      10.3   
Indemnification    38

11.

   NOTICES    39

12.

   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER    40

13.

   ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS    40

 

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     13.1    Assignments and Participations    40      13.2    Successors    42

14.

   AMENDMENTS; WAIVERS    42      14.1    Amendments and Waivers    42      14.2
   Replacement of Holdout Lender    43      14.3    No Waivers; Cumulative
Remedies    44

15.

   AGENT; THE LENDER GROUP    44      15.1    Appointment and Authorization of
Agent    44      15.2    Delegation of Duties    45      15.3    Liability of
Agent    45      15.4    Reliance by Agent    45      15.5    Notice of Default
or Event of Default    45      15.6    Credit Decision    45      15.7    Costs
and Expenses; Indemnification    46      15.8    Agent in Individual Capacity   
46      15.9    Successor Agent    47      15.10    Lender in Individual
Capacity    47      15.11    Withholding Taxes    47      15.12    Collateral
Matters    49      15.13    Restrictions on Actions by Lenders; Sharing of
Payments    49      15.14    Agency for Perfection    50      15.15    Payments
by Agent to the Lenders    50      15.16    Concerning the Collateral and
Related Loan Documents    50      15.17    Field Audits and Examination Reports;
Confidentiality; Disclaimers by Lenders; Other Reports and Information    50  
   15.18    Several Obligations; No Liability    51      15.19    Bank Product
Providers    51

16.

   GENERAL PROVISIONS    52      16.1    Effectiveness    52      16.2   
Section Headings    52      16.3    Interpretation    52      16.4   
Severability of Provisions    52      16.5    Counterparts; Electronic Execution
   52      16.6    Revival and Reinstatement of Obligations    52

 

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16.7

   Confidentiality    52    

16.8

   Integration    53    

16.9

   Parent as Agent for Borrowers    53

 

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of March 31, 2005,
by and among the lenders identified on the signature pages hereof (such lenders,
together with their respective successors and permitted assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
and WELLS FARGO FOOTHILL, INC., a California corporation, as the arranger and
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and RADIANT SYSTEMS, INC., a
Georgia corporation (“Parent”), and each of Parent’s Subsidiaries identified on
the signature pages hereof (such Subsidiaries, together with Parent, are
referred to hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”).

 

The parties agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

 

1.1 Definitions. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.

 

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Borrowers” or the term “Parent” is used in respect of a financial covenant or a
related definition, it shall be understood to mean Parent and its Subsidiaries
on a consolidated basis unless the context clearly requires otherwise.

 

1.3 Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein,
provided, however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code,
the definition of such term contained in Article 9 shall govern.

 

1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document (other than the Blue Cube
Reseller Agreement, the Aloha Asset Purchase Agreement and the Aloha Debt
Documents) shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Obligations other than contingent
indemnification Obligations and other than any Bank Product Obligations that, at
such time, are allowed by the applicable Bank Product Provider to remain
outstanding and are not required to be repaid or cash collateralized pursuant to
the provisions of this Agreement. Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in the other Loan Documents shall be satisfied by
the transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.

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1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

 

2. LOAN AND TERMS OF PAYMENT.

 

2.1 Revolver Advances.

 

(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make advances (“Advances”) to Borrowers in
an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share
of an amount equal to the lesser of (i) the Maximum Revolver Amount less the
Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit
Usage.

 

(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base, including reserves (i) with respect to
(A) sums that Borrowers are required to pay by any Section of this Agreement or
any other Loan Document (such as taxes, assessments, insurance premiums, or, in
the case of leased assets, rents or other amounts payable under such leases) and
have failed to pay, and (B) amounts owing by Borrowers or their Subsidiaries to
any Person to the extent secured by a Lien on, or trust over, any of the
Collateral, which Lien or trust, in the Permitted Discretion of Agent, likely
would have a priority superior to the Agent’s Liens (such as Liens or trusts in
favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral, and (ii) after the occurrence and during the continuance of an Event
of Default, with respect to such other matters as Agent in its Permitted
Discretion shall deem necessary or appropriate.

 

(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement.

 

(d) In the event that, at any time, the amount equal to (i) 2.5 times (ii) the
sum of (A) the Revolver Usage plus (B) the outstanding principal balance of the
Term Loan exceeds EBITDA for the immediately preceding 12 months, measured on a
quarter-end basis, Borrowers shall pay to Agent, within 5 Business Days of
receipt of notice from Agent of such event, the amount of such excess as a
mandatory repayment of the outstanding Advances.

 

2.2 Term Loan.

 

(a) Subject to the terms and conditions of this Agreement, on the date on which
the condition subsequent set forth in Section 3.6(a)(i) has been satisfied and
the Agent’s Lien in and on the Aloha Assets is a first priority Lien (other than
Permitted Liens) (the “Term Loan Funding Date”), each Lender with a Term Loan
Commitment agrees (severally, not jointly or jointly and severally) to make the
term loans (collectively, the “Term Loan”) to Borrowers in an amount equal to
such Lender’s Pro Rata Share of the Term Loan Amount. Commencing on the first
day of the month following the Term Loan Funding Date, and on the first day of
each month thereafter until the Amortization Date, the Term Loan shall be repaid
in equal installments of an amount equal to one-sixtieth of the amount of the
Term Loan advanced on the Closing Date.

 

(b) The outstanding unpaid principal balance and all accrued and unpaid interest
under the Term Loan shall be due and payable on the date of termination of this
Agreement, whether by its terms, by prepayment, or by acceleration. All amounts
outstanding under the Term Loan shall constitute Obligations.

 

(c) In the event that, at any time, the outstanding principal balance of the
Term Loan exceeds 25% of the Enterprise Value, Borrowers shall immediately pay
to Agent the amount of such excess as a mandatory prepayment of the Term Loan.
Any payment due under this Section 2.2(c) shall be applied to the remaining
installments on the Term Loan in the inverse order of maturity.

 

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(d) In the event that Parent sells, transfers or otherwise disposes of the
Alpharetta Property, Borrowers shall immediately pay to Agent the cash proceeds
(net of reasonable and customary transaction costs properly attributable to such
sale, transfer or disposition and payable by such Parent in connection with such
sale, transfer or other disposition, including, without limitation, sales
commissions and underwriting discounts) of such sale, transfer or disposition as
a mandatory prepayment of the Term Loan if a Default or Event of Default has
occurred and is continuing.

 

(e) In the event that Parent sells, transfers or otherwise disposes of the
HotelTools Software and a Default or Event of Default has occurred and is
continuing, Borrowers shall immediately pay to Agent the amount of any proceeds
received in connection with such sale, transfer or disposition as a mandatory
prepayment of the Term Loan; provided, that, in the absence of a Default or
Event of Default, if Parent sells, transfers or otherwise disposes of the
HotelTools Software and receives an amount in excess of $500,000 as cash
proceeds in connection with such sale, transfer or disposition, Borrowers shall
immediately pay to Agent the amount of such excess as a mandatory prepayment of
the Term Loan.

 

2.3 Borrowing Procedures and Settlements.

 

(a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent. Unless Swing Lender
is not obligated to make a Swing Loan pursuant to Section 2.3(b) below, such
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day that is the requested Funding Date specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day; provided, however, that if Swing Lender is not obligated to make a Swing
Loan as to a requested Borrowing, such notice must be received by Agent no later
than 10:00 a.m. (California time) on the Business Day prior to the date that is
the requested Funding Date. At Agent’s election, in lieu of delivering the
above-described written request, any Authorized Person may give Agent telephonic
notice of such request by the required time. In such circumstances, Borrowers
agree that any such telephonic notice will be confirmed in writing within 24
hours of the giving of such telephonic notice, but the failure to provide such
written confirmation shall not affect the validity of the request.

 

(b) Making of Swing Loans. In the case of a request for an Advance and so long
as either (i) the aggregate amount of Swing Loans made since the last Settlement
Date plus the amount of the requested Advance does not exceed $1,500,000, or
(ii) Swing Lender, in its sole discretion, shall agree to make a Swing Loan
notwithstanding the foregoing limitation, Swing Lender, as a Lender, shall make
an Advance in the amount of such Borrowing (any such Advance made solely by
Swing Lender as a Lender pursuant to this Section 2.3(b) being referred to as a
“Swing Loan” and such Advances being referred to collectively as “Swing Loans”)
available to Borrowers on the Funding Date applicable thereto by transferring
immediately available funds to the Designated Account. Each Swing Loan shall be
deemed to be an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments on any Swing
Loan shall be payable to Swing Lender as a Lender solely for its own account.
Subject to the provisions of Section 2.3(d)(ii), Swing Lender as a Lender shall
not make and shall not be obligated to make any Swing Loan if Swing Lender has
actual knowledge that (i) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. Swing Lender as a Lender shall not otherwise
be required to determine whether the applicable conditions precedent set forth
in Section 3 have been satisfied on the Funding Date applicable thereto prior to
making any Swing Loan. The Swing Loans shall be secured by the Agent’s Liens,
constitute Obligations hereunder, and bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.

 

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(c) Making of Loans.

 

(i) In the event that Swing Lender is not obligated to make a Swing Loan, then
promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a),
Agent shall notify the Lenders, not later than 1:00 p.m. (California time) on
the Business Day immediately preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata Share of
the requested Borrowing available to Agent in immediately available funds, to
Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date
applicable thereto. After Agent’s receipt of the proceeds of such Advances,
Agent shall make the proceeds thereof available to Administrative Borrower on
the applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent the Designated Account; provided, however, that,
subject to the provisions of Section 2.3(d)(ii), Agent shall not request any
Lender to make, and no Lender shall have the obligation to make, any Advance if
Agent shall have actual knowledge that (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such condition has
been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.

 

(ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California
time) on the date of a Borrowing that such Lender will not make available as and
when required hereunder to Agent for the account of Borrowers the amount of that
Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has
made or will make such amount available to Agent in immediately available funds
on the Funding Date and Agent may (but shall not be so required), in reliance
upon such assumption, make available to Borrowers on such date a corresponding
amount. If and to the extent any Lender shall not have made its full amount
available to Agent in immediately available funds and Agent in such
circumstances has made available to Borrowers such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If such
amount is so made available, such payment to Agent shall constitute such
Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the
Funding Date, Agent will notify Administrative Borrower of such failure to fund
and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Advances composing such Borrowing. The failure of any Lender to make
any Advance on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on any Funding Date.

 

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in
the absence of such transfer to the Defaulting Lender, Agent shall transfer any
such payments to each other non-Defaulting Lender member of the Lender Group
ratably in accordance with their Commitments (but only to the extent that such
Defaulting Lender’s Advance was funded by the other members of the Lender Group)
or, if so directed by Administrative Borrower and if no Default or Event of
Default had occurred and is continuing (and to the extent such Defaulting
Lender’s Advance was not funded by the Lender Group), retain same to be
re-advanced to Borrowers as if such Defaulting Lender had made Advances to
Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting Lender shall be
deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero. This Section shall remain effective with respect to such Lender until (x)
the Obligations under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender’s default in
writing, or (z) the

 

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Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to
Agent all amounts owing by Defaulting Lender in respect thereof. The operation
of this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by Borrowers of their duties and
obligations hereunder to Agent or to the Lenders other than such Defaulting
Lender. Any such failure to fund by any Defaulting Lender shall constitute a
material breach by such Defaulting Lender of this Agreement and shall entitle
Administrative Borrower at its option, upon written notice to Agent, to arrange
for a substitute Lender to assume the Commitment of such Defaulting Lender, such
substitute Lender to be acceptable to Agent. In connection with the arrangement
of such a substitute Lender, the Defaulting Lender shall have no right to refuse
to be replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being repaid its share of the outstanding Obligations (other
than Bank Product Obligations, but including an assumption of its Pro Rata Share
of the Risk Participation Liability) without any premium or penalty of any kind
whatsoever; provided, however, that any such assumption of the Commitment of
such Defaulting Lender shall not be deemed to constitute a waiver of any member
of the Lender Group’s or Borrowers’ rights or remedies against any such
Defaulting Lender arising out of or in relation to such failure to fund.

 

(d) Protective Advances and Optional Overadvances.

 

(i) Agent hereby is authorized by Borrowers and the Lenders, from time to time
in Agent’s sole discretion, (A) after the occurrence and during the continuance
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 3 are not satisfied, to
make Advances to Borrowers on behalf of the Lenders that Agent, in its Permitted
Discretion deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (3) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 9 (any of the Advances described in this Section 2.3(d)(i) shall be
referred to as “Protective Advances”).

 

(ii) Any contrary provision of this Agreement notwithstanding, the Lenders
hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing
Lender, as applicable, may, but is not obligated to, knowingly and
intentionally, continue to make Advances (including Swing Loans) to Borrowers
notwithstanding that an Overadvance exists or thereby would be created, so long
as (A) after giving effect to such Advances, the outstanding Revolver Usage does
not exceed the Borrowing Base by more than $1,500,000, and (B) after giving
effect to such Advances, the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount. In the event Agent
obtains actual knowledge that the Revolver Usage exceeds the amounts permitted
by the immediately foregoing provisions, regardless of the amount of, or reason
for, such excess, Agent shall notify the Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers intended to reduce, within
a reasonable time, the outstanding principal amount of the Advances to Borrowers
to an amount permitted by the preceding paragraph. In such circumstances, if any
Lender with a Revolver Commitment disagrees over the proposed terms of reduction
or repayment of any Overadvance, the terms of reduction or repayment thereof
shall be implemented according to the determination of the Required Lenders.
Each Lender with a Revolver Commitment shall be obligated to settle with Agent
as provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of
any unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.3(d)(ii), and any
Overadvances resulting from the charging to the Loan Account of interest, fees,
or Lender Group Expenses.

 

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(iii) Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be
eligible to be a LIBOR Rate Loan and all payments on the Protective Advances
shall be payable to Agent solely for its own account. The Protective Advances
and Overadvances shall be repayable on demand, secured by the Agent’s Liens,
constitute Obligations hereunder, and bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans. The provisions of this
Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the
Lenders and are not intended to benefit any Borrower in any way.

 

(e) Settlement. It is agreed that each Lender’s funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agent, Swing
Lender, and the other Lenders agree (which agreement shall not be for the
benefit of any Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:

 

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on behalf of
Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with
respect to the outstanding Protective Advances, and (3) with respect to
Borrowers’ or their Subsidiaries’ Collections received, as to each by notifying
the Lenders by telecopy, telephone, or other similar form of transmission, of
such requested Settlement, no later than 2:00 p.m. (California time) on the
Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”). Such notice of a
Settlement Date shall include a summary statement of the amount of outstanding
Advances, Swing Loans, and Protective Advances for the period since the prior
Settlement Date. Subject to the terms and conditions contained herein (including
Section 2.3(b)(iii)): (y) if a Lender’s balance of the Advances (including Swing
Loans and Protective Advances) exceeds such Lender’s Pro Rata Share of the
Advances (including Swing Loans and Protective Advances) as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m. (California time) on the
Settlement Date, transfer in immediately available funds to a Deposit Account of
such Lender (as such Lender may designate), an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata
Share of the Advances (including Swing Loans and Protective Advances), and (z)
if a Lender’s balance of the Advances (including Swing Loans and Protective
Advances) is less than such Lender’s Pro Rata Share of the Advances (including
Swing Loans and Protective Advances) as of a Settlement Date, such Lender shall
no later than 12:00 p.m. (California time) on the Settlement Date transfer in
immediately available funds to the Agent’s Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances (including Swing Loans and Protective
Advances). Such amounts made available to Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the
applicable Swing Loans or Protective Advances and, together with the portion of
such Swing Loans or Protective Advances representing Swing Lender’s Pro Rata
Share thereof, shall constitute Advances of such Lenders. If any such amount is
not made available to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.

 

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and
Protective Advances is less than, equal to, or greater than such Lender’s Pro
Rata Share of the Advances, Swing Loans, and Protective Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. To the extent that a net amount
is owed to any such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.

 

(iii) Between Settlement Dates, Agent, to the extent no Protective Advances or
Swing Loans are outstanding, may pay over to Swing Lender any payments received
by Agent, that in

 

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accordance with the terms of this Agreement would be applied to the reduction of
the Advances, for application to Swing Lender’s Pro Rata Share of the Advances.
If, as of any Settlement Date, Collections of Borrowers or their Subsidiaries
received since the then immediately preceding Settlement Date have been applied
to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as
provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to
the outstanding Advances of such Lenders, an amount such that each Lender shall,
upon receipt of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Advances. During the period between Settlement Dates, Swing Lender
with respect to Swing Loans, Agent with respect to Protective Advances, and each
Lender (subject to the effect of agreements between Agent and individual
Lenders) with respect to the Advances other than Swing Loans and Protective
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the daily amount of funds employed by Swing Lender,
Agent, or the Lenders, as applicable.

 

(f) Notation. Agent shall record on its books the principal amount of the
Advances owing to each Lender, including the Swing Loans owing to Swing Lender,
and Protective Advances owing to Agent, and the interests therein of each
Lender, from time to time and such records shall, absent manifest error,
conclusively be presumed to be correct and accurate.

 

(g) Lenders’ Failure to Perform. All Advances (other than Swing Loans and
Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.

 

2.4 Payments.

 

(a) Payments by Borrowers.

 

(i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to Agent’s Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 11:00 a.m. (California
time) on the date specified herein. Any payment received by Agent later than
11:00 a.m. (California time), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.

 

(ii) Unless Agent receives notice from Administrative Borrower prior to the date
on which any payment is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

 

(b) Apportionment and Application.

 

(i) Except as otherwise provided with respect to Defaulting Lenders and except
as otherwise provided in the Loan Documents (including agreements between Agent
and individual Lenders), aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal balance
of the Obligations to which such payments relate held by each Lender) and
payments of fees and expenses (other than fees or expenses that are for Agent’s
separate account, after giving effect to

 

7

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any agreements between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee relates. All payments shall be remitted to
Agent and all such payments, and all proceeds of Collateral received by Agent,
shall be applied as follows:

 

(A) first, ratably to pay any Lender Group Expenses then due to Agent or any of
the Lenders under the Loan Documents, until paid in full,

 

(B) second, ratably to pay any fees or premiums then due to Agent (for its
separate account, after giving effect to any agreements between Agent and
individual Lenders) or any of the Lenders under the Loan Documents until paid in
full,

 

(C) third, to pay interest due in respect of all Protective Advances until paid
in full,

 

(D) fourth, to pay the principal of all Protective Advances until paid in full,

 

(E) fifth, ratably to pay interest due in respect of the Advances (other than
Protective Advances), the Swing Loans, and the Term Loan until paid in full,

 

(F) sixth, ratably to pay all principal amounts then due and payable (other than
as a result of an acceleration thereof) with respect to the Term Loan until paid
in full,

 

(G) seventh, to pay the principal of all Swing Loans until paid in full,

 

(H) eighth, so long as no Event of Default has occurred and is continuing, and
at Agent’s election (which election Agent agrees will not be made if an
Overadvance would be created thereby), to pay amounts then due and owing by
Administrative Borrower or its Subsidiaries in respect of Bank Products, until
paid in full,

 

(I) ninth, so long as no Event of Default has occurred and is continuing, to pay
the principal of all Advances until paid in full,

 

(J) tenth, if an Event of Default has occurred and is continuing, ratably (i) to
pay the principal of all Advances until paid in full, (ii) to Agent, to be held
by Agent, for the ratable benefit of Issuing Lender and those Lenders having a
Revolver Commitment, as cash collateral in an amount up to 105% of the Letter of
Credit Usage until paid in full, and (iii) to Agent, to be held by Agent, for
the benefit of the Bank Product Providers, as cash collateral in an amount up to
the amount of the Bank Product Reserve established prior to the occurrence of,
and not in contemplation of, the subject Event of Default until Borrowers’ and
its Subsidiaries’ obligations in respect of Bank Products have been paid in full
or the cash collateral amount has been exhausted,

 

(K) eleventh, if an Event of Default has occurred and is continuing, to pay the
outstanding principal balance of the Term Loan (in the inverse order of the
maturity of the installments due thereunder) until the Term Loan is paid in
full,

 

(L) twelfth, if an Event of Default has occurred and is continuing, to pay any
other Obligations (including the provision of amounts to Agent, to be held by
Agent, for the benefit of the Bank Product Providers, as cash collateral in an
amount up to the amount determined by Agent in its Permitted Discretion as the
amount necessary to secure Borrowers’ and its Subsidiaries’ obligations in
respect of Bank Products), and

 

8

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(M) thirteenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.

 

(ii) Agent promptly shall distribute to each Lender, pursuant to the applicable
wire instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in Section
2.3(e).

 

(iii) In each instance, so long as no Event of Default has occurred and is
continuing, this Section 2.4(b) shall not apply to any payment made by Borrowers
to Agent and specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement.

 

(iv) For purposes of the foregoing, “paid in full” means payment of all amounts
owing under the Loan Documents according to the terms thereof, including loan
fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not any
of the foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.

 

(v) In the event of a direct conflict between the priority provisions of this
Section 2.4 and other provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions in such documents
shall be read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of this Section
2.4 shall control and govern.

 

2.5 Overadvances. If, at any time or for any reason, the amount of Obligations
owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.12 is
greater than any of the limitations set forth in Section 2.1 or Section 2.12, as
applicable (an “Overadvance”), Borrowers immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to reduce
the Obligations in accordance with the priorities set forth in Section 2.4(b).
In addition, Borrowers hereby promise to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full as and when
due and payable under the terms of this Agreement and the other Loan Documents.

 

2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

 

(a) Interest Rates. Except as provided in clause (c) below, all Obligations
(except for undrawn Letters of Credit and except for Bank Product Obligations)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof as follows: (i) if the relevant
Obligation is an Advance that is a LIBOR Rate Loan, at a per annum rate equal to
the LIBOR Rate plus the LIBOR Rate Margin; and (ii) otherwise, at a per annum
rate equal to the Base Rate.

 

The foregoing notwithstanding, at no time shall any portion of the Obligations
(other than Bank Product Obligations) bear interest on the Daily Balance thereof
at a per annum rate less than 4%. To the extent that interest accrued hereunder
at the rate set forth herein would be less than the foregoing minimum daily
rate, the interest rate chargeable hereunder for such day automatically shall be
deemed increased to the minimum rate.

 

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any agreements between Agent
and individual Lenders), a Letter of Credit fee (in addition to the charges,
commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at
a rate equal to 2.50% per annum times the Daily Balance of the undrawn amount of
all outstanding Letters of Credit.

 

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(c) Default Rate. Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders),

 

(i) all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof at a per annum
rate equal to 4 percentage points above the per annum rate otherwise applicable
hereunder, and

 

(ii) the Letter of Credit fee provided for above shall be increased to 4
percentage points above the per annum rate otherwise applicable hereunder.

 

(d) Payment. Except as provided to the contrary in Section 2.11 or Section
2.13(a), interest, Letter of Credit fees, and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any time
that Obligations or Commitments are outstanding. Borrowers hereby authorize
Agent, from time to time, without prior notice to Borrowers, to charge all
interest and fees (when due and payable), all Lender Group Expenses (as and when
incurred), all charges, commissions, fees, and costs provided for in Section
2.12(e) (as and when accrued or incurred), all fees and costs provided for in
Section 2.11 (as and when accrued or incurred), and all other payments as and
when due and payable under any Loan Document (including the amounts due and
payable with respect to the Term Loan and including any amounts due and payable
to the Bank Product Providers in respect of Bank Products up to the amount of
the Bank Product Reserve) to Borrowers’ Loan Account, which amounts thereafter
shall constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances hereunder. Any interest not paid when due shall be
compounded by being charged to Borrowers’ Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans hereunder.

 

(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days
elapsed. In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

 

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.

 

2.7 Cash Management.

 

(a) Borrowers shall and shall cause each of their Subsidiaries to establish and
maintain cash management services of a type and on terms satisfactory to Agent
at one or more of the banks set forth on Schedule 2.7(a) (each a “Cash
Management Bank”), and shall request in writing and otherwise take such
reasonable steps to ensure that all of their and their Subsidiaries’ Account
Debtors forward payment of the amounts owed by them directly to a Deposit
Account of a Borrower or a Subsidiary of a Borrower established at such Cash
Management Bank, and (ii) deposit or cause to be deposited promptly, and in any
event no later than the first Business Day after the date of receipt thereof,
all of their Collections into a Deposit Account of a Borrower or a Subsidiary of
a Borrower at one of the Cash Management Banks.

 

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(b) Each Cash Management Bank shall establish and maintain Control Agreements
with Agent and Borrowers or, unless such Subsidiary is not required to deliver
any security document as provided in Section 5.16, their Subsidiaries, as
applicable, in form and substance acceptable to Agent. Each such Control
Agreement shall provide, among other things, that (i) the Cash Management Bank
will comply with any instructions originated by Agent directing the disposition
of the funds in the Deposit Accounts established at such Cash Management Bank
without further consent by Borrowers or their Subsidiaries, as applicable, and
(ii) the Cash Management Bank has no rights of setoff or recoupment or any other
claim against the applicable Deposit Account, other than for payment of its
service fees and other charges directly related to the administration of such
Deposit Account and for returned checks or other items of payment.

 

(c) So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash
Management Bank or a Deposit Account established at a Cash Management Bank;
provided, however, that (i) such prospective Cash Management Bank shall be
reasonably satisfactory to Agent, and (ii) prior to the time of the opening of
such Deposit Account, a Borrower or its Subsidiary, as applicable, and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Control Agreement. Borrowers (or their Subsidiaries, as applicable) shall close
any of their Deposit Accounts (and establish replacement Deposit Accounts in
accordance with the foregoing sentence) promptly and in any event within 30 days
of notice from Agent that the creditworthiness of any Cash Management Bank is no
longer acceptable in Agent’s reasonable judgment, and as promptly as practicable
and in any event within 60 days of notice from Agent that the operating
performance, funds transfer, or availability procedures or performance of the
Cash Management Bank with respect to Deposit Accounts or Agent’s liability under
any Control Agreement with such Cash Management Bank is no longer acceptable in
Agent’s reasonable judgment.

 

(d) Agent may direct the Cash Management Banks and any other applicable bank to
forward by daily sweep all amounts in any and all Deposit Accounts of Borrowers
and their Subsidiaries to the Agent’s Account (i) upon the occurrence of an
Event of Default, (ii) in the event that, at any time, Excess Availability plus
Qualified Cash is less than $7,500,000 and (iii) in the event that Borrowers do
not repay the outstanding Advances in accordance with Section 2.1(d).

 

(e) Borrowers shall (i) request in writing or otherwise take such reasonable
steps to ensure that all of their Credit Card Processors forward all payments to
be made by them directly to the Deposit Account 003271595060 maintained at Bank
of America (or such other Deposit Account at a Cash Management Bank that is
acceptable to Agent) and (ii) shall not instruct the Credit Card Processors to
forward such payments to any other deposit account without the prior written
consent of Agent.

 

2.8 Crediting Payments. The receipt of any payment item by Agent (whether from
transfers to Agent by the Cash Management Banks pursuant to the Control
Agreements or otherwise) shall not be considered a payment on account unless
such payment item is a wire transfer of immediately available federal funds made
to the Agent’s Account or unless and until such payment item is honored when
presented for payment. Should any payment item not be honored when presented for
payment, then Borrowers shall be deemed not to have made such payment and
interest shall be calculated accordingly. Anything to the contrary contained
herein notwithstanding, any payment item shall be deemed received by Agent only
if it is received into the Agent’s Account on a Business Day on or before 11:00
a.m. (California time). If any payment item is received into the Agent’s Account
on a non-Business Day or after 11:00 a.m. (California time) on a Business Day,
it shall be deemed to have been received by Agent as of the opening of business
on the immediately following Business Day. The parties acknowledge and agree
that the economic benefit of the foregoing provisions of this Section 2.8 shall
be for the exclusive benefit of Agent.

 

2.9 Designated Account. Agent is authorized to make the Advances and the Term
Loan, and Issuing Lender is authorized to issue the Letters of Credit, under
this Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if pursuant to
Section 2.6(d). Administrative Borrower agrees to establish and maintain the
Designated Account

 

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with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrowers and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Administrative Borrower, any Advance,
Protective Advance, or Swing Loan requested by Borrowers and made by Agent or
the Lenders hereunder shall be made to the Designated Account.

 

2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with the Term Loan, all Advances (including
Protective Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders
to Borrowers or for Borrowers’ account, the Letters of Credit issued by Issuing
Lender for Borrowers’ account, and with all other payment Obligations hereunder
or under the other Loan Documents (except for Bank Product Obligations),
including accrued interest, fees and expenses, and Lender Group Expenses. In
accordance with Section 2.8, the Loan Account will be credited with all payments
received by Agent from Borrowers or for Borrowers’ account, including all
amounts received in the Agent’s Account from any Cash Management Bank. Agent
shall render statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges
and expenses constituting Lender Group Expenses owing, and such statements,
absent manifest error, shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Administrative Borrower, Administrative
Borrower shall deliver to Agent written objection thereto describing the error
or errors contained in any such statements.

 

2.11 Fees. Borrowers shall pay to Agent, as and when due and payable under the
terms of the Fee Letter, the fees set forth in the Fee Letter.

 

2.12 Letters of Credit.

 

(a) Subject to the terms and conditions of this Agreement, the Issuing Lender
agrees to issue letters of credit for the account of Borrowers (each, an “L/C”)
or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an “L/C Undertaking”) with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Wells Fargo) for the account of
Borrowers. Each request for the issuance of a Letter of Credit or the amendment,
renewal, or extension of any outstanding Letter of Credit shall be made in
writing by an Authorized Person and delivered to the Issuing Lender and Agent
via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance satisfactory to the
Issuing Lender in its Permitted Discretion and shall specify (i) the amount of
such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration date of such Letter of
Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and (v) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the issuance of such requested Letter of Credit:

 

(i) the Letter of Credit Usage would exceed the Borrowing Base less the
outstanding amount of Advances, or

 

(ii) the Letter of Credit Usage would exceed $4,000,000, or

 

(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less
the outstanding amount of Advances.

 

12

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Borrowers and the Lender Group acknowledge and agree that certain Underlying
Letters of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date. Each Letter of Credit (and corresponding
Underlying Letter of Credit) shall be in form and substance acceptable to the
Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in Dollars. If
Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers
immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to
Agent an amount equal to such L/C Disbursement not later than 11:00 a.m.,
California time, on the date that such L/C Disbursement is made, if
Administrative Borrower shall have received written or telephonic notice of such
L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Administrative Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on the Business Day
that Administrative Borrower receives such notice, if such notice is received
prior to 10:00 a.m., California time, on the date of receipt, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance
hereunder, Borrowers’ obligation to reimburse such L/C Disbursement shall be
discharged and replaced by the resulting Advance. Promptly following receipt by
Agent of any payment from Borrowers pursuant to this paragraph, Agent shall
distribute such payment to the Issuing Lender or, to the extent that Lenders
have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender,
then to such Lenders and the Issuing Lender as their interests may appear.

 

(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrowers had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such Lender’s Pro Rata Share of any payments made by the Issuing Lender under
such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not
reimbursed by Borrowers on the date due as provided in clause (a) of this
Section, or of any reimbursement payment required to be refunded to Borrowers
for any reason. Each Lender with a Revolver Commitment acknowledges and agrees
that its obligation to deliver to Agent, for the account of the Issuing Lender,
an amount equal to its respective Pro Rata Share of each L/C Disbursement made
by the Issuing Lender pursuant to this Section 2.12(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3 hereof. If any such Lender fails to make
available to Agent the amount of such Lender’s Pro Rata Share of each L/C
Disbursement made by the Issuing Lender in respect of such Letter of Credit as
provided in this Section, such Lender shall be deemed to be a Defaulting Lender
and Agent (for the account of the Issuing Lender) shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.

 

(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer’s regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by
Issuing Lender to or for such Borrower’s account, even though this
interpretation may be different from such Borrower’s own, and each

 

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Borrower understands and agrees that the Lender Group shall not be liable for
any error, negligence, or mistake, whether of omission or commission, in
following Borrowers’ instructions or those contained in the Letter of Credit or
any modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group’s
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.

 

(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver
to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender’s instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.

 

(e) Any and all issuance charges, commissions, fees, and costs incurred by the
Issuing Lender relating to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Agent for the account of the Issuing Lender; it being acknowledged
and agreed by each Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Underlying Issuer is .825% per annum times the face
amount of each Underlying Letter of Credit, that such issuance charge may be
changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.

 

(f) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):

 

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued hereunder, or

 

(ii) there shall be imposed on the Underlying Issuer or the Lender Group any
other condition regarding any Underlying Letter of Credit or any Letter of
Credit issued pursuant hereto;

 

and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.

 

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2.13 LIBOR Option.

 

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Advances be charged at a
rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period applicable
thereto (provided, however, that, subject to the following clauses (ii) and
(iii), in the case of any Interest Period greater than 3 months in duration,
interest shall be payable at 3 month intervals after the commencement of the
applicable Interest Period and on the last day of such Interest Period), (ii)
the occurrence of an Event of Default in consequence of which the Required
Lenders or Agent on behalf thereof have elected to accelerate the maturity of
all or any portion of the Obligations, or (iii) termination of this Agreement
pursuant to the terms hereof. On the last day of each applicable Interest
Period, unless Administrative Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the rate of interest then applicable to Base Rate
Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request
that Advances bear interest at a rate based upon the LIBOR Rate and Agent shall
have the right to convert the interest rate on all outstanding LIBOR Rate Loans
to the rate then applicable to Base Rate Loans hereunder.

 

(b) LIBOR Election.

 

(i) Administrative Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of Administrative Borrower’s election of the LIBOR
Option for a permitted portion of the Advances and an Interest Period pursuant
to this Section shall be made by delivery to Agent of a LIBOR Notice received by
Agent before the LIBOR Deadline, or by telephonic notice received by Agent
before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR
Notice received by Agent prior to 5:00 p.m. (California time) on the same day).
Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy
thereof to each of the Lenders having a Revolver Commitment.

 

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (a) the payment of any principal of any
LIBOR Rate Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (c) the failure to borrow, convert, continue or prepay any LIBOR
Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto
(such losses, costs, and expenses, collectively, “Funding Losses”). Funding
Losses shall, with respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any, of (i) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Agent or such Lender
would be offered were it to be offered, at the commencement of such period,
Dollar deposits of a comparable amount and period in the London interbank
market. A certificate of Agent or a Lender delivered to Administrative Borrower
setting forth any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.13 shall be conclusive absent manifest error.

 

(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of
at least $1,000,000 and integral multiples of $500,000 in excess thereof.

 

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(c) Prepayments. Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that in the event that LIBOR Rate Loans are prepaid on any date that is
not the last day of the Interest Period applicable thereto, including as a
result of any automatic prepayment through the required application by Agent of
proceeds of Borrowers’ and their Subsidiaries’ Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with clause (b)(ii) above.

 

(d) Special Provisions Applicable to LIBOR Rate.

 

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including changes in tax
laws (except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding loans
bearing interest at the LIBOR Rate. In any such event, the affected Lender shall
give Administrative Borrower and Agent notice of such a determination and
adjustment and Agent promptly shall transmit the notice to each other Lender
and, upon its receipt of the notice from the affected Lender, Administrative
Borrower may, by notice to such affected Lender (y) require such Lender to
furnish to Administrative Borrower a statement setting forth the basis for
adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under clause (b)(ii) above).

 

(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Advances or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.

 

(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants,
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues at the LIBOR Rate. The
provisions of this Section shall apply as if each Lender or its Participants had
match funded any Obligation as to which interest is accruing at the LIBOR Rate
by acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.

 

2.14 Capital Requirements. If, after the date hereof, any Lender determines that
(a) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (b) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender’s or
such holding company’s capital as a consequence of such Lender’s Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration

 

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such Lender’s or such holding company’s then existing policies with respect to
capital adequacy and assuming the full utilization of such entity’s capital) by
any amount deemed by such Lender to be material, then such Lender may notify
Administrative Borrower and Agent thereof. Following receipt of such notice,
Borrowers agree to pay such Lender on demand the amount of such reduction of
return of capital as and when such reduction is determined, payable within 90
days after presentation by such Lender of a statement in the amount and setting
forth in reasonable detail such Lender’s calculation thereof and the assumptions
upon which such calculation was based (which statement shall be presumed true
and correct absent manifest error). In determining such amount, such Lender may
use any reasonable averaging and attribution methods.

 

2.15 Joint and Several Liability of Borrowers.

 

(a) Each Borrower is accepting joint and several liability hereunder and under
the other Loan Documents in consideration of the financial accommodations to be
provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.

 

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including any Obligations arising under this Section
2.15), it being the intention of the parties hereto that all the Obligations
shall be the joint and several obligations of each Borrower without preferences
or distinction among them.

 

(c) If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or perform, such
Obligation.

 

(d) The Obligations of each Borrower under the provisions of this Section 2.15
constitute the absolute and unconditional, full recourse Obligations of each
Borrower enforceable against each Borrower to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.

 

(e) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
Agreement). Each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
any Agent or Lender with respect to the failure by any Borrower to comply with
any of its respective Obligations, including any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of each Borrower under

 

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this Section 2.15 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each Borrower under this
Section 2.15 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Agent or Lender.

 

(f) Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers’ financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.

 

(g) The provisions of this Section 2.15 are made for the benefit of Agent,
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all Borrowers as often as occasion
therefor may arise and without requirement on the part of any such Agent,
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 2.15 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this Section
2.15 will forthwith be reinstated in effect, as though such payment had not been
made.

 

(h) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to any Agent or Lender hereunder
or under any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment in full in
cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the
laws of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.

 

(i) Each Borrower hereby agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the payment of any amounts due
with respect to the indebtedness owing by any Borrower to any other Borrower is
hereby subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, such Borrower will not demand, sue for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).

 

3. CONDITIONS; TERM OF AGREEMENT.

 

3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of
each Lender to make its initial extension of credit provided for hereunder is
subject to the fulfillment, to the satisfaction of

 

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Agent and each Lender, of each of the conditions precedent set forth on Schedule
3.1 (the making of such initial extension of credit by a Lender being
conclusively deemed to be its satisfaction or waiver of the conditions
precedent).

 

3.2 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder at any time
(or to extend any other credit hereunder) shall be subject to the following
conditions precedent:

 

(a) the representations and warranties contained in this Agreement or in the
other Loan Documents shall be true and correct in all material respects on and
as of the date of such extension of credit, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date);

 

(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;

 

(c) no injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Borrower, Agent, any Lender, or any of their Affiliates; and

 

(d) no Material Adverse Change shall have occurred.

 

3.3 Term. This Agreement shall continue in full force and effect for a term
ending on March 31, 2008 (the “Maturity Date”). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.

 

3.4 Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with
respect to outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without notice or demand
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the Bank Product Obligations). No termination of this
Agreement, however, shall relieve or discharge Borrowers or their Subsidiaries
of their duties, Obligations, or covenants hereunder or under any other Loan
Document and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been paid in full and the Lender Group’s obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and the
Lender Group’s obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Agent will, at Borrowers’ sole expense,
execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, the Agent’s Liens
and all notices of security interests and liens previously filed by Agent with
respect to the Obligations.

 

3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon
90 days prior written notice by Administrative Borrower to Agent, to terminate
this Agreement by paying to Agent, in cash, the Obligations (including (a)
either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral (in an amount
determined by Agent as sufficient to satisfy the reasonably estimated credit
exposure) to be held by Agent for the benefit of the Bank Product Providers with
respect to the Bank Products Obligations), in full.

 

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If Administrative Borrower has sent a notice of termination pursuant to the
provisions of this Section, then the Commitments shall terminate and Borrowers
shall be obligated to repay the Obligations (including (a) either (i) providing
cash collateral to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the Letter of Credit Usage, or
(ii) causing the original Letters of Credit to be returned to the Issuing
Lender, and (b) providing cash collateral (in an amount determined by Agent as
sufficient to satisfy the reasonably estimated credit exposure) to be held by
Agent for the benefit of the Bank Product Providers with respect to the Bank
Products Obligations), in full, on the date set forth as the date of termination
of this Agreement in such notice.

 

3.6 Conditions Subsequent to the Initial Extension of Credit. The obligation of
each Lender to continue to make Advances (or otherwise extend credit hereunder)
is subject to the fulfillment, on or before the date applicable thereto, of each
of the conditions subsequent, as set forth below:

 

(a) on or before the date 30 days from the Closing Date, Agent shall have
received each of the following documents, in form and substance satisfactory to
Agent, duly executed, and each such document shall be in full force and effect:

 

(i) a letter, in form and substance satisfactory to Agent, from Aloha Agent to
Agent respecting the amount necessary to reduce the obligations of Borrowers and
their Subsidiaries owing to Aloha Agent and the Sellers on the date of such
letter to an aggregate amount not to exceed $1,000,000 and to obtain a release
of all of the Liens existing in favor of Aloha Agent and the Sellers in and to
the properties and assets of Borrowers and their Subsidiaries, together with
termination statements and other documentation evidencing the termination by
Aloha Agent of the Liens existing in favor of Aloha Agent and the Sellers in and
to the properties and assets of Borrowers and their Subsidiaries, and

 

(ii) a Mortgage with respect to the Real Property Collateral;

 

(b) on or before the date 30 days from the Closing Date, Borrowers shall use
best efforts to deliver to Agent duly executed Collateral Access Agreements with
respect to each of the following locations: (A) 3905 Brookside Parkway, Atlanta,
Georgia 30022, (B) 3925 Brookside Parkway, Alpharetta, Georgia 30022, (C) 4325
Alexander Drive, Alpharetta, Georgia 30022, (D) 6610 Shiloh Road East, Suite A,
Alpharetta, Georgia 30022, (E) 3180 Irving Boulevard, Dallas, Texas 75247-6235,
and (F) 1320 Tennis Drive, Bedford, Texas 76022, and each such document shall be
in full force and effect; and

 

(c) on or before the date 60 days from the Closing Date, Agent shall have
received each of the following documents, in form and substance satisfactory to
Agent, duly executed, as applicable, and each such document shall be in full
force and effect:

 

(i) the pledge agreements with respect to the Stock of Radiant Systems
Asia-Pacific Pty Ltd, Radiant Systems Retail Solutions Pte Ltd, Radiant Systems,
s.r.o., Radiant Systems UK Limited and Radiant Systems Retail Solutions, S.L.
pledged by Radiant Systems International, Inc. to Agent, and

 

(ii) all original certificates representing the shares of Stock pledged under
such pledge agreements, and Stock powers with respect thereto endorsed in blank.

 

(d) on or before the date 10 days from the Closing Date, Agent shall have
received either (i) evidence, in form and substance reasonably satisfactory to
Agent that Borrowers have terminated account number 3263931141 held with Bank of
America, N.A. or (ii) a Control Agreement among Bank of America, Parent and
Agent, in form and substance reasonably satisfactory to Agent, with respect to
account number 3263931141.

 

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4. REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects, as of the date
hereof, and shall be true, correct, and complete, in all material respects, as
of the Closing Date, and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

4.1 No Encumbrances. Each Borrower and its Subsidiaries has good and
indefeasible title to, or a valid leasehold interest in, their personal property
assets and good and marketable title to, or a valid leasehold interest in, their
Real Property, in each case, free and clear of Liens except for Permitted Liens.

 

4.2 Eligible Accounts. As to each Account that is identified by a Borrower as an
Eligible Account in a Borrowing Base Certificate submitted to Agent, such
Account is (a) a bona fide existing payment obligation of the applicable Account
Debtors created by the sale and delivery of Inventory or the rendition of
services to such Account Debtors in the ordinary course of Borrowers’ business,
(b) owed to Borrowers without any known defenses, disputes, offsets,
counterclaims, or rights of return or cancellation, and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Accounts.

 

4.3 Software.

 

(a) Schedule 4.3(a) contains a complete and accurate list of (i) all computer
Software owned by any Borrower or any Subsidiary of a Borrower that is necessary
in the operation of Borrowers’ and their Subsidiaries’ business and (ii) all
other material computer Software owned by any Borrower or any Subsidiary of a
Borrower that is useful to the operation of Borrowers’ and their Subsidiaries’
business (collectively, the “Owned Software”). Borrowers and such Subsidiaries
have exclusive title to the Owned Software, free and clear of all claims,
including claims or rights of employees, agents, consultants, customers,
licensees or other parties involved in the development, creation, marketing,
maintenance, enhancement or licensing of such Software (other than licensed
rights of use granted to customers and licensees in the ordinary issuance of
business). Except as expressly stated in Schedule 4.3(a), the Owned Software is
not dependent on any Licensed Software (as defined in paragraph (b) below) in
order to fully operate in the manner in which it is intended. Except as
expressly stated in Schedule 4.3(a), Borrowers and their Subsidiaries have
registered copyrights in the United States Copyright Office with respect to all
versions of the Owned Software. All material copyrights of Borrowers and their
Subsidiaries have been registered with the United States Copyright Office in a
manner sufficient to impart constructive notice of the ownership of the
appropriate Borrower or Subsidiary thereof.

 

(b) Schedule 4.3(b-1) contains a complete and accurate list of (i) all Software
under which any Borrower or any Subsidiary of a Borrower is a licensee, lessee
or otherwise has obtained the right to use such Software, other than
Off-the-Shelf Software that is not imbedded in Owned Software, that is necessary
in the operation of Borrowers’ and their Subsidiaries’ business and (ii) all
other material Software under which any Borrower or any Subsidiary of a Borrower
is a licensee, lessee or otherwise has obtained the right to use such Software,
other than Off-the-Shelf Software that is not imbedded in Owned Software, that
is marketed or otherwise distributed by such Borrower or such Subsidiary to its
customers (collectively, the “Licensed Software”). The licenses for such
Licensed Software are not terminable, other than for breach thereof, during the
term of this Agreement. Schedule 4.3(b-1) also sets forth a list of all material
amounts of license fees, rents, royalties or other charges that any Borrower or
any Subsidiary of a Borrower is required or obligated to pay with respect to the
Licensed Software. Each Borrower and each of its Subsidiaries is in full
compliance with all material provisions of any license, lease or other similar
agreement pursuant to which it has rights to use the Licensed Software and has
proof of purchase or license of each item of Licensed

 

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Software. Except as expressly stated in Schedule 4.3(b-1), none of the Licensed
Software has been incorporated into or made a part of any Owned Software or any
other Licensed Software. The Owned Software and Licensed Software (collectively,
the “Borrowers’ Software”) constitute all Software necessary for the conduct of
the business of Borrowers and their Subsidiaries as currently conducted and all
material Software that is used in the business of Borrowers and their
Subsidiaries as currently conducted, other than Off-the-Shelf Software that is
not imbedded in Borrowers’ Software, marketed or otherwise distributed by any
Borrower or any Subsidiary of Borrower to its customers. Schedule 4.3(b-2)
contains a complete and accurate list of all Off-the-Shelf Software that is not
listed as Licensed Software but is necessary for the conduct of the business of
Borrowers and their Subsidiaries as currently conducted or is necessary for the
operation of the Owned Software or the Licensed Software (the “Required
Off-the-Shelf Software”). Schedule 4.3(b-2) also sets forth a list of all
license fees, rents, royalties or other charges that any Borrower or any
Subsidiary of a Borrower is required or obligated to pay with respect to the
Required Off-the-Shelf Software. Each Borrower and each of its Subsidiaries is
in full compliance with all material provisions of any license, lease or other
similar agreement pursuant to which it has rights to use the Required
Off-the-Shelf Software and has proof of purchase or license of each item of
Required Off-the-Shelf Software.

 

(c) Schedule 4.3(c) identifies the 10 largest customer contracts (based upon
2004 revenues) pursuant to which Borrowers’ Software is licensed to third
parties and under which any Borrower currently has maintenance or support
obligations. Except as set forth on Schedule 4.3(c), no contract pursuant to
which Borrowers’ Software is licensed to third parties (the “End User
Licenses”), regardless of whether such license is required to be listed on
Schedule 4.3(c), is exclusive and each End User License is limited to the
internal use of the licensee. All End User Licenses are in full force and
effect; no Borrower or any of its respective Subsidiaries is in default of any
provisions thereunder; and execution and performance of this Agreement,
including the granting of (and any subsequent execution upon) collateral
interests in the End User Licenses, will not cause a breach or default
thereunder. Schedule 4.3(c) discloses which, if any, licensee of Borrowers’
Software under any End User License has required that any Escrow Material be
deposited into escrow. Schedule 4.3(c) includes Borrowers’ and their
Subsidiaries’ estimates of implied renewal rates for customer maintenance
agreements.

 

(d) Schedule 4.3(d) lists and separately identifies all contracts pursuant to
which any Borrower or any Subsidiary of a Borrower has been granted rights to
market Licensed Software owned by third parties, and lists and separately
identifies all contracts, if any, pursuant to which any Borrower or any
Subsidiary of a Borrower has granted marketing rights in Borrowers’ Software to
third parties. All such contracts are in full force and effect; no Borrower or
any of its respective Subsidiaries is in default of any provisions thereunder;
and execution and performance of this Agreement, including the granting of (and
any subsequent execution upon) collateral interests in such contracts, will not
cause a breach or default thereunder.

 

(e) The transactions contemplated by this Agreement will not cause a breach or
default under any license, lease or similar agreement relating to Borrowers’
Software or materially impair any Borrower’s or any Subsidiary’s ability to use
Borrowers’ Software after the Closing Date in the same manner as such Software
is currently used by such Borrower or such Subsidiary. To each Borrower’s
knowledge, no Borrower or any of its respective Subsidiaries is infringing any
Intellectual Property rights of any other Person with respect to Borrowers’
Software and no other Person is infringing any Intellectual Property rights of
any Borrower or any Subsidiary of a Borrower with respect to Borrowers’ Software
or is claiming any right, title or interest in Borrowers’ Software or any
infringement by any Borrower or any Subsidiary of a Borrower of any Intellectual
Property right which such other Person may possess. No Borrower or any of its
respective Subsidiaries has taken or failed to take any actions under the law of
any applicable jurisdictions where such Borrower or such Subsidiary has marketed
or licensed Borrowers’ Software that would restrict or limit the ability in any
material manner of such Borrower or such Subsidiary to protect, or prevent it
from protecting, its ownership interests in, confidentiality rights of, and
rights to market, license, modify or enhance, Borrowers’ Software.

 

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(f) Each Borrower and each of its Subsidiaries employs procedures to maintain
the proprietary nature of Borrowers’ Software and technical data required for or
incident to the development, manufacture, operation and sale of all products and
services sold or proposed to be sold by such Borrower or such Subsidiary, free
and clear of any and all claims of current and former employees, consultants,
officers, directors and shareholders. Each employee and officer of each Borrower
and each of its Subsidiaries has executed an agreement with such Borrower or
such Subsidiary regarding confidentiality and proprietary information. No
Borrower, after reasonable investigation, is aware that any of such Borrower’s
or such Subsidiary’s employees are in violation thereof.

 

(g) Except as disclosed in Schedule 4.3(g), no current or former employee of any
Borrower or any Subsidiary of a Borrower and no other Person owns or has any
proprietary, financial or other interest, direct or indirect, in whole or in
part, and including any right to royalties or other compensation, in any of the
Owned Software.

 

4.4 Equipment. Each material item of Equipment of Borrowers and their
Subsidiaries is used or held for use in their business and is in good working
order, ordinary wear and tear and damage by casualty excepted.

 

4.5 Location of Inventory and Equipment. The Inventory and Equipment (other than
vehicles or Equipment out for repair) of Borrowers and their Subsidiaries are
not stored with a bailee, warehouseman, or similar party and are located only
at, or in-transit between, the locations identified on Schedule 4.5 (as such
Schedule may be updated pursuant to Section 5.9).

 

4.6 Inventory Records. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.

 

4.7 State of Incorporation; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims.

 

(a) The legal name and the jurisdiction of organization of each Borrower and
each of its Subsidiaries is set forth on Schedule 4.7(a).

 

(b) The chief executive office of each Borrower and each of its Subsidiaries is
located at the address indicated on Schedule 4.7(b) (as such Schedule may be
updated pursuant to Section 5.9).

 

(c) Each Borrower’s and each of its Subsidiaries’ organizational identification
number, if any, are identified on Schedule 4.7(c).

 

(d) As of the Closing Date, Borrowers and their Subsidiaries, to the best of
their knowledge, do not hold any commercial tort claims, except as set forth on
Schedule 4.7(d).

 

4.8 Due Organization and Qualification; Subsidiaries.

 

(a) Each Borrower is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could be expected to
result in a Material Adverse Change.

 

(b) Set forth on Schedule 4.8(b), is a complete and accurate description of the
authorized capital Stock of each Borrower, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding. Other than as described on Schedule 4.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower’s capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.

 

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(c) Set forth on Schedule 4.8(c), is a complete and accurate list of each
Borrower’s direct and indirect Subsidiaries, showing: (i) the number of shares
of each class of common and preferred Stock authorized for each of such
Subsidiaries, and (ii) the number and the percentage of the outstanding shares
of each such class owned directly or indirectly by the applicable Borrower. All
of the outstanding capital Stock of each such Subsidiary has been validly issued
and is fully paid and non-assessable.

 

(d) Except as set forth on Schedule 4.8(c), there are no subscriptions, options,
warrants, or calls relating to any shares of any Borrower’s Subsidiaries’
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Borrower or any of its respective
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of any Borrower’s
Subsidiaries’ capital Stock or any security convertible into or exchangeable for
any such capital Stock.

 

(e) Equilease Financial Services, Inc., an Oregon corporation, has been
administratively dissolved and has no operations, assets or liabilities.

 

4.9 Due Authorization; No Conflict.

 

(a) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Borrower.

 

(b) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of any Borrower, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of Borrower, other than Permitted Liens, or (iv) require any approval
of any Borrower’s interestholders or any approval or consent of any Person under
any material contractual obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and effect.

 

(c) Other than the filing of financing statements, the execution, delivery, and
performance by each Borrower of this Agreement and the other Loan Documents to
which such Borrower is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than consents or approvals that have been obtained
and that are still in force and effect.

 

(d) As to each Borrower, this Agreement and the other Loan Documents to which
such Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Borrower will be the legally valid
and binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally.

 

(e) The Agent’s Liens are validly created, perfected, and first priority Liens,
subject only to Permitted Liens.

 

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(f) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party have been duly authorized by all necessary
action on the part of such Guarantor.

 

(g) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party do not and will not (i) violate any provision
of federal, state, or local law or regulation applicable to such Guarantor, the
Governing Documents of such Guarantor, or any order, judgment, or decree of any
court or other Governmental Authority binding on such Guarantor, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of such Guarantor,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Guarantor, other than Permitted
Liens, or (iv) require any approval of such Guarantor’s interestholders or any
approval or consent of any Person under any material contractual obligation of
such Guarantor, other than consents or approvals that have been obtained and
that are still in force and effect.

 

(h) Other than the filing of financing statements, the execution, delivery, and
performance by each Guarantor of the Loan Documents to which such Guarantor is a
party do not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Governmental Authority, other
than consents or approvals that have been obtained and that are still in force
and effect.

 

(i) The Loan Documents to which each Guarantor is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by such
Guarantor will be the legally valid and binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.

 

4.10 Litigation. Other than those matters disclosed on Schedule 4.10, and other
than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or
proceedings pending or, to the best knowledge of each Borrower, threatened
against any Borrower or any of its Subsidiaries which could reasonably be
expected to result in any judgment against or liability of such Borrower or such
Subsidiary in excess of $250,000 or the loss of any certification or license
material to the operations of the business of such Borrower or such Subsidiary.

 

4.11 No Material Adverse Change. All financial statements relating to Borrowers
and their Subsidiaries that have been delivered by Borrowers to the Lender Group
have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments) and present fairly in all material respects, Borrowers’ and
their Subsidiaries’ financial condition as of the date thereof and results of
operations for the period then ended. There has not been a Material Adverse
Change with respect to Borrowers and their Subsidiaries since the date of the
latest financial statements submitted to Agent on or before the Closing Date.

 

4.12 Fraudulent Transfer.

 

(a) Each Borrower and each Subsidiary of a Borrower is Solvent.

 

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

 

4.13 Employee Benefits. None of Borrowers, any of their Subsidiaries, or any of
their ERISA Affiliates maintains or contributes to any Benefit Plan.

 

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4.14 Environmental Condition. Except as set forth on Schedule 4.14, (a) to
Borrowers’ knowledge, none of Borrowers’ or their Subsidiaries’ properties or
assets has ever been used by Borrowers, their Subsidiaries, or by previous
owners or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, where such use, production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of any applicable Environmental Law, (b) to Borrowers’
knowledge, none of Borrowers’ nor their Subsidiaries’ properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of Borrowers
nor any of their Subsidiaries have received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any Real Property owned or
operated by Borrowers or their Subsidiaries, and (d) none of Borrowers nor any
of their Subsidiaries have received a summons, citation, notice, or directive
from the United States Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by any Borrower or
any Subsidiary of a Borrower resulting in the releasing or disposing of
Hazardous Materials into the environment.

 

4.15 Intellectual Property. Schedule 4.15 contains a true, correct and complete
description of all registered Copyrights, Patents and Trademarks, all other
Intellectual Property necessary in the operation of Borrowers’ and their
Subsidiaries’ business and all other material Intellectual Property, other than
Borrowers’ Software and Off-the-Shelf Software that is not embedded in
Borrowers’ Software, marketed or otherwise distributed by any Borrower or any
Subsidiary of a Borrower to its customers, or owned or used by any Borrower or
any Subsidiary of a Borrower (the “Borrowers’ Intellectual Property”). Schedule
4.15 separately discloses all Borrowers’ Intellectual Property under license.
All Borrowers’ Intellectual Property developed by any Person for use by any
Borrower or any Subsidiary of a Borrower was developed by employees of a
Borrower or a Subsidiary of a Borrower or pursuant to valid work-for-hire
contracts with a Borrower or a Subsidiary of a Borrower, has been assigned to a
Borrower or a Subsidiary of a Borrower pursuant to a valid written assignment,
or has otherwise been transferred to a Borrower or a Subsidiary of a Borrower by
operation of law, and such Borrowers’ Intellectual Property is not subject to
any license to any Borrower or any Subsidiary of a Borrower or royalty payments
by any Borrower or any Subsidiary of a Borrower. Except for Borrowers’ Software
and Off-the-Shelf Software that is not embedded in Borrowers’ Software, marketed
or otherwise distributed by any Borrower or any Subsidiary of a Borrower to its
customers, no Intellectual Property rights not described on Schedule 4.15 are
necessary to the conduct of the business of Borrowers and their Subsidiaries.
Except as expressly stated in Schedule 4.15, Borrowers and their Subsidiaries
own the entire right, title and interest in and to, and have the exclusive
perpetual royalty-free right to use, the Borrowers’ Intellectual Property, free
and clear of all encumbrances (other than licensed rights of use granted to
customers and licensees in the ordinary course of business). There are no
pending or, to the knowledge of any Borrower, threatened claims against any
Borrower or any Subsidiary of a Borrower by any Person with respect to any of
the items listed in Schedule 4.15 or the use thereof. To each Borrower’s
knowledge, no Person is infringing upon nor has any Person misappropriated the
Borrowers’ Intellectual Property and no Borrower or any of its respective
Subsidiaries is infringing upon the Intellectual Property rights of any other
Person.

 

4.16 Leases. Borrowers and their Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are
parties or under which they are operating and all of such material leases are
valid and subsisting and no material default by Borrowers or their Subsidiaries
exists under any of them.

 

4.17 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.17 is a
listing of all of Borrowers’ and their Subsidiaries’ Deposit Accounts and
Securities Accounts, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the account
numbers of the Deposit Accounts or Securities Accounts maintained with such
Person.

 

4.18 Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of Borrowers or their Subsidiaries in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement,

 

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the other Loan Documents, or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Borrowers or their Subsidiaries in writing to Agent or any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. On the Closing Date, the Closing Date
Projections represent, and as of the date on which any other Projections are
delivered to Agent, such additional Projections represent Borrowers’ good faith
estimate of their and their Subsidiaries’ future performance for the periods
covered thereby.

 

4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list of all
Indebtedness of each Borrower and each Subsidiary of a Borrower outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately reflects the aggregate principal
amount of such Indebtedness and describes the principal terms thereof.

 

4.20 Real Property. Except as set forth on Schedule R-1, no Borrower or any of
its respective Subsidiaries owns any Real Property as of the Closing Date.

 

5. AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrowers shall and shall
cause each of their respective Subsidiaries to do all of the following:

 

5.1 Accounting System. Maintain a system of accounting that enables Borrowers to
produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent. Borrowers also shall keep a reporting
system that shows all additions, sales, claims, returns, and allowances with
respect to their and their Subsidiaries’ sales.

 

5.2 Collateral Reporting. Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports set forth on Schedule 5.2 at
the times specified therein. In addition, each Borrower agrees to cooperate
fully with Agent to facilitate and implement a system of electronic collateral
reporting in order to provide electronic reporting of each of the items set
forth above.

 

5.3 Financial Statements, Reports, Certificates. Deliver to Agent, with copies
to each Lender, each of the financial statements, reports, or other items set
forth on Schedule 5.3 at the time specified herein. In addition, Parent agrees
that no Subsidiary of Parent will have a fiscal year different from that of
Parent.

 

5.4 [Intentionally omitted].

 

5.5 Inspection. Permit Agent, each Lender, and each of their duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent or any such Lender may designate and, so long as no
Default or Event of Default exists, with reasonable prior notice to
Administrative Borrower.

 

5.6 Maintenance of Properties. Maintain and preserve all of their properties
which are necessary or useful in the proper conduct to their business in good
working order and condition, ordinary wear, tear, and casualty excepted (and
except where the failure to do so could not be expected to result in a Material
Adverse Change), and comply at all times with the provisions of all material
leases to which it is a party as lessee, so as to prevent any loss or forfeiture
thereof or thereunder.

 

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5.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers,
their Subsidiaries, or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrowers will and will cause their Subsidiaries to make
timely payment or deposit of all tax payments and withholding taxes required of
them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A.,
state disability, and local, state, and federal income taxes, and will, upon
request, furnish Agent with proof satisfactory to Agent indicating that the
applicable Borrower or Subsidiary of a Borrower has made such payments or
deposits.

 

5.8 Insurance.

 

(a) At Borrowers’ expense, maintain insurance respecting their and their
Subsidiaries’ assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrowers also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver copies of all such policies to Agent with an endorsement naming
Agent as the loss payee (under a satisfactory lender’s loss payable endorsement)
or additional insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever.

 

(b) Administrative Borrower shall give Agent prompt notice of any loss exceeding
$250,000 covered by such insurance. So long as no Event of Default has occurred
and is continuing, Borrowers shall have the exclusive right to adjust any losses
payable under any such insurance policies which are less than $250,000.
Following the occurrence and during the continuation of an Event of Default, or
in the case of any losses payable under such insurance exceeding $250,000, Agent
shall have the exclusive right to adjust any losses payable under any such
insurance policies, without any liability to Borrowers whatsoever in respect of
such adjustments. Any monies received as payment for any loss under any
insurance policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to Agent to be applied at the option of the Required
Lenders either to the prepayment of the Obligations or to be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to
the Required Lenders for application to the cost of repairs, replacements, or
restorations; provided, however, that, with respect to any such monies in an
aggregate amount during any 12 consecutive month period not in excess of
$250,000, so long as (A) no Default or Event of Default shall have occurred and
is continuing, (B) Borrowers’ Excess Availability is greater than $5,000,000,
(C) Administrative Borrower shall have given Agent prior written notice of
Borrowers’ or their Subsidiaries’ intention to apply such monies to the costs of
repairs, replacement, or restoration of the property which is the subject of the
loss, destruction, or taking by condemnation, (D) the monies are held in a cash
collateral account in which Agent has a perfected first-priority security
interest, and (E) Borrowers or their Subsidiaries complete such repairs,
replacements, or restoration within 180 days after the initial receipt of such
monies, Borrowers shall have the option to apply such monies to the costs of
repairs, replacement, or restoration of the property which is the subject of the
loss, destruction, or taking by condemnation unless and to the extent that such
applicable period shall have expired without such repairs, replacements, or
restoration being made, in which case, any amounts remaining in the cash
collateral account shall be paid to Agent and applied as set forth above.

 

5.9 Location of Inventory and Equipment. Keep (i) Borrowers’ and their
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for
repair or in transit) only at the locations identified on Schedule 4.5 as
locations for each such Borrower or such Subsidiary and (ii) the chief executive
office for each Borrower and each Subsidiary only at the location identified on
Schedule 4.7(b) for such Borrower or such Subsidiary; provided, however, that
Administrative Borrower may amend Schedule 4.5 or Schedule 4.7 so long as such
amendment occurs by written notice to Agent not less than 30 days prior to the

 

28

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date on which such Inventory or Equipment is moved to such new location or such
chief executive office is relocated, so long as such new location is (a) with
respect to Parent and its Domestic Subsidiaries, within the continental United
States, and (b) with respect to Foreign Subsidiaries of a Borrower or its
Subsidiaries, within the country under which such Foreign Subsidiary is
organized or existing (or in which its state or province of organization is
located), and so long as the applicable Borrower or Subsidiary provides Agent,
upon the request of Agent, a Collateral Access Agreement with respect thereto.

 

5.10 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

 

5.11 Leases. Pay when due all rents and other amounts payable under any material
leases to which any Borrower or any Subsidiary of a Borrower is a party or by
which any Borrower’s or any of its Subsidiaries’ properties and assets are
bound, unless such payments are the subject of a Permitted Protest.

 

5.12 Existence. At all times preserve and keep in full force and effect each
Borrower’s and each of its Subsidiaries’ valid existence and good standing and
any rights and franchises material to their businesses.

 

5.13 Environmental. Keep any property either owned or operated by any Borrower
or any Subsidiary of a Borrower free of any Environmental Liens or post bonds or
other financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material in any reportable quantity from or onto property owned or
operated by any Borrower or any Subsidiary of a Borrower and take any Remedial
Actions required to abate said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event within 5 days
of its receipt thereof, provide Agent with written notice of any of the
following: (i) notice that an Environmental Lien has been filed against any of
the real or personal property of any Borrower or any Subsidiary of a Borrower,
(ii) commencement of any Environmental Action or notice that an Environmental
Action will be filed against any Borrower or any Subsidiary of a Borrower, and
(iii) notice of a violation, citation, or other administrative order which
reasonably could be expected to result in a Material Adverse Change.

 

5.14 Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.

 

5.15 Control Agreements. Take all reasonable steps in order for Agent to obtain
control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the
Code with respect to (subject to the proviso contained in Section 6.12) all of
its Securities Accounts, Deposit Accounts, electronic chattel paper, investment
property, and letter of credit rights.

 

5.16 Formation of Subsidiaries. At the time that any Borrower or any Guarantor
forms any direct or indirect Subsidiary or acquires any direct or indirect
Subsidiary after the Closing Date, such Borrower or such Guarantor shall (a)
cause such new Subsidiary to (i) if such new Subsidiary is a Domestic
Subsidiary, provide to Agent a Joinder Agreement, (ii) if such new Subsidiary is
a Foreign Subsidiary, provide to Agent a joinder to the Guaranty or such other
guaranty agreement requested by Agent and (iii) provide to Agent a

 

29

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joinder to the Security Agreement, together with such other security documents
(including Mortgages with respect to any Real Property of such new Subsidiary),
as well as appropriate financing statements (and with respect to all property
subject to a Mortgage, fixture filings), all in form and substance satisfactory
to Agent (including being sufficient to grant Agent a first priority Lien
(subject to Permitted Liens) in and on the assets of such newly formed or
acquired Subsidiary), (b) provide to Agent a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such new Subsidiary, in form and substance
satisfactory to Agent, provided, however, that with respect to any Foreign
Subsidiary, to the extent that the pledge of all of the Stock of such Subsidiary
would result in a material adverse tax consequence to Borrowers on a
consolidated basis with their Subsidiaries, such pledge shall be limited to 65%
of the Stock of each Subsidiary, and (c) provide to Agent all other
documentation, including one or more opinions of counsel satisfactory to Agent,
which in its opinion is appropriate with respect to the execution and delivery
of the applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage). Any document, agreement, or instrument executed or issued pursuant to
this Section 5.16 shall be a Loan Document. Notwithstanding the foregoing, no
Foreign Subsidiary shall be required to deliver any security document to the
extent that the delivery of such security document would result in a material
adverse tax consequence to Borrowers on a consolidated basis with their
Subsidiaries.

 

5.17 Change of Maintenance Billing Practices. Continue with their maintenance
billing practices in place as of the Closing Date, provided that Borrowers and
their Subsidiaries may change such billing practices so long as no material
impact on their business valuation will be caused by such change.

 

5.18 License Agreements. Comply in all material respects with all license
agreements and other contracts and documents pursuant to which any Borrower or
any Subsidiary of a Borrower has obtained the right to the Licensed Software,
including, without limitation, all payment obligations.

 

5.19 Pass Through Revenues. Pass through or otherwise pay to BlueCube all Pass
Through Revenues within 1 week of receipt thereof unless such payment is the
subject matter of a Permitted Protest.

 

5.20 Account. Prior to deliver of a Control Agreement with respect to account
number 3263931141 held with Bank of America in compliance with Section 3.6(d)
hereof, maintain an account balance no greater than $10,000,000 in such account.

 

6. NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrowers will not and will
not permit any of their respective Subsidiaries to do any of the following:

 

6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:

 

(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,

 

(b) (i) until the date 30 days from the Closing Date, the Indebtedness evidenced
by the Aloha Debt Documents in an amount not to exceed $15,700,000, and
thereafter in an amount not to exceed $1,000,000, and (ii) the other
Indebtedness existing on the Closing Date set forth on Schedule 4.19,

 

(c) Permitted Purchase Money Indebtedness,

 

(d) upon payment in full of the Indebtedness evidenced by the Aloha Debt
Documents, refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b) and (c) of this Section 6.1

 

30

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(and continuance or renewal of any Permitted Liens associated therewith) so long
as: (i) the terms and conditions of such refinancings, renewals, or extensions
do not, in Agent’s reasonable judgment, materially impair the prospects of
repayment of the Obligations by Borrowers or materially impair Borrowers’
creditworthiness, (ii) such refinancings, renewals, or extensions do not result
in an increase in the principal amount of, or interest rate with respect to, the
Indebtedness so refinanced, renewed, or extended or add one or more Borrowers as
liable with respect thereto if such additional Borrowers were not liable with
respect to the original Indebtedness, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions, that, taken as a whole, are materially more burdensome or
restrictive to the applicable Borrower, (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must include subordination terms and conditions that are
at least as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness, and (v) the Indebtedness that is
refinanced, renewed, or extended is not recourse to any Person that is liable on
account of the Obligations other than those Persons which were obligated with
respect to the Indebtedness that was refinanced, renewed, or extended,

 

(e) endorsement of instruments or other payment items for deposit, and

 

(f) Indebtedness composing Permitted Investments.

 

6.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced, renewed, or extended under Section
6.1(d) and so long as the replacement Liens only encumber those assets that
secured the refinanced, renewed, or extended Indebtedness).

 

6.3 Restrictions on Fundamental Changes.

 

(a) Enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its Stock; provided, however, that (i) any Borrower may merge into
any other Borrower so long as, if such merger is with Parent, Parent is the
surviving entity after such merger, (ii) any Subsidiary may merge into any
Borrower so long as such Borrower is the surviving entity after such merger,
(iii) any Domestic Subsidiary or any Foreign Subsidiary may merge into any other
Domestic Subsidiary so long as a Domestic Subsidiary is the surviving entity
after such merger, and (iv) any Foreign Subsidiary may merge into any other
Foreign Subsidiary,

 

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution),

 

(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in
one transaction or a series of transactions, all or any substantial part of its
assets,

 

(d) Suspend or go out of a substantial portion of its or their business, or

 

(e) Acquire (i) any Person, (ii) all or any substantial part of the assets,
property or business of a Person, or (iii) any assets that constitute a division
or operating unit of the business of any Person; provided, however, that
Borrowers and their Subsidiaries may acquire all or any substantial part of the
assets, property or business of, a Person or any assets that constitute a
division or operating unit of the business of a Person so long as either (A) (1)
Borrowers’ Excess Availability and Qualified Cash is greater than $10,000,000,
(2) Borrowers deliver to Agent evidence satisfactory to Agent that Borrowers and
their Subsidiaries will be in pro forma compliance with this Agreement and the
other Loan Documents after giving effect to such acquisition, (3) the aggregate
cash consideration (including, without limitation, contributions) for all such
acquisitions does not exceed $8,000,000 during any fiscal year, (4) the
aggregate amount of liabilities

 

31

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assumed (including, without limitation, assumption of Indebtedness and other
liabilities and seller financing) for all such acquisitions does not exceed
$5,000,000 during any fiscal year, (5) such assets, property or business is
located in the United States, (6) no Default or Event of Default has occurred
and is continuing or will result from such acquisition, and (7) Borrowers and
their Subsidiaries execute and deliver to Agent all documents required by, to
the extent applicable, this Agreement and any other Loan Documents and any
opinions reasonably requested by Agent regarding the creation and perfection of
the security interests of Agent in the Collateral and provided, further, that no
assets so acquired shall be included in the Borrowing Base without the prior
written consent of Agent and, upon the request of Agent, completion of a field
examination of such assets by Agent; or (B) (1) Borrower’s Excess Availability
plus Qualified Cash is greater than or equal to $20,000,000 for the 30 days
immediately preceding and immediately after giving effect to such acquisition,
(2) Borrowers deliver to Agent evidence satisfactory to Agent that Borrowers and
their Subsidiaries will be in pro forma compliance with this Agreement and the
other Loan Documents after giving effect to such acquisition, (3) the aggregate
cash consideration (including, without limitation, contributions) for all
acquisitions does not exceed $15,000,000 during any fiscal year, (4) the
aggregate amount of liabilities assumed (including, without limitation,
assumption of Indebtedness and other liabilities and seller financing) for all
such acquisitions does not exceed $10,000,000 during any fiscal year, (5) such
assets, property or business is located in the United States, (6) no Default or
Event of Default has occurred and is continuing or will result from such
acquisition, (7) Borrowers and their Subsidiaries execute and deliver to Agent
all documents required by, to the extent applicable, this Agreement and any
other Loan Documents and any opinions reasonably requested by Agent regarding
creation and perfection of the security interests of Agent in the Collateral and
provided, further, that no assets so acquired shall be included in the Borrowing
Base without the prior consent of Agent and, upon the request of Agent,
completion of a field examination of such assets by Agent.

 

6.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of any of the assets of any
Borrower or any Subsidiary of a Borrower.

 

6.5 Change Name. Change any Borrower’s or any of its Subsidiaries’ name,
organizational identification number, state of organization, or organizational
identity; provided, however, that a Borrower or a Subsidiary of a Borrower may
change its name upon at least 30 days prior written notice by Administrative
Borrower to Agent of such change and so long as, at the time of such written
notification, such Borrower or such Subsidiary provides any financing statements
necessary to perfect and continue perfected the Agent’s Liens.

 

6.6 Nature of Business. Make any change in the principal nature of their
business.

 

6.7 Prepayments and Amendments. Except in connection with a refinancing
permitted by Section 6.1(d),

 

(a) optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Borrower or any Subsidiary of a Borrower, other than the
Obligations in accordance with this Agreement,

 

(b) make any payment on account of Indebtedness that has been contractually
subordinated in right of payment if such payment is not permitted at such time
under the subordination terms and conditions, or

 

(c) directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Section 6.1(b) or
(c).

 

6.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.

 

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6.9 Consignments.

 

(a) Consign any of their Inventory or sell any of their Inventory on bill and
hold, sale or return, sale on approval, or other conditional terms of sale,
provided that sales involving software or services may be subject to acceptance
testing and other acceptance procedures as are consistent with Parent’s
historical practices for such matters.

 

(b) Commingle any of their Inventory with any other Person’s inventory,
including, without limitation, pursuant to any bill and hold sale or otherwise.

 

(c) Possess any other Person’s inventory unless such inventory is identified as
such other Person’s inventory.

 

6.10 Distributions. Other than distributions or declaration and payment of
dividends by a Borrower to another Borrower, make any distribution or declare or
pay any dividends (in cash or other property, other than common Stock) on, or
purchase, acquire, redeem, or retire any of any Borrower’s Stock, of any class,
whether now or hereafter outstanding; provided, however, Borrowers shall be
permitted to purchase, acquire, redeem, or retire any Borrower’s Stock of any
class so long as (i) no Default or Event of Default has occurred and is
continuing; (ii) Agent shall have received the letter required in Section
3.6(a)(i) hereof; (iii) Borrowers shall have Excess Availability plus Qualified
Cash in amounts greater than or equal to $12,000,000 for the 30 days immediately
preceding and immediately after giving effect to such purchase, acquisition,
redemption or retirement; and (iv) the amounts paid by Borrowers in connection
with such purchases, acquisitions, redemptions or retirements shall not exceed
(A) $5,000,000 in the aggregate from the Closing Date to the first anniversary
of the Closing Date or (B) $10,000,000 in the aggregate in each year for any
year thereafter.

 

6.11 Accounting Methods. Modify or change their fiscal year or their method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrowers’ or their Subsidiaries’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding Borrowers’ and their Subsidiaries’ financial condition.

 

6.12 Investments. Except for Permitted Investments, directly or indirectly, make
or acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
Administrative Borrower and its Subsidiaries shall not have Permitted
Investments in Deposit Accounts or Securities Accounts in an aggregate amount in
excess of $250,000 at any one time unless Administrative Borrower or its
Subsidiary, as applicable, and the applicable securities intermediary or bank
have entered into Control Agreements governing such Permitted Investments in
order to perfect (and further establish) Agent’s Liens in such Permitted
Investments. Subject to the foregoing proviso, Borrowers shall not and shall not
permit their Subsidiaries to establish or maintain any Deposit Account or
Securities Account unless Agent shall have received a Control Agreement in
respect of such Deposit Account or Securities Account. Notwithstanding the
foregoing, all Deposit Accounts in which Collections are deposited or to which
any Account Debtor forwards payment of the amounts owed by it shall be subject
to a Control Agreement.

 

6.13 Transactions with Affiliates. Other than transactions with BlueCube under
the BlueCube Reseller Agreement, directly or indirectly enter into or permit to
exist any transaction with any Affiliate of any Borrower except for transactions
that (a) are in the ordinary course of Borrowers’ business, (b) are upon fair
and reasonable terms, (c) if they involve one or more payments by any Borrower
or any of its Subsidiaries in excess of $250,000, are fully disclosed to Agent,
and (d) are no less favorable to Borrowers or their Subsidiaries, as applicable,
than would be obtained in an arm’s length transaction with a non-Affiliate.
Without limiting the foregoing, neither Borrowers nor any Domestic Subsidiary of
a Borrower shall enter into any transaction with a Foreign Subsidiary, make an
Investment in a Foreign Subsidiary or otherwise transfer any property to a
Foreign Subsidiary, except Borrowers may make Investments in a Foreign
Subsidiary that constitute Permitted Investments.

 

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6.14 Use of Proceeds. Use the proceeds of the Advances and the Term Loan for any
purpose other than (a) on the Closing Date and the Term Loan Funding Date, (i)
to repay in full or reduce to an amount not to exceed $1,000,000 the outstanding
principal, accrued interest, and accrued fees and expenses owing to Aloha Agent,
for the benefit of the Aloha Agent and the Sellers, and (ii) to pay
transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, to finance the working capital, capital expenditures and general
corporate needs of Borrowers.

 

6.15 Inventory and Equipment with Bailees. Other than as set forth on Schedule
4.5, store the Inventory or Equipment of Borrowers or their Subsidiaries at any
time now or hereafter with a bailee, warehouseman, or similar party.

 

6.16 Financial Covenants.

 

(a) Fail to maintain or achieve:

 

(i) Minimum EBITDA. EBITDA, measured on a quarter-end basis, of at least the
required amount set forth in the following table for the applicable period set
forth opposite thereto:

 

Applicable Amount

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

  

Applicable Period

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

$ 11,740,000    For the 12 month period ending March 31, 2005 $ 12,215,000   
For the 12 month period ending June 30, 2005 $ 12,646,000    For the 12 month
period ending September 30, 2005 $ 12,590,000    For the 12 month period ending
December 31, 2005

 

provided that, thereafter, upon receipt of the Projections required to be
delivered to Agent pursuant to clause (f) of Schedule 5.3 hereof for each fiscal
year, Borrowers and Agent shall negotiate in good faith to determine the minimum
EBITDA as of the end of each trailing 12 month period covered by such
Projections for such fiscal year and, in the event that Borrowers and Agent are
unable to agree upon the amounts of such EBITDA covenant levels on or before the
earlier of (A) the date that is 30 days after the date that Agent has received
such Projections and (B) the date that is 30 days after the date that Borrowers
were required to deliver to Agent such Projections, or if the Projections
delivered to Agent are not reasonably satisfactory to Agent in form and
substance in terms of projected amounts and assumptions, the EBITDA covenant
levels contained in this Section 6.16(a)(i) for each 12 month period ending on
the last day of each quarter of such fiscal year shall be 110% of the EBITDA
covenant level for the corresponding 12-month period ending on the last day of
the immediately preceding fiscal year.

 

(ii) Minimum Tangible Net Worth. Tangible Net Worth, measured on a quarter-end
basis as of the last day of each quarter, of at least the required amount set
forth in the following table for the applicable period ending on the date set
forth opposite thereto:

 

Applicable Amount

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

  

Applicable Period

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

$ 10,065,000    March 31, 2005 $ 12,513,000    June 30, 2005 $ 14,493,000   
September 30, 2005 $ 17,781,000    December 31, 2005

 

34

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provided that, thereafter, upon receipt of the Projections required to be
delivered to Agent pursuant to clause (f) of Schedule 5.3 hereof for each fiscal
year, Borrowers and Agent shall negotiate in good faith to determine the minimum
Tangible Net Worth as of the end of each trailing 12 month period covered by
such Projections for such fiscal year and, in the event that Borrowers and Agent
are unable to agree upon the amounts of such Tangible Net Worth covenant levels
on or before the earlier of (A) the date that is 30 days after the date that
Agent has received such Projections and (B) the date that is 30 days after the
date that Borrowers were required to deliver to Agent such Projections, or if
the Projections delivered to Agent are not reasonably satisfactory to Agent in
form and substance in terms of projected amounts and assumptions, the Tangible
Net Worth covenant levels contained in this Section 6.16(a)(ii) shall be 110% of
the Tangible Net Worth covenant level for last day of the immediately preceding
fiscal year.

 

(b) Capital Expenditures. Make Capital Expenditures and capitalized software
development cost expenditures in any fiscal year in excess of the aggregate
amount set forth in the following table for the applicable period:

 

Applicable Amount

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

  

Fiscal Year

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

$4,140,000.00    Fiscal Year 2005

 

provided that, thereafter, upon receipt of the Projections required to be
delivered to Agent pursuant to clause (f) of Schedule 5.3 hereof for each fiscal
year, Borrowers and Agent shall negotiate in good faith to determine the maximum
Capital Expenditures and capitalized software development cost expenditures for
the fiscal year covered by such Projections and, in the event that Borrowers and
Agent are unable to agree upon the maximum amount of such expenditures on or
before the earlier of (A) the date that is 30 days after the date that Agent has
received such Projections and (B) the date that is 30 days after the date that
Borrowers were required to deliver to Agent such Projections, or if the
Projections delivered to Agent are not reasonably satisfactory to Agent in form
and substance in terms of projected amounts and assumptions, the expenditure
covenant level contained in this Section 6.16(b) for each 12 month period ending
on the last day of such fiscal year shall be 100% of the expenditure covenant
level for the corresponding 12-month period ending on the last day of the
immediately preceding fiscal year.

 

6.17 Collections. Deposit Collections in any Deposit Account from which
disbursements are made.

 

7. EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

 

7.1 If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due to the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations);

 

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7.2 If Borrowers or any Subsidiary of any Borrower:

 

(a) fail to perform or observe any covenant or other agreement contained in any
of Sections 2.7, 5.2, 5.3, 5.5, 5.8, 5.12, 5.14, 5.16, and 6.1 through 6.16 of
this Agreement,

 

(b) fail to perform or observe any covenant or other agreement contained in any
of Sections 5.6, 5.7, 5.9, 5.10, 5.11, and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the date on
which such failure shall first become known to any officer of any Borrower or
(ii) written notice thereof is given to Administrative Borrower by Agent, or

 

(c) fail to perform or observe any covenant or other agreement contained in this
Agreement, or in any of the other Loan Documents; in each case, other than any
such covenant or agreement that is the subject of another provision of this
Section 7 (in which event such other provision of this Section 7 shall govern),
and such failure continues for a period of 20 days after the earlier of (i) the
date on which such failure shall first become known to any officer of any
Borrower or (ii) written notice thereof is given to Administrative Borrower by
Agent;

 

7.3 If any material portion of any Borrower’s or any of its Subsidiaries’ assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any third Person and the same is not discharged
before the earlier of 30 days after the date it first arises or 5 days prior to
the date on which such property or asset is subject to forfeiture by such
Borrower or the applicable Subsidiary;

 

7.4 If an Insolvency Proceeding is commenced by any Borrower or any Subsidiary
of a Borrower;

 

7.5 If an Insolvency Proceeding is commenced against any Borrower or any
Subsidiary of a Borrower, and any of the following events occur: (a) the
applicable Borrower or Subsidiary consents to the institution of such Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 60 calendar days of the date of the filing thereof; (d)
an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, any Borrower or any Subsidiary of a Borrower, or (e)
an order for relief shall have been issued or entered therein;

 

7.6 If any Borrower or any Subsidiary of a Borrower is enjoined, restrained, or
in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;

 

7.7 If one or more judgments, orders, or awards involving an aggregate amount of
$250,000, or more (except to the extent fully covered by insurance pursuant to
which the insurer has accepted liability therefor in writing) shall be entered
or filed against any Borrower or any Subsidiary of any Borrower or with respect
to any of their respective assets, and the same is not released, discharged,
bonded against, or stayed pending appeal before the earlier of 30 days after the
date it first arises or 5 days prior to the date on which such asset is subject
to being forfeited by the applicable Borrower or the applicable Subsidiary;

 

7.8 If there is a default in one or more agreements to which any Borrower or any
Subsidiary of a Borrower is a party with one or more third Persons relative to
Indebtedness of any Borrower or any Subsidiary of any Borrower involving an
aggregate amount of $250,000 or more, and such default (i) occurs at the final
maturity of the obligations thereunder, or (ii) results in a right by such third
Person(s), irrespective of whether exercised, to accelerate the maturity of the
applicable Borrower’s or Subsidiary’s obligations thereunder;

 

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7.9 If any warranty, representation, statement, or Record made herein or in any
other Loan Document or delivered to Lender in connection with this Agreement or
any other Loan Document proves to be untrue or misleading in any material
respect as of the date of issuance or making or deemed making thereof;

 

7.10 If the obligation of any Guarantor under the Guaranty is limited (excluding
limitations arising under applicable law as of the date hereof) or terminated by
operation of law or by such Guarantor;

 

7.11 If the Security Agreement or any other Loan Document that purports to
create a Lien shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement; or

 

7.12 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by any Borrower or any Subsidiary of a Borrower, or a proceeding shall
be commenced by any Borrower or any Subsidiary of a Borrower, or by any
Governmental Authority having jurisdiction over any Borrower or any Subsidiary
of a Borrower, seeking to establish the invalidity or unenforceability thereof,
or any Borrower or any Subsidiary of a Borrower shall deny that it has any
liability or obligation purported to be created under any Loan Document.

 

8. THE LENDER GROUP’S RIGHTS AND REMEDIES.

 

8.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default, the Required Lenders (at their election but without notice of
their election and without demand) may authorize and instruct Agent to do any
one or more of the following on behalf of the Lender Group (and Agent, acting
upon the instructions of the Required Lenders, shall do the same on behalf of
the Lender Group), all of which are authorized by Borrowers:

 

(a) Declare all or any portion of the Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;

 

(b) Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other
agreement between Borrowers and the Lender Group;

 

(c) Terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
the Agent’s Liens in the Collateral and without affecting the Obligations; and

 

(d) Exercise all other rights and remedies of the Lender Group available at law
or in equity or pursuant to any other Loan Document.

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 7.4 or Section 7.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Borrowers.

 

8.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, in equity or pursuant
to any other Loan Document. No exercise by the Lender Group of one right or
remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver. No delay by the Lender
Group shall constitute a waiver, election, or acquiescence by it.

 

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9. TAXES AND EXPENSES.

 

If any Borrower fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, and such payment matter is
not the subject of a Permitted Protest, all as required under the terms of this
Agreement, then, Agent, in its sole discretion and without prior notice to any
Borrower, may do any or all of the following: (a) make payment of the same or
any part thereof; (b) set up such reserves against the Borrowing Base or the
Maximum Revolver Amount as Agent deems necessary to protect the Lender Group
from the exposure created by such failure; or (c) in the case of the failure to
comply with Section 5.8 hereof, obtain and maintain insurance policies of the
type described in Section 5.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.

 

10. WAIVERS; INDEMNIFICATION.

 

10.1 Demand; Protest; etc. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.

 

10.2 The Lender Group’s Liability for Collateral. Each Borrower hereby agrees
that: (a) so long as Agent complies with its obligations, if any, under the
Code, the Lender Group shall not in any way or manner be liable or responsible
for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an “Indemnified Person”) harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrowers’ and their
Subsidiaries’ compliance with the terms of the Loan Documents, and (b) with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (all the foregoing, collectively, the “Indemnified Liabilities”). The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation to
any Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were

 

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required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and
reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY
NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

 

11. NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands by Borrowers
or Agent to the other relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, electronic mail (at such email
addresses as Administrative Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrowers in care of
Administrative Borrower or to Agent, as the case may be, at its address set
forth below:

 

If to Administrative Borrower:   Radiant Systems, Inc.     3925 Brookside
Parkway     Alpharetta, Georgia 30022     Attn: Mark Haidet     Fax No.: (770)
360-7627 with copies to:   Smith, Gambrell & Russell, LLP     1230 Peachtree
Street, N.E., Suite 3100     Atlanta, Georgia 30309-3592     Attn: Brett
Lockwood, Esq.     Fax No.: (404) 685-6974 If to Agent:   WELLS FARGO FOOTHILL,
INC.     1000 Abernathy Road, Suite 1450     Atlanta, Georgia 30328     Attn:
Business Finance Manager     Fax No.: (770) 508-1375     WELLS FARGO FOOTHILL,
INC.     2450 Colorado Avenue, Suite 3000W     Santa Monica, California 90404  
  Attn: Business Finance Division Manager     Fax No. (310) 453-7413 with copies
to:   Paul, Hastings, Janofsky & Walker LLP     600 Peachtree Street, N.E.    
Suite 2400     Atlanta, Georgia 30308     Attn: Jesse H. Austin, III, Esq.    
Fax No.: (404) 815-5208

 

Agent and Borrowers may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, other
than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices

 

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sent by the Lender Group in connection with the exercise of enforcement rights
against Collateral under the provisions of the Code shall be deemed sent when
deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.

 

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF GEORGIA.

 

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF FULTON, STATE OF GEORGIA, PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS
AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 12(b).

 

(c) BORROWERS AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1 Assignments and Participations.

 

(a) Any Lender may assign and delegate to one or more assignees (each an
“Assignee”) that are Eligible Transferees all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000; provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and (iii) the
assigning Lender or Assignee has paid to Agent for Agent’s separate account a
processing fee in the amount of $3,500. Anything contained herein to the
contrary notwithstanding, the payment of any fees

 

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shall not be required and the Assignee need not be an Eligible Transferee if
such assignment is in connection with any merger, consolidation, sale, transfer,
or other disposition of all or any substantial portion of the business or loan
portfolio of the assigning Lender.

 

(b) From and after the date that Agent notifies the assigning Lender (with a
copy to Administrative Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to Section 10.3 hereof) and be released from any future obligations
under this Agreement (and in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation between
Borrowers and the Assignee; provided, however, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender’s obligations under Article
16 and Section 16.7 of this Agreement.

 

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or the
performance or observance by Borrowers of any of their obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (vi) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

 

(d) Immediately upon Agent’s receipt of the required processing fee payment and
the fully executed Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.

 

(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the “Originating Lender”) hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender shall remain a “Lender” for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a “Lender” hereunder or under the other Loan Documents and the
Originating Lender’s obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and

 

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directly with the Originating Lender in connection with the Originating Lender’s
rights and obligations under this Agreement and the other Loan Documents, (iv)
no Lender shall transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums, and (v) all amounts payable by Borrowers hereunder shall be determined
as if such Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrowers, the Collections of Borrowers or their Subsidiaries, the Collateral,
or otherwise in respect of the Obligations. No Participant shall have the right
to participate directly in the making of decisions by the Lenders among
themselves.

 

(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of Section
16.7, disclose all documents and information which it now or hereafter may have
relating to Borrowers and their Subsidiaries and their respective businesses.

 

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR § 203.24, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.

 

13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 hereof and, except as expressly required pursuant to
Section 13.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.

 

14. AMENDMENTS; WAIVERS.

 

14.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements), and
no consent with respect to any departure by Borrowers therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or by Agent at the written request of the Required Lenders) and Administrative
Borrower (on behalf of all Borrowers) and then any such waiver or consent shall
be effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Administrative Borrower (on behalf of all Borrowers), do any of the following:

 

(a) increase or extend any Commitment of any Lender,

 

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(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

 

(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,

 

(d) change the Pro Rata Share that is required to take any action hereunder,

 

(e) amend or modify this Section or any provision of this Agreement providing
for consent or other action by all Lenders,

 

(f) other than as permitted by Section 15.12, release Agent’s Lien in and to any
of the Collateral,

 

(g) change the definition of “Required Lenders” or “Pro Rata Share”,

 

(h) contractually subordinate any of the Agent’s Liens,

 

(i) release any Borrower or any Guarantor from any obligation for the payment of
money,

 

(j) change the definition of Borrowing Base or the definitions of Eligible
Accounts, Maximum Revolver Amount, Term Loan Amount, or change Section 2.1(b),
or

 

(k) amend any of the provisions of Section 15.

 

and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of Borrowers.

 

14.2 Replacement of Holdout Lender.

 

(a) If any action to be taken by the Lender Group or Agent hereunder requires
the unanimous consent, authorization, or agreement of all Lenders, and a Lender
(“Holdout Lender”) fails to give its consent, authorization, or agreement, then
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no
right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall
not be later than 15 Business Days after the date such notice is given.

 

(b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Holdout Lender being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance. The replacement of any Holdout Lender shall be made in
accordance with the

 

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terms of Section 13.1. Until such time as the Replacement Lenders shall have
acquired all of the Obligations, the Commitments, and the other rights and
obligations of the Holdout Lender hereunder and under the other Loan Documents,
the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata
Share of Advances and to purchase a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit.

