EXHIBIT 10.1

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of

 

April 15, 2005

 

among

 

DIGITAL GENERATION SYSTEMS, INC.,

as Borrower

 

The Lenders Party Hereto,

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and Issuing Bank

 

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J.P. MORGAN SECURITIES INC.

as Advisor, Sole Bookrunner and Sole Lead Arranger

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TABLE OF CONTENTS

 

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ARTICLE I

      DEFINITIONS    1     SECTION 1.01   Defined Terms    1     SECTION 1.02  
Terms Generally    21     SECTION 1.03   Accounting Terms; GAAP    21    
SECTION 1.04   UCC Changes    22

ARTICLE II

      THE CREDITS    22     SECTION 2.01   Commitments    22     SECTION 2.02  
Loans and Borrowings    22     SECTION 2.03   Requests for Borrowings    23    
SECTION 2.04   Letters of Credit    24     SECTION 2.05   Funding of Borrowings
   28     SECTION 2.06   Interest Elections    29     SECTION 2.07   Termination
and Reduction of Commitments    30     SECTION 2.08   Repayment of Loans;
Evidence of Debt    31     SECTION 2.09   Prepayment of Loans    32     SECTION
2.10   Fees    33     SECTION 2.11   Interest    34     SECTION 2.12   Taxes   
35     SECTION 2.13   Payments Generally; Pro Rata Treatment; Sharing of
Set-offs    36     SECTION 2.14   Mitigation Obligations; Replacement of Lenders
   38     SECTION 2.15   Increase of Commitments; Additional Lenders    38

ARTICLE III

      YIELD PROTECTION AND ILLEGALITY    40     SECTION 3.01   Increased Costs
   40     SECTION 3.02   Alternate Rate of Interest    41     SECTION 3.03  
Illegality    42     SECTION 3.04   Treatment of Affected Borrowings    42    
SECTION 3.05   Break Funding Payments    43

ARTICLE IV

      SECURITY    43     SECTION 4.01   Collateral    43

ARTICLE V

      REPRESENTATIONS AND WARRANTIES    44     SECTION 5.01   Organization;
Powers    44     SECTION 5.02   Authorization; Enforceability    44

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    SECTION 5.03   Governmental Approvals; No Conflicts    44     SECTION 5.04  
Financial Condition; No Material Adverse Change    45     SECTION 5.05  
Properties    45     SECTION 5.06   Litigation and Environmental Matters    46  
  SECTION 5.07   Compliance with Laws and Agreements    46     SECTION 5.08  
Investment and Holding Company Status    46     SECTION 5.09   Taxes    46    
SECTION 5.10   ERISA    47     SECTION 5.11   Disclosure    47     SECTION 5.12
  Indebtedness    47     SECTION 5.13   Subsidiaries    47     SECTION 5.14  
Inventory    47     SECTION 5.15   Patents, Trademarks and Copyrights    48    
SECTION 5.16   Margin Securities    48     SECTION 5.17   Labor Matters    48  
  SECTION 5.18   Solvency    48     SECTION 5.19   Burdensome Agreements    49  
  SECTION 5.20   Permits, Licenses, Etc    49

ARTICLE VI

      CONDITIONS    49     SECTION 6.01   Effective Date    49     SECTION 6.02
  Each Credit Event    52

ARTICLE VII

      AFFIRMATIVE COVENANTS    53     SECTION 7.01   Financial Statements and
Other Information    53     SECTION 7.02   Notices of Material Events    55    
SECTION 7.03   Existence; Conduct of Business    55     SECTION 7.04   Payment
of Obligations    55     SECTION 7.05   Maintenance of Properties    55    
SECTION 7.06   Books and Records; Inspection Rights    55     SECTION 7.07  
Insurance    56     SECTION 7.08   Compliance with Laws    56     SECTION 7.09  
Use of Proceeds and Letters of Credit    56     SECTION 7.10   Compliance with
Agreements    57     SECTION 7.11   Additional Subsidiaries    57     SECTION
7.12   Real Property    57     SECTION 7.13   Environmental Matters    57    
SECTION 7.14   Further Assurances    57

 

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ARTICLE VIII

      NEGATIVE COVENANTS    58     SECTION 8.01   Indebtedness    58     SECTION
8.02   Liens    59     SECTION 8.03   Fundamental Changes    59     SECTION 8.04
  Investments, Loans, Advances, Guarantees and Acquisitions    60     SECTION
8.05   Hedging Agreements    60     SECTION 8.06   Restricted Payments; Certain
Payments of Indebtedness    61     SECTION 8.07   Transactions with Affiliates
   61     SECTION 8.08   Restrictive Agreements    62     SECTION 8.09  
Disposition of Assets    62     SECTION 8.10   Sale and Leaseback    63    
SECTION 8.11   Accounting    63     SECTION 8.12   Amendment of Material
Documents    63     SECTION 8.13   Preferred Equity Interests    63     SECTION
8.14   Synthetic Repurchases    63     SECTION 8.15   Permitted Media DVX
Payments    63

ARTICLE IX

      FINANCIAL COVENANTS    64     SECTION 9.01   Fixed Charge Coverage Ratio
   64     SECTION 9.02   Senior Leverage Ratio    64     SECTION 9.03   Total
Leverage Ratio    64     SECTION 9.04   Tangible Net Worth    64     SECTION
9.05   Capital Expenditures    65

ARTICLE X

      EVENTS OF DEFAULT    65     SECTION 10.01   Default    65     SECTION
10.02   Performance by the Administrative Agent    68

ARTICLE XI

      THE ADMINISTRATIVE AGENT    68

ARTICLE XII

      MISCELLANEOUS    70     SECTION 12.01   Notices    70     SECTION 12.02  
Waivers; Amendments    70     SECTION 12.03   Expenses; Indemnity; Damage Waiver
   72     SECTION 12.04   Successors and Assigns    74     SECTION 12.05  
Survival    77     SECTION 12.06   Counterparts; Effectiveness    78     SECTION
12.07   Severability    78

 

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     SECTION 12.08    Right of Setoff    78      SECTION 12.09    GOVERNING LAW;
VENUE; SERVICE OF PROCESS    78      SECTION 12.10    WAIVER OF JURY TRIAL    79
     SECTION 12.11    Headings    79      SECTION 12.12    Confidentiality    79
     SECTION 12.13    Maximum Interest Rate    80      SECTION 12.14   
Non-Application of Chapter 346 of Texas Finance Code    80      SECTION 12.15   
NO ORAL AGREEMENTS    81      SECTION 12.16    No Fiduciary Relationship    81  
   SECTION 12.17    Construction    81      SECTION 12.18    USA PATRIOT Act   
81      SECTION 12.19    Release of Claims    81

 

EXHIBITS

 

“A-1”

  Form of Revolving Credit Note

“A-2”

  Form of Term Note

“B-1”

  Borrowing Request Form

“B-2”

  Letter of Credit Request Form

“C”

  Security Agreement

“D”

  Guaranty

“E”

  Contribution and Indemnification Agreement

“F”

  Compliance Certificate

“G”

  Borrowing Base Certificate

“H”

  Assignment and Assumption

 

SCHEDULES

 

1.01

   Lenders and Commitments

5.06

   Disclosed Matters

5.13

   Subsidiaries

5.15

   Patents, Trademarks and Copyrights

8.01

   Existing Indebtedness

8.02

   Existing Liens

8.08

   Existing Restrictive Agreements

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
April 15, 2005, among DIGITAL GENERATION SYSTEMS, INC., a Delaware corporation,
as Borrower, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A. (formerly
known as JPMorgan Chase Bank), a national banking association, as Administrative
Agent and Issuing Bank.

 

RECITALS

 

  A. The parties hereto are parties to the Existing Credit Agreement.

 

  B. The parties hereto are entering into this Agreement in order, among other
things, to amend the Existing Credit Agreement pursuant to the terms of this
Agreement, and to provide for (i) a term loan which is in part in renewal,
extension and modification of, but not extinguishment of, the term loans
outstanding under the Existing Credit Agreement, and (ii) a revolving credit
facility which is in part in renewal, extension and modification of, but not
extinguishment of, the revolving credit loans outstanding under the Existing
Credit Agreement and which includes a sub facility for the issuance of Letters
of Credit.

 

  C. Lenders and Administrative Agent are willing to continue to extend credit
to the Borrower upon the terms and conditions of this Agreement, with the
proceeds of the loans to be used by Borrower solely for the purposes specified
in this Agreement.

 

  D. The parties hereto desire to amend the Existing Credit Agreement as
hereinafter provided and have agreed for purposes of clarity and ease of
administration, to amend the Existing Credit Agreement and then restate the
Existing Credit Agreement in its entirety by means of this Agreement.

 

AGREEMENTS

 

Accordingly, in consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows, and the Existing 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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   1

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“Acquired AGT EBITDA” means, for any period prior to June 11, 2004, EBITDA of
the Broadcast Division of AGT for such period, including without limitation any
and all amounts allocated internally by AGT to such Broadcast Division for such
period.

 

“Acquired Maythenyi EBITDA” means, for any period prior to September 1, 2004,
EBITDA of Maythenyi for such period.

 

“Acquisition” means any transaction or series of related transactions for the
direct or indirect (a) acquisition of all or substantially all of the property
of a Person, or of any business or division of a Person, including without
limitation the Media DVX Acquisition, (b) acquisition of in excess of 50% of the
Equity Interests of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person.

 

“Acquisition Documents” means all documents executed or provided in connection
with any Acquisition.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders and the Issuing Bank hereunder.

 

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

 

“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.

 

“AGT” means Applied Graphics Technologies, Inc., a Delaware corporation.

 

“AGT Acquisition Corp.” means DG Systems Acquisition Corporation, a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.

 

“AGT Acquisition Target” means the Broadcast Division of AGT, all or
substantially all of the assets of which were acquired by AGT Acquisition Corp.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the Prime
Rate in effect on such day.

 

“Applicable Margin” means, for any day, (a) with respect to the Loans comprising
each Eurodollar Borrowing, the margin of interest over the Adjusted LIBO Rate
that is applicable

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   2

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when any interest rate based on the Adjusted LIBO Rate is determined under this
Agreement, (b) with respect to the Loans comprising each ABR Borrowing, the
margin of interest over the Alternate Base Rate that is applicable when any
interest rate based on the Alternate Base Rate is determined under this
Agreement, and (c) with respect to Commitment Fees, the percentage rate per
annum that is applicable when any such Commitment Fee is determined under this
Agreement. During the period commencing on the Effective Date and continuing
until the Initial Adjustment Date, the Applicable Margin shall be 1.25% per
annum for ABR Loans and 2.75% per annum for Eurodollar Loans. Thereafter, the
Applicable Margin shall be a percentage per annum subject to adjustment (upwards
or downwards, as appropriate) based on the Total Leverage Ratio. On the Initial
Adjustment Date, the Applicable Martin shall be adjusted to reflect the
Applicable Margin prescribed below for the Total Leverage Ratio as demonstrated
by the most recently delivered Compliance Certificate. Thereafter, on each date
a Compliance Certificate is due under Section 7.01(c), the Applicable Margin
shall be adjusted to reflect the Applicable Margin prescribed below for the
Total Leverage Ratio as demonstrated by such Compliance Certificate. At all
times on or after the Initial Adjustment Date, the Applicable Margin shall be as
follows:

 

TOTAL LