Exhibit 10.49

 

 

Credit Agreement

 

 

among

 

WIRELESS FACILITIES, INC.,

 

 

KEYBANK NATIONAL ASSOCIATION,

 

AS ADMINISTRATIVE AGENT,
LENDER AND
LETTER OF CREDIT ISSUING LENDER

 

 

and

 

THE OTHER FINANCIAL
INSTITUTIONS PARTIES HERETO

 

 

with

 

KEYBANC CAPITAL MARKETS,

 

AS DESIGNATED SOLE ARRANGER AND
SOLE BOOK MANAGER

 

 

Dated as of March 16, 2005

 

 

 

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TABLE OF CONTENTS

 

 

 

 

PAGE

 

 

 

 

SECTION I

 

DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

 

1.1

Defined Terms

1

1.2

Use of Certain Terms

22

1.3

Accounting Terms

22

1.4

Rounding

22

1.5

Exhibits and Schedules

23

1.6

References to Agreements and Laws

23

 

 

 

 

SECTION II

 

THE COMMITMENTS AND EXTENSIONS OF CREDIT

23

 

 

 

 

2.1

Loans; Maximum Amounts

23

2.2

Borrowings, Conversions and Continuations of Loans

24

2.3

Letters of Credit

24

2.4

Prepayments

29

2.5

Reduction or Termination of Commitments

29

2.6

Principal and Interest

29

2.7

Fees

30

2.8

Computation of Interest and Fees

30

2.9

Making Payments

31

2.10

Funding Sources

32

2.11

Collateral

32

2.12

Additional Loan Commitments

32

 

 

 

 

SECTION III

 

TAXES, YIELD PROTECTION AND ILLEGALITY

34

 

 

 

 

3.1

Taxes

34

3.2

Illegality

36

3.3

Inability to Determine Rates

36

3.4

Increased Cost and Reduced Return; Capital Adequacy

36

3.5

Breakfunding Costs

37

3.6

Matters Applicable to all Requests for Compensation

38

3.7

Survival

38

 

 

 

 

SECTION IV

 

CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT

38

 

 

 

 

4.1

Conditions of Initial Extension of Credit

38

4.2

Conditions to all Extensions of Credit

40

 

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PAGE

 

 

 

 

SECTION V

 

REPRESENTATIONS AND WARRANTIES

41

 

 

 

 

5.1

Existence and Qualification; Power; Compliance with Laws

41

5.2

Power; Authorization; Enforceable Obligations

41

5.3

No Legal Bar

41

5.4

Financial Statements; No Material Adverse Effect

42

5.5

Litigation

42

5.6

No Default; Continued Business

42

5.7

Ownership of Property; Liens

43

5.8

Taxes

43

5.9

Margin Regulations; Investment Company Act; Public Utility Holding Company Act

43

5.10

ERISA Compliance

43

5.11

Intangible Assets

44

5.12

Compliance With Laws

44

5.13

Environmental Compliance

44

5.14

Insurance

44

5.15

Swap Obligations

44

5.16

Solvency

44

5.17

Disclosure

45

 

 

 

 

SECTION VI

 

AFFIRMATIVE COVENANTS

45

 

 

 

 

6.1

Financial Statements

45

6.2

Certificates, Notices and Other Information

46

6.3

Payment of Taxes

47

6.4

Preservation of Existence

47

6.5

Maintenance of Properties

47

6.6

Maintenance of Insurance

47

6.7

Compliance With Laws

47

6.8

Inspection Rights

48

6.9

Keeping of Records and Books of Account

48

6.10

Compliance with ERISA

48

6.11

Compliance With Agreements

48

 

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PAGE

 

 

 

 

6.12

Subsidiary Guaranties and Pledge of Ownership Interests

48

6.13

Use of Proceeds

50

6.14

Restrictive Agreements

50

6.15

Guaranty Under Material Indebtedness Agreement

50

 

 

 

 

SECTION VII

 

NEGATIVE COVENANTS

50

 

 

 

 

7.1

Indebtedness

50

7.2

Liens

52

7.3

Fundamental Changes

53

7.4

Dispositions

53

7.5

Investments

53

7.6

Restricted Payments

54

7.7

ERISA

55

7.8

Change in Nature of Business

55

7.9

Transactions with Affiliates

55

7.10

Use of Proceeds

56

7.11

Certain Indebtedness Payments, Etc

56

7.12

Financial Covenants

56

7.13

Accounting Changes

56

 

 

 

 

SECTION VIII

 

EVENTS OF DEFAULT AND REMEDIES

57

 

 

 

 

8.1

Events of Default

57

8.2

Certain Financial Covenant Defaults

59

8.3

Remedies Upon Event of Default

59

 

 

 

 

SECTION IX

 

ADMINISTRATIVE AGENT

60

 

 

 

 

9.1

Appointment and Authorization of Administrative Agent

60

9.2

Delegation of Duties

61

9.3

Liability of Administrative Agent

61

9.4

Reliance by Administrative Agent

62

9.5

Notice of Default

62

9.6

Credit Decision; Disclosure of Information by Administrative Agent

63

9.7

Indemnification of Administrative Agent

63

9.8

Administrative Agent in Individual Capacity

64

 

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PAGE

 

 

 

 

9.9

Successor Administrative Agent

64

9.10

Designation of Arranger; No Affiliate Liability

64

 

 

 

 

SECTION X

 

MISCELLANEOUS

65

 

 

 

 

10.1

Amendments; Consents

65

10.2

Transmission and Effectiveness of Communications and Signatures

66

10.3

Attorney Costs, Expenses and Taxes

67

10.4

Binding Effect; Assignment

67

10.5

Set-off

69

10.6

Sharing of Payments

69

10.7

No Setoff

70

10.8

No Waiver; Cumulative Remedies

70

10.9

Usury

70

10.10

Counterparts

71

10.11

Integration

71

10.12

Nature of Lenders’ Obligations

71

10.13

Survival of Representations and Warranties

71

10.14

Indemnity by Borrower

71

10.15

Nonliability of Lender

72

10.16

No Third Parties Benefited

73

10.17

Severability

73

10.18

Confidentiality

73

10.19

Further Assurances

74

10.20

Headings

74

10.21

Time of the Essence

74

10.22

Foreign Lenders

74

10.23

Governing Law

75

10.24

Waiver of Right to Trial by Jury

76

10.25

Entire Agreement

76

 

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EXHIBITS

 

Forms of:

 

A

 

Request for Extension of Credit

B

 

Compliance Certificate

C

 

Form of Note

D

 

Notice of Assignment and Acceptance

E-1

 

Form of General Security Agreement

E-2

 

Form of Intellectual Property Security Agreement

E-3

 

Form of UK Pledge Agreement

E-4

 

Form of Mexican Pledge Agreement

F

 

Form of Multi-Party Guaranty

G

 

Acceptance Letter

H

 

Opinions of Counsel

 

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SCHEDULES

 

2.1

 

Commitments and Pro Rata Shares

7.1

 

Existing Indebtedness and Liens

10.2

 

Offshore and Domestic Lending Offices, Addresses for Notices

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of March 16, 2005, by and
among WIRELESS FACILITIES, INC., a Delaware corporation (“Borrower”), KEYBANK
NATIONAL ASSOCIATION, as Administrative Agent, as a Lender and as Issuing Lender
hereunder, such other lenders as shall from time to time be party hereto with
KEYBANC CAPITAL MARKETS as designated Sole Arranger and Sole Book Manager
hereunder.

 

RECITAL

 

Borrower has requested that Lenders and Issuing Lender provide a revolving line
of credit, and Lenders, Issuing Lender and Administrative Agent are willing to
do so on the terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

SECTION I
DEFINITIONS AND ACCOUNTING TERMS

 

1.1                  Defined Terms. As used in this Agreement, the following
terms shall have the meanings set forth below:

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any line of business or
any division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary).

 

“Administrative Agent” means KeyBank National Association, in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

 

“Administrative Agent’s Office” means Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.2, or such other address or
account as Administrative Agent hereafter may designate by written notice to
Borrower and Lenders.

 

“Administrative Agent-Related Persons” means Administrative Agent (including any
successor agent), together with its Affiliates (including, in the case of
KeyBank, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

 

“Affiliate” means any Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with another Person. A Person shall
be deemed to be “controlled by” any other Person if such other Person possesses,
directly or indirectly, power (a) to vote 10% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors
or managing general partners; or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

 

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“Agreement” means this Credit Agreement, as amended, restated, extended,
supplemented or otherwise modified in writing from time to time.

 

“Applicable Margin” means the following amounts per annum (expressed in basis
points per annum), based upon the Total Leverage Ratio:

 

Total Leverage Ratio

 

Offshore Rate
Margin (bps)

 

Base Rate Margin
(bps)

 

Commitment Fee
(bps)

 

X > 2.25

 

 

250.0

 

25.0

 

45.0

 

 

 

 

 

 

 

 

 

 

X is > 1.25 but < 2.25

 

 

200.0

 

0.0

 

40.0

 

 

 

 

 

 

 

 

 

 

X is > 0.5 but < 1.25

 

 

150.0

 

0.0

 

32.5

 

 

 

 

 

 

 

 

 

 

X < 0.5

 

 

125.0

 

0.0

 

25.0

 

 

For purposes of Borrower’s payment of interest in accordance with Section 2.6
and the commitment fee specified in Section 2.7(a), each Applicable Margin
calculated in accordance with the most recent Compliance Certificate received by
Administrative Agent shall be in effect from the date such Compliance
Certificate is received by Administrative Agent to but excluding the date the
next Compliance Certificate is received; provided, however, that the Applicable
Margin from the Closing Date until Administrative Agent’s receipt of Borrower’s
first Compliance Certificate shall be the amounts set forth above as applying
when the Total Leverage Ratio is [X <0.5].

 

“Applicable Payment Date” means, (a) as to any Offshore Rate Loan, the last day
of the relevant Interest Period or every ninety days, whichever is earlier, any
date that such Loan is prepaid or converted in whole or in part and the Maturity
Date; and (b) as to any other Obligations, the last Business Day of each
calendar quarter and the Maturity Date; provided, further, that interest
accruing at the Default Rate shall be payable from time to time upon demand of
Administrative Agent.

 

“Arranger” means KeyBanc Capital Markets, in its capacity as “Sole Arranger” and
“Sole Book Manager.”

 

“Assignment and Acceptance” means an Assignment and Acceptance substantially in
the form of Exhibit D.

 

“Attorney Costs” means and includes all reasonable attorney’s and other fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal legal services and all disbursements of internal counsel.

 

“Audited Financial Statements” means the audited consolidated balance sheet,
income statement and cash flows of Borrower and its Subsidiaries for each 52 or
53 week year, as applicable, on or about December 31.

 

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“Base Rate” means a fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by KeyBank as its “prime rate.”
Such prime rate is a rate set by KeyBank based upon various factors including
KeyBank’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such prime rate
announced by KeyBank shall take effect at the opening of business on the day
specified in the public announcement of such change. If KeyBank ceases to
establish or publish a prime rate, the applicable Base Rate thereafter shall be
instead the prime rate reported in The Wall Street Journal (or the average prime
rate if a high and a low prime rate are therein reported).

 

“Base Rate Loan” means a Loan made in not less than the Minimum Amount pursuant
to Requisite Notice to Administrative Agent by delivering a Request for
Extension of Credit not later than the Requisite Time and specified to be a Base
Rate Loan or if not designated otherwise. Interest on each Base Rate Loan shall
be calculated using the Applicable Margin for the Base Rate effective as of the
date of the advance of such Base Rate.

 

“Borrower” has the meaning set forth in the introductory paragraph hereto.

 

“Borrowing” and “Borrow” each mean a borrowing of Loans hereunder.

 

“Borrowing Date” means the date that a Loan is made, which shall be a Business
Day.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banks in Cleveland, Ohio; New York, New York; San
Francisco, California; or (if interest is being determined by reference to the
Offshore Rate) London, England are generally authorized or obligated, by law or
executive order, to close.

 

“Capital Leases” means any and all leases under which certain obligations are
required to be capitalized on the books of a lessee in accordance with GAAP.

 

“Cash Acquisition Consideration” means the amount of cash paid or payable prior
to the Maturity Date in connection with an Acquisition including, without
limitation, (a) all amounts recorded on the books of Borrower or any Subsidiary
as deferred liabilities (whether or not characterized as an earn-out) determined
as of the Acquisiton date, (b) contingent liabilities (whether or not
characterized as an earn-out) determined as of the date paid, (c) Indebtedness
assumed or incurred in connection with such Acquisiton and (d) Indebtedness of
such Persons as are acquired in such Acquisition.

 

“Change of Control” means (a) the acquisition of, or, if earlier, the
shareholder or director approval of the acquisition of, ownership or voting
control, directly or indirectly, beneficially or of record, on or after the
Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the
SEC under the Securities Exchange Act of 1934, as then in effect), of shares
representing more than forty-five percent 45% of the aggregate ordinary Voting
Power represented by the issued and outstanding capital stock of Borrower;
(b) during any period of twelve (12) consecutive months, the occupation of a
majority of the seats (other than vacant seats) on the board of directors or
other governing body of Borrower by Persons who were neither (i) nominated by
the board of directors or other governing body of Borrower nor

 

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(ii) appointed by directors so nominated; or (c) the occurrence of a change in
control, or other similar provision, as defined in any Material Indebtedness
Agreement (triggering a default or mandatory prepayment, which default or
mandatory prepayment has not been waived in writing).

 

“Closing Date” means the date all the conditions precedent in Section 4.1 are
satisfied or waived in accordance with Section 4.1.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute thereto.

 

“Comerica Letters of Credit” means (i) Letter of Credit No. 575012 issued by
Comerica Bank on June 13, 2002 in favor of Safety National Casualty Corporation
in the original amount of $100,000 (and since increased to $700,000) for the
account of Borrower; (ii) Letter of Credit No. 598836-44 issued by Comerica Bank
on January 26, 2005 in favor of Insurance Company of North America, Pacific
Employers Insurance Company, Westchester Fire Insurance Company, and Indemnity
Insurance Company of North America in the original amount of $500,000 for the
account of Borrower; and (iii) Letter of Credit No. 593737-44 issued by Comerica
Bank on July 19, 2004 in favor of Nortel Networks Israel (Sales and Marketing )
Ltd. in the original amount of $300,000 for the account of Wireless Facilities
International Limited.

 

“Commitment” means, for each Lender, the amount set forth opposite such Lender’s
name on Schedule 2.1. as such amount may be reduced or adjusted from time to
time in accordance with the terms of this Agreement (collectively, the “combined
Commitments”).

 

“Commitment Fee” has the meaning set forth in Section 2.7 hereof.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit B, properly completed and signed by a Responsible Officer of Borrower.

 

“Consolidated EBITDA” means the sum of the following, provided that the items
contained in clauses (b)-(f) below shall be added to (a) only to the extent they
have been deducted in the calculation of Consolidated Net Income and
consolidated statement of cash flows and provided, further, that for the quarter
ended September 30, 2004 Consolidated EBITDA shall mean the sum of Consolidated
Net Income, Consolidated Interest Charges, the amount of taxes, based on or
measured by income, used or included in the determination of such Consolidated
Net Income, the amount of depreciation and amortization expense deducted in
determining such Consolidated Net Income and $23,100,000.

 

(a)                      Consolidated Net Income, provided that, all items of
gain, income, loss or expense that are properly classified as extraordinary in
accordance with GAAP or are unusual or non-recurring (but do not fall within
clauses (b)-(f) below), the cash portion of which items shall be limited to a
maximum of $7,500,000 in net expense over the prior four fiscal quarter period,
shall be excluded from such Consolidated Net Income;

 

(b)                      Consolidated Interest Charges;

 

(c)                      The amount of taxes, based on or measured by income,
used or included in the determination of such Consolidated Net Income;

 

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(d)                      The amount of depreciation and amortization expense
deducted in determining such Consolidated Net Income, including any impairment
of goodwill or other purchased intangibles as defined under FAS 141 or FAS 142;

 

(e)                      The amount non-cash or non-recurring costs from
discontinued operations; and

 

(f)                        the amount of earn-out or similar payments required
to be reported as compensation expense instead of goodwill be excluded from such
Consolidated Net Income.

 

“Consolidated Interest Charges” means, for any period, for Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, fees, charges and related expenses payable by Borrower and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, (b) the portion of rent
payable by Borrower and its Subsidiaries with respect to such period under
Capital Leases that is treated as interest in accordance with GAAP and (c) the
portion of rent under any Synthetic Lease Obligation that would be treated as
interest in accordance with GAAP if the Synthetic Lease Obligation were treated
as a Capital Lease under GAAP.

 

“Consolidated Net Income” means, for any period, for Borrower and its
Subsidiaries on a consolidated basis, net income of Borrower and its
Subsidiaries in accordance with GAAP adjusted to include (a) the net income of
TLA and DSI, together with each other Person (or business division, business
unit or substantially all of the assets of another Person), in each case
acquired in connection with a Permitted Acquisition, as if the acquisition of
TLA, DSI and any such Permitted Acquisition, had been consummated on the first
day of the applicable measuring period and (b) all pro-forma cost savings in
connection with any such Permitted Acquisition is approved by the Administrative
Agent at the time of Acquisition, such approval not to be unreasonably withheld.

 

“Continuation” and “Continue” mean, with respect to any Offshore Rate Loan, the
continuation of such Offshore Rate Loan as an Offshore Rate Loan on the last day
of the Interest Period for such Loan.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which
such Person is a party or by which it or any of its property is bound.

 

“Conversion” and “Convert” mean, with respect to any Loan, the conversion of
such Loan from or into another type of Loan.

 

“Credit Party” means Borrower and each Guarantor.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief

 

5

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Laws of the United States of America or other applicable jurisdictions from time
to time in effect affecting the rights of creditors generally.

 

“Default” means any event that, with the giving of any notice, the passage of
time, or both, would be an Event of Default.

 

“Default Rate” means an interest rate equal to the Base Rate plus the applicable
margin specified in the definition of Applicable Margin, if any, applicable to
Base Rate Loans, plus 2% per annum; provided, however, that with respect to an
Offshore Rate Loan, the Default Rate shall be an interest rate equal to the
interest rate otherwise applicable to such Loan, plus the Applicable Margin
specified for Offshore Rate Loans, plus 2% per annum, in each case to the
fullest extent permitted by applicable Laws.

 

“Delmarva” means Delmarva Systems Corporation.

 

“Disclosure Letter” means that Disclosure Letter of even date herewith and
delivered to Administrative Agent together with this Agreement.

 

“Disposition” or “Dispose” mean the sale, transfer, License Disposition or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal with or
without recourse of any notes or accounts receivable or any rights and claims
associated therewith; provided, however, that an issuance by Borrower of its
Equity Securities shall not be a Disposition.

 

“Dollar,” “USD” and “$” mean lawful money of the United States of America.

 

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

 

“DSI” means Defense Systems, Incorporated.

 

“Eligible Assignee” means (a) a financial institution organized under the laws
of the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000; (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $ 100,000,000, provided that
such bank is acting through a branch or agency located in the United States;
(c) a Person that is primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary;
(d) another Lender; (e) any other entity which is an “accredited investor” (as
defined in Regulation D under the Securities Act of 1933, as amended) which
extends credit or buys loans as one of its businesses, including but not limited
to, insurance companies, mutual funds and lease financing companies; or
(f) other lenders or institutional investors consented to in writing in advance
by Administrative Agent and Borrower. Neither Borrower nor any Affiliate of
Borrower shall be an Eligible Assignee.

 

“Employee Benefits Plan” means a 401k plan, employee stock purchase program,
deferred compensation program or similar programs from time to time maintained
by Borrower or any of its Subsidiaries.

 

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“ENCO Systems” means collectively ENCO Systems, Inc. and ENCO Systems
Partnership, Ltd.

 

“Environmental Laws” means all Laws relating to environmental, health, safety
and land use matters applicable to any property of Borrower.

 

“Equity Securities” of any Person means (a) all common stock, preferred stock,
participations, shares, partnership interests or other equity interests in such
Person (regardless of how designated and whether or not voting or non-voting)
and (b) all warrants, options and other rights to acquire any of the foregoing,
other than convertible debt securities which have not been converted into common
stock, preferred stock, participations, shares, partnership interests or other
equity interests in any such Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor Federal statute.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with Borrower within the meaning of Sections 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001 (a)(2) of ERISA) or a cessation of operations that
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing with the PBGC of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any ERISA Affiliate.

 

“Escrowed Securities” means Thomas Collateral, the Cuculic/Horn Collateral, and
the Suntech Collateral, as such terms are defined in Section 1 of the General
Security Agreement.

 

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, rounded upward to the next
l/100th of 1%) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

 

“Event of Default” means any of the events specified in Section 8.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor federal statute.

 

“Extension of Credit” means (a) a Borrowing, Conversion or Continuation of Loans
and (b) a Letter of Credit Action wherein a new Letter of Credit is issued or
which has the effect of increasing the amount of, extending the maturity of, or
making a material modification to an outstanding Letter of Credit or the
reimbursement of drawings thereunder.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards to
the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
on the Business Day next succeeding such day; provided that (a) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to KeyBank on such day on such transactions as determined
by Administrative Agent.

 

“First-Tier Material Foreign Subsidiary” means a direct Foreign Subsidiary of
either Borrower or a Domestic Subsidiary that is also a Material Subsidiary.

 

“Fixed Charge Coverage Ratio” means as of any date of determination the ratio of
(a) Borrower’s Consolidated EBITDA for the preceding four fiscal quarters most
recently ended plus consolidated operating lease expenses (as determined in
accordance with GAAP) during such period to (b) the sum of Borrower’s
consolidated capital expenditures, Consolidated Interest Charges, and
consolidated operating lease expenses and consolidated cash income taxes paid
(less cash income tax refunds actually received) (all as determined in
accordance with GAAP) for the four fiscal quarters most recently ended.

 

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

 

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or such other principles as may be approved
by a significant segment of the accounting profession, that are applicable to
the circumstances as of the date of determination, consistently applied,
provided, however, that for purposes of calculating the Senior Leverage Ratio,
the Total Leverage Ratio, the Liquidity Ratio and the Fixed Charge Coverage
Ratio (and in each case the components thereof), GAAP shall mean GAAP as in
effect and applied on the Closing Date, without giving effect to any subsequent
change in such principles.

 

“General Security Agreement” means that certain Security Agreement dated as of
the date hereof, in favor of Administrative Agent (for the account of each
Lender in accordance with its Pro Rata Share) by Borrower and each Guarantor in
the form of Exhibit E-l hereto.

 

“Governmental Authority” means (a) any international, foreign, federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-

 

8

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governmental agency, authority, board, bureau, commission, department,
instrumentality, central bank or public body, or (c) any court, administrative
tribunal or public utility.

 

“Guaranty Obligation” means, as to any Person, any (a) guaranty by such Person
of Indebtedness of, or other obligation payable or performable by, any other
Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by such Person to an obligee of any
other Person with respect to the payment or performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any “keep-well” or other arrangement of whatever nature, in each
such case, given for the purpose of assuring or holding harmless such obligee
against loss with respect to any obligation of such other Person; provided,
however, that the term Guaranty Obligation shall not include performance bond
guarantees or endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guaranty Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, covered by such Guaranty Obligation or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the Person in good faith.

 

“Guarantor” shall mean each Person signatory as an obligor under the Multi-Party
Guaranty or any other Person that shall become an obligor thereunder after the
Closing Date.

 

“Hazardous Substance” means any substance, material or waste, including asbestos
and petroleum (including crude oil or any fraction thereof), which is or becomes
designated, classified or regulated as “toxic,” “hazardous,” a “pollutant” or
similar designation under any Laws.

 

“Indebtedness” means:

 

(a)                      all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;

 

(b)                      any direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), banker’s
acceptances, bank guaranties, surety bonds and similar instruments, but
excluding performance bonds and guaranties thereof (whether in the form of a
letter of credit or otherwise) entered into in the ordinary course of business;

 

(c)                      net obligations under any Swap Contract in an amount
equal to the Swap Termination Value of such Swap Contract;

 

(d)                      with or without recourse, all obligations of such
Person to pay the deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements);

 

9

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(e)                      Capital Leases or Synthetic Lease Obligations, where
(i) the amount of Indebtedness in the case of Capital Leases shall be the amount
of the capitalized lease liability appearing on Borrower’s financial statements
delivered in accordance with Sections 6.1 (a) and (b) of this Agreement and
(ii) the amount of Indebtedness in the case of Synthetic Lease Obligations shall
be the sum of all outstanding principal advances and any other sums advanced and
outstanding pursuant to the Synthetic Lease Obligations;

 

(f)                        all obligations under asset securitization financing
transactions, including recourse sales of receivables but exclusive of
nonrecourse sales of receivables; and

 

(g)                     all Guaranty Obligations of such Person in respect of
any of the foregoing obligations of any other Person.

 

For all purposes of this Agreement, the Indebtedness of any Person shall
include, the Indebtedness of any partnership or joint venture (to the extent the
joint venture consists of a legal entity where a joint venturer has pass-through
liability for all of the debts of the joint venture) in which such Person is a
general partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person (subject to customary recourse exceptions acceptable
to Requisite Lenders).

 

“Indemnified Liabilities” has the meaning set forth in Section 10.14.

 

“Indemnitees” has the meaning set forth in Section 10.14.

 

“Interest Period” means for each Offshore Rate Loan, (i) initially, the period
commencing on the date such Offshore Rate Loan is disbursed or Continued or
Converted into such Offshore Rate Loan, and (ii) thereafter, the period
commencing on the last day of the preceding Interest Period, and ending, in each
case, on the earlier of (x) the scheduled Maturity Date, or (y) one, two, three
or six months thereafter, as elected by Borrower; provided that:

 

(a)                      any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;

 

(b)                      any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and

 

(c)                      unless Administrative Agent otherwise consents, there
may not be more than five (5) Interest Periods for Offshore Rate Loans in effect
at any time.

 

“Intellectual Property Security Agreement” means that certain Intellectual
Property Security Agreement dated as of the date hereof, in favor of
Administrative Agent (for the account of each Lender in accordance with its Pro
Rata Share) by Borrower and each. Guarantor in the form attached to the Form of
General Security Agreement in Exhibit E-2 hereto

 

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“Investment” means, as to any Person, any investment by such Person, whether by
means of the purchase or other acquisition of stock or other securities of any
other Person or by means of a loan, creating a debt, capital contribution,
guaranty or other debt or equity participation or interest in any other Person.
For purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Lender” means KeyBank National Association, or any other Lender, who
from time to time effects a Letter of Credit Action in accordance with the terms
of this Agreement.

 

“KeyBank” means KeyBank National Association.

 

“Laws” or “Law” means all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“Lender” means each lender from time to time party hereto and, as the context
requires, Issuing Lender.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such on Schedule 10.2, or such other office or offices as a Lender
may from time to time notify Administrative Agent.

 

“Letter of Credit” means any standby letter of credit issued or outstanding
hereunder. A Letter of Credit may be a performance letter of credit or a
financial letter of credit.

 

“Letter of Credit Action” means the issuance, supplement, amendment, renewal,
extension, modification or other action relating to a Letter of Credit
hereunder.

 

“Letter of Credit Application” means an application for a Letter of Credit
Action from time to time in use by Issuing Lender.

 

“Letter of Credit Expiration Date” means the scheduled Maturity Date.

 

“Letter of Credit Sublimit” means an amount equal to $12,500,000. The Letter of
Credit Sublimit is part of, and not in addition to, the combined Commitments.

 

“Letter of Credit Usage” means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate amount of all drawings under the Letters of Credit not reimbursed by
Borrower or converted into Loans.

 

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“License Disposition” means, in respect of any patent, trademark, copyright,
mask work, trade secret or other intellectual property right owned or held by
Borrower or any of its Subsidiaries (the “IP Holder”) which is material to
Borrower or any of its Subsidiaries (together, “Material IP”), (i) the granting
by the IP Holder of an exclusive license across all or substantially all fields,
uses or regions to any Person other than Borrower or another Subsidiary,
(ii) the granting of any license by the IP Holder that conveys directly or
indirectly to any Person other than Borrower or its Subsidiaries all or
substantially all of the economic value of such Material IP, or (iii) the
abandonment by the IP Holder of such Material IP.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement (including in the nature of, cash collateral accounts or security
interests), encumbrance, lien (statutory or other), fixed or floating charge, or
other security interest of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable Laws
of any jurisdiction), including the interest of a purchaser of accounts
receivable.

 

“Liquidity Ratio” means as of any date of determination, for Borrower and its
Subsidiaries on a consolidated basis and in accordance with GAAP, the ratio of
(a) the sum of cash on hand, cash equivalents, marketable securities, and billed
and unbilled accounts receivable (excluding accounts receivable owing from any
Affiliate, shareholder or employee of Borrower or any of its Subsidiaries) to
(b) current liabilities; provided that for all periods ending in the four fiscal
quarter period prior to the Maturity Date, current liabilities shall exclude the
Obligations.

 

“Loan” means any advance made by any Lender to Borrower as provided in Section 2
(collectively, the “Loans”).

 

“Loan Documents” means this Agreement and each Note, the Multi-Party Guaranty,
the Security Documents, each Letter of Credit Application, each Request for
Extension of Credit, each certificate, each fee letter, and each other
instrument or agreement from time to time executed by Borrower or any of its
Subsidiaries or any Responsible Officer and delivered in connection with this
Agreement.

 

“Material Adverse Effect” means any set of circumstances or events which (a) has
any material adverse effect upon the validity or enforceability of any Loan
Document or the rights and remedies of Administrative Agent and Lenders
hereunder or thereunder, (b) is material and adverse to the prospects, financial
condition, business, assets or operations of Borrower and its Subsidiaries,
taken as a whole, (c) has any material adverse effect upon the value or
condition of the Collateral, or (d) materially impairs the ability of and Credit
Party to perform the Obligations.

 

“Material Indebtedness Agreement” shall mean any debt instrument, lease
(capital, operating or otherwise), guaranty, contract, commitment, agreement or
other arrangement evidencing any Indebtedness of any Company or the Companies in
excess of the Threshold Amount.

 

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“Material Subsidiary” means each Subsidiary of Borrower that has (a) assets as
of the end of most recent fiscal year of Borrower in excess of $2,000,000 or
(b) net revenues in excess of $5,000,000 for the most recent fiscal year of
Borrower.

 

“Maturity Date” means (a) March 16, 2008, or (b) such earlier date upon which
the combined Commitments may be terminated in accordance with the terms of this
Agreement.

 

“Mexican Pledge Agreement” means that certain Pledge Agreement dated as of the
date hereof, in favor of Administrative Agent (for the account of each Lender in
accordance with its Pro Rata Share) by Borrower in the form of Exhibit E-4
hereto.

 

“Minimum Amount” means, with respect to each of the following actions, the
minimum amount and any multiples in excess thereof set forth opposite such
action:

 

Type of Action

 

Minimum Amount

 

Multiples in
excess thereof

 

Borrowing or prepayment of, or Conversion into, Base Rate Loans

 

$

1,000,000

 

$

500,000

 

 

 

 

 

 

 

Borrowing, prepayment or Continuation of, or Conversion into, Offshore Rate
Loans

 

$

1,000,000

 

$

500,000

 

 

 

 

 

 

 

Letter of Credit Action

 

$

100,000

 

None

 

 

 

 

 

 

 

Reduction or Increase in Commitment

 

$

5,000,000

 

$

1,000,000

 

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3)of ERISA.

 

“Multi-Party Guaranty” means that Multi-Party Guaranty in the form attached
hereto as Exhibit F.

 

“Note” means a promissory note made by Borrower in favor of a Lender evidencing
the Loans made by such Lender, substantially in the form of Exhibit C
(collectively, the “Notes”).

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, Borrower arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement of any proceeding under
any Debtor Relief Laws by or against Borrower or any Subsidiary or Affiliate of
Borrower.

 

“Offshore Rate” means for any Interest Period with respect to each Offshore Rate
Loan comprising part of the same Borrowing, a rate per annum determined by
Administrative Agent as the offered rate for Dollar deposits in the approximate
amount of the requested Offshore Rate Loan and having a maturity comparable to
such Interest Period, which rate appears (i) on the

 

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British Bankers’ Association internet web
page (http://www.bba.org.uk/public/libor/), or via (ii) Reuters (BBALIBORS),
Bloomberg, Moneyline Telerate (Page 3750) or any other information provider of
the British Bankers’ Association daily Libor rates as of 11:00 A.M., London
time, on the date (an “Interest Determination Date”) which is the second day on
which banks are open for interbank deposits in London prior to the commencement
of such Interest Period. If, on the Interest Determination Date for such
Interest Period, the Administrative Agent is unable to obtain any quotation as
provided above, the Offshore Rate for the relevant Interest Period shall be the
rate per annum that the Administrative Agent determines in good faith to be the
arithmetic mean (rounded, if necessary, to the nearest sixth decimal place) of
all the per annum rates of interest at which deposits in Dollars in an amount
comparable to the requested Offshore Rate Loan in Dollars in respect of which
the Offshore Rate is then being determined for a period comparable to such
Interest Period are offered by Administrative Agent to prime banks in the London
interbank market at approximately 11:00 A.M., London time on such Interest
Determination Date. The Administrative Agent shall provide to Borrower, upon
request, details as to the manner in which the Offshore Rate is calculated, but
such calculation shall be conclusive and binding absent manifest error. The
Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage by dividing (i) the Offshore Rate by (ii) one minus the Eurodollar
Reserve Percentage. The determination of the Eurodollar Reserve Percentage and
the Offshore Rate by Administrative Agent shall be conclusive in the absence of
manifest error.

 

“Offshore Rate Loan” means a Loan made in not less than the Minimum Amount
pursuant to Requisite Notice to Administrative Agent and by deliverance of a
Request for Extension of Credit not later than the Requisite Time and specified
to be a Offshore Rate Loan. Interest on each Offshore Rate Loan shall be
calculated using the Applicable Margin for the Offshore Rate effective as of the
date of the advance of such Offshore Rate.

 

“Ordinary Course Dispositions” means:

 

(a)                      Dispositions of surplus equipment or damaged, obsolete
or worn out property, whether now owned or hereafter acquired, in the ordinary
course of business;

 

(b)                      Dispositions of cash, cash equivalents or inventory in
the ordinary course of business;

 

(c)                      Dispositions of property to the extent that such
property is exchanged for credit against the purchase price of similar
replacement property, or the proceeds of such sale are reasonably promptly
applied to the purchase price of such replacement property or where Borrower or
its Subsidiary determine in good faith that the failure to replace such
equipment will not be detrimental to the business of Borrower or such
Subsidiary;

 

(d)                      Dispositions of assets or property by any Subsidiary of
Borrower to Borrower or another Subsidiary of Borrower, or by Borrower to any
Subsidiary of Borrower;

 

(e)                      Dispositions which constitute the making or liquidating
of Permitted Investments; and

 

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(f)                        Dispositions which constitute the incurrence (but not
the enforcement) of Permitted Liens;

 

provided, however, that, other than with respect to Dispositions of the types
described in clauses (a) and (c) of this definition, no such Disposition shall
be for significantly less than the fair market value of the property being
disposed of.

 

“Ordinary Course Indebtedness” means:

 

(a)                      Intercompany Guaranty Obligations of Borrower or any of
its Subsidiaries guarantying Indebtedness otherwise permitted hereunder of
Borrower or any Subsidiary of Borrower;

 

(b)                      Indebtedness arising from the honoring of a check,
draft or similar instrument against insufficient funds or from the endorsement
of instruments for collection in the ordinary course of Borrower’s or any
Subsidiary’s’ Subsidiary’s business;

 

(c)                      Permitted Swap Obligations;

 

(d)                      Indebtedness of Borrower or any of its Subsidiaries
with respect to surety, appeal, indemnity, performance or other similar bonds in
the ordinary course of business with respect to agreements providing for
indemnification, adjustment of purchase price, earnest money or similar
obligations in connection with Acquisitions or Dispositions otherwise permitted
by this Agreement; and

 

(e)                      Indebtedness with respect to cash deposited by
customers to obtain the right to delivery of future goods or services.

 

“Ordinary Course Investments” means Investments consisting of:

 

(a)                      Investments in other assets properly classified as
“marketable securities” or “cash” or “cash equivalents” under GAAP, and which
conform to the investment policies adopted by the Board of Directors of Borrower
from time to time;

 

(b)                      Advances to officers, directors and employees of
Borrower and its Subsidiaries for travel, entertainment, relocation and
analogous ordinary business purposes;

 

(c)                      Investments of Borrower in any of its Subsidiaries and
Investments of any Subsidiary of Borrower in Borrower or another Subsidiary of
Borrower;

 

(d)                      Extensions of credit to customers or suppliers of
Borrower and its Subsidiaries in the ordinary course of business and any
Investments received in satisfaction or partial satisfaction thereof;

 

(e)                      Guaranty Obligations permitted by Section 7.1.

 

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(f)                        Investments received by Borrower or any of its
Subsidiaries as distributions on claims in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;

 

(g)                     Investments of any Subsidiary existing at the time it
becomes a Subsidiary of Borrower, provided that such Investments were not made
in anticipation of such Person becoming a Subsidiary of Borrower; and

 

(h)                     Investments consisting of loans to employees, officers
and directors, the proceeds of which shall be used to purchase Equity Securities
of Borrower or its Subsidiaries and other loans to non-executive officers and
employees.

 

“Ordinary Course Liens” means:

 

(a)                      Liens pursuant to any Loan Document;

 

(b)                      Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

(c)                      carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, landlord’s or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

 

(d)                      pledges or deposits in connection with worker’s
compensation, unemployment insurance and other social security legislation;

 

(e)                      deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business (including, without limitation,
Liens securing all those obligations described in clause (d) of the definition
of Ordinary Course Indebtedness);

 

(f)                        easements, rights-of-way, restrictions, Liens granted
by a third-party lessor to any Person and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of any
Person;

 

(g)                     attachment, judgment or other similar Liens arising in
connection with litigation or other legal proceedings (and not otherwise an
Event of Default hereunder) in the ordinary course of business that is currently
being contested in good faith by appropriate proceedings, adequate reserves have
been set aside, and no material property is subject to a material risk of loss
or forfeiture;

 

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(h)                     Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties and in connection
with the importation of goods in the ordinary course of Borrower’s and its
Subsidiaries’ businesses;

 

(i)                        Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by Borrower in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by
Borrower or any Subsidiary to provide collateral to the depository institution;

 

(j)                        Liens on insurance proceeds in favor of insurance
companies with respect to the financing of insurance premiums; and

 

(k)                    purported Liens evidenced by the filing of UCC
precautionary financing statements relating to operating leases entered into in
the ordinary course of business.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership or joint venture agreement and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation with the secretary of state or other department in the state of its
formation, in each case as amended from time to time.

 

“Outstanding Obligations” means, as of any date, and giving effect to making any
Extensions of Credit requested on such date and all payments, repayments and
prepayments made on such date, (a) when reference is made to all Lenders, the
sum of (i) the aggregate outstanding principal amount of all Loans, and (ii) all
Letter of Credit Usage, and (b) when reference is made to one Lender, the sum of
(i) the aggregate outstanding principal amount of all Loans made by such Lender,
and (ii) such Lender’s ratable risk participation in all Letter of Credit Usage.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto
established under ERISA.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.

 

“Permitted Acquisition” has the meaning specified in Section 7.5(e).

 

“Permitted Indebtedness” has the meaning specified in Section 7.1.

 

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“Permitted Investments” has the meaning specified in Section 7.5.

 

“Permitted Liens” has the meaning specified in Section 7.2.

 

“Permitted Swap Obligations” means all obligations (contingent or otherwise) of
Borrower or any of its Subsidiaries existing or arising under Swap Contracts,
provided that such obligations are (or were) entered into by such Person for the
purpose of: (i) directly mitigating risks associated with liabilities,
commitments or assets held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder; or
(ii) directly mitigating the dilution associated with the issuance of
convertible securities by Borrower, and not for purposes of speculation or
taking a “market view.”

 

“Person” means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture,
Governmental Authority, or otherwise.

 

“Plan” means any employee benefit plan maintained or contributed to by Borrower
or by any trade or business (whether or not incorporated) under common control
with Borrower as defined in Section 400l(b) of ERISA and insured by the Pension
Benefit Guaranty Corporation under Title IV of ERISA.

 

“Pro Rata Share” means, with respect to each Lender, the percentage of the
combined Commitments set forth opposite the name of such Lender on Schedule 2.1,
as such share may be adjusted as contemplated herein.

 

“PT” means Pacific Time.

 

“Reportable Event” means any of the events set forth in Section 4043(b) of ERISA
or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in
Section 4062(c) of ERISA.

 

“Request for Extension of Credit” means, unless otherwise specified herein,
(a) with respect to a Borrowing, Conversion or Continuation of Loans, a written
request substantially in the form of Exhibit A, and (b) with respect to a Letter
of Credit Action, a Letter of Credit Application; in each case duly completed
and signed by a Responsible Officer of Borrower and

 

“Requisite Lenders” means, as of any date of determination: (a) if the
Commitments are then in effect, Lenders having in the aggregate more than 50% of
the combined Commitments then in effect and (b) if the Commitments have then
been terminated and there are Outstanding Obligations, Lenders holding
Outstanding Obligations aggregating more than 50% of such Outstanding
Obligations; provided, however, that the voting rights of any Lender that has
failed to fund any amounts when required to do so hereunder shall be limited to
the Outstanding Obligations with respect to such Lender.

 

“Requisite Notice” means, unless otherwise provided herein, (a) irrevocable
written notice to the intended recipient or (b) except with respect to Letter of
Credit Actions (which must be in writing), irrevocable telephonic notice to the
intended recipient, promptly followed by a

 

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written notice to such recipient. Such notices shall be (i) delivered to such
recipient at the address or telephone number specified on Schedule 10.2 or as
otherwise designated by such recipient by Requisite Notice to Administrative
Agent, and (ii) if made by Borrower, given or made by a Responsible Officer of
Borrower. Any written notice delivered in connection with any Loan Document
shall be in the form, if any, prescribed herein or therein. Any notice sent by
other than hardcopy shall be promptly confirmed by a telephone call to the
recipient and, if requested by Administrative Agent, by a manually-signed
hardcopy thereof.

 

“Requisite Time” means, with respect to any of the actions listed below, the
time and date set forth below opposite such action:

 

Type of Action

 

Applicable
Time

 

Date of Action

Delivery of Request for Extension
of Credit for, or notice for:

 

 

 

 

•             Borrowing or prepayment of, or Conversion into, Base Rate Loans

 

10:00 a.m. PT

 

Same date as such Borrowing, prepayment or Conversion

•             Borrowing, prepayment or Continuation of, or Conversion into,
Offshore Rate Loans or Termination of Commitment

 

10:00 a.m. PT

 

3 Business Days prior to such Borrowing, prepayment Continuation or Conversion

•             Letter of Credit Action

 

10:00 a.m. PT

 

2 Business Days prior to such action (or such lesser time which is acceptable to
Issuing Lender)

•             Payments by Lenders or Borrower to Administrative Agent

 

10:00 a.m. PT

 

On date payment is due

 

“Responsible Officer” means the chief executive officer, president, the chief
financial officer, any vice president of finance, the treasurer or the assistant
treasurer of Borrower. Any document or certificate hereunder that is signed by a
Responsible Officer of Borrower shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of Borrower and such Responsible Officer shall be conclusively presumed to
have acted on behalf of Borrower.

 

“Restricted Payment” means:

 

(a)                      the declaration or payment of any dividend or
distribution by Borrower or any Subsidiary, either in cash or property, on any
shares of Equity Securities of any class of Borrower or any Subsidiary; and

 

(b)                      any other payment or distribution by Borrower or any
Subsidiary in respect of its Equity Securities, either directly or indirectly.

 

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“Security Documents” means the General Security Agreement, the Intellectual
Property Security Agreement, the UK Pledge Agreement and the Mexican Pledge
Agreement.

 

“Senior Debt” means all Indebtedness excluding Subordinated Debt.

 

“Senior Leverage Ratio” means as of any date of determination, for Borrower and
its Subsidiaries on a consolidated basis, the ratio of (a) the principal amount
of Senior Debt as of such date (but excluding Indebtedness with respect to
earn-out payments incurred pursuant to the Delmarva Acquisition, the ENCO
Systems Acquisition, the Suntech Acquisition, the TLA Acquisition, the DSI
Acquisition or other Permitted Acquisitions) to (b) Consolidated EBITDA for the
period of the four fiscal quarters ending on, or ending most recently prior to,
such date.

 

“Shareholders’ Equity” means, as of any date of determination for Borrower and
its Subsidiaries on a consolidated basis, shareholders’ equity as of that date
determined in accordance with GAAP.

 

“Solvent” means, as to any Person at any time, that (i) the fair value of the
property of such Person is greater than the amount of such Person’s liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (ii) the present fair saleable value of the property of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured;
(iii) such Person is able to realize upon its property and pay its debts and
other liabilities (including disputed, contingent and unliquidated liabilities)
as they mature in the normal course of business; (iv) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature; and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

 

“Subordinated Debt” means any Indebtedness of Borrower or its Subsidiaries in
form and substance satisfactory to Requisite Lenders in their sole and absolute
discretion and expressly approved by Requisite Lenders after the date hereof.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned or controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of Borrower.

 

“Suntech” means Suntech Systems, Inc.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward

 

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foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, or any other similar transactions or any combination of any of
the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., or any other master agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a) the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

 

“Synthetic Lease Obligations” means all monetary obligations of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations which do
not appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as secured debt of such Person
(without regard for accounting treatment).

 

“Threshold Amount” means $5,000,000.

 

“TLA” means TLA Associates.

 

“To the best knowledge of” means, when modifying a representation, warranty or
other statement of any Person, that the fact or situation described therein is
known by such Person (or, (i) in the case of Borrower, known by any Responsible
Officer or executive officer of Borrower, or, (ii) in the case of any other
Person other than a natural Person, known by any officer of such Person) making
the representation, warranty or other statement, or with the exercise of
reasonable due diligence under the circumstances (in accordance with the
standard of what a reasonable Person in similar circumstances would have done)
would have been known by such Person (or, (i) in the case of Borrower, would
have been known by any Responsible Officer or executive officer of Borrower, or,
(ii) in the case of any other Person other than a natural Person, would have
been known by any executive officer of such Person).

 

“Total Commitments” means an amount equal to the aggregate amount of all
Commitments (i.e., initially $15,000,000), as the same may increase pursuant to
Section 2.12 or decrease pursuant to section 2.5.

 

“Type” of Loan means (a) a Base Rate Loan and (b) an Offshore Rate Loan.

 

“Total Leverage Ratio” means, as of any date of determination, for Borrower and
its Subsidiaries on a consolidated basis, the ratio of (a) the principal amount
of Indebtedness as of such date (but excluding Indebtedness with respect to
earn-out payments incurred pursuant to the Delmarva Acquisition, the ENCO
Systems Acquisition, the Suntech Acquisition, the TLA

 

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Acquisition, the DSI Acquisition or other Permitted Acquisitions) to
(b) Consolidated EBITDA for the period of the four fiscal quarters ending on, or
ending most recently prior to, such date.

 

“UK Agreement” means that certain Charge over Shares dated as of the date
hereof, in favor of Administrative Agent (for the account of each Lender in
accordance with its Pro Rata Share) by Borrower in the form of Exhibit E-3
hereto.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

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

 

1.2                  Use of Certain Terms.

 

(a)                      All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto or thereto, unless otherwise defined therein.

 

(b)                      As used herein, unless the context requires otherwise,
the masculine, feminine and neuter genders and the singular and plural include
one another.

 

(c)                      The words “herein” and “hereunder” and words of similar
import when used in any Loan Document shall refer to the Loan Documents as a
whole and not to any particular provision thereof. The term “including” is by
way of example and not limitation. References herein to a Section, subsection or
clause shall, unless the context otherwise requires, refer to the appropriate
Section, subsection or clause in this Agreement.

 

(d)                      The term “or” is disjunctive; the term “and” is
conjunctive. The term “shall” is mandatory; the term “may” is permissive.

 

1.3                  Accounting Terms. All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data required to be submitted by this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, and applied in a manner consistent with that used in preparing the
Audited Financial Statements, except as otherwise specifically prescribed
herein.

 

1.4                  Rounding. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other

 

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component, carrying the result to one place more than the number of places by
which such ratio is expressed in this Agreement and rounding the result up or
down to the nearest number (with a round-up if there is no nearest number), to
the number of places by which such ratio is expressed in this Agreement.

 

1.5                  Exhibits and Schedules. All exhibits and schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference.

 

1.6                  References to Agreements and Laws. Unless otherwise
expressly provided herein, (a) references to agreements (including the Loan
Documents) and other contractual instruments shall include all amendments,
restatements, extensions, supplements and other modifications thereto (unless
prohibited by any Loan Document), and (b) references to any Law shall include
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Law.

 

SECTION II
THE COMMITMENTS AND EXTENSIONS OF CREDIT

 

2.1                  Loans; Maximum Amounts.

 

(a)                      Subject to the terms and conditions set forth in this
Agreement, each Lender severally agrees to make, Convert and Continue Loans
until the Maturity Date in such amounts as Borrower may from time to time
request; provided, however, that the Outstanding Obligations of all Lenders
shall not exceed at any time the combined Commitments, as the same may be from
time to time adjusted in accordance with this Agreement and there shall be no
more than five (5) Offshore Rate Loans outstanding at any one time. The amount
of the combined Commitments initially totals $15,000,000. Following the date of
this Agreement, the amount of the combined Commitments may be increased by up to
$45,000,000 to a total not to exceed $60,000,000 in the event Administrative
Agent, acting in its sole and absolute discretion, elects to secure additional
commitments from the Existing Lenders or from New Lenders as otherwise provided
herein. This is a revolving credit and, subject to the terms and conditions
hereof, Borrower may borrow, Convert, Continue, prepay and reborrow Loans as set
forth herein without premium or penalty.

 

(b)                      Loans made by each Lender shall be evidenced by one or
more Notes. The date, amount and maturity of each Lender’s Loans and payments
and other particulars with respect thereto may be endorsed on schedule(s)
attached to its Note by each Lender and/or recorded on one or more loan accounts
or records maintained by such Lender in the ordinary course of business. Such
Notes, loan accounts and records shall be conclusive absent manifest error of
the amount of such Loans and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of Borrower to pay any amount owing with respect to the Loans.

 

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2.2      Borrowings, Conversions and Continuations of Loans.

 

(a)       Borrower may irrevocably request a Borrowing, Conversion or
Continuation of Loans in a Minimum Amount therefor by delivering a Request for
Extension of Credit therefor by Requisite Notice to Administrative Agent not
later than the Requisite Time therefor. All Borrowings, Conversions and
Continuations of Loans shall constitute Base Rate Loans unless properly and
timely otherwise designated as set forth in the prior sentence.

 

(b)       Following receipt of a Request for Extension of Credit, Administrative
Agent shall promptly notify each Lender of its Pro Rata Share thereof by
Requisite Notice. In the case of a Borrowing of Loans, each Lender shall make
the funds for its Loan available to Administrative Agent at Administrative
Agent’s Office not later than the Requisite Time therefor on the Business Day
specified in such Request for Extension of Credit. Upon satisfaction of the
applicable conditions set forth in Section 4.2 (and, in the case of an initial
Extension of Credit hereunder, Section 4.1), all funds so received shall be made
available to Borrower in Dollars. Administrative Agent shall promptly notify
Borrower and Lenders of the interest rate applicable to any Loan other than a
Base Rate Loan upon determination of same.

 

(c)       Except as otherwise provided herein, an Offshore Rate Loan may be
Continued or Converted only as of the last day of the Interest Period for such
Offshore Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, Converted into or Continued as Offshore Rate Loans
without the consent of Requisite Lenders, and Requisite Lenders may demand that
any or all of the then outstanding Offshore Rate Loans be Converted immediately
into Base Rate Loans.

 

(d)       If a Loan is to be made on the same date that another Loan is due and
payable, Borrower or Lenders, as the case may be, shall, unless Administrative
Agent otherwise requests, make available to Administrative Agent the net amount
of funds giving effect to both such Loans and the effect for purposes of this
Agreement shall be the same as if separate transfers of funds had been made with
respect to each such Loan.

 

(e)       The failure of any Lender to make any Loan on any date shall not
relieve any other Lender of any obligation to make a Loan on such date, but no
Lender shall be responsible for the failure of any other Lender to so make its
Loan.

 

2.3      Letters of Credit.

 

(a)       The Letter of Credit Sublimit. Subject to the terms and conditions set
forth in this Agreement, until the Letter of Credit Expiration Date, Issuing
Lender shall take such Letter of Credit Actions as Borrower may from time to
time request; provided, however, that (i) the Outstanding Obligations of each
Lender shall not at any time exceed such Lender’s Commitment; (ii) the
Outstanding Obligations of all Lenders shall not at any time exceed the combined
Commitments; and (iii) Letter of Credit Usage shall not at any time exceed the
Letter of Credit Sublimit. Subject to subsection (g) below and unless

 

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consented to by Issuing Lender and Requisite Lenders, no Letter of Credit may
expire more than 12 months after the date of its issuance or last renewal.

 

(b)       Letter of Credit Actions. Subject to the terms and conditions set
forth in this Agreement, until the Letter of Credit Expiration Date, Issuing
Lender shall take such Letter of Credit Actions as Borrower may from time to
time request; provided, however, that the Outstanding Obligations of each Lender
shall not exceed such Lender’s Commitment and the Outstanding Obligations of all
Lenders shall not exceed the combined Commitments at any time. Subject to
subsection (g) below and unless consented to by Issuing Lender and Requisite
Lenders, no Letter of Credit may expire more than twelve (12) months after the
date of its issuance or last renewal; provided, however, that no Letter of
Credit shall expire after the Letter of Credit Expiration Date unless Borrower
shall post cash collateral with respect to such Letter of Credit in such manner
as is reasonably satisfactory to Lender and the amount of the Letter of Credit
does not exceed the Letter of Credit Sublimit.

 

(c)       Requesting Letter of Credit Actions. Borrower may irrevocably request
a Letter of Credit Action in a Minimum Amount therefor by delivering a Letter of
Credit Application therefor to Issuing Lender, with a copy to Administrative
Agent (who shall notify Lenders) by Requisite Notice not later than the
Requisite Time therefor. Each Letter of Credit Action shall be in a form
acceptable to Issuing Lender in its sole discretion. Unless Administrative Agent
notifies Issuing Lender that such Letter of Credit Action is not permitted
hereunder, or Issuing Lender notifies Administrative Agent that it has
determined that such Letter of Credit Action is contrary to any Laws or policies
of Issuing Lender, Issuing Lender shall, upon satisfaction of the applicable
conditions set forth in Section 4.2 with respect to any Letter of Credit Action
constituting an Extension of Credit, effect such Letter of Credit Action. This
Agreement shall control in the event of any conflict with any Letter of Credit
Application. Upon the issuance of a Letter of Credit, each Lender shall be
deemed to have purchased from Issuing Lender a risk participation therein in an
amount equal to such Lender’s Pro Rata Share times the amount of such Letter of
Credit.

 

(d)       Reimbursement of Payments Under Letters of Credit. Borrower shall
reimburse Issuing Lender through Administrative Agent for any payment that
Issuing Lender makes under a Letter of Credit on or before the date of such
payment; provided, however, that if the conditions precedent set forth in
Section 4.2 can be satisfied, Borrower may request a Borrowing of Loans pursuant
to Section 2.2 to reimburse Issuing Lender for such payment, or, failing to make
such request, Borrower shall be deemed to have requested a Borrowing of Base
Rate Loans on such payment date pursuant to subsection (e) below.

 

(e)       Funding by Lender When Issuing Lender Not Reimbursed. Upon any drawing
under a Letter of Credit, Issuing Lender shall notify Administrative Agent and
Borrower. If Borrower fails to timely make the payment required pursuant to
subsection (d) above, Issuing Lender shall notify Administrative Agent of such
fact and the amount of such unreimbursed payment. Administrative Agent shall
promptly notify each Lender of its Pro Rata Share of such amount by Requisite
Notice. Each Lender shall make funds

 

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in an amount equal its Pro Rata Share of such amount available to Administrative
Agent at Administrative Agent’s Office not later than the Requisite Time
therefor on the Business Day specified by Administrative Agent, Administrative
Agent shall remit the funds so received to Issuing Lender. The obligation of
each Lender to so reimburse Issuing Lender shall be absolute and unconditional
and shall not be affected by the occurrence of a Default or Event of Default or
any other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of Borrower to reimburse Issuing Lender for the
amount of any payment made by Issuing Lender under any Letter of Credit,
together with interest as provided herein.

 

(f)        Nature of Lenders’ Funding. If the conditions precedent set forth in
Section 4.2 can be satisfied (except for the giving of a Request for Extension
of Credit) on any date Borrower is obligated to, but fails to, reimburse Issuing
Lender for a drawing under a Letter of Credit, the funding by Lenders pursuant
to the previous subsection shall be deemed to be a Borrowing of Base Rate Loans
(without regard to the Minimum Amount therefor) deemed requested by Borrower. If
the conditions precedent set forth in Section 4.2 cannot be satisfied on the
date Borrower is obligated to, but fails to, reimburse Issuing Lender for a
drawing under a Letter of Credit, the funding by Lenders pursuant to the
previous subsection shall be deemed to be a funding by each Lender of its risk
participation in such Letter of Credit, and each Lender making such funding
shall thereupon acquire a pro rata participation, to the extent of its
reimbursement, an interest in the claim of Issuing Lender against Borrower in
respect of such payment and shall share in accordance with that pro rata
participation, in any payment made by Borrower with respect to such claim. Any
amounts made available by a Lender under its risk participation shall be payable
by Borrower upon demand of Administrative Agent, and shall bear interest at a
rate per annum equal to the Default Rate.

 

(g)       Obligations Absolute. The obligation of Borrower to pay to Issuing
Lender the amount of any payment made by Issuing Lender under any Letter of
Credit shall be absolute, unconditional, and irrevocable. Without limiting the
foregoing, Borrower’s obligation shall not be affected by any of the following
circumstances:

 

(i)        any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

 

(ii)       any amendment or waiver of or any consent to departure from such
Letter of Credit, this Agreement, or any other agreement or instrument relating
hereto or thereto;

 

(iii)     the existence of any claim, setoff, defense, or other rights which
Borrower may have at any time against Issuing Lender, Administrative Agent or
any Lender, any beneficiary of such Letter of Credit (or any persons or entities
for whom any such beneficiary may be acting) or any other Person, whether in
connection with such Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, or any unrelated transactions;

 

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(iv)      any demand, statement, or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
whatsoever so long as any such document appeared to comply with the terms of the
Letter of Credit;

 

(v)        any payment made by Issuing Lender under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief
Laws;

 

(vi)      the existence, character, quality, quantity, condition, packing, value
or delivery of any property purported to be represented by documents presented
in connection with such Letter of Credit or for any difference between any such
property and the character, quality, quantity, condition, or value of such
property as described in such documents;

 

(vii)     the time, place, manner, order or contents of shipments or deliveries
of property as described in documents presented in connection with such Letter
of Credit or the existence, nature and extent of any insurance relative thereto;

 

(viii)    the solvency or financial responsibility of any party issuing any
documents in connection with such Letter of Credit;

 

(ix)      any failure or delay in notice of shipments or arrival of any
property;

 

(x)       any error in the transmission of any message relating to such Letter
of Credit not caused by Issuing Lender, or any delay or interruption in any such
message;

 

(xi)      any error, neglect or default of any correspondent of Issuing Lender
in connection with such Letter of Credit;

 

(xii)     any consequence arising from acts of God, wars, insurrections, civil
unrest, terrorist action, disturbances, labor disputes, emergency conditions or
other causes beyond the control of Issuing Lender;

 

(xiii)   so long as Issuing Lender in good faith determines that the document
appears to comply with the terms of the Letter of Credit, the form, accuracy,
genuineness or legal effect of any contract or document referred to in any
document submitted to Issuing Lender in connection with such Letter of Credit;
and

 

(xiv)    any other circumstances whatsoever where Issuing Lender has acted in
good faith.

 

In addition, Borrower will promptly examine a copy of each Letter of Credit and
amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrower’s instructions or other irregularity, Borrower will
immediately notify Issuing Lender in

 

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writing. Borrower shall be conclusively deemed to have waived any such claim
against Issuing Lender and its correspondents unless such notice is given as
aforesaid.

 

(h)       Role of Issuing Lender. Each Lender and Borrower agree that, in paying
any drawing under a Letter of Credit, Issuing Lender shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Administrative
Agent-Related Person nor any of the respective correspondents, participants or
assignees of Issuing Lender shall be liable to any Lender for any action taken
or omitted in connection herewith at the request or with the approval of Lenders
or Requisite Lenders, as applicable; any action taken or omitted in the absence
of gross negligence or willful misconduct; or the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit. Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude Borrower’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. No Administrative
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of Issuing Lender, shall be liable or responsible for any of the
matters described in subsection (g) above. In furtherance and not in limitation
of the foregoing, Issuing Lender may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

(i)        Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
Issuing Lender and Borrower when a Letter of Credit is issued and subject to
applicable laws, performance under Letters of Credit by Issuing Lender, its
correspondents, and beneficiaries will be governed by, with respect to standby
Letters of Credit, the rules of the “International Standby Practices 1998”
(ISP98) or such later revision as may be published by the International Chamber
of Commerce (the “ICC”).

 

(j)        Letter of Credit Fee. On each Applicable Payment Date, Borrower shall
pay to Administrative Agent in arrears, for the account of each Lender in
accordance with its Pro Rata Share, a Letter of Credit fee equal to the
Applicable Margin for Offshore Rate Loans on a per annum basis times the actual
daily maximum amount available to be drawn under each Letter of Credit for the
period since the later of the Closing Date and the previous Applicable Payment
Date. If there is any change in the Applicable Margin during any quarter, the
actual daily amount shall be computed and multiplied by the Applicable Margin
separately for each period during such quarter that such Applicable Margin was
in effect.

 

(k)       Fronting Fee and Documentary and Processing Charges Payable to Issuing
Lender. On each Applicable Payment Date, Borrower shall pay to

 

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Administrative Agent for the sole account of Issuing Lender a fronting fee in an
amount equal to 0.150% per annum on the daily average face amount of all
outstanding Letters of Credit, payable in arrears. In addition, Borrower shall
pay directly to Issuing Lender, upon demand, for its sole account its customary
documentary and processing charges in accordance with its standard schedule, as
from time to time in effect, for any Letter of Credit Action or other occurrence
relating to a Letter of Credit for which such charges are customarily made. Such
fees and charges are nonrefundable.

 

2.4      Prepayments.

 

(a)       Upon Requisite Notice to Administrative Agent not later than the
Requisite Time therefor, Borrower may at any time and from time to time
voluntarily prepay Loans in part in the Minimum Amount therefor or in full
without premium or penalty. Administrative Agent will promptly notify each
Lender thereof and of such Lender’s Pro Rata Share of such prepayment. Any
prepayment of a Loan shall be accompanied by all accrued interest thereon and
any prepayment of an Offshore Rate Loan shall be made together with the amounts
set forth in Section 3.5.

 

(b)       If for any reason the Outstanding Obligations exceed the combined
Commitments as in effect or as reduced because of any limitation set forth in
this Agreement or otherwise, Borrower shall immediately prepay Loans in an
aggregate amount equal to such excess.

 

2.5      Reduction or Termination of Commitments. Upon Requisite Notice to
Administrative Agent not later than the Requisite Time therefor, Borrower may at
any time and from time to time, without premium or penalty, permanently and
irrevocably reduce the Commitments in a Minimum Amount therefor to an amount not
less than the Outstanding Obligations at such time or terminate the Commitments.
Any such reduction or termination shall be accompanied by payment of all accrued
and unpaid commitment fees with respect to the portion of the Commitments being
reduced or terminated. Administrative Agent shall promptly notify Lenders of any
such request for reduction or termination of the Commitments. Each Lender’s
Commitment shall be reduced by an amount equal to such Lender’s Pro Rata Share
times the amount of such reduction.

 

2.6      Principal and Interest.

 

(a)       Except as otherwise provided hereunder, if not sooner paid, Borrower
agrees to pay the outstanding principal amount of each Loan on the Maturity
Date.

 

(b)       Subject to subsection (c) below, and unless otherwise specified
herein, Borrower shall pay interest on the unpaid principal amount of each Loan
(before and after default, before and after maturity, before and after judgment,
and before and after the commencement of any proceeding under any Debtor Relief
Laws) from the date borrowed until paid in full (whether by acceleration or
otherwise) on each Applicable Payment Date at a rate per annum equal to the
interest rate determined in accordance with the definition of such type of Loan,
plus the Applicable Margin specified in the definition in this Agreement of
Applicable Margin with respect to such type of Loan.

 

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(c)       Notwithstanding subsection (b) of this Section, while any Event of
Default exists or after acceleration, Borrower shall pay interest (after as well
as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at the Default Rate.

 

2.7      Fees.

 

(a)       Commitment Fee. Borrower shall pay to Administrative Agent (for the
account of each Lender according to its Pro Rata Share) the respective
commitment fee (the “Commitment Fee”) set forth in the definition of Applicable
Margin, calculated on the average unused amount of the combined Commitments. The
commitment fee shall be calculated and payable quarterly in arrears on each
Applicable Payment Date. The Commitment Fee shall continue to accrue at all
times, including at any time during which one or more conditions in Section 4
are not met.

 

(b)       Agency and Arrangement Fees. Borrower shall pay to Administrative
Agent and Arranger an administrative agency fee and a structuring and
arrangement fee, respectively, in such amounts and on the Closing Date as set
forth in a separate letter agreement dated March 16, 2005 among Borrower,
Administrative Agent and Arranger (the “Fee Letter”). Such fees are for the
services to be performed by Administrative Agent in acting as Administrative
Agent and for the services of Arranger in structuring and arranging the credit
facilities under this Agreement, respectively, and are fully earned on the date
paid. The Fee Letter may be modified to reflect the mutual agreement of
Borrower, Administrative Agent and Arranger to reflect those additional fees
associated with any increase of the Total Commitment as may be agreed pursuant
to the terms of Section 2.12 hereof. All fees payable under the Fee Letter are
solely for Administrative Agent’s and Arranger’s own account and are
nonrefundable.

 

(c)       Lenders’ Upfront Fee. On the Closing Date, Borrower shall pay to
Administrative Agent for the account of each Lender the balance due of an
upfront fee in the amount set forth in the Fee Letter. Such upfront fees are
consideration for the Commitments by each Lender under this Agreement and is
fully earned on the date paid. The upfront fee paid to each Lender is solely for
its own account and is nonrefundable.

 

2.8      Computation of Interest and Fees. Computation of interest on Base Rate
Loans when the Base Rate is determined by KeyBank’s “prime rate” shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed. Computation of other types of interest and
all fees shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed, which results in a higher yield to Lenders than a method
based on a year of 365 or 366 days. Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that
any Loan that is repaid on the same day on which it is made shall bear interest
for one day.

 

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2.9      Making Payments.

 

(a)       Except as otherwise provided herein, all payments by Borrower or any
Lender hereunder shall be made to Administrative Agent at Administrative Agent’s
Office not later than the Requisite Time for such type of payment. All payments
received after such Requisite Time shall be deemed received on the next
succeeding Business Day. All payments shall be made in immediately available
funds in lawful money of the United States of America. All payments by Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.

 

(b)       Upon satisfaction of any applicable terms and conditions set forth
herein, Administrative Agent shall promptly pay amounts received in accordance
with the prior subsection available in like funds as received, as follows: (i)
if payable to Borrower, by crediting such account as Borrower may designate in
writing to Administrative Agent from time to time, and (ii) if payable to any
Lender, by wire transfer to such Lender at its Lending Office. In the case of
amounts held by Administrative Agent that are payable to Borrower, if any
applicable terms and conditions are not so satisfied, Administrative Agent shall
return any funds it is holding that would otherwise be payable to Borrower to
the Lenders making such funds available, without interest.

 

(c)       Subject to the definition of “Interest Period,” if any payment to be
made by Borrower shall come due on a day other than a Business Day, payment
shall instead be considered due on the next succeeding Business Day, and such
extension of time shall be reflected in computing interest and fees.

 

(d)       Unless Borrower or any Lender has notified Administrative Agent prior
to the date any payment to be made by it is due, that it does not intend to
remit such payment, Administrative Agent may, in its sole and absolute
discretion, assume that Borrower or Lender, as the case may be, has timely
remitted such payment and may, in its sole and absolute discretion and in
reliance thereon, make available such payment to the Person entitled thereto. If
such payment was not in fact remitted to Administrative Agent in immediately
available funds, then:

 

(i)        if Borrower failed to make such payment, each Lender shall forthwith
on demand repay to Administrative Agent the amount of such assumed payment made
available to such Lender, together with interest thereon in respect of each day
from and including the date such amount was made available by Administrative
Agent to such Lender to the date such amount is repaid to Administrative Agent
at the Federal Funds Rate; and

 

(ii)       if any Lender failed to make such payment, Administrative Agent shall
be entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent promptly shall notify Borrower,
and Borrower shall pay such corresponding amount to Administrative Agent.
Administrative Agent also shall be entitled to recover from such Lender interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made

 

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available by Administrative Agent to Borrower to the date such corresponding
amount is recovered by Administrative Agent, (A) from such Lender at a rate per
annum equal to the daily Federal Funds Rate, and (B) from Borrower, at a rate
per annum equal to the interest rate applicable to such Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which Administrative Agent or Borrower may
have against any Lender as a result of any default by such Lender hereunder.

 

(e)       If Administrative Agent or any Lender is required at any time to
return to Borrower, or to a trustee, receiver, liquidator, custodian, or any
official under any proceeding under Debtor Relief Laws, any portion of a
payments made by Borrower, each Lender shall, on demand of Administrative Agent,
return its share of the amount to be returned, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the daily Federal Funds Rate.

 

2.10    Funding Sources. Nothing in this Agreement shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

 

2.11    Collateral. Borrower’s Obligations are secured by or will be secured by
the Security Agreement Documents.

 

2.12    Additional Loan Commitments.

 

(a)       Provided that no Default of Event of Default shall have occurred and
be continuing, Borrower shall have the option from time to time, by giving
written notice (an “Increase Notice”), to the Administrative Agent on or before
the Maturity Date subject to the terms and conditions set forth in this
Agreement, to increase the Total Commitments by an amount up to $45,000,000 (the
amount of the requested increase to be set forth in the Increase Notice) (which,
assuming no previous reduction in the Commitments, would result in a maximum
Total Commitment of $60,000,000). The increase in the Total Commitment pursuant
to any such particular request shall be at least in the Minimum Amount but in no
event greater than $45,000,000 less any previous increase in the Total
Commitment pursuant to this Section and less any reduction pursuant to Section
2.5 (a “Requested Increase”). The Increase Notice shall contain such other
details with respect to such Requested Increase as the Administrative Agent
shall reasonably request.

 

(b)       Upon receipt of Increase Notice, from Borrower, Administrative Agent
shall promptly send a copy of the Increase Notice to each Lender. In the event
Requisite Lenders, acting in their respective sole and absolute discretion,
instruct Administrative Agent to do so, Administrative Agent shall act to
facilitate the Requested Increase as expressly set forth in this Section 2.12.
Following such instruction of Requisite Lenders, Administrative Agent shall send
a request to each Lender that each such Lender increase its Commitment by an
amount equal to its Pro Rata Share of the Requested Increase (the “First
Request”). Each Lender shall have the right, but not the obligation, acting in
its

 

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sole and absolute discretion, to increase its Commitment by an amount equal to
its Pro Rata Share of the Requested Increase, and shall have a period of fifteen
(15) days from the First Request to notify Administrative Agent whether or not
such Lender elects so to increase its Commitment. Any Lender that fails to
respond to the First Request within such fifteen (15)-day period will be deemed
to have elected not to increase their respective Commitment. If all Lenders
elect to increase their respective Commitments by amounts equal to their
respective Pro Rata Share of the Requested Increase, Administrative Agent shall
so notify Borrower and Lenders, and Borrower shall proceed in accordance with
Section (c) below. If any Lender (any such Lender, a “Declining Lender”) shall
not elect or shall be deemed to have elected not to increase its Commitment as
aforesaid, (i) the amount of such Declining Lender’s Commitment shall remain
unchanged, (ii) Administrative Agent shall notify Borrower and each of the other
Lenders as to which Lenders have elected to increase their Commitments and by
what amounts and (iii) if Borrower so requests, Administrative Agent shall
either (A) solicit from the Lenders that elected to increase their respective
Commitments a further increase in their Commitments in an aggregate amount equal
to all or any portion of the aggregate amount of the Declining Lender’s Pro Rata
Share of the Requested Increase (the “Shortfall”) or (B) submit a list of
proposed lenders that are not then a party to this Credit Agreement to Borrower
for its review and approval (such approval not to be unreasonably withheld or
delayed) in order to obtain additional Commitments in an amount equal to the
Shortfall.

 

(c)       In connection with the Requested Increase in the Commitments of some
or all of the Lenders as provided in Section 2.12(b) above, Borrower shall
execute a modification to its Notes (each a “Modified Note”) evidencing such
increase, as well as such other modifications to this Credit Agreement as
Administrative Agent shall reasonably request. In connection with the addition
of new lenders as a result of solicitations by Administrative Agent pursuant to
2.12(b) above (the “New Lenders”), Borrower, Administrative Agent and each New
Lender shall execute an Acceptance Letter in the form of Exhibit G, Borrower
shall execute a Note to each New Lender in the amount of the New Lender’s
Commitment (a “New Note”) and Borrower, Administrative Agent and the Lenders
shall execute such modifications to this Credit Agreement (including, without
limitation, modifications of the financial covenants contained in Sections
7.12(a) and 7.12(b) hereof) as Administrative Agent shall reasonably request,
whereupon the New Lender shall become, and have the rights and obligations of a
“Lender”, with a Commitment in the amount set forth in such Acceptance Letter.
Each Modified Note and New Note shall constitute a “Note” for all purposes of
this Credit Agreement. Borrower shall also execute and deliver to Administrative
Agent and the Lenders such additional documents, instruments, certifications and
opinions as the Administrative Agent may require in its sole and absolute
discretion, including, without limitation, a Compliance Certificate,
demonstrating compliance with all covenants, representations and warranties set
forth in the Loan Documents after giving effect to the increase, and any
amendments to Security Documents, as Administrative Agent may request, and
Borrower shall pay any updated UCC searches, all filing costs and fees, Attorney
Costs and any and all intangible taxes or other taxes, assessments or charges or
any similar fees, taxes or expenses arising in connection with such increase.

 

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(d)       If at the time a New Lender becomes a Lender (or a Lender increases
its Commitment) pursuant to this Section 2.12 there is any principal outstanding
under the existing Notes of the previously admitted Lenders (the “Existing
Lenders”), such New Lenders (or Lender increasing its Commitment) shall remit to
Administrative Agent an amount equal to the Outstanding Percentage (as defined
below) multiplied by the Commitment of the New Lenders (or the amount of the
increase in the Commitment of a Lender increasing its Commitment), which amount
shall be deemed advanced under the Loan of the New Lender (or the Lender
increasing its Commitment). Administrative Agent shall pay such amount to the
Existing Lenders in accordance with the Existing Lenders’ respective Pro Rata
Shares (as calculated immediately prior to the admission of the New Lenders (or
the increase in a Lender’s Commitment), and such payment shall effect an
automatic reduction of the outstanding principal balance under the respective
Notes of the Existing Lenders. For purposes of this Section, the term
“Outstanding Percentage” means the ratio of (i) the aggregate outstanding
principal amount under the Notes of the Existing Lenders, immediately prior to
the admission of the New Lender (or the increase in the Commitment of a Lender),
to (ii) the aggregate of the Commitments of the Existing Lenders (as increased
pursuant to this Section, if applicable) and the New Lenders. Administrative
Agent shall distribute an amended Schedule 2.1, which shall thereafter be
incorporated into this Agreement, to reflect adjustments to Lenders and their
Commitments.

 

(e)       Notwithstanding anything in this Section 2.12 to the contrary, making
the Requested Increase is subject to the approval of Administrative Agent and
the Lenders or New Lenders, as applicable, acting in their sole and absolute
discretion, and additional conditions and fees may be required by them in
connection therewith .

 

SECTION III
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.1      Taxes.

 

(a)       Any and all payments by Borrower to or for the account of
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of
Administrative Agent and each Lender, (i) taxes imposed on or measured by its
net income, (ii) franchise taxes imposed on it (in lieu of net income taxes) by
the jurisdiction (or any political subdivision thereof) under the Laws of which
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office; (iii) any branch profits tax imposed by the United
States of America or any similar tax imposed by another jurisdiction in which
Borrower is located; (iv) applicable withholding tax imposed by Sections 1441
and 1442 of the Code that is withheld by Administrative Agent from a payment to
any Foreign Lender (as defined in Section 10.21 of this Agreement) pursuant to
Section 10.21; and (v) any penalties, interest, costs and expenses (including
Attorney Costs) imposed on Administrative Agent

 

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or any Lender arising from the assertion by any Governmental Authority that
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of any Foreign Lender (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”). If Borrower
shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender (other
than as a result of a breach by a Foreign Lender of its obligations under
Section 10.22 of this Agreement, (A) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), Administrative Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (B) Borrower shall make such deductions, (C)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (D) within 30 days
after the date of such payment, Borrower shall furnish to Administrative Agent
(who shall forward the same to such Lender) the original or a certified copy of
a receipt evidencing payment thereof.

 

(b)       In addition, Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).

 

(c)       If Borrower shall be required by the Laws of any jurisdiction outside
the United States to deduct any Taxes from or in respect of any sum payable
under any Loan Document to Administrative Agent or any Lender, Borrower shall
also pay to such Lender or Administrative Agent (for the account of such
Lender), at the time interest is paid, such additional amount that the
respective Administrative Agent or such Lender specifies as necessary to
preserve the after tax yield (after factoring in United States (federal and
state) taxes imposed on or measured by net income) such Lender would have
received if such deductions (including deductions applicable to additional sums
payable under this Section ) had not been made.

 

(d)       Borrower agrees to indemnify, defend and hold Administrative Agent and
each Lender harmless for (i) the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section) paid by Administrative Agent and such Lender; and
(ii) any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; provided that (A) Borrower shall not be
obligated to indemnify the Administrative Agent or any Lender for any penalties
described in clause (ii) above to the extent the Administrative Agent or such
Lender, as applicable, (1) had actual knowledge of the existence of the tax,
interest, or expense, the non-payment of which gave rise to such penalties, and
(2) failed to give Borrower notice of such tax, interest or expense within ten
(10) Business Days after the Administrative Agent or such Lender received actual
knowledge of the existence thereof; and (B) except to the extent contemplated in
clause (A) of this Section 3.1(d), nothing contained in this subsection (d)
shall be deemed to imply any obligation on the part of the Administrative Agent
or any Lender to provide

 

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Borrower with the notice of any such tax, penalty, interest or expense. Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor.

 

3.2      Illegality. If any Lender determines that any Laws have made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Offshore Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the Offshore
Rate, then, on notice thereof by Lender to Borrower through Administrative
Agent, any obligation of such Lender to make Offshore Rate Loans shall be
suspended until such Lender notifies Administrative Agent and Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, Borrower shall, upon demand from such Lender (with a copy to
Administrative Agent), prepay or Convert all Offshore Rate Loans of such Lender,
either on the last day of the Interest Period thereof, if such Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if Lender may not lawfully continue to maintain such Offshore Rate
Loans. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

 

3.3      Inability to Determine Rates. If, in connection with any Request for
Extension of Credit involving any Offshore Rate Loan, Administrative Agent
determines that (a) Dollar deposits are not being offered to banks in the
applicable offshore dollar market for the applicable amount and Interest Period
of the requested Offshore Rate Loan, (b) adequate and reasonable means do not
exist for determining the underlying interest rate for such Offshore Rate Loan,
or (c) such underlying interest rate does not adequately and fairly reflect the
cost to Lender of funding such Offshore Rate Loan, Administrative Agent will
promptly notify Borrower and all Lenders. Thereafter, the obligation of all
Lenders to make or maintain such Offshore Rate Loan shall be suspended until
Administrative Agent revokes such notice. Upon receipt of such notice, Borrower
may revoke any pending request for a Borrowing of Offshore Rate Loans or,
failing that, be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

 

3.4      Increased Cost and Reduced Return; Capital Adequacy.

 

(a)       If any Lender determines that any Laws announced after the date
hereof:

 

(i)        impose on such Lender any Tax, duty, or other charge with respect to
any Offshore Rate Loans or its obligation to make Offshore Rate Loans (other
than as a result of any change in the rate of applicable taxes imposed on or
measured by the net income of Agent or any Lender);

 

(ii)       change the basis on which Taxes are imposed on any amounts payable to
such Lender under this Agreement in respect of any Offshore Rate Loans;

 

(iii)     impose or modify any reserve, special deposit, or similar requirement
(other than the reserve requirement utilized in the determination of the

 

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Offshore Rate) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (including its
Commitment); or

 

(iv)      impose on such Lender or on the offshore Dollar interbank market any
other condition affecting this Agreement or any of such extensions of credit or
liabilities or commitments;

 

and the result of any of the foregoing is to increase the cost to such Lender of
making, Converting into, Continuing, or maintaining any Offshore Rate Loans or
to reduce any sum received or receivable by such Lender under this Agreement
with respect to any Offshore Rate Loans, then from time to time upon demand of
such Lender (with a copy of such demand to Administrative Agent), Borrower shall
pay to such Lender such additional amounts as will compensate such Lender for
such increased cost or reduction (except to the extent that such increased cost
or reduction is an amount subject to Section 3.1, in which case the sum received
or receivable by such Lender shall be increased in accordance with the
provisions of Section 3.1).

 

(b)       If any Lender determines that any change in or the interpretation of
any Laws announced after the date hereof have the effect of reducing the rate of
return on the capital of such Lender or compliance by such Lender (or its
Lending Office) or any corporation controlling such Lender as a consequence of
such Lender’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender’s desired return on capital), then
from time to time upon demand of such Lender (with a copy of such demand to
Administrative Agent), Borrower shall pay to such Lender such additional amounts
as will compensate such Lender for such reduction; provided, however, that
Borrower shall not be required to pay additional amounts to compensate any
Lender for (i) any applicable withholding tax imposed by Sections 1441 and 1442
of the Code that is withheld by Administrative Agent from a payment to any
Foreign Lender pursuant to Section 10.22, (ii) any reduction in connection with
any penalties, interest, costs and expenses (including Attorney Costs) arising
from the assertion by any Governmental Authority that Administrative Agent did
not properly withhold any tax or other amount from payments made in respect of
any Foreign Lender; or (iii) any change in the rate of applicable taxes imposed
on or measured by net income.

 

3.5      Breakfunding Costs. Upon demand of any Lender (with a copy to
Administrative Agent) from time to time, Borrower shall promptly compensate such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:

 

(a)       any Continuation, Conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

 

(b)       any failure by Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, Continue or Convert any Loan other
than a Base Rate Loan on the date or in the amount notified by Borrower;

 

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including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
Borrower shall also pay any customary administrative fees charged by such Lender
in connection with the foregoing.

 

3.6      Matters Applicable to all Requests for Compensation.

 

(a)       The Administrative Agent or any Lender claiming compensation under
this Section 3, Lender shall deliver to Borrower a certificate setting forth in
reasonable detail the additional amount or amounts to be paid to it hereunder,
which shall be conclusive in the absence of clearly demonstrable error. In
determining such amount, Lenders may use any reasonable averaging and
attribution methods. For purposes of this Section 3, a Lender shall be deemed to
have funded each Offshore Rate Loan at the Offshore Rate for such Loan by a
matching deposit or other borrowing in the offshore Dollar interbank market,
whether or not such Offshore Rate Loan was in fact so funded.

 

(b)       Borrower shall not be obligated to pay any amount under this Section 3
which arose prior to the date which is 180 days preceding the date of such
demand or is attributable to periods prior to the date which is 180 days
preceding the date of such demand; provided, however, that in the event any Law
is enacted that retroactively imposes any cost or charge upon the Administrative
Agent or any Lender that would otherwise be a basis for compensation under
Sections 3.1 through 3.5, the Administrative Agent or such Lender may make a
demand for such compensation through and including the date which is 180 days
after the date upon which such Law takes effect.

 

(c)       Upon any Lender making a claim for compensation under Section 3.1 or
3.4, Borrower may remove and replace such Lender in accordance with Section
10.22.

 

3.7      Survival. All of Borrower’s obligations under this Section 3 shall
survive for a period of one (1) year after the later of termination of the
Commitments, and payment in full of all Obligations; provided, however, that the
obligation of Borrower to make any payment under this Section 3 is contingent
upon the receipt by Borrower of the certificate described in Section 3.6(a)
within the later of (a) 180 days after the later of the repayment of all Loans,
the termination of all Letters of Credit and the termination of the Commitment,
or (b) in the case of any Law retroactively imposing any cost or charge upon the
Administrative Agent or any Lender, 180 days after the date upon which such Law
takes effect.

 

SECTION IV
CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT

 

4.1      Conditions of Initial Extension of Credit. The obligation of each
Lender to make its initial Extension of Credit hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)       Unless waived by Administrative Agent and Lenders, Administrative
Agent’s receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the applicable Credit Party, each dated on,
or in the case of third-party

 

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certificates, recently before the Closing Date and each in form and substance
satisfactory to Administrative Agent, Lenders and their legal counsel:

 

(i)        executed counterparts of this Agreement, sufficient in number for
distribution to Administrative Agent, Lenders and Borrower;

 

(ii)       the Notes executed by Borrower in favor of each Lender, each in a
principal amount equal to such Lender’s Commitment;

 

(iii)     the Multi-Party Guaranty;

 

(iv)      the General Security Agreement, together with such certificates, stock
powers, registrations and other supporting documents as Administrative Agent
shall reasonably require;

 

(v)        the Intellectual Property Security Agreement together with such
certificates, stock powers, registrations and other supporting documents as
Administrative Agent shall reasonably require;

 

(vi)      the UK Pledge Agreement together with such certificates, stock powers,
registrations and other supporting documents as Administrative Agent shall
reasonably require;

 

(vii)     the Mexican Pledge Agreement together with such certificates, stock
powers, registrations and other supporting documents as Administrative Agent
shall reasonably require;

 

(viii)    the original Fee Letter;

 

(ix)      such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of Borrower as
Administrative Agent may require to establish the identities of and verify the
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer thereof;

 

(x)       such evidence as Administrative Agent and any Lender may reasonably
require to verify that each Credit Party is duly organized or formed, validly
existing, in good standing and qualified to engage in business in such
jurisdiction(s) as specified in Section 5.1, including certified copies of
Borrower’s certificates of good standing and/or qualification to engage in
business, tax clearance certificates, and the like;

 

(xi)      a certificate signed by a Responsible Officer of each Credit Party (A)
that the representations and warranties made by Borrower herein are true and
correct on and as of the Closing Date (except to the extent such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date), (B) that Borrower is in compliance
with all the terms and provisions of the Loan Documents to which it is a party,
and no Default or Event of Default shall have

 

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occurred and be continuing, and (C) that there has been no event or circumstance
since the date of the Audited Financial Statements which has a Material Adverse
Effect;

 

(xii)     opinions of counsel to Borrower in substantially the form of Exhibit
H;

 

(xiii)   with respect to the property owned or leased by Borrower and each
Guarantor Borrower shall have caused to be delivered to Administrative Agent (i)
the results of Uniform Commercial Code lien searches for the states of
California and Delaware and any other state where a Guarantor is organized or
has its chief executive office, satisfactory to Agent and the Lenders, and (ii)
Uniform Commercial Code termination statements reflecting termination of all
financing statements previously filed by any Person except as expressly
permitted hereunder; and

 

(xiv)    such other assurances, certificates, documents, consents or opinions as
Administrative Agent, Issuing Lender or Requisite Lenders reasonably may
require.

 

(b)       Any fees required to be paid on or before the Closing Date shall have
been paid.

 

(c)       Unless waived by Administrative Agent, Borrower shall have paid all
Attorney Costs of Administrative Agent to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of Attorney Costs as shall constitute
its reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between Borrower and
Administrative Agent).

 

(d)       Administrative Agent and its counsel shall have reviewed any and all
outstanding litigation involving Borrower or its Subsidiaries and shall be
satisfied with the same, in its sole and absolute discretion.

 

4.2      Conditions to all Extensions of Credit. In addition to any applicable
conditions precedent set forth elsewhere in this Section 4 or in Section 2, the
obligation of each Lender to honor any Request for Extension of Credit other
than a Conversion or Continuation is subject to the following conditions
precedent:

 

(a)       the representations and warranties of Borrower contained in Section 5
shall be correct on and as of the date of such Extension of Credit, except to
the extent that such representations and warranties specifically refer to an
earlier date;

 

(b)       no Default or Event of Default exists, or would result from such
proposed Extension of Credit;

 

(c)       Administrative Agent shall have timely received a Request for
Extension of Credit by Requisite Notice by the Requisite Time;

 

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(d)       The sum of the Outstanding Obligations plus the advances requested
pursuant to the Request for Extension of Credit shall not exceed the amount
available for borrowing in accordance with the most recent financial statements
delivered by Borrower pursuant to Sections 6.1(a) and (b) of this Agreement; and

 

(e)       Administrative Agent shall have received, in form and substance
satisfactory to it, such other assurances, certificates, documents or consents
related to the foregoing as Administrative Agent and Requisite Lenders
reasonably may require.

 

Each Request for Extension of Credit by Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.2(a) and
(b) have been satisfied on and as of the date of such Extension of Credit.

 

SECTION V
REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Administrative Agent and Lenders that:

 

5.1      Existence and Qualification; Power; Compliance with Laws. Each Credit
Party is a corporation duly incorporated, validly existing and in good standing
under the Laws of the state of its incorporation, has the corporate power and
authority and the legal right to own, lease and operate its properties and to
conduct its business as currently conducted, is duly qualified and in good
standing under the Laws of its state of incorporation and in all other
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified could not be reasonably expected to have a Material Adverse
Effect, and is in compliance with all Laws except to the extent that
noncompliance could not be reasonably expected to have a Material Adverse
Effect.

 

5.2      Power; Authorization; Enforceable Obligations. Each Credit Party has
the corporate power and authority and the legal right to make, deliver and
perform each Loan Document to which it is a party and Borrower has the corporate
power and authority to borrow hereunder and has taken all necessary action to
authorize the borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party. No consent or authorization of,
filing with, or other act by or in respect of any Governmental Authority or any
other Person, is required in connection with the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents. The Loan Documents have been duly
executed and delivered by Borrower, and constitute a legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms.

 

5.3      No Legal Bar. The execution, delivery, and performance by each Credit
Party of the Loan Documents to which it is a party and compliance with the
provisions thereof have been duly authorized by all requisite action on the part
of such Credit Party and do not and will not (a) violate or conflict with, or
result in a breach of, or require any consent under (i) any Organization
Documents of the Credit Parties, (ii) any material applicable Laws, rules, or
regulations or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator, or (iii) any

 

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material Contractual Obligation of such Credit Party or any of its Subsidiaries
or by which any of them or any of their property is bound or subject, (b)
constitute a default under any such material agreement or instrument, or (c)
result in, or require, the creation or imposition of any Lien on any of the
properties of such Credit Party or any of its Subsidiaries (other than the Liens
granted in connection herewith).

 

5.4      Financial Statements; No Material Adverse Effect.

 

(a)       The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of Borrower and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) to the extent required by GAAP,
show all material indebtedness and other liabilities, direct or contingent, of
Borrower and its Subsidiaries as of the date thereof.

 

(b)       Since the date of the Audited Financial Statements, there has been no
event or circumstance which has a Material Adverse Effect except as disclosed in
the Disclosure Letter.

 

5.5      Litigation. Except as disclosed in the Disclosure Letter, there are (a)
no lawsuits, investigations or proceedings of or before an arbitrator or
Governmental Authority pending or, to the best of knowledge of Borrower,
threatened by or against Borrower or any of its Subsidiaries or against any of
their properties or revenues which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (b) no orders, writs, injunctions,
judgments, or decrees of any court or government agency or instrumentality to
which the Borrower or any of its Subsidiaries is a party or by which the
property or assets of them are bound, or (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of Borrower or any of its Subsidiaries, or, to the knowledge of each Company,
threats of work stoppage, strike, or pending demands for collective bargaining,
which could reasonably be expected to cause or result in a Material Adverse
Effect.

 

5.6      No Default; Continued Business. Neither Borrower nor any its
Subsidiaries are in default under or with respect to any Contractual Obligation
which could reasonably be expected to have a Material Adverse Effect, and no
Default or Event of Default has occurred and is continuing or will result from
the consummation of this Agreement or any of the other Loan Documents, or the
making of the Extensions of Credit hereunder. There exists no actual, pending,
or, to Borrower’s knowledge, any threatened termination, cancellation or
limitation of, or any modification or change in the business relationship of any
Company and any customer or supplier, or any group of customers or suppliers,
whose purchases or supplies, individually or in the aggregate, could reasonably
be expected to cause or result in a Material Adverse Effect, and there exists no
present condition or state of facts or circumstances that would have a Material
Adverse Effect or prevent a Company from conducting such business or the
transactions contemplated by this Agreement in substantially the same manner in
which it was previously conducted.

 

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5.7      Ownership of Property; Liens. Borrower and its Subsidiaries have valid
fee or leasehold interests in all real property which they use in their
respective businesses, and Borrower and its respective Subsidiaries have good
and marketable title to all their other property, and none of such property is
subject to any Lien, except as permitted in Section 7.2.

 

5.8      Taxes. Borrower and its Subsidiaries have filed all material tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, property or transactions
covered by said returns, or pursuant to any assessment received by Borrower or
its respective Subsidiaries, except (a) such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained, and (b) immaterial taxes;
provided, however, that in each case no material item or portion of property of
Borrower or any of its Subsidiaries is in jeopardy of being seized, levied upon
or forfeited.

 

5.9      Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.

 

(a)       Neither Borrower for any of its Subsidiaries is engaged nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” “margin stock”
within the respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. No part of the proceeds of any Extensions of Credit
hereunder will be used for “purchasing” or “carrying” “margin stock” as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of Regulations U or X of such Board of Governors.

 

(b)       Neither Borrower nor any of its Subsidiaries (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of
a “holding company” or of a “subsidiary company” of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

5.10    ERISA Compliance.

 

(a)       Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable Laws. Each Plan or
other employee benefit plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination or opinion letter from the IRS
or an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification. Borrower and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan. There has been no prohibited transaction (which is not
otherwise exempt under Section 4975 of the Code) or violation of the fiduciary
responsibility rules under ERISA with respect to any Plan that has or could
reasonably be expected to have a Material Adverse Effect.

 

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(b)       (i) No ERISA Event has occurred or, to the best of knowledge of
Borrower or any ERISA Affiliate, is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither Borrower nor
any ERISA Affiliate has incurred, or, to the best of knowledge of Borrower or
any ERISA Affiliate, reasonably expects to incur, any liability (and, to the
best of knowledge of Borrower or any ERISA Affiliate, no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

 

5.11    Intangible Assets. Borrower and its Subsidiaries own, or possess the
right to use, all trademarks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intangible assets that are used in the conduct of
their respective businesses as now operated or could obtain such right without
causing a Material Adverse Effect, and none of such items, to the best knowledge
of Borrower, conflicts with the valid trademark, trade name, copyright, patent,
patent right or intangible asset of any other Person to the extent that such
conflict has or could reasonably be expected to have a Material Adverse Effect.

 

5.12    Compliance With Laws. Borrower and its Subsidiaries are in compliance in
all material respects with all material Laws that are applicable such Person.

 

5.13    Environmental Compliance. Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof Borrower has reasonably concluded that such
Environmental Laws and claims do not, individually or in the aggregate, have a
Material Adverse Effect.

 

5.14    Insurance. The properties of Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Borrower or such Subsidiary operates.

 

5.15    Swap Obligations. Neither Borrower nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. Borrower has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.

 

5.16    Solvency. Borrower has received consideration that is the reasonable
equivalent value of the obligations and liabilities Borrower has incurred in
favor of Administrative Agent and the Lenders. Each Credit Party is Solvent and
no Credit Party will not be Solvent after

 

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giving effect to the execution and delivery of the Loan Documents to
Administrative Agent and the Lenders.

 

5.17    Disclosure. No statement, information, report, representation, or
warranty made by Borrower in any Loan Document or furnished to Lender in
connection with any Loan Document contains any untrue statement of a material
fact or, when viewed together with Borrower’s periodic reports filed under the
Exchange Act and the rules and regulations promulgated thereunder, omits to
state any material fact necessary to make the statements herein or therein not
misleading; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. After due inquiry by
Borrower, there is no known fact that any Credit Party has not disclosed to
Agent and the Lenders that has or is reasonably likely to have a Material
Adverse Effect.

 

SECTION VI
AFFIRMATIVE COVENANTS

 

So long as any Obligation (excluding inchoate indemnity obligations) remains
unpaid or unperformed, or any portion of the Commitments remain outstanding,
Borrower shall, and shall (except in the case of Borrower’s reporting covenants
set forth in Sections 6.1 and 6.2(a)-(c), cause each Subsidiary, to:

 

6.1      Financial Statements. Deliver to Administrative Agent and each Lender,
in form and detail satisfactory to Administrative Agent and Requisite Lenders:

 

(a)       as soon as available, but in any event within 90 days after the end of
each fiscal year of Borrower (except for the fiscal year ending December 2004
for which Borrower shall have 120 days after the end of such fiscal year), a
consolidated balance sheet, a consolidated statement of income and a
consolidated cash flow statement of Borrower and its Subsidiaries as at the end
of such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing, which report and opinion shall be prepared in
accordance with GAAP and shall not be subject to any qualifications or
exceptions as to the scope of the audit nor to any qualifications and exceptions
not reasonably acceptable to Requisite Lenders;

 

(b)       as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of Borrower, a
consolidated balance sheet, a consolidated statement of income and a
consolidated cash flow statement of Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the for such fiscal quarter and for the portion of
Borrower’s fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified by a Responsible Officer of Borrower as fairly
presenting in all material respects the financial condition, results of
operations and cash flows of Borrower and its

 

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Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and

 

(c)       Reports required to be delivered pursuant to clauses (a) and (b) of
this Section 6.1 shall be deemed to have been delivered on the date on which
Borrower posts such reports on Borrower’s internet website at the website
address listed on Schedule 10.2 hereof or when such report is posted on the
Securities and Exchange Commission’s website at www.sec.gov.; provided that (x)
Borrower shall notify Administrative Agent of the posting of any such new
material, and (y) in every instance Borrower shall provide paper copies of the
Compliance Certificates required by clause (a) of Section 6.2 to Administrative
Agent and each Lender. Except for the Compliance Certificates referred to in
such clause (a) of Section 6.2, Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the reports referred to in clauses
(a) and (b) of this Section 6.1, and in any event shall have no responsibility
to monitor compliance by Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such reports.

 

6.2      Certificates, Notices and Other Information. Deliver to Administrative
Agent and each Lender, in form and detail satisfactory to Administrative Agent
and Requisite Lenders:

 

(a)       within five (5) days after the delivery of the financial statements
referred to in Sections 6.1 (a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of Borrower;

 

(b)       promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which Borrower may file or be
required to file with the Securities and Exchange Commission under Sections 13
or 15(d) of the Exchange Act, and not otherwise required to be delivered to
Administrative Agent pursuant hereto;

 

(c)       promptly after the occurrence thereof, notice of any Default or Event
of Default;

 

(d)       notice of any change in accounting policies or financial reporting
practices by Borrower or any Subsidiary that is material to Borrower or to
Borrower and its Subsidiaries on a consolidated basis;

 

(e)       promptly after the commencement thereof, notice of any litigation,
investigation or proceeding affecting Borrower where the reasonably expected
damages to Borrower exceed the Threshold Amount, or in which injunctive relief
or similar relief is sought, which relief, if granted, could reasonably be
expected to have a Material Adverse Effect;

 

(f)        promptly after the occurrence thereof, notice of any Reportable Event
with respect to any Plan or the intent to terminate any Plan, or the institution
of proceedings or the taking or expected taking of any other action to terminate
any Plan or withdraw from any Plan;

 

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(g)       promptly after the occurrence thereof, notice of any Material Adverse
Effect; and

 

(h)       promptly, such other data and information as from time to time may be
reasonably requested by Lender.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of Borrower setting forth details of the occurrence referred
to therein and stating what action Borrower has taken and proposes to take with
respect thereto. The annual reports, proxies, financial statements or other
communications required by Section 6.2(c) above shall be deemed to have been
delivered on the date on which Borrower posts such reports on Borrower’s website
on the Internet at the website address listed on Schedule 10.2 hereof or when
such report is posted on the Securities and Exchange Commission’s website at
www.sec.gov.; provided that Borrower shall notify Administrative Agent of the
posting of any such new material. Lender shall have no obligation to request the
delivery or to maintain copies of the reports and communications referred to in
Section 6.2(c), and in any event shall have no responsibility to monitor
compliance by Borrower with any such request for delivery, and each Lender shall
be solely responsible for requesting delivery to it or maintaining its copies of
such reports and communications.

 

6.3      Payment of Taxes. Pay and discharge when due all material taxes,
assessments, and governmental charges, except for any such tax, assessment,
charge, or levy which is an Ordinary Course Lien under subsection (b) of the
definition of such term.

 

6.4      Preservation of Existence. Preserve and maintain its existence,
licenses, permits, rights, franchises and privileges necessary or desirable in
the normal conduct of its business, except (i) as permitted by Section 7.3, or
(ii) where failure to do so would not reasonably be expected to have a Material
Adverse Effect.

 

6.5      Maintenance of Properties. Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good order and condition, subject to wear and tear in the ordinary course of
business, and not permit any waste of its properties, except where failure to do
so would not reasonably be expected to have a Material Adverse Effect.

 

6.6      Maintenance of Insurance. Maintain liability and casualty insurance
with responsible insurance companies reasonably satisfactory to Lender in such
amounts and against such risks as is customary for similarly situated
businesses.

 

6.7      Compliance With Laws.

 

(a)       Comply with the requirements of all applicable Laws and orders of any
Governmental Authority, noncompliance with which would reasonably be expected to
have a Material Adverse Effect.

 

(b)       Conduct its operations and keep and maintain its property in material
compliance with all Environmental Laws.

 

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6.8      Inspection Rights. At any time during regular business hours and as
often as reasonably requested upon reasonable notice, permit Administrative
Agent or any Lender, or any employee, agent or representative thereof, to
examine, audit and make copies and abstracts from Borrower’s records and books
of account and to visit and inspect its properties and to discuss its affairs,
finances and accounts with any of its officers and key employees, and, upon
request, furnish promptly to Administrative Agent or any Lender true copies of
all financial information and internal management reports made available to
their senior management. Notwithstanding any provision of this Agreement to the
contrary, so long as no Default or Event of Default shall have occurred and be
continuing, neither Borrower nor any of its Subsidiaries shall be required to
disclose, permit the inspection, examination, photocopying or making extracts
of, or discuss, any document, information or other matter that (i) constitutes
non-financial trade secrets or non-financial proprietary information, or (ii)
the disclosure of which to any Lender, or their designated representative, is
then prohibited by law or any agreement binding on Borrower or any of its
Subsidiaries that was not entered into by Borrower or any such Subsidiary for
the purpose of concealing information from the Lenders. Borrower shall, however,
furnish to Administrative Agent such information concerning Borrower’s
intellectual property (including, without limitation, application and
registration numbers for any filings in connection with such intellectual
property) as is reasonably necessary to permit Administrative Agent (on behalf
of itself and the other Lenders) to perfect a security interest in such
intellectual property.

 

6.9      Keeping of Records and Books of Account. Keep records and books of
account adequate to prepare financial statements in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Borrower or any applicable Subsidiary.

 

6.10    Compliance with ERISA. Cause, and cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable Laws; (b) to take
all actions to cause each Plan which is qualified under Section 401 (a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.

 

6.11    Compliance With Agreements. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, except for
any such Contractual Obligations (a) the nonperformance of which would not cause
a Default or Event of Default, (b) then being contested by any of them in good
faith by appropriate proceedings, or (c) if the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.

 

6.12    Subsidiary Guaranties and Pledge of Ownership Interests.

 

(a)       Domestic Subsidiaries. In the event that the aggregate gross revenues
or assets for any fiscal year, commencing with the fiscal year ending nearest
December 31, 2005, of Borrower and Guarantors, when taken together with the
aggregate gross revenues and assets of Borrower’s Foreign Subsidiaries as to
which 65% of the ownership interests thereof have been pledged in favor of
Administrative Agent for the benefit of Lenders, is less than 90% of the
aggregate gross revenues or assets of Borrower and its Subsidiaries on a
consolidated basis for such fiscal year, Borrower will, within 90 days after the
end of such fiscal year, cause one or more additional Domestic

 

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Subsidiaries to execute and deliver to Administrative Agent a joinder to the
Multi-Party Guaranty and to the General Security Agreement along with any such
other supporting documentation, certificates (accompanied by irrevocable undated
stock powers, duly endorsed in blank), corporate governance and authorization
documents as may be deemed reasonably necessary or advisable by Administrative
Agent such that the aggregate gross revenues and assets for such fiscal year of
Borrower and Guarantors, when taken together with the aggregate gross revenues
and assets of Borrower’s Foreign Subsidiaries as to which 65% of the ownership
interests thereof have been pledged in favor of Administrative Agent for the
benefit of Lenders, equal to at least 90% of the aggregate gross revenues and
assets of Borrower and its Subsidiaries on a consolidated basis for such fiscal
year. In addition, in the event that (i) any Domestic Subsidiary becomes a
Material Subsidiary after the date hereof, and such Domestic Subsidiary has not
previously executed the Multi-Party Guaranty and General Security Agreement, or
(ii) any Domestic Subsidiary of Company that has not previously executed a
joinder to Multi-Party Guaranty and General Security Agreement becomes a
guarantor in respect of the obligations of Borrower or any Subsidiary under any
Material Indebtedness Agreement, Borrower will promptly cause such Domestic
Subsidiary to execute and deliver to Administrative Agent a joinder to the
Multi-Party Guaranty and the General Security Agreement along with any such
other supporting documentation, certificates (accompanied by irrevocable undated
stock powers, duly endorsed in blank), corporate governance and authorization
documents as may be deemed necessary or advisable by Administrative Agent.
Notwithstanding anything in this Section 6.12(a) to the contrary, Borrower will
not be required to deliver to Administrative Agent share or stock certificates
evidencing Escrowed Securities until such time as such Escrowed Securities are
eligible for release from the escrow to Borrower.

 

(b)       Foreign Subsidiary Stock Pledge. In addition, with respect to each
First-Tier Material Foreign Subsidiary as to which 65% of the ownership
interests therein have not previously been pledged to Administrative Agent,
Borrower shall and shall cause its Domestic Subsidiaries to, within 90 days
after the end of such fiscal year (unless a longer period is agreed to by
Administrative Agent), (i) pledge to Administrative Agent, for the benefit of
the Lenders, 65% of the ownership interest owned by a Credit Party pursuant to
the General Security Agreement, and (ii) deliver to Agent, for the benefit of
the Lenders, the outstanding shares certificates (or other evidence of equity),
as applicable, evidencing such pledged ownership interest.

 

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

 

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then Administrative Agent may agree to forego the foreign perfection of such
security interest.

 

6.13    Use of Proceeds. Use the proceeds of Extensions of Credit for lawful
general corporate purposes including working capital and general corporate
purposes, including Acquisitions, not otherwise in contravention of this
Agreement.

 

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

 

6.15    Guaranty Under Material Indebtedness Agreement. No Domestic Subsidiary
of Borrower shall be or become liable as an obligor under any Material
Indebtedness Agreement unless such Subsidiary shall also be a Guarantor under
this Agreement prior to or concurrently therewith. No Foreign Subsidiary of
Borrower shall be or become liable as an obligor under any Material Indebtedness
Agreement unless 65% of the ownership interests thereof have been pledged in
favor of Administrative Agent for the benefit of Lenders.

 

SECTION VII
NEGATIVE COVENANTS

 

So long as any Obligations remain unpaid or unperformed, or any portion of the
Commitments remain outstanding, Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

 

7.1      Indebtedness. Create, incur, assume or suffer to exist any Indebtedness
except for the following (“Permitted Indebtedness”):

 

(a)       Indebtedness under the Loan Documents;

 

(b)       Indebtedness outstanding on the date hereof and listed on Schedule 7.1
hereto and any refinancings, refundings, renewals or extensions thereof,
provided that (i) the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension except by an amount equal
to the premium or other amount paid, and fees and expenses incurred, in
connection with such refinancing and by an amount equal to any utilized
commitments thereunder, and (ii) the weighted average life of the principal
payments pursuant to such refinanced, refunded, renewed or extended Indebtedness
shall be no shorter than the weighted average life of such payments

 

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pursuant to such Indebtedness immediately prior to such refinancing, refunding,
renewal or extension;

 

(c)       Ordinary Course Indebtedness;

 

(d)       Indebtedness of Borrower and its Subsidiaries under loans and Capital
Leases incurred by Borrower or any of its Subsidiaries to finance the
acquisition by such Person of real property, improvements, fixtures, equipment
or other fixed assets (together with attachments, ascensions, additions, “soft
costs” and proceeds thereof), provided that in each case, (i) such Indebtedness
is incurred by such Person at the time of, or not later than six (6) months
after, the acquisition by such Person of the property so financed, (ii) such
Indebtedness does not exceed the purchase price of the property so financed, and
(iii) the aggregate of all such Indebtedness at any time outstanding does not
exceed the Threshold Amount;

 

(e)       Indebtedness of Borrower and its Subsidiaries under initial or
successive refinancings, refundings, renewals or extensions of any Indebtedness
permitted by subsections (c) and (d) above, provided that (i) the amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to the premium or other amount
paid, and fees and expenses incurred, in connection with such refinancing, and
(ii) the weighted average life of the principal payments pursuant to such
refinanced, refunded, renewed or extended Indebtedness shall be no shorter than
the weighted average life of such payments pursuant to such Indebtedness
immediately prior to such refinancing, refunding, renewal or extension;

 

(f)        Indebtedness of Borrower to any of Borrower’s Subsidiaries,
Indebtedness of any of Borrower’s Subsidiaries to Borrower or Indebtedness of
any of Borrower’s Subsidiaries to any of Borrower’s other Subsidiaries;

 

(g)       Subordinated Debt as the same shall have been approved by Requisite
Lenders;

 

(h)       Indebtedness which may arise as a result of any invalidity of
receivables sold as described in Section 7.4(b), or in similar transactions as
approved by Administrative Agent, provided (i) the aggregate of all such
Indebtedness at any time outstanding does not exceed $15,000,000 and (ii) such
Indebtedness is subordinated to the Obligations hereunder pursuant to a
subordination agreement in form and substance satisfactory to Administrative
Agent;

 

(i)        Indebtedness incurred in favor of sellers in connection with
Permitted Acquisitions, but only to the extent permitted in the definition
thereof; and

 

(j)        Other Indebtedness not included in (a) through (i) above and not
exceeding, in the aggregate at any one time the Threshold Amount;

 

provided, however, that in no event shall Permitted Indebtedness include any
replacement letters of credit with Comerica Bank or any other financial
institution (other than Issuing Lender) upon expiration of the Comerica Letters
of Credit. Borrower shall not permit Comerica Bank to

 

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automatically extend or automatically renew any of the Comerica Letters of
Credit, and each Comerica Letter of Credit shall expire at the end of its
current expiry date.

 

7.2      Liens. Incur, assume or suffer to exist, any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
for the following (“Permitted Liens”):

 

(a)       Liens existing on the date hereof and listed on Schedule 7.1 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.1 (a);

 

(b)       Ordinary Course Liens;

 

(c)       Liens on the property or assets of any Person which becomes a
Subsidiary of Borrower after the date of this Agreement or acquired after the
date of this Agreement, provided that (i) such Liens exist at the time such
Person became a Subsidiary or the assets were acquired, and (ii) such Liens were
not created in contemplation of the acquisition of such Person or assets;

 

(d)       Rights of vendors or lessors under conditional sale agreements,
Capital Leases or other agreements relating to Indebtedness described in Section
7.1(d) or other title retention agreements, provided that in each case, (i) such
rights secure or otherwise relate to Permitted Indebtedness, (ii) such rights do
not extend to any property other than property acquired with the proceeds of
such Permitted Indebtedness (together with accessions, additions, replacements
and proceeds thereof), and (iii) such rights do not secure any Indebtedness
other than Permitted Indebtedness;

 

(e)       Liens incurred in connection with leases, subleases, licenses and
sublicenses granted to Persons not interfering in any material respect with the
business of Borrower and its Subsidiaries and any interest or title of a lessee
or licensee under any such leases, subleases, licenses or sublicenses;

 

(f)        Liens arising in connection with judgments not constituting an Event
of Default pursuant to Section 8.1(h);

 

(g)       Liens securing Indebtedness permitted under Section 7.1(h) on selected
assets as shall be reasonably necessary, in the judgment of Administrative
Agent, to support the sale receivables of Foreign Subsidiaries to the extent
permitted under Section 7.4(b);

 

(h)       Liens not otherwise permitted hereunder on the property or assets of
Borrower and any of its Subsidiaries securing Indebtedness, provided the
aggregate Indebtedness secured thereby does not exceed the Threshold Amount;

 

provided, however, that in no event shall any Lien be permitted to exist on, or
in respect of, any depositary or investment account containing any cash or cash
equivalent of Borrower or any of its Domestic Subsidiaries, except for Liens in
favor of the entity (and its affiliates) with which

 

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any such depository or investment account is maintained; and provided further,
however, that in no event shall Permitted Liens include any liens on any cash
collateral account to secure the reimbursement obligations of Borrower or any of
its Subsidiaries with respect to replacement letters of credit with Comerica
Bank or any other financial institution (other than Issuing Lender) upon
expiration of the Comerica Letters of Credit.

 

7.3      Fundamental Changes. Merge or consolidate with or into any Person or
liquidate, wind-up or dissolve itself, or permit or suffer any liquidation or
dissolution or sell all or substantially all of its assets, except that:

 

(a)       any Subsidiary may merge with (i) Borrower, provided that Borrower
shall be the continuing or surviving corporation, (ii) any Guarantor Subsidiary
or, if such Subsidiary is not a Guarantor, with any other Subsidiary, and (iii)
any joint venture, partnership or other Person, so long as such joint venture,
partnership and other Person will, as a result of making such merger and all
other contemporaneous related transactions, becomes a Subsidiary;

 

(b)       any Subsidiary may sell or transfer all or substantially all of its
assets (through voluntary liquidation, dissolution or winding up or otherwise),
to Borrower or to another Subsidiary that is a Guarantor or, if the selling or
transferring Subsidiary is not a Guarantor, to any other Subsidiary;

 

(c)       Borrower may merge into or consolidate with any other Person, provided
that (i) Borrower is the surviving corporation, and (ii) immediately after
giving effect to such merger or consolidation, no Default or Event of Default
shall have occurred and be continuing; and

 

(d)       any Subsidiary may merge or consolidate with or into any other Person
or sell all or substantially all of its assets to the extent such transaction is
a Disposition otherwise permitted under Section 7.4 or an Investment otherwise
permitted under Section 7.5 and immediately after giving effect to such merger
or consolidation, no Default or Event of Default shall have occurred and be
continuing.

 

7.4      Dispositions. Make any Dispositions, except:

 

(a)       Ordinary Course Dispositions;

 

(b)       True sales of the accounts receivable of Foreign Subsidiaries, or
similar arrangements approved by Administrative Agent, entered into to finance
the operations of Borrower’s Foreign Subsidiaries; and

 

(c)       Dispositions permitted by Section 7.3; and

 

(d)       Other Dispositions of Property having an aggregate net book value from
the date hereof not exceeding the Threshold Amount.

 

7.5      Investments. Make any Investments, except for the following (“Permitted
Investments”):

 

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(a)       Investments existing on the Closing Date;

 

(b)       Ordinary Course Investments;

 

(c)       Investments permitted by Section 7.1 or Section 7.3;

 

(d)       Investments arising from rights received by Borrower and its
Subsidiaries upon the required payment of any permitted contingent obligations
of Borrower and its Subsidiaries;

 

(e)       Investments constituting Acquisitions, provided that (i) in the case
of a merger, amalgamation or other combination including Borrower, Borrower
shall be the surviving entity, (ii) in the case of a merger, amalgamation or
other combination including a Credit Party (other than Borrower), a Credit Party
shall be the surviving entity; (iii) the business to be acquired shall be
similar to the lines of business of the Borrower and its Subsidiaries, (iv) no
Default or Event of Default shall exist prior to or after giving effect to such
Acquisition, (v) if the consideration paid for such Acquisition is in excess of
$5,000,000 Borrower shall have provided to Agent and each of the Lenders, at
least ten (10) Business Days prior to such Acquisition a certificate of a
Responsible Officer of Borrower showing pro forma compliance with Section 7.12
hereof, both before and after the proposed Acquisition, (vi) either (a) such
Acquisition is not actively opposed by the board of directors (or similar
governing body) of the selling Persons or the Persons whose equity interests are
to be acquired, or (b) the number of shares of the target Person tendered in
response to a tender offer by a Company shall represent at least ninety percent
(90%) of the Voting Power of such Person, (vii) the Cash Acquisition
Consideration associated with the DSI Acquisition shall not exceed $10,000,000,
and (viii) the aggregate Cash Acquisition Consideration of the Acquisition, when
taken together with the Cash Acquisition Consideration of all other Acquisitions
occurring after the date hereof, shall not exceed $65,000,000, unless otherwise
approved by the Requisite Lenders (each such Acquisition being a
“PermittedAcquisition”).

 

(f)        Investments of Borrower and its Subsidiaries in Permitted Swap
Obligations; and

 

(g)       Other Investments not exceeding the Threshold Amount in the aggregate
at any time outstanding.

 

7.6      Restricted Payments. Make any Restricted Payments, except as follows:

 

(a)       Borrower or any Subsidiary, as applicable, may pay dividends or other
distributions (i) payable solely in shares of capital stock of Borrower or (ii)
payable by a Subsidiary to Borrower or to a Guarantor Subsidiary;

 

(b)       Borrower may distribute rights pursuant to a shareholder rights plan
or redeem such rights, provided that such redemption is in accordance with the
terms of such shareholder rights plan;

 

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(c)       Borrower may make Restricted Payments or purchase its own Equity
Securities in connection with or pursuant to any of its Employee Benefits Plans
or in connection with the employment, termination or compensation of its
employees, officers or directors;

 

(d)       Borrower may purchase its own Equity Securities pursuant to one or
more stock repurchase programs, provided that (i) no Default or Event of Default
shall have occurred and be continuing, (ii) after giving effect to any such
repurchases Borrower shall be in compliance with Section 7.12; and (iii) when
combined with the amount of all dividends, purchases or redemptions made under
Section 7.6(e), the total of all such purchases of Equity Securities shall not
exceed the sum of $10,000,000 in the aggregate over the life of this Agreement;

 

(e)       Borrower or any Subsidiary of Borrower may declare or pay any
dividends in respect of its Equity Securities or purchase or redeem shares of
its Equity Securities or make distributions to shareholders not otherwise
permitted hereunder, provided that (i) the aggregate amount paid or distributed
in any period of four consecutive quarters (excluding any amounts covered by
subsection (b) above) does not exceed 5% of consolidated assets as determined as
of the fiscal quarter immediately preceding the date of determination; and (ii)
when combined with the amount of all purchases of Equity Securities made under
Section 7.6(d) but excluding those made under Section 7.6(c), the total of all
such dividends, purchases or redemptions shall not exceed the sum of $
10,000,000 in the aggregate in the aggregate over the life of this Agreement;
and

 

(f)        Borrower may repurchase fractional shares of capital stock arising
out of stock dividends, splits or combinations, business combinations or
conversion of convertible securities.

 

7.7      ERISA. At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Pension Plan to (a) engage in
any non-exempt “prohibited transaction” (as defined in Section 4975 of the
Code); (b) fail to comply with ERISA or any other applicable Laws; or (c) incur
any material “accumulated funding deficiency” (as defined in Section 302 of
ERISA), which, with respect to each event listed above, when combined with any
other event listed above, has a Material Adverse Effect.

 

7.8      Change in Nature of Business. Engage, either directly or indirectly
through Affiliates or Acquisitions in any line of business other than the
enterprise software business, any other business incidental or reasonably
related thereto, or any businesses that are, as determined by the Board of
Directors of Borrower, appropriate extensions thereof.

 

7.9      Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate (other than transactions among Borrower or any of its
Subsidiaries and any Subsidiary) of Borrower other than arm’s-length
transactions with Affiliates that are otherwise permitted hereunder and except
as follows:

 

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(a)       reasonable and customary fees in Borrower’s industry paid to members
of the board of directors (or similar governing body) of Borrower; and

 

(b)       reasonable compensation arrangements and benefit plans for officers
and other employees of Borrower and its Subsidiaries entered into or maintained
in the ordinary course of business; provided that such transactions do not have
a Material Adverse Effect on Borrower or any Subsidiary.

 

7.10    Use of Proceeds. Borrower’s use of the proceeds of the Loans shall be
solely for working capital and other general corporate purposes of the
Companies, for the refinancing of existing Indebtedness and for Acquisitions,
all to the extent permitted hereunder.

 

7.11    Certain Indebtedness Payments, Etc. Neither Borrower nor any of its
Subsidiaries shall (a) pay, prepay, redeem, purchase, defease or otherwise
satisfy in any manner prior to the scheduled payment thereof any Subordinated
Debt or (b) amend, modify or otherwise change the terms of any document,
instrument or agreement evidencing Subordinated Debt such that such amendment,
modification or change would (i) cause the outstanding aggregate principal
amount of all such Subordinated Debt so amended, modified or changed to be
increased (except as a consequence of the deferral of cash interest payments by
adding such payments to the principal amount thereof) as a consequence of such
amendment, modification or change, (ii) increase the interest rate applicable
thereto, or (iii) accelerate the scheduled payment thereof.

 

7.12    Financial Covenants.

 

(a)       Maximum Senior Leverage Ratio. Borrower shall not permit the Senior
Leverage Ratio, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis) to be greater than 1.50 to 1.00.

 

(b)       Maximum Total Leverage Ratio. Borrower shall not permit the Total
Leverage Ratio, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis) to be greater than 3.00 to 1.00.

 

(c)       Minimum Liquidity Ratio. Borrower shall not permit the Liquidity Ratio
at any time to be less than 1.35 to 1.00.

 

(d)       Minimum Fixed Charge Coverage Ratio. Borrower shall not permit the
Fixed Charge Coverage Ratio, determined as of the last day of any fiscal quarter
of Borrower (measured on a rolling four quarter basis) to be less than 1.25 to
1:00.

 

7.13    Accounting Changes. Change (i) its fiscal year (currently a 52 or 53
week year, as applicable, ending on or about December 31), or (ii) its
accounting practices except as permitted by GAAP.

 

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SECTION VIII
EVENTS OF DEFAULT AND REMEDIES

 

8.1      Events of Default. Any one or more of the following events shall
constitute an Event of Default:

 

(a)       Borrower fails to pay any principal on the date when due; or

 

(b)       Borrower fails to pay interest on any Outstanding Obligation, the
Commitment Fee or any other fees due hereunder within three (3) Business Days
after the date when due; or fails to pay any other fees or amount payable to
Administrative Agent or any Lender under any Loan Document within five (5)
Business Days after the date due; or

 

(c)       Any default occurs in the observance or performance of any agreement
contained in Section 7; or

 

(d)       Any default occurs in the observance or performance of any agreement
contained in Section 6.1 and such default continues for three (3) days; or

 

(e)       The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any other
Loan Document; or Borrower fails to perform or observe any other covenant or
agreement (not specified in subsections (a), (b) (c) or (d) above) contained in
any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

 

(f)        Any representation or warranty in any Loan Document proves to have
been incorrect in any material respect when made or deemed made; or

 

(g)       Any Credit Party (x) defaults on any payment when due, which remains
uncured beyond any applicable cure period, of principal or interest on any
Indebtedness (other than Indebtedness hereunder) having an aggregate principal
amount in excess of the Threshold Amount, or (y) defaults in the observance or
performance of any other agreement or covenant relating to any Indebtedness
(other than Indebtedness hereunder) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur, the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, any Indebtedness in excess of the Threshold Amount to become payable
or cash collateral in respect thereof to be demanded on account of such default
or other event; or (ii) the occurrence under any Swap Contract of an Early
Termination Date (as defined in such Swap Contract) resulting from (x) any event
of default under such Swap Contract as to which Borrower or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (y) any termination
event under any Swap Contract (as defined therein) as to which Borrower or any
Subsidiary is an affected party (as so defined) (other than termination events
resulting solely from changes in the value of Borrower’s stock price or other
rates, prices or indices underlying any such Swap Contract), and as to which, in

 

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either event, the Swap Termination Value owed by Borrower or such Subsidiary as
a result thereof is greater than the Threshold Amount; or

 

(h)       Any Loan Document, at any time after its execution and delivery and
for any reason other than the agreement of all Lenders or satisfaction in full
of all the Obligations, ceases to be in full force and effect or is declared by
a court of competent jurisdiction to be null and void, invalid or unenforceable
in any respect; or any Credit Party denies that it has any or further liability
or obligation under any Loan Document to which it is a party, or purports to
revoke, terminate or rescind any such Loan Document; or

 

(i)        A final judgment (to the extent not covered by insurance form a
solvent insurer who has accepted tender of defense and is defending such action)
against Borrower or any Material Subsidiary is entered for the payment of money
in excess of the Threshold Amount and such judgment remains unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of thirty (30) days
from the date of its entry, or any non-monetary final judgment is entered
against Borrower that has a Material Adverse Effect and such judgment remains
unvacated, unbonded or unstayed by appeal or otherwise for a period of thirty
(30) days from the date of its entry.

 

(j)        Borrower or any of its Material Subsidiaries institutes or consents
to the institution of any proceeding under Debtor Relief Laws, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of that Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under Debtor Relief Laws relating to any such
Person or to all or any part of its property is instituted without the consent
of that Person and continues undismissed or unstayed for 45 calendar days, or an
order for relief is entered in any such proceeding; or

 

(k)       (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower or its Subsidiaries under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
the Threshold Amount; (ii) the aggregate amount of Unfunded Pension Liability
among all Pension Plans at any time exceeds the Threshold Amount; (iii) Borrower
or any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or (iv) the events listed in clauses
(i), (ii) and (iii) in the aggregate have resulted or could reasonably be
expected to result in liability of Borrower in excess of the Threshold Amount;
or

 

(l)        There occurs (i) any Change of Control, or (ii) any event relating to
a change in the corporate ownership, control or governance of Borrower or any
Subsidiary

 

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as issuer (“Issuer”) of any notes, bonds, debentures, Subordinated Debt or other
debt securities, the result of which is to cause Indebtedness evidenced by any
such notes, bonds, debentures, Subordinated Debt or other debt securities to be
subject to mandatory redemption or repurchase by Issuer, provided the
outstanding amount of such outstanding Indebtedness exceeds the Threshold
Amount; or

 

(m)      There occurs a change in the assets, liabilities, financial condition,
operations, affairs or prospects of Borrower and its Subsidiaries, taken as a
whole, which in the reasonable determination of Requisite Lenders has had a
Material Adverse Effect.

 

8.2      Certain Financial Covenant Defaults. In the event that Borrower
determines to restate any of its financial statements and announces the same or
delivers such restated financial statements to Administrative Agent or any
Lender and, after giving effect to such restatement, as of the end of any fiscal
period of Borrower there would exist an Event of Default by virtue of such
restatement due to breach of Section 7.12 as of such fiscal period end date,
such Event of Default shall be deemed to arise as of the end of such fiscal
period. Notwithstanding Section 2.6(c) to the contrary, interest shall accrue
and at the Default Rate in respect of any Event of Default arising solely by
virtue of this Section 8.2 only from the date such restatement is announced or
such restated financial statements are delivered.

 

8.3      Remedies Upon Event of Default. Without limiting any other rights or
remedies of Administrative Agent or Lenders provided for elsewhere in this
Agreement, or the other Loan Documents, or by applicable Law, or in equity, or
otherwise:

 

(a)       Upon the occurrence, and during the continuance, of any Event of
Default other than an Event of Default described in Section 8.1(j):

 

(i)        Requisite Lenders may request Administrative Agent to, and
Administrative Agent thereupon shall, terminate the Commitments and/or declare
all or any part of the unpaid principal of all Loans, all interest accrued and
unpaid thereon and all other amounts payable under the Loan Documents to be
immediately due and payable, whereupon the same shall become and be immediately
due and payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by Borrower;
and/or

 

(ii)       Issuing Lender, with the approval of Administrative Agent on behalf
of Requisite Lenders, may demand immediate payment by Borrower of an amount
equal to the aggregate amount of all outstanding Letter of Credit Usage to be
held in a blocked Letter of Credit cash collateral account held with Lender.

 

(b)       Upon the occurrence of any Event of Default described in Section 8.1
(j):

 

(i)        the Commitments and all other obligations of Administrative Agent or
Lenders shall automatically terminate without notice to or demand upon Borrower,
which are expressly waived by Borrower;

 

(ii)       the unpaid principal of all Loans, all interest accrued and unpaid
thereon and all other amounts payable under the Loan Documents shall be
immediately

 

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due and payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by Borrower; and

 

(iii)     an amount equal to the aggregate amount of all outstanding Letter of
Credit Usage shall be immediately due and payable to Issuing Lender without
notice to or demand upon Borrower, which are expressly waived by Borrower, to be
held in a blocked Letter of Credit cash collateral account held with Lender.

 

(c)       Upon the occurrence of any Event of Default, Lenders and
Administrative Agent, or any of them, without notice to (except as expressly
provided for in any Loan Document) or demand upon Borrower, which are expressly
waived by Borrower (except as to notices expressly provided for in any Loan
Document), may proceed to (but only with the consent of Requisite Lenders)
protect, exercise and enforce their rights and remedies under the Loan Documents
against Borrower and such other rights and remedies as are provided by Law or
equity (including, without limitation, the provisions of the applicable Uniform
Commercial Code).

 

(d)       Except as permitted by Section 10.5, no Lender may exercise any rights
or remedies with respect to the Obligations without the consent of Requisite
Lenders in their sole and absolute discretion. The order and manner in which
Administrative Agent’s and Lenders’ rights and remedies are to be exercised
shall be determined by Requisite Lenders in their sole and absolute discretion.
Regardless of how a Lender may treat payments for the purpose of its own
accounting, for the purpose of computing the Obligations hereunder, payments
shall be applied first, to costs and expenses (including Attorney Costs)
incurred by Administrative Agent and each Lender, second, to the payment of
accrued and unpaid interest on the Loans to and including the date of such
application, third, to the payment of the unpaid principal of the Loans, and
fourth, to the payment of all other amounts (including fees) then owing to
Administrative Agent and Lenders under the Loan Documents, in each case paid pro
rata to each Lender in the same proportions that the aggregate Obligations owed
to each Lender under the Loan Documents bear to the aggregate Obligations owed
under the Loan Documents to all Lenders, without priority or preference among
Lenders. No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Loan
Documents, or prevent the exercise, or continued exercise, of rights or remedies
of Administrative Agent and Lenders hereunder or thereunder or at Law or in
equity.

 

SECTION IX
ADMINISTRATIVE AGENT

 

9.1      Appointment and Authorization of Administrative Agent.

 

(a)       Each Lender hereby irrevocably (subject to Section 9.9) appoints,
designates and authorizes Administrative Agent to take such 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 it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably

 

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incidental thereto. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document, Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative 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 Administrative
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” in this Agreement with reference to Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.

 

(b)       Issuing Lender shall act on behalf of Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as Administrative Agent may agree at the request of
Requisite Lenders to act for such Issuing Lender with respect thereto; provided,
however, that Issuing Lender shall have all of the benefits and immunities (i)
provided to Administrative Agent in this Section 9 with respect to any acts
taken or omissions suffered by Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term “Administrative Agent” as used in this Section 9 included Issuing
Lender with respect to such acts or omissions, and (ii) as additionally provided
in this Agreement with respect to Issuing Lender.

 

9.2      Delegation of Duties. Administrative 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. Administrative Agent shall not
be responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.

 

9.3      Liability of Administrative Agent. No Administrative Agent-Related
Person shall (i) 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 (ii) be responsible in any manner to any Lender for any
recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any officer 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
Administrative 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
Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Administrative 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 properties, books or
records of Borrower or any of Borrower’s Subsidiaries or Affiliates.

 

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9.4      Reliance by Administrative Agent.

 

(a)       Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, 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 Borrower), independent accountants and other experts selected by
Administrative Agent. Administrative Agent shall be fully justified in failing
or refusing to take any action under any other Loan Document unless it shall
first receive such advice or concurrence of Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
Administrative 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 Requisite Lenders or all Lenders, if
required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of Lenders. Where this Agreement
expressly permits or prohibits an action unless Requisite Lenders otherwise
determine, and in all other instances, Administrative Agent may, but shall not
be required to, initiate any solicitation for the consent or a vote of Lenders.

 

(b)       For purposes of determining compliance with the conditions specified
in Section 4.1, each Lender that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Lender.

 

(c)       Each Lender hereby authorizes Administrative Agent, upon payment of
the amount certified by Borrower as the full and final payment of all principal,
interest, fees and other charges outstanding under this Agreement, and following
termination of the Commitments, to execute with and in favor of Borrower a
termination letter that, inter alia, terminates Borrower’s obligation to observe
any or all of the covenants in Sections 3, 6 and 7 hereof.

 

9.5      Notice of Default. Administrative 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 and fees required
to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. Administrative
Agent will notify Lenders of its receipt of any such notice. Administrative
Agent shall take such action with respect to such Default or Event of Default as
may be directed by Requisite Lenders in accordance with Section 8; provided,
however, that unless and until Administrative Agent has received any such
direction, Administrative Agent may (but shall not be obligated to) take such
action, or refrain

 

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from taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of Lenders.

 

9.6      Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Administrative Agent-Related Person has made
any representation or warranty to it, and that no act by Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender as to any matter, including whether Administrative Agent-
Related Persons have disclosed material information in their possession. Each
Lender, including any Lender by assignment, represents to Administrative Agent
that it has, independently and without reliance upon any Administrative
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 Borrower and its Subsidiaries, 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 Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Administrative 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 Borrower. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Administrative Agent herein,
Administrative 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
Borrower or any of its Subsidiaries which may come into the possession of any
Administrative Agent-Related Person.

 

9.7      Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, Lenders shall indemnify upon
demand each Administrative Agent-Related Person (to the extent not reimbursed by
or on behalf of Borrower and without limiting the obligation of Borrower to do
so), pro rata, and hold harmless each Administrative Agent-Related Person from
and against any and all Indemnified Liabilities incurred by it; provided,
however, that no Lender shall be liable for the payment to any Administrative
Agent-Related Person of any portion of such Indemnified Liabilities resulting
from such Person’s gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of Requisite Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by Administrative
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 Administrative Agent
is not reimbursed for such expenses by or on behalf of Borrower. The

 

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undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Administrative Agent.

 

9.8      Administrative Agent in Individual Capacity. KeyBank 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 Borrower and its
Subsidiaries and Affiliates as though KeyBank were not Administrative Agent or
Issuing Lender hereunder and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, KeyBank or its Affiliates may
receive information regarding Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of Borrower or such
Affiliate) and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
KeyBank shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not Administrative Agent or
Issuing Lender.

 

9.9      Successor Administrative Agent. Administrative Agent may, and at the
request of Requisite Lenders shall, resign as Administrative Agent upon 30 days’
notice to Lenders. If Administrative Agent resigns under this Agreement,
Requisite Lenders shall appoint from among Lenders a successor administrative
agent for Lenders which successor administrative agent shall be approved by
Borrower. If no successor administrative agent is appointed prior to the
effective date of the resignation of Administrative Agent, Administrative Agent
may appoint, after consulting with Lenders and Borrower and upon approval of
Borrower (other than at any time as there exists an Event of Default) which will
not be unreasonably withheld, a successor administrative agent from among
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” shall mean such successor administrative agent and the
retiring Administrative Agent’s appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Section 9 and Sections
10.3 and 10.11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
(whether due to absence of Borrower approval or otherwise) by the date which is
30 days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as Requisite Lenders appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, KeyBank may
not be removed as Administrative Agent at the request of Requisite Lenders
unless KeyBank shall also simultaneously be replaced as “Issuing Lender”
hereunder pursuant to documentation in form and substance reasonably
satisfactory to KeyBank. Any Administrative Agent hereunder must hold a
Commitment in an amount not less than the $5,000,000.

 

9.10    Designation of Arranger; No Affiliate Liability. The parties hereto
hereby designates KeyBanc Capital Markets, an Affiliate of KeyBank as “Sole
Arranger” and “Sole Book Runner” under this Agreement. None of Lenders (or
Affiliates of Lenders) identified from time to time herein by the titles “Sole
Arranger,” “Sole Book Runner,” “Syndication Agent,”

 

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“Documentation Agent” or similar titles shall have any right, power, obligation,
liability, responsibility or duty under this Agreement in such capacity. Without
limiting the foregoing, none of Lenders (or Affiliates of Lenders) so identified
shall have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of Lenders
(or Affiliates of Lenders) so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

 

SECTION X
MISCELLANEOUS

 

10.1    Amendments; Consents. No amendment, modification, supplement, extension,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, and no consent to any departure by
Borrower therefrom shall be effective unless in writing signed by Requisite
Lenders and acknowledged by Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. Except as otherwise expressly provided herein, without
the approval in writing of Administrative Agent and all Lenders, no amendment,
modification, supplement, termination, waiver or consent may be effective:

 

(a)       To reduce the amount of principal, principal prepayments or the rate
of interest payable on, any Loan, or the amount of any fee or other amount
payable to any Lender under the Loan Documents (unless such modification is
consented to by each Lender entitled to receive such fee) or to waive an Event
of Default consisting of the failure of Borrower to pay when due principal,
interest or any commitment fee;

 

(b)       To postpone any date fixed for any payment of principal of, prepayment
of principal of, or any installment of interest on, any Loan or any installment
of any commitment fee, to extend the term of, or increase the amount of, any
Lender’s Commitment (it being understood that a waiver of an Event of Default
shall not constitute an extension or increase in the Commitment of any Lender)
or modify the Pro Rata Share of any Lender;

 

(c)       To release collateral in which Lenders have a security interest to
secure the performance of Borrower’s obligations under the Loan Documents
constituting more than 20% of the value of Borrower’s consolidated assets;

 

(d)       To amend the definition of “Requisite Lenders” or the provisions of
Section 4, Section 9, this Section 10.1 or Section 10.6;

 

(e)       To amend any provision of this Agreement that expressly requires the
consent or approval of all Lenders; provided, however, that (i) no amendment,
waiver or consent shall, unless in writing and signed by Issuing Lender in
addition to Requisite Lenders or all Lenders, as the case may be, affect the
rights or duties of Issuing Lender, (ii) no amendment, waiver or consent shall,
unless in writing and signed by Administrative Agent in addition to Requisite
Lenders or all Lenders, as the case may be, affect the rights or duties of
Administrative Agent, and (iii) the fee letters may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties

 

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thereto. Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section shall apply equally to, and shall be binding upon, all
Lenders and Administrative Agent.

 

10.2    Transmission and Effectiveness of Communications and Signatures.

 

(a)       Modes of Delivery. Except as otherwise provided in any Loan Document,
notices, requests, demands, directions, agreements and documents delivered in
connection with the Loan Documents (collectively, “communications”) shall be
transmitted by Requisite Notice to the number and address set forth on Schedule
10.2, may be delivered by the following modes of delivery, and shall be
effective as follows:

 

Mode of Delivery

 

Effective on earlier of actual receipt and:

 

 

 

Courier

 

Scheduled delivery date

 

 

 

Facsimile

 

When transmission in legible form complete

 

 

 

Mail

 

Fourth Business Day after deposit in U.S. mail first class postage pre-paid

 

 

 

Personal delivery

 

When received

 

 

 

Telephone

 

When conversation completed

 

provided, however, that communications delivered to Administrative Agent
pursuant to Section 2 must be in writing and shall not be effective until
actually received by Administrative Agent.

 

(b)       Reliance by Administrative Agent and Lenders. Administrative Agent and
Lenders shall be entitled to rely and act on any communications purportedly
given by or on behalf of Borrower even if (i) such communications (A) were not
made in a manner specified herein, (B) were incomplete or (C) were not preceded
or followed by any other notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any subsequent related communications
provided for herein. Borrower shall indemnify Administrative Agent and Lenders
from any loss, cost, expense or liability as a result of relying on any
communications permitted herein.

 

(c)       Effectiveness of Facsimile Documents and Signatures. Documents and
agreements delivered from time to time in connection with the Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as hardcopies with manual signatures and shall be binding on all
Borrower and its Subsidiaries and Administrative Agent and Lenders.
Administrative Agent may also request that any such documents and signature be
confirmed by a manually-signed hardcopy thereof; provided, however, that the
failure to request or deliver any such manually-signed hardcopy shall not affect
the effectiveness of any facsimile documents or signatures.

 

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10.3    Attorney Costs, Expenses and Taxes. Borrower agrees (a) to pay or
reimburse Administrative Agent for all reasonable costs and expenses incurred in
connection with the development, preparation, negotiation and execution of the
Loan Documents, and the development, preparation, negotiation and execution of
any amendment, waiver, consent, supplement or modification to, any Loan
Documents, and any other documents prepared in connection herewith or therewith,
including all reasonable Attorney Costs, and (b) to pay or reimburse
Administrative Agent and each Lender for all costs and expenses incurred in
connection with any refinancing, restructuring, reorganization (including a
bankruptcy reorganization), collection and enforcement or attempted enforcement,
or preservation of any rights under any Loan Documents, and any other documents
prepared in connection herewith or therewith, or in connection with any
refinancing, or restructuring of any such documents in the nature of a “workout”
or of any insolvency or bankruptcy proceeding, including Attorney Costs. The
foregoing costs and expenses shall include all reasonable search, filing, and
appraisal charges and fees and documentary, stamp or similar taxes related
thereto, and other out-of- pocket expenses incurred by Administrative Agent or
any Lender and the cost of independent public accountants and other outside
experts retained by Administrative Agent or any Lender. Any amount payable by
Borrower under this Section shall bear interest from the tenth (10th) Business
Day following the date of demand for payment at the Default Rate, unless waived
by Administrative Agent. The agreements in this Section shall survive repayment
of all Obligations.

 

10.4    Binding Effect; Assignment.

 

(a)       This Agreement and the other Loan Documents to which Borrower is a
party will be binding upon and inure to the benefit of Borrower, Lenders and
Administrative Agent and their respective successors and assigns, except that,
Borrower may not assign its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of all Lenders and any such
attempted assignment shall be void. Any Lender may at any time pledge its Note
or any other instrument evidencing its rights as a Lender under this Agreement
to a Federal Reserve Bank, but no such pledge shall release each such Lender
from its obligations hereunder or grant to such Federal Reserve Bank the rights
of a Lender hereunder absent foreclosure of such pledge.

 

(b)       From time to time following the Closing Date, each Lender may assign
to one or more Eligible Assignees all or any portion of its Commitment and/or
Extensions of Credit; provided that (i) such assignment, if not to a Lender or
an Affiliate of the assigning Lender, shall be consented to by Borrower at all
times other than during the existence of a Default or Event of Default and by
Administrative Agent and Issuing Lender (which approval of Borrower shall not be
unreasonably withheld), (ii) a copy of a duly signed and completed Assignment
and Acceptance shall be delivered to Administrative Agent, (iii) except in the
case of an assignment (A) to an Affiliate of the assigning Lender or to another
Lender or (B) of the entire remaining Commitment of the assigning Lender, the
portion of the Commitment assigned shall not be less than the Minimum Amount
therefor, and (iv) the effective date of any such assignment shall be as
specified in the Assignment and Acceptance, but not earlier than the date which
is five Business Days after the date Administrative Agent has received the
Assignment and Acceptance. Upon any required consent by Administrative Agent,
Issuing Lender and

 

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Borrower to such assignment and payment of the requisite fee described below,
the assignee named therein shall be a Lender for all purposes of this Agreement,
with the Pro Rata Share therein set forth and, to the extent of such Pro Rata
Share, the assigning Lender shall be released from its further obligations under
this Agreement. Borrower agrees that it shall execute and deliver upon request
(against delivery by the assigning Lender to Borrower of any Note) to such
assignee Lender, one or more Notes evidencing such assignee Lender’s Loans, and
to the assigning Lender if requested, one or more Notes evidencing Loans under
any Commitment retained by the assigning Lender. Administrative Agent’s consent
to any assignment shall not be deemed to constitute any representation or
warranty by any Administrative Agent-Related Person as to any matter. For
purposes hereof, each mutual fund that is an Affiliate of a Lender shall be
deemed to be a single Eligible Assignee, whether or not such fund is managed by
the same fund manager as other mutual funds that are Affiliates of the same
Lender.

 

(c)       After receipt of a completed Assignment and Acceptance, and receipt of
an assignment fee of $3,500 (unless such fee is waived by the Administrative
Agent) from such Eligible Assignee (including in the case of assignments to
Affiliates of assigning Lenders), Administrative Agent shall, promptly following
the effective date thereof, provide to Borrower and Lenders a revised Schedule
10.2 giving effect thereto.

 

(d)       Each such Lender may from time to time, without the consent of any
other Person, grant participations to one or more other Person (including
another Lender) of all or any portion of its Pro Rata Share of its Commitment or
Extensions of Credit; provided, however, that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) participating banks or other financial institutions shall not
be a Lender hereunder for any purpose except, if the participation agreement so
provides, for the purposes of Section 3 (but only to the extent that the cost of
such benefits to Borrower does not exceed the cost which Borrower would have
incurred in respect of such Lender absent the participation) and subject to
Sections 10.5 and 10.6, (iv) Borrower, Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement, (v)
the participation agreement shall not restrict an increase in the combined
Commitments, or in granting Lender’s Pro Rata Share, so long as the amount of
the participation interest is not affected thereby, and (iv) the consent of the
holder of such participation interest shall not be required for amendments or
waivers of provisions of the Loan Documents; provided, however, that the
assigning Lender may, in any agreement with a participant, give such participant
the right to consent to any matter which (A) extends the Maturity Date as to
such participant or any other date upon which any payment of money is due to
such participant, (B) reduces the rate of interest owing to such participant,
any fee or any other monetary amount owing to such participant, or (C) reduces
the amount of any installment of principal owing to such participant. Any Lender
that sells a participation to any Person that is a “foreign corporation,
partnership or trust” within the meaning of the Code shall include in its
participation agreement with such Person a covenant by such Person that such
Person will comply with the provisions of Section 10.22 as if such Person were a
Lender and

 

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provide that Administrative Agent and Borrower shall be third party
beneficiaries of such covenant.

 

10.5    Set-off. In addition to any rights and remedies of Administrative Agent
and Lenders or any assignee or participant of any Lender or any Affiliate
thereof (each, a “Proceeding Party”) provided by law, upon the occurrence and
during the continuance of any Event of Default, each Proceeding Party is
authorized at any time and from time to time, without prior notice to Borrower,
any such notice being waived by Borrower to the fullest extent permitted by law,
to proceed directly, by right of set-off, banker’s lien, or otherwise, against
any assets of Borrower and its Subsidiaries which may be in the hands of such
Proceeding Party (including all general or special, time or demand, provisional
or other deposits and other indebtedness owing by such Proceeding Party to or
for the credit or the account of Borrower) and apply such assets against the
Obligations, irrespective of whether such Proceeding Party shall have made any
demand therefor and although such Obligations may be unmatured. Each Lender
agrees promptly to notify Borrower and Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.

 

10.6    Sharing of Payments. Each Lender severally agrees that if it, through
the exercise of any right of setoff, banker’s lien or counterclaim against
Borrower or otherwise, receives payment on account of the Outstanding
Obligations held by it that is ratably more than any other Lender receives in
payment on account of the Outstanding Obligations held by such other Lender,
then, subject to applicable Laws: (a) the Lender exercising the right of setoff,
banker’s lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Lender a participation in the Outstanding Obligations held by the other Lender
and shall pay to the other Lender a purchase price in an amount so that the
share of the Outstanding Obligations held by each Lender after the exercise of
the right of setoff, banker’s lien or counterclaim or receipt of payment shall
be in the same proportion that existed prior to the exercise of the right of
setoff, banker’s lien or counterclaim or receipt of payment; and (b) such other
adjustments and purchases of participations shall be made from time to time as
shall be equitable to ensure that all Lenders share any payment obtained in
respect of the Outstanding Obligations ratably in accordance with each Lender’s
share of the Outstanding Obligations immediately prior to, and without taking
into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Outstanding Obligations pursuant to this Section shall from and after the
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Outstanding Obligations purchased to the same extent as though the purchasing
Lender were the original owner of the Outstanding Obligations purchased.
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation so purchased may exercise any
and all rights of setoff, banker’s lien or counterclaim with respect to the
participation as fully as if Lender were the original owner of the Obligation
purchased.

 

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10.7    No Setoff. As to any and all funds, securities or other assets of
Borrower which are now or hereafter held by Administrative Agent or any Lender
as collateral pursuant to the Credit Agreement or any other Loan Document for
any of the obligations thereunder (collectively the “Collateral Assets”),
Administrative Agent and the Lenders agree that they shall not exercise any
right of setoff or recoupment against nor shall they assert any security
interest in the Collateral Assets in connection with any other obligation owed
to Administrative Agent or any Lender which is unrelated to the Credit Agreement
or the Loan Documents, except for: (i) recovery for any items deposited with
Administrative Agent or any Lender and returned unpaid or as to which claims
have been asserted as to breach of transfer or presentment warranties, (ii)
overdrafts on any account which generated the funds which constitute part of the
Collateral Assets, (iii) automated clearing house entries, and (iv)
Administrative Agent or any Lender’s usual and customary fees for services
rendered in connection with the assets or bank accounts which constitute the
Collateral Assets.

 

10.8    No Waiver; Cumulative Remedies.

 

(a)       No failure by any Lender or Administrative Agent to exercise, and no
delay by any Lender or Administrative Agent in exercising, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. Without limiting the generality of
the foregoing, the terms and conditions of Section 4 may be waived in whole or
in part, with or without terms or conditions, in respect of any Extension of
Credit without prejudicing Administrative Agent’s or Lender’s rights to assert
them in whole or in part in respect of any other Extension of Credit.

 

(b)       The rights, remedies, powers and privileges herein or therein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by Law. Any decision by Administrative Agent or any Lender not to
require payment of any interest (including Default Interest), fee, cost or other
amount payable under any Loan Document or to calculate any amount payable by a
particular method on any occasion shall in no way limit or be deemed a waiver of
Administrative Agent’s or Lender’s right to require full payment thereof, or to
calculate an amount payable by another method that is not inconsistent with this
Agreement, on any other or subsequent occasion.

 

(c)       The terms and conditions of Section 9 are for the sole benefit of
Administrative Agent and Lenders.

 

10.9    Usury. Notwithstanding anything to the contrary contained in any Loan
Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum Rate”). If Administrative Agent or any Lender
shall receive interest or a fee in an amount that exceeds the Maximum Rate, the
excessive interest or fee shall be applied to the principal of the Outstanding
Obligations or, if it exceeds the unpaid principal, refunded to Borrower. In
determining whether the interest or a fee contracted for, charged, or received
by Administrative Agent or any Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by

 

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applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations.

 

10.10  Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

10.11  Integration. This Agreement, together with the other Loan Documents and
any letter agreements referred to herein, comprises the complete and integrated
agreement of the parties on the subject matter hereof and supersedes all prior
agreements, written or oral, on the subject matter hereof. In the event of any
conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control and govern; provided
that the inclusion of supplemental rights or remedies in favor of Administrative
Agent or Lenders in any other Loan Document shall not be deemed a conflict with
this Agreement. Each Loan Document was drafted with the joint participation of
the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.

 

10.12  Nature of Lenders’ Obligations. Nothing contained in this Agreement or
any other Loan Document and no action taken by Administrative Agent or Lenders
or any of them pursuant hereto or thereto may, or may be deemed to, make Lenders
a partnership, an association, a joint venture or other entity, either among
themselves or with Borrower or any Affiliate of Borrower. Each Lender’s
obligation to make any Extension of Credit pursuant hereto is several and not
joint or joint and several, provided that, in the case of the initial Extension
of Credit only, each lender’s obligation is conditioned upon the performance by
all other Lenders of their obligations to make the initial Extension of Credit.
A default by any Lender will not increase the Pro Rata Share attributable to any
other Lender.

 

10.13  Survival of Representations and Warranties. All representations and
warranties made hereunder and in any Loan Document, certificate or statement
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery thereof but shall terminate the later
of (a) when the Commitments are terminated and (b) when no Obligations remain
outstanding under any Loan Document. Such representations and warranties have
been or will be relied upon by Administrative Agent and each Lender,
notwithstanding any investigation made by Administrative Agent or any Lender or
on their behalf.

 

10.14  Indemnity by Borrower. Borrower agrees to indemnify, defend, save and
hold harmless each Administrative Agent-Related Person and each Lender and their
respective Affiliates, directors, officers, agents, attorneys and employees
(collectively, the “Indemnitees”) from and against: (a) any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person (other than Administrative Agent or any Lender) relating directly or
indirectly to a claim, demand, action or cause of action that such Person
asserts or may assert against Borrower, any of its Affiliates or any its
officers or directors; (b) any and all claims, demands, actions or causes of
action arising out of or relating to, the Loan Documents,

 

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any predecessor loan documents, the Commitments, the use or contemplated use of
the proceeds of any Loan, property that is the subject of any Material Lease or
any other collateral given to secure the obligations of Borrower under this
Agreement, or the relationship of Borrower, Administrative Agent and Lenders
under this Agreement; (c) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action or
cause of action described in subsection (a) or (b) above; and (d) all
liabilities, claims, actions, loss, damages, including, without limitation,
foreseeable and unforeseeable consequential damages, costs and expenses
(including sums paid in settlement of claims and all consultant, expert and
legal fees and expenses of Indemnitees’ counsel) directly or indirectly arising
out of or resulting from any Hazardous Substance being present at any time in or
around any part of Borrower’s properties (leasehold or fee), or in the soil,
groundwater or soil vapor on or under Borrower’s properties (leasehold or fee),
including those incurred in connection with any investigation of site conditions
or any clean-up, remedial, removal or restoration work, or any resulting damages
or injuries to the person or property of any third parties or to any natural
resources; (e) any and all liabilities, losses, costs or expenses (including
Attorney Costs) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or proceeding,
or as a result of the preparation of any defense in connection with any
foregoing claim, demand, action, cause of action or proceeding, in all cases,
whether or not an Indemnitee is a party to such claim, demand, action, cause of
action or proceeding, including those liabilities caused by an Indemnitee’s own
negligence (all the foregoing, collectively, the “Indemnified Liabilities”);
provided that no Indemnitee shall be entitled to indemnification for any loss
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee.

 

10.15  Nonliability of Lender.

 

Borrower acknowledges and agrees that:

 

(a)       Any inspections of any property of Borrower made by or through
Administrative Agent or Lenders are for purposes of administration of the Loan
Documents only, and Borrower is not entitled to rely upon the same (whether or
not such inspections are at the expense of Borrower);

 

(b)       By accepting or approving anything required to be observed, performed,
fulfilled or given to Administrative Agent or Lenders pursuant to the Loan
Documents, neither Administrative Agent nor Lenders shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty or representation
to anyone with respect thereto by Administrative Agent or Lenders;

 

(c)       The relationship between Borrower and Administrative Agent and Lenders
is, and shall at all times remain, solely that of borrower and lenders; neither
Administrative Agent nor Lenders shall under any circumstance be deemed to be in
a relationship of confidence or trust or a fiduciary relationship with Borrower
or its Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither Administrative Agent nor any Lender undertakes or assumes any
responsibility or duty to

 

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Borrower or its Affiliates to select, review, inspect, supervise, pass judgment
upon or inform Borrower or its Affiliates of any matter in connection with their
property or the operations of Borrower or its Affiliates; Borrower and its
Affiliates shall rely entirely upon their own judgment with respect to such
matters; and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by Lender in connection with such matters
is solely for the protection of Lenders and neither Borrower nor any other
Person is entitled to rely thereon; and

 

(d)       Neither Administrative Agent nor Lenders shall be responsible or
liable to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to property caused by the
actions, inaction or negligence of Borrower and/or its Affiliates and Borrower
hereby indemnifies and holds Administrative Agent and Lenders harmless from any
such loss, damage, liability or claim.

 

10.16  No Third Parties Benefited. This Agreement is made for the purpose of
defining and setting forth certain obligations, rights and duties of Borrower,
Administrative Agent and Lenders in connection with the Extensions of Credit,
and is made for the sole benefit of Borrower, Administrative Agent and Lenders,
and Administrative Agent and Lenders’ successors and assigns. Except as provided
in Sections 10.14 and 10.22, no other Person shall have any rights of any nature
hereunder or by reason hereof.

 

10.17  Severability. Any provision of the Loan Documents that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.18  Confidentiality. Administrative Agent and each Lender shall use any
confidential non-public information concerning Borrower and its Subsidiaries
that is furnished to Administrative Agent or such Lender by or on behalf of
Borrower and its Subsidiaries in connection with the Loan Documents that has
been identified in writing as confidential at the time so furnished
(collectively, “Confidential Information”) solely for the purpose of evaluating
and providing products and services to them and administering and enforcing the
Loan Documents, and it will hold the Confidential Information in confidence in
accordance with such Person’s customary procedures for handling confidential of
the same nature. Notwithstanding the foregoing, Administrative Agent and each
Lender may disclose Confidential Information to: (a) their Affiliates, or any of
their or their Affiliates’ directors, officers, employees, advisors, or
representatives (collectively, the “Representatives”) whom it determines need to
know such information for the purposes set forth in this Section (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Confidential Information and instructed to keep
such Confidential Information confidential; (b) any bank or financial
institution or other entity to which such Lender has assigned or desires to
assign an interest or participation in the Loan Documents or the Obligations,
provided that any such foregoing recipient of such Confidential Information
agrees to keep such Confidential Information confidential as specified herein;
(c) any governmental agency or regulatory body having or claiming to have
authority to regulate or oversee any aspect of Administrative Agent’s or such
Lender’s business or that of their Representatives in connection with the
exercise of such

 

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authority or claimed authority; (d) the extent necessary or appropriate to
effect or preserve Administrative Agent or such Lender’s or any of their
Affiliates’ security (if any) for any Obligation or to enforce any right or
remedy or in connection with any claims asserted by or against Administrative
Agent or such Lender or any of its Representatives; and (e) pursuant to any
subpoena or any similar legal process so long as Borrower is, or has been, given
notice of such legal process and the opportunity to seek a protective order. For
purposes hereof, the term “Confidential Information” shall not include
information that (x) is in Administrative Agent’s or such Lender’s possession
prior to its being provided by or on behalf of Borrower and its Subsidiaries,
provided that such information is not known by Administrative Agent or such
Lender to be subject to another confidentiality agreement with, or other legal
or contractual obligation of confidentiality to, Borrower, (y) is or becomes
publicly available (other than through a breach hereof by Administrative Agent
or such Lender), or (z) becomes available to Administrative Agent or such Lender
on a nonconfidential basis, provided that the source of such information was not
known by Administrative Agent or such Lender to be bound by a confidentiality
agreement or other legal or contractual obligation of confidentiality with
respect to such information. Administrative Agent and each Lender acknowledges
that (i) the Confidential Information may include material non-public
information concerning the Borrower or a Subsidiary, as the case may be, (ii) it
has developed compliance procedures regarding the use of material, non-public
information and (iii) it will handle material non-public information concerning
the Borrower or a Subsidiary in accordance with all Laws, including federal and
state securities Laws applicable to Administrative Agent or such Lender, as
applicable, provided that neither Administrative Agent nor any Lender shall in
any way be responsible for compliance with such Laws by Borrower or any of its
Subsidiaries and provided, further, that nothing in this sentence shall limit
the right of Administrative Agent or any Lender to disclose Confidential
Information as otherwise permitted in this Section 10.18.

 

10.19  Further Assurances. Borrower and its Subsidiaries shall, at their expense
and without expense to Administrative Agent or Lenders, do, execute and deliver
such further acts and documents as any Lender or Administrative Agent from time
to time reasonably requires for the assuring and confirming unto Lender of the
rights hereby created or intended now or hereafter so to be, or for carrying out
the intention or facilitating the performance of the terms of any Loan Document.

 

10.20  Headings. Section headings in this Agreement and the other Loan Documents
are included for convenience of reference only and are not part of this
Agreement or the other Loan Documents for any other purpose.

 

10.21  Time of the Essence. Time is of the essence of the Loan Documents.

 

10.22  Foreign Lenders. Each Lender that is a “foreign corporation, partnership
or trust” within the meaning of the Code (a “Foreign Lender”) shall deliver to
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or after accepting an assignment of an interest herein), two
duly signed completed copies of either Form W-8BEN or any successor thereto
(relating to such Person and entitling it to a complete exemption from
withholding on all payments to be made to such Person by Borrower pursuant to
this Agreement) or Form W-8ECI or any successor thereto (relating to all
payments to be made to such Person by Borrower pursuant to this Agreement) of
the United States Internal Revenue Service or such

 

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other evidence satisfactory to Borrower and Administrative Agent that no
withholding under the federal income tax laws is required with respect to such
Person. Thereafter and from time to time, each such Person shall (a) promptly
submit to Administrative Agent such additional duly completed and signed copies
of one of such forms (or such successor forms as shall be adopted from time to
time by the relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid, or such evidence
as is satisfactory to Borrower and Administrative Agent of any available
exemption from, United States withholding taxes in respect of all payments to be
made to such Person by Borrower pursuant to this Agreement, and (b) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Persons fail to deliver the above forms or other
documentation, then Administrative Agent may withhold from any interest payment
to such Person an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code. If any Governmental Authority asserts that
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Person, such Person shall indemnify
Administrative Agent therefor, including all penalties and interest and costs
and expenses (including Attorney Costs) of Administrative Agent. The obligation
of Lenders under this Section shall survive the payment of all Obligations and
the resignation or replacement of Administrative Agent.

 

10.23  Governing Law.

 

(a)       THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)       ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED HERETO. BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

 

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10.24  Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.25  Entire Agreement. This Agreement and the other Loan Documents represent
the final agreement between the parties and may not be contradicted by evidence
of prior, contemporaneous, or subsequent oral agreements of the parties. There
are no unwritten oral agreements between the parties.

 

[SIGNATURES ON FOLLOWING PAGE.]

 

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

 

WIRELESS FACILITIES, INC.,

a Delaware corporation,
as Borrower

KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
Issuing Lender and Lender

 

 

 

 

By:

/s/ Laura L. Siegal

 

By:

 

 

 

 

 

 

Name:

Laura L. Siegal

 

Name:

 

 

 

 

 

Title:

Vice President and Treasurer

 

Title:

 

 

 

 

Signature page to Credit Agreement

 

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

 

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

 

WIRELESS FACILITIES, INC.,
a Delaware corporation,
as Borrower

KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
Issuing Lender and Lender

 

 

 

 

By:

 

 

By:

/s/ Robert W. Boswell

 

Name:

 

 

Name:

ROBERT W. BOSWELL

 

Title:

 

 

Title:

VICE PRESIDENT

 

 

 

Signature page to Credit Agreement

 

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EXHIBIT A

 

FORM OF REQUEST FOR EXTENSION OF CREDIT

 

Date:                                   ,          

 

To:      KeyBank National Association

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement dated as of March 16, 2005,
between Wireless Facilities, Inc., a Delaware corporation (“Borrower”) and,
Lenders from time to time party thereto, and KeyBank National Association, as
Administrative Agent, Lender and Issuing Lender with KeyBanc Capital Markets as
designated Sole Arranger and Sole Book Manager (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement”) the terms defined therein being used herein as therein defined).

 

The undersigned hereby requests (select one):

 

o A Borrowing of Loans

 

¨ A Conversion or Continuation of Loans

 

1.         On

 

2.         In the amount of $

 

3.         Comprised of [Offshore Rate or Base Rate]

 

[type of Loan requested]

 

4.         If applicable: with an Interest Period of [1, 2, 3 or 6] months.

 

The foregoing request complies with the requirements of Section 2.1 of the
Agreement. Other than in connection with a Conversion or Continuation of Loans,
the undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the above date, before and after giving effect
to the Extension of Credit:

 

(a)       The representations and warranties made by Borrower in the Agreement,
or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection therewith, are and will
be correct on and as of the date of this Extension of Credit, except to the
extent that such representations and warranties specifically refer to any
earlier date; and

 

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(b)       No Default or Event of Default has occurred and is continuing on the
date hereof or after giving effect to this Extension of Credit.

 

 

WIRELESS FACILITIES, INC.,
a Delaware corporation, as Borrower

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

2

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