 

14.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

 

15. AGENT; THE LENDER GROUP.

 

15.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 15. The
provisions of this Section 15 (other than the proviso to Section 15.11(a)) are
solely for the benefit of Agent, and the Lenders, and Borrowers and their
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word “Agent” is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Borrowers and their Subsidiaries, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Borrowers and their Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of
Borrowers and their Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.

 

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15.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

 

15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, 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 other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall 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 other Loan
Document, or to inspect the books and records or properties of Borrowers or the
books or records or properties of any of Borrowers’ Subsidiaries or Affiliates.

 

15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.

 

15.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.” Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 8; provided, however, that unless and until Agent has received any such
request, 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.

 

15.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of

 

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the affairs of Borrowers and their Subsidiaries or Affiliates, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrowers and any other Person party to
a Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrowers. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers and any other Person party to a Loan
Document that may come into the possession of any of the Agent-Related Persons.

 

15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Borrowers and their Subsidiaries received by Agent to reimburse
Agent for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders. In the event Agent is not reimbursed for such costs and
expenses from the Collections of Borrowers and their Subsidiaries received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender’s Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person’s gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender’s Pro Rata Share of any costs or out of pocket expenses
(including attorneys, accountants, advisors, and consultants fees and expenses)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.

 

15.8 Agent in Individual Capacity. WFF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrowers and their Subsidiaries
and Affiliates and any other Person party to any Loan Documents as though WFF
were not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, WFF or its Affiliates may receive
information regarding Borrowers or their Affiliates and any other Person party
to any Loan Documents that is subject to confidentiality obligations in favor of
Borrowers or such other Person and that prohibit the disclosure of such

 

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information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms “Lender” and “Lenders” include WFF in its individual capacity.

 

15.9 Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders and Administrative Borrower. If Agent resigns under this Agreement, the
Required Lenders shall appoint a successor Agent for the Lenders. If no
successor Agent is appointed prior to the effective date of the resignation of
Agent, Agent may appoint, after consulting with the Lenders, a successor Agent.
If Agent has materially breached or failed to perform any material provision of
this Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace Agent with a successor Agent from among the Lenders. In
any such event, upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term “Agent” shall mean such successor
Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be
terminated. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement. If no
successor Agent has accepted appointment as Agent by the date which is 45 days
following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.

 

15.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrowers and
their Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though such Lender were not a Lender hereunder without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Borrowers or their
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them. With respect to the Swing Loans and Protective
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of Agent.

 

15.11 Withholding Taxes.

 

(a) All payments made by any Borrower hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, each Borrower shall comply with
the penultimate sentence of this Section 15.11(a). “Taxes” shall mean any taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but excluding
any tax imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein measured by or based on the net income or net
profits of Lender) and all interest, penalties or similar liabilities with
respect thereto. If any Taxes are so levied or imposed, each Borrower agrees to
pay the full amount of such Taxes and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement, any
note, or any other Loan Document, including any amount paid pursuant to this
Section 15.11(a) after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein; provided, however, that
Borrowers shall not be required to increase any such amounts if the increase in
such amount payable results from Agent’s or such Lender’s own willful misconduct
or gross negligence (as finally

 

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determined by a court of competent jurisdiction). Each Borrower will furnish to
Agent as promptly as possible after the date the payment of any Tax is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by any Borrower.

 

(b) If a Lender claims an exemption from United States withholding tax, such
Lender agrees with and in favor of Agent and any Borrower, to deliver to Agent:

 

(i) if such Lender claims an exemption from United States withholding tax
pursuant to its portfolio interest exception, (A) a statement of the Lender,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within
the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign
corporation related to any Borrower within the meaning of Section 864(d)(4) of
the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or any Borrower;

 

(ii) if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed and executed IRS Form
W-8BEN before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or any Borrower;

 

(iii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before receiving its first payment under this
Agreement and at any other time reasonably requested by Agent or any Borrower;
or

 

(iv) such other form or forms, including IRS Form W-9, as may be required under
the IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or any Borrower.

 

such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.

 

(c) If a Lender claims an exemption from withholding tax in a jurisdiction other
than the United States, such Lender agrees with and in favor of Agent and
Borrowers to deliver to Agent any such form or forms, as may be required under
the laws of such jurisdiction as a condition to exemption from, or reduction of,
foreign withholding or backup withholding tax before receiving its first payment
under this Agreement and at any other time reasonably requested by Agent or
Administrative Borrower.

 

(d) Each Lender agrees promptly to notify Agent and Administrative Borrower of
any change in circumstances which would modify or render invalid any claimed
exemption or reduction.

 

(e) If any Lender claims exemption from, or reduction of, withholding tax and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrowers to such Lender, such Lender agrees
to notify Agent and Administrative Borrower of the percentage amount in which it
is no longer the beneficial owner of Obligations of Borrowers to such Lender. To
the extent of such percentage amount, Agent and Borrowers will treat such
Lender’s documentation provided pursuant to Sections 15.11(b) or 15.11(c) as no
longer valid. With respect to such percentage amount, Lender may provide new
documentation, pursuant to Sections 15.11(b) or 15.11(c), if applicable.

 

(f) If any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by subsection (b) or (c) of this
Section 15.11 are not delivered to Agent, then Agent may withhold from any
interest payment to such

 

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Lender not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.

 

(g) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender due to a failure on the part of
the Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent, as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section 15.11,
together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.

 

15.12 Collateral Matters.

 

(a) The Lenders hereby irrevocably authorize Agent, at its option and in its
sole discretion, to release any Lien on any Collateral (i) upon the termination
of the Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Administrative Borrower
certifies to Agent that the sale or disposition is permitted under Section 6.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which no Borrower or its Subsidiaries owned any interest at the time the
Agent’s Lien was granted nor at any time thereafter, or (iv) constituting
property leased to a Borrower or its Subsidiaries under a lease that has expired
or is terminated in a transaction permitted under this Agreement. Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 15.12; provided, however, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent’s opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.

 

(b) Agent shall have no obligation whatsoever to any of the Lenders to assure
that the Collateral exists or is owned by Borrowers or is cared for, protected,
or insured or has been encumbered, or that the Agent’s Liens have been properly
or sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission, or event related thereto,
subject to the terms and conditions contained herein, Agent may act in any
manner it may deem appropriate, in its sole discretion given Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that Agent
shall have no other duty or liability whatsoever to any Lender as to any of the
foregoing, except as otherwise provided herein.

 

15.13 Restrictions on Actions by Lenders; Sharing of Payments.

 

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
amounts owing by such Lender to Borrowers or any deposit accounts of

 

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Borrowers now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so in
writing by Agent, take or cause to be taken any action, including the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.

 

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

 

15.14 Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

 

15.15 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.

 

15.16 Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

 

15.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:

 

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,

 

(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

 

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Borrowers and will
rely significantly upon the books and records of Borrowers and their
Subsidiaries, as well as on representations of Borrowers’ personnel,

 

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(d) agrees to keep all Reports and other material, non-public information
regarding Borrowers and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with Section 16.7, and

 

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including attorneys fees and costs) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who
might obtain all or part of any Report through the indemnifying Lender.

 

In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrowers, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender’s notice to Agent, whereupon Agent promptly shall request of
Administrative Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and (z)
any time that Agent renders to Administrative Borrower a statement regarding the
Loan Account, Agent shall send a copy of such statement to each Lender.

 

15.18 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 16.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make credit available hereunder, nor to
advance for it or on its behalf in connection with its Commitment, nor to take
any other action on its behalf hereunder or in connection with the financing
contemplated herein.

 

15.19 Bank Product Providers. Each Bank Product Provider shall be deemed a party
hereto for purposes of any reference in a Loan Document to the parties for whom
Agent is acting; it being understood and agreed that the rights and benefits of
such Bank Product Provider under the Loan Documents consist exclusively of such
Bank Product Provider’s right to share in payments and collections out of the
Collateral as more fully set forth herein. In connection with any such
distribution of payments and collections, Agent shall be entitled to assume no
amounts are due to any Bank Product Provider unless such Bank Product Provider
has notified Agent in writing of the amount of any such liability owed to it
prior to such distribution.

 

51

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16. GENERAL PROVISIONS.

 

16.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrowers, Agent, and each Lender whose signature is provided for on
the signature pages hereof.

 

16.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

 

16.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Borrowers, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

 

16.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

 

16.5 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

 

16.6 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by any Borrower or Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of Borrowers
or Guarantors automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.

 

16.7 Confidentiality. Agent and Lenders each individually (and not jointly or
jointly and severally) agree that material, non-public information regarding
Borrowers and their Subsidiaries, their operations, assets, and existing and
contemplated business plans shall be treated by Agent and the Lenders in a
confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except: (a) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group, (b) to Subsidiaries and Affiliates of any member of the Lender
Group (including the Bank Product Providers), provided that any such Subsidiary
or Affiliate shall have agreed to receive such information hereunder subject to
the terms of this Section 16.7, (c) as may be required by statute, decision, or
judicial or administrative order, rule, or regulation, (d) as may be agreed to
in advance by Administrative Borrower or its Subsidiaries or as requested or
required by any Governmental Authority pursuant to any subpoena or other legal
process (but any such disclosures to any Governmental Authority shall only be
disclosed to the limited extent requested or required by such Governmental
Authority and shall continue to be subject to the terms of this Section 16.7 as
to any other third parties and as between Borrowers and Lenders

 

52

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and Agent), (e) as to any such information that is or becomes generally
available to the public (other than as a result of prohibited disclosure by
Agent or the Lenders), (f) in connection with any assignment, prospective
assignment, sale, prospective sale, participation or prospective participations,
or pledge or prospective pledge of any Lender’s interest under this Agreement,
provided that any such assignee, prospective assignee, purchaser, prospective
purchaser, participant, prospective participant, pledgee, or prospective pledgee
shall have agreed in writing to receive such information hereunder subject to
the terms of this Section, and (g) in connection with any litigation or other
adversary proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents. The provisions of this Section 16.7
shall survive for 2 years after the payment in full of the Obligations.

 

16.8 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

16.9 Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints
Parent as the borrowing agent and attorney-in-fact for all Borrowers
(“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes Administrative Borrower (i) to provide Agent with all
notices with respect to Advances and Letters of Credit obtained for the benefit
of any Borrower and all other notices and instructions under this Agreement and
(ii) to take such action as Administrative Borrower deems appropriate on its
behalf to obtain Advances and Letters of Credit and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. It is understood that the handling of the Loan Account and Collateral
of Borrowers in a combined fashion, as more fully set forth herein, is done
solely as an accommodation to Borrowers in order to utilize the collective
borrowing powers of Borrowers in the most efficient and economical manner and at
their request, and that Lender Group shall not incur liability to any Borrower
as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the
Lender Group to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify each member of the Lender Group and
hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group’s relying on any instructions of Administrative
Borrower, or (c) any other action taken by the Lender Group hereunder or under
the other Loan Documents, except that Borrowers will have no liability to the
relevant Agent-Related Person or Lender-Related Person under this Section 16.9
with respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.

 

[Signature pages to follow.]

 

53

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

RADIANT SYSTEMS, INC., a Georgia corporation

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Chief Financial Officer

RADIANT SYSTEMS INTERNATIONAL, INC., a

Georgia corporation

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Treasurer

RETAILENTERPRISE, LLC, a Georgia limited liability

company

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Chief Financial Officer

RADIANT SYSTEMS CENTRAL EUROPE, INC., a

Georgia corporation

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Treasurer

RADIANT HOSPITALITY SYSTEMS, LTD., a Texas

partnership

By:

 

Radiant Systems, Inc., a Georgia corporation, its

sole General Partner

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Chief Financial Officer

RADS HOLDING CORP., a Delaware corporation

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Treasurer

RADIANT ENTERPRISE SOFTWARE LLC, a Georgia

limited liability company

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Chief Financial Officer

 

CREDIT AGREEMENT

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

ESTORELINK.COM, INC., a Georgia corporation

By:

 

 

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

Name:

 

Mark Haidet

Title:

 

Treasurer

WELLS FARGO FOOTHILL, INC.,

a California corporation, as Agent and as a Lender

By:

 

 

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

Name:

 

 

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

Title:

 

 

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

 

CREDIT AGREEMENT

 

2

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

   Form of Assignment and Acceptance

Exhibit B-1

   Form of Borrowing Base Certificate

Exhibit C-1

   Form of Compliance Certificate

Exhibit L-1

   Form of LIBOR Notice

Schedule A-1

   Agent’s Account

Schedule C-1

   Commitments

Schedule D-1

   Designated Account

Schedule P-1

   Permitted Holders

Schedule P-2

   Permitted Liens

Schedule R-1

   Real Property Collateral

Schedule 1.1

   Definitions

Schedule 2.7(a)

   Cash Management Banks

Schedule 3.1

   Conditions Precedent

Schedule 4.3(a)

   Owned Software

Schedule 4.3(b-1)

   Licensed Software

Schedule 4.3(b-2)

   Required Off-the-Shelf Software

Schedule 4.3(c)

   End User Licenses; Customer Maintenance Agreements

Schedule 4.3(d)

   Rights to Market Licensed Software

Schedule 4.3(g)

   Employees’ Rights in Owned Software

Schedule 4.5

   Locations of Inventory and Equipment

Schedule 4.7(a)

   States of Organization

Schedule 4.7(b)

   Chief Executive Offices

Schedule 4.7(c)

   Organizational Identification Numbers

Schedule 4.7(d)

   Commercial Tort Claims

Schedule 4.8(b)

   Capitalization of Borrowers

Schedule 4.8(c)

   Capitalization of Borrowers’ Subsidiaries

Schedule 4.10

   Litigation

Schedule 4.14

   Environmental Matters

Schedule 4.15

   Intellectual Property

Schedule 4.17

   Deposit Accounts and Securities Accounts

Schedule 4.19

   Permitted Indebtedness

Schedule 5.2

   Collateral Reporting

Schedule 5.3

   Financial Statements, Reports, Certificates