Exhibit 10.1

 

 

 

$300,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

October 11, 2011

among

SCANSOURCE, INC.,

The Subsidiary Borrowers Party Hereto,

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Swingline Lender and Issuing Bank

WELLS FARGO BANK, N.A.,

as Syndication Agent

REGIONS BANK and

TD BANK, N.A.,

as Co-Documentation Agents

 

 

J.P. MORGAN SECURITIES LLC,

as Sole Bookrunner and Sole Lead Arranger

 

 

 

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TABLE OF CONTENTS

Page

 

ARTICLE I Definitions

     1  

SECTION 1.01. Defined Terms

     1  

SECTION 1.02. Classification of Loans and Borrowings

     30  

SECTION 1.03. Terms Generally

     30  

SECTION 1.04. Accounting Terms; GAAP

     31  

SECTION 1.05. Foreign Currency Calculations

     31  

SECTION 1.06. Redenomination of Certain Foreign Currencies

     31  

ARTICLE II The Credits

     32  

SECTION 2.01. Commitments

     32  

SECTION 2.02. Loans and Borrowings

     32  

SECTION 2.03. Requests for Revolving Borrowings

     33  

SECTION 2.04. [Intentionally Omitted]

     34  

SECTION 2.05. Swingline Loans

     34  

SECTION 2.06. Letters of Credit

     36  

SECTION 2.07. Funding of Borrowings

     41  

SECTION 2.08. Interest Elections

     42  

SECTION 2.09. Termination, Reduction and Increase of Commitments

     43  

SECTION 2.10. Repayment of Loans; Evidence of Debt

     45  

SECTION 2.11. Prepayment of Loans

     46  

SECTION 2.12. Fees

     47  

SECTION 2.13. Interest

     48  

SECTION 2.14. Alternate Rate of Interest

     49  

SECTION 2.15. Increased Costs

     49  

SECTION 2.16. Break Funding Payments

     51  

SECTION 2.17. Taxes

     51  

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     55  

SECTION 2.19. Mitigation Obligations; Replacement of Lenders

     56  

SECTION 2.20. Subsidiary Borrowers

     57  

SECTION 2.21. [Intentionally Omitted]

     58  

SECTION 2.22. Defaulting Lenders

     58  

ARTICLE III Representations and Warranties

     60  

SECTION 3.01. Organization; Powers

     60  

SECTION 3.02. Authorization; Enforceability

     60  

SECTION 3.03. Governmental Approvals; No Conflicts

     60  

SECTION 3.04. Financial Condition; No Material Adverse Change

     60  

SECTION 3.05. Properties

     61  

SECTION 3.06. Litigation and Environmental Matters

     61  

SECTION 3.07. Compliance with Laws and Agreements

     61  

SECTION 3.08. Investment Company Status

     61  

SECTION 3.09. Taxes

     62  

SECTION 3.10. ERISA

     62  

 

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SECTION 3.11. Disclosure

     62  

SECTION 3.12. Security Documents

     62  

SECTION 3.13. Subsidiaries

     62  

SECTION 3.14. Regulation U

     63  

SECTION 3.15. Solvency

     63  

SECTION 3.16. Material Agreements

     63  

SECTION 3.17. Foreign Pension Plan

     63  

SECTION 3.18. Labor Relations

     63  

SECTION 3.19. Anti-Corruption Laws and Sanctions

     64  

SECTION 3.20. EEA Financial Institution

     64  

ARTICLE IV Conditions

     64  

SECTION 4.01. Effective Date

     64  

SECTION 4.02. Each Credit Event

     66  

ARTICLE V Affirmative Covenants

     66  

SECTION 5.01. Financial Statements; Ratings Change and Other Information

     66  

SECTION 5.02. Notices of Material Events

     68  

SECTION 5.03. Existence; Conduct of Business

     69  

SECTION 5.04. Payment of Obligations

     69  

SECTION 5.05. Maintenance of Properties; Insurance

     69  

SECTION 5.06. Books and Records; Inspection Rights

     69  

SECTION 5.07. Compliance with Laws

     69  

SECTION 5.08. Use of Proceeds and Letters of Credit

     69  

SECTION 5.09. Further Assurances; etc.

     70  

SECTION 5.10. Ownership of Subsidiaries; etc.

     70  

SECTION 5.11. Additional Guarantors and Collateral

     70  

ARTICLE VI Negative Covenants

     71  

SECTION 6.01. Indebtedness

     71  

SECTION 6.02. Liens

     74  

SECTION 6.03. Fundamental Changes; Asset Dispositions

     76  

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions

     77  

SECTION 6.05. Swap Agreements

     79  

SECTION 6.06. Restricted Payments

     79  

SECTION 6.07. Transactions with Affiliates

     79  

SECTION 6.08. Restrictive Agreements

     79  

SECTION 6.09. Subordinated Indebtedness; Certain Prepayments

     80  

SECTION 6.10. Sale and Leaseback Transactions

     81  

SECTION 6.11. Fiscal Year

     81  

SECTION 6.12. Maximum Leverage Ratio

     81  

SECTION 6.13. Minimum Interest Coverage Ratio

     81  

 

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ARTICLE VII Events of Default

     81  

ARTICLE VIII The Administrative Agent

     84  

ARTICLE IX Miscellaneous

     88  

SECTION 9.01. Notices

     88  

SECTION 9.02. Waivers; Amendments

     90  

SECTION 9.03. Expenses; Indemnity; Damage Waiver

     92  

SECTION 9.04. Successors and Assigns

     93  

SECTION 9.05. Survival

     97  

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution

     97  

SECTION 9.07. Severability

     98  

SECTION 9.08. Right of Setoff

     98  

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process

     98  

SECTION 9.10. WAIVER OF JURY TRIAL

     99  

SECTION 9.11. Headings

     99  

SECTION 9.12. Confidentiality

     99  

SECTION 9.13. Interest Rate Limitation

     101  

SECTION 9.14. USA PATRIOT Act

     101  

SECTION 9.15. Conversion of Currencies

     101  

SECTION 9.16. Appointment of Borrower

     101  

SECTION 9.17. Application of Proceeds

     102  

SECTION 9.18. Parallel Debt Provisions

     102  

SECTION 9.19. Amendment and Restatement

     103  

SECTION 9.20. No Fiduciary Duty, etc.

     103  

SECTION 9.21. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions

     104  

SECTION 9.22. Reference Bank Replacement

     105  

 

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SCHEDULES:

Schedule 1.01 – Pricing Schedule

Schedule 1.02 – Exiting Lenders

Schedule 2.01 – Commitments

Schedule 2.20 – Closing Date Subsidiary Borrowers

Schedule 3.13 – Subsidiaries

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.08 – Existing Restrictions

EXHIBITS:

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Designation Letter

Exhibit C – Form of Termination Letter

Exhibit D – Form of Compliance Certificate

Exhibit E – U.S. Tax Certificate

 

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AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 11, 2011, among
SCANSOURCE, INC., the Subsidiary Borrowers party hereto, the LENDERS party
hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent, Swingline Lender
and Issuing Bank.

RECITALS

A.        The Borrower, the Subsidiary Borrowers, the Administrative Agent, the
financial institutions designated as existing lenders on Schedule 2.01 hereto
(the “Continuing Lenders”) and the financial institutions listed on Schedule
1.02 hereto (“Exiting Lenders”) are party to that certain Credit Agreement dated
as of September 28, 2007 (as amended up to but not including the date hereof,
the “Original Credit Agreement”).

B.        The Borrower, the Administrative Agent and the Continuing Lenders wish
to amend and restate the Original Credit Agreement on the terms and conditions
set forth below to, among other things, extend the Maturity Date, reallocate the
Commitments and make the other changes to the Original Credit Agreement
evidenced hereby.

C.        The financial institutions identified on Schedule 2.01 which are not
Continuing Lenders wish to become “Lenders” hereunder and accept and assume the
obligations of “Lenders” hereunder with the Commitments specified on such
schedule.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements
made herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Original Credit Agreement is hereby amended and restated in its entirety as
follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Acquired Entity or Business” means either (a) the assets constituting a
business, division, facility, product line or line of business of any Person not
already a Subsidiary or (b) the capital stock of any such Person, which Person
shall, as a result of an acquisition or merger, become at least a 51% owned
Subsidiary of the Borrower (or shall be merged with and into the Borrower or a
Subsidiary Guarantor, with the Borrower or such Subsidiary Guarantor being the
surviving Person).

“Adjusted LIBOR Rate” means, with respect to any Eurocurrency Borrowing in
Dollars for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the Benchmark Rate for such
Interest Period multiplied by (b) the

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Statutory Reserve Rate. For all other Eurocurrency Borrowings, “Adjusted LIBOR
Rate” means the Benchmark Rate.

“Administrative Agent” means JPMorgan, in its capacity as administrative agent
for the Lenders hereunder, and, as applicable with respect to Borrowings and
Loans in Foreign Currencies, J.P. Morgan Europe Limited.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Advance” means any Loan or any Letter of Credit.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

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

“Agreement Currency” shall have the meaning assigned to such term in
Section 9.15(b).

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus  1⁄2 of 1% and (c) the Adjusted LIBOR Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that for the purposes of
this definition, the Adjusted LIBOR Rate for any day shall be based on the
Benchmark Screen Rate (or if the Benchmark Screen Rate is not available for such
one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m.
London time on such day. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the NYFRB Rate or the Adjusted LIBOR Rate shall be effective
from and including the effective date of such change in the Prime Rate, the
NYFRB Rate or the Adjusted LIBOR Rate, respectively.

“Amendment No. 1 Effective Date” means the “Effective Date” as defined in
Amendment No. 1 to this Agreement dated as of November 6, 2013 by and among the
Borrowers, the Administrative Agent and the Lenders party thereto.

“Amendment No. 2” means that certain Amendment No. 2 to Amended and Restated
Credit Agreement dated as of December 10, 2015, by and among the Borrowers, the
Administrative Agent and the Lender party thereto.

“Amendment No. 3 Effective Date” means the “Amendment No. 3 Effective Date” as
defined in Amendment No. 3 to Amended and Restated Credit Agreement dated as of
April 3, 2017 by and among the Borrowers, the Administrative Agent and the
Lenders party thereto.

 

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“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries concerning or
relating to bribery or corruption.

“Applicable Borrower” means, with respect to any Loan or other amount owing
hereunder or any matter pertaining to such Loan or other amount, whichever of
the Borrowers is the primary obligor on such Loan or other amount and, with
respect to any Letter of Credit, whichever of the Borrowers is the account party
with respect thereto.

“Applicable Creditor” shall have the meaning assigned to such term in
Section 9.15(b).

“Applicable Lending Installation” is defined in Section 2.02(e).

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that in the
case of Section 2.20 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments and to any Lender’s status as a Defaulting Lender at the time of
determination.

“Applicable Rate” means, for any day, with respect to any Eurocurrency Loan or
ABR Loan or with respect to the commitment fees payable hereunder, the
applicable rate per annum set forth on Schedule 1.01 under the caption
“Eurocurrency Spread”, “ABR Spread” or “Commitment Fee Rate”, as the case may
be, based upon the Leverage Ratio.

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Asset Disposition” means any sale, transfer or other disposition of any asset
of the Borrower or any Subsidiary in a single transaction or in a series of
related transactions (other than (a) the sale or lease of inventory or products
in the ordinary course or the sale of obsolete or worn out property in the
ordinary course, (b) the licensing of intellectual property and other general
intangibles to third parties in the ordinary course of business, (c) the
disposal of obsolete, worn-out or surplus equipment in the ordinary course of
business, (d) the disposition of receivables in connection with the compromise,
settlement or collection thereof in the ordinary course of business, (e) the
sale of lease portfolios and (f) the sale of Permitted Investments in the
ordinary course of business).

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

“AUD Bank Bill Reference Rate” means, with respect to any Eurocurrency Borrowing
in Australian Dollars and for any applicable Interest Period, the average bank
bill reference rate as administered by the Australian Financial Markets
Association (or any other

 

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Person that takes over the administration of that rate) for bills of exchange
with a tenor equal to the relevant period displayed on page BBSY of the Reuters
screen (or, in the event such rate does not appear on a Reuters page or screen,
on any successor or substitute page on such screen that displays such rate, or
on the appropriate page of such other information service that publishes such
rate from time to time as selected by the Administrative Agent in its reasonable
discretion) at or about 10:30 a.m. (Melbourne, Australia time) on the Quotation
Day for such Interest Period.

“Australian Dollars” means the lawful currency of Australia.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Banking Services” means each and any of the following bank services provided to
any Credit Party by any Lender or any of its Affiliates: (a) commercial credit
cards, (b) stored value cards and (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).

“Banking Services Obligations” of the Credit Parties means any and all
obligations of the Credit Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978, as amended.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Person (or such
Governmental

 

4

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Authority or instrumentality) to reject, repudiate, disavow or disaffirm any
contracts or agreements made by such Person.

“Benchmark Rate” means, with respect to (a) any Eurocurrency Borrowing in any
LIBOR Quoted Currency and for any applicable Interest Period, the Benchmark
Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, (b) any Eurocurrency Borrowing
denominated in any Non-Quoted Currency and for any applicable Interest Period,
the applicable Local Screen Rate for such Non-Quoted Currency; provided, that,
if the Benchmark Screen Rate or the Local Screen Rate, as applicable, shall not
be available at such time for such Interest Period (an “Impacted Interest
Period”) with respect to the applicable currency, then the Benchmark Rate or the
Local Screen Rate, as applicable, shall be the Interpolated Rate, and (c) any
Eurocurrency Borrowing in Mexican Pesos for any applicable Interest Period, a
rate per annum equal to (i) with respect to Swingline Loans, such rate which is
the cost to JPMorgan of funding such Eurocurrency Borrowing (from whatever
source it may reasonably select and as determined in the sole discretion of
JPMorgan) and agreed to by the Borrower not later than 12:00 p.m. (London time)
two Business Days prior to the commencement of such Interest Period (or by such
other time and day as the Administrative Agent may determine) and (ii) with
respect to Revolving Loans, the Peso Reference Bank Rate for such Interest
Period.

“Benchmark Screen Rate” means, for any day and time, with respect to any
Eurocurrency Borrowing in any LIBOR Quoted Currency for any Interest Period, the
London interbank offered rate as administered by ICE Benchmark Administration
(or any other Person that takes over the administration of such rate for such
LIBOR Quoted Currency for a period equal in length to such Interest Period as
displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen
that displays such rate (or, in the event such rate does not appear on a Reuters
page or screen, on any successor or substitute page on such screen that displays
such rate, or on the appropriate page of such other information service that
publishes such rate from time to time as selected by the Administrative Agent in
its reasonable discretion); provided that if the Benchmark Screen Rate shall be
less than zero, such rate shall be deemed to zero for the purposes of this
Agreement.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Bond Financing Agreement” means that certain Financing Agreement dated as of
August 1, 2007, between the Borrower and Mississippi Business Finance
Corporation, as the same may be amended, modified, supplemented, restated or
renewed from time to time.

“Bonds” means the Mississippi Business Finance Corporation Taxable Industrial
Development Revenue Bonds, Series 2007 (ScanSource, Inc. Project), issued by the
Mississippi Business Finance Corporation in connection with the Borrower’s
distribution center located in Southaven, DeSoto County, Mississippi, the
proceeds of which Bonds were loaned to the Borrower or one of its Subsidiaries
pursuant to the Bond Financing Agreement.

“Borrower” means ScanSource, Inc., a South Carolina corporation.

 

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“Borrowers” means the Borrower and each Subsidiary Borrower.

“Borrowing” means (a) a Revolving Borrowing of the same Type, made, converted or
continued on the same date to the same Applicable Borrower and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect or (b) a
Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; and when used in connection with a Eurocurrency Loan for a LIBOR
Quoted Currency, the term “Business Day” shall also exclude any day on which
banks are not open for general business in London; and in addition, with respect
to any date for the payment or purchase of, or the fixing of an interest rate in
relation to, any Non-Quoted Currency, the term “Business Day” shall also exclude
any day on which banks are not open for general business in the principal
financial center of the country of that currency and, if the Borrowing or LC
Disbursements which are the subject of a borrowing, drawing, payment,
reimbursement or rate selection are denominated in Euro, the term “Business Day”
shall also exclude any day on which the TARGET2 payment system is not open for
the settlement of payments in Euro).

“Canadian Dollars” means the lawful currency of Canada.

“Capital Expenditures” means for any period the sum of all capital expenditures
incurred during such period by the Borrower and its consolidated Subsidiaries,
as determined in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“CDOR Rate” means, with respect to any Eurocurrency Borrowing in Canadian
Dollars and for any applicable Interest Period, the average rate for bankers
acceptances as administered by the Investment Industry Regulatory Organization
of Canada (or any other Person that takes over the administration of that rate)
with a tenor equal to the relevant period displayed on CDOR01 page of the
Reuters Monitor Service (or, in the event such rate does not appear on a Reuters
page or screen, on any successor or substitute page on such screen or service
that displays such rate, or on the appropriate page of such other information
service that publishes such rate from time to time as selected by the
Administrative Agent in its reasonable discretion) at or about 10:15 a.m.
(Toronto, Ontario time) on the Quotation Day for such Interest Period.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in

 

6

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effect on the date hereof) of Equity Interests representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Borrower; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated or approved by the board of directors of the Borrower nor
(ii) appointed or approved by directors so nominated; or (c) the acquisition of
direct or indirect Control of the Borrower by any Person or group.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rules,
guideline, requirement or directive (whether or not having the force of law) by
any Governmental Authority; provided however, that notwithstanding anything
herein to the contrary,(i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law” regardless of the date enacted,
adopted, issued or implemented.

“Charges” has the meaning set forth in Section 9.13.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means all property with respect to which any security interests
have been granted (or purported to be granted) pursuant to any Security
Document, including, without limitation, all cash delivered as collateral
pursuant to Section 2.06(j).

“Collateral Agent” means JPMorgan acting as collateral agent and security
trustee for the Secured Creditors pursuant to the Security Documents.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or increased from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Lenders’ Commitments as of the
Amendment No. 3 Effective Date is $300,000,000.

 

7

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“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Continuing Lenders” is defined in the Recitals hereto.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power or by contract. “Controlling” and
“Controlled” have meanings correlative thereto.

“Credit Documents” means this Agreement and, after the execution and delivery
thereof pursuant to the terms of this Agreement, each promissory note, if any,
delivered pursuant to Section 2.10(e), the Parent Guaranty, the Subsidiary
Guaranty, each Security Document, the Reaffirmation, the Fee Letter, letter of
credit applications and any agreements between the Borrower and the Issuing Bank
regarding the Issuing Bank’s Letter of Credit Commitment or the respective
rights and obligations between the Borrower and the Issuing Bank in connection
with the issuance of Letters of Credit, each amendment to any of the foregoing
and each other document from time to time designated as such by the Borrower and
the Administrative Agent.

“Credit Parties” means each of the Borrowers and each Subsidiary Guarantor.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Specified Party any other amount
required to be paid by it hereunder, unless, in the case of clause (i) above,
such Lender notifies the Administrative Agent in writing that such failure is
the result of such Lender’s good faith determination that a condition precedent
to funding (specifically identified and including the particular default, if
any) has not been satisfied, (b) has notified the Borrower or any Specified
Party in writing, or has made a public statement to the effect, that it does not
intend or expect to comply with any of its funding obligations under this
Agreement (unless such writing or public statement indicates that such position
is based on such Lender’s good faith determination that a condition precedent
(specifically identified and including the particular default, if any) to
funding a loan under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit, (c) has failed, within
three Business Days after request by a Specified Party, acting in good faith, to
provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans under this Agreement, provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
such Specified Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of (i) a Bankruptcy Event or (ii) a Bail-In Action.

 

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“Designation Letter” means a letter in substantially the form of Exhibit B
hereto.

“Disposed Company” means an entity or assets constituting a business, division,
facility, product line or line of business sold by the Borrower or any of its
Subsidiaries by way of sale of equity or substantially all of such assets of
such entity and otherwise permitted by this Agreement.

“Dollar Equivalent” means, on any date of determination (a) with respect to any
amount in Dollars, such amount, and (b) with respect to any amount in any
Foreign Currency, the equivalent in Dollars of such amount, determined by the
Administrative Agent or, as applicable, the relevant Issuing Bank pursuant to
Section 1.05 using the Exchange Rate with respect to such Foreign Currency at
the time in effect under the provisions of such Section.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means each Subsidiary that is incorporated under the laws
of the United States, any State thereof or the District of Columbia.

“Dutch Pledge Agreement” means the Pledge Agreement dated as of October 30, 2009
made by certain of the Credit Parties with respect to Equity Interests of
ScanSource Europe CV, as reaffirmed by the Reaffirmation, as the same may be
amended, restated, modified or supplemented from time to time.

“EBITDA” means, for any applicable computation period, the Borrower’s and its
Subsidiaries’ Net Income on a consolidated basis, plus, to the extent included
in the determination of Net Income, (a) income and franchise taxes and other
taxes measured by income or profits in respect of the Borrower and its
Subsidiaries paid or accrued during such period, (b) Total Interest Expense for
such period, (c) amortization and depreciation deducted in determining Net
Income for such period, (d) other non-cash charges for such period (other than
charges that represent an accrual for future cash expenditures),
(e) non-recurring losses for such period, and (f) non-cash charges in respect of
stock options and goodwill amortization for such period, and minus, to the
extent included in the determination of Net Income, (a) extraordinary non-cash
gains for such period and (b) non-recurring gains for such period. Solely with
respect to the calculation of the Leverage Ratio (or the Net Leverage Ratio as
defined on Schedule 1.01 hereto), for any computation period during which (i) an
Acquired Company or Business is acquired or (ii) a Disposed Company is sold,
EBITDA shall be calculated on a pro forma basis as if such Acquired Entity or
Business or Disposed Company, as the case may be, had been acquired (and any
related Indebtedness incurred) or sold (and any related Indebtedness repaid), as
the case may be, on the first day of such computation period.

“EDGAR” means the Electronic Data Gathering, Analysis and Retrieval system
established and operated by the SEC, or any successor system.

“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which

 

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is a subsidiary of an institution described in clauses (a) or (b) of this
definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a person with
the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax,
Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent and the Issuing Bank and any of its respective
Related Parties or any other Person, providing for access to data protected by
passcodes or other security system.

“EMU Legislation” means the legislative measures of the European Union for the
introduction of, changeover to or operation of the Euro in one or more member
states of the European Union.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Euro” or “€” means the single currency unit of the Participating Member States.

“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBOR Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Exchange Rate” means on any day, for purposes of determining the Dollar
Equivalent of any currency other than Dollars, the rate at which such currency
may be exchanged into Dollars at the time of determination on such day on the
Reuters Currency pages, if available, for such currency. In the event that such
rate does not appear on any Reuters Currency pages, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent (or relevant
Issuing Bank as applicable) and the Borrowers, or, in the absence of such an
agreement, such Exchange Rate shall instead be the arithmetic average of the
spot rates of exchange of the Administrative Agent (or relevant Issuing Bank as
applicable) in the market where its foreign currency exchange operations in
respect of such currency are then being conducted, at or about

 

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such time as the Administrative Agent (or relevant Issuing Bank as applicable)
shall elect after determining that such rates shall be the basis for determining
the Exchange Rate, on such date for the purchase of Dollars for delivery two
Business Days later; provided that if at the time of any such determination, for
any reason, no such spot rate is being quoted, the Administrative Agent (or
relevant Issuing Bank as applicable) may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be conclusive
absent manifest error.

“Exchange Rate Date” means, if on such date any outstanding Loan or Letter of
Credit is (or any Loan or Letter of Credit that has been requested at such time
would be) denominated in a currency other than Dollars, each of:

(a)        the last Business Day of each calendar month,

(b)        if an Event of Default has occurred and is continuing, any Business
Day designated as an Exchange Rate Date by the Administrative Agent in its sole
discretion, and

(c)        each date (with such date to be reasonably determined by the
Administrative Agent) that is on or about the date of (i) a Borrowing Request or
an Interest Election Request with respect to any Revolving Borrowing or
(ii) each request for the issuance, amendment, renewal or extension of any
Letter of Credit or Swingline Loan.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a U.S. Lender, U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Commitment (other than pursuant to an assignment request
by the Borrower under Section 2.19) or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to Section 2.17,
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its lending office, (c) any Taxes attributable to
such U.S. Lender’s failure (other than as a result of a Change in Law) to comply
with Section 2.17(f) and (d) any U.S. federal withholding Taxes imposed under
FATCA.

“Exiting Lenders” is defined in the Recitals hereto.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions,
as determined

 

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in such manner as the NYFRB shall set forth on its public website from time to
time, and published on the next succeeding Business Day by the NYFRB as the
federal funds effective rate, provided that if the Federal Funds Effective Rate
shall be less than zero, such rate shall be deemed to zero for the purposes of
this Agreement.

“Fee Letter” means that certain letter agreement dated March 2, 2017 by and
between JPMorgan and the Borrower.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

“Foreign Currency” means (a) with respect to any Revolving Loan, Euros,
Sterling, Canadian Dollars, Swedish Krona, Swiss Francs, Japanese Yen,
Australian Dollars, Hong Kong Dollars and any other currency acceptable to the
Administrative Agent and each of the Lenders that is freely available, freely
transferable and freely convertible into Dollars and in which dealings in
deposits are carried on in the London interbank market, (b) with respect to any
Letter of Credit, any currency acceptable to the Administrative Agent that is
freely available, freely transferable and freely convertible into Dollars, and
agreed to by the Issuing Bank issuing such Letter of Credit, and (c) with
respect to any Swingline Foreign Currency Loan, any currency acceptable to the
Administrative Agent that is freely available, freely transferable and freely
convertible into Dollars, and agreed to by applicable Swingline Lender.

“Foreign Investment Grade Rating” means a rating of BBB- or higher from S&P or
Baa3 or higher from Moody’s (or, if not rated by S&P or Moody’s, an equivalent
rating from another recognized and reputable rating agency).

“Foreign Pension Plan” means any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside
the United States by the Borrower or any one or more of its Subsidiaries
primarily for the benefit of employees of the Borrower or such Subsidiaries
residing outside the United States, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination or severance
of employment, and which plan is not subject to ERISA or the Code.

“Foreign Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of any jurisdiction other than the United States of America, any
State thereof or the District of Columbia.

“GAAP” means, subject to Section 1.04, generally accepted accounting principles
in the United States of America.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government, including
the European Union.

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee made by any guarantor shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Guarantee is made and (b) the maximum amount for which such
guarantor may be liable pursuant to the terms of the instrument embodying such
Guarantee, unless (in the case of a primary obligation that is not Indebtedness)
such primary obligation and the maximum amount for which such guarantor may be
liable are not stated or determinable, in which case the amount of such
Guarantee shall be such guarantor’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“HIBOR Rate” means, with respect to any Eurocurrency Borrowing in Hong Kong
Dollars and for any applicable Interest Period, the rate per annum designated as
“FIXING@11.00” displayed under the heading “HONG KONG INTERBANK OFFERED RATES
(HK DOLLAR)” on the Reuters Screen Page HIBOR XX for a period equal in length to
such Interest Period as displayed on the applicable Reuters screen page or, in
the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate as
shall be selected by the Administrative Agent from time to time in its
reasonable discretion, at approximately 11:00 a.m., Hong Kong time, on the
Quotation Date for such Interest Period.

“Hong Kong Dollars” means the lawful currency of Hong Kong.

“Incremental Facilities” has the meaning assigned to it in Section 2.09(d).

“Incremental Revolving Commitment” has the meaning assigned to it in
Section 2.09(d).

“Incremental Term Loan” has the meaning assigned to it in Section 2.09(d).

 

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“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business (including accounts payable
payable on extended terms under supply chain financing arrangements established
by suppliers) and also excluding obligations to make contingent “earn out”
payments associated with the post-closing performance of a business or Person
acquired in a Permitted Acquisition), (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property now or hereafter owned by
such Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances and (k) all Off-Balance Sheet Liabilities. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding anything to the contrary contained herein, for the purposes of
determining compliance with Section 6.01 and Section 6.12 (including for
purposes of computing the Leverage Ratio relative to Schedule 1.01) only,
Indebtedness shall be deemed to exclude any credit card obligations incurred for
the purchase of goods and services in the ordinary course of business which have
not been outstanding more than 45 days and do not exceed $10,000,000 in the
aggregate at any time outstanding. Notwithstanding clause (f) above,
Indebtedness shall not include Indebtedness of a joint venture to the extent
secured by a pledge of Equity Interests in such joint venture and otherwise
without recourse to such pledgor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on behalf of any Credit Party under any
Credit Document and (b) Other Taxes.

“Ineligible Institution” has the meaning assigned to it in Section 9.04(b).

“Information Memorandum” means the Confidential Information Memorandum dated
March 2017 relating to the Borrower and the Transactions.

“Interest Coverage Ratio” means the ratio, determined as of the end of each
fiscal quarter of the Borrower for the most recently ended four fiscal quarters,
of (a) EBITDA to (b) Total Interest Expense, all calculated for the Borrower and
its Subsidiaries on a consolidated basis in accordance with GAAP.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08.

 

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“Interest Payment Date” means (a) with respect to any ABR Loan and any Swingline
Loan, the first day of each January, April, July and October, and (b) with
respect to any Eurocurrency Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period.

“Interest Period” means (a) with respect to any Eurocurrency Revolving
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is seven (7) days or
one, two, three or six months thereafter, as the Borrower may elect, and (b) as
to any Swingline Foreign Currency Loan, the period commencing on the date of
such Loan and ending on the day that is designated in the notice delivered
pursuant to Section 2.04 with respect to such Swingline Foreign Currency Loan,
which shall not be later than thirty days thereafter; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurocurrency Borrowing only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurocurrency Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made,
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the Benchmark Screen Rate
or the Local Screen Rate, as applicable) determined by the Administrative Agent
(which determination shall be conclusive and binding absent manifest error) to
be equal to the rate that results from interpolating on a linear basis between:
(a) the Benchmark Screen Rate or the Local Screen Rate, as applicable, for the
longest period for which the Benchmark Screen Rate or the Local Screen Rate, as
applicable, is available for the applicable currency) that is shorter than the
Impacted Interest Period; and (b) the Benchmark Screen Rate or the Local Screen
Rate, as applicable, for the shortest period (for which that Benchmark Screen
Rate or the Local Screen Rate, as applicable, is available for the applicable
currency) that exceeds the Impacted Interest Period, in each case, at such time.

“Issuing Bank” means JPMorgan, TD Bank, N.A., Bank of America, N.A. and any
other Lender that agrees in writing with the Borrower to issue Letters of Credit
(provided that notice of such agreement is given to the Administrative Agent),
in each case, in its capacity as the issuer of Letters of Credit hereunder, and
its successors in such capacity as provided in Section 2.06(i) and, with respect
to any Letter of Credit (or requested Letter of Credit), means the issuer (or
requested issuer) thereof. The Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate. Each reference herein to the
“Issuing Bank” shall be deemed to be a reference to the relevant Issuing Bank.

 

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“Japanese Yen” means the lawful currency of Japan.

“JPMorgan” means JPMorgan Chase Bank, N.A., a national banking association, and
its successors.

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the Dollar Equivalent of the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the Dollar Equivalent of the aggregate amount of all LC Disbursements that
have not yet been reimbursed by or on behalf of the Applicable Borrower at such
time. The LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.

“Lender Parent” means, with respect to any Lender, any Person as to which such
Lender is, directly or indirectly, a subsidiary.

“Lenders” means the Persons listed on Schedule 2.01, any other Person that shall
have become a party hereto in accordance with Section 2.09(d) and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lenders.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Letter of Credit Commitment” means, (a) with respect to each Issuing Bank
listed on Schedule 2.01, the commitment of such Issuing Bank to issue Letters of
Credit hereunder in the amount set forth with respect to such Issuing Bank on
Schedule 2.01 or (b) if an Issuing Bank has entered into an Assignment and
Assumption, the amount set forth for such Issuing Bank as its Letter of Credit
Commitment in the Register maintained by the Administrative Agent. For the
avoidance of doubt and subject to the definition of Issuing Bank and
Section 2.06, a Lender is not required to have a Letter of Credit Commitment in
order to become an Issuing Bank.

“Leverage Ratio” means, at any time, the ratio of Total Debt at such time to
EBITDA for the most recently completed four fiscal quarters of the Borrower,
computed on a consolidated basis for the Borrower and its Subsidiaries.

“LIBOR Quoted Currency” means Dollars, Euro, Sterling, Swiss Francs, Japanese
Yen and any other currency which becomes a Foreign Currency and is designated as
a LIBOR Quoted Currency by the Borrower and the Administrative Agent.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, assignment by way of security, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of

 

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securities, any purchase option, call or similar right of a third party with
respect to such securities.

“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.

“Local Time” means (a) with respect to a Loan or Borrowing denominated in
Dollars, New York City time and (b) with respect to a Loan or Borrowing
denominated in any Foreign Currency, London time.

“Local Screen Rate” means each of the AUD Bank Bill Reference Rate, the CDOR
Rate, the HIBOR Rate and the STIBOR Rate; provided that if any Local Screen Rate
shall be less than zero, such rate shall be deemed to be zero for the purposes
of this Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or financial condition, of the Borrower and the Subsidiaries
taken as a whole, (b) the ability of any Credit Party to perform its obligations
under the Credit Documents or (c) the rights of or benefits available to the
Administrative Agent, Collateral Agent or the Lenders under the Credit
Documents.

“Material Indebtedness” means Indebtedness (other than (a) the Loans and Letters
of Credit and (b) intercompany Indebtedness owing among the Borrower and its
Subsidiaries), or Swap Obligations of any one or more of the Borrower and its
Subsidiaries in an aggregate principal amount exceeding $20,000,000.

“Material Foreign Subsidiary” means a Foreign Subsidiary the Equity Interests of
which are held directly by the Borrower or a Domestic Subsidiary and which,
together with its subsidiaries, accounts for (or in the case of a recently
formed or acquired Foreign Subsidiary would so account for on a pro forma
historical basis) at least 10% of Net Income (determined on any date as of the
last day of the fiscal quarter of the Borrower immediately preceding such date)
or has total assets of at least 10% of Total Assets (determined on any date as
of the last day of the fiscal quarter immediately preceding such date).

“Material Subsidiary” means a Domestic Subsidiary which at any date accounts for
(or in the case of a recently formed or acquired Domestic Subsidiary would so
account for on a pro forma historical basis) at least: (a) 10% of Total Assets
as measured as at the end of the then most recently ended fiscal year of the
Borrower, or (b) 10% of Net Income (before taxes) for either of the two most
recently ended fiscal years of the Borrower.

“Maturity Date” means April 3, 2022.

“Maximum Rate” has the meaning set forth in Section 9.15.

“Mexican Pesos” means the lawful currency of Mexico.

“Moody’s” means Moody’s Investors Service, Inc.

 

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“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Net Income” means, for any computation period, with respect to the Borrower on
a consolidated basis with its Subsidiaries (other than any Subsidiary which is
restricted from declaring or paying dividends or otherwise advancing funds to
its parent whether by contract or otherwise), cumulative net income earned
during such period (determined after the deduction of minority interests) as
determined in accordance with GAAP.

“Non-Quoted Currency” means, individually and collectively, each of Australian
Dollars, Canadian Dollars, Hong Kong Dollars, Swedish Krona and any other
currency which becomes a Foreign Currency and is designated as a Non-Quoted
Currency by the Borrower and the Administrative Agent.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day (or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received to the
Administrative Agent from a Federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Credit Parties to the
Lenders or to any Lender, the Administrative Agent, the Collateral Agent, the
Issuing Bank or any indemnified party arising under the Credit Documents.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person (other than in connection with a Specified Customer Financing
Program), (c) any liability under any so-called “synthetic lease” arrangement or
transaction entered into by such Person, or (d) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person.

“Original Credit Agreement” is defined in the Recitals hereto.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction

 

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pursuant to, or enforced, any Credit Document, or sold or assigned an interest
in any Credit Document).

“Other Taxes” means any present or future stamp, court, documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, or from the registration, receipt or perfection of a security
interest under, or otherwise with respect to, any Credit Document, except any
such Taxes that are Other Connection Taxes imposed with respect to an assignment
(other than an assignment under Section 2.19(b)).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time,
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).

“Parent Guaranty” means that certain Parent Guaranty dated as of September 28,
2007 by the Borrower in favor of the Secured Creditors, as reaffirmed by the
Reaffirmation, as the same may be amended, restated, modified or supplemented
from time to time.

“Participant” has the meaning set forth in Section 9.04.

“Participant Register” has the meaning set forth in Section 9.04(c).

“Participating Member State” means any member state of the European Communities
that designates the Euro as its lawful currency in accordance with the
legislation of the European Community relating to the Economic and Monetary
Union.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means the acquisition by the Borrower or a Wholly-Owned
Subsidiary thereof of an Acquired Entity or Business (including by way of merger
of such Acquired Entity or Business with and into the Borrower (so long as the
Borrower is the surviving corporation) or a Wholly-Owned Subsidiary thereof (so
long as the Person surviving such merger is a Wholly-Owned Subsidiary and the
Borrower has complied with Section 5.11)); provided that, in each case, (a) the
consideration paid or to be paid by the Borrower or such Wholly-Owned Subsidiary
consists solely of cash (including proceeds of Loans), the issuance or
incurrence of Indebtedness otherwise permitted by Section 6.01, the assumption
of trade and other obligations, the issuance of common stock of the Borrower to
the extent no Default or Event of Default exists pursuant to clause (m) of
Article VII or would result therefrom and the assumption/acquisition of any
Indebtedness (calculated at face value) which is permitted to remain outstanding
in accordance with the requirements of Section 6.01; (b) the Acquired Entity or
Business acquired pursuant to the respective Permitted Acquisition is in a
business permitted by Section 6.03(c); (c) in the case of a stock acquisition,
such acquisition shall have been approved by the board of directors of the
Acquired Entity or Business; (d) all applicable requirements of Sections 6.03
and 6.04(e) applicable to Permitted Acquisitions are satisfied; and

 

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(e) no Default shall have occurred and be continuing either immediately prior
thereto or immediately after giving effect thereto.

“Permitted Encumbrances” means:

(a)        Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.04;

(b)        carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
other like Liens imposed by law (or consensual liens replicating Liens so
imposed), arising in the ordinary course of business and securing obligations
that are not overdue by more than 30 days or are being contested in compliance
with Section 5.04;

(c)        pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

(d)        deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e)        judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;

(f)        easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary; and

(g)        Liens in favor of customs or revenue authorities or freight
forwarders or handlers to secure payment of freight costs and customs duties, in
each case, incurred in the ordinary course of business;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Investments” shall mean any of the following:

(a)        any evidence of Indebtedness, maturing not more than one year after
the acquisition thereof, issued by the United States of America or Canada, or
any instrumentality or agency thereof and guaranteed fully as to principal,
interest and premium, if any, by the United States of America or Canada;

(b)        in the case of Permitted Investments made by Foreign Subsidiaries,
readily marketable direct obligations of any other sovereign government or any
agency or instrumentality thereof which are unconditionally guaranteed by the
full faith and credit of such government and which have a Foreign Investment
Grade Rating;

 

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(c)        any certificate of deposit, banker’s acceptance or time or demand
deposit (including Eurodollar time deposits), maturing not more than one year
after the date of purchase, issued or guaranteed by or placed with (i) the
Administrative Agent or any bank providing Banking Services to the Borrower or
any of its Subsidiaries or (ii) a commercial banking institution which has a
combined capital and surplus of not less than $500,000,000 (or the Dollar
Equivalent thereof);

(d)        commercial paper (i) maturing not more than 270 days after the date
of purchase and (ii) issued by a corporation (other than a Credit Party or any
Affiliate of a Credit Party) with a rating, at the time as of which any
determination thereof is to be made, of “P-1” or higher by Moody’s or “A-1” or
higher by S&P (or, in the case of a Permitted Investment made by a Foreign
Subsidiary, a Foreign Investment Grade Rating);

(e)         investments in fully collateralized repurchase agreements with a
term of not more than 90 days for underlying securities of the types described
in clauses (a) or (b) above entered into with any bank or trust company meeting
the qualifications specified in clause (c) above;

(f)        in the case of deposits by Foreign Subsidiaries, demand deposits with
any bank or trust company or other deposits with any bank or trust company which
are reinvested by the bank or trust company for the account of the depositor in
Permitted Investments or in unsubordinated obligations to the depositor of a
Lender or an Affiliate of a Lender even if such Lender or Affiliate or such
investments are not themselves rated;

(g)         money market funds that (i) in the case of money market funds
invested in by the Borrower or any Domestic Subsidiary (or in the case of any
money market fund located in the United States of America, invested in by any
Foreign Subsidiary) purport to comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated A- or higher by S&P and A-3 or higher by Moody’s (or, in the case
of a Permitted Investment made by a Foreign Subsidiary, have a Foreign
Investment Grade Rating); and (iii) have net assets of at least $250,000,000;

(h)        municipal fixed and variable rate short-term securities that mature
within one (1) year from the date of purchase by any Borrower or such Subsidiary
that at the time of purchase have been rated and the ratings for which are not
less than “MIG-1/VMIG-1” (or its then equivalent) if rated by Moody’s or any
successor service thereto having a substantially similar rating system or not
less than “SP-1/A-1” (or its then equivalent) if rated by S&P or any successor
service thereto having a substantially similar rating system; and

(i)         in the case of the Foreign Subsidiaries of the Borrower, short-term
investments comparable to the foregoing.

“Permitted Securitization” means any receivables financing program (other than
any Specified Customer Financing Program) (a) providing for the sale of
Receivables for cash in transactions purporting to be sales (and treated as
legal true sales for bankruptcy and state law purposes), in each case pursuant
to documentation in form and substance reasonably satisfactory to the
Administrative Agent and (b) in respect of which there is no recourse to the
Borrower, any

 

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Domestic Subsidiary, any Foreign Subsidiary (other than the transferor of the
Receivables) (except as a result of the actions or inactions of the Borrower,
such Domestic Subsidiary or such Foreign Subsidiary) or any assets thereof with
respect to the collectability of such Receivables or the creditworthiness of the
account debtors of such Receivables.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Peso Reference Bank Rate” means, with respect to any Interest Period, the
arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Administrative Agent at its request by the Reference Banks as
the rate at which the relevant Reference Bank could borrow funds in the London
interbank market in Mexican Pesos and for the relevant Interest Period were it
to do so by asking for and then accepting interbank offers for deposits in
reasonable market size in such currency and for such Interest Period at
approximately 11:00 a.m., London time, on the Quotation Date for such Interest
Period; provided that if the Peso Reference Bank Rate shall be less than zero,
such rate shall be deemed to be zero for the purposes of this Agreement.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar
electronic transmission system.

“Pledge Agreements” means, collectively, the Pledge Agreement dated as of
September 28, 2007 made by certain Credit Parties in favor of the Collateral
Agent for the benefit of the Secured Creditors, the Dutch Pledge Agreement and
each other document or instrument pursuant to which Equity Interests are pledged
to the Collateral Agent for the benefit of the Secured Creditors pursuant
hereto, in each case as reaffirmed by the Reaffirmation, as the same may be
amended, restated, modified or supplemented from time to time.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan as its prime rate in effect at its office located at 270
Park Avenue, New York City, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

“Quotation Day” means, with respect to any Eurocurrency Borrowing and any
Interest Period, (a) if the currency is Australian Dollars, Canadian Dollars or
Sterling, the first day of such Interest Period, (b) if the currency is Euro,
the day two TARGET Days before the first day of such Interest Period, (c) for
any other currency, the day two Business Days prior to the commencement of such
Interest Period (or such other day as the Administrative Agent shall determine
is the day on which it is market practice in the relevant interbank market for
prime banks to give quotations for deposits in the currency of such Borrowing
for delivery on the first day of such Interest Period).

 

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“Reaffirmation” means, collectively, (a) that certain Reaffirmation of Guaranty
and Security Documents dated as of the date hereof made by certain Credit
Parties for the benefit of the Administrative Agent, the Collateral Agent and
the other Secured Creditors, (b) that certain Reaffirmation and Amendment of
Guaranty and Security Documents dated as of the Amendment No. 1 Effective Date
made by certain Credit Parties for the benefit of the Administrative Agent, the
Collateral Agent and the other Secured Creditors, (c) that certain Reaffirmation
and Amendment of Guaranty and Security Documents dated as of the Amendment No. 3
Effective Date made by certain Credit Parties for the benefit of the
Administrative Agent, the Collateral Agent and the other Secured Creditors,
(d) that certain Reaffirmation of Dutch Pledge dated as of the date hereof made
by certain Credit Parties for the benefit of the Administrative Agent, the
Collateral Agent and the other Secured Creditors, (e) that certain Reaffirmation
of Dutch Pledge dated as of the Amendment No. 1 Effective Date made by certain
Credit Parties for the benefit of the Administrative Agent, the Collateral Agent
and the other Secured Creditors, and (f) that certain Reaffirmation of Dutch
Pledge dated as of the Amendment No. 3 Effective Date made by certain Credit
Parties for the benefit of the Administrative Agent, the Collateral Agent and
the other Secured Creditors, in each case, as the same may be amended, restated,
modified or supplemented from time to time.

“Receivables” means, with respect to any Person, accounts receivable, lease
receivables, payment intangibles, accounts or notes receivable of such Person,
together with (i) all of the Seller’s interest in the inventory and goods
(including returned, foreclosed or repossessed inventory or goods) the
financing, lease or sale of which by such Person gave rise thereto such
Receivable, and all insurance contracts with respect thereto, (ii) all
supporting obligations, if any, purporting to guarantee or secure payment of
such Receivable, (iii) all service contracts and other agreements associated
therewith, (iv) all books and record related thereto, and (v) all proceeds of
any of the foregoing.

“Receivables Transaction Attributed Indebtedness” means the amount of
obligations outstanding under the legal documents entered into as part of any
Permitted Securitization on any date of determination that would be
characterized as principal if such Permitted Securitization were structured as a
secured lending transaction rather than as a purchase.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) the Issuing Bank.

“Register” has the meaning set forth in Section 9.04.

“Reference Banks” means the principal London offices of JPMorgan and Regions
Bank or such other banks as may be appointed from time to time by the
Administrative Agent in consultation with the Borrower and, with respect to any
appointed bank, with the consent of such bank.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

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“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing more than 50% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Borrower or any option, warrant or other right
to acquire any such Equity Interests in the Borrower.

“Revolving Borrowing” means a Borrowing comprised of Revolving Loans.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the Dollar Equivalent of the outstanding principal amount of such
Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such
time.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s.

“Sale and Leaseback Transaction” means any sale or other transfer of property by
any Person with the intent to lease such property as lessee.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Cuba, Iran, North Korea, Sudan, Syria and Crimea).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the European Union or any
European Union member state, (b) any Person operating, organized or resident in
a Sanctioned Country or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).

“Sanctions” economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, any European Union member state or
Her Majesty’s Treasury of the United Kingdom.

“Screen Rate” means each of the Benchmark Screen Rate and each Local Screen
Rates.

“Secured Creditors” shall have the meaning assigned that term in the respective
Security Documents.

 

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“Secured Obligations” means all Obligations, together with all Banking Services
Obligations and Swap Obligations owing to one or more Lenders or their
respective Affiliates.

“Security Agreement” means the Security Agreement dated as of September 28, 2007
made by certain of the Credit Parties in favor of the Collateral Agent for the
benefit of the Secured Creditors, as reaffirmed by the Reaffirmation, as the
same may be amended, restated, modified or supplemented from time to time.

“Security Documents” means and includes the Pledge Agreements, the Security
Agreement, the Reaffirmation and each other document or instrument pursuant to
which security is granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant hereto.

“Solvent” means, when used with respect to a Person, that (a) the fair saleable
value of the assets of such Person is in excess of the total amount of the
present value of its liabilities (including for purposes of this definition all
liabilities (including loss reserves as determined by such Person), whether or
not reflected on a balance sheet prepared in accordance with GAAP and whether
direct or indirect, fixed or contingent, secured or unsecured, disputed or
undisputed), (b) such Person is able to pay its debts or obligations in the
ordinary course as they mature and (c) such Person does not have unreasonably
small capital to carry out its business as conducted and as proposed to be
conducted. “Solvency” shall have a correlative meaning.

“SPC” means a special purpose, bankruptcy-remote Person formed for the sole and
exclusive purpose of engaging in activities in connection with the purchase,
sale and financing of accounts receivable, payment intangibles, accounts or
notes receivable and related rights in connection with and pursuant to a
Permitted Securitization.

“Specified Customer Financing Program” means any sale of receivables in the
ordinary course of business pursuant to supply chain financing or
reverse-factoring programs, in each case, subject to customary terms and
established by customers of the Borrower or a Subsidiary.

“Specified Party” means the Administrative Agent, the Issuing Bank, each
Swingline Lender and each other Lender.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBOR Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“Sterling” or “£” means the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.

“STIBOR Rate” means, with respect to any Eurocurrency Borrowing in Swedish Krona
and for any applicable Interest Period, the rate per annum equal to the
Stockholm interbank offered rate for Swedish Krona for a period equal in length
to such Interest Period as displayed on the applicable Reuters screen page or,
in the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate as
shall be selected by the Administrative Agent from time to time in its
reasonable discretion, at approximately 11:00 a.m., Stockholm time, on the
Quotation Date for such Interest Period.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Borrower” means ScanSource Latin America, Inc. (f/k/a Netpoint
International, Inc.), ScanSource Europe SPRL and any Wholly-Owned Subsidiary
designated as such by the Borrower pursuant to Section 2.20.

“Subsidiary Guarantor” means each Subsidiary of the Borrower which is a party to
the Subsidiary Guaranty.

“Subsidiary Guaranty” means the Subsidiary Guaranty dated as of September 28,
2007 made by the Subsidiaries party thereto in favor of the Secured Creditors,
as reaffirmed by the Reaffirmation, as the same may be amended, restated,
modified or supplemented from time to time.

“Substantial Portion” means, with respect to the property of the Borrower and
its Subsidiaries, property which (a) represents more than 12.5% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the last day of the month
preceding the month in which such determination is made, or (b) is responsible
for more than 12.5% of the consolidated net sales or of the consolidated net
income of the Borrower and its Subsidiaries as reflected in the financial
statements referred to in clause (a) above for such twelve month period.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference

 

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to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.

“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction. The Swap Obligations under a Swap Agreement
shall be equal at any time to the termination value of such Swap Agreements
(giving effect to any netting agreements) that would be payable by the Borrower
or any Subsidiary if such Swap Agreement were terminated at such time.

“Swedish Krona” means the lawful currency of Sweden.

“Swingline Dollar Loan” means a Swingline Loan denominated in Dollars.

“Swingline Exposure” means, at any time, the Dollar Equivalent of the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be the sum of (a) its Applicable
Percentage of the total Swingline Exposure at such time other than with respect
to any Swingline Loans made by such Lender in its capacity as a Swingline Lender
and (b), the aggregate principal amount of all Swingline Loans made by such
Lender as a Swingline Lender outstanding at such time (less the amount of
participations funded by the other Lenders in such Swingline Loans).

“Swingline Foreign Currency Loan” means a Swingline Loan denominated in a
Foreign Currency.

“Swingline Lender” means JPMorgan and any other Lender that agrees in writing
with the Borrower to act in such capacity (provided that notice of such
agreement is given to the Administrative Agent), in each case, in its capacity
as a lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Swiss Francs” means the lawful currency of Switzerland.

“Tangible Net Worth” means an amount equal to (a) the Borrower’s total
shareholders equity (including capital stock, additional paid in capital and
retained earnings after deducting treasury stock) determined in accordance with
GAAP, minus (b) the aggregate book value of the intangible assets, including
goodwill, of the Borrower and its consolidated Subsidiaries, determined in
accordance with GAAP.

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express
Transfer (TARGET2) payment system (or, if such payment system ceases to be

 

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operative, such other payment system (if any) reasonably determined by the
Administrative Agent to be a suitable replacement) for the settlement of
payments in Euro.

“TARGET Day” means any day on which TARGET2 (or, if such payment system ceases
to be operative, such other payment system, if any, determined by the
Administrative Agent to be a suitable replacement) is open for the settlement of
payments in Euro.

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

“Termination Letter” means a letter in substantially the form of Exhibit C
hereto.

“Total Assets” means, at any time, the total assets of the Borrower and its
consolidated Subsidiaries, determined on a consolidated basis, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
consolidated Subsidiaries delivered to the Administrative Agent pursuant to
Section 5.01.

“Total Debt” means all Indebtedness of the Borrower and its Subsidiaries, on a
consolidated basis, calculated in accordance with GAAP plus, without
duplication, (a) all Off-Balance Sheet Liabilities, (b) the face amount of all
outstanding letters of credit in respect of which the Borrower or any Subsidiary
has any actual or contingent reimbursement obligation and (c) the principal
amount of all Guarantees by the Borrower and its Subsidiaries of Indebtedness.

“Total Interest Expense” means, for any period, total cash interest expense
deducted in the computation of Net Income for such period (including that
attributable to Capital Lease Obligations and interest paid under synthetic
leases) of the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs of rate hedging in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).

“Transactions” means the execution, delivery and performance by the Borrowers of
this Agreement and any Designation Letters, the Credit Documents, the borrowing
of Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(D)(2).

 

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“Wholly-Owned Subsidiary” of a Person means (a) any subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled (in each case other than in the case of Foreign Subsidiaries,
director’s qualifying shares and/or other nominal amounts of shares required to
be held by Persons other than the Borrower and its Subsidiaries under applicable
law). Solely for purposes of the definition of Permitted Acquisition, a
Subsidiary as to which the Borrower or a Wholly-Owned Subsidiary has the
contractual right to acquire 100% of the ownership interests therein shall be
deemed to be a Wholly-Owned Subsidiary.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

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SECTION 1.04. Accounting Terms; GAAP.     Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted without giving effect to such change in GAAP until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Notwithstanding the foregoing, obligations under any lease that were
(or would be) accounted for as an operating lease under GAAP as in effect on the
Amendment No. 3 Effective Date shall continue to be (or shall be) classified and
accounted for as an operating lease for all purposes of this Agreement
notwithstanding any change in GAAP relating thereto.

SECTION 1.05. Foreign Currency Calculations.    (a) For purposes of determining
the Dollar Equivalent of any Advance denominated in a Foreign Currency or any
related amount, the Administrative Agent (or, for purposes of Section 2.06(e),
the applicable Issuing Bank) shall determine the Exchange Rate as of the
applicable Exchange Rate Date with respect to each Foreign Currency in which any
requested or outstanding Advance is denominated and shall apply such Exchange
Rates to determine such amount (in each case after giving effect to any Advance
to be made or repaid on or prior to the applicable date for such calculation).

(b)         For purposes of any determination hereunder (including
determinations under Section 6.01, 6.02, 6.04 or 6.09 or under Article VII), all
amounts incurred, outstanding or proposed to be incurred or outstanding in
currencies other than Dollars shall be translated into Dollars at the currency
exchange rates in effect on the date of such determination; provided that no
Default shall arise as a result of any limitation set forth in Dollars in
Section 6.01 or 6.02 being exceeded solely as a result of changes in currency
exchange rates from those rates applicable at the time or times Indebtedness or
Liens were initially consummated in reliance on the exceptions under such
Sections. For purposes of any determination under Section 6.04 or 6.09, the
amount of each investment, asset disposition or other applicable transaction
denominated in a currency other than Dollars shall be translated into Dollars at
the currency exchange rate in effect on the date such investment, disposition or
other transaction is consummated. Such currency exchange rates shall be
determined in good faith by the Borrowers.

SECTION 1.06. Redenomination of Certain Foreign Currencies.    (a) Each
obligation of any party to this Agreement to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the Effective Date shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London Interbank Market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Borrowing in the currency of such member state is

 

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outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Borrowing, at the end of the then current Interest Period.

(b)        Without prejudice and in addition to any method of conversion or
rounding prescribed by any EMU Legislation and (i) without limiting the
liability of any Borrower for any amount due under this Agreement and
(ii) without increasing any Commitment of any Lender, all references in this
Agreement to minimum amounts (or integral multiples thereof) denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the Effective Date shall, immediately upon
such adoption, be replaced by references to such minimum amounts (or integral
multiples thereof) as shall be specified herein with respect to Borrowings
denominated in Euros.

(c)        Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro or any other Foreign Currency.

ARTICLE II

The Credits

SECTION 2.01. Commitments.    Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans denominated in Dollars and
Foreign Currencies to the Borrowers from time to time during the Availability
Period in an aggregate principal amount that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment (subject,
in the case of each Swingline Lender, to Section 2.05(a)) or (b) the sum of the
total Revolving Credit Exposures exceeding the total Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings.    (a) Each Revolving Loan shall be made as
part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

(b)        Subject to Section 2.14, each Revolving Borrowing denominated in
Dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the
Borrower may request in accordance herewith and each Revolving Borrowing
denominated in a Foreign Currency shall be comprised entirely of Eurocurrency
Loans. Each Swingline Dollar Loan shall be a Eurocurrency Loan (except as the
applicable Swingline Lender and the Borrower may otherwise agree) and each
Swingline Foreign Currency Loan shall be a Eurocurrency Loan.

(c)        At the commencement of each Interest Period for any Eurocurrency
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $1,000,000 in the case of such
a Borrowing

 

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denominated in Dollars and $5,000,000 (or the approximate equivalent) in the
case of such a Borrowing denominated in a Foreign Currency. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $500,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e). Each Swingline Dollar Loan shall be in an amount that is an
integral multiple of $50,000 and not less than $250,000 or such other amounts as
agreed by the Borrower and the applicable Swingline Lender, and each Swingline
Foreign Currency Loan shall be in an amount that is an integral multiple of
$100,000 and not less than $500,000. Borrowings of more than one Type and Class
may be outstanding at the same time; provided that there shall not at any time
be outstanding more than a total of twelve Eurocurrency Revolving Borrowings
denominated in Dollars or eight Eurocurrency Revolving Borrowings denominated in
Foreign Currencies. Notwithstanding the foregoing, Loans which are not
denominated in Dollars may be made in amounts and increments in the applicable
Foreign Currency satisfactory to the Administrative Agent and, where applicable,
the applicable Swingline Lender.

(d)        Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.

(e)        Notwithstanding any other provision of this Agreement, each Lender at
its option may make any ABR Loan or Eurocurrency Loan by causing any domestic or
foreign office, branch or Affiliate of such Lender (an “Applicable Lending
Installation”) to make such Loan that has been designated by such Lender to the
Administrative Agent. All terms of this Agreement shall apply to any such
Applicable Lending Installation of such Lender and the Loans and any Notes
issued hereunder shall be deemed held by each Lender for the benefit of any such
Applicable Lending Installation. Each Lender may, by written notice to the
Administrative Agent and the Borrower, designate replacement or additional
Applicable Lending Installations through which Loans will be made by it and for
whose account Loan payments are to be made. Any exercise of such option shall
not affect the obligation of the Applicable Borrower to repay such Loan in
accordance with the terms of this Agreement. For the avoidance of doubt, the
foregoing provisions shall apply to the Swingline Lenders in respect of their
making Swingline Foreign Currency Loans and shall similarly apply to the Issuing
Banks in connection with issuing any Letters of Credit in a foreign currency.

SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurocurrency Borrowing, not later than 11:00
a.m., Local Time, (i) in the case of such Borrowings denominated in Dollars,
Euros, Sterling or Canadian dollars, three Business Days and (ii) in the case of
such Borrowings denominated in any other Foreign Currency, four Business Days or
such shorter period as the Administrative Agent may agree, in each case before
the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery, telecopy or electronic communication to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such

 

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telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

(i)        the identity of the Applicable Borrower;

(ii)       the aggregate amount of the requested Borrowing;

(iii)      the currency (which may be Dollars or a Foreign Currency) in which
such Borrowing is to be denominated;

(iv)      the date of such Borrowing, which shall be a Business Day;

(v)       in the case of a Borrowing denominated in Dollars, whether such
Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

(vi)      in the case of a Eurocurrency Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by clause (a) of
the definition of the term “Interest Period”; and

(vii)     the location and number of the Applicable Borrower’s account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.07.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing, unless such Revolving
Borrowing is denominated in a Foreign Currency, in which case such Revolving
Borrowing shall be a Eurocurrency Borrowing. If no Interest Period is specified
with respect to any requested Eurocurrency Revolving Borrowing, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing. Notwithstanding the foregoing, with respect to Revolving
Borrowings in currencies which become Foreign Currencies after the date hereof
pursuant to the definition of “Foreign Currency”, related request periods and
borrowing increments shall be as agreed to by the Borrower and the
Administrative Agent.

SECTION 2.04. [Intentionally Omitted]

SECTION 2.05. Swingline Loans.    (a) Subject to the terms and conditions set
forth herein, each Swingline Lender may, in its sole discretion, make Swingline
Loans to the Borrowers denominated in Dollars and Foreign Currencies (provided
that Subsidiary Borrowers which are Foreign Subsidiaries may only borrow
Swingline Foreign Currency Loans) from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the Swingline Exposure exceeding $50,000,000, (ii) the sum of the
total Revolving Credit Exposures exceeding the total Commitments, or (iii) the
Dollar Equivalent of the aggregate amount of all Swingline Foreign Currency
Loans exceeding $25,000,000. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Swingline Loans; provided, that except as the Swingline Lenders

 

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may otherwise agree, there shall not at any time be more than a total of four
Swingline Foreign Currency Loans outstanding.

(b)        To request a Swingline Loan, except as the Administrative Agent and
such Swingline Lender may otherwise agreement, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy or
electronic communication), (i) not later than 2:00 pm, New York City time, on
the day of a proposed Swingline Loan in the case of Swingline Dollar Loans,
(ii) not later than 10:00 a.m., Local Time, on the day of a proposed Swingline
Loan in the case of Swingline Loans denominated in Euros, Sterling or Canadian
Dollars and (iii) not later than 10:00 a.m., Local Time, two Business Days
before the date of the proposed Swingline Loan in the case of Swingline Loans
denominated in any other Foreign Currency permitted under this Section 2.05.
Each such notice shall be irrevocable and shall specify (i) the requested date
(which shall be a Business Day), (ii) whether such Swingline Loan is to be
denominated in Dollars or a Foreign Currency, (iii) the amount of the requested
Swingline Loan, (iv) the identity of the Applicable Borrower, (v) the Swingline
Lender from which such Swingline Loan is requested and (vi) in the case of a
Swingline Borrowing denominated in a Foreign Currency, the Interest Period
requested to be applicable thereto, which shall be a period contemplated by
clause (b) of the definition of the term “Interest Period.” The Administrative
Agent will promptly advise the applicable Swingline Lender of any such notice
received from the Borrower. Each Swingline Lender, if it elects to make the
requested Swingline Loan, shall make each of its Swingline Loan available to the
Applicable Borrower by means of a credit to the general deposit account of the
Applicable Borrower with such Swingline Lender (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank) by 5:00 p.m., Local Time, on
the requested date of such Swingline Loan. Notwithstanding the foregoing, with
respect to Swingline Loans in currencies which become Foreign Currencies after
the date hereof pursuant to the definition of “Foreign Currency”, related
request periods and borrowing increments shall be as agreed to by the Borrower,
the Administrative Agent and the Swingline Lenders.

(c)        Each Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate, and such amount of Swingline Loans, if denominated in Foreign
Currency, shall be converted to Dollars and shall bear interest at the Alternate
Base Rate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the applicable Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.
Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as

 

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provided in Section 2.07 with respect to Loans made by such Lender (and
Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the applicable
Swingline Lender the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the applicable Swingline Lender. Any amounts received by any Swingline Lender
from the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by applicable Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the applicable Swingline Lender, as
their interests may appear; provided that any such payment so remitted shall be
repaid to the applicable Swingline Lender or to the Administrative Agent, as
applicable, if and to the extent such payment is required to be refunded to the
Borrower for any reason. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.

(d)      Any Swingline Lender may be replaced at any time by written agreement
among the Borrower, the Administrative Agent, the replaced Swingline Lender and
the successor Swingline Lender. The Administrative Agent shall notify the
Lenders of any such replacement of a Swingline Lender. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid interest
accrued for the account of the replaced Swingline Lender pursuant to
Section 2.13(c) or (d), as applicable. From and after the effective date of any
such replacement, (x) the successor Swingline Lender shall have all the rights
and obligations of the replaced Swingline Lender under this Agreement with
respect to Swingline Loans made thereafter and (y) references herein to the term
“Swingline Lender” shall be deemed to refer to such successor or to any previous
Swingline Lender, or to such successor and all previous Swingline Lenders, as
the context shall require. After the replacement of a Swingline Lender
hereunder, the replaced Swingline Lender shall remain a party hereto and shall
continue to have all the rights and obligations of a Swingline Lender under this
Agreement with respect to Swingline Loans made by it prior to its replacement,
but shall not be required to make additional Swingline Loans.

(e)      Subject to the appointment and acceptance of a successor Swingline
Lender, any Swingline Lender may resign as a Swingline Lender at any time upon
thirty days’ prior written notice to the Administrative Agent, the Borrower and
the Lenders, in which case, such Swingline Lender shall be replaced in
accordance with Section 2.05(d) above.

SECTION 2.06. Letters of Credit.    (a) General. Subject to the terms and
conditions set forth herein, each of the Borrowers may request the issuance of
Letters of Credit denominated in Dollars or Foreign Currencies for its own
account (provided that Subsidiary Borrowers which are Foreign Subsidiaries may
only request Letters of Credit denominated in Foreign Currencies), in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by any Borrower to, or entered into by any Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. Notwithstanding anything herein to the contrary,

 

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the Issuing Bank shall have no obligation hereunder to issue, and shall not
issue, any Letter of Credit the proceeds of which would be made available to any
Person (i) to fund any activity or business of or with any Sanctioned Person, or
in any country or territory that, at the time of such funding, is the subject of
any Sanctions or (ii) in any manner that would result in a violation of any
Sanctions by any party to this Agreement.

(b)        Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Applicable
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph
(c) of this Section), the amount of such Letter of Credit, the name and address
of the beneficiary thereof, the currency in which such Borrower proposes such
Letter of Credit be denominated and such other information as shall be necessary
to prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, such Borrower also shall submit a letter of credit application on
the Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit
such Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure
shall not exceed $50,000,000, (ii) the aggregate LC Exposure for Letters of
Credit denominated in Foreign Currencies shall not exceed $25,000,000, (iii) the
sum of the total Revolving Credit Exposures shall not exceed the total
Commitments and (iv) the aggregate LC Exposure of all Issuing Banks that do not
have a Letter of Credit Commitment shall not exceed $5,000,000. An Issuing Bank
that has a Letter of Credit Commitment may, but shall be not obligated to,
issue, amend, renew or extend any Letter of Credit if, after giving effect to
such issuance, amendment, renewal or extension, (x) the aggregate undrawn amount
of all outstanding Letters of Credit issued by such Issuing Bank at such time
plus (y) the aggregate amount of all LC Disbursements made by such Issuing Bank
that have not yet been reimbursed by or on behalf of the Borrower at such time
exceeds its Letter of Credit Commitment. The Borrower may, at any time and from
time to time, reduce the Letter of Credit Commitment of any Issuing Bank with
the consent of such Issuing Bank; provided that the Borrower shall not reduce
the Letter of Credit Commitment of any Issuing Bank if, after giving effect of
such reduction, the conditions set forth in clauses (i) through (iv) above shall
not be satisfied. Each Issuing Bank shall give prompt notice to the
Administrative Agent of its issuance, amendment, renewal or extension of any
Letter of Credit.

(c)        Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the date that is five Business Days prior to the
Maturity Date.

(d)        Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such

 

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Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Applicable Borrower on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
the Applicable Borrower for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.

(e)        Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Applicable Borrower shall reimburse such LC
Disbursement in the currency thereof (or, in the case of disbursements
denominated in a Foreign Currency and with the consent of the Issuing Bank, in
the Dollar Equivalent thereof as determined by the Issuing Bank) by paying to
the Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Local Time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
Local Time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 12:00 noon, Local
Time, on (i) the Business Day that the Borrower receives such notice, if such
notice is received prior to 10:00 a.m., Local Time, on the day of receipt, or
(ii) the Business Day immediately following the day that the Borrower receives
such notice, if such notice is not received prior to such time on the day of
receipt; provided that the Applicable Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, such Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan; provided that, to the extent that a
failure to make a timely reimbursement of an LC Disbursement due to the failure
of a Lender or Lenders to fund a Loan it is required to make pursuant to a
request made as contemplated by the preceding proviso, the Applicable Borrower
shall be deemed to have timely repaid such LC Reimbursement if it shall do so
within one Business Day of being notified by the Administrative Agent of such
failure. If the Applicable Borrower fails to make such payment when due, such
amount, if denominated in Foreign Currency, shall be converted to the Dollar
Equivalent thereof (as determined by the Issuing Bank) and shall bear interest
at the Alternate Base Rate and the Administrative Agent shall notify each Lender
of the applicable LC Disbursement, the payment then due from the Applicable
Borrower in respect thereof and such Lender’s Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Applicable Borrower, in the same manner as provided in Section 2.07 with respect
to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Applicable Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Lenders have
made

 

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payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve the
Applicable Borrower of its obligation to reimburse such LC Disbursement.

(f)        Obligations Absolute. The Applicable Borrower’s obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Applicable Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Applicable Borrower
to the extent of any direct damages (as opposed to special, indirect,
consequential or punitive damages, claims in respect of which are hereby waived
by the Borrowers to the extent permitted by applicable law) suffered by the
Applicable Borrower that are caused by the Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(g)        Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the

 

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Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Applicable Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such LC Disbursement.

(h)        Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the Applicable Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Applicable Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Applicable Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(e) shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to
the extent of such payment.

(i)        Replacement of the Issuing Bank.

(i)        An Issuing Bank may be replaced at any time by written agreement
among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any
such replacement of such Issuing Bank. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the account
of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the
effective date of any such replacement, (x) the successor Issuing Bank shall
have all the rights and obligations of the replaced Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and
(y) references herein to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.

(ii)        Subject to the appointment and acceptance of a successor Issuing
Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty
days’ prior written notice to the Administrative Agent, the Borrower and the
Lenders, in which case, such Issuing Bank shall be replaced in accordance with
the foregoing clause (i).

(j)        Cash Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Issuing Bank and the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash

 

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collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to any Borrower described in
clause (h) or (i) of Article VII. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower’s risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of the Borrowers under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

SECTION 2.07. Funding of Borrowings.     (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Local Time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.05. The Administrative Agent will make such Loans available to the
Applicable Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Applicable Borrower maintained with the
Administrative Agent in New York City (or, in the case of Subsidiary Borrowers
or Loans denominated in a Foreign Currency, in such other accounts as may be
designated by the Applicable Borrower and agreed by the Administrative Agent)
and designated by the Borrower in the applicable Borrowing Request; provided
that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.06(e) shall be remitted by the Administrative Agent to
the Issuing Bank.

(b)        Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Applicable
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Applicable Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Applicable Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, (x) the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation (in the case
of a Borrowing

 

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denominated in Dollars) or (y) the rate reasonably determined by the
Administrative Agent to be the cost to it of funding such amount (in the case of
a Borrowing denominated in a Foreign Currency) or (ii) in the case of the
Applicable Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

SECTION 2.08. Interest Elections.    (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurocurrency Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type, in the case of Borrowings
denominated in Dollars, or to continue such Borrowing and, in the case of a
Eurocurrency Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Foreign Currency
Borrowings or Swingline Dollar Borrowings, which may not be converted or
continued.

(b)        To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type and denominated in the Foreign
Currency resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery, telecopy or electronic
communication to the Administrative Agent of a written Interest Election Request
in a form approved by the Administrative Agent and signed by the Borrower.

(c)        Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:

(i)        the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii)        the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

(iii)        whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and

(iv)        if the resulting Borrowing is a Eurocurrency Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

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If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d)        Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e)        If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurocurrency Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing (unless such Borrowing is denominated in a Foreign
Currency, in which case such Borrowing shall be continued as a Eurocurrency
Borrowing with an Interest Period of one month’s duration commencing on the last
day of such Interest Period). Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurocurrency Borrowing, (ii) unless repaid,
each Eurocurrency Revolving Borrowing denominated in Dollars shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto, and
(iii) unless repaid, each Eurocurrency Revolving Borrowing denominated in a
Foreign Currency shall be continued as a Eurocurrency Revolving Borrowing with
an Interest Period of one month’s duration.

SECTION 2.09. Termination, Reduction and Increase of Commitments.    (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

(b)        The Borrower may at any time terminate, or from time to time reduce,
the Commitments; provided that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of $5,000,000 and not less than
$10,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.11, the sum of the Revolving Credit Exposures would exceed the
total Commitments.

(c)        The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

 

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(d)        The Borrower at its option may, from time to time, seek to
(i) request one or more term loans (each an “Incremental Term Loan” and,
collectively, the “Incremental Term Loans”) and/or (ii) increase the aggregate
Commitments (each such increase, an “Incremental Revolving Commitment” and,
together with the Incremental Term Loans, the “Incremental Facilities”) by up to
an aggregate amount of $200,000,000 upon at least three (3) Business Days’ prior
written notice to the Administrative Agent, which notice shall specify the
amount of any such Incremental Facility (which shall not be less than
$25,000,000 or such lesser amount to which the Administrative Agent may agree)
and shall certify that no Default has occurred and is continuing. After delivery
of such notice, the Borrower, in consultation with the Administrative Agent, may
offer the Incremental Facility (which may be declined by any Lender in its sole
discretion) on either a ratable basis to the Lenders or on a non pro-rata basis
to one or more Lenders and/or to other lenders or entities reasonably acceptable
to the Administrative Agent, the Issuing Banks (in the case of an Incremental
Revolving Commitment) and the Borrower. No Incremental Facility shall become
effective until the existing or new Lenders extending such Incremental Facility
and the Borrower shall have delivered to the Administrative Agent a document in
form and substance reasonably satisfactory to the Administrative Agent and the
Borrower pursuant to which (i) any such existing Lender providing or increasing
a commitment in respect of such Incremental Facility agrees to the amount of its
portion of the Incremental Facility, (ii) any such new lender providing a
commitment in respect of such Incremental Facility agrees to its portion of the
Incremental Facility and agrees to assume and accept the obligations and rights
of a revolving Lender and/or term lender hereunder, as applicable, (iii) the
Borrower accepts such Incremental Facility, (iv) the effective date of any
Incremental Facility is specified by the Borrower and the lenders providing or
increasing their respective commitments in respect of such Incremental Facility
and (v) the Borrower certifies that on such date the conditions for a new Loan
set forth in Section 4.02 are satisfied. The terms of any Incremental Term Loan
shall, taken as a whole, be substantially identical to, or less favorable to the
lenders making such Incremental Term Loan than, the terms applicable to Loans
hereunder, except that (A) the Borrower and the Administrative Agent may amend
this Agreement and the other Credit Documents to implement such mechanical and
conforming changes as the Borrower and the Administrative Agent deem
appropriate, (B) the maturity date of any Incremental Term Loan shall be no
earlier than the Maturity Date, (C) the interest rate margins and other economic
terms, amortization schedule, prepayment terms, borrower (which shall be the
Borrower or a Subsidiary Borrower) and currency applicable to any Incremental
Term Loan shall be determined by the Borrower and the lenders thereunder and
(D) the foregoing limitation upon the terms of any Incremental Term Loan shall
not apply to covenants or other provisions applicable only to periods after the
Maturity Date. Each Incremental Term Loan shall be made pursuant to an
amendment, restatement or amendment and restatement (an “Incremental Term Loan
Amendment”) of this Agreement and, as appropriate, the other Credit Documents,
executed by each Borrower, each lender under such Incremental Term Loan and the
Administrative Agent, in each case without the need to obtain the consent of any
other Person. Each Incremental Term Loan Amendment may effect such amendments to
this Agreement and the other Credit Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the
Borrower, to effect the provisions of this Section. The Lenders hereby
irrevocably authorize the Administrative Agent to enter into such Incremental
Term Loan Amendments. Upon the effectiveness of any Incremental Revolving
Commitment pursuant hereto, (i) each revolving Lender (new or existing) shall be
deemed to have accepted an assignment at par from

 

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the existing revolving Lenders, and the existing revolving Lenders shall be
deemed to have made an assignment at par to each new or existing revolving
Lender accepting a new or increased Commitment, of an interest in each then
outstanding Loan (in each case, on the terms and conditions set forth in the
Assignment and Assumption) and (ii) the Swingline Exposure and LC Exposure of
the existing and new revolving Lenders shall be automatically adjusted such
that, after giving effect to such assignments and adjustments, all Revolving
Credit Exposure hereunder is held ratably by the revolving Lenders in proportion
to their respective Commitments. Assignments pursuant to the preceding sentence
shall be made in exchange for, and substantially contemporaneously with the
payment to the assigning Lenders of, the principal amount assigned plus accrued
and unpaid interest and commitment and Letter of Credit fees relating to such
principal amount. Payments received by assigning revolving Lenders pursuant to
this Section in respect of the principal amount of any Eurocurrency Loan shall,
for purposes of Section 2.16, be deemed prepayments of such Loan. Any
Incremental Facility pursuant to this Section shall be subject to receipt by the
Administrative Agent from the Borrower of such supplemental opinions,
resolutions, certificates and other documents as the Administrative Agent may
reasonably request. Notwithstanding anything in Section 9.02 or elsewhere herein
to the contrary, no consent of any Lender (other than the Lenders agreeing to
new or increased commitments) shall be required for any Incremental Facility
provided or Loan made pursuant to this Section 2.09(d).

SECTION 2.10. Repayment of Loans; Evidence of Debt.    (a) Each Applicable
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each of its
Revolving Loans on the Maturity Date and (ii) to the applicable Swingline Lender
the then unpaid principal amount of each Swingline Loan made by such Swingline
Lenders on the earlier of the Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made; provided that on
each date that a Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding.

(b)        Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(c)        The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)        The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.

 

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(e)        Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Applicable Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).

(f)        If at any time for any reason (other than fluctuations in currency
exchange rates) the aggregate Revolving Credit Exposure of the Lenders exceeds
the aggregate Commitments of the Lenders, the Borrower shall (or shall cause one
or more Subsidiary Borrowers to) immediately prepay the Loans in the amount of
such excess. To the extent that, after the prepayment of all Loans an excess of
the Revolving Credit Exposure over the aggregate Commitments still exists, the
Borrower shall (or shall cause one or more Subsidiary Borrowers to) promptly
cash collateralize the Letters of Credit in the manner described in
Section 2.06(j) in an amount sufficient to eliminate such excess.

(g)        The Administrative Agent will determine the aggregate LC Exposure and
the Dollar Equivalent of each Loan on each Exchange Rate Date. If at any time
the sum of such amounts exceeds 105% of the aggregate Commitments of the Lenders
as a result of fluctuations in currency exchange rates, the Borrower shall (or
shall cause one or more Subsidiary Borrowers to) immediately prepay the Loans in
the amount of such excess. To the extent that, after the prepayment of all Loans
an excess of the sum of such amounts over the aggregate Commitments still
exists, the Borrower shall (or shall cause one or more Subsidiary Borrowers to)
promptly cash collateralize the Letters of Credit in the manner described in
Section 2.06(j) in an amount sufficient to eliminate such excess.

(h)         Notwithstanding anything to the contrary contained herein, in no
event shall any payment under any Credit Document by a Subsidiary Borrower that
is a Foreign Subsidiary or is a Subsidiary of a Foreign Subsidiary be for the
account of any obligation of the Borrower or of any Domestic Subsidiary of the
Borrower.

SECTION 2.11. Prepayment of Loans.     (a) The Borrowers shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section.

(b)        The Borrower shall notify the Administrative Agent (and, in the case
of prepayment of a Swingline Loan, the applicable Swingline Lender) by telephone
(confirmed by telecopy or electronic communication) of any prepayment hereunder
(i) in the case of prepayment of a Eurocurrency Revolving Borrowing, not later
than 11:00 a.m., Local Time, three Business Days before the date of prepayment,
(ii) in the case of prepayment of an ABR Revolving Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment
or (iii) in the case of prepayment of a Swingline Dollar Loan, not later than
4:00 p.m., New York City time, and in the case of prepayment of a Swingline
Foreign Currency Loan, not later than 2:00 p.m., London time, in each case on
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal

 

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amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.09, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02.
Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.

SECTION 2.12. Fees.    (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the daily amount of the difference between the Commitment of
such Lender and the Revolving Credit Exposure (excluding Swingline Exposure) of
such Lender during the period from and including the date hereof to but
excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the fifth Business Day after the last day of
March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

(b)        The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate used to
determine the interest rate applicable to Eurocurrency Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate or rates per annum separately agreed upon between the
Borrower and the Issuing Bank on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

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(c)        The Borrower agrees to pay to the Administrative Agent, for its own
account or for the account of the Lenders, as applicable, fees payable in the
amounts and at the times separately agreed upon between the Borrower and the
Administrative Agent.

(d)        All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing Bank
in the case of fees payable to it) for distribution, in the case of facility
fees and participation fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.

SECTION 2.13. Interest.    (a) The Loans comprising each ABR Borrowing
(excluding Swingline Loans) shall bear interest at the Alternate Base Rate plus
the Applicable Rate.

(b)        The Loans comprising each Eurocurrency Borrowing shall bear interest
at the Adjusted LIBOR Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.

(c)        Each Swingline Dollar Loan made by a Swingline Lender shall bear
interest at the Adjusted LIBOR Rate for a one-month Interest Period, floating
daily, plus the Applicable Rate for Eurocurrency Loans or at such other rate as
the Borrower and such Swingline Lender may from time to time agree.

(d)        Each Swingline Foreign Currency Loan shall bear interest at the
Adjusted LIBOR Rate plus the Applicable Rate.

(e)        Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by any of the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.

(f)        Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (e) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment, (iii) in the event
of any conversion of any Eurocurrency Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) except as it may earlier come due
pursuant to Article VII, interest on Eurocurrency Loans made to ScanSource
Europe Limited having an Interest Period ending prior to the six month
anniversary of the Effective Date shall be due and payable on such date.

(g)        All interest hereunder shall be computed on the basis of a year of
360 days, except that (i) interest on Borrowings denominated in Sterling shall
be computed on the basis of a year of 365 days, (ii) interest on Borrowings
denominated in any other Foreign

 

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Currency for which it is required by applicable law or customary to compute
interest on the basis of a year of 365 days or, if required by applicable law or
customary, 366 days in a leap year, shall be computed on such basis, and
(iii) interest computed by reference to the Alternate Base Rate at times when
the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate or Adjusted LIBOR
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.

SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing denominated in any currency:

(a)        the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means (including,
without limitation by means of an Interpolated Rate) do not exist for
ascertaining the Adjusted LIBOR Rate or the Benchmark Rate, as applicable, for
such Interest Period (it being understood that, with respect to Revolving Loans
denominated in Mexican Pesos, such means shall be deemed not to exist for
ascertaining a Benchmark Rate or Adjusted LIBOR Rate for any Interest Period
unless at least two Reference Banks submit the requisite information for the
determination of the Peso Reference Bank Rate for such Interest Period); or

(b)        the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBOR Rate or the Benchmark Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurocurrency Borrowing denominated
in such currency shall be ineffective, (ii) such Borrowing shall be converted to
or continued as on the last day of the Interest Period applicable thereto (A) if
such Borrowing is denominated in Dollars, an ABR Borrowing or (B) if such
Borrowing is denominated in a Foreign Currency, as a Borrowing bearing interest
at such rate the Administrative Agent determines adequately reflects the costs
to the Lenders of making or maintaining such Borrowing, plus the Applicable Rate
for Eurocurrency Loans and (iii) if any Borrowing Request requests a
Eurocurrency Borrowing in such currency, such Borrowing shall be made as an ABR
Borrowing (if such Borrowing is requested to be made in Dollars) or (if not made
in Dollars) shall be made as a Borrowing bearing interest at the rate described
under (ii)(B) above.

SECTION 2.15. Increased Costs.    (a) If any Change in Law shall:

(i)        impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBOR Rate) or the Issuing Bank;

 

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(ii)        impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurocurrency Loans made
by such Lender or any Letter of Credit or participation therein; or

(iii)        subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Excluded Taxes and (C) Connection Income Taxes) on its loans, loan
principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting or maintaining
any Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to such Lender, the Issuing Bank or such other Recipient of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then the Borrower will pay to such Lender, the Issuing Bank or such other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the Issuing Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.

(b)        If any Lender or the Issuing Bank determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy or liquidity), then from time to time the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender’s or the Issuing Bank’s holding company for any such reduction
suffered.

(c)        A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 20 days
after receipt thereof.

(d)        Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased

 

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costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurocurrency Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.11(b) and is revoked in accordance therewith) or (d) the assignment of
any Eurocurrency Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to
be equal to an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of
such Loan had such event not occurred, at the Adjusted LIBOR Rate that would
have been applicable to such Loan (i.e., excluding the Applicable Margin), for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it
to bid, at the commencement of such period, for deposits in the applicable
currency of a comparable amount and period from other banks in the eurocurrency
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

SECTION 2.17. Taxes.  (a) Withholding of Taxes; Gross-Up. Each payment by or on
account of any Credit Party under any Credit Document shall be made without
withholding for any Taxes, unless such withholding is required by any law. If
any withholding agent determines, in its sole discretion exercised in good
faith, that it is so required to withhold Taxes, then such withholding agent may
so withhold and shall timely pay the full amount of withheld Taxes to the
relevant Governmental Authority in accordance with applicable law and, if such
Taxes are Indemnified Taxes, then the amount payable by such Credit Party shall
be increased as necessary so that, net of such withholding (including such
withholding applicable to additional amounts payable under this Section), the
applicable Recipient receives the amount it would have received had no such
withholding been made.

(b)        Payment of Other Taxes by the Borrower. The Borrower shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

(c)        Evidence of Payments. As soon as practicable after any payment of
Taxes by any Credit Party to a Governmental Authority pursuant to this
Section 2.17, such Credit Party shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

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(d)        Indemnification by the Borrower. Without duplication of amounts paid
or payable pursuant to Section 2.17(a), the Credit Parties shall jointly and
severally indemnify each Recipient for any Indemnified Taxes that are paid by,
payable by, or required to be withheld or deducted on payments to, such
Recipient in connection with any Credit Document (including amounts paid or
payable under this Section 2.17(d)) and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
The indemnity under this Section 2.17(d) shall be paid within 20 days after the
receipt by any Credit Party of a certificate from a Recipient stating the amount
of any Indemnified Taxes so paid or payable by such Recipient and describing the
basis for the indemnification claim. Such certificate shall be conclusive of the
amount so paid or payable absent manifest error. Such Recipient shall deliver a
copy of such certificate to the Administrative Agent.

(e)        Indemnification by the Lenders. Each Lender shall severally indemnify
the Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Credit Parties have not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Credit Parties to
do so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any
Credit Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Credit Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f)        Status of Lenders. (i) Any Lender that is entitled to an exemption
from, or reduction of, any applicable withholding Tax with respect to any
payments under any Credit Document shall deliver to the Borrower and the
Administrative Agent, at the time or times reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without, or at a reduced rate of, withholding. In
addition, any Lender, if reasonably requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by law
or reasonably requested by the Borrower or the Administrative Agent as will
enable the Borrower or the Administrative Agent to determine whether or not such
Lender is subject to any withholding (including backup withholding) or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 2.17(f)(ii)(A)
through (E) and Section 2.17(f)(iii) below) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender. Upon the
reasonable request of such Borrower or the Administrative Agent, any Lender
shall update any form or certification previously delivered pursuant to this
Section 2.17(f). If any form or certification previously

 

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delivered pursuant to this Section expires or becomes obsolete or inaccurate in
any respect with respect to a Lender, such Lender shall promptly (and in any
event within 10 days after such expiration, obsolescence or inaccuracy) notify
such Borrower and the Administrative Agent in writing of such expiration,
obsolescence or inaccuracy and update the form or certification if it is legally
eligible to do so.

(ii)          Without limiting the generality of the foregoing, if the Borrower
is a U.S. Person, any Lender with respect to such Borrower shall, if it is
legally eligible to do so, deliver to such Borrower and the Administrative Agent
(in such number of copies reasonably requested by such Borrower and the
Administrative Agent) on or prior to the date on which such Lender becomes a
party hereto, duly completed and executed copies of whichever of the following
is applicable:

(A)        in the case of a Lender that is a U.S. Person, IRS Form W-9
certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)        in the case of a Non-U.S. Lender claiming the benefits of an income
tax treaty to which the United States is a party (1) with respect to payments of
interest under any Credit Document, IRS Form W-8BEN or W-8BEN-E, as applicable,
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “interest” article of such tax treaty and (2) with respect to
any other applicable payments under this Agreement, IRS Form W-8BEN or W-8BEN-E,
as applicable, establishing an exemption from, or reduction of, U.S. Federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty;

(C)        in the case of a Non-U.S. Lender for whom payments under this
Agreement constitute income that is effectively connected with such Lender’s
conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)        in the case of a Non-U.S. Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code both
(1) IRS Form W-8BEN or W-8BEN-E, as applicable, and (2) a certificate
substantially in the form of Exhibit E (a “U.S. Tax Certificate”) to the effect
that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning
of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or
business in the United States with which the relevant interest payments are
effectively connected;

(E)        in the case of a Non-U.S. Lender that is not the beneficial owner of
payments made under this Agreement (including a partnership or a participating
Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms
prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that
would be required of each such beneficial owner or partner of such partnership
if such beneficial owner or partner were a Lender; provided, however, that if
the Lender is a partnership and one or more of its partners are claiming the
exemption for portfolio interest under Section 881(c) of the Code, such Lender
may provide a U.S. Tax Certificate on behalf of such partners; or

 

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(F)        any other form prescribed by law as a basis for claiming exemption
from, or a reduction of, U.S. Federal withholding Tax together with such
supplementary documentation necessary to enable the Borrower or the
Administrative Agent to determine the amount of Tax (if any) required by law to
be withheld.

(iii)        If a payment made to a Lender under any Credit Document would be
subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent, at the time
or times prescribed by law and at such time or times reasonably requested by the
Borrower and the Administrative Agent, such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower and the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA, to determine that such
Lender has or has not complied with such Lender’s obligations under FATCA and,
as necessary, to determine the amount to deduct and withhold from such payment.
Solely for purposes of this Section 2.17(f)(iii), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

(g)         Treatment of Certain Refunds.  If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including
additional amounts paid pursuant to this Section 2.17), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made or additional amounts paid under this Section with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including any Taxes) of such indemnified party and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid to such
indemnified party pursuant to the previous sentence (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) in the
event such indemnified party is required to repay such refund to such
Governmental Authority. This Section 2.17(g) shall not be construed to require
any indemnified party to make available its Tax returns (or any other
information relating to its Taxes which it deems confidential) to the
indemnifying party or any other Person.

(h)         Survival. Each party’s obligations under this Section 2.17 shall
survive any assignment of rights by, or the replacement of, a Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all other obligations under any Credit Document.

(i)         Issuing Bank. For purposes of this Section 2.17, the term “Lender”
includes any Issuing Bank.

(j)         FATCA. For purposes of determining withholding Taxes imposed under
FATCA, from and after the Amendment No. 3 Effective Date, the Borrower and the
Administrative Agent shall treat (and the Lenders hereby authorize the
Administrative Agent to

 

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treat) the Loans as not qualifying as a “grandfathered obligation” within the
meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each of the Borrowers shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, Local Time (4:00 p.m., New York City time, in
the case of Swingline Dollar Loans and 2:00 p.m. London time, in the case of
Swingline Foreign Currency Loans), on the date when due, in immediately
available funds, without set off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its applicable offices set forth in Section 9.01, except
payments to be made directly to the Issuing Bank or any Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder of (i) principal or interest in respect of any Loan shall be made in
the currency in which such Loan is denominated, (ii) reimbursement obligations
shall be made in the currency in which the Letter of Credit in respect of which
such reimbursement obligation exists is denominated (or as otherwise provided in
Section 2.06(e)) or (iii) any other amount due hereunder or under another Credit
Document shall be made in Dollars. Any payment required to be made by the
Administrative Agent hereunder shall be deemed to have been made by the time
required if the Administrative Agent shall at or before such time, have taken
the necessary steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the
Administrative Agent to make such payment.

(b)        If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(c)        If any Lender shall, by exercising any right of set off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC

 

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Disbursements and Swingline Loans of other Lenders without recourse or warranty
from the other Lenders except as contemplated by Section 9.04 in respect of
assignments to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by any of the Borrowers pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Disbursements to any assignee or participant,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). Each of the Borrowers consents to
the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Applicable Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Applicable Borrower in the amount of such
participation.

(d)        Unless the Administrative Agent shall have received notice from the
Applicable Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Applicable Borrower will not make such payment, the
Administrative Agent may assume that the Applicable Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Applicable Borrower has not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, (i) at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation (in
the case of an amount denominated in Dollars) and (ii) the rate reasonably
determined by the Administrative Agent to be the cost to it of funding such
amount (in the case of an amount denominated in a Foreign Currency).

(e)        If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent or the Issuing Bank to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid,
and/or (ii) hold any such amounts in a segregated account as cash collateral
for, and application to, any future funding obligations of such Lender under
such Sections; in the case of each of (i) and (ii) above, in any order as
determined by the Administrative Agent in its discretion.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.15, or if any of the Borrowers is required
to pay

 

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any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

(b)        If any Lender requests compensation under Section 2.15, if any of the
Borrowers is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
if any Lender becomes a Defaulting Lenders or if any Lender refuses to consent
to the designation of a Subsidiary Borrower pursuant to Section 2.20 when
Lenders holding greater than 66-2/3% of the aggregate Commitments have consented
to such designation or if any Lender refuses to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which requires
the consent of all Lenders or such Lender and has been approved by the Required
Lenders, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

SECTION 2.20. Subsidiary Borrowers.

(a)        Designation.   The Borrower may, at any time or from time to time,
designate one or more Wholly-Owned Subsidiaries of the Borrower as a “Subsidiary
Borrower” hereunder by furnishing to the Administrative Agent a Designation
Letter in duplicate, duly completed and executed by the Borrower and such
Wholly-Owned Subsidiary, together with the items described in paragraphs (b) and
(c) of Section 4.01 relating to such Subsidiary Borrower in substantially the
same form and scope as those delivered with respect to any Subsidiary Borrower
designated on the date of this Agreement (or, as the Administrative Agent may
reasonably require if there were no such deliveries) and such other documents as
the Administrative Agent shall reasonably request. Upon any such designation of
a Wholly-Owned

 

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Subsidiary and, in the case of a designated Subsidiary which is not a Domestic
Subsidiary, the approval of such designation by the Administrative Agent and
each Lender, such Subsidiary shall be a Subsidiary Borrower hereunder (with all
the related rights and obligations thereof) and shall be entitled to Revolving
Loans, Letters of Credit and Swingline Loans on and subject to the terms and
conditions of, and to the extent provided in, this Agreement. Subsidiary
Borrowers designated as of the date hereof are set forth on Schedule 2.20.

(b)        Termination of Subsidiary Borrower Status. So long as all Loans made
to any Subsidiary Borrower and any related obligations have been paid in full,
the Borrower may terminate the status of such Subsidiary Borrower as a
Subsidiary Borrower hereunder by furnishing to the Administrative Agent a
Termination Letter in duplicate, duly completed and executed by the Borrower and
such Subsidiary. Any Termination Letter furnished hereunder shall be effective
upon receipt by the Administrative Agent, which shall promptly notify the
Lenders. Notwithstanding the foregoing, the delivery of a Termination Letter
with respect to any Subsidiary Borrower shall not terminate (i) any obligation
of such Subsidiary Borrower that remains unpaid at the time of such delivery or
(ii) the obligations of the Borrower under the Parent Guaranty with respect to
any such unpaid obligations.

SECTION 2.21. [Intentionally Omitted]

SECTION 2.22. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a)        fees shall cease to accrue on the unfunded portion of the Commitment
of such Defaulting Lender pursuant to Section 2.12(a);

(b)        the Commitments, LC Exposure and Revolving Credit Exposure of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment or waiver pursuant to Section 9.02), provided that this clause
(b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender affected thereby (except (i) such Defaulting Lender’s Commitment may
not be increased or extended without its consent and (ii) the principal amount
of, or interest or fees payable on, Loans or LC Disbursements may not be reduced
or excused or the scheduled date of payment may not be postponed as to such
Defaulting Lender without such Defaulting Lender’s consent);

(c)        if any Swingline Exposure or LC Exposure exists at the time a Lender
becomes a Defaulting Lender then:

(i)        all or any part of such Swingline Exposure and LC Exposure shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentages but only to the extent the sum of all non-Defaulting
Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline
Exposure and LC Exposure does not exceed the total of all non-Defaulting
Lenders’ Commitments;

 

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(ii)        if the reallocation described in clause (i) above cannot, or can
only partially, be effected, the Borrower shall within one Business Day
following notice by the Administrative Agent (x) first, prepay such Swingline
Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank
only the Borrower’s obligations corresponding to such Defaulting Lender’s LC
Exposure (after giving effect to any partial reallocation pursuant to clause
(i) above) in accordance with the procedures set forth in Section 2.06(j) for so
long as such LC Exposure is outstanding;

(iii)        if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv)        if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to clause (i) above, then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or

(v)        if all or any portion of such Defaulting Lender’s LC Exposure is
neither cash collateralized nor reallocated pursuant to clause (i) or
(ii) above, then, without prejudice to any rights or remedies of the Issuing
Bank or any other Lender hereunder, all facility fees that otherwise would have
been payable to such Defaulting Lender (solely with respect to the portion of
such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and
letter of credit fees payable under Section 2.12(b) with respect to such
Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such
LC Exposure is cash collateralized and/or reallocated; and

(d)         so long as such Lender is a Defaulting Lender, no Swingline Lender
shall be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 2.20(c), and participating interests in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and such
Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent
shall occur following the date hereof and for so long as such event shall
continue or (ii) any Swingline Lender or the Issuing Bank has a good faith
belief that any Lender has defaulted in fulfilling its obligations under one or
more other agreements in which such Lender commits to extend credit, no
Swingline Lender shall be required to fund any Swingline Loan and the Issuing
Bank shall not be required to issue, amend or increase any Letter of Credit,
unless such Swingline Lender or the Issuing Bank, as the case may be, shall have
entered into arrangements with the Borrower or such Lender, satisfactory to such
Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to
it in respect of such Lender hereunder.

 

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In the event that the Administrative Agent, the Borrower, the applicable
Swingline Lender and the Issuing Bank each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders (other
than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Applicable Percentage.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

SECTION 3.01. Organization; Powers.         Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

SECTION 3.02. Authorization; Enforceability.     The Transactions are within the
Borrowers’ corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder or shareholder action. This Agreement
has been duly executed and delivered by the Borrower and constitutes a legal,
valid and binding obligation of the Borrowers, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts.     The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority as a condition to the effectiveness,
enforceability or performance thereof, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or
regulation or the charter, by-laws, memorandum and articles of association or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries except Liens created under the Credit
Documents.

SECTION 3.04. Financial Condition; No Material Adverse Change.     (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, shareholders equity and cash flows (i) as of and for
the fiscal years ended June 30, 2016 and June 30, 2015, reported on by Grant
Thornton, LLP, independent public accountants

 

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and (ii) as of and for the fiscal quarter and portions of the fiscal year ended
December 31, 2016, certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.

(b)        Since June 30, 2016, there has been no material adverse change in the
business, assets, operations or financial condition, of the Borrower and its
Subsidiaries, taken as a whole.

SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

(b)        Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any failure to so own or license or any such infringements that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.

(b)        Neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability, except where such failure, liability or claims
could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07. Compliance with Laws and Agreements.     Each of the Borrower and
its Subsidiaries is in compliance with: (i) all laws, regulations and orders of
any Governmental Authority applicable to it or its property and (ii) all
indentures, agreements and other instruments binding upon it or its property,
except in each case where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

SECTION 3.08. Investment Company Status.     Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

 

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SECTION 3.09. Taxes.    Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except in each case (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

SECTION 3.10. ERISA.    No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $20,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $20,000,000 the fair
market value of the assets of all such underfunded Plans.

SECTION 3.11. Disclosure.    The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished but excluding
information of a general economic or industry nature), taken as a whole,
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

SECTION 3.12. Security Documents.    The security interests created in favor of
the Collateral Agent, as pledgee, for the benefit of the Secured Creditors,
under each Security Document constitute perfected security interests in the
Collateral described in such Security Document under the governing law of such
Security Document, to the extent perfection thereof is required under such
Security Documents, subject to no security interests of any other Person, except
as permitted by such Security Document. No filings or recordings are required in
order to perfect (or maintain the perfection or priority of) the security
interests created in the Collateral under any Security Document, to the extent
perfection thereof is required under such Security Documents, other than filings
or recordings that have been made, except where the Administrative Agent has
determined that the time or expense of such perfection is not justified by the
value of such Collateral.

SECTION 3.13. Subsidiaries.   As of the Amendment No. 3 Effective Date, the
Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule
3.13. Schedule

 

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3.13 correctly sets forth, as of the Amendment No. 3 Effective Date, (i) the
percentage ownership (direct or indirect) of the Borrower in each class of
capital stock or other equity of its Subsidiaries and also identifies the direct
owner thereof, and (ii) the jurisdiction of organization of each such
Subsidiary. Schedule 3.13 correctly identifies those Subsidiaries which
constitute Material Subsidiaries and which constitute Material Foreign
Subsidiaries as of the Amendment No. 3 Effective Date.

SECTION 3.14. Regulation U.    Margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) constitutes less than 25% of
the value of those assets of the Borrower and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder. Neither the
making of any Loan or issuance of any Letters of Credit hereunder nor the use of
the proceeds thereof will violate the provisions of Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve System.

SECTION 3.15. Solvency.    On the Effective Date, after giving effect to the
consummation of the transactions contemplated hereby and by the Credit Documents
and the payment of all fees, costs and expenses payable by the Borrower with
respect to the transactions contemplated hereby and by the Credit Documents,
each of the Borrowers is Solvent.

SECTION 3.16. Material Agreements.    Neither the Borrower nor any Subsidiary is
a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (a) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (b) any
agreement governing Material Indebtedness.

SECTION 3.17. Foreign Pension Plan.    Each Foreign Pension Plan has been
maintained in substantial compliance with its terms and in compliance with the
requirements of any and all applicable laws, statutes, rules, regulations and
orders and has been maintained, where required, in good standing with applicable
regulatory authorities except where any such failure could not reasonably be
expected to result in payment obligations of the Borrower and its Subsidiaries
(or the acceleration of such payment obligations) aggregating more than
$20,000,000. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any material obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The present value of
the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of the Borrower’s most recently ended
fiscal year on the basis of actuarial assumptions, each of which is reasonable,
did not exceed the current value of the assets of such Foreign Pension Plan
allocable to such benefit liabilities.

SECTION 3.18. Labor Relations.    Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (a) no significant unfair
labor practice complaint pending against the Borrower or any of its Subsidiaries
or, to the best knowledge of the Borrower, threatened against any of them before
the National Labor Relations Board or any similar Governmental Authority in any
jurisdiction, and no significant grievance or significant

 

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arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, threatened against any of them, (b) no
significant strike, labor dispute, slowdown or stoppage is pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (c) to the best
knowledge of the Borrower, no question concerning union representation exists
with respect to the employees of the Borrower or any of its subsidiaries, except
(with respect to any matter specified in clause (a), (b) or (c) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.

SECTION 3.19. Anti-Corruption Laws and Sanctions.    The Borrowers have
implemented and maintains in effect policies and procedures designed to require
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and the Borrower, its Subsidiaries and their respective officers and
employees and, to the knowledge of the Borrowers, their directors and agents,
are in compliance with (x) Anti-Corruption Laws (other than Anti-Corruption Laws
non-compliance with which would have an immaterial effect on the Borrower and
its Subsidiaries) and (y) applicable Sanctions, in each case in all material
respects and no Subsidiary Borrower is knowingly engaged in any activity that
would reasonably be expected to result in such Subsidiary Borrower being
designated as a Sanctioned Person. None of (a) the Borrower, any Subsidiary or
to the knowledge of the Borrower or such Subsidiary, any of their respective
directors, officers or employees, or (b) to the knowledge of the Borrower, any
agent of the Borrower or any Subsidiary that will act in any capacity in
connection with or benefit from the credit facility established hereby, is a
Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other
transaction contemplated by this Agreement will violate any Anti-Corruption Law
or applicable Sanctions.

SECTION 3.20. EEA Financial Institution. No Credit Party is an EEA Financial
Institution.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a)        The Administrative Agent (or its counsel) shall have received from
each party to a Credit Document either (i) a counterpart of such Credit Document
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include electronic transmission of a signed
signature page) that such party has signed a counterpart of such Credit
Document.

(b)        The Administrative Agent shall have received favorable written
opinion(s) (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of U.S.,

 

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Dutch and Belgian counsel for the Borrower covering such matters relating to the
Borrowers, this Agreement or the Transactions as the Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such opinions.

(c)        The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrowers, the
authorization of the Transactions and any other legal matters relating to the
Borrowers, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.

(d)        The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.

(e)        The Administrative Agent shall have received all fees and other
amounts due and payable to it or for the account of the Lenders on or prior to
the Effective Date, including, to the extent invoiced, reimbursement or payment
of all out of pocket expenses required to be reimbursed or paid by the Borrower
hereunder.

(f)        The Administrative Agent shall have received (i) satisfactory audited
consolidated financial statements of the Borrower for the two most recent fiscal
years ended prior to the Effective Date as to which such financial statements
are available, and (ii) five-year projections of the Borrower and its
consolidated Subsidiaries for fiscal years 2011 to 2016 in form and substance
satisfactory to the Administrative Agent.

(g)        All obligations under the Original Credit Agreement shall have been
(or shall substantially contemporaneously be) repaid in full (it being
understood that such obligations may be repaid out of the initial borrowings
hereunder).

(h)        The Administrative Agent shall have received insurance certificates
naming the Collateral Agent, on behalf of the Secured Creditors, as lender’s
loss payee for any casualty policies and additional insured for any general
liability policies, in form and substance acceptable to the Administrative
Agent.

(i)        The Administrative Agent shall have received such duly completed UCC
financing statements as the Administrative Agent shall have requested to perfect
its security interest in the Collateral and such copies of searches of financing
statements filed under the UCC, together with tax lien and judgment searches
with respect to the assets of the Credit Parties, in both cases in such
jurisdictions as the Administrative Agent may request.

(j)        The Administrative Agent shall have received (or confirmed prior
receipt of) (or arrangements satisfactory to the Administrative Agent shall have
been made with respect to the delivery of) all stock (or unit) certificates
evidencing all certificated Equity Interests to be pledged pursuant to the
Pledge Agreements, accompanied by stock (or unit) powers executed in blank, and
all notes to be pledged pursuant to the Pledge Agreements (including notes
evidencing indebtedness required to be so evidenced pursuant to Section 6.04),
accompanied by note powers executed in blank.

 

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(k)        The Administrative Agent shall have received copies of all
Governmental Authority and third party approvals necessary or, in the discretion
of the Administrative Agent, advisable in connection with the Transactions and
all other documents reasonably requested by the Administrative Agent.

(l)        A consent hereto from each Exiting Lender in form reasonably
satisfactory to the Administrative Agent.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on October 31, 2011 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

SECTION 4.02. Each Credit Event.    The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a)        The representations and warranties of the Credit Parties set forth in
the Credit Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true on and as of such earlier
date.

(b)        At the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

SECTION 5.01. Financial Statements; Ratings Change and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:

 

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(a)        within 90 days after the end of each fiscal year of the Borrower (or
105 days if an extension has been obtained for the filing of an equivalent
periodic report under Rule 12b-25 of the General Rules and Regulations under the
Securities Exchange Act of 1934), its audited consolidated balance sheet and
related statements of operations, shareholders’ equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;

(b)        within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower (or 60 days if an extension has
been obtained for the filing of an equivalent periodic report under Rule 12b-25
of the General Rules and Regulations under the Securities Exchange Act of 1934),
its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

(c)        [reserved];

(d)        concurrently with any delivery of financial statements under clause
(a) or (b) above, (i) a certificate in the form of Exhibit D hereto of a
Financial Officer of the Borrower (A) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (B) setting forth
reasonably detailed calculations demonstrating compliance with Sections 6.12 and
6.13, and (C) notifying the Administrative Agent of any Commercial Tort Claims
(to the extent held by the Borrower or a Domestic Subsidiary), Copyrights,
Patents or Trademarks (each term as defined in the Security Agreement) of a
Credit Party not previously disclosed to the Administrative Agent and which, in
the case of Copyrights, Patents or Trademarks, have been registered with any
Governmental Authority, and (ii) if there has occurred any change in GAAP since
the date of the previous financial statements delivered under clause (a) or
(b) above which would affect the calculations under Section 6.12 or 6.13 or any
other limitation contained in this agreement, a reconciliation between
calculations of such covenant or limitation made before and after giving effect
to such change in GAAP; provided, however, that if the Borrower in good faith
regards the extent to which any such change in GAAP would affect such
calculations as immaterial, it may, in lieu of providing such reconciliation,
deliver at the same time as it delivers such certificate a written description
of the applicable change in GAAP and shall be obligated to provide such
reconciliation only if

 

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it is requested to do so by the Administrative Agent within ten (10) Business
Days after delivery of such certificate (and if so requested, shall do so within
ten (10) Business Days after such request (or such greater number of days to
which the Administrative Agent may agree));

(e)         promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may be; and

(f)         promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to Sections 5.01(a), (b) or (e) (to
the extent any such documents are included in materials otherwise filed with the
Securities Exchange Commission) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet or such documents become available on EDGAR; provided
that the Borrower shall deliver paper or electronic copies of such documents to
the Administrative Agent or any Lender that requests the Borrower to deliver
copies of such documents until a written request to cease delivering such copies
is given by the Administrative Agent or such Lender. The Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

SECTION 5.02. Notices of Material Events.    The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a)        the occurrence of any Default;

(b)        the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that could reasonably be expected to result in
a Material Adverse Effect;

(c)        the occurrence of any ERISA Event (or comparable event with respect
to a Foreign Pension Plan) that, alone or together with any other ERISA Events
(or comparable events with respect to a Foreign Pension Plan) that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries in an aggregate amount exceeding $20,000,000; and

(d)        any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

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Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business.    The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises required to carry on its
business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.04. Payment of Obligations.    The Borrower will, and will cause each
of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties; Insurance.    The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property
necessary to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.

SECTION 5.06. Books and Records; Inspection Rights.    The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities sufficient to permit the
preparation of the consolidated financial statements of the Borrower and its
Subsidiaries in accordance with GAAP. The Borrower will, and will cause each of
its Subsidiaries to, permit any representatives designated by the Administrative
Agent, the Collateral Agent or any Lender, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested (and, in the case of any Lender, at such Lender’s
expense).

SECTION 5.07. Compliance with Laws.    The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. The Borrowers will maintain in
effect and enforce policies and procedures designed to require compliance by the
Borrower, its Subsidiaries and their respective directors, officers, employees
and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08. Use of Proceeds and Letters of Credit.    The proceeds of the
Loans will be used only for general corporate purposes, including, but not
limited to, acquisitions

 

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permitted hereby, refinancing of indebtedness and working capital. No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. The Borrowers will not request any Borrowing
or Letter of Credit, and the Borrowers shall not use, and shall procure that its
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country in violation of any Sanctions,
or (C) in any manner that would result in the violation of any Sanctions
applicable to any party hereto.

SECTION 5.09. Further Assurances; etc. (a) The Borrower will, and will cause
each of its Subsidiaries to, at the expense of the Borrower, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports,
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require to assure the creation and continuation of perfected security
interests in the Collateral and as are generally consistent with the terms of
this Agreement and the Security Documents. Furthermore, the Borrower will, and
will cause its Subsidiaries to, deliver to the Collateral Agent such opinions of
counsel and other related documents as may be reasonably requested by the
Administrative Agent to assure compliance with this Section 5.09.

(b)        The Borrower agrees that each action required by clause (a) of this
Section 5.09 shall be completed as soon as reasonably practical, but in no event
later than 30 days (or such greater number of days as the Administrative Agent
may agree) after such action is requested to be taken by the Collateral Agent,
the Administrative Agent or the Required Lenders.

SECTION 5.10. Ownership of Subsidiaries; etc.    The Borrower will directly or
indirectly own (a) in the case of any Person which becomes a Subsidiary after
the date hereof, not less than the percentage of the Equity Interests of such
Person directly or indirectly owned by the Borrower at the time such Person
becomes a Subsidiary and (b) in each other case, 100% of the Equity Interests of
each of its Subsidiaries except, in the case of Foreign Subsidiaries, director’s
qualifying shares and/or other nominal amounts of shares required to be held by
Persons other than the Borrower and its Subsidiaries under applicable law;
provided that the foregoing shall not prohibit any sale or other disposition of
all of the Equity Interests in any Subsidiary held by the Borrower and its
Subsidiaries made in accordance with Section 6.03.

SECTION 5.11. Additional Guarantors and Collateral.

(a)        Effective upon any Domestic Subsidiary which is not, as of the date
hereof, a Material Subsidiary becoming a Material Subsidiary or a Subsidiary
Borrower, the Borrower shall cause such Domestic Subsidiary to, within thirty
(30) days, or such longer period as the Administrative Agent may agree, after
the delivery of the financial statements pursuant to Section 5.01(a) or (b) for
the fiscal period at the end of which such Subsidiary becomes a Material
Subsidiary (or, in the case of a Material Subsidiary acquired in a Permitted
Acquisition,

 

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within thirty (30) days, or such longer period as the Administrative Agent may
agree, after the closing of such Permitted Acquisition), (i) execute and deliver
to the Administrative Agent for the benefit of the Secured Creditors a joinder
to the Subsidiary Guaranty and (ii) pledge to the Collateral Agent for the
benefit of the Secured Creditors a first priority security interest in
substantially all personal property owned by such Person pursuant to, and to the
extent required by, security documents substantially similar to the Security
Documents. Notwithstanding the foregoing, (i) a Domestic Subsidiary which is not
a Wholly-Owned Subsidiary and which would otherwise be required by the foregoing
to become a guarantor and pledgor shall not be obligated to do so for so long as
it is prohibited from doing so by its charter, bylaws or other constituent
documents or by the contractual terms of its joint venture or other agreement
with the minority shareholders of such Domestic Subsidiary and (ii) a Domestic
Subsidiary which is a Subsidiary of a Foreign Subsidiary shall not be obligated
to become a guarantor or a pledgor. The Borrower shall promptly notify the
Administrative Agent of (i) the time at which any such Domestic Subsidiary
becomes a Material Subsidiary, (ii) where appropriate, of the applicability of
the preceding sentence to a Domestic Subsidiary which is a Material Subsidiary
and (iii) where applicable, of the preceding sentence ceasing to be a basis for
such Domestic Subsidiary not becoming a guarantor and pledgor as provided above.

(b)        Effective upon any Foreign Subsidiary of the Borrower or any
Subsidiary Guarantor which is not, as of the date hereof, a Material Foreign
Subsidiary becoming a Material Foreign Subsidiary or a Subsidiary Borrower, the
Borrower shall, or shall cause the applicable Subsidiary Guarantor to, within
thirty (30) days after the delivery of the financial statements pursuant to
Section 5.01(a) or (b) for the fiscal period at the end of which such Subsidiary
becomes a Material Foreign Subsidiary, pledge to the Collateral Agent for the
benefit of the Secured Creditors a first priority security interest in the
Equity Interests of such Material Foreign Subsidiary directly owned by such
Person (up to 65% of the total voting Equity Interests (and 100% of the
non-voting Equity Interests) of such Foreign Subsidiary in the aggregate)
pursuant to a pledge agreement in form satisfactory to the Administrative Agent
and provide such other documentation with respect thereto, including legal
opinions, as the Administrative Agent may reasonably request. The Borrower shall
promptly notify the Administrative Agent at any time any such Foreign Subsidiary
becomes a Material Foreign Subsidiary.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:

(a)        Indebtedness created hereunder and the other Loan Documents;

 

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(b)        Indebtedness existing or proposed on the Amendment No. 3 Effective
Date and set forth in Schedule 6.01, and any extensions, renewals or
replacements of any such Indebtedness and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof;

(c)        Indebtedness between and among the Borrower and the Subsidiary
Guarantors and Indebtedness arising out of Guarantees by any such Person of the
Indebtedness of any other such Person;

(d)        Indebtedness between and among Subsidiaries which are not Subsidiary
Guarantors and Indebtedness arising out of Guarantees by any such Person of the
Indebtedness of any other such Person;

(e)        (i) Indebtedness between and among the Borrower and its Subsidiaries
and (ii) Indebtedness arising out of Guarantees by the Borrower or any
Subsidiary of Indebtedness of the Borrower or any Subsidiary; provided, that no
additional Indebtedness may be incurred pursuant to the foregoing clause (i) or
(ii) if, after giving effect thereto, (A) the Leverage Ratio would be in excess
of 3.00 to 1.00 and (B) the aggregate outstanding principal amount of
Indebtedness incurred pursuant to this clause (e) would exceed an amount equal
to $50,000,000;

(f)        Indebtedness of the Borrower or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 180
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (f) shall not exceed $50,000,000 at any time outstanding;

(g)        Indebtedness of the Borrower or any Subsidiary; provided that the
aggregate principal amount of Indebtedness permitted by this clause (g) shall
not exceed $50,000,000 at any time outstanding;

(h)        all reimbursement obligations of the Borrower or any Subsidiary
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments in respect of
the obligations of such Person arising in the ordinary course of business;

(i)         Indebtedness, including that of SPCs, incurred in connection with
Permitted Securitizations; provided that the aggregate outstanding amount of
such Receivables Transaction Attributed Indebtedness shall at no time exceed
(i) the greater of $217,500,000 or €150,000,000 and (ii) $75,000,000 with
respect to Indebtedness incurred by the Borrower, any Domestic Subsidiary or any
SPC domiciled in the United States, any state thereof or the District of
Columbia;

(j)         Indebtedness arising under the Bond Financing Agreement not
exceeding $20,000,000 in the aggregate at any time outstanding;

 

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(k)         Indebtedness incurred and owing to Avaya, Inc., IBM Credit
Corporation or their respective Affiliates for the purpose of financing all or
any part of the cost of acquiring inventory from such Person;

(l)          Indebtedness of Foreign Subsidiaries in an aggregate principal
amount not to exceed $15,000,000 at any time outstanding;

(m)        Indebtedness incurred to pay premiums for insurance policies
maintained by the Borrower or any of its Subsidiaries in the ordinary course of
business not exceeding in aggregate the amount of such unpaid premiums;

(n)         other unsecured Indebtedness or Guaranties of the Borrower and/or
the Subsidiary Guarantors, in each case, as long as the Leverage Ratio,
calculated giving effect thereto as of the time of incurrence, shall be less
than or equal to 3.00 to 1.00; and

(o)        other secured Indebtedness of the Borrower and/or the Subsidiary
Guarantors; provided that the aggregate principal amount of Indebtedness
outstanding at any time permitted by this clause (n) shall not exceed the
greater of (i) $50,000,000 and (ii) an amount equal to 10% of Tangible Net Worth
as of the most recent fiscal quarter end for which financial statements are
available.

For purposes of determining compliance with this Section 6.01, (x) in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (a) through (o) above, the
Borrower shall, in its sole discretion, classify and reclassify or later divide,
classify or reclassify such item of Indebtedness (or any portion thereof) and
will only be required to include the amount and type of such Indebtedness in one
or more of the above clauses; provided that all Indebtedness outstanding under
the Loan Documents will be deemed to have been incurred in reliance only on the
exception in clause (a); (y) the principal amount of Indebtedness denominated in
a foreign currency shall be calculated based on the relevant currency exchange
rate in effect on the date such Indebtedness was incurred; provided that if such
Indebtedness is incurred to extend, replace, refund, refinance, renew or defease
other Indebtedness denominated in a foreign currency, and such extension,
replacement, refunding, refinancing, renewal or defeasance would cause the
applicable restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such extension, replacement, refunding,
refinancing, renewal or defeasance, such restriction shall be deemed not to have
been exceeded so long as the principal amount of such refinancing Indebtedness
does not exceed the principal amount of such Indebtedness being extended,
replaced, refunded, refinanced, renewed or defeased; and (z) in the case of
Sections 6.01(e), 6.01(n) and 6.01(o), any Indebtedness incurred shall be deemed
to comply with such Section if either (1) such Indebtedness complies with such
Section on the date incurred or (2) in cases where such Indebtedness (to the
extent in the nature of a Guarantee) is of a nature that it may fluctuate over
time, if the maximum amount of such Indebtedness complies with such Section on
the date such Indebtedness is made available, whether or not all of such
Indebtedness is incurred on such date and regardless of fluctuations in the
amount of such Indebtedness up to but not exceeding such maximum amount.

 

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SECTION 6.02. Liens.        The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:

(a)         Permitted Encumbrances;

(b)        any Lien on any property or asset of the Borrower or any Subsidiary
existing or proposed on the Amendment No. 3 Effective Date and set forth in
Schedule 6.02; provided that (i) such Lien shall not apply to any other property
or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof;

(c)        any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or asset
of any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements (including any replacement incurred in
respect thereof at the time of assumption thereof) thereof that do not increase
the outstanding principal amount thereof;

(d)        Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (f) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary;

(e)        Liens created pursuant to the Security Documents;

(f)        Liens upon assets of an SPC granted in connection with a Permitted
Securitization and customary backup Liens granted by originators of Receivables
and related assets transferred to an SPC in accordance with a Permitted
Securitization;

(g)        Liens on Receivables securing Indebtedness permitted by
Section 6.01(i);

(h)        Liens on inventory acquired from Avaya, Inc., IBM Credit Corporation
or their respective Affiliates securing Indebtedness permitted by
Section 6.01(k);

(i)         Liens of suppliers on the assets of Persons or businesses acquired
after the date hereof; provided, however, that (i) such Liens shall secure only
the purchase price of inventory purchased from such suppliers on customary
commercial terms consistent with past practice, (ii) the Borrower shall use
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permitting to exist such supplier Liens and (iii) in no event shall the
aggregate amount secured by such Liens at any time exceed an amount equal to 10%
of the book value of the total inventory of the Borrower and its Subsidiaries as
of the most recent date for which financial statements have been delivered
pursuant to Section 5.01(a) or (b) prior to such time;

(j)        the leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any Subsidiary of the
Borrower and any interest or title of a lessor under any lease (whether a
Capital Lease or an operating lease) permitted by this Agreement;

(k)       Liens arising from the granting of a lease or license to enter into or
use any asset of the Borrower or any Subsidiary of the Borrower to any Person in
the ordinary course of business of the Borrower or such Subsidiary that does not
interfere in any material respect with the use or application by the Borrower or
such Subsidiary of the asset subject to such license in the business of the
Borrower or such Subsidiary;

(l)        Liens attaching solely to cash earnest money deposits made by the
Borrower or any Subsidiary Guarantor of the Borrower in connection with any
letter of intent or purchase agreement entered into in connection with a
Permitted Acquisition permitted hereunder;

(m)      Liens on assets of Subsidiaries which are not Borrowers or Guarantors
securing Debt otherwise permitted by Section 6.01;

(n)       Liens arising from precautionary UCC financing statements (or
analogous personal property security filings or registrations in other
jurisdictions) regarding operating leases;

(o)       Liens on insurance policies and proceeds thereof to secure premiums
thereunder;

(p)       Liens relating solely to employee contributions withheld from pay
imposed by applicable pension law;

(q)       Liens on assets of Subsidiaries which are not Borrowers or Subsidiary
Guarantors securing obligations not incurred in violation of this Agreement;

(r)        bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to cash and cash equivalents on deposit in one or more
accounts maintained by the Borrower or any Subsidiary of the Borrower, in each
case granted in the ordinary course of business in favor of the bank or banks
with which such accounts are maintained, securing amounts owing to such bank
with respect to cash management and operating account arrangements, including
those involving pooled accounts and netting arrangements;

(s)        Liens resulting from progress payments or partial payments under
United States government contracts or subcontracts in the ordinary course of
business;

 

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(t)         Liens on Equity Interests issued by a joint venture of the Borrower
or any of its Subsidiaries (but that is not a Subsidiary of the Borrower)
securing Indebtedness of such joint venture permitted hereunder so long as such
Indebtedness is recourse to the Borrower and/or its Subsidiaries solely to the
extent of such Equity Interest and substantially similar Liens have been pledged
by each other Person owning Equity Interests in such joint venture to secure
such Indebtedness; and

(u)        other Liens securing Indebtedness permitted by Section 6.01(o).

For purposes of determining compliance with Sections 6.02(o), any Lien incurred
shall be deemed to comply with such Section if either (a) the Indebtedness
secured by such Lien complies with such Section on the date incurred or (b) in
cases where such Indebtedness (to the extent in the nature of a Guarantee) is of
a nature that it may fluctuate over time, if the maximum amount of such
Indebtedness complies with such Section on the date such Indebtedness is made
available, whether or not all of such Indebtedness is incurred on such date and
regardless of fluctuations in the amount of such Indebtedness up to but not
exceeding such maximum amount.

SECTION 6.03. Fundamental Changes; Asset Dispositions.

(a)        The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge or amalgamate into any other Borrower in a transaction in
which the Person surviving such merger or amalgamation is a Borrower, (iii) any
Person (other than a Borrower) may merge into any Subsidiary in a transaction in
which the surviving entity is a Subsidiary (and, if either such Subsidiary is a
Subsidiary Guarantor, then the surviving entity shall also be a Subsidiary
Guarantor) and (iv) any Subsidiary (other than a Subsidiary Borrower) may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a Wholly-Owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04 or
Section 6.03(b). Notwithstanding the foregoing, except as permitted by
Section 6.03(b) hereof, no merger or consolidation involving a Subsidiary which
is a Subsidiary Guarantor or which has pledged its assets as Collateral shall be
permitted unless the surviving entity is also a Subsidiary Guarantor and/or
pledges its assets as Collateral, as applicable.

(b)        The Borrower will not, nor will it permit any Subsidiary to, make any
Asset Disposition except for (i) Asset Dispositions among the Borrowers and one
or more Domestic Subsidiaries or Subsidiary Guarantors or among any Domestic
Subsidiaries or Subsidiary Guarantors, (ii) Asset Dispositions by Foreign
Subsidiaries that are not Subsidiary Borrowers or Subsidiary Guarantors to the
Borrower or any Subsidiary, (iii) Asset Dispositions permitted by Sections 6.04,
6.06 or 6.07, (iv) transfers of Receivables pursuant to, and in accordance with
the terms of, a Permitted Securitization; provided that, the related Receivables
Transaction Attributed Indebtedness shall be permitted by Section 6.01, (v) the
sale and leaseback of real property permitted under Section 6.10, (vi) other
Asset Dispositions of property that, together with all other property of the
Borrower and its Subsidiaries previously leased, sold

 

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or disposed of in Asset Dispositions made pursuant to this Section 6.03(b)(vi)
during the twelve-month period ending with the month in which any such lease,
sale or other disposition occurs, do not constitute a Substantial Portion of the
property of the Borrower and its Subsidiaries and (vii) transfers of Receivables
pursuant to, and in accordance with the terms of, a Specified Customer Financing
Program.

(c)         The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than the business of the
distribution and sale and/or lease of technology products and services and any
business or other activities that are reasonably similar, ancillary,
complementary or related to, or a reasonable extension, development or expansion
of, such business.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
Wholly-Owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) substantially all of
the assets of any other Person or any business unit of any other Person, except:

(a)         Permitted Investments;

(b)         investments (including investments in Subsidiaries) existing on the
Amendment No. 3 Effective Date and set forth on Schedule 6.04;

(c)         loans or advances giving rise to Indebtedness permitted to be
incurred under Sections 6.01(c), (d) or (e) and other investments which, if made
in the form of a loan or advance, would give rise to Indebtedness permitted to
be incurred under Sections 6.01(c), (d) or (e);

(d)        (i) Guarantees constituting Indebtedness permitted by Section 6.01
and (ii) Guarantees by Borrower of trade and other obligations of Subsidiaries
not constituting Indebtedness and incurred in the ordinary course of business;

(e)         subject to the provisions of this Section 6.04(e) and the
requirements contained in the definition of Permitted Acquisition, the Borrower
and its Wholly-Owned Subsidiaries may from time to time effect Permitted
Acquisitions, so long as: (i) no Default shall have occurred and be continuing
at the time of the consummation of the proposed Permitted Acquisition or
immediately after giving effect thereto; (ii) if the proposed Permitted
Acquisition is for aggregate consideration of $50,000,000 or more (inclusive of
reasonably anticipated (by the Company in good faith) earn-out payments
associated with such Permitted Acquisition), the Borrower shall have given to
the Administrative Agent written notice of such proposed Permitted Acquisition
on the earlier of (x) the date on which the Permitted Acquisition is publicly
announced and (y) ten (10) Business Days prior to consummation of such Permitted
Acquisition (or such shorter period of time as may be reasonably acceptable to
the

 

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Administrative Agent), which notice shall be executed by its chief financial
officer or treasurer and shall describe in reasonable detail the principal terms
and conditions of such Permitted Acquisition and shall certify that the
Borrower, immediately before and immediately after giving effect to such
Permitted Acquisition, will be in pro forma compliance with Sections 6.12 and
6.13; and (iii) the Leverage Ratio, calculated on a pro forma basis as if such
Permitted Acquisition(s) had been made (and any related Indebtedness incurred)
on the first day of the applicable computation period, shall be less than or
equal to 3.00 to 1.00;

(f)        routine advances to officers, directors and employees for travel,
entertainment, relocation or other reimbursable expenses incurred in the
ordinary course of business and to the extent permitted by applicable law;

(g)        investments received in connection with the bankruptcy or
reorganization of any Person and in settlement of obligations of, or disputes
with, any Person arising in the ordinary course of business and upon foreclosure
with respect to any secured investment or other transfer of title with respect
to any secured investment;

(h)        promissory notes and other non-cash consideration received in
connection with Asset Dispositions permitted by Section 6.03;

(i)        investments in the ordinary course of business consisting of
(i) endorsements for collection or deposit, (ii) customary trade arrangements
with customers or (iii) deposit accounts or securities accounts opened in the
ordinary course of business;

(j)        [reserved];

(k)        investments under Swap Agreements permitted by Section 6.05;

(l)        advances of commissions to sales agents and partners in the ordinary
course of business;

(m)      other Investments made so long as (i) no Default shall have occurred
and be continuing at the time of the consummation thereof or immediately after
giving effect thereto and (ii) the Leverage Ratio, calculated on a pro forma
basis as if such Investment had been made (and any related Indebtedness
incurred) on the first day of the applicable computation period, shall be less
than or equal to 3.00 to 1.00; and

(n)        other investments in the aggregate at any time not exceeding
$50,000,000.

For purposes of determining compliance with Sections 6.04(e), 6.04(l) and
6.04(m), any investment made shall be deemed to comply with such Section if
either (a) such investment complies with such Section on the date made or (b) in
cases where such investment is of a nature that it may fluctuate over time, if
the maximum amount of such investment complies with such Section on the date the
obligations to make such investment is entered into, whether or not all of such
investment is made on such date and regardless of fluctuations in the amount of
such investments up to but not exceeding such maximum amount.

 

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SECTION 6.05. Swap Agreements. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of the
Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Borrower or
any Subsidiary.

SECTION 6.06. Restricted Payments. The Borrower will not, and will not permit
any of its Subsidiaries to, declare, pay or make, or agree to declare, pay or
make, directly or indirectly, any Restricted Payment, except (a) the Borrower
may declare and pay dividends with respect to its Equity Interests payable
solely in additional shares of its common stock, (b) Subsidiaries may declare
and pay dividends ratably with respect to their Equity Interests, (c) the
Borrower may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of the Borrower
and its Subsidiaries and (d) so long as no Default shall have occurred and be
continuing either immediately prior to or immediately after giving effect
thereto, the Borrower may make additional Restricted Payments in an aggregate
amount in any fiscal year not in excess of an amount equal to 20% of the
Borrower’s Tangible Net Worth as of the end of the immediately preceding fiscal
year.

SECTION 6.07. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) at prices and on terms and conditions not less favorable
to the Borrower or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties and pursuant to the reasonable requirements
of the Borrower’s or its Subsidiaries’ business, (b) transactions between or
among the Borrower, its Wholly-Owned Subsidiaries and the Subsidiary Guarantors
(or, with respect to (i) transactions in an amount or fair market value of
$20,000,000 or less for any single transaction or series of related
transactions, (ii) transfer pricing arrangements, or (iii) allocation of
selling, general and administrative expenses, in each case, consistent with past
practice, transactions between or among the Borrower and its Subsidiaries) not
involving any other Affiliate, (c) any Restricted Payment permitted by
Section 6.06, (d) any incurrence of Indebtedness permitted by Section 6.01 or
investment permitted by Section 6.04, (e) transactions with any Person that is
an Affiliate solely by reason of the ownership by the Borrower or its
Subsidiaries in the Equity Interest of such Person so long as such Person does
not own, directly or indirectly, any Equity Interests of the Borrower, and
(f) employment agreements and severance arrangements and health, disability and
similar insurance or benefit plans between the Borrower and the Subsidiaries and
their respective officers and employees (including management and employee
benefit or incentive plans or agreements, phantom equity plans, subscription
agreements or similar agreements pertaining to the repurchase of Equity
Interests pursuant to put/call rights or similar rights with present or former
employees, officers or directors and stock option or incentive plans and other
compensation arrangements) in the ordinary course of business (including loans
and advances pursuant to Section 6.04(f)) and any payments in respect thereof.

SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
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agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Borrower, any Domestic Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets as
security for the Obligations, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.08 and any
extensions, renewals, amendments, modifications and replacements thereof (but
shall apply to any extension, renewal, amendment, modification or replacement
expanding the scope of (or increasing the amount of other Indebtedness having
the benefit of) any such restriction or condition), (iii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided that such
restrictions and conditions apply only to the Subsidiary (and the Equity
Interest of such Subsidiary) that is to be sold and such sale is permitted
hereunder, (iv) the foregoing shall not apply to customary restrictions on
Receivables or on any SPC created in connection with any Permitted
Securitization, (v) the foregoing shall not apply to restrictions with respect
to the disposition or distribution of assets in joint venture agreements or
other agreements with respect to Asset Dispositions permitted by Section 6.03,
(vi) the foregoing shall not apply to the subordination of subrogation,
contribution and similar claims contained in guaranties permitted hereunder,
(vii) the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (viii) the foregoing shall not apply to the subordination of loans
or advances owing by a Subsidiary to a subsidiary of such Subsidiary,
(ix) clause (a) of the foregoing shall not apply to customary restrictions or
conditions imposed by any agreement relating to Indebtedness permitted by
Section 6.01(g), (n) or (o), (x) clause (b) of the foregoing shall not apply to
restrictions contained in agreements governing intercompany Indebtedness
permitted by Section 6.01 (provided that this clause (x) shall not be deemed to
permit any restrictions on the ability of any Subsidiary to provide guarantees
as and to the extent otherwise required by this Agreement or the other Loan
Documents), (xi) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof,
(xii) the foregoing shall not apply to customary restrictions on cash deposits
or other deposits imposed by customers under contracts entered into in the
ordinary course of business and relating exclusively to such deposits, and
(xiii) the foregoing shall not apply to encumbrances or restrictions in
documents governing Indebtedness assumed or incurred under Section 6.01(l) or
existing with respect to any Person or the property or assets of such Person
acquired by the Borrower or any Subsidiary of the Borrower in an acquisition
permitted hereunder; provided, further, that such encumbrances and restrictions
permitted by this clause (xiii) are not applicable to any Person or the property
or assets of any Person other than such acquired Person or the property or
assets of such acquired Person, such restriction was not entered into in
contemplation of such acquisition and the Borrower has determined in good faith
that such restrictions could not reasonably be expected to impair the ability of
the Credit Parties and their subsidiaries to meet their obligations.

SECTION 6.09. Subordinated Indebtedness; Certain Prepayments. The Borrower will
not, and will not permit any Subsidiary to, make any amendment or modification
to any indenture, note or other agreement evidencing or governing any
Indebtedness which has

 

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been subordinated in right of payment to the Obligations or directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any such subordinated Indebtedness (except
to the extent such subordinated Indebtedness is owing to the Borrower or any
Subsidiary Guarantor). Without limiting the preceding sentence, so long as an
Event of Default has occurred and is continuing, the Borrower will not, and will
not permit any Subsidiary to, directly or indirectly voluntarily prepay, defease
or in substance defease, purchase, redeem, retire or otherwise acquire, any
single Indebtedness that constitutes a Material Indebtedness or collective
Indebtedness that constitutes Material Indebtedness prior to the date when due
(other than its obligations hereunder).

SECTION 6.10. Sale and Leaseback Transactions. The Borrower will not, nor will
it permit any Subsidiary to, enter into or suffer to exist any Sale and
Leaseback Transaction other than the sale and leaseback of real property so long
as, giving effect thereto, the Borrower is in pro forma compliance with Sections
6.12 and 6.13 and no Default exists or would result therefrom.

SECTION 6.11. Fiscal Year. The Borrower shall not, nor shall it permit any
Subsidiary to, change its fiscal year to end on any date other than June 30 of
each year; provided, however, that the Borrower may change its fiscal year end
to December 31.

SECTION 6.12. Maximum Leverage Ratio. The Borrower will cause the Leverage Ratio
to be less than or equal to 3.50 to 1.00 at all times.

SECTION 6.13. Minimum Interest Coverage Ratio. The Borrower will cause the
Interest Coverage Ratio as of the end of each fiscal quarter of the Borrower to
be no less than 3.00:1.00.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a)        any of the Borrowers shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement or any cash
collateral amount due pursuant to Section 2.06(j) when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

(b)        any of the Borrowers shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of five
days;

(c)        any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this

 

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Agreement or any amendment or modification hereof or waiver hereunder, shall
prove to have been incorrect in any material respect when made or deemed made;

(d)         the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to the
Borrower’s existence) or 5.08 or in Article VI;

(e)         the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after the earlier of (i) the first day on
which any executive officer of a Credit Party has knowledge of such failure or
(ii) the date written notice thereof has been given to the Borrower by the
Administrative Agent (which notice will be given at the request of any Lender);

(f)         the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable, and
such failure continues beyond any applicable grace or cure period;

(g)         any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that (any
applicable grace or cure period having expired) enables or permits the holder or
holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;

(h)         an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, winding-up, administration,
reorganization, voluntary arrangement, scheme of arrangement or other relief in
respect of the Borrower, any Credit Party, any Material Subsidiary or any
Material Foreign Subsidiary or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
administration, receivership or similar law now or hereafter in effect or
(ii) the appointment of a liquidator, receiver, trustee, custodian,
sequestrator, conservator, administrator, administrative receiver,
administrator, compulsory manager or similar official for the Borrower, any
Credit Party, any Material Subsidiary or any Material Foreign Subsidiary or for
a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(i)         the Borrower, any Credit Party, any Material Subsidiary or any
Material Foreign Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, winding-up, administration,
reorganization, voluntary arrangement, scheme of arrangement or other relief
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, (ii) consent to the

 

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institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a liquidator, receiver, trustee, custodian,
sequestrator, conservator, administrator, administrative receiver,
administrator, compulsory manager or similar official for the Borrower, any
Credit Party, any Material Subsidiary or any Material Foreign Subsidiary or for
a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment, composition, compromise or arrangement for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

(j)         the Borrower, any Credit Party, any Material Subsidiary or any
Material Foreign Subsidiary shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;

(k)        one or more judgments for the payment of money in an aggregate amount
in excess of $20,000,000 shall be rendered against the Borrower, any Material
Subsidiary, any Material Foreign Subsidiary, any Subsidiary Guarantor or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower, any Material Subsidiary, any Material Foreign
Subsidiary, any Subsidiary Guarantor to enforce any such judgment;

(l)         an ERISA Event (or comparable event with respect to a Foreign
Pension Plan) shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events (or comparable events with
respect to a Foreign Pension Plan) that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $20,000,000;

(m)        a Change in Control shall occur;

(n)        except as otherwise provided in Section 6.03(a), the Parent Guaranty,
the Subsidiary Guaranty or any provisions thereof shall cease to be in full
force or effect as to the Borrower or any Subsidiary Guarantor, or the Borrower,
any Subsidiary Guarantor or any Person acting for or on behalf of the Borrower
or any Subsidiary Guarantor shall deny or disaffirm the Borrower’s or such
Subsidiary Guarantor’s obligations under the Parent Guaranty or the Subsidiary
Guaranty, as applicable; or

(o)        any Security Document shall cease to be in full force and effect, or
shall cease to give the Collateral Agent for the benefit of the Secured
Creditors the Liens, rights, powers and privileges purported to be created
thereby, or any Credit Party shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any such Security Document and such default shall continue beyond
the period of grace, if any, specifically applicable thereto pursuant to the
terms of such Security Document;

 

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then, and in every such event (other than an event with respect to any of the
Borrowers described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to any of the Borrowers
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.

ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

The Lenders identified on the front page of this Agreement as Syndication Agent
or Co-Documentation Agent shall not have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein. Without limiting
the generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or

 

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not taken by it with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the

 

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Administrative Agent’s resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

Each Lender acknowledges and agrees that the extensions of credit made hereunder
are commercial loans and letters of credit and not investments in a business
enterprise or securities. Each Lender further represents that it is engaged in
making, acquiring or holding commercial loans in the ordinary course of its
business and has, independently and without reliance upon the Administrative
Agent, any arranger of this credit facility or any amendment thereto or any
other Lender and their respective Related Parties and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement as a Lender, and to make, acquire or hold
Loans hereunder. Each Lender shall, independently and without reliance upon the
Administrative Agent, any arranger of this credit facility or any amendment
thereto or any other Lender and their respective Related Parties and based on
such documents and information (which may contain material, non-public
information within the meaning of the United States securities laws concerning
the Borrower and its Affiliates) as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder and in deciding whether or to the extent to which it will continue
as a Lender or assign or otherwise transfer its rights, interests and
obligations hereunder.

The Administrative Agent shall be permitted from time to time to designate one
of its Affiliates to perform the duties to be performed by the Administrative
Agent hereunder with respect to Loans and Borrowings denominated in Foreign
Currencies or to foreign Subsidiary Borrowers. The provisions of this Article
VIII shall apply to any such Affiliate mutatis mutandis.

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Collateral Agent as its agent and authorizes the Collateral Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Collateral Agent by the terms hereof or of the other Credit Documents, together
with such actions and powers as are reasonably incidental thereto, including, as
the Collateral Agent may deem appropriate, entering into intercreditor
agreements with Persons financing the acquisition of inventory or equipment by
the Borrower or its Subsidiaries in transactions otherwise permitted hereby. All
provisions of this Article VIII relating to the Administrative Agent shall be
equally applicable to the Collateral Agent mutatis mutandis. Without limiting
the foregoing, the Collateral Agent is authorized to enter into the Dutch Pledge
Agreement and exercise its rights thereunder. The Collateral Agent is also
authorized and directed by the Lenders to enter into the Reaffirmation and to
effect the amendments to the schedules to the Security Agreement and Pledge
Agreement contemplated thereby.

Without limiting the foregoing, if any Collateral is sold in a transaction
permitted hereunder (other than to the Borrower or to a Subsidiary thereof which
is not an SPC), such Collateral shall be sold free and clear of the Liens
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Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.

The Secured Creditors hereby irrevocably authorize the Collateral Agent, at the
direction of the Required Lenders, to credit bid all or any portion of the
Obligations (including by accepting some or all of the Collateral in
satisfaction of some or all of the Obligations pursuant to a deed in lieu of
foreclosure or otherwise) and in such manner purchase (either directly or
through one or more acquisition vehicles) all or any portion of the Collateral
(a) at any sale thereof conducted under the provisions of the Bankruptcy Code,
including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any
similar laws in any other jurisdictions, or (b) at any other sale, foreclosure
or acceptance of collateral in lieu of debt conducted by (or with the consent or
at the direction of) the Collateral Agent (whether by judicial action or
otherwise) in accordance with any applicable law. In connection with any such
credit bid and purchase, the Obligations owed to the Secured Creditors shall be
credit bid by the Collateral Agent at the direction of the Required Lenders on a
ratable basis (with Obligations with respect to contingent or unliquidated
claims receiving contingent interests in the acquired assets on a ratable basis
that shall vest upon the liquidation of such claims in an amount proportional to
the liquidated portion of the contingent claim amount used in allocating the
contingent interests) for the asset or assets so purchased (or for the equity
interests or debt instruments of the acquisition vehicle or vehicles that are
issued in connection with such purchase). In connection with any such bid
(i) the Collateral Agent shall be authorized to form one or more acquisition
vehicles and to assign any successful credit bid to such acquisition vehicle or
vehicles (ii) each of the Secured Creditors’ ratable interests in the
Obligations which were credit bid shall be deemed without any further action
under this Agreement to be assigned to such vehicle or vehicles for the purpose
of closing such sale, (iii) the Collateral Agent shall be authorized to adopt
documents providing for the governance of the acquisition vehicle or vehicles
(provided that any actions by the Collateral Agent with respect to such
acquisition vehicle or vehicles, including any disposition of the assets or
equity interests thereof, shall be governed, directly or indirectly, by, and the
governing documents shall provide for, control by the vote of the Required
Lenders or their permitted assignees under the terms of this Agreement or the
governing documents of the applicable acquisition vehicle or vehicles, as the
case may be, irrespective of the termination of this Agreement and without
giving effect to the limitations on actions by the Required Lenders contained in
Section 9.02 of this Agreement), (iv) the Collateral Agent on behalf of such
acquisition vehicle or vehicles shall be authorized to issue to each of the
Secured Parties, ratably on account of the relevant Obligations which were
credit bid, interests, whether as equity, partnership, limited partnership
interests or membership interests, in any such acquisition vehicle and/or debt
instruments issued by such acquisition vehicle, all without the need for any
Secured Creditor or acquisition vehicle to take any further action, and (v) to
the extent that Obligations that are assigned to an acquisition vehicle are not
used to acquire Collateral for any reason, such Obligations shall automatically
be reassigned to the Secured Creditors pro rata and the equity interests and/or
debt instruments issued by any acquisition vehicle on account of such
Obligations shall automatically be cancelled, without the need for any Secured
Creditor or any acquisition vehicle to take any further action. Notwithstanding
that the ratable portion of the Obligations of each Secured Creditor are deemed
assigned to the acquisition vehicle or vehicles as set forth in clause
(ii) above, each Secured Creditor shall execute such documents and provide such
information regarding the Secured Creditor (and/or any designee of the Secured
Creditor which will receive interests in or debt instruments issued

 

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by such acquisition vehicle) as the Collateral Agent may reasonably request in
connection with the formation of any acquisition vehicle, the formulation or
submission of any credit bid or the consummation of the transactions
contemplated by such credit bid.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices.     (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by electronic transmission, as
follows:

(i)         if to the Borrower or any Subsidiary Borrower, to it at 6 Logue
Court, Greenville, South Carolina 29615, Attention of Mary Gentry, Treasurer
(Telecopy No. (864) 286-4938) (mary.gentry@scansource.com);

(ii)        if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 S.
Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of LaDesiree
Williams (Telecopy No. 1-(844) 490-5663; provided, however, that all notices
with respect to Eurocurrency Revolving Borrowings in Foreign Currencies shall be
sent to J.P. Morgan Europe, 25 Bank Street, Canary Wharf, London, E14 5JP,
United Kingdom, Attention of Loan and Agency London
(loan_and_agency_london@jpmorgan.com);

(iii)        if to the Issuing Bank, to JPMorgan Chase Bank, N.A., 10 S.
Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of LaDesiree
Williams (Telecopy No. 1-(844) 490-5663 (or if the Issuing Bank is not JPMorgan,
to such Issuing Bank’s address (or telecopy number) provided to the Borrower);

(iv)        if to the Swingline Lender, to JPMorgan Chase Bank, N.A., 10 S.
Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of LaDesiree
Williams (Telecopy No. 1-(844) 490-5663; provided, however, that all notices
with respect to Swingline Foreign Currency Loans shall be sent to J.P. Morgan
Europe Limited, J.P. Morgan Europe, 25 Bank Street, Canary Wharf, London, E14
5JP, United Kingdom, Attention of Loan and Agency London
(loan_and_agency_london@jpmorgan.com) (or if the Swingline Lender is not
JPMorgan, to such Swingline Lender’s address (or telecopy number) provided to
the Borrower by such Swingline Lender); and

(v)         if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through Electronic Systems, to the extent provided
in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

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(b)         Notices and other communications to the Lenders hereunder may be
delivered or furnished by using Electronic Systems pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. References elsewhere in this
Agreement to delivery of notices or other communications to the Administrative
Agent by “electronic communication” shall mean electronic communications
approved as contemplated by the preceding sentence.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

(c)         Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.

(d)         Each of the Borrowers agrees that the Administrative Agent may, but
shall not be obligated to, make Communications (as defined below) available to
the Issuing Banks and the other Lenders by posting the Communications on Debt
Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic
System. Any Electronic System used by the Administrative Agent is provided “as
is” and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects, is made by any Agent Party in
connection with the Communications or any Electronic System. In no event shall
the Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any of the Borrowers, any Lender, the Issuing
Bank or any other Person or entity for damages of any kind, including, without
limitation, direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of such
Borrower’s or the Administrative Agent’s transmission of communications through
an Electronic System. “Communications” means, collectively, any notice, demand,
communication, information, document or other material provided by or on behalf
of any of the Borrowers pursuant to any Credit Document or the transactions
contemplated therein which is distributed by the Administrative Agent, any
Issuing Bank or any Lender by means of electronic communications pursuant to
this Section, including through an Electronic System.

 

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SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by the
Borrowers therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, 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 or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.

(b)        Neither this Agreement, any other Credit Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the
Required Lenders (and, in each case, amendments or modifications entered into by
the Borrower shall be effective without the separate approval of any other
Credit Party); provided that a waiver by the Lenders only of their rights shall
not require the consent of the Borrower and further provided that no such
agreement shall:

(i)        increase the Commitment of any Lender without the written consent of
such Lender,

(ii)        reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby,

(iii)        postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby,

(iv)        change Section 2.18(b) or (c), or any other provision of this
Agreement that provides for the pro rata treatment of the Lenders, in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender,

(v)        change any of the provisions of this Section or 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, or the provisions of
Section 9.17, without the written consent of each Lender,

 

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(vi)        release all or substantially all of the Collateral or, except in
connection with a transaction permitted by Section 6.03, release any Subsidiary
Guarantor (which at the time of such release is a Material Subsidiary) from its
obligations under the Subsidiary Guaranty, without the written consent of each
Lender; provided, however, that the release of a Subsidiary Guarantor which is
primarily engaged in the leasing business shall require only the approval of the
Required Lenders, whether or not such Subsidiary Guarantor is a Material
Subsidiary,

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lenders hereunder without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lenders, as the case may be and, without limiting the foregoing,
Section 2.22 shall not be amended or modified without the consent of each of
such parties; provided further that no such agreement shall amend or modify the
provisions of Section 2.06 or any letter of credit application and any bilateral
agreement between the Applicable Borrower and the Issuing Bank regarding the
Issuing Bank’s Letter of Credit Commitment or the respective rights and
obligations between the Applicable Borrower and the Issuing Bank in connection
with the issuance of Letters of Credit without the prior written consent of the
Administrative Agent and the Issuing Bank, respectively.

Notwithstanding the foregoing, upon the execution and delivery of all
documentation required by Section 2.09(d) to be delivered in connection with an
increase to the aggregate Commitments, the Administrative Agent, the Borrower
and the new or existing Lenders whose Commitments have been affected may and
shall enter into an amendment hereof (which shall be binding on all parties
hereto and the new Lenders) solely for the purpose of reflecting in the
definition of Required Lenders and as otherwise deemed appropriate by the
Administrative Agent and the Borrower any new Lenders and their new Commitments
and any increase in the Commitment of any existing Lender. For the avoidance of
doubt, an amendment of the definition of “Revolving Credit Exposure” in
connection with a future amendment hereof incorporating the concept of alternate
currency tranches or an alternate currency fronting arrangement shall not be
deemed an amendment of the definition of “Required Lenders” subject to clause
(v) above.

Notwithstanding the foregoing, no amendment or amendment and restatement of this
Agreement which is in all other respects approved by the Lenders in accordance
with this Section 9.02 shall require the consent or approval of any Lender
(i) which immediately after giving effect to such amendment or amendment and
restatement, shall have no Commitment or other obligation to maintain or extend
credit under this Agreement (as so amended or amended and restated), including,
without limitation, any obligation in respect of any drawing under or
participation in any Letter of Credit and (ii) which, substantially
contemporaneously with the effectiveness of such amendment or amendment and
restatement, is paid in full all amounts owing to it hereunder (including,
without limitation principal, interest and fees, but excluding unmatured
contingent obligations). From and after the effectiveness of any such amendment
or amendment and restatement, any such Lender shall be deemed to no longer be a
“Lender” hereunder or a party hereto; provided, that any such Lender shall
retain the benefit of indemnification and other provisions hereof which, by the
terms hereof would survive a termination of this Agreement.

 

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Notwithstanding anything to the contrary contained herein, if the Administrative
Agent and the Borrower acting together identify any ambiguity, omission,
mistake, typographical error or other defect in any provision of this Agreement
or any other Credit Document, then the Administrative Agent and the Borrower
shall be permitted to amend, modify or supplement such provision to cure such
ambiguity, omission, mistake, typographical error or other defect, and such
amendment shall become effective without any further action or consent of any
other party to this Agreement.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay
(i) all reasonable out of pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of
this Agreement and the other Credit Documents or any amendments, modifications
or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender (such fees of counsel
limited to one firm of counsel and, if necessary, one firm of local counsel in
each relevant jurisdiction plus additional counsel in the event of a perceived
conflict), in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Credit Document, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

(b)        The Borrower shall indemnify the Administrative Agent, the Collateral
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Credit Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the Transactions or any other transactions contemplated hereby
or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by the Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrower or any of its Subsidiaries,
or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not such claim,
litigation, investigation or proceeding is brought by the Borrower or any
Subsidiary or their respective equity holders, Affiliates, creditors or any
other third Person and whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not,

 

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as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to (x) have resulted from
(A) the gross negligence, bad faith or willful misconduct of such Indemnitee or
(B) a material breach of such Indemnitee’s obligations under this Agreement or
(y) have not resulted from an act or omission by the Borrower, any Subsidiary or
any of their Affiliates and have been brought by an Indemnitee against any other
Indemnitee (other than any claims against the Administrative Agent, the
Collateral Agent, any arranger, any syndication agent or any other similar role
hereunder, in each case, in its capacity or in fulfilling its role as an
arranger or agent or any other similar role hereunder). This Section 9.03(b)
shall not apply with respect to Taxes other than any Taxes that represent losses
or damages arising from any non-Tax claim.

(c)        To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, the Issuing Bank or such Swingline Lender, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or such
Swingline Lender in its capacity as such.

(d)        To the extent permitted by applicable law, the Borrowers shall not
assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Credit Document, or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof; provided that, nothing in this clause (d) shall relieve
the Borrower of any obligation it may have to indemnify an Indemnitee against
special, indirect, consequential or punitive damages asserted against such
Indemnitee by a third party.

(e)        All amounts due under this Section shall be payable not later than
ten Business Days after written demand therefor.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) the
Borrowers may not assign or otherwise transfer any of their respective rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the

 

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Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b)        (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more Person (other than an Ineligible
Institution) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment, participations in Letters of
Credit and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

            (A)         the Borrower; provided that, the Borrower shall be
deemed to have consented to an assignment unless it shall have objected thereto
by written notice to the Administrative Agent within five (5) Business Days
after having received notice thereof; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is continuing, any
other assignee;

            (B)         the Administrative Agent; provided that no consent of
the Administrative Agent shall be required for an assignment of any Commitment
to an assignee that is a Lender immediately prior to giving effect to such
assignment; and

            (C)         the Issuing Bank.

(ii)        Assignments shall be subject to the following additional conditions:

            (A)         except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment and Loans, the amount of the Commitment or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each of
the Borrower and the Administrative Agent otherwise consent, provided that no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing;

            (B)         each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement;

            (C)         the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants), together with a processing and
recordation fee of $3,500; and

            (D)         the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire in which the
assignee designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information about the
Borrower and its affiliates, the Credit Parties

 

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and their related parties or their respective securities) will be made available
and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws.

For the purposes of this Section 9.04(b), the term “Approved Fund” and
“Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means (a) a natural person, (b) a Defaulting Lender or
its Lender Parent, (c) a holding company, investment vehicle or trust for, or
owned and operated for the primary benefit of, a natural person or relative(s)
thereof or (d) the Borrower or any of its Affiliates; provided that, such
holding company, investment vehicle or trust shall not constitute an Ineligible
Institution if it (x) has not been established for the primary purpose of
acquiring any Loans or Commitments, (y) is managed by a professional advisor,
who is not such natural person or a relative thereof, having significant
experience in the business of making or purchasing commercial loans, and (z) has
assets greater than $25,000,000 and a significant part of its activities consist
of making or purchasing commercial loans and similar extensions of credit in the
ordinary course of its business.

(iii)        Subject to acceptance and recording thereof pursuant to paragraph
(b)(v) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

(iv)        The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrowers, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of (and stated interest on) the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the

 

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contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(v)        Upon its receipt of (x) a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee or (y) to the extent applicable,
an agreement incorporating an Assignment and Assumption by reference pursuant to
a Platform as to which the Administrative Agent and the parties to the
Assignment and Assumption are participants), the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.05(c),
2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have
no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(c)        Any Lender may, without the consent of the Borrowers, the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Swingline
Lender, sell participations to one or more banks or other entities (a
“Participant”), other than an Ineligible Institution, in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Administrative
Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) (it being understood
that the documentation required under Section 2.17(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (i) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (ii) shall not be entitled to receive any greater payment under
Sections 2.15 or 2.17, with respect to any participation, than its participating
Lender would have been entitled to receive or becomes entitled to receive. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.

 

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Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrowers, maintain a register on which it enters the name and
address of each Participant and the principal amounts (and stated interest) of
each Participant’s interest in the Loans or other obligations under this
Agreement (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any Participant or any information relating to
a Participant’s interest in any Commitments, Loans, Letters of Credit or its
other obligations under any Credit Document) except to the extent that such
disclosure is necessary to establish that such Commitment, Loan, Letter of
Credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(d)        Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank or any other central bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

SECTION 9.05. Survival.      All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17,
9.03 and 9.15 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution.

(a)        This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Credit Documents and any separate letter
agreements with respect to (i) fees payable to the Administrative Agent and
(ii) the reductions of the Letter of Credit Commitment of any Issuing Bank
constitute the entire contract among the parties relating to the subject matter
hereof and

 

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supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

(b)        Delivery of an executed counterpart of a signature page of this
Agreement by telecopy, emailed pdf. or any other electronic means that
reproduces an image of the actual executed signature page shall be effective as
delivery of a manually executed counterpart of this Agreement. The words
“execution,” “signed,” “signature,” “delivery,” and words of like import in or
relating to any document to be signed in connection with this Agreement and the
transactions contemplated hereby shall be deemed to include Electronic
Signatures, deliveries or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act; provided that nothing herein shall require the Administrative
Agent to accept electronic signatures in any form or format without its prior
written consent.

SECTION 9.07. Severability.    Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08. Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any of the
Borrowers against any of and all the obligations of such Person now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured; provided that no such setoff shall be allowed
to or for the credit or the account of the Borrower if such deposit or other
obligation is with respect to or otherwise attributable to any Subsidiary
Borrower that is a Foreign Subsidiary. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b)        Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of the
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New York sitting in the Borough of Manhattan, and of the United States District
Court for the Southern District of New York sitting in the Borough of Manhattan,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrowers or their respective
properties in the courts of any jurisdiction.

(c)        Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d)        Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law. Each foreign Subsidiary Borrower appoints
the Borrower as its agent for purposes of receipt of service of process in
connection with the Credit Documents.

SECTION 9.10. WAIVER OF JURY TRIAL.      EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings.      Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality.      Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and

 

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other advisors (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any Governmental Authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party to this Agreement, (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a non-confidential basis from a source other than the Borrower. For
the purposes of this Section, “Information” means all information received from
the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a non-confidential basis prior to disclosure by the Borrower and
other than information pertaining to this Agreement routinely provided by
arrangers to data service providers, including league table providers, that
serve the lending industry. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN THIS SECTION 9.12
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING
THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS AFFILIATES,
THE CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.
ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT
THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO
MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

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SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies such Person, which information includes the names and addresses
of the Borrowers and other information that will allow such Lender to identify
the Borrowers in accordance with the Act.

SECTION 9.15. Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one
currency into another currency, each party hereto agrees, to the fullest extent
that it may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures in the relevant jurisdiction
the first currency could be purchased with such other currency on the Business
Day immediately preceding the day on which final judgment is given.

(b)        The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrower contained
in this Section 9.15 shall survive the termination of this Agreement and the
payment of all other amounts owing hereunder.

SECTION 9.16. Appointment of Borrower. Each Subsidiary Borrower hereby
authorizes and empowers the Borrower to act as its representative and
attorney-in-fact for the purposes of signing documents and giving and receiving
notices (including borrowing requests and interest elections hereunder) and
other communications in connection with this Agreement and the transactions
contemplated hereby and for the purposes of modifying or amending any

 

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provision of this Agreement and further agrees that the Administrative Agent and
each Lender may conclusively rely on the foregoing authorization.

SECTION 9.17. Application of Proceeds. After the exercise of remedies provided
for in Article VII (or after the Loans have automatically become immediately due
and payable), any proceeds of Collateral or other amounts received by the
Administrative Agent or Collateral Agent in respect of the Obligations pursuant
to the Credit Documents shall, subject to Section 23 of the Subsidiary Guaranty,
be applied, in each case ratably within the applicable priority level, first, to
pay any fees, indemnities, or expense reimbursements then due to the
Administrative Agent, the Collateral Agent or the Issuing Bank from any Credit
Party (other than in connection with a Swap Agreement), second, to pay any fees,
indemnities or expense reimbursements then due to the Lenders from any Credit
Party (other than in connection with a Swap Agreement), third, to pay interest
then due and payable on the Loans, fourth, to pay principal on the Loans and
unreimbursed LC Disbursements, fifth, to pay any obligations owing to a Secured
Creditor with respect to Swap Agreements, sixth, to the payment of any other
Obligation, and seventh, the balance, if any, after all of the Obligations have
been indefeasibly paid in full, to the Borrower or as otherwise required by law.

SECTION 9.18. Parallel Debt Provisions.

(a)        For the purpose of ensuring and preserving the validity and
enforceability of any of the security rights created under the Dutch Pledge
Agreement, the Borrower and each Subsidiary Guarantor hereby irrevocably and
unconditionally undertakes to pay to the Collateral Agent an amount equal to the
aggregate amount payable by such Credit Party in respect of its Secured
Obligations as they may exist from time to time (each undertaking, a “Parallel
Debt”). Each Parallel Debt will be payable in the currency of the relevant
Secured Obligation. Each Parallel Debt of a Credit Party will become due and
payable as and when the relevant Secured Obligation of such Credit Party becomes
due and payable.

(b)        Each of the parties hereto hereby acknowledges that: (i) each
Parallel Debt constitutes an undertaking, obligation and liability of the
applicable Credit Party to the Collateral Agent which is separate and
independent from, and without prejudice to, the Secured Obligations; and
(ii) each Parallel Debt represents the Collateral Agent’s own separate and
independent claim to receive payment of that Parallel Debt from the relevant
Credit Party, it being understood, in each case, that the amount which may
become payable by a Credit Party as its Parallel Debt shall never exceed the
total of the amounts which are payable under the Secured Obligations of such
Credit Party.

(c)        For the avoidance of doubt, the Parties confirm that the claim of the
Collateral Agent against a Credit Party in respect of a Parallel Debt and the
claims of any one or more of the Secured Creditors against such Credit Party in
respect of the Secured Obligations payable by such Credit Party to such Secured
Creditors do not constitute common property (gemeenschap) within the meaning of
article 3:166 of the Dutch Civil Code and that the provisions relating to common
property shall not apply. If, however, it shall be held that the claim of the
Collateral Agent and the claims of any one or more of the Secured Creditors do
constitute common property and the provisions of common property do apply, the
Lenders, the Administrative Agent and the Collateral Agent agree that this
Agreement shall constitute the

 

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administration agreement (beheersregeling) within the meaning of article 3:168
of the Dutch Civil Code.

(d)        To the extent the Collateral Agent irrevocably receives any amount in
payment of the Parallel Debt of a Credit Party, the Collateral Agent shall
distribute that amount among the Secured Creditors that are creditors in respect
of the corresponding Secured Obligations of such Credit Party (subject, if
applicable, to Section 9.17). Upon irrevocable receipt by a Secured Creditor of
any amount so distributed to it (a “Received Amount”), the Secured Obligations
of the applicable Credit Party to such Secured Creditor shall be reduced by an
amount (a “Deductible Amount”) equal to the Received Amount in the manner as if
the Deductible Amount were received as a payment of the Secured Obligations on
the date of receipt by such Secured Creditor of the Received Amount.

SECTION 9.19. Amendment and Restatement. (a) On the Effective Date, the Original
Credit Agreement shall be amended, restated and superseded in its entirety. The
parties hereto acknowledge and agree that (a) this Agreement, any promissory
notes delivered pursuant to Section 2.09(e) and the other Credit Documents
executed and delivered in connection herewith do not constitute a novation,
payment and reborrowing, or termination of the “Liabilities” (as defined in the
Security Agreement) under the Original Credit Agreement as in effect prior to
the Effective Date and (b) such “Liabilities” are in all respects continuing
with only the terms thereof being modified as provided in this Agreement.

(b)        All indemnification obligations of the Borrower pursuant to the
Original Credit Agreement (including any arising from a breach of the
representations thereunder) shall survive the amendment and restatement of the
Original Credit Agreement pursuant to this Agreement.

SECTION 9.20. No Fiduciary Duty, etc. Each of the Borrowers acknowledges and
agrees, and acknowledges its Subsidiaries’ understanding, that no Specified
Party will have any obligations except those obligations expressly set forth
herein and in the other Credit Documents and each Specified Party is acting
solely in the capacity of an arm’s length contractual counterparty to the
Borrowers with respect to the Credit Documents and the transaction contemplated
therein and not as a financial advisor or a fiduciary to, or an agent of, any of
the Borrowers or any other person. Each of the Borrowers agrees that it will not
assert any claim against any Specified Party based on an alleged breach of
fiduciary duty by such Specified Party in connection with this Agreement and the
transactions contemplated hereby. Additionally, each of the Borrowers
acknowledges and agrees that no Specified Party is advising any Borrower as to
any legal, tax, investment, accounting, regulatory or any other matters in any
jurisdiction. The Borrowers shall consult with their own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Specified Parties shall have no responsibility or liability to the Borrowers
with respect thereto.

Each of the Borrower further acknowledges and agrees, and acknowledges its
Subsidiaries’ understanding, that each Specified Party is a full service
securities or banking firm engaged in securities trading and brokerage
activities as well as providing investment banking and other financial services.
In the ordinary course of business, any Specified Party may provide

 

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investment banking and other financial services to, and/or acquire, hold or
sell, for its own accounts and the accounts of customers, equity, debt and other
securities and financial instruments (including bank loans and other
obligations) of, the Borrower and its Subsidiaries and other companies with
which the Borrower or its Subsidiaries may have commercial or other
relationships. With respect to any securities and/or financial instruments so
held by any Specified Party or any of its customers, all rights in respect of
such securities and financial instruments, including any voting rights, will be
exercised by the holder of the rights, in its sole discretion.

In addition, each of the Borrowers acknowledges and agrees, and acknowledges its
Subsidiaries’ understanding, that each Specified Party and its Affiliates may be
providing debt financing, equity capital or other services (including financial
advisory services) to other companies in respect of which the Borrower or any of
its Subsidiaries may have conflicting interests regarding the transactions
described herein and otherwise. No Specified Party will use confidential
information obtained from the Borrower or any of its Subsidiaries by virtue of
the transactions contemplated by the Credit Documents or its other relationships
with you in connection with the performance by such Specified Party of services
for other companies, and no Specified Party will furnish any such information to
other companies. Each of the Borrowers also acknowledges, and acknowledges its
Subsidiaries understanding, that no Specified Party has any obligation to use in
connection with the transactions contemplated by the Credit Documents, or to
furnish to the Borrower or any of its Subsidiaries, confidential information
obtained from other companies.

SECTION 9.21. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Credit Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Credit Document may be subject to the write-down
and conversion powers of an EEA Resolution Authority and agrees and consents to,
and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)        the effects of any Bail-In Action on any such liability, including,
if applicable:

(i)        a reduction in full or in part or cancellation of any such liability;

(ii)       a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
entity, or a bridge institution that may be issued to it or otherwise conferred
on it, and that such shares or other instruments of ownership will be accepted
by it in lieu of any rights with respect to any such liability under this
Agreement or any other Credit Document; or

(iii)       the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

 

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SECTION 9.22. Reference Bank Replacement. If a Reference Bank (or, if a
Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases
to be a Lender, the Administrative Agent shall (in consultation with the
Borrower) appoint another Lender or an Affiliate of a Lender to replace that
Reference Bank.

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

SCANSOURCE, INC.

By

   

Name: Richard P. Cleys

Title:

 

Vice President and Chief Financial Officer    

NETPOINT INTERNATIONAL, INC.

By

   

Name: Linda B. Davis

Title: Treasurer

SCANSOURCE EUROPE SPRL

By

   

Name: Richard P. Cleys

Title: Gérant

 

Signature Page to ScanSource Credit Agreement

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

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent, Swingline
Lender and Issuing Bank By                                    
                               Name: Title:

 

 

Signature Page to ScanSource Credit Agreement

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

[OTHER BANKS] By                                    
                               Name: Title:  

 

 

Signature Page to ScanSource Credit Agreement

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

Schedule 1.01

PRICING SCHEDULE

 

APPLICABLE RATE   

LEVEL I  

STATUS  

 

LEVEL II  

STATUS  

 

LEVEL III  

STATUS  

 

LEVEL IV  

STATUS  

 

LEVEL V  

STATUS  

 

LEVEL VI  

STATUS  

Eurocurrency Spread    1.00%   1.125%   1.375%   1.625%   1.875%   2.125% ABR
Spread    0%   0.125%   0.375%   0.625%   0.875%   1.125% Commitment Fee Rate   
0.175%   0.175%   0.20%   0.25%   0.30%   0.35%

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

“Financials” means the annual or quarterly financial statements of the Borrower
delivered pursuant to Section 5.01 of this Agreement.

“Level I Status” exists at any date if, as of the last day of the fiscal quarter
of the Borrower referred to in the most recent Financials, the Net Leverage
Ratio is less than 0.50 to 1.00.

“Level II Status” exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Net Leverage Ratio is
less than 1.00 to 1.00.

“Level III Status” exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Net Leverage Ratio is less than 1.50 to 1.00.

“Level IV Status” exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Net Leverage Ratio is less than 2.25 to 1.00.

“Level V Status” exists at any date if, as of the last day of the fiscal quarter
of the Borrower referred to in the most recent Financials, (i) the Borrower has
not qualified for Level I Status, Level II Status, Level III Status or Level IV
Status and (ii) the Net Leverage Ratio is less than 3.00 to 1.00.

“Level VI Status” exists at any date if the Borrower has not qualified for Level
I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

“Net Leverage Ratio” means a ratio of the Borrower’s and its Subsidiaries
(a) Total Debt less up to $10,000,000 of unrestricted domestic cash to
(b) trailing twelve month EBITDA.

“Status” means Level I Status, Level II Status, Level III Status, Level IV
Status, Level V Status or Level VI Status.

The Applicable Fee Rate shall be determined in accordance with the foregoing
table based on the Borrower’s Status as reflected in the then most recent
Financials. Adjustments, if any, to the Applicable Fee Rate shall be effective
five Business Days after the Administrative Agent has

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received the applicable Financials. If the Borrower fails to deliver the
Financials to the Administrative Agent at the time required pursuant to the
Credit Agreement, then the Applicable Fee Rate shall be the highest Applicable
Fee Rate set forth in the foregoing table until five Business Days after such
Financials are so delivered. Until adjusted in accordance with the June 30, 2017
Financials, Level III Status shall be deemed to exist.

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Schedule 2.01

Commitments; Letter of Credit Commitments

Commitments

 

 

JPMorgan Chase Bank, N. A.

 

 

 

$60,000,000.00

 

 

TD Bank, N.A.

 

 

 

$60,000,000.00

 

 

Bank of America, N.A.

 

 

 

$60,000,000.00

 

 

Wells Fargo Bank, N.A.

 

 

 

$50,000,000.00

 

 

Regions Bank

 

 

 

$45,000,000.00

 

 

Citibank, N.A.

 

 

 

$25,000,000.00

 

         

 

TOTAL  

 

 

 

$300,000,000

 

Letter of Credit Commitments

 

 

JPMorgan Chase Bank, N. A.

 

 

 

$15,000,000.00

 

 

TD Bank, N.A.

 

 

 

$15,000,000.00

 

 

Bank of America, N.A.

 

 

 

$15,000,000.00

 

         

 

TOTAL  

 

 

 

$45,000,000

 

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Schedule 2.20

Subsidiary Borrowers

ScanSource Europe SPRL

ScanSource Latin America Inc.