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SUBORDINATED LOAN AGREEMENT
 
by and among
 
CYALUME TECHNOLOGIES HOLDINGS, INC., as Guarantor
 
CYALUME TECHNOLOGIES, INC., as Borrower
 
and the Subsidiary Guarantors
from time to time party hereto,
as Guarantors
 
and
 
GRANITE CREEK PARTNERS AGENT, LLC, as Agent
 
and
 
The Additional Lenders From
Time to Time Party Hereto
 
July 29, 2010
 

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TABLE OF CONTENTS
 
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION
1
Section 1.1
Definitions
1
Section 1.2
Rules of Interpretation
20
   
ARTICLE 2. TERM LOANS.
21
Section 2.1
Term Loan; Commitment to Lend
21
Section 2.2
The Term Notes
21
   
ARTICLE 3. CONVERSION
21
   
ARTICLE 4. [Intentionally Omitted]
22
   
ARTICLE 5. REPAYMENT OF LOANS
22
Section 5.1
Maturity Date
22
Section 5.2
Optional Prepayments
22
Section 5.3
Mandatory Prepayments
22
Section 5.4
Loan Payments Settlement
23
   
ARTICLE 6. CERTAIN GENERAL PROVISIONS
23
Section 6.1
Closing Fee
23
Section 6.2
Interest on Loans
24
Section 6.3
Funds for Payments
24
Section 6.4
Computations
24
Section 6.5
Additional Costs, Etc.
25
Section 6.6
Capital Adequacy
26
Section 6.7
Certificate
26
Section 6.8
Interest Following Event of Default
26
Section 6.9
[Intentionally Omitted]
26
Section 6.10
[Intentionally Omitted]
26
Section 6.11
[Intentionally Omitted]
26
Section 6.12
Taxes
27
Section 6.13
General Obligations
28
Section 6.14
Replacement of Lender Due to Increased Costs
29
   
ARTICLE 7. [Intentionally Omitted]
29
   
ARTICLE 8. COLLATERAL SECURITY
29
   
ARTICLE 9. REPRESENTATIONS AND WARRANTIES
30
Section 9.1
Corporate Authority
30
Section 9.2
Governmental Approvals
31
Section 9.3
Title to Properties; Leases
31
Section 9.4
Financial Statements and Projections
31

 
 
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Section 9.5
No Material Changes, Etc.
32
Section 9.6
Franchises, Patents, Copyrights, Etc.
32
Section 9.7
Litigation
32
Section 9.8
No Materially Adverse Contracts, Etc.
33
Section 9.9
Compliance with Other Instruments, Laws, Etc.
33
Section 9.10
Tax Status
33
Section 9.11
No Event of Default
34
Section 9.12
Holding Company and Investment Company Acts
34
Section 9.13
Absence of Financing Statements, Etc.
34
Section 9.14
Perfection of Security Interest
34
Section 9.15
Certain Transactions
34
Section 9.16
Employee Benefit Plans
35
Section 9.17
Regulations T, X and U
35
Section 9.18
Environmental Compliance
36
Section 9.19
Ownership; Subsidiaries, Etc.
37
Section 9.20
Bank Accounts
38
Section 9.21
Chief Executive Offices
38
Section 9.22
Fiscal Year
38
Section 9.23
No Amendments to Certain Documents
38
Section 9.24
Disclosure
38
Section 9.25
[Intentionally Omitted]
39
Section 9.26
Insurance
39
Section 9.27
Foreign Assets Control Regulation, Etc.
39
Section 9.28
[Intentionally Omitted]
39
Section 9.29
Licenses and Permits
39
Section 9.30
SBA License Application and Related Requirements
40
Section 9.31
Small Business Administration Documentation
40
Section 9.32
Small Business Concern
40
Section 9.33
Product Liability
40
Section 9.34
Government Contracts
40
Section 9.35
Export Licenses and Compliance
43
   
ARTICLE 10. AFFIRMATIVE COVENANTS OF THE BORROWER
44
Section 10.1
Punctual Payment
44
Section 10.2
Maintenance of Office
44
Section 10.3
Records and Accounts
44
Section 10.4
Financial Statements, Certificates and Information
45
Section 10.5
Notices
47
Section 10.6
Legal Existence; Maintenance of Properties
48
Section 10.7
Insurance
48
Section 10.8
Taxes
49
Section 10.9
Inspection of Properties and Books, Etc.
49
Section 10.10
Compliance with Laws, Contracts, Licenses, and Permits
50
Section 10.11
Employee Benefit Plans
51
Section 10.12
Bank Accounts
51

 
 
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Section 10.13
Further Assurances
51
Section 10.14
Use of Proceeds
51
Section 10.15
Board; Board Meetings
51
Section 10.16
SBIC Regulatory Provisions
52
   
ARTICLE 11. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
54
Section 11.1
Restrictions on Indebtedness
54
Section 11.2
Restrictions on Liens
55
Section 11.3
Restrictions on Investments
57
Section 11.4
Restricted Payments
58
Section 11.5
Merger, Consolidation and Disposition of Assets
59
Section 11.6
Sale and Leaseback
60
Section 11.7
Compliance with Environmental Laws
60
Section 11.8
Employee Benefit Plans
60
Section 11.9
Modification of Documents
61
Section 11.10
Negative Pledges
61
Section 11.11
Transactions with Affiliates
62
Section 11.12
Upstream Limitations
62
Section 11.13
Inconsistent Agreements
62
Section 11.14
Bank Accounts
62
Section 11.15
Restriction on Subsidiaries
62
Section 11.16
Restrictions on Loans and Advances
63
Section 11.17
Line of Business
63
Section 11.18
Use of Proceeds
63
Section 11.19
Activity of the Holding Company
63
   
ARTICLE 12. FINANCIAL COVENANTS OF THE BORROWER
64
Section 12.1
Coverage Ratios
64
Section 12.2
Leverage Ratio
64
Section 12.3
Capital Expenditures
65
Section 12.4
Current Ratio
65
Section 12.5
Minimum EBITDA
65
   
ARTICLE 13. CLOSING CONDITIONS
65
Section 13.1
Loan Documents
65
Section 13.2
Senior Debt Documents
65
Section 13.3
Certified Copies of Charter Documents
66
Section 13.4
Corporate Action
66
Section 13.5
Incumbency Certificate
66
Section 13.6
Validity of Liens
66
Section 13.7
Perfection Certificates and Lien Search Results
66
Section 13.8
Certificates of Insurance
67
Section 13.9
Pro Forma Compliance
67
Section 13.10
Solvency Certificate
67
Section 13.11
Opinion of Counsel
67
Section 13.12
Disbursement Instructions
67

 
 
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Section 13.13
Payment of Fees
67
Section 13.14
Material Adverse Effect
67
Section 13.15
Consents
68
Section 13.16
[Intentionally Omitted]
68
Section 13.17
Senior Debt Payment and Documents
68
Section 13.18
Representations True; No Event of Default
68
Section 13.19
No Legal Impediment
68
Section 13.20
Governmental Regulations
68
Section 13.21
Proceedings and Documents
68
   
ARTICLE 14. [Intentionally Omitted]
69
   
ARTICLE 15. EVENTS OF DEFAULT; ACCELERATION; ETC.
69
Section 15.1
Events of Default and Acceleration
69
Section 15.2
Termination of Total Commitment
72
Section 15.3
Remedies
72
Section 15.4
Distribution of Collateral Proceeds
72
   
ARTICLE 16. SETOFF
73
   
ARTICLE 17. EXPENSES
74
   
ARTICLE 18. INDEMNIFICATION
75
   
ARTICLE 19. SURVIVAL OF COVENANTS, ETC.
75
   
ARTICLE 20. AGENT
76
Section 20.1
Appointment and Authorization of Agent
76
Section 20.2
Delegation of Duties
76
Section 20.3
Liability of the Agents
76
Section 20.4
Reliance by Agent
77
Section 20.5
Notice of Default
77
Section 20.6
Credit Decision; Disclosure of Information by Agent
78
Section 20.7
Indemnification of Agent
78
Section 20.8
Agent in its Individual Capacity
79
Section 20.9
Successor Agent
79
Section 20.10
Agent May File Proofs of Claim
80
Section 20.11
Collateral and Guaranty Matters
80
Section 20.12
Lender Pledge
81
Section 20.13
Return of Payments; Defaulting Lender
81
Section 20.14
Right to Perform, Preserve and Protect
82
Section 20.15
Amendment of Article 20
82
   
ARTICLE 21. ASSIGNMENT AND PARTICIPATION
83
Section 21.1
Conditions to Assignment by any Lender
83
Section 21.2
Participations
83

 

 
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Section 21.3
Disclosure
83
Section 21.4
Assignee or Participant Affiliated with the Borrower
83
Section 21.5
Assignment by the Borrower
84
   
ARTICLE 22. NOTICES, ETC.
84
   
ARTICLE 23. GOVERNING LAW
85
   
ARTICLE 24. HEADINGS
85
   
ARTICLE 25. COUNTERPARTS
85
   
ARTICLE 26. ENTIRE AGREEMENT, ETC.
85
   
ARTICLE 27. WAIVER OF JURY TRIAL
86
   
ARTICLE 28. CONSENTS, AMENDMENTS, WAIVERS, ETC.
86
   
ARTICLE 29. SEVERABILITY
87
   
ARTICLE 30. SUBORDINATION AGREEMENT
88

 
 
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List of Exhibits and Schedules
 
Exhibits
 
Exhibit A
 
Form of Term Note
 
Exhibit B
 
Form of Compliance Certificate
 
Exhibit C
 
Form of Assignment and Acceptance Agreement
 
Exhibit D
 
Form of Management Fees Subordination Agreement
 
Exhibit E
 
Form of Conversion Notice
 
Exhibit G
 
Form of Consulting Fees Subordination Agreement
 

 
Schedules
 
Schedule 9.3
 
Title to Property; Leases
 
Schedule 9.5
 
Material Changes
 
Schedule 9.6
 
Franchises, Patents, Copyrights, Etc.
 
Schedule 9.7
 
Litigation
 
Schedule 9.8
 
No Materially Adverse Contracts, Etc.
 
Schedule 9.9
 
Compliance with Other Instruments, Laws, Etc.
 
Schedule 9.15
 
Indemnification Agreements
 
Schedule 9.19A
 
Post-Closing Capitalization of Borrower
 
Schedule 9.19B
 
Post-Closing Capitalization of Holding Company
 
Schedule 9.20
 
Bank Accounts
 
Schedule 9.26
 
Insurance
 
Schedule 9.29
 
Licenses and Permits
 
Schedule 9.34
 
Government Contracts
 
Schedule 9.35
 
Export Licenses
 

 
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This Subordinated Loan Agreement is subject to the terms and provisions of the
Intercreditor and Subordination Agreement executed by GRANITE CREEK PARTNERS
AGENT, LLC, as Junior Agent on behalf of itself and the Junior Lenders, and TD
BANK, N.A. dated as of July 29, 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “Subordination Agreement”) and each
holder of the Loans, by its acceptance hereof, shall be bound by the provisions
of the Intercreditor and Subordination Agreement.
 
SUBORDINATED LOAN AGREEMENT
 
This SUBORDINATED LOAN AGREEMENT is made as of the 29th day of July, 2010, by
and among CYALUME TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"),
CYALUME TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (the "Holding
Company"), the Lenders and the other financial institutions or other entities
from time to time parties hereto identified on the signature pages hereto and
GRANITE CREEK PARTNERS AGENT, LLC, a Delaware limited Liability company, as
Agent.
 
Background
 
Borrower hereby requests loans from Agent and Lenders, and the parties wish to
provide for the terms and conditions upon which such loans shall be made;
 
NOW, THEREFORE, in consideration of the promises and the agreements, provisions
and covenants herein contained, the Borrower, the Holding Company and the Agent
hereby agree as follows:
 
ARTICLE 1.
DEFINITIONS AND RULES OF INTERPRETATION.
 
Section 1.1      Definitions.
 
The following terms shall have the meanings set forth in this Article 1 or
elsewhere in the provisions of this Credit Agreement referred to below:
 
Acquired EBITDA.  With respect to the twelve (12) month period following the
closing of a Permitted Acquisition, the maximum, stipulated, pro forma amount
approved by the Agent and the Lenders which can be added to actual trailing
twelve (12) month EBITDA.
 
Acquisition.  The acquisition by a Subsidiary of the Holding Company on the
Acquisition Closing Date of substantially all of the assets of the Borrower.
 
Acquisition Closing Date.  The date on which the conditions set forth in the
Purchase Agreement have been satisfied and the Acquisition has been consummated.
 
Acquisition Documents.  Collectively, the Purchase Agreement and all other
agreements and documents required to be entered into or delivered pursuant
thereto or in connection with the Acquisition, each in the form delivered to the
Agent on the Acquisition Closing Date and as amended as permitted hereunder.

 

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Adjusted EBITDA.  With respect to any period, an amount equal to EBITDA for such
period plus to the extent accounted for in EBITDA and without duplication, the
sum of (i) Acquired EBITDA and (ii) legal and professional fees related to
Permitted Acquisitions to the extent included in Consolidated Net Income.
 
Affiliate.  As applied to any Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person.  For purposes of this definition, "control" means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the ownership of Shares, by contract, or otherwise;
provided that, for purposes of Section 11.11 hereof:  (a) any Person which owns
directly or indirectly 10% or more of the securities having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person; (b) each director (or comparable manager) of a Person shall
be deemed to be an Affiliate of such Person; and (c) each partnership or joint
venture in which a Person is a partner or joint venturer shall be deemed to be
an Affiliate of such Person.
 
Agent.  Granite Agent, solely in its capacity as agent and collateral agent for
the Lenders hereunder and any other holder of Obligations, and any successor
thereto.
 
Agent Approved Subordination Agreement.  A subordination agreement in form and
substance satisfactory to the Agent, in its sole discretion, which contains such
payment, remedy blockages and standstill provisions and other such terms as the
Agent may require or may deem acceptable.
 
Agent's Head Office.  The Agent's office located at 222 West Adams Street, Suite
1980, Chicago, Illinois 60606 or such other location as the Agent may designate
from time to time.
 
Agent's Special Counsel.  Goldberg Kohn Ltd. or such other counsel as may be
approved by the Agent.
 
Anti-Terrorism Laws.  Any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.
 
Balance Sheet Date.  December 31, 2009.
 
Bankruptcy Code.  The provisions of Title 11 of the United States Code,
11 U.S.C., §§101 et seq., as now and hereafter in effect, any successors to such
statute and any other applicable insolvency or similar law of any jurisdiction
including, without limitation, any law of any jurisdiction permitting a debtor
to obtain a stay or a compromise of the claims of its creditors against it.

 
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Blocked Person.  Any Person:  (i) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224; (ii) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person
that commits, threatens or conspires to commit or supports "terrorism" as
defined in Executive Order No. 13224; or (v) a Person that is named a "specially
designated national" or "blocked person" on the most current list published by
OFAC or other similar list.
 
Borrower.  See the preamble hereto.
 
Borrower's Key Officers.  Derek Dunaway, Thomas McCarthy, Earl Cranor and
Michael Bielonko.
 
Business Day.  Any day (other than Saturday, Sunday or holiday) on which the
Agent is open and conducting its customary banking transactions in the State of
Illinois.
 
Capital Assets.  Fixed assets, both tangible (such as land, buildings, fixtures,
machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill).
 
Capital Expenditures.  For any date of determination, the aggregate amount of
payments made by the Borrower or any of its Subsidiaries for the rental, lease,
purchase, construction, or use of any property, the value or cost of which under
GAAP would appear on the Borrower's balance sheet in the category of property,
plant or equipment or intangibles, minus the sum of:  (i) expenditures made in
Permitted Acquisitions, including, without limitation, reasonable capitalized
transaction costs related thereto and approved by the Required Lenders and
(ii) capitalized transaction costs related to the obtaining and closing of the
Loans approved by the Required Lenders.
 
Capitalization Documents.  The Charter Documents of the Holding Company.
 
Capitalized Lease(s).  Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
 
CERCLA.  See Section 9.18(a).

 
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Change of Control.  The occurrence of any one of the following events:  (i) the
common stock of Holding Company is no longer publicly traded or held under the
Securities and Exchange Act of 1934; (ii) the Holding Company shall cease to own
100% of the Shares of the Borrower; (iii) there is a sale of all or
substantially all of the assets of the Borrower or (iv) any "person" or "group"
(as such terms are used in Sections 15(d) and 14(d) of the Securities Exchange
Act of 1934 becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or group shall
be deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire (such right, an "option right" whether such right
is exercisable immediately or only after the passage of time)) directly or
indirectly, of 40% or more of the equity interests of the Holding Company on a
fully diluted basis.
 
Charter Documents.  With respect to a Person which is a corporation, its
Certificate of Incorporation as amended with the consent of the Required Lenders
and in effect from time to time.
 
Chattel Paper.  All now owned or hereafter acquired right, title and interest
with respect to "chattel paper" including, without limitation, "tangible chattel
paper" and "electronic chattel paper", as such terms are defined from time to
time in the UCC and any and all supporting obligations in respect thereof.
 
Closing Date.  The first date on which the conditions set forth in Article 13
have been satisfied and the Agent and the Lenders execute and deliver this
Credit Agreement.
 
Closing Fee.  See Section 6.1.
 
Code.  The Internal Revenue Code of 1986, as amended.
 
Collateral.  All of the property, rights and interests of the Borrower and each
Guarantor that are or are intended to be subject to the security interests and
mortgages created by the Security Documents.
 
Collateral Access Agreements.  A waiver or consent in form and substance
satisfactory to the Agent executed by any lessor of Real Estate leased by
Borrower or any of its Subsidiaries at which Real Estate any Collateral is
located.
 
Collateral Assignment of Acquisition Documents.  The Subordinated Collateral
Assignment of Acquisition Documents dated or to be dated on or prior to July 29,
2010, between the Borrower and the Agent, in form and substance satisfactory to
the Agent, as may be amended, modified or supplemented from time to time.
 
Consolidated or consolidated or Consolidating or consolidating.  With reference
to any term defined herein, shall mean that term as applied to the financial
statements of the Holding Company and its Subsidiaries, consolidated or
consolidating in accordance with generally accepted accounting principles.

 
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Consolidated Net Income (or Deficit).  For any period the gross revenues of the
Borrower and its Subsidiaries on a consolidated basis during such period, less
all expenses and other proper charges (including taxes on income), all
determined in accordance with generally accepted accounting principles, but in
any event, excluding:  (i) any gain arising from any write down or write-up of
assets, except to the extent inclusion thereof shall be approved in writing by
the Required Lenders; (ii) earnings of any Subsidiary accrued prior to the date
it became a Subsidiary; (iii) the net earnings of any business entity (other
than a Subsidiary) in which the Borrower or any Subsidiary has an ownership
interest, except to the extent such net earnings shall have actually been
received by the Borrower or such Subsidiary in the form of cash distributions;
(iv) the proceeds of any life insurance policy; (v) any deferred or other credit
representing any excess of the equity of any Subsidiary at the date of
acquisition thereof over the amount invested in such Subsidiary; and (vi) any
reversal of any contingency reserve, except to the extent that provision for
such contingency reserve shall be made from income arising during such period.
 
Consolidated Total Debt Service.  For any period, the sum of:  (i) Consolidated
Total Interest Expense but excluding deferred interest not paid in the
applicable period plus (ii) all scheduled installments of principal (which shall
not include the annual mandatory prepayment of Excess Cash Flow required in
Section 5.3(e)) or other like sums payable during such period on all
Indebtedness of the Borrower and its Subsidiaries outstanding during all or any
part of such period.
 
Consolidated Total Interest Expense.  For any period, the aggregate amount of
cash interest required to be paid by the Borrower and its Subsidiaries during
such period on all Indebtedness of the Borrower and its Subsidiaries outstanding
during all or any part of such period, whether such interest was or is required
to be reflected as an item of expense or capitalized and including commitment
fees, agency fees, facility fees, and similar recurring fees in connection with
the borrowing of money.
 
Consulting Agreement.  A consulting agreement between Jarret Fass and the
Holding Company in form and substance reasonably satisfactory to the Required
Lenders, as may be amended, modified or supplemented from time to time in
accordance with the terms of this Credit Agreement, which agreement and
Consulting Fees payable thereunder have been subordinated pursuant to the
Consulting Fee Subordination Letter.
 
Consulting Fees.  All fees or compensation to be paid to Jarret Fass pursuant to
the Consulting Agreement.
 
Consulting Fee Subordination Letter.  The letter agreement between Jarret Fass
and the Agent, substantially in the form attached hereto as Exhibit G, or such
other form as is reasonably satisfactory to the Required Lenders, as may be
amended, modified or supplemented from time to time.
 
Credit Agreement.  This Subordinated Loan Agreement, including the Schedules and
Exhibits hereto, as the same may be amended, modified or supplemented from time
to time.
 
CTSA.  Cyalume Technologies, S.A.S., a corporation organized under the laws of
France and which is a Subsidiary of the Borrower.

 
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Current Assets.  As of any date of determination, all assets of the Holding
Company and its Subsidiaries which would, in accordance with generally accepted
accounting principles, be classified as current assets at such date.
 
Current Liabilities.  As of any date of determination, all liabilities of the
Holding Company and its Subsidiaries which would, in accordance with generally
accepted accounting principles, be classified as current liabilities at such
date but excluding therefrom the current maturities of long term debt but
including the outstanding Revolving Credit Loans (as defined in the Senior Loan
Agreement).
 
Current Ratio.  As of any date of determination, the ratio of:  (i) Current
Assets to (ii) Current Liabilities.
 
Default.  See Section 15.1.
 
Default Rate.  See Section 6.8.
 
Derivative Contract.  A forward contract, futures contract, swap, option or
other financing agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements), the value of which is dependent upon
interest rates, currency exchange rates, commodities or other indices and the
ISDA Master Agreement dated as of December 19, 2008 by and between TD Bank, N.A.
and the Borrower and all schedules thereto.
 
Derivative Termination Value.  In respect of any one or more Derivative
Contracts, after taking into account the effect of any legally enforceable
netting arrangement relating to such Derivative Contracts, for any date of
determination, such calculation shall be made as if such Derivative Contracts
have been closed out on such date and termination value(s) determined in
accordance therewith as if terminated on such date.
 
Distribution.  As to any Person, any of the following:  (i) the declaration or
payment of any dividend on or in respect of any Shares of the Borrower, (ii) the
purchase, redemption, or other retirement of any Shares of the Borrower,
directly or indirectly, through a Subsidiary of the Borrower or otherwise,
(iii) the return of capital by the Borrower to its owners as such; or (iv) any
other distribution on or in respect of any ownership interests of the Borrower.
 
Dollars or $.  Dollars in lawful currency of the United States of America.
 
Domestic Subsidiaries.  A Subsidiary that is organized under the laws of any
state of the United States of America.

 
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EBITDA.  With respect to any period, an amount equal to the Consolidated Net
Income of the Borrower and its Subsidiaries for such period, plus to the extent
accounted for in Consolidated Net Income during such period and without
duplication the sum of:  (i) depreciation and amortization, (ii) Consolidated
Total Interest Expense for such period, (iii) non-cash expenses, (iv) income tax
expense, (v) up to $1,500,000 in the aggregate, to be added back during the
period incurred, for the term of this Credit Agreement for the reserves or
charges for the Omniglow Litigation, (vi) extraordinary losses (net of tax
effects) approved by the Agent in writing, and (vii) up to $800,000 during the
term of this Credit Agreement to be included during the fiscal quarter in which
they are paid, fees and expenses incurred by Borrower in connection with
transactions contemplated by this Credit Agreement and the Granite Subordinated
Debt Documents (including, without limitation, any amendments, waivers,
consents, future findings and other agreements entered into in connection
herewith) determined in accordance with GAAP, in each case to be included during
the fiscal quarter in which they are paid, minus the sum of:  (a) interest and
dividend income during such period, (b) gain on the sale of assets other than
the sale of inventory in the ordinary course of business during such period,
(c) extraordinary gains during such period, and (d) any non-cash components of
income during such period.
 
EBITDA Threshold.  With respect to any period ending prior to December 31, 2011,
$7,500,000, with respect to any period ending on or after December 31, 2011 and
prior to December 31, 2012, $7,750,000, and with respect to any period ending on
or after December 31, 2012, $8,000,000.
 
Eligible Assignee.  Any of:  (i) a commercial bank or finance company or similar
institutional lender organized under the laws of the United States, or any State
thereof or the District of Columbia, and having total assets in excess of
$250,000,000; (ii) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $250,000,000; (iii) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$250,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; and (iv) if, no Default or Event of Default has occurred
and is continuing, any other bank, insurance company, commercial finance company
or other financial institution or other Person approved by the Borrower, such
approval not to be unreasonably withheld, conditioned or delayed.
 
Employee Benefit Plan.  Any employee benefit plan within the meaning of Section
(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
 
Environmental Laws.  See Section 9.18(a).
 
ERISA.  The Employee Retirement Income Security Act of 1974, as amended.
 
ERISA Affiliate.  Any Person which is treated as a single employer with the
Borrower under §414 of the Code.
 
ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension
Plan within the meaning of §4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived.

 
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Event of Default.  See Section 15.1.
 
Excess Cash Flow.  With respect to the Borrower and its Subsidiaries, for any
fiscal year of the Borrower, an amount equal to EBITDA for such fiscal year
minus Fixed Charges during such fiscal year.
 
Extraordinary Receipts.  Any proceeds that the Borrower or any of its
Subsidiaries receives not in the ordinary course of their respective businesses,
including without limitation, from (i) any casualty insurance policies
maintained by the  Borrower and/or any Subsidiary which the Agent is permitted
hereunder to apply to the repayment of the Obligations; (ii) tax refunds of the
Borrower and its Domestic Subsidiaries, (iii) pension plan reversions,
(iv) condemnation awards (and payments in lieu thereof), (v) indemnity payments
or (vi) any extraordinary gains realized by the Borrower and/or any Subsidiary.
 
Following Business Day Convention.  The convention for adjusting any relevant
date that would otherwise fall on a day that is not a Business Day so that the
date will be the first following day that is a Business Day.
 
Fixed Charge Coverage Ratio.  As of any date of determination, the ratio
of:  (i)  EBITDA for the period of the four (4) fiscal quarters then ending to
(ii) Fixed Charges for such period.
 
Fixed Charges.  For any applicable period, the sum, without duplication,
of:  (i) Consolidated Total Debt Service (other than principal payments on the
Revolving Credit Loan, as defined in the Senior Loan Agreement) plus (ii) all
income tax expenses for such period (excluding deferred income taxes) plus
(iii) all Capital Expenditures made during such period plus (iv) the amount of
all Distributions for such period plus (v) all capitalized costs associated with
the development of patents and trademarks plus (vi) the amount of all cash
payments made by Borrower to Holdings since July 1, 2010 for Permitted Holdco
Distributions.
 
Foreign Lender.  See Section 6.12(c).
 
Foreign Lender Complete Exemption Certificate.  See Section 6.12(c).
 
Foreign Subsidiary.  Any Subsidiary of the Borrower which is not a Domestic
Subsidiary.
 
General Intangible.  As applied to any Person, all now owned or hereafter
acquired right, title, and interest with respect to "general intangibles" (as
such term is defined from time to time in the UCC), and any and all supporting
obligations in respect thereof.

 
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GAAP or generally accepted accounting principles.  (i) When used in this Credit
Agreement, whether directly or indirectly through reference to a capitalized
term used therein, means (x) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(y) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (x) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (y) consistently applied with past financial
statements of the Borrower adopting the same principles; provided, that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
 
Governmental Authority.  The government of the United States of America or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
 
Granite.  Granite Creek FlexCap I, L.P., a Delaware limited partnership.
 
Granite Agent .  Granite Creek Partners Agent, LLC, a Delaware limited liability
company.
 
Guaranteed Pension Plan.  Any employee pension benefit plan within the meaning
of §3(2) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.
 
Guarantor.  The Holding Company and each Domestic Subsidiary of the Borrower now
or hereafter existing.
 
Guaranty.  The guaranty of any Guarantor in form and substance satisfactory to
the Lenders, as amended, modified or supplemented from time to time.
 
Hazardous Substances.  See Section 9.18(b).
 
Holding Company.  See the preamble hereto.
 
Indebtedness.  As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
 
(i)        every obligation of such Person for money borrowed;
 
(ii)       every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses or secured by a lien or other
encumbrance on any property of such Person;

 
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(iii)       every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person;
 
(iv)      every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith);
 
(v)       every obligation of such Person under any Capitalized Lease;
 
(vi)      every obligation of such Person under any lease (a "synthetic
lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes;
 
(vii)     all sales by such Person of:  (x) accounts or general intangibles for
money due or to become due, (y) chattel paper, instruments or documents creating
or evidencing a right to payment of money or (z) other receivables (collectively
"receivables"), whether pursuant to a purchase facility or otherwise, other than
in connection with the disposition of the business operations of such Person
relating thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties, recourse, expenses
or other amounts in connection therewith;
 
(viii)    every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock or membership interests or membership units of any class
issued by such Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants or other
similar right;
 
(ix)       every obligation of such Person under a Derivative Contract;
 
(x)        every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law; and
 
(xi)       every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise acting
as surety for, any obligation of a type described in any of clauses (i) through
(x) (the "primary obligation") of another Person (the "primary obligor"), in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (A) to purchase or pay (or advance or supply funds for
the purchase of) any security for the payment of such primary obligation, (B) to
purchase property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such primary obligation.

 
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The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by:  (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
Derivative Contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such Derivative Contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
 
Indemnified Liabilities.  See Section 18.
 
Insolvency Proceeding. Any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
 
Intercompany Agreement.  That certain Intercompany Agreement between the
Borrower and CTSA, dated as of February 26, 2007, as the same may be amended,
modified or supplemented from time to time with the prior written consent of the
Agent.
 
Inventory.  As applied to any Person, all now owned or hereafter acquired right,
title, and interest with respect to inventory, including goods held for sale or
lease or to be furnished under a contract of service, goods that are leased by
such Person as lessor, goods that are furnished by such Person under a contract
of service, and raw materials, work in process, or materials used or consumed in
the business of such Person and as such term is defined in the UCC.

 
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Investments.  All expenditures made and all liabilities incurred (contingently
or otherwise) for the acquisition of stock, membership interests or membership
units, or Indebtedness of, or for loans, advances, or capital contributions to,
or in respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person.  In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
 
Lender.  Each of:  (i) Granite, (ii) Patriot, (iii) each other Person party
hereto in its capacity as a lender, (iv) each other Eligible Assignee that
becomes a party hereto and (v) the respective successors of all of the
foregoing, and "Lenders" means all of the foregoing.
 
Loan Documents.  This Credit Agreement, the Notes, the Guaranty, the Security
Documents and each of the other documents, instruments and agreements executed
in connection therewith in favor of the Agent and/or the Lenders, as each may be
amended, modified or supplemented from time to time including, without
limitation, in connection with the execution, delivery and implementation of
this Credit Agreement.
 
Loans.  Collectively, the Term Loan.
 
Management Agreement.  A management agreement between Selway or an Affiliate
thereof and the Holding Company in form and substance reasonably satisfactory to
the Required Lenders, as may be amended, modified or supplemented from time to
time in accordance with the terms of this Credit Agreement, which agreement and
the Management Fees payable thereunder have been subordinated pursuant to the
Management Fee Subordination Letter.
 
Management Fees.  All fees or other compensation to be paid to Selway pursuant
to the Management Agreement.
 
Management Fee Subordination Letter.  The letter agreement among the Holding
Company, Selway or such Affiliate and the Agent substantially in the form
attached hereto as Exhibit D, or such other form as is reasonably satisfactory
to the Required Lenders with respect to the payment of Management Fees.
 
Mandatory Prepayments.  See Section 5.3.
 
Material Adverse Effect.  A material adverse effect on:  (a) the business
condition (financial or otherwise), operations, performance or properties, of
the Holding Company, the Borrower and the Borrower's Subsidiaries, taken as a
whole, or the Collateral, (b) the rights and remedies of the Agent under any
Loan Document, or (c) the ability of the Holding Company or any Subsidiary to
perform its or their obligations under the Loan Documents.

 
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Mortgage.  The mortgage dated July 29, 2010 between the Borrower and Agent,
pursuant to which the Borrower grants a mortgage in all of the Borrower's right,
title and interest in that certain real estate more commonly known as 96 Windsor
Street, West Springfield, Massachusetts, together with the improvements thereon.
 
Multiemployer Plan.  Any multiemployer plan within the meaning of §3(37) of
ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
 
Net Proceeds.  With respect to any proceeds of insurance or the sale, transfer
or other disposition by any Person of any group of Capital Assets (other than
Inventory in the ordinary course of business) means the amount of cash in
Dollars received by such Person from such insurance proceeds or sale or other
disposition after (i) provision for all income or other taxes of such Person
measured by or resulting from the receipt of such insurance proceeds or as a
result of such sale or other disposition, (ii) payment of all reasonable
brokerage commissions, reasonable attorney fees and other reasonable fees and
expenses related to such insurance proceeds, sale or other disposition including
the tax benefit resulting from a loss on such sale or other disposition as and
when such tax benefit is realized, (iii) deduction of such appropriate amount to
be provided by such Person as a reserve, in accordance with GAAP, against any
liabilities associated with such sale, transfer, or other disposition and
retained by such Person after such sale or other disposition, (iv) transfer
taxes, and (v) amounts payable to holders of Permitted Liens to obtain a release
of the Lien on the asset sold.
 
Notes.  The Term Notes.
 
OFAC.  The U.S. Department of Treasury Office of Foreign Assets Control.
 
OFAC Lists.  Collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.
 
Obligations.  All indebtedness, obligations and liabilities of the Holding
Company, the Borrower and the Borrower's Subsidiaries to the Lenders,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made incurred or any of the Notes, or other
instruments at any time evidencing any thereof.

 
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Omniglow Litigation.  That certain litigation between the Borrower and Omniglow
LLC, as more particularly described on Schedule 1.1 hereto, wherein Omniglow LLC
was awarded $827,942.25 plus certain costs.
 
Outstanding.  With respect to the Loans, the aggregate unpaid principal thereof
as of any date of determination.
 
Patriot.  Patriot Capital II, L.P., a Delaware limited partnership.
 
PBGC.  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and
any successor entity or entities having similar responsibilities.
 
Perfection Certificate.  The Perfection Questionnaire as defined in the Security
Agreement.
 
Permitted Acquisitions.  Acquisitions of a business in the national security or
homeland security industries approved by the Required Lenders in writing.
 
Permitted Acquisition Indebtedness.  Indebtedness incurred (other than
hereunder) or assumed in connection with a Permitted Acquisition approved by the
Required Lenders in writing and all of the documents, instruments or agreements
evidencing, or with respect to the payment of, any Permitted Acquisition
Indebtedness are subject to an Agent Approved Subordination Agreement; provided,
that, no Default or Event of Default has occurred and is continuing at the time
such Permitted Acquisition Indebtedness is incurred or assumed.
 
Permitted Holdco Distributions.  See Section 11.4(vi).
 
Permitted Liens.  Liens, security interests and other encumbrances permitted by
Section 11.2.
 
Person.  Any individual, corporation, partnership, trust, unincorporated
association, business, limited liability company or other legal entity, and any
government or any governmental agency or political subdivision thereof.
 
Pledge Agreement.  The Subordinated Stock Pledge Agreement dated July 29, 2010,
between the Holding Company and the Agent, pursuant to which the Holding Company
pledges to the Agent all of the Shares of the Borrower, in form and substance
satisfactory to the Lenders, as may be amended, modified or supplemented from
time to time.
 
Pro Rata Share.  the Term Loan Commitment Percentage of such Term Loan Lender.
 
Purchase Agreement.  That certain Stock Purchase Agreement dated February 14,
2008, as amended, among the Holding Company, the Borrower, Cyalume Acquisition
Corp. and GMS Acquisition Partners Holdings, LLC.

 
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Real Estate.  All real property owned or leased (as lessee or sublessee) by the
Borrower or any of its Subsidiaries.
 
Record.  The grid attached to a Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Agent with
respect to any Loan referred to in such Note.
 
Regulatory Problem:  Any transaction, circumstance or situation whereby (i) any
Person and such Person's Affiliates would own, control or have power over a
greater quantity of securities of any kind issued by any Borrower or Guarantor
than are permitted under any requirement of the SBA or any other Governmental
Authority, or (ii) any Governmental Authority has asserted (or such Person
believes that there is a risk of such assertion) that such Person and its
Affiliates are not entitled to hold, or exercise any significant right with
respect to, the common stock of any Borrower or Guarantor held by such Person,
including without limitation the existence of any other set of facts or
circumstances wherein it has been asserted by any governmental regulatory agency
(or Agent reasonably believe that there is a substantial risk of such assertion)
that any Lender and its Affiliates are not entitled to hold, or exercise any
significant right with respect to, any securities issued in exchange or
conversion thereof.
 
 Regulatory Violation:  With respect to any SBIC Holder providing Financing
(within the meaning of the SBIC Regulations) under this Credit Agreement, (i) a
diversion of the proceeds of such Financing from the reported use thereof on SBA
Form 1031 delivered in connection with the transactions contemplated hereunder
to occur on the Closing Date, if such diversion was effected without obtaining
the prior written consent of the SBIC Holders (which may be withheld in their
sole discretion) or (ii) a change in the principal business activity of
Holdings, Borrower or any of their Subsidiaries to an ineligible business
activity (within the meaning of the SBIC Regulations).
 
Rental Obligations.  All present or future obligations of the Borrower or any of
its Subsidiaries under any rental agreements or leases of real or personal
property, other than:  (a) obligations that can be terminated by the giving of
notice without liability to the Borrower or such Subsidiary in excess of the
liability for rent due as of the date on which such notice is given and under
which no penalty or premium is paid as a result of any such termination, and
(b) obligations in respect of Capitalized Leases.
 
Required Lenders.  Lenders holding an aggregate Pro Rata Share of the
outstanding principal balance of the Loans in an amount equal to or in excess of
51% of the total outstanding principal balance of the Loans.
 
Restricted Payment.  As to the Borrower and its Subsidiaries, each of the
following: (i) any Distribution, (ii) any loan, advance or other payment to the
holders of any Shares of the Borrower (which payments shall not include salaries
or reasonable compensation paid to any such holder other than to a Borrower Key
Officer pursuant to such holder's employment arrangement with the Borrower, such
employment arrangement to be approved by the board of directors of the
Borrower) or to any Affiliate of Borrower, or to any Guarantor, (iii) any
payment of any compensation, management fee or expense, investment banking fee
or similar amount to any Affiliate of the Borrower, (iv) any payment under the
Purchase Agreement after the Closing Date, or (v) any payment to the holders of
any Subordinated Debt except in accordance with the Agent Approved Subordination
Agreement applicable thereto.

 
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SBA:  The U.S. Small Business Administration or any successor agency.
 
SBIC:  A small business investment company licensed under the SBIC Act.
 
SBIC Act:  The Small Business Investment Act of 1958, as amended and the
regulations promulgated thereunder.
 
SBIC Holders:  Granite and Patriot, each of which is an SBIC.
 
SBIC Regulations:  The Small Business Investment Company Act of 1958, as
amended, and the regulations issued by the SBA thereunder, codified as Title 13
of the Code of Federal Regulations, 107 and 121, as amended.
 
SCP Holders.  Each of Winston J. Churchill, Yaron Eitan, Thomas J. Rebar and
Wayne B. Weisman, as holders of the SCP Subordinated Notes, their successors,
assigns, heirs, executors and administrators.
 
SCP Partners.  A general partnership consisting of, inter alia, Winston J.
Churchill, Yaron Eitan, Thomas J. Rebar and Wayne B. Weisman.
 
SCP Subordinated Notes.  Those amended and restated unsecured subordinated
promissory notes each dated as of the Closing Date, in the original principal
amounts and held by the respective SCP Holder as follows:  $800,000 held by
Winston J. Churchill, $100,000 held by Thomas J. Rebar and $100,000 held by
Wayne B. Weisman, each in form and substance satisfactory to the Agent.
 
Selway.  Selway Management, Inc., a Delaware corporation which is an Affiliate
of SCP Partners.
 
Security Agreement(s).  The Subordinated Security and Pledge Agreement(s), dated
July 29, 2010, between the Borrower and each of its Subsidiaries and each
Guarantor and the Agent, pursuant to which the Borrower and each of its
Subsidiaries and each Guarantor grants a security interest in all of its
tangible and intangible personal property, in form and substance satisfactory to
the Lenders, as may be amended, modified or supplemented from time to time.
 
Security Documents.  The Security Agreements, the Collateral Assignment of
Acquisition Documents, the Pledge Agreement, the Collateral Access Agreements,
the Mortgage, the Collateral Assignment of Leases and all other security
agreements between the Agent and any Subsidiary of the Holding Company and any
Guarantor.

 
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Seller.  GMS Acquisition Partners Holdings, LLC, a Delaware limited liability
company.
 
Seller Notes.  Those certain subordinate promissory notes payable to a seller in
a Permitted Acquisition executed in connection with a Permitted Acquisition,
which are in form and substance satisfactory to the Agent, which are subject to
and the holder of such notes shall have executed and delivered, an Agent
Approved Subordination Agreement.
 
Senior Debt.  The “Senior Debt” as defined in the Subordination Agreement.
 
Senior Debt Documents.  The “Senior Loan Documents” as defined in the
Subordination Agreement.
 
Senior Funded Debt.  Shall mean all of:
 
(i)         Indebtedness in respect of borrowed money other than the
Subordinated Debt and the Loans;
 
(ii)        Indebtedness in respect of Capitalized Lease Obligations;
 
(iii)       Indebtedness in respect of the deferred purchase price of assets
(other than normal trade accounts payable in the ordinary cause of business);
 
(iv)       Indebtedness in respect of unfunded pension liabilities;
 
(v)        Any guaranties or any agreement having the economic affect of
guarantying or otherwise acting as a surety for any of the foregoing (i) through
(iv) in any manner, whether directly or indirectly, and including, without
limitation, any obligation (A) to purchase or pay (or advance or supply funds
for the purchase of) any security for the payment of such primary obligation,
(B) to purchase property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor to pay such primary obligation;
 
(vi)       For purposes of calculating the financial covenants in Article
12, Indebtedness in the amount of the aggregate Derivative Termination Value of
all Derivative Contracts under which the Agent is not the counterparty; and
 
(vii)      Indebtedness (other than the Loans) incurred at the time of, or
within 20 days after, the acquisition of fixed assets for the purpose of
financing all or any part of the acquisition cost thereof.
 
Senior Leverage Ratio.  As of any date of determination, the ratio
of:  (i) Senior Funded Debt of the Borrower and its Subsidiaries on a
consolidated basis as of any date of determination to (ii) Adjusted EBITDA of
the Borrower and its Subsidiaries on a consolidated basis for the period of the
four (4) consecutive quarters then ended.

 
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Senior Loan Agreement.  The Amended and Restated Revolving Credit and Term Loan
Agreement dated as of the date hereof by and among Borrower, Guarantor, TD Bank,
N.A., as agent (the “Senior Agent”) and a lender, and the additional lenders
from time to time party thereto.
 
Services Agreement.  That certain Services Agreement between the Borrower and
CTSA, dated as of January 1, 2007, as the same may be amended, modified or
supplemented from time to time with the prior written approval of the Agent.
 
Shares.  With respect to the Borrower, the Holding Company or any other Person,
any and all shares of capital stock or other shares, interests, participations
or other equivalents (however designated of any class) in the capital of or
other ownership interests therein.
 
Subordinated Debt.  The Indebtedness of the Borrower that is expressly
subordinated and made junior to the payment and performance in full of all of
the Obligations, and is either (x) evidenced by any Seller Notes, (y) Permitted
Acquisition Indebtedness or any other indebtedness approved by the Agent and the
Lenders in their sole and absolute discretion subordinated to the obligations
pursuant to an Agent Approved Subordination Agreement or (z) is evidenced by the
SCP Subordinated Notes.
 
Subordinated Debt Documents.  Collectively: any Seller Notes, any notes
evidencing any other Subordinated Debt, and the Agent Approved Subordination
Agreements relating thereto.
 
Subordination Agreement.  See preamble hereto.
 
Subsidiary.  Any corporation, limited liability company, association, trust or
other business entity of which the Holding Company shall at any time own
directly or indirectly through a subsidiary or subsidiaries at least a majority
(by number of votes) of the outstanding Voting Stock.
 
Term Note.  See Section 2.2(a).
 
Term Loan.  The term loan in the aggregate principal amount of $8,500,000 to be
made severally by the Term Loan Lenders to the Borrower.
 
Term Loan Commitment Percentage.  As to any Term Loan Lender, the percentage set
forth opposite such Term Loan Lender's name on the Commitment Annex under the
column "Term Loan Commitment Percentage" (if such Lender's name is not so set
forth thereon, then, on the Closing Date, such percentage for such Term Loan
Lender shall be deemed to be zero).
 
Term Loan Lenders.  All Lenders committed to make, subject to the terms and
conditions herein contained, Term Loan advances hereunder.

 
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Term Loan Maturity Date.  March 19, 2014, unless sooner occurring following
acceleration.
 
Term Notes.  Collectively, the Term Note(s).
 
Total Debt Service.  For any applicable period, the sum of (i) Consolidated
Total Interest Expense plus (ii) all scheduled installments of principal or
other like sums payable during such period by the Borrower and its Subsidiaries
in respect of Indebtedness.
 
Total Debt Service Coverage Ratio.  As of any date of determination, the ratio
of:  (i) EBITDA for the period of the two (2) fiscal quarters then ending
(including deductions for any Restricted Payments during such period) to
(ii) Consolidated Total Debt Service for such period.
 
Total Funded Debt.  Shall mean:
 
(i)         all Senior Funded Debt and the Loans;
 
(ii)        all Subordinated Debt; and
 
(iii)       (without duplication) any guaranties or any agreement having the
economic affect of guarantying or otherwise acting as a surety for any of the
foregoing (i) and (ii) in any manner, whether directly or indirectly, and
including, without limitation, any obligation (A) to purchase or pay (or advance
or supply funds for the purchase of) any security for the payment of such
primary obligation, (B) to purchase property, securities or services for the
purpose of assuring the payment of such primary obligation, or (C) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor to pay such primary obligation.
 
Total Leverage Ratio.  As at any date of determination, the ratio of (a) Total
Funded Debt of the Borrower and its Subsidiaries on a consolidated basis to (b)
Adjusted EBITDA of the Borrower and its Subsidiaries on a consolidated basis for
the period of the four (4) consecutive quarters then ended.
 
Uniform Commercial Code.  The Uniform Commercial Code as in effect on the date
hereof in the State of Illinois, as may be amended from time to time.
 
Voting Stock.  Shares or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
 
Warrants.  Collectively:  the Warrant to Purchase Common Stock of Cyalume
Technologies Holdings, Inc. dated as of the date hereof issued by Holding
Company in favor of Granite and the Warrant to Purchase Common Stock of Cyalume
Technologies Holdings, Inc. dated as of the date hereof issued by Holding
Company in favor of Patriot, in each case, as may be amended, modified or
supplemented from time to time.

 
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Wholly Owned Subsidiary.  With respect to any Subsidiary, one hundred percent
(100%) of the Shares of such Subsidiary are owned directly by the Holding
Company.
 
Section 1.2       Rules of Interpretation.
 
(a)        A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
 
(b)        The singular includes the plural and the plural includes the
singular.
 
(c)        A reference to any law includes any amendment or modification to such
law.
 
(d)        A reference to any Person includes its permitted successors and
permitted assigns.
 
(e)        Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
 
(f)         The words "include", "includes" and "including" are not limiting.
 
(g)        All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the State of Illinois, have the meanings assigned to them therein,
with the term "instrument" being that defined under Article 9 of the Uniform
Commercial Code.
 
(h)        Reference to a particular "Section" refers to that section of this
Credit Agreement unless otherwise indicated.
 
(i)         The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
 
(j)         Unless otherwise expressly indicated, in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."
 
(k)        This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters.  All such limitations, tests and measurements are, however, cumulative
and are to be performed in accordance with the terms thereof.

 
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(l)         This Credit Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the
Lenders and the Borrower and are the product of discussions and negotiations
among all parties.  Accordingly, this Credit Agreement and the other Loan
Documents are not intended to be construed against the Lenders merely on account
of the Agent's involvement in the preparation of such documents.
 
(m)       Reference to a "schedule" in Article 9 hereof shall be deemed to
include updates of such schedule or the information disclosed thereon which
update may be provided in writing from the Borrower to the Agent in accordance
with Article 22 hereof.
 
(n)       Reference to a statute or regulation in this Credit Agreement shall
mean such statute or regulation and any statute or regulation which is enacted
in replacement or substitution thereof or as a successor thereto.
 
ARTICLE 2.
TERM LOANS.
 
Section 2.1      Term Loan; Commitment to Lend.
 
Subject to the terms and conditions set forth in this Credit Agreement, each
Term Loan Lender severally agrees to lend to the Borrower on the date hereof a
term loan equal to such Term Loan Lender's Term Loan Commitment Percentage of
the Term Loan.  Once repaid, the Term Loan may not be reborrowed.
 
Section 2.2      The Term Notes.
 
The Term Loan made by each Term Loan Lender is evidenced by a promissory note of
the Borrower in favor of such Term Loan Lender, in substantially the form of
Exhibit A hereto (the "Term Loan Note") in the amount of such Term Loan Lender's
Term Loan Commitment Percentage dated as of the Closing Date.
 
ARTICLE 3.
CONVERSION
 
Each Lender may at any time, on a single occasion, convert the entire unpaid
principal balance of the Loans held by such Lender (a “Converting Lender”) at
such time of conversion into common stock of the Holding Company at a conversion
price of $3.19 per share (the “Conversion Price”).  Any such conversion shall be
effected by notice from such Converting Lender to the Borrower and the Holding
Company in the form attached hereto as Exhibit E.  Promptly after receipt of the
foregoing notice, the Holding Company shall issue and deliver to such Converting
Lender certificates for the number of shares of stock issuable upon such
conversion. Such conversion shall be deemed to have been effected as of the
opening of business on the date the Borrower and the Holding Company receives
such notice or such conversion is deemed to occur as provided above. Upon any
such conversion, all accrued and unpaid interest owed to such Converting Lender
shall be paid in full in cash.

 
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If, after the date hereof, the Holding Company effects a stock dividend, stock
split, combination or similar transaction on its common stock, the Conversion
Price in effect immediately prior to such action shall be adjusted so that the
Lenders shall be entitled to receive the amount of common stock of the Holding
Company it would have owned immediately following such action had the Loans been
converted in full immediately prior thereto.
 
ARTICLE 4.
[Intentionally Omitted].
 
ARTICLE 5.
REPAYMENT OF LOANS.
 
Section 5.1      Maturity Date.
 
The Borrower promises to pay, in addition to interest thereon, all outstanding
principal of the Term Loan on the Term Loan Maturity Date.
 
Section 5.2      Optional Prepayments.
 
Subject to the terms of the Subordination Agreement, the Borrower may, at any
time or from time to time, subject to also making the payments required under
this Section 5.2, prepay any Loan in whole or in part, in the minimum amount of
$100,000 (or the remainder if less).  Such notice of prepayment shall specify
the date and amount of such prepayment and the Loan being prepaid.  If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
prepayment amount specified in such notice shall be due and payable on the date
specified therein, together, with accrued interest to each such date on the
amount prepaid.  
 
Section 5.3      Mandatory Prepayments.
 
Subject to the terms of the Subordination Agreement, the Borrower shall be
required to make prepayments of (x) first, the Senior Debt until paid in full
and (y) thereafter, the Loans as set forth below (each a "Mandatory
Prepayment"), such payments being due and payable on the date on which any
amount described below is received by the Borrower or the Borrower is entitled
to receive cash payments therefor to be applied first to the Senior Debt and
then to the Loans:
 
(a)           an amount equal to 100% of the Net Proceeds received by the
Borrower or any of its Subsidiaries from the sale or other disposition of any of
its Capital Assets, except for (i) sales of inventory in the ordinary course of
business or (ii) sales of any assets no longer used or useful in the conduct of
such business, provided, with respect to clause (ii) immediately preceding, that
no Default or Event of Default then exists or would exist after giving effect to
such use of Net Proceeds, the value of such assets does not exceed $500,000 in
any fiscal year, the Borrower or such Subsidiary uses the cash proceeds of any
such sale to purchase replacement or other equipment within 120 days of such
sale, and such sales are at fair market value;

 
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(b)           subject to Section 11.1, an amount equal to 100% of the proceeds
received by the Guarantor or any of its Subsidiaries (i) from the incurrence of
any Indebtedness for borrowed money other than borrowings permitted hereunder
and (ii) from the issuance of any Shares of the Guarantor or any of its
Subsidiaries (referred to herein, collectively, as “New Equity”), in each case,
excluding reasonable fees and expenses incurred by such Person relating to the
incurrence of such Indebtedness or issuance of such Shares;
 
(c)           an amount equal to 100% of the Net Proceeds received by the
Borrower or any of its Subsidiaries as insurance proceeds or condemnation
awards, other than insurance proceeds or condemnation awards not in excess of an
aggregate amount of $500,000 in respect of loss or damage to equipment,
Inventory, fixed assets or real property to the extent such cash proceeds are
applied to replace or repair the equipment, Inventory, fixed assets or real
property in respect of which such proceeds were received, so long as such
application is made within one hundred and twenty (120) days after the
occurrence of such loss, damage, or condemnation;
 
(d)           subject to Borrower’s obligation to make payments in accordance
with  Section 11.4(v), an amount equal to 100% of all Extraordinary Receipts
received by the Holding Company or any of its Subsidiaries; and
 
(e)           commencing with a payment on June 1, 2012 and on each June 1 of
each year thereafter, an amount equal to 60% of Excess Cash Flow for the
immediately preceding fiscal year of the Borrower.
 
Section 5.4      Loan Payments Settlement.
 
(a)           Payments of principal, interest and fees in respect of the Loans
will be settled on the date of receipt if received by Agent on the first
Business Day of a month or on the Business Day immediately following the date of
receipt if received on any day other than the first Business Day of a month.
 
(b)           Any amounts required to be paid under Section 5.3 shall be applied
to the prepayment of the Loans pro rata in accordance with each Lender's Pro
Rata Share of such Loan.
 
ARTICLE 6.
CERTAIN GENERAL PROVISIONS.
 
Section 6.1      Closing Fee.
 
The Borrower will pay to the Agent for the benefit of the Lenders on the Closing
Date a closing fee (the "Closing Fee") in the amount of Two Hundred Fifty-Five
Thousand Dollars ($255,000).  The Closing Fee shall be deemed fully earned on
the Closing Date and shall not be subject to rebate or return, in whole or in
part under any circumstances.

 
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Section 6.2      Interest on Loans.
 
(a)           Unless an Event of Default shall have occurred and the Default
Rate applies, the outstanding principal of the Loans shall bear interest at
eleven percent (11%) per annum.
 
(b)           The Borrower promises to pay interest on the outstanding amount of
each of the Loans, in arrears, on the first day of each calendar month
commencing with the payment to be made on September 1, 2010 (subject to the
Following Business Day Convention).
 
Section 6.3      Funds for Payments.
 
(a)           All payments of principal, interest, fees and any other amounts
due hereunder or under any of the other Loan Documents shall be made to the
Agent at the Agent's Head Office, in each case in immediately available funds.
 
(b)           All payments by the Borrower hereunder and under any of the other
Loan Documents to or for the account of any Lender or the Agent hereunder or
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such deduction
or withholding.  If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Agent for the benefit of the Lenders on
the date on which such amount is due and payable hereunder or under such other
Loan Document, such additional amount in Dollars as shall be necessary to enable
each Lender to receive the same net amount which such Lender would have received
on such due date had no such obligation been imposed upon the Borrower.
 
Section 6.4      Computations.
 
All computations of interest on the Loans and of other fees to the extent
applicable shall be based on a 360-day year and paid for the actual number of
days elapsed.  Whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension.

 
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Section 6.5      Additional Costs, Etc.
 
If any present or future applicable law, which expression, as used herein,
includes statutes, rules and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Lender by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law), shall:
 
(a)           subject any Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Credit Agreement or
the other Loan Documents (other than taxes based upon or measured by the income
or profits of a Lender or taxes in lieu thereof), or
 
(b)           materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to any Lender under this
Credit Agreement or the other Loan Documents, or
 
(c)           impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or commitments of an office of a
Lender, or
 
(d)           impose on any Lender any other conditions or requirements with
respect to this Credit Agreement, the other Loan Documents, the Loans, or any
class of loans or commitments of which any of the Loans forms a part;
 
and the result of any of the foregoing is:
 
(i)          to increase the cost to such Lender of making, funding, issuing,
renewing, extending or maintaining any of the Loans, or
 
(ii)         to reduce the amount of principal, interest or other amount payable
to such Lender hereunder on account of any of the Loans, or
 
(iii)        to require such Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender from the Borrower hereunder,
 
then, and in each such case, the Borrower will, upon demand made by such
Lender at any time and from time to time and as often as the occasion therefor
may arise, pay to such Lender such additional amounts as will be sufficient to
compensate such Lender for such additional cost, reduction, payment or foregone
interest or other sum.  Such Lender shall allocate such cost increases among its
customers in good faith and on an equitable basis.

 
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Section 6.6      Capital Adequacy.
 
If any present or future law, governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law) or the interpretation
thereof by a court or Governmental Authority with appropriate jurisdiction
affects the amount of capital required or expected to be maintained by any
Lender or any corporation controlling any Lender determines that the amount of
capital required to be maintained by it is increased by or based upon the
existence of such Loans made or deemed to be made pursuant hereto, then such
Lender may notify the Borrower of such fact, and the Borrower shall pay to such
Lender from time to time on demand, as an additional fee payable hereunder, such
amount as such Lender shall determine in good faith and certify in a notice to
the Borrower to be an amount that will adequately compensate such Lender in
light of these circumstances for its increased costs of maintaining such
capital.  Such Lender shall allocate such cost increases among its customers in
good faith and on an equitable basis.
 
Section 6.7      Certificate.
 
A certificate setting forth any additional amounts payable pursuant to Sections
6.5 or 6.6 and a brief explanation of such amounts which are due, submitted by
such Lender to the Borrower, shall be prima facie evidence that such amounts are
due and owing.
 
Section 6.8      Interest Following Event of Default.
 
After the occurrence of any Event of Default set forth in clause (a), (b), (g)
or (h) of Section 15.1 which is continuing, the outstanding principal of the
Loan shall bear interest payable on demand at a rate ("Default Rate") per annum
equal to fifteen percent (15%) per annum.  The imposition of the Default Rate
shall not cure any such Event of Default
 
Section 6.9      [Intentionally Omitted]
 
Section 6.10    [Intentionally Omitted]
 
Section 6.11    [Intentionally Omitted]

 
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Section 6.12     Taxes.
 
(a)           Unless otherwise required by a taxing authority, all payments of
principal and interest on the Loans and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present or future
excise, stamp, documentary or property taxes and other taxes, fees, duties,
levies, assessments, withholdings or other charges of any nature whatsoever
(including interest and penalties thereon) imposed by any taxing authority,
excluding taxes imposed on or measured by the Agent's or any Lender's net income
or revenue by any jurisdiction under which the Agent or such Lender is organized
or conducts business (all non-excluded items being called "Taxes").  If any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, then the
Borrower will:  (i) pay directly to the relevant Governmental Authority the full
amount required to be so withheld or deducted; (ii) promptly forward to the
Agent an official receipt or other documentation satisfactory to the Agent
evidencing such payment to such Governmental Authority; and (iii) pay to the
Agent for the account of the Agent and the Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually received by the
Agent and each Lender will equal the full amount the Agent and such Lender would
have received had no such withholding or deduction been required.  If any Taxes
are directly asserted against the Agent or any Lender with respect to any
payment received by the Agent or such Lender hereunder, the Agent or such Lender
may pay such Taxes and Borrower will promptly pay such additional amounts
(including any penalty, interest or expense, other than as a result of delay by
the Agent or a Lender) as is necessary in order that the net amount received by
such Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person would have received had
such Taxes not been asserted so long as such amounts have accrued on or after
the day which is ninety (90) days prior to the date on which the Agent or such
Lender first made demand therefor; provided, that the foregoing obligation to
pay such additional amounts shall not apply:  (i) to any payment to a Lender
that fails to comply with Section 6.12(c), or (ii) to any Taxes imposed by
reason of the voluntary change by a Lender of the jurisdiction to which such
Lender is subject from the United States to a jurisdiction outside the United
States.
 
(b)           If Borrower fails to pay any Taxes when due to the appropriate
Governmental Authority or fails to remit to the Agent, for the account of the
Agent and the respective Lenders, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and each Lender for
any incremental Taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure.
 
(c)           Each Lender, assignee and participant that is a U.S. person as
defined in Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Agent, and if applicable, the assigning Lender (or, in the case of a
participant, to the Lender from which the related participation shall have been
purchased) on or before the date on which it becomes a party to this Credit
Agreement (or, in the case of a participant, on or before the date on which such
participant purchases the related participation), two duly completed and signed
copies of Internal Revenue Service Form W-9.  Each Lender, assignee and
participant that is not a U.S. person as defined in Section 7701(a)(30) of the
Code (a "Foreign Lender") shall deliver to the Borrower and the Agent, and if
applicable, the assigning Lender (or, in the case of a participant, to the
Lender from which the related participation shall have been purchased) on or
before the date on which it becomes a party to this Credit Agreement (or, in the
case of a participant, on or before the date on which such participant purchases
the related participation) either:
 
(i)            two duly completed and signed copies of any of Internal Revenue
Service Form W-8ECI, Form W-BEN (with respect to a complete exemption under any
income tax treaty) or Form W-8IMY or successor and related applicable forms, as
the case may be, certifying to such Lender's entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
to be made under this Credit Agreement (or successor forms), or
 
 
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(ii)           in the case of a Foreign Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with the
requirements of clause (A) hereof, (x) a statement in form and content
reasonably acceptable to Agent and Borrower to the effect that such Foreign
Lender is eligible for a complete exemption from withholding of U.S. Taxes under
Code section 871(h) or 881(c) (a "Foreign Lender Complete Exemption
Certificate"), and (y) two duly completed and signed copies of Internal Revenue
Service Form W-8BEN or successor and related applicable form.
 
Further, each Foreign Lender agrees (i) to deliver to the Borrower and the
Agent, and if applicable, the assigning Lender (or, in the case of a
participant, to the Lender from which the related participation shall have been
purchased), two further duly completed and signed copies of the applicable Form
W-8 or successor and related applicable forms or certificates, on or before the
date that any such form or certificate, as the case may be, expires or becomes
obsolete and promptly after the occurrence of any event requiring a change from
the most recent form(s) or certificate(s) previously delivered by it to the
Borrower (or, in the case of participant, to the Lender from which the related
participation shall have been purchased) in accordance with applicable U.S. laws
and regulations, (ii) in the case of a Foreign Lender that delivers a Foreign
Lender Complete Exemption Certificate, to deliver to the Borrower and the Agent,
and if applicable, the assigning Lender, such statement on an annual basis on
the anniversary of the date on which such Foreign Lender became a party to this
Credit Agreement and to deliver promptly to the Borrower and the Agent, and if
applicable, the assigning Lender, such additional statements and forms as shall
be reasonably requested by the Borrower from time to time, and (iii) to notify
promptly the Borrower and the Agent (or, in the case of Participant, the Lender
from which the related participation shall have been purchased) if it is no
longer able to deliver, or if it is required to withdraw or cancel, any form or
certificate previously delivered by it pursuant to this Section 6.12(c).  The
Borrower shall not be required to pay additional amounts to any Lender pursuant
to this Section 6.12 with respect to United States withholding and income Taxes
to the extent that the obligation to pay such additional amounts would not have
arisen but for the failure of such Lender to comply with this paragraph other
than as a result of a change in law.
 
Section 6.13     General Obligations.
 
All extensions of credit by any Lender to the Borrower under the Term Notes and
all other Obligations to the Agent and the Lenders under this Credit Agreement
and any of the Loan Documents shall constitute one general obligation secured by
the security interest in all of the Collateral and by all other security
interests, liens, claims, and encumbrances heretofore, now, or at any time or
times hereafter granted by the Borrower and its Subsidiaries to the Agent and
the Lenders.  The Borrower agrees that all of the rights of the Agent and the
Lenders set forth in this Credit Agreement shall apply to any modification of or
supplement to this Credit Agreement, any supplements or exhibits hereto, and
other agreements, unless otherwise agreed in writing.
 
 
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Section 6.14     Replacement of Lender Due to Increased Costs.
 
Anything contained herein to the contrary notwithstanding, in the event
that:  (a) (i) any Lender (an "Increased Cost Lender") shall give notice to the
Borrower that such Lender is entitled to receive payments under Section 6.5, the
Borrower may, at its option, so long as no Default or no Event of Default has
occurred and is continuing, notify such Increased Cost Lender and the Agent of
its intention to obtain, at the Borrower's expense, a replacement lender
("Increased Cost Replacement Lender") for such Increased Cost Lender, which
Increased Cost Replacement Lender must be reasonably satisfactory to the
Agent.  In the event the Borrower obtains an Increased Cost Replacement Lender
within ninety (90) days following notice of its intention to do so, Increased
Cost Lender shall sell, at par, its interest in the Loans, the Obligations
related thereto and its rights hereunder as a Lender arising from and after the
date of such sale (but not its rights and liabilities in respect thereof or
under this Credit Agreement and the other Loan Documents for obligations,
indemnities and other matters arising or matters occurring before the date of
such sale) shall terminate on the date of such sale, and Increased Cost Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest.  Upon any such sale and payment, such replaced Increased
Cost Lender shall no longer constitute a "Lender" for purposes hereof, other
than with respect to such rights and obligations that survive termination as set
forth herein.  Without in any manner limiting the remedies of the Lenders, the
obligations of an Increased Cost Lender to sell and assign its Pro Rata Share
under this Section 6.14 shall be specifically enforceable by the Borrower, by an
action brought in any court of competent jurisdiction for such purpose, it being
acknowledged and agreed that, in light of the disruption in the administration
of the Loans and the other terms of the Loan Documents that an Increased Cost
Lender may cause, damages and other remedies at law are not adequate.
 
ARTICLE 7.
[Intentionally Omitted]
 
ARTICLE 8.
COLLATERAL SECURITY.
 
The Obligations shall be secured by a perfected second priority security
interest (subject only to the Liens securing the Senior Debt and the other
Permitted Liens and only to a 65% pledge of all of the equity interests in CTSA
and any other Foreign Subsidiary now owned or hereafter formed or acquired) in
favor of the Agent for the benefit of the Lenders, in all of the assets
(including, without limitation, in all Real Property) of the Borrower and its
Domestic Subsidiaries, whether now owned or hereafter formed or acquired
pursuant to the terms of the Security Documents to which the Borrower and its
Domestic Subsidiaries, are a party and, by a guaranty of the Holding Company and
a pledge by the Holding Company of all of the Shares of the Borrower each in
favor of the Agent for the benefit of the Lenders.
 
 
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ARTICLE 9.
REPRESENTATIONS AND WARRANTIES.
 
In order to induce the Lenders to enter into this Credit Agreement and to make
Loans, the Holding Company, the Borrower and each of the Borrower's Subsidiaries
a party hereto represents and warrants to the Agent and to each of the Lenders
as follows:
 
Section 9.1       Corporate Authority.
 
(a)           The Holding Company, the Borrower and each of the Borrower's
Subsidiaries:  (i) is a company duly organized, validly existing and in good
standing under the laws of its state of organization, (ii) has all requisite
power to own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing as a foreign company and
is duly authorized to do business in each jurisdiction in which the nature of
the business conducted therein or the property owned by it therein makes such
qualification necessary except where a failure to be so qualified or in good
standing would not have or could not reasonably be expected to have a Material
Adverse Effect.
 
(b)           The execution, delivery and performance of this Credit Agreement
and the other Loan Documents to which the Holding Company or any of its
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby:  (i) are within the corporate authority of such Person, (ii) have
been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Holding Company or any of its
Subsidiaries is subject or any judgment, order, writ, injunction, license or
permit applicable to the Holding Company or any of its Subsidiaries except where
such conflict, breach or contravention does not have, or could not reasonably be
expected to have, a Material Adverse Effect and (iv) do not conflict with any
provision of (A) the Charter Documents, (B) the Capitalization Documents or
(C) any other instrument binding upon the Holding Company or any of its
Subsidiaries except, in the case of this clause C only, where such conflicts
could not reasonably be expected to have a Material Adverse Effect..
 
(c)           The execution and delivery of this Credit Agreement and the other
Loan Documents to which the Holding Company or any of its Subsidiaries is or is
to become a party will result in valid and legally binding obligations of such
Person enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights or by general equitable
principles and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
 
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Section 9.2       Governmental Approvals.
 

The execution, delivery and performance by the Holding Company and any of its
Subsidiaries of this Credit Agreement, the other Loan Documents or the
Capitalization Documents to which the Holding Company or any of its Subsidiaries
is or is to become a party and the transactions contemplated hereby and thereby
do not require the approval or consent of, or filing with, any Governmental
Authority other than those already obtained.
 
Section 9.3       Title to Properties; Leases.
 
Except as indicated on Schedule 9.3 hereto, the Holding Company and each of its
Subsidiaries own all of the assets reflected in the balance sheet of the Holding
Company and its Subsidiaries as at the Balance Sheet Date or acquired since that
date (except property and assets sold or otherwise disposed of in the ordinary
course of business since that date or disposed of in accordance with the terms
and conditions of this Credit Agreement), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
 
Section 9.4       Financial Statements and Projections.
 
(a)           The Borrower has furnished to the Agent an audited balance sheet
of the Holding Company and its Subsidiaries as at the Balance Sheet Date, and a
statement of income of the Holding Company and its Subsidiaries, on a
consolidated basis, for the fiscal year ended on December 31, 2009, and a
related statement of cash flows as of such date as audited by its accountant,
CCR, LLP.  Such balance sheet, statement of income and statement of cash flows
have been prepared in accordance with generally accepted accounting principles
and fairly present, in all material respects, the financial condition of the
Holding Company and its Subsidiaries as at the close of business on the date
thereof and the results of operations for the period then ended (subject to the
lack of footnotes and year-end adjustments).  To the knowledge of the Borrower,
there are no contingent liabilities of the Holding Company and its Subsidiaries
as of such date involving material amounts, which were not disclosed in such
balance sheet and the notes related thereto other than (a) liabilities incurred
in the ordinary course of business since the Balance Sheet Date and
(b) executory obligations under contracts which are not required to be disclosed
in such financial statements in accordance with GAAP.  The Borrower has also
furnished to the Agent an unaudited, balance sheet of the Borrower, as at April
30, 2010 and a statement of income of the Holding Company and its Subsidiaries
on a consolidated basis, for the period and a related statement of cash flows as
of such date, all prepared in good faith and such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Holding Company and its Subsidiaries as of such
date and for such periods in accordance with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes and other than (a) liabilities
incurred in the ordinary course of business since the Balance Sheet Date and
(b) executory obligations under contracts which are not required to be disclosed
in such financial statements in accordance with GAAP.  To the knowledge of the
Borrower, except as fully reflected in such financial statements, there are no
material liabilities or obligations with respect to the Holding Company or any
of its Subsidiaries on a consolidated basis, of any nature whatsoever (whether
absolute, contingent or otherwise and whether or not due).
 
 
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(b)           The projections of the annual operating budgets of the Borrower
and its Subsidiaries on a consolidated basis, balance sheets and cash flow
statements through the Borrower's fiscal year ending December 31, 2013, copies
of which the Borrower has delivered to the Agent, disclose all material
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections.  To the knowledge of the
Borrower, no facts exist that (individually or in the aggregate) would result in
any material change in any of such projections.  The projections are based upon
reasonable estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the results
of operations and other information projected therein.  The projections
delivered to Agent are not guarantees of performance and the failure to achieve
any such projections shall not by itself constitute an Event of Default.
 
Section 9.5       No Material Changes, Etc.
 
Except as set forth on Schedule 9.5, since the Balance Sheet Date there has
occurred no Material Adverse Effect (assuming the financial condition and
business of the Borrower would have been the same as the Borrower at such time)
from the financial condition shown on or reflected in the balance sheet of the
Holding Company and its Subsidiaries on a consolidated basis,  as at the Balance
Sheet Date, or from the statement of income for the fiscal year then ended,
other than changes in the ordinary course of business that have not had any
Material Adverse Effect, the occurrence of which has not been waived in writing
by the Required Lenders.  Since the Closing Date, neither the Borrower nor any
of its Subsidiaries has made any Distribution other than a Distribution
permitted pursuant to this Credit Agreement.
 
Section 9.6       Franchises, Patents, Copyrights, Etc.
 
The Borrower and its Subsidiaries owns or licenses all franchises, patents,
copyrights, trademarks, trade names, licenses, rights under distribution
agreements and permits, and rights in respect of the foregoing adequate for the
conduct of its business substantially as conducted on the Closing Date.  All of
such franchises, patents, copyrights, trademarks, tradenames, licenses, rights
under distribution agreements or permits which are material are listed on
Schedule 9.6, and to the knowledge of the Borrower and its Subsidiaries, the use
thereof by the Borrower or any of its Subsidiaries does not conflict with or
infringe upon the rights of others and all of any such licenses are in full
force and effect.
 
Section 9.7       Litigation.
 
There are no actions, suits, proceedings or investigations of any kind pending
or, to Borrower's knowledge, threatened against the Holding Company or any of
its Subsidiaries before any court, tribunal or administrative agency or board or
other Governmental Authority that, if adversely determined, might reasonably be
expected, either in any case or in the aggregate, to have a Material Adverse
Effect, or which question the validity of this Credit Agreement or any of the
other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.  Schedule 9.7 hereto, as the same may be updated pursuant to notices
given under Section 10.5(d), lists all material actions, suits, proceedings, or
investigations of any kind pending against the Holding Company or any of its
Subsidiaries.
 
 
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Section 9.8       No Materially Adverse Contracts, Etc.
 
Neither the Holding Company nor any of its Subsidiaries are subject to any
Charter Document or other legal restrictions, or any judgment, decree, order,
rule or regulation that has or is reasonably expected to have a Material Adverse
Effect in the future.  Other than those contracts or agreements listed on
Schedule 9.8, in the judgment of the Borrower, none of the Holding Company or
any of its Subsidiaries is a party to any contract or agreement which, if
terminated by a party thereto, would have or could reasonably be expected to
have a Material Adverse Effect.
 
Section 9.9       Compliance with Other Instruments, Laws, Etc.
 
None of the Holding Company or any of its Subsidiaries is in violation of any
provision of its or their Charter Documents, bylaws or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that has, or could
reasonably be expected to have, a Material Adverse Effect.  Schedule 9.9
accurately and completely lists each material agreement, contract and instrument
and each material license, consent, permit and other federal, state or local
authorization which are in effect in connection with the conduct of the business
of Holding Company and its Subsidiaries on the date hereof.  Except as listed on
Schedule 9.9, the Holding Company and its Subsidiaries, and to Borrower's
knowledge, all other parties to such material agreements, contracts or
instruments are in material compliance with the terms thereof, and no default or
event of default by any party thereto exists thereunder.  The Borrower and its
Subsidiaries are in material compliance, with such governmental consents,
permits and authorizations.  The Holding Company and each of its Subsidiaries
have provided true, accurate and complete copies of each material agreement,
contracts or instruments listed on Schedule 9.9 together with any and all
amendments thereto in each case as in effect on the date hereof.
 
Section 9.10     Tax Status.
 
The Holding Company, the Borrower and each of the Borrower's
Subsidiaries:  (a) have made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which any
of them is subject or any legal extensions therefor with the appropriate
Governmental Authority, (b) have paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith, diligently and by
appropriate proceedings, (c) have set aside on their books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply in accordance with GAAP and
(d) have no lien filed therefor on any assets of the Holding Company, the
Borrower or any of the Borrower’s Subsidiaries.  There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the Borrower's Key Officers know of no basis for any such
claim.
 
 
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Section 9.11     No Event of Default.
 
No Default or Event of Default has occurred and is continuing.
 
Section 9.12     Holding Company and Investment Company Acts.
 
Neither the Holding Company nor any of its Subsidiaries is a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is it an "investment company", or an "affiliate
company" or a "principal underwriter" of an "investment company", as such terms
are defined in the Investment Company Act of 1940.
 
Section 9.13     Absence of Financing Statements, Etc.
 
Except with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice of any present or possible future lien
on, or security interest in, any assets or property of the Holding Company, the
Borrower or any of the Borrower's Subsidiaries or any rights relating thereto.
 
Section 9.14     Perfection of Security Interest.
 
All filings, assignments, pledges and deposits of documents or instruments have
been made or are being made and all other actions have been taken or are being
taken that are necessary or advisable, under applicable law, to establish and
perfect the Agent's security interest in the Collateral.  The Collateral and the
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses.
 
Section 9.15     Certain Transactions.
 
Except (a) as otherwise permitted under Section 11.11 and (b) the Management
Agreement, none of the officers, directors, employees or Affiliates of the
Holding Company or any of its Subsidiaries is presently a party to any
transaction with the Holding Company or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any Affiliate or employee has a substantial
interest or is an officer, director trustee or partner.  Except as set forth on
Schedule 9.15, neither Borrower nor any Guarantor has indemnified any other
Person under any contract, agreement or arrangement providing for the furnishing
of services or goods to such Person by Borrower or such Guarantor.
 
 
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Section 9.16     Employee Benefit Plans.
 
(a)           Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions.
 
(b)           Under each Employee Benefit Plan which is an employee welfare
benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA, no benefits are
due unless the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA).  The Borrower or
an ERISA Affiliate, as appropriate, may terminate each such Plan at any time (or
at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower or such ERISA Affiliate without
liability to any Person.
 
(c)           Each contribution required to be made to a Guaranteed Pension
Plan, whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of §302(f) or ERISA, or
otherwise, has been timely made.  No waiver of an accumulated funding deficiency
or extension of amortization periods has been received with respect to any
Guaranteed Pension Plan. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the Borrower or any
ERISA Affiliate with respect to any Guaranteed Pension Plan and there has not
been any ERISA Reportable Event, or any other event or condition which presents
a material risk of termination of any Guaranteed Pension Plan by the
PBGC.  Based on the latest valuation of each Guaranteed Pension Plan (which in
each case occurred within twelve months of the date of this representation), and
on the actuarial methods and assumptions employed for that valuation, the
aggregate benefit liabilities of all such Guaranteed Pension Plans within the
meaning of §4001 of ERISA did not exceed the aggregate value of the assets of
all such Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities, by more than $100,000.
 
(d)           Neither the Borrower nor any ERISA Affiliate has incurred any
material liability (including secondary liability) to any Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan under
§4201 of ERISA or as a result of a sale of assets described in §4204 of
ERISA.  Neither the Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of §4241 or §4245 of ERISA or that any Multiemployer Plan intends to
terminate or has been terminated under §4041A of ERISA.
 
Section 9.17     Regulations T, X and U.
 
No portion of any Loan is to be used for the purpose of purchasing or carrying
any "margin security" or "margin stock" or for any other purpose which might
cause any of the Loans to be considered a "purpose credit" as such terms are
used in Regulations T, U and X of the Board of Governors of the Federal Reserve
System.
 
 
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Section 9.18     Environmental Compliance.
 
Each of the Holding Company, the Borrower and the Borrower's Subsidiaries has
made reasonable inquiry into the past and present condition and usage of the
Real Estate and the operations conducted thereon:
 
(a)           none of the Holding Company, the Borrower or the Borrower's
Subsidiaries or, to Borrower's knowledge, any operator of the Real Estate or any
operations thereon is in violation, or alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"), which
violation would have, or could reasonably be expected to have, a Material
Adverse Effect;
 
(b)           neither the Holding Company, the Borrower nor any of the
Borrower's Subsidiaries has received written notice from any third party
including, without limitation: any federal, state or local Governmental
Authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. §9601(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any
pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any one of
them has generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has conducted or has
ordered that any of the Holding Company, the Borrower or any of the Borrower's
Subsidiaries conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind whatsoever
in connection with the release of Hazardous Substances;
 
 
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(c)           (i) no portion of the Real Estate has been used by the Borrower
for the handling, processing, storage or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws: and no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate except in accordance with applicable Environmental
Laws; (ii) in the course of any activities conducted by the Borrower or any of
its Subsidiaries or its operators of its properties, no Hazardous Substances
have been generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws in all material respects; (iii) there have
been no releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances on, upon,
into or from the properties of the Holding Company or its Subsidiaries by the
Holding Company, the Borrower or any of its Subsidiaries or, any other Person,
which releases could reasonably be expected to have a Material Adverse Effect;
(iv) to the Borrower's knowledge, there have been no releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to be located on the Real
Estate, and which could reasonably be expected to have a Material Adverse
Effect; and (v) in addition, any Hazardous Substances that have been generated
on any of the Real Estate have, to the Borrower's knowledge, been transported
offsite only by carriers having an identification number issued by the EPA,
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental Laws; and
 
(d)           neither the Borrower nor any of the Borrower's Subsidiaries or any
of the  Real Estate is subject to any applicable Environmental Law that at the
time of making this representation requires them to perform Hazardous Substances
site assessments, or to remove or remediate Hazardous Substances, or to give
notice to any Governmental Authority or to record or deliver to other Persons
any environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the recording of
any mortgage or to the effectiveness of any other transactions contemplated
hereby.
 
Section 9.19     Ownership; Subsidiaries, Etc.
 
On the Closing Date, the Holding Company has a Wholly Owned Subsidiary which is
the Borrower and the Borrower has no Subsidiaries other than CTSA.  As of the
Closing Date, the authorized, issued and outstanding Shares of the Borrower is
as set forth on Schedule 9.19A which also lists the number of Shares or
interests owned of record or beneficially by any Person on a fully diluted basis
and the name of owners of more than five percent (5%) of the outstanding Shares
and of the officers and directors thereof.  As of the Closing Date, the
authorized, issued and outstanding shares of the Holding Company is as set forth
on Schedule 9.19B which also lists the number of Shares or interests owned of
record or beneficially by any Person that owns five percent (5%) or more of the
Holding Company on a fully diluted basis and the name of such owner.  All of
such outstanding Shares are duly authorized, validly issued, fully paid and
nonassessable and are free and clear of all liens.  Except as listed on Schedule
9.19A, the Borrower has not issued any securities convertible into, or options
or warrants for, any common or preferred Shares and there are no agreements,
voting trusts or understandings binding upon the Holding Company or Borrower or
affecting in any manner, the sale, pledge, assignment or other disposition
thereof, including any right of first refusal, option, redemption, call or other
right with respect thereto.
 
 
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Section 9.20     Bank Accounts.
 
Schedule 9.20, as updated in writing and delivered to the Agent from time to
time in accordance with Article 22, sets forth the account numbers and location
of all bank accounts of the Borrower and each of its Subsidiaries.
 
Section 9.21     Chief Executive Offices.
 
The Holding Company's and the Borrower's chief executive office is located at
which location its books and records are kept.
 
Section 9.22     Fiscal Year.
 
The Holding Company and its Subsidiaries have a fiscal year which is the twelve
(12) months ending on December 31 of each year.
 
Section 9.23     No Amendments to Certain Documents.
 
Except for amendments effectuated prior to or on the Closing Date, neither the
Borrower nor the Holding Company has amended the Purchase Agreement, any Seller
Note, the SCP Subordinated Notes, or the Management Agreement.  Each of the
representations and warranties made by the Holding Company and the Borrower in
any of the Loan Documents or the Subordinated Debt Documents was true and
correct in all material respects when made and continues to be true and correct
in all material respects on and as of the Closing Date, except to the extent
that any of such representations and warranties relate, by the express terms
thereof, solely to a date falling prior to the Closing Date, and except to the
extent that any of such representations and warranties may have been affected by
the consummation of the transactions contemplated and permitted or required by
the Loan Documents.
 
Section 9.24     Disclosure.
 
No representation or warranty made by the Holding Company or any of its
Subsidiaries in this Credit Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Agent or any of the Lenders by
or on behalf of the Holding Company or any of its Subsidiaries in connection
with any of the transactions contemplated by any of the Loan Documents contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which they are made.  There is no existing
condition known to the Holding Company or any of its Subsidiaries which is
reasonably likely in the future to cause a Material Adverse Effect.
 
 
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Section 9.25     [Intentionally Omitted].
 
Section 9.26     Insurance.
 
The Borrower and each of its Subsidiaries maintains with financially sound and
reputable insurers insurance with respect to its properties and businesses
against such casualties and contingencies as are in accordance with sound
business practices, with the details of such coverage being more fully described
on Schedule 9.26, as updated in writing and delivered to the Agent from time to
time in accordance with Article 22.
 
Section 9.27     Foreign Assets Control Regulation, Etc.
 
Neither the making of the Loans nor the incurrence of the Indebtedness evidenced
thereby nor the Holding Company's nor any of its Subsidiaries use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or any Anti-Terrorism
Laws.  Without limiting the foregoing, neither the Holding Company nor any of
its Subsidiaries:  (a) is, or will become, a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of Executive Order No. 13,244 of
September 24, 2001, Blocking Property and Prohibiting Transactions with Persons
Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079
(2001), as amended, or (b) engages or will engage in any dealings or
transactions, or is or will be otherwise associated, with any such Person.  The
Holding Company and its Subsidiaries are in compliance, in all material
respects, with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of
2001, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.  No part of the proceeds from the Loans
will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the Borrower and its Subsidiaries.
 
Section 9.28     [Intentionally Omitted]
 
Section 9.29     Licenses and Permits.
 
The Borrower holds all licenses, permits, authorizations, certifications,
accreditations, provider agreements and associated provider numbers
(collectively, the "Licenses") issued by a Governmental Authority or other
organization which are material to the Borrower to operate its business, and
which are capable of being issued at this time and each of the Licenses is
listed on Schedule 9.29 attached hereto.  The Borrower is in material compliance
with the Licenses, except where failure to be in compliance could not reasonably
be expected to have a Material Adverse Effect.  All Licenses which have been
issued are in full force and effect.  The Borrower does not know of any
threatened suspension, revocation or invalidation of any of the Licenses, or any
basis therefore.
 
 
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Section 9.30     SBA License Application and Related Requirements
 
Borrower hereby acknowledges that each of Granite and Patriot is a SBIC pursuant
to the SBIC Act.  Borrower acknowledges that compliance by Borrower with the
terms of this Credit Agreement and the representations, warranties and covenants
contained herein are necessary for Granite and Patriot to be in compliance under
the SBIC Act and Borrower agrees to comply with the terms of this Credit
Agreement for such purpose.
 
Section 9.31     Small Business Administration Documentation.
 
The information regarding Borrower set forth in the SBA Form 480, Form 652,
Parts A and B of Form 1031 and the Use of Proceeds Statement (as defined below)
is accurate and complete in all material respects.  Each SBIC Holder
acknowledges that Borrower completed, executed and delivered to Granite SBA
Forms 480, 652 and 1031 (Parts A and B) together with a business plan showing
Borrower's financial projections (including balance sheets and income and cash
flows statements) for the period described therein and a written statement
(whether included in this Credit Agreement or pursuant to a separate statement)
from Borrower regarding its use of proceeds from the Loans or Warrants to
Lenders (the "Use of Proceeds Statement").
 
Section 9.32     Small Business Concern.
 
Each of Borrower and each Guarantor, together with its "affiliates" (as that
term is defined in Title 13, Code of Federal Regulations, § 121.103), is a
"small business concern" within the meaning of the SBIC Act, including, without
limitation, Title 13, Code of Federal Regulations, § 121.301 and each of
Borrower and such Guarantor does not presently engage in, and does not intend to
engage in, any activities, nor does such Borrower intend to use, directly or
indirectly, the proceeds of the Loans or Warrants for any purpose for which a
licensee under the SBIC Act is prohibited from providing funds by the SBIC Act
(including Title 13, Code of Federal Regulations, § 107.720).
 
Section 9.33     Product Liability.
 
All of Borrower’s and Guarantors’ products are non-toxic and do not contain any
Hazardous Substances.
 
Section 9.34     Government Contracts.
 
(i)           Schedule 9.34 lists all Government Contracts, and Schedule
9.34 lists all Government Bids.  “Government Contract” means any contract
that:  (a) is between the Borrower or a Guarantor and a U.S. or other
governmental entity, or is entered into by the Borrower as a subcontractor (at
any tier) in connection with a contract between another entity and a U.S. or
other governmental entity; and (b) for which final payment to the Borrower was
not made prior to the Closing Date.  “Government Bid” means any offer to sell
made by the Borrower prior to the Closing Date which, if accepted, would result
in a Government Contract.
 
 
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(ii)           Except as set forth in Schedule 9.34, none of Borrower, any
Guarantor nor any director, officer, agent, employee (whether full time or
contract) or other Person acting on behalf of Borrower or any Guarantor has, in
the course of its actions for, or on behalf of, Borrower or such Guarantor: (a)
used or authorized the use of any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to commercial or
political activity; (b) offered, made or authorized any direct or indirect
unlawful payment to any foreign or domestic government official or employee
(whether full time or contract); or (c) offered, made or authorized any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee (whether full time or
contract).
 
(iii)          With respect to each Government Contract or Government Bid to
which Borrower or such Guarantor is a party:
 
(A)           Borrower and each Guarantor has complied with all terms and
conditions of such Government Contract or Government Bid, including all clauses,
provisions and requirements incorporated expressly, by reference or by operation
of law therein, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect;
 
(B)            All representations and certifications executed, acknowledged or
set forth in or pertaining to such Government Contract or Government Bid were,
to the knowledge of the Borrower, complete and correct in all material respects
as of their effective date;
 
(C)           Neither the United States Government nor any prime contractor,
subcontractor or other Person has notified Borrower or any Guarantor, either in
writing or, to the knowledge of Borrower or such Guarantor, verbally, that
Borrower or such Guarantor has breached or violated any law, regulation,
certification, representation, clause, provision or requirement pertaining to
such Government Contract or Government Bid;
 
(D)           No cure notice or show cause notice is currently in effect
pertaining to such Government Contract, and such Government Contract was not
terminated for default or convenience;
 
(E)            No material cost incurred by Borrower or any Guarantor pertaining
to such Government Contract or Government Bid has been formally questioned or
challenged, is the subject of any investigation or has been disallowed by the
United States Government, and no material amount due to Borrower or any
Guarantor pertaining to such Government Contract or Government Bid has been
withheld or set-off nor has any claim been made to withhold or set-off money;
 
 
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(F)            Neither Borrower or any Guarantor has received any written
adverse or negative assessment of its performance under any Government Contract
during the last three years;
 
(G)            Borrower’s and each Guarantor’s cost accounting system complies
with the Cost Accounting Standards (as defined in the Federal Acquisition
Regulations, 48 C.F.R. Chapter 99) to the extent required by such Government
Contract, and during the past three years, Borrower’s and each Guarantor’s bids
or proposals for such Government Contract complied with the Truth in
Negotiations Act;
 
(H)           Borrower and each Guarantor is in compliance with, and maintains
controls sufficient to monitor compliance with, all Qualified Products Lists and
Qualified Manufacturer Lists applicable to the products and production
facilities of Borrower or such Guarantor; and
 
(I)             Borrower and each Guarantor is in compliance with, and maintains
controls sufficient to monitor compliance with, the Buy American Act (as
implemented in the Federal Acquisition Regulations, 48 C.F.R. Part 25), and any
domestic preference applicable to such Government Contract, including without
limitation, a preference for domestic specialty metals.
 
(iv)          Except as set forth in Schedule 9.34:  (a) neither Borrower nor
any Guarantor nor any of the Borrower’s or Guarantors’ employees is, or during
the last three years has been, under administrative, civil or criminal
investigation or audit (other than routine inquiries, audits and
reconciliations) by the United States Government, or is the subject of any
internal audit by Borrower or such Guarantor, with respect to any alleged
material irregularity, misstatement or omission arising under or relating to any
Government Contract or Government Bid; (b) during the last three years, neither
Borrower nor any Guarantor has conducted or initiated any material internal
investigation or made a voluntary disclosure to the United States Government
with respect to any alleged irregularity, misstatement or omission arising under
or relating to a Government Contract or Government Bid and neither Borrower nor
any Guarantor is currently subject to any Administrative Agreement relating to a
Government Contract or Government Bid; (c) during the last three years, neither
Borrower nor any Guarantor nor any of Borrower’s or such Guarantor’s employees
has been suspended or debarred from doing business with the United States
Government, has been proposed for suspension or debarment, or has been the
subject of a finding of non-responsibility on a Government Bid; and (d) during
the last three years, neither Borrower nor any Guarantor nor any of Borrower’s
or such Guarantor’s employees has been named as a defendant in any proceeding
brought under the False Claims Act.  To the knowledge of Borrower, there exist
no facts or circumstances that would warrant the institution of suspension or
debarment proceedings or the finding of non-responsibility on the part of
Borrower or any Guarantor or any of Borrower’s or such Guarantor’s employees.
 
 
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(v)           To the knowledge of the Borrower, except as set forth in Schedule
9.34, there exist: (a) no outstanding material claims against Borrower or any
Guarantor either by the United States Government or by any prime contractor,
subcontractor, vendor or other Person, arising under or relating to any
Government Contract or Government Bid; and (b) no material disputes between
Borrower or any Guarantor and the United States Government under the Contract
Disputes Act or between Borrower or any Guarantor and any prime contractor,
subcontractor or vendor arising under or relating to any Government Contract or
Government Bid.
 
(vi)          Except for the security interest granted to Agent and liens
granted to secure the Senior Debt, neither Borrower nor any Guarantor has
assigned or otherwise conveyed or transferred, or agreed to assign, to any
Person, any Government Contract, or any account receivable relating thereto.
 
Section 9.35     Export Licenses and Compliance.
 
(i)            Except as set forth in Schedule 9.35, Borrower and each Guarantor
conducts, and has at all times during the past three years conducted, its export
and reexport transactions in all material respects in accordance with all
applicable U.S. export and reexport controls, including the United States Export
Administration Act and Export Administration Regulations, the Arms Export
Control Act and International Traffic in Arms Regulations and all regulations
promulgated and administered by the Treasury Department’s Office of Foreign
Assets Control (collectively “U.S. Export Controls”).
 
(ii)           Except as set forth in Schedule 9.35, neither Borrower nor any
Guarantor has received any written notification or communication (or, to the
knowledge of the Borrower, any oral notification or communication) from any
Governmental Authority asserting that Borrower or any Guarantor is not in
compliance, in any material respect, with any U.S. Export Controls.
 
(iii)          Except as set forth in Schedule 9.35, Borrower and each Guarantor
has or has applied for all permits, registrations, licenses, certifications and
other approvals (collectively, the “Permits”) from Governmental Authorities
which are required under U.S. Export Controls in order for Borrower or such
Guarantor to conduct its business as presently conducted and which, if not
possessed, would be material to the operations of Borrower or such Guarantor,
considered together.  To the Borrower’s knowledge, (i) all such issued Permits
are valid and in full force and effect and (ii) there is no formal proceeding
pending by a, nor has Borrower or any Guarantor received a written notice from
any Governmental Authority seeking or threatening to, modify, suspend, revoke,
withdraw, terminate or otherwise limit any such Permit.
 
(iv)          Schedule 9.35 lists all material export, re-export or
transshipment licenses, pending license applications, authorizations and
approved manufacturing license agreements or technical assistance agreements
which are held by Borrower or any Guarantor as of the date of this Credit
Agreement.
 
(v)           Except as set forth in Schedule 9.35, during the last three years,
neither Borrower nor any Guarantor has in any material respect disclosed,
disseminated or released to a foreign national in the United States technology
or technical data in a manner that required Borrower or such Guarantor to obtain
a license for deemed export from the United States of America without obtaining
such license.
 
 
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(vi)          Except as set forth in Schedule 9.35, there have been no voluntary
self disclosures made by Borrower or any Guarantor to the U.S. Department of
State's Directorate of Defense Trade Controls, the U.S. Department of Commerce's
Bureau of Industry and Security, or the U.S. Department of Treasury’s Office of
Foreign Assets Control with respect to any exports, imports or other
transactions by Borrower or any Guarantor in the last three years.
 
(vii)         To the knowledge of the Borrower, neither Borrower nor any
Guarantor has participated directly or indirectly in any export, import or other
transactions with a person or entity denied U.S. export privileges or otherwise
specially designated or debarred from exporting or receiving exported products,
software, technology or services by the United States Government, except as
authorized by applicable Law or Permit.
 
ARTICLE 10.
AFFIRMATIVE COVENANTS OF THE BORROWER.
 
The Holding Company, the Borrower and each of the Borrower's Subsidiaries that
become a party to this Credit Agreement from time to time covenant and agree
that, so long as any Loan, or Note is outstanding or the Agent or any Lender has
any obligation to make any Loans and any and all other amounts payable under the
Loan Documents have been paid in full in cash:
 
Section 10.1     Punctual Payment.
 
The Borrower will duly and punctually pay or cause to be paid the principal and
interest on the Loans, and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which the Holding Company or any of
its Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
 
Section 10.2     Maintenance of Office.
 
The Borrower will maintain its chief executive office at the location described
in Section 9.21, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
 
Section 10.3     Records and Accounts.
 
The Holding Company and its Subsidiaries will:  (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles and
(b) maintain adequate accounts and reserves for all taxes (including income
taxes), depreciation, depletion, obsolescence and amortization of its
properties, contingencies, and other reserves.
 
 
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Section 10.4     Financial Statements, Certificates and Information.
 
The Borrower will deliver to the Agent and each of the Lenders:
 
(a)           as soon as practicable, but in any event not later than one
hundred twenty (120) days after the end of each fiscal year of the Holding
Company and its Subsidiaries, commencing with the fiscal year ending December
31, 2010, and thereafter, the audited consolidated balance sheet of the Holding
Company and its Subsidiaries and the consolidating balance sheet of the Holding
Company and its Subsidiaries, each as at the end of such year, and the related
consolidated statement of the income and consolidated statement of operations,
stockholders' equity and cash flow and consolidating statement of income and
consolidating statement of cash flow for such year, setting forth in comparative
form the figures for the previous fiscal year and all such consolidated and
consolidating statements to be in reasonable detail, in each case prepared in
accordance with generally accepted accounting principles, and for all such
statements, certified without qualification by CCR LLP or by other independent
certified public accountants reasonably satisfactory to the Agent and the
Required Lenders, together with an opinion of such accountant to the effect that
such financial statements present fairly in all material respects the financial
condition and results of operations of the Holding Company and its Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied and that
the audit by such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards and a written
statement from such accountants to the effect that they have read a copy of this
Credit Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default under Article 12 hereof, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default under Article 12,
they shall disclose in such statement any such Default or Event of Default;
 
(b)           as soon as practicable, but in any event not later than forty-five
(45) days after the end of each fiscal quarter of the Borrower commencing with
the fiscal quarter ending September 30, 2010, copies of the unaudited
consolidated balance sheet of the Holding Company and its Subsidiaries and the
unaudited consolidating balance sheet of the Borrower and its Subsidiaries, each
as at the end of such fiscal quarter, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with a
certification by one of the Borrower's Key Officers that the information
contained in such financial statements fairly presents in all material respects
the financial position of the Holding Company and its Subsidiaries on the date
thereof (subject to the lack of footnotes and year-end adjustments);
 
 
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(c)           simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower, in substantially the
form of Exhibit B hereto, and setting forth in reasonable
detail:  (i) computations evidencing compliance with the covenants contained in
Article 12 and (if applicable) reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date, together with
supporting documentation used in such calculations or determinations, as the
case may be, and a comparison to:  (x) the Borrower's results obtained in such
applicable period during the preceding fiscal year and (y) the budget which was
delivered to the Lenders for the then current fiscal year;
 
(d)           as soon as practicable, but in any event not later than thirty
(30) days after the end of each calendar month, commencing with the month ending
June 30, 2010, copies of the unaudited consolidated balance sheet of the Holding
Company and its Subsidiaries and the unaudited consolidating balance sheet of
the Holding Company and its Subsidiaries, each as at the end of such calendar
month, the related consolidating statement of income and consolidating statement
of cash flow for the portion of the Borrower's fiscal year then elapsed, and a
comparison to the results obtained in the preceding fiscal year and to the
budget which was delivered to the Lenders for the then current fiscal year, all
in reasonable detail and prepared in accordance with generally accepted
accounting principals together with a certification by one of the Borrower's Key
Officers that the information contained in such financial statements fairly
presents in all material respects the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments and the lack
of footnotes);
 
(e)           contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower or the Holding Company,
as the case may be;
 
(f)            by not later than fifteen (15) days after the end of each
calendar month: (i) an accounts receivable aging and (ii) Inventory reports in
form satisfactory to the Agent;
 
(g)           as soon as practicable, but in any event not later than December
31 of each fiscal year of the Borrower, projections of the Holding Company and
its Subsidiaries updating those projections delivered to the Lenders and
referred to in Section 9.4(b) or, if applicable, updating any later such
projections delivered in response to a request pursuant to this Section
10.4(g) and a proposed annual detailed business operating budget for the next
succeeding fiscal year prepared on a monthly basis which shall set forth, in
detail reasonably satisfactory to the Required Lenders, the assumptions
underlying such business operating budget; and
 
(h)           from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Lender may
reasonably request.
 
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Section 10.5     Notices.
 

(a)           The Borrower will promptly notify the Agent and each of the
Lenders in writing of the occurrence of any Default or Event of Default of which
it becomes aware.  If any Person shall give any notice or take any other action
in respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note or other evidence of
Indebtedness, evidencing an obligation in excess of $100,000, to which or with
respect to which it  or any of its Subsidiaries is a party or obligor, whether
as principal, guarantor, surety or otherwise, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Lenders, describing the
notice or action and the nature of the claimed default.
 
(b)           The Borrower will promptly notify the Agent and each of the
Lenders in writing:  (i) of any violation of any Environmental Law that it or
any of its Subsidiaries reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and (ii) upon becoming
aware thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental liability, or any
federal, state or local environmental agency or board, that can reasonably be
expected to materially and adversely affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Subsidiaries, or security
interests or priority thereof pursuant to the Security Documents.
 
(c)           The Borrower will, promptly upon becoming aware thereof, notify
the Agent and each of the Lenders in writing of any setoff, claims (including,
with respect to the Real Estate, environmental claims), withholdings or other
defenses to which any of the Collateral, or the Agent's rights with respect to
the Collateral, are subject.
 
(d)           The Holding Company and the Borrower will, and will cause each of
the Borrower's Subsidiaries to, give notice to the Agent and each of the Lenders
in writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Holding Company, the Borrower or any of the Borrower's
Subsidiaries or to which the Holding Company, the Borrower or any of the
Borrower's Subsidiaries is or becomes a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect and stating the nature and status of
such litigation or proceedings.  The Holding Company will, and will cause each
of its Subsidiaries to, give notice to the Agent and each of the Lenders in
writing, in form and detail satisfactory to the Required Lenders, within ten
(10) days of any judgment not covered by insurance, final or otherwise, against
the Holding Company, the Borrower or any of the Borrower's Subsidiaries in an
amount in excess of $100,000.
 
(e)           The Borrower will promptly upon receipt thereof, deliver to the
Agent and each of the Lenders copies of all audit reports and management
letters, if any, submitted to the Holding Company or to the Borrower by its
accountants and copies of all financial statements, material reports, material
notices and proxy statements sent by or on behalf of the Holding Company or the
Borrower to its stockholders.
 
(f)           The Holding Company and the Borrower will simultaneously with the
issuance thereof, and immediately upon the receipt thereof by or on behalf of
the Holding Company or the Borrower, as applicable, deliver to the Agent and
each of the Lenders copies of all reports, covenant compliance certificates,
budgets, projections, requests for waivers, notices of default, requests for
amendments or other correspondence issued in connection with or relating to the
Subordinated Debt Documents.
 
 
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(g)          The Borrower will promptly notify the Agent and each of the Lenders
in writing upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any Governmental
Authority of any violation of any laws or any action, pending or threatened
regarding any Licenses that can reasonably be expected to have a Material
Adverse Effect.
 
(h)          The Borrower will promptly notify the Agent in writing upon a
Borrower Key Officer ceasing to be involved on a full time basis in the day to
day management and operations of the business of the Borrower.
 
(i)           The Borrower will within five (5) days of its receipt thereof,
deliver to the Agent a copy of any material notice, document, survey results,
report or other written communication from any Governmental Authority delivered
in connection with any inspection, License renewal or other site visit
including, without limitation, all survey results.
 
(j)           The Borrower will deliver to the Agent written notice of its
intention (i) to prepay all or any portion of the Loans no less than sixty (60)
days prior to making such prepayment, and (ii) to prepay the Senior Debt in full
not less than ten (10) days prior to making such payment.
 
Section 10.6     Legal Existence; Maintenance of Properties.
 
The Holding Company will do and will cause each of the Borrower and the
Borrower's Subsidiaries to do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence, rights, and
franchises.  The Holding Company:  (a) will cause all of its properties used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order, consistent with
past practice, in all material respects, ordinary wear and tear excepted, and
supplied with all necessary equipment, (b) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Holding Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all time consistent with past practices, and (c) will, and will cause each of
its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses.
 
Section 10.7     Insurance.
 
The Borrower will, and will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be in
accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such period as may be reasonable and prudent and in
accordance with the terms of the Security Agreement.
 
 
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Section 10.8     Taxes.
 
The Holding Company and the Borrower will, and will cause each of the Borrower's
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed on it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property except for taxes, assessments,
governmental charges, and claims for labor, materials or supplies that are being
contested in good faith by appropriate proceedings and for which the Borrower or
the applicable Subsidiary has set aside on its books adequate reserves and no
Lien has been filed in connection therewith.
 
Section 10.9     Inspection of Properties and Books, Etc.
 
(a)           The Holding Company and the Borrower shall permit the Lenders,
through the Agent, or any of the Agent's designated representatives, to visit
and inspect any of the properties of the Holding Company and its Subsidiaries,
to examine the books of account of the Holding Company and its Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Holding Company and its Subsidiaries with the
Holding Company and its Subsidiaries, officers and accountants, and to be
advised as to the same by, such officers and accountants and to communicate
directly with such officers and accountants, and the Borrower hereby authorizes
such officer's and accountants to disclose to the Agent for the Lenders any and
all financial statements and other supporting financial documents with respect
to the Holding Company and its Subsidiaries' financial condition and affairs
(other than materials protected by the attorney-client privilege and materials
which may not be disclosed without violation of a confidentiality obligation
binding upon it), all at such reasonable times and intervals, and so long as no
Default exists or Event of Default has occurred and is continuing, during
regular business hours and upon reasonable prior notice, at the Borrower's
expense, as the Agent may reasonably request.  So long as no Event of Default
has occurred and is continuing, no more than two (2) such examinations shall be
conducted during any calendar year.
 
(b)           Upon the Agent's reasonable request and at reasonable times, the
Holding Company and its Subsidiaries will permit the Agent's examiners or
independent collateral auditors selected by the Agent to conduct commercial
finance examinations at such times and intervals as the Agent may request;
provided, that so long as no Default or Event of Default has occurred and is
continuing such audits shall not occur more often than once during each fiscal
year and after the occurrence of any Default or Event of Default which is
continuing shall not occur more often than twice during each fiscal year.  All
such examinations shall be conducted and made at the expense of the Borrower.
 
 
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(c)           Upon the Agent's reasonable request, the Holding Company and its
Subsidiaries will obtain and deliver to the Agent and each of the Lenders
appraisal reports in form and substance and from appraisers satisfactory to the
Agent, stating (i) the then current fair market, orderly liquidation and forced
liquidation values of all or any portion of the Capital Assets or Real Estate
owned by the Borrower or any of its Subsidiaries and (ii) the then current
business value of the Holding Company and its Subsidiaries.  All such appraisals
shall be at the expense of the Borrower, provided that so long as no Default or
Event of Default has occurred and is continuing (x) such appraisals shall not
occur more often than twice during each fiscal year and (y) for purposes of the
limitation contained in this proviso, any such appraisal performed at the
request of, and acceptable to, the Senior Agent shall be deemed to be an
appraisal performed pursuant to this clause (c) so long as a copy of such
appraisal is promptly provided to Agent and Lenders.  In the event a Default or
Event of Default has occurred and is continuing, there shall be no such limit.
 
(d)           No more frequently than once during any twelve (12) month period,
or more frequently as determined by the Agent if Default or an Event of Default
shall have occurred and be continuing, the Agent may, in its discretion, obtain
one or more environmental assessments or audits of the Real Estate prepared by a
hydro-geologist, an independent engineer or other qualified consultant or expert
approved by the Agent to evaluate or confirm:  (i) whether any Hazardous
Substances are present in the soil or water at such Real Estate and (ii) whether
the use and operation of such real Estate complies with all Environmental Laws;
provided, that for purposes of the limitation set forth at the beginning of this
sentence, any such environmental assessment or audit performed at the request
of, and acceptable to, the Senior Agent shall be deemed to be an environmental
assessment or audit performed pursuant to this clause (c) so long as a copy of
such environmental assessment or audit is promptly provided to Agent and
Lenders.  Environmental assessments may include without limitation detailed
visual inspections of such Real Estate including any and all storage areas,
storage tanks, drains, dry wells and leaching areas, and the taking of soil
samples, surface water samples and ground water samples, as well as such other
investigations or analyses as the Agent deems appropriate.  All such
environmental assessments shall be conducted and made at the expense of the
Borrower.
 
(e)           At the request of the Agent, the Borrower shall deliver a letter
addressed to the accountants referenced in Section 10.9(a) instructing them to
comply with the provisions of such Section.
 
Section 10.10  Compliance with Laws, Contracts, Licenses, and Permits.
 
The Holding Company and the Borrower will comply with and the Borrower will
cause its Subsidiaries to comply with:  (a) the applicable laws and regulations
wherever its business is conducted, including all Environmental Laws, (b) the
provisions of its Charter Documents, (c) all agreements and instruments by which
it or any of its properties may be bound and (d) all applicable decrees, orders,
and judgments except in the case of (a), (c) and (d) above where such
noncompliance does not have or could not reasonably be expected to have a
Material Adverse Effect.  If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any Governmental
Authority shall become necessary or required in order that the Holding Company,
the Borrower or any of the Borrower's Subsidiaries may fulfill any of its
obligations hereunder or any of the other Loan Documents to which the Holding
Company, the Borrower or any of the Borrower's Subsidiaries is a party, the
Borrower will, or (as the case may be) will cause such Subsidiary to, promptly
take or cause to be taken all reasonable steps within the power of the Holding
Company, the Borrower or any of its Subsidiaries to obtain such authorization,
consent, approval, permit or license and furnish the Agent with evidence
thereof.
 
 
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Section 10.11   Employee Benefit Plans.
 
The Borrower will:  (a) promptly upon filing the same with the Department of
Labor or Internal Revenue Service furnish to the Agent a copy of the most recent
actuarial statement required to be submitted under §103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each Guaranteed
Pension Plan and (b) promptly upon receipt or dispatch, furnish to the Agent any
material notice, report or demand sent or received in respect of a Guaranteed
Pension Plan under §§302, 4041, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan under §§4041A, 4202, 4219, 4242 or 4245 of
ERISA.
 
Section 10.12   Bank Accounts.
 
The Borrower and its Domestic Subsidiaries shall maintain its or their primary
operating and primary deposit accounts and all cash concentration accounts in
accordance with the terms of the Senior Loan Agreement.
 
Section 10.13   Further Assurances.
 
The Holding Company will, and will cause each of its Subsidiaries to, cooperate
with the Lenders and the Agent and execute such further instruments and
documents as the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.
 
Section 10.14   Use of Proceeds.
 
The Borrower will use the proceeds of the Loans solely:  (a) to repay Senior
Debt, (b) to pay transaction fees and expenses incurred in connection with the
Loans, (c) for Capital Expenditures, to the extent permitted hereunder, and
(d) for working capital purposes.
 
Section 10.15   Board; Board Meetings.
 
(a)           Subject to Section 10.15(c), the Holding Company shall give to
Agent notice of all meetings and actions by written consent of its board of
directors and each committee thereof, at the same time and in the same manner as
notice of any meetings of such board of directors or committees is required to
be given to managers who do not waive such notice (or, if such action requires
no notice, then 5 days written notice thereof describing the matters upon which
action is to be taken). The Holding Company shall furnish to the Agent copies of
all consents and other documents furnished to any body described in the first
sentence of this Section at the same time the same are furnished to the members
of any such body.
 
 
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(b)           The Agent shall have the right to send two observers selected by
the Agent, to each meeting of the board of directors of the Holding Company or
any committee thereof, or to have such observers attend any such meeting
telephonically. Notwithstanding the foregoing, such observers may be excluded
from any portion of any such meeting that is devoted solely to a discussion
concerning any Person such observer represents in such Person's capacity as a
lender to the Borrower.
 
(c)           In the event that the Holding Company holds an emergency meeting
of its board of directors, it shall provide the Agent and Lenders with the
notice contemplated by Section 10.15 and shall, in any event, endeavor to
provide such notice within 3 Business Days of the date of such meeting.
 
(d)           Subject to the Subordination Agreement, all reasonable
out-of-pocket costs and expenses of the Agent’s and Lenders’ board observers in
connection with attendance of board of director meeting in accordance with this
Section 10.15 shall be at the Borrower's sole expense.
 
Section 10.16   SBIC Regulatory Provisions.
 
(a)           As long as any SBIC Holder is a Lender, Borrower shall notify SBIC
Holders (a) at least fifteen (15) days prior to taking any action after which
the number of record holders of the Borrower would be increased from fewer than
fifty (50) to fifty (50) or more, and (b) of any other action or occurrence
after which the number of record holders of stock of the Borrower was increased
(or would increase) from fewer than fifty (50) to fifty (50) or more, as soon as
practicable after the Borrower becomes aware that such other action or
occurrence has occurred or is proposed to occur.
 
(b)           At the same time Borrower delivers its financial statements to
Lenders pursuant to Section 10.4, and at such other times as Agent or any Lender
reasonably requests, Borrower shall deliver to each SBIC Holder a written
statement certified by an authorized signatory of Borrower describing in
reasonable detail the use of the proceeds of the Loans.  In addition to any
other rights granted hereunder, Borrower and each Guarantor shall grant SBIC
Holders and the SBA access to Borrower or such Guarantor's books and records for
the purpose of verifying the use of such proceeds and verifying the
certifications made in SBA Forms 480 and 652 and for the purpose of determining
whether the principal business activity of Borrower or such Guarantor continues
to constitute an eligible business activity (within the meaning of the SBIC
Regulations).
 
 
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(c)           Upon the occurrence of a Regulatory Violation or in the event that
any SBIC Holder determines in its sole discretion that a Regulatory Violation
has occurred, in addition to any other rights and remedies to which it may be
entitled as a holder of the Loan Documents (whether under this Credit Agreement,
the Term Note or otherwise), such SBIC Holder shall have the right, to the
extent required under the SBIC Regulations, to demand the immediate repayment of
the Obligations or repurchase of the Warrants owned by such SBIC Holder at a
price equal (a) to the outstanding amount of the Obligations, plus all accrued
interest thereon and (b) the fair market value of the Warrants, by delivering
written notice of such demand to Borrower and Guarantors.  Borrower shall pay
the purchase price for such securities by a cashier's or certified check or by
wire transfer of immediately available funds to such SBIC Holder demanding
repurchase within thirty (30) days after Borrower's receipt of the demand
notice, and upon such payment, such SBIC Holder shall deliver the certificates
evidencing the securities to be repurchased duly endorsed for transfer or
accompanied by duly executed forms of assignment.
 
(d)           In the event that any SBIC Holder determines that it has a
Regulatory Problem, such SBIC Holder shall have the right to transfer the
Obligations and the Warrants without regard to any restrictions on transfer set
forth in this Credit Agreement, the Borrower’s Charter Documents or otherwise,
and Borrower and each Guarantor  shall take all such actions as are reasonably
requested by such SBIC Holder in order to (a) effectuate and facilitate any
transfer by such SBIC Holder of any securities of Borrower or such Guarantor
then held by such SBIC Holder to any Person designated by such SBIC Holder which
is an accredited investor, (b) permit such SBIC Holder (or any of its
Affiliates) to exchange all or any portion of the equity interests of Borrower
or any Guarantor then held by it on a share-for-share basis for shares of a
class of nonvoting equity interests of Borrower or such Guarantor, which
nonvoting equity interests shall be identical in all respects to the equity
interests on such terms as are requested by such SBIC Holder in light of
regulatory considerations then prevailing, and (c) amend this Credit Agreement,
the Borrower’s Charter Documents and any related agreements and instruments to
the extent necessary to effectuate and reflect the foregoing.  Such cooperation
shall include, without limitation, the making of any required filing with any
Governmental Authority including the filing of a certificate or plan of
divestiture.
 
(e)           Promptly after the end of each calendar year commencing with the
calendar year ending December 31, 2010 (but in any event prior to January 31st
of each year), Borrower shall deliver to each SBIC Holder a written assessment
of the economic impact of such SBIC Holder's investment in Borrower, specifying
the full-time equivalent jobs created or retained in connection with the
investment, the impact of the investment on the business of Borrower and
Guarantors and on taxes paid by Borrower and Guarantors and their employees and
such other reasonable information requested by the SBA or such SBIC Holder in
connection with the filing of its SBA Form 46B or similar filings or requests.
 
Section 10.17   Post Closing Covenant.
 
Borrower shall deliver, within 60 days of the date hereof, to Agent fully
executed documents as may be reasonably required pursuant to French law to
provide to Agent, for the benefit of the Lenders, a valid and perfected first
priority security interest in 65% of the outstanding equity securities of CTSA.
 
 
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ARTICLE 11.
CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
 
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or the Agent or any Lender has any obligation to make any Loans and
any and all other amounts payable under the Loan Documents have been paid in
full in cash:
 
Section 11.1     Restrictions on Indebtedness.
 
The Borrower will not, and will not permit any of its Subsidiaries to, create,
incur, assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
 
(a)           Indebtedness to the Lenders arising under any of the Loan
Documents;
 
(b)           Current Liabilities of the Borrower and its Subsidiaries incurred
in the ordinary course of business not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
 
(c)           Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of Section 10.8 or Section 11.2(vi);
 
(d)           endorsements for collection, deposit or negotiation and warranties
or products or services, in each case incurred in the ordinary course of
business;
 
(e)           Subordinated Debt subject to an Agent Approved Subordination
Agreement;
 
(f)           unsecured Indebtedness of CTSA, including, without limitation
under the Intercompany Agreement, in an amount not to exceed U.S. $1,000,000;
 
(g)           purchase money Indebtedness incurred in connection with the
acquisition after the date hereof of any personal property by the Borrower and
its Subsidiaries or obligations under Capitalized Leases; provided, that the
aggregate principal amount of such Indebtedness and the payment obligations of
the Borrower under such Capitalized Leases shall not exceed the aggregate amount
of $500,000 at any one time;
 
(h)           deferred compensation due to employees not to exceed an aggregate
$20,000 outstanding at any time;
 
(i)            obligations consisting of financing of insurance premiums in the
ordinary course of business;
 
(j)            Permitted Acquisition Indebtedness;
 
 
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(k)           obligations arising with respect to customary indemnification
obligations incurred in the ordinary course of business in connection with (b),
or (g) above; and
 
(l)            obligations incurred in the ordinary course of business with
respect to surety and performance bonds;
 
(m)          Subordinated Debt evidenced by the SCP Subordinated Notes in an
aggregate principal amount on December 19, 2008 of $1,000,000 and which
principal amount may increase in accordance with the provisions of the SCP
Subordinated Notes which provide for the compounding of interest;
 
(n)           Senior Debt;
 
(o)           any extension, renewal or replacement of any of the foregoing on
terms and conditions that are, on the whole, no more onerous to the Borrower,
Holding Company and its Subsidiaries than the terms and conditions applicable
immediately before such extension, renewal or replacement, so long as (i) such
Indebtedness is not increased above the amount outstanding immediately prior to
giving effect to any such extension, renewal or replacement, and (ii) to the
extent that the Indebtedness to be extended, renewed or replaced is Subordinated
Debt, such extension, renewal or replacement continues to be subordinated to the
Obligations on terms and conditions reasonably satisfactory to the Agent.
 
Section 11.2     Restrictions on Liens.
 
The Borrower will not, and will not permit any of its Subsidiaries
to:  (a) create or incur or suffer to be created or incurred or to exist any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of such property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist any Indebtedness or claim
or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) sell, assign, pledge or otherwise transfer any accounts,
contract right, general intangibles, chattel paper or instruments, with or
without recourse; provided, that the Borrower or any of its Subsidiaries may
create or incur or suffer to be created or incurred or to exist:
 
(i)            liens to secure taxes, assessments and other government charges
in respect of obligations not overdue;
 
 
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(ii)           deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or other
social security obligations or to secure the performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases or to
secure statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business;
 
(iii)          encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower or any of its Subsidiaries is a party, and other
minor liens or encumbrances none of which in the opinion of the Borrower
interferes materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which defects do
not individually or in the aggregate have or could reasonably be expected to
have, a Material Adverse Effect;
 
(iv)          liens to lessors under Capitalized Leases permitted by
Section 11.1(g) and purchase money security interests in or purchase money
mortgages on personal property acquired after the date hereof to secure purchase
money Indebtedness of the type and amount permitted by Section 11.1(g), incurred
in connection with the acquisition of such property, which security interests or
mortgages cover only the personal property so acquired; and
 
(v)           liens in favor of the Agent for the benefit of the Lenders under
the Loan Documents;
 
(vi)          liens arising in the ordinary course of business out of
mechanics', carriers', laborers, material suppliers, workmen's, repairmen's or
other like liens in respect of obligations which are not overdue, or making
deposits to obtain the release of such liens or are being contested in good
faith and by appropriate proceedings diligently conducted and for which proper
reserve or other provision has been made in accordance with and to the extent
required by GAAP so long as such liens do not gain priority over any of the
liens in favor of the Agent for any of the Loans or any proceeds thereof;
 
(vii)         making deposits to secure replevin, surety, attachment or appeal
bonds relating to legal proceedings to which the Borrower or any of its
Subsidiaries is a party;
 
(viii)        bankers' liens, rights of set-off or similar rights as to accounts
maintained with a financial institution;
 
(ix)          liens in favor of vendors of goods arising as a matter of law
securing the payment of the purchase price therefor so long as such liens attach
only to the purchased goods;
 
(x)           incurring liens arising out of judgments or awards against the
Borrower or any of its Subsidiaries with respect to which it is currently
engaged in proceedings for review or appeal and with respect to which it shall
have secured a stay of execution pending such proceedings for review or appeal.
 
 
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(xi)          any interest of title of a licensor, sublicensor, lessor or
sublessor, lessee or sublessee, in each case under any license or lease
agreement in the ordinary course of business arising solely under a state
statute or common law and liens arising from Uniform Commercial Code financing
statements (or equivalent filings, registrations or agreements in foreign
jurisdictions) solely evidencing a lessor's interest under leases;
 
(xii)         liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;
 
(xiii)        liens arising solely under a state statute or common law in
connection with the purchase, storage or shipping of goods or assets on the
related goods or assets and proceeds thereof in favor of the seller, or shipper
of such goods or assets; and
 
(xiv)        liens arising under the Senior Debt Documents securing the Senior
Debt.
 
Section 11.3     Restrictions on Investments.
 
The Borrower will not, and will not permit any of its Subsidiaries to, make or
permit to exist or to remain outstanding any Investment except Investments in:
 
(a)           marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase;
 
(b)          demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;
 
(c)           securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Moody's Investors
Services, Inc., and not less than "A 1" if rated by Standard and Poor's;
 
(d)           Accounts receivable created, acquired or made and trade credit
extended in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;
 
(e)           Investments consisting of stock, obligations, securities or other
property received in connection with any bankruptcy or reorganization of, or any
good faith settlement of delinquent accounts and disputes with, any customer or
supplier arising in the ordinary course of business;
 
 
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(f)            Investments constituting deposits made in connection with the
purchase of goods or services in the ordinary course of business;
 
(g)           the Borrower may make a loan to a Wholly Owned Domestic Subsidiary
which is a Guarantor provided:  (i) the aggregate amount of all of such loans
does not exceed $250,000 outstanding at any time and (ii) such loans are
evidenced by a promissory note which is pledged and delivered to the Agent for
the benefit of the Lenders and is part of the Collateral;
 
(h)           Permitted Acquisitions;
 
(i)            security deposits in connection with any lease;
 
(j)            non cash loans or advances made in connection with a management
or employee stock ownership program;
 
(k)           Investments in Wholly Owned Domestic Subsidiaries which are
Guarantors; and
 
(l)            Investments prior to the date hereof in CTSA.
 
provided, however, that with the exception of demand deposits referred to in
Section 11.3(b), the Investments listed in (a), (b) (c) and (e) immediately
preceding will be considered Investments permitted by this Section 11.3 only if
all actions have been taken to the satisfaction of the Agent to provide to the
Agent for the benefit of the Lenders a second priority (subordinate only to the
Liens securing the Senior Debt) perfected security interests in all of such
Investments free of all encumbrances other than Permitted Liens.
 
Section 11.4             Restricted Payments.
 
The Borrower will not and will not permit any of its Subsidiaries to make any
Restricted Payment:
 
(i)            provided, that: the Borrower may make a Distribution to the
Holding Company to allow the Holding Company to make a payment of (A) the
Management Fee under the Management Agreement in the amount of such Management
Fees and (B) the Consulting Fee under the Consulting Agreement in the amount of
such Consulting Fee, so long as upon such payments: (x) the aggregate amount of
all of such payments made pursuant to this clause (i) shall not exceed $20,000
in any calendar month, (y) both at the time of and after giving effect to each
such payment no Default or Event of Default shall have occurred and be
continuing or would be caused if such payment were made and (z) EBITDA for the
twelve (12) consecutive month period ending on the last day of the then most
recent month for which financial statements have been delivered to Agent is not
less than the EBITDA Threshold;
 
 
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(ii)           provided, that the Borrower may make a Distribution to the
Holding Company to allow the Holding Company to pay out-of-pocket expenses for
accounting, board of director fees and expenses, investor relations, legal, and
SEC reporting and other operating costs (excluding such costs and expenses
incurred in connection with this financing transaction), in an amount not to
exceed $500,000 in any fiscal year of the Borrower;
 
(iii)          provided, that any Subsidiary of the Borrower may make a
Distribution to the Borrower;
 
(iv)          provided, that the Borrower may make payments on Subordinated Debt
permitted under an Agent Approved Subordination Agreement including, without
limitation, an Agent Approved Subordination Agreement relating to the Granite
Subordinated Debt Documents;
 
(v)          provided, that the Borrower may pay to the Seller under the
Purchase Agreements net cash proceeds actually received which it is required to
pay to such Sellers from the litigation described in Section 8.12 of the
Purchase Agreement in effect on the date hereof; and
 
(vi)          provided, that the Borrower may make a Distribution to the Holding
Company to allow the Holding Company to pay costs and expenses, including,
without limitation, legal fees incurred in connection with this financing
transaction and the transactions contemplated by the Original Credit Agreement
(as defined in the Senior Loan Agreement) so long as: (x) the aggregate amount
of such payment made pursuant to this clause (vi) shall not exceed $150,000 in
any fiscal quarter (y) EBITDA for the twelve consecutive month period ending on
the last day of the then most recent month for which financial statements have
been delivered to the Agent is not less than EBITDA Threshold and (z) both at
the time of and after giving effect to each such payment no Default or Event of
Default shall have occurred and be continuing or would be caused if such payment
were made (such permitted payments of such costs and expenses referred to as
“Permitted Holdco Distributions”).
 
Section 11.5     Merger, Consolidation and Disposition of Assets.
 
(a)           The Borrower will not, nor will it permit any of its Subsidiaries
to, become a party to any merger or consolidation, or agree to or effect any
asset acquisition or stock, membership interest or membership unit or
partnership interest acquisition other than a Permitted Acquisition and merger
of a Subsidiary of the Borrower into the Borrower, provided that the Borrower
survives as the sole remaining entity.
 
(b)           The Borrower will not, nor will it permit any of its Subsidiaries
to, become a party to or agree to or effect any disposition of assets except for
dispositions of assets listed in (i)-(iv) of this subsection and in the case of
(ii), (iii) and (iv) below of up to $500,000 in value in the aggregate in any
fiscal year, unless such proceeds are otherwise reinvested as provided in
Section 5.3(a) hereof.  The dispositions permitted under this subsection (b)
are:
 
 
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(i)      the sale of Inventory in the ordinary course of business;
 
(ii)     disposition of leased or owned motor vehicles in the ordinary course of
business;
 
(iii)    the disposition of assets damaged in a casualty event; and
 
(iv)    the disposition of assets which are obsolete or no longer useful in the
Borrower's or its Subsidiaries' business.
 
Section 11.6       Sale and Leaseback.
 
The Borrower will not and will not permit any of its Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby the Borrower or any Subsidiary
of the Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Borrower or
such Subsidiary intends to use for substantially the same purpose as the
property being sold or transferred.
 
Section 11.7       Compliance with Environmental Laws.
 
The Borrower will not, and will not permit any of its Subsidiaries to:  (a) use
any of the Real Estate or any portion thereof for the handling, processing,
storage or disposal of Hazardous Substances other than in the ordinary course of
business, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances on any of the Real Estate
other than in the ordinary course of business and in accordance with all
applicable Environmental Laws, (d) conduct any activity at any Real Estate or
use any Real Estate in any manner so as to cause a release (i.e. releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) or threatened release of Hazardous
Substances on, upon or into the Real Estate the liability for the clean up or
remediation of such release or activity would exceed, in the aggregate for all
of such occurrences, could reasonably be expected to have a Material Adverse
Effect or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate in any manner, that would violate any Environmental Law or bring such
Real Estate in violation of any Environmental Law if such violation could
reasonably be expected to have a Material Adverse Effect.
 
Section 11.8       Employee Benefit Plans.
 
Neither the Borrower nor any ERISA Affiliate will:
 
(a)           engage in any "prohibited transaction" within the meaning of §406
of ERISA or §4975 of the Code which could result in a material liability for the
Borrower or any of its Subsidiaries;

 
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(b)           permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in §302 of ERISA, whether or not
such deficiency is or may be waived;
 
(c)           fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of the Borrower or any
of its Subsidiaries pursuant to §302(f) or §4068 of ERISA; or
 
(d)           permit to take any action which would result in the aggregate
benefit liabilities (the meaning of §4001 or ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of such Plans, disregarding
for this purpose of the benefit liabilities and assets of any such Plan with
assets in excess of benefit liabilities, by more than the amount set forth in
Section 9.16(c).
 
Section 11.9       Modification of Documents.
 
The Borrower will not, nor will it permit any of its Subsidiaries to:  (a) make
any amendment or modification to any indenture, notes or other agreement
evidencing or governing any Subordinated Debt, except as permitted under the
applicable Agent Approved Subordination Agreement, (b) make an amendment or
modification to the Management Agreement which increases any amount the Borrower
is required to pay thereunder or is otherwise adverse to the Lenders or the
Holding Company's or Borrower or Borrower's Subsidiaries' ability to perform its
obligations under the Loan Documents, (c) make any amendment or modification to
any terms or provisions of their respective Charter Documents if the effect of
such amendment or modification shall adversely affect the Lenders, without the
prior written consent of the Agent, (d) issue any Shares other than in
connection with the conversion contemplated by Article 3 or the exercise of any
Warrant, or the issuance of 45,000 shares to Selway on or about the date hereof,
or (e) amend, waive, modify or terminate any provision of the Purchase
Agreement.
 
Section 11.10     Negative Pledges.
 
The Borrower will not and will not permit any of its Subsidiaries to enter into
any agreement (excluding this Credit Agreement, the other Loan Documents and the
Senior Debt Documents) prohibiting the creation or assumption of any lien upon
its properties, revenues or assets or those of any of its Subsidiaries, whether
now owned or hereafter acquired other than agreements with Persons prohibiting
any such lien on assets in which such Person has a prior security interest which
is permitted by Section 11.2.

 
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Section 11.11     Transactions with Affiliates.
 
Other than the Intercompany Agreement, the Services Agreement,  the Management
Agreement and the SCP Subordinated Notes, the Borrower will not, and will not
permit any of its Subsidiaries to, enter into, or cause, suffer or permit to
exist (a) any arrangement or contract with any of its other Affiliates of a
nature customarily entered into by Persons which are Affiliates of each other
(including advisory, management or similar contracts or arrangements relating to
the allocation of revenues, taxes and expenses or otherwise) requiring any
payments to be made by the Borrower or any of its Subsidiaries to any Affiliate
unless such arrangement is fair and equitable to the Borrower or such
Subsidiary; or (b) any other transaction, arrangement or contract with any of
their other Affiliates which would not be entered into by a prudent Person in
the position of the Borrower or such Subsidiary with, or which is on terms which
are less favorable than are obtainable from, any Person which is not one of its
Affiliates.
 
Section 11.12     Upstream Limitations.
 
The Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
enter into any agreement, contract or arrangement (other than this Credit
Agreement and the other Loan Documents and the Senior Debt
Documents) restricting the ability of any Subsidiary to pay or make dividends or
distributions in cash or kind, to make loans, advances or other payments of
whatsoever nature or to make transfers or distributions of all or any part of
its assets to the Borrower or to any Subsidiary of such Subsidiary.
 
Section 11.13     Inconsistent Agreements.
 
The Borrower will not, nor will it permit any of its Subsidiaries to, enter into
any agreement containing any provision which would be violated or breached by
the performance by the Borrower or such Subsidiary of its obligations hereunder
or under any of the Loan Documents.
 
Section 11.14     Bank Accounts.
 
The Borrower will not:  (a) establish any bank accounts other than those listed
on Schedule 9.20 without the Agent's prior written consent or (b) violate
directly or indirectly any bank agency or lock box agreement, if any, in favor
of the Agent for the benefit of the Lenders with respect to such account (it
being understood that no such agreement will be in place on the Closing Date),
(c) deposit into any of the payroll accounts listed on Schedule 9.20 any amounts
in excess of amounts necessary to pay current payroll obligations from such
accounts.
 
Section 11.15     Restriction on Subsidiaries.
 
The Borrower will not nor will it permit any of its Subsidiaries to form any
Subsidiary without the prior written consent of the Required Lenders other than
a Subsidiary formed to hold the assets from a Permitted Acquisition and no other
assets.  In the event that the Required Lenders, in their sole discretion,
consent to, or, if a Subsidiary is formed to hold the assets of a Permitted
Acquisition, the formation or acquisition of a Subsidiary, any such Subsidiary
formed or acquired by the Borrower or any Subsidiary thereof shall
simultaneously with the consummation of any such formation or acquisition grant
to the Agent for the benefit of the Lenders a second perfected security interest
(except as otherwise permitted by the Required Lenders) in all of its existing
and after-acquired assets, and guaranty of all of the Obligations and all of the
ownership interests of such Subsidiary shall be pledged to the Agent for the
benefit of the Lenders.  All applicable parties shall execute and/or deliver to
the Agent all such documents and instruments requested by the Agent in order to
perfect the Agent's security interest therein.

 
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Section 11.16     Restrictions on Loans and Advances.
 
The Borrower will not make any loans or advances to, nor acquire the
Indebtedness of, any Person except for the following:
 
(a)           advance payments made to the Borrower's suppliers in the ordinary
course of its business and consistent with past practices;
 
(b)           advances to the Borrower's officers, employees and sales persons
with respect to reasonable expenses to be incurred by such officers, employees
and sales persons for the benefit of the Borrower, which expenses are properly
substantiated by the Person seeking such advance and properly reimbursable by
the Borrower and in any event not to exceed $10,000 in the aggregate outstanding
at any one time;
 
(c)           the extension of trade credit in the ordinary course of business
consistent with past practices;
 
(d)           loans or advances made under the Intercompany Agreement, provided
that such loans or advances shall not exceed, in the aggregate, $100,000 in any
fiscal year; and
 
(e)           loans permitted by Section 11.3.
 
Section 11.17     Line of Business.
 
The Borrower and its Subsidiaries will engage in no business other than that of
a manufacturer and distributor of chemiluminescent light and infrared safety,
security and training products for use by the military and homeland security
businesses and businesses incidental thereto.
 
Section 11.18     Use of Proceeds.
 
The Borrower will not use the proceeds of the Loans for any purpose other than
the purposes stated in Section 10.14.
 
Section 11.19     Activity of the Holding Company.
 
The Holding Company shall conduct no business or other activity other than
holding all of the Shares of the Borrower or any other Subsidiary.

 
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ARTICLE 12.
FINANCIAL COVENANTS OF THE BORROWER.
 
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or the Agent or any Lender has any obligation to make any Loans and
any and all other amounts payable under the Loan Documents have been paid in
full in cash:
 
Section 12.1       Coverage Ratios.
 
(a)           Fixed Charge Ratio.  As of the last day of the fiscal quarter
ending September 30, 2010,  the Fixed Charge Coverage Ratio for the immediately
preceding four (4) fiscal quarters shall not be less than .68:1.00, and as of
the last day of the fiscal quarter ending December 31, 2010, the Fixed Charge
Coverage Ratio for the immediately preceding four (4) fiscal quarters shall not
be less than 0.85:1.00, and as of the last day of the fiscal quarter ending
March 31, 2011 and for each fiscal quarter thereafter, the Fixed Charge Coverage
Ratio for the immediately preceding four (4) fiscal quarters shall not be less
than 0.94:1.00.
 
(b)           Total Debt Service Coverage Ratio.  As of the last day of the
fiscal quarter ending on September 30, 2010, and for each fiscal quarter
thereafter, the Total Debt Service Coverage Ratio shall not be less than
1.02:1.00.
 
Section 12.2       Leverage Ratio.
 
(a)           At any time during the periods set forth below, the Senior
Leverage Ratio shall not be more than the ratio set forth below during such
period:
 
Period
 
Ratio
     
the Closing Date, through and including December 31, 2010
 
3.45:1.00
     
January 1, 2011, through and including December 31, 2011
 
2.87:1.00
     
January 1, 2012, and thereafter
  
2.30:1.00

(b)           At any time during the periods set forth below, the Total Leverage
Ratio shall not be more than the ratio set forth below during such period:
 
Period
 
Ratio
     
the Closing Date, through and including December 31, 2010
 
4.60:1.00
     
January 1, 2011, through and including December 31, 2011
 
4.02:1.00
     
March 31, 2012
 
3.73:1.00
 
   
June 30, 2012, and thereafter
  
3.45:1.00

 
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Section 12.3       Capital Expenditures.
 
The Borrower will not make, nor permit any Subsidiary to make any Capital
Expenditures in any fiscal year that exceed $2,000,000 for any fiscal year.
 
Section 12.4       Current Ratio.
 
As of the last day of any fiscal quarter the Holding Company and its
Subsidiaries shall not permit the Current Ratio to be less than 0.85:1.00.
 
Section 12.5       Minimum EBITDA.
 
At any time during the periods ending on the dates set forth below the minimum
EBITDA of the Borrower and its Subsidiaries for the four (4) fiscal quarters
then ending shall not be less than the amount set forth below:
 
Period
 
Minimum EBITDA
         
September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011 and
September 30, 2011
  $ 5,950,000            
December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012
  $ 6,162,925            
December 31, 2012 and the last day of each fiscal quarter thereafter
  $ 6,375,000  

ARTICLE 13.
CLOSING CONDITIONS.
 
The obligations of the Lenders to make the Loans and  to enter into this Credit
Agreement shall be subject to the satisfaction of the following conditions
precedent on or prior to the date hereof.
 
Section 13.1       Loan Documents.
 
Each of the Loan Documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to the Lenders.  Each of the Lenders shall have
received a fully-executed copy of each such document.
 
Section 13.2       Senior Debt Documents.
 
Each of the Senior Debt Documents shall have been duly executed and delivered by
the respective parties thereto, shall be in full force and effect and shall be
in form and substance reasonably satisfactory to the Lenders.  Each of the
Lenders shall have received a fully-executed copy of each such document.

 
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Section 13.3       Certified Copies of Charter Documents.
 
The Lenders shall have received from the Borrower a copy, certified by a duly
authorized officer of such Person to be true and complete on and as of the
Closing Date, of its Charter Documents, the Charter Documents of the Holding
Company and each Subsidiary of the Borrower.
 
Section 13.4       Corporate Action.
 
All corporate action necessary for the valid execution, delivery and performance
by the Borrower of this Credit Agreement and the other Loan Documents to which
it is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Lenders shall have been provided to the
Agent.
 
Section 13.5       Incumbency Certificate.
 
The Agent shall have received from the Holding Company and each of its
Subsidiaries an incumbency certificate, dated as of the Closing Date, signed by
a duly authorized officer of the Holding Company and each of its Subsidiaries
and giving the name and bearing a specimen signature of each individual who
shall be authorized:  (a) to sign, in the name and on behalf of the Holding
Company and each of its Subsidiaries, each of the Loan Documents to which the
Holding Company and each of its Subsidiaries is or is to become a party;
(b) Term Loan borrowing; and (c) to give notices and to take other action on its
behalf under the Loan Documents.
 
Section 13.6       Validity of Liens.
 
The Security Documents shall be effective to create in favor of the Agent for
the benefit of the Lenders a legal, valid and enforceable second (except for
Permitted Liens entitled to priority under applicable law and the Liens granted
to secure the Senior Debt) security interest in and lien upon the
Collateral.  All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected.  The Lenders
shall have received evidence thereof in form and substance satisfactory to the
Lenders.  Agent shall have received in form and substance satisfactory to the
Lenders the Mortgage with evidence of its recording in the applicable Registry
of Deeds creating a second lien priority subject only to such encumbrances as
approved by the Agent in writing including, without limitation, Liens securing
the Senior Debt.
 
Section 13.7       Perfection Certificates and Lien Search Results.
 
The Agent shall have received from the Borrower a completed and fully-executed
Perfection Certificate and the results of UCC searches indicating no liens other
than Permitted Liens or liens to be released prior to Closing and otherwise in
form and substance satisfactory to the Agent.

 
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Section 13.8       Certificates of Insurance.
 
The Agent shall have received:  a certificate of insurance from an independent
insurance broker dated as of the Closing Date, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security Documents
and a summary of the polices to be issued.
 
Section 13.9       [Intentionally Omitted].
 
Section 13.10     Solvency Certificate.
 
Each of the Lenders shall have received an officer's certificate from the
Borrower dated as of the Closing Date as to the solvency of the Borrower
following the consummation of the transactions contemplated herein and in form
and substance satisfactory to the Agent.
 
Section 13.11     Opinion of Counsel.
 
The Agent shall have received a favorable legal opinion dated as of the Closing
Date and addressed to each of the Lenders, in form and substance reasonably
satisfactory to each of the Lenders, from corporate counsel to the Borrower and
the Holding Company.
 
Section 13.12     Disbursement Instructions.
 
The Agent shall have received disbursement instructions from the Borrower.
 
Section 13.13     Payment of Fees.
 
The Borrower shall have paid to the Agent for distribution to the Lenders the
Closing Fee which is due and payable on the Closing Date and all other fees and
expenses (including, without limitation, all legal fees and disbursements,
commercial finance examination fees and appraisal fees incurred prior to the
Closing Date) required to be paid as of the Closing Date.
 
Section 13.14     Material Adverse Effect.
 
No event shall have occurred since the Balance Sheet Date which had or could
reasonably be expected to have a Material Adverse Effect on the Holding Company
and its Subsidiaries, including, without limitation, the Borrower.

 
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Section 13.15     Consents.
 
Copies of the applications to be submitted to the appropriate Governmental
Authorities to transfer and/or apply for federal, state and local licenses,
permissions and consents of all jurisdictions in which the Company conducts
business, and all required consents to the transfer of all material contracts.
 
Section 13.16     [Intentionally Omitted].
 
Section 13.17     Senior Debt Payment and Documents.
 
Borrower shall prepay no less than Seven Million Two Hundred Thousand Dollars
($7,200,000) of the Term Loan (as defined in the Senior Loan Agreement) and no
less than $500,000 of the Revolving Credit Loan (as defined in the Senior Loan
Agreement) from the proceeds of the Loans.
 
Section 13.18     Representations True; No Event of Default.
 
Each of the representations and warranties of the Holding Company and its
Subsidiaries contained in this Credit Agreement, the other Loan Documents, or in
any certificate, document or instrument delivered pursuant to or in connection
with this Credit Agreement shall be true as of the date as of which they were
made and shall also be true at and as of the time of the making of such Loan
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions permitted by this Credit Agreement and the
other Loan Documents, and to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default shall
have occurred and be continuing.
 
Section 13.19     No Legal Impediment.
 
No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of the Required Lenders
would make it illegal for the Lenders to make such Loan.
 
Section 13.20     Governmental Regulations.
 
Each Lender shall have received such statements in substance and form reasonably
satisfactory to the Agent as the Agent shall require for the purpose of
compliance with any applicable regulations of the Comptroller of the Currency or
the Board of Governors of the Federal Reserve System.
 
Section 13.21     Proceedings and Documents.
 
All proceedings in connection with the transactions contemplated by this Credit
Agreement, the other Loan Documents and all other documents incident thereto
shall be satisfactory in substance and in form to the Lenders and the Lenders'
Special Counsel, and the Lenders, the Agent and such counsel shall have received
all information and such counterpart originals or certified other copies of such
documents as the Agent may reasonably request.

 
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ARTICLE 14.
[Intentionally Omitted]
 
ARTICLE 15.
EVENTS OF DEFAULT; ACCELERATION; ETC.
 
Section 15.1       Events of Default and Acceleration.
 
If any of the following events ("Events of Default" or, if the giving of notice
or the lapse of time of both is required, then, prior to such notice or lapse of
time, "Defaults") shall occur:
 
(a)           the Borrower shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
 
(b)           the Borrower shall fail to pay any interest on the Loans within
three (3) days such interest payment is due or other fees and sums due hereunder
or under any of the other Loan Documents, when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
 
(c)           the Borrower shall fail to comply with any of its covenants
contained in Sections 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.12, 10.13,
10.14, 10.17, 11 or 12;
 
(d)           the Borrower or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this Section 15.1) for thirty
(30) days after written notice of such failure has been given to the Borrower by
the Agent;
 
(e)           any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
 
(f)            the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for borrowed
money or credit received or in respect of any Capitalized Leases where the
principal amount or the aggregate payments, respectively, exceed $100,000, or
fail to observe or perform any material term, covenant or agreement contained in
any agreement (other than the Senior Debt Documents) by which it is bound,
evidencing or securing such borrowed money or credit received or in respect of
any Capitalized Leases for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;

 
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(g)           the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of the Borrower or any of its Subsidiaries or of any substantial part
of the assets of the Borrower or any of its Subsidiaries or shall commence any
Insolvency Proceeding, or shall take any action to authorize or in furtherance
of the foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against the Borrower or any of
its Subsidiaries and the Borrower or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein;
 
(h)           a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
Insolvency Proceeding, or a decree or order for relief is entered in respect of
the Borrower or any of its Subsidiaries in an involuntary case under federal
bankruptcy laws as now or hereafter constituted and any such decree or order
continues unstayed and in effect for a period of forty-five (45) days;
 
(i)            there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the Borrower or any of its
Subsidiaries exceeds in the aggregate $250,000 and which judgment is not fully
covered by insurance by a financially sound and reputable insurance company
which has accepted full coverage therefor in writing;
 
(j)            a default shall occur under any of the Subordinated Debt
Documents which has a principal amount in excess of, in the aggregate, $250,000
or any part of the Subordinated Debt or the Subordinated Debt shall be (or shall
be required at such time to be) prepaid, redeemed or repurchased in whole or in
part other than in accordance with an Agent Approved Subordination Agreement;
 
(k)           if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Required
Lenders, or any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or any of its Subsidiaries party thereto or any other
Governmental Authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;

 
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(l)            the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate
amount exceeding $100,000, or the Borrower or any ERISA Affiliate is assessed
withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $100,000, or any of the following
occurs with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event,
or a failure to make a required installment or other payment (within the meaning
of §302(f)(1) of ERISA); provided, that the Agent determines in its reasonable
discretion that such event:  (A) could be expected to result in liability of the
Borrower to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $100,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan;
(ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;
 
(m)           the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days;
 
(n)           there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than thirty (30) consecutive
days, of cessation or substantial curtailment of revenue producing activities at
any facility of the Borrower or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance and would have a
Material Adverse Effect;
 
(o)           the Borrower or any of its Subsidiaries shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any assets
of the Borrower or such Subsidiary included in any assets of the Borrower or
such Subsidiary having a fair market value in excess of $100,000;
 
(p)           a Change of Control shall occur;
 
(q)           the Borrower and its Subsidiaries shall have one or more of its
material contracts with its customers cancelled and the effect of such
cancellation shall result directly or indirectly, the loss, in the aggregate of
fifteen percent (15%) of the revenues of the Borrower and its Subsidiaries as
such revenue is shown on the audited financial statement, most recently
delivered to the Agent; or
 
(r)           more than two (2) of Borrower's Key Officers shall cease to be
involved in the management and operations of the business of the Borrower on a
full time basis and no successor reasonably satisfactory to Agent shall have
been appointed within sixty (60) days from the date such Key Officer ceases to
be involved in the management and operations;

 
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Section 15.2       Termination of Total Commitment.
 
If any one or more of the Events of Default specified in Section 15.1(g) or
Section 15.1(h) shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Lenders shall be relieved of all further
obligations to make loans to the Borrower.  If any other Event of Default shall
have occurred and be continuing, the Agent may, and upon request of the Required
Lenders shall, by notice to the Borrower, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the Lenders  shall be
relieved of all further obligations to make Loans.  No termination of the credit
hereunder shall relieve the Borrower of any of the Obligations.  In addition, if
any Event of Default shall have occurred and be continuing, Agent may, without
notice, take any one or more of the following actions: (i) declare all or any
portion of the Obligations to be forthwith due and payable, whereupon such
Obligations shall become and be due and payable or (ii) exercise any rights and
remedies provided to Agent and the Lenders under the Loan Documents or at law or
equity, including all remedies provided under the Uniform Commercial Code;
provided, that upon the occurrence of any Event of Default specified in Section
15.1(g) or Section 15.1(h), the Obligations shall become immediately due and
payable without declaration, notice or demand by Lender.
 
Section 15.3       Remedies.
 
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Lenders have accelerated the maturity of the
Loans pursuant to Section 15.2, the Agent, if owed any amount with respect to
the Loans, may proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
the Lenders are evidenced, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of any Lender.  No remedy herein conferred upon any
Lender or the Agent or the holder of any Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
 
Section 15.4       Distribution of Collateral Proceeds.
 
In the event that all of the Loans, all accrued and unpaid interest thereon and
all other amounts owing under the Loan Documents, shall have been declared due
and payable pursuant to the provisions of Section 15.2, any funds received by
any Lender from or on behalf of the Borrower or any of its Subsidiaries shall be
remitted to, and applied by, the Agent in the following manner and order:
 
(a)           first, to the payment of interest on, and then the principal
portion of, any Loans which the Agent may have advanced on  behalf of any Lender
for which the Agent has not then been reimbursed by such Lender or the Borrower
or any of its Subsidiaries;

 
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(b)           second, to reimburse the Agent and the Lenders, in that order, for
any expenses due from the Borrower under the Loan Documents;
 
(c)           third, to the payment of the fees, pro rata according to the fees
due and owing to the Lenders;
 
(d)            fourth, to the payment of any other fees, expenses or other
amounts (other than the principal of and interest on the Loans) payable by the
Borrower or any of its Subsidiaries to the Lenders under the Loan Documents;
 
(e)            fifth, to the payment, pro rata according to the Pro Rata Share
of each Lender, of interest due on the Loans;
 
(f)            sixth, to the payment to the Lenders of, pro rata according to
the Pro Rata Share of each Lender of, the unpaid principal amount of the Loans;
 
(g)           seventh, to all other Obligations for distribution to the Lenders
in accordance with their Pro Rata Share; and
 
(h)           eighth, thereafter, any remaining funds shall be paid to the
Borrower or as a court of competent jurisdiction shall direct.
 
Notwithstanding the foregoing, the Lenders may agree among themselves to an
allocation of such funds that does not comply with the immediately preceding
sentence.
 
ARTICLE 16.
SETOFF.
 
Subject to the Subordination Agreement, regardless of the adequacy of any
Collateral, during the continuance of any Event of Default, any deposits or
other sums credited by or due from any Lender to the Borrower or any of its
Subsidiaries and any securities or other property of the Borrower or any of its
Subsidiaries in the possession of any Lender may be applied to or set off by
such Lender against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of the Borrower to such Lender.
 
Each of the Lenders agrees with each other Lender that:  (i) if an amount to be
set off is to be applied to obligations of the Borrower or any of its
Subsidiaries to such Lender, other than Obligations evidenced by the Notes held
by such Lender, such amount shall be applied ratably to such other Obligations
and to the Obligations evidenced by all such Notes held by such Lender and if
such Lender shall receive from the Borrower or any of its Subsidiaries, whether
by voluntary payment, exercise of the right of setoff, counterclaim, or offset,
enforcement of the claim evidenced by the Notes held by such Lender by
proceeding against the Borrower or any of its Subsidiaries at law or in equity
or by proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Lender any amount in excess of its ratable
portion of the payments received by all of the Lenders with respect to the Notes
held by all of the Lenders, such Lender will make such dispositions and
arrangements with the other Lenders with respect to such excess, either by way
of distribution, assignment of claim, subrogation or otherwise or shall result
in each Lender receiving in on account of the Note or Notes held by it its
proportionate payment as contemplated by this Credit Agreement; provided, that
if all or any part of such excess payment is thereafter recovered from such
Lender, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.

 
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ARTICLE 17.
EXPENSES.
 
Subject to the Subordination Agreement, the Borrower agrees to pay:  (a) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto) payable
by the Agent or any of the Lenders (other than taxes based upon the Agent's or
any such Lenders' net income) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to indemnify
the Agent and each Lender with respect thereto), (c) the reasonable fees,
expenses and disbursements of the Agent's Special Counsel or any local counsel
to the Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including all commercial finance examinations and appraisal charges, (e) any
fees, costs, expenses and bank charges, including bank charges for returned
checks, incurred by the Agent in establishing, maintaining or handling accounts
for the collection of any of the Collateral, (f) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of the Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by the Agent or any Lenders in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or any guarantor or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to the Agent's or any Lender's relationship with the Borrower or any
of its Subsidiaries, and (g) all reasonable fees, expenses and disbursements of
the Agent or any Lenders incurred in connection with UCC searches, UCC filings
or mortgage recordings.  The Borrower hereby agrees to reimburse the Agent on
demand for any and all costs, liabilities and obligations incurred by Agent
pursuant to Section 20.14.  The covenants of this Article 17 shall survive
payment or satisfaction of all Obligations.

 
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ARTICLE 18.
INDEMNIFICATION.
 
Subject to the Subordination Agreement, the Borrower and each of its
Subsidiaries agree to indemnify and hold harmless the Agent and each Lender and
each of their respective officers, directors, employees, agents, attorneys and
Affiliates from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby (except due to the indemnified party's own willful misconduct or gross
negligence) including, without limitation:  (a) any actual or proposed use by
the Borrower or any of its Subsidiaries of the proceeds of any of the Loans,
(b) the reversal or withdrawal of any provisional credits granted by the Agent
upon the transfer of funds from the bank agency or lock box accounts or in
connection with the provisional honoring of checks or other items, (c) any
actual or alleged infringement of any patent, copyright, trademark, service mark
or similar right of the Borrower or any of its Subsidiaries comprised in the
Collateral, (d) the Borrower or any of its Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents or (e) with
respect to the Borrower or any of its Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding brought or asserted by any party, including without limitation
liabilities caused by the negligence of the party seeking indemnification
(collectively, the "Indemnified Liabilities").  In litigation, or the
preparation therefor, the Agent shall be entitled to select its own counsel and,
in addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel.  If, and to the extent that the
obligations of the Borrower under this Article 18 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.  The covenants contained in this Article 18 shall survive
payment or satisfaction in full of all Obligations.
 
ARTICLE 19.
SURVIVAL OF COVENANTS, ETC.
 
All covenants, agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto shall be deemed to have been relied upon by the Agent and the Lenders,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Lender has any obligation to make any Loans, and for
such further time as may be otherwise expressly specified in this Credit
Agreement.  All statements contained in any certificate or other paper delivered
to the Agent or any Lenders at any time by or on behalf of the Borrower or any
of its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.

 
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ARTICLE 20.
AGENT.
 
Section 20.1       Appointment and Authorization of Agent.
 
Each Lender hereby irrevocably appoints, designates and authorizes the Agent to
take such action on its behalf under the provisions of this Credit 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 Credit Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto.  Notwithstanding any provision to the contrary contained elsewhere
herein or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Credit Agreement or any other
Loan Document or otherwise exist against the Agent.  Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Loan Documents with reference to the 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.
 
Section 20.2       Delegation of Duties.
 
The Agent may execute any of its duties under this Credit Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties.  The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct in such selection.
 
Section 20.3       Liability of the Agents.
 
The Agent shall:  (a) not be liable for any action taken or omitted to be taken
by it or any agent, employee or attorney-in-fact under or in connection with
this Credit Agreement or any other Loan Document or the transactions
contemplated hereby (except for the Agent's own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by the Borrower or any Subsidiary or
any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Credit Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Credit Agreement or any other Loan Document, or for any
failure of the Borrower or any Subsidiary or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  The Agent shall
not be under any obligation to any Lender or participant to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Credit Agreement or any other Loan Document, or to
inspect the properties, books or records of Borrower or any of its Subsidiaries
or any Affiliate thereof.

 
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Section 20.4       Reliance by Agent.
 
(a)           The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail 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, independent accountants and other experts
selected by the Agent.  The Agent shall be fully justified in failing or
refusing to take any action under any Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the 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.  The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Credit Agreement or any other Loan Document
in accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
 
(b)           For purposes of determining compliance with the conditions
specified in Article 5, each Lender that has signed this Credit Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.
 
Section 20.5       Notice of Default.
 
The 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 the Agent for the account
of the Lenders, unless the Agent shall have received written notice from a
Lender or from the Borrower referring to this Credit Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default."  The Agent will notify the Lenders of its receipt of any such
notice.  The Agent shall take such action with respect to such Default or Event
of Default as may be directed by the Required Lenders; provided, however, that
unless and until the Agent has received any such direction, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable or
in the best interest of the Lenders.

 
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Section 20.6       Credit Decision; Disclosure of Information by Agent.
 
Each Lender acknowledges that the Agent has not made any representation or
warranty to it, and that no act by the Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of the
Borrower or any Subsidiary or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by the Agent to any Lender as to any
matter, including whether the Agent has disclosed material information in its
possession.  Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent 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 the Borrower or any Subsidiary, and all applicable bank or
other regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Credit Agreement and to extend credit to the
Borrower hereunder.  Each Lender also represents that it will, independently and
without reliance upon the Agent 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 Credit
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 the
Borrower.  Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent herein, the 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 the Borrower or any of its
Subsidiaries or any of their respective Affiliates which may come into the
possession of any Person retained by the Agent.
 
Section 20.7       Indemnification of Agent.
 
Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand each of the Agent, its agents, employees,
representatives and attorneys-in-fact (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower or
any Subsidiary to do so), pro rata, and hold harmless each of the Agent, its
agents, employees, representatives and attorneys-in-fact 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 of the Agent, its agents,
employees, representatives and attorneys-in-fact of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such of the
Agent, its agents, employees, representatives and attorneys-in-fact own gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section
20.7.  Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including the reasonable costs and expenses of the Agent's Special
Counsel) incurred by the 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 Credit Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Borrower or its Subsidiaries.  The covenants of this Section 20.7 shall survive
payment or satisfaction of all Obligations and the resignation of the Agent.

 
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Section 20.8       Agent in its Individual Capacity.
 
Granite Agent and its Affiliates may make loans to, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Borrower or any Subsidiary and their
respective Affiliates as though Granite Agent were not the Agent hereunder and
without notice to or consent of the Lenders.  The Lenders acknowledge that,
pursuant to such activities, Granite Agent or its Affiliates may receive
information regarding the Borrower or any Subsidiary or their Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them.  With respect to its
Loans, Granite Agent shall have the same rights and powers under this Credit
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Agent and the terms "Lender" and "Lenders" include Granite, in
its individual capacity.
 
Section 20.9       Successor Agent.
 
The Agent may resign as Agent upon thirty (30) days' notice to the Lenders and
the Borrower.  If the Agent resigns under this Credit Agreement, the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which so long as no Default or Event of Default has occurred and is continuing,
shall be with the consent of the Borrower (which consent of the Borrower shall
not be unreasonably withheld or delayed), provided that, if a Default or Event
of Default has occurred and is continuing no such Borrower consent is
required.  If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and so long as no Default or Event of Default has occurred and is
continuing, a successor agent from among the Lenders.  Upon the acceptance of
its appointment as successor agent hereunder, the Person acting as such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such retiring Agent or
any other Lender.  After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article 20 shall no longer apply to such resigning agent
except Section 20.4 and 20.5 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.  If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.

 
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Section 20.10     Agent May File Proofs of Claim.
 
Subject to the Subordination Agreement, in case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Borrower or
any Subsidiary, the Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Agent shall have made any demand on the
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise
 
(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Agent and their respective agents and counsel and all
other amounts due the Lenders and the Agent) allowed in such judicial
proceeding; and
 
(b)           to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Agent and, in the event that the Agent
shall consent to the making of such payments directly to the Lenders, to pay to
the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent hereunder.
 
(c)           Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Agent to vote in respect of the
claim of any Lender in any such proceeding.
 
Section 20.11     Collateral and Guaranty Matters.
 
The Lenders irrevocably authorize the Agent, at its option and in its
discretion:
 
(a)           to release any lien on any property granted to or held by the
Agent under any Loan Document:  (i) upon termination of all commitments to lend
hereunder and payment in full of all Obligations (other than contingent
indemnification obligations), (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document,
or (iii) if approved, authorized or ratified in writing by the Required Lenders;

 
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(b)           to subordinate any lien on any property granted to or held by the
Agent under any Loan Document to the holder of any lien on such property that is
permitted by Section 11.2; and
 
(c)           to release any Guarantor from its obligations under a Guaranty if
such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.
 
Upon request by the Agent at any time, the Required Lenders will confirm in
writing the Agent's authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under a Guaranty pursuant to this Section 20.11.
 
Section 20.12     Lender Pledge.
 
Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Credit Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that, no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledge or assignee for such Lender as a party hereto.
 
Section 20.13     Return of Payments; Defaulting Lender.
 
(a)           If the Agent pays an amount to a Lender under this Credit
Agreement in the belief or expectation that a related payment has been or will
be received by the Agent from the Borrower or any of its Subsidiaries and such
related payment is not received by the Agent, then the Agent will be entitled to
recover such amount from such Lender on demand without setoff, counterclaim or
deduction of any kind, together with interest accruing on a daily basis at the
Defaulting Lender Rate.
 
(b)           If the Agent determines at any time that any amount received by
the Agent under this Credit Agreement must be returned to the Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Credit Agreement or any
other Loan Document, the Agent will not be required to distribute any portion
thereof to any Lender.  In addition, each Lender will repay to the Agent on
demand any portion of such amount that the Agent has distributed to such Lender,
together with interest at such rate, if any, as the Agent is required to pay to
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind.
 
(c)           Notwithstanding anything set forth herein to the contrary, a
Defaulting Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" (or be included in the
calculation of "Required Lenders" hereunder) for any voting or consent rights
under or with respect to any Loan Document.

 
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(d)           If any Lender shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on account of any
Loan in excess of its Pro Rata Share of payments entitled pursuant to the other
provisions of this Section 20.13, such Lender shall purchase from the other
Lenders such participations in extensions of credit made by such other Lenders
(without recourse, representation or warranty) as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery, without interest.  The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this clause (d) may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation.  If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this clause (d) applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this clause (d) to share in the benefits of any recovery on such
secured claim.
 
Section 20.14     Right to Perform, Preserve and Protect.
 
If the Borrower fails to perform any obligation hereunder or under any other
Loan Document beyond any applicable grace period, the Agent itself may, but
shall not be obligated to, cause such obligation to be performed at the
Borrower's expense.  Following such failure by the Borrower, the Agent is
further authorized by the Borrower and the Lenders to make expenditures from
time to time which the Agent, in its reasonable business judgment, deems
necessary or desirable to:  (a) preserve or protect the business conducted by
the Borrower, the Collateral, or any portion thereof and/or (b) enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations.
 
Section 20.15     Amendment of Article 20.
 
The Borrower hereby agrees that this Article 20 constitutes an agreement among,
and solely for the benefit of, the Agent and the Lenders, (and the Agent and the
Lenders acknowledge that the Borrower is not a party to such foregoing
provisions) and that any and all of the provisions of this Article 20 and that
such agreements among the Lenders may be amended at any time by the Lenders
without the consent or approval of or notice to the Borrower (other than any
requirement of notice to the Borrower of the resignation of the Agent).

 
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ARTICLE 21.
ASSIGNMENT AND PARTICIPATION.
 
Section 21.1       Conditions to Assignment by any Lender.
 
Except as provided herein, any Lender may assign to one or more Eligible
Assignees all or a portion of its interest, rights and obligations under this
Credit Agreement and the Notes held by it in accordance with the Assignment and
Acceptance form attached hereto as Exhibit C; provided, that, prior to the
payment in full of the Senior Debt, any such Eligible Assignee shall have agreed
in writing to be bound in all respects by the terms and provisions of the
Subordination Agreement.
 
Section 21.2       Participations.
 
Any Lender may sell participations to one or more banks or other entities in all
or a portion of any Lender's rights and obligations under this Credit Agreement
and the other Loan Documents; provided, that:  (a) any such sale or
participation shall not affect the rights and duties of such Lender hereunder to
the Borrower, (b) the Borrower shall continue to deal with the selling Lender
and (c) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or modifications
of the Loan Documents shall be the rights to approve waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Loan or extend any regularly scheduled payment date for principal or interest.
 
Section 21.3       Disclosure.
 
The Borrower and its Subsidiaries agree that in addition to disclosures made in
accordance with standard and customary banking practices the Lenders may
disclose information obtained by such Lender pursuant to this Credit Agreement
to assignees or participants and potential assignees or participants hereunder;
provided, that such assignees or participants or potential assignees or
participants shall agree:  (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and
(c) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
 
Section 21.4       Assignee or Participant Affiliated with the Borrower.
 
If any assignee of a Lender is an Affiliate of the Borrower or of any of its
Subsidiaries, then any such assignee Lender shall have no right to vote as a
"Lender" hereunder or under any of the other Loan Documents for purposes of
granting consents or waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents.

 
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Section 21.5       Assignment by the Borrower.
 
Neither the Borrower nor any of its Subsidiaries shall assign or transfer any of
its rights or obligations under any of the Loan Documents without the prior
written consent of the Required Lenders and the Agent.
 
ARTICLE 22.
NOTICES, ETC.
 
Except as otherwise expressly provided in this Credit Agreement, all notices and
other communications made or required to be given pursuant to this Credit
Agreement or the Notes shall be in writing and shall be delivered in hand,
mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
 
(a)          if to the Borrower or any of its Subsidiaries, or at such other
address for notice as the Borrower shall last have furnished in writing to the
Person giving the notice; and
 
 
to:
96 Windsor Street

 
West Springfield, MA 01089

 
Attention:  Michael Bielonko

 
 
with a copy to:
Loeb & Loeb LLP

 
345 Park Avenue

 
New York, NY 10154

 
Attention:  Mitchell Nussbaum, Esq.

 
(b)          if to the Agent, to 222 West Adams, Suite 1980, Chicago,
Illinois  60611, Attention: Brian Boorstein, or such other address for notice as
the Agent shall last have furnished in writing to the Person giving the notice.
 
 
with a copy to:
Goldberg Kohn Ltd.

 
55 East Monroe Street, Suite 3300

 
Chicago, Illinois  60606

 
Attention:  Denise B. Caplan

 
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.

 
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ARTICLE 23.
GOVERNING LAW.
 
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN,
EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SAID STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW).  EACH PARTY HERETO AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH PARTY BY
MAIL AT THE ADDRESS SPECIFIED IN ARTICLE 22.  EACH PARTY HERETO HEREBY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
 
ARTICLE 24.
HEADINGS.
 
The captions in this Credit Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
 
ARTICLE 25.
COUNTERPARTS.
 
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument.  In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
 
ARTICLE 26.
ENTIRE AGREEMENT, ETC.
 
The Loan Documents and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby.  Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Article 28.

 
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ARTICLE 27.
WAIVER OF JURY TRIAL.
 
EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF WHICH RIGHTS AND
OBLIGATIONS.  EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  THE BORROWER
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY OF THE
LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY OF THE
LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS.
 
ARTICLE 28.
CONSENTS, AMENDMENTS, WAIVERS, ETC.
 
(a)           No failure to exercise and no delay in exercising, on the part of
any Lender, any right, remedy, power or privilege under any Loan Document 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.  The rights, remedies, powers and privileges under the Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.  No waiver of any provision of any Loan Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by this Article 28, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether any
Lender may have had notice or knowledge of such Default at the time.
 
(b)           Notwithstanding anything to the contrary contained in any Loan
Document, with the written consent of the Required Lenders, the Agent and the
appropriate parties to the Loan Documents (other than the other Lenders) may,
from time to time, enter into written amendments, supplements or modifications
thereof and, with the consent of the Required Lenders, the Agent on behalf of
the other Lenders, may execute and deliver to any such parties a written
instrument waiving or consenting to the departure from, on such terms and
conditions as the Agent may specify in such instrument, any of the requirements
of the Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such amendment, supplement, modification, waiver or
consent shall:
 
(i)      extend or increase the Pro Rata Share of any of the commitment of any
Lender to fund a portion of the Term Loan, without such Lender's consent;
 
(ii)     unless agreed to by each Lender affected thereby:  (A) reduce the
principal amount of any Loan, or reduce the rate of interest thereon, or reduce
any fees or other obligations payable under the Loan Documents or (B) extend any
date (including the Term Loan Maturity Date) fixed for the payment or mandatory
prepayment of principal or interest on any Loan, any fees, or any other
obligation payable under the Loan Documents;

 
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(iii)    unless agreed to by all of the Lenders, (A)  increase the commitment of
any Lender to fund a portion of the Term Loan, (B) change the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, (C) change the order of
payments under Section 15.4, (D) consent to any assignment or delegation by any
Borrower of any of its rights or obligations under any Loan Document,
(E) release any Borrower from its obligations under this Credit Agreement,
(F) release any Guarantor from its obligations under this Credit Agreement or
any Guaranty (except as a result of the termination of the existence of such
Guarantor in a transaction permitted hereunder), or release any of the
Collateral from the liens of the Security Documents (except as may be expressly
permitted thereunder or hereunder, or (G) amend, modify or affect Article 28);
 
(iv)    unless agreed to by all of the Lenders, shorten the maturity of the
Loans; and
 
(v)     unless agreed to by the Agent, amend, modify or otherwise affect the
rights or duties of the Agent under this Credit Agreement or the other Loan
Documents.
 
Any such amendment, supplement, modification, waiver or consent shall apply
equally to each Lender and shall be binding upon each Lender and subject to the
Borrower's execution of such amendment, supplement, modification, waiver or
consent the Borrower and upon all future holders of the Notes.  In the case of
any waiver, the Lender and the Borrower shall be restored to their former
position and rights hereunder and under the outstanding Notes and other Loan
Documents to the extent provided for in such waiver, and any Default or Event of
Default waived shall not extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
 
ARTICLE 29.
SEVERABILITY.
 
The provisions of this Credit Agreement are severable and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.

 
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ARTICLE 30.
SUBORDINATION AGREEMENT.
 
Notwithstanding any provision to the contrary in this Credit Agreement, this
Credit Agreement, the Liens and security interests granted to the Agent and
Lenders, at law or equity, pursuant to this Credit Agreement, and the exercise
of any right or remedy by the Agent or any Lender hereunder are subject to the
provisions of the Subordination Agreement.  Agent and each Lender acknowledge
and agree to be bound by the Subordination Agreement.  In the event of any
conflict between the terms of the Subordination Agreement and this Credit
Agreement or the other Loan Documents, the terms of the Subordination Agreement
shall govern.  Without limiting the generality of the foregoing, and
notwithstanding anything herein to the contrary, all right and remedies of the
Agent and Lenders shall be subject to the terms of the Subordination Agreement,
and until the Senior Debt is paid in full, any obligation of Borrower or any
Guarantor hereunder with respect to the delivery or control of any Collateral,
the notation of any lien on any certificate of title, bill of lading or other
document, the giving of any notice to any bailee or other Person, the provision
of voting rights or the obtaining of any consent of any Person shall be deemed
to be satisfied if the Borrower or such Guarantor complies with the requirements
of the similar provision of the Senior Loan Agreement or the applicable Senior
Debt Document.
 
The Borrower and Guarantors acknowledge that the Subordination Agreement and the
rights and benefits thereof (as specific references thereto herein) inure only
to the benefit of the holders of the Senior Debt and that no other Person,
including the Borrower and Guarantors, shall have or be entitled to assert any
rights or benefits hereunder arising under the Subordination Agreement or by
virtue of the existence of the specific references thereto herein.

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IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement as
a sealed instrument as of the date first set forth above.
 
CYALUME TECHNOLOGIES
HOLDINGS, INC.
   
By:
/s/ Derek Dunaway
Title: Chief Executive Officer
   
CYALUME TECHNOLOGIES, INC.
   
By:
/s/ Michael Bielonko
Title: Chief Financial Officer

Signature Page to Subordinated Loan Agreement

 

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PATRIOT CAPITAL II, L.P., a Delaware
limited partnership
   
By:
Patriot Partners II, LLC, a Delaware
 
limited liability company, General
Partner
   
By:
/s/ Thomas O. Holland, Jr.
 
Thomas O. Holland, Jr.
 
Managing Member

Signature Page to Subordinated Loan Agreement

 

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GRANITE CREEK FLEXCAP I, L.P.
   
By:
/s/ Brian B. Boorstein
Title: Managing Partner

 
Signature Page to Subordinated Loan Agreement

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GRANITE CREEK PARTNERS AGENT,
LLC, as Agent
   
By:
/s/ Brian B. Boorstein
Title: Managing Member

Signature Page to Subordinated Loan Agreement

 

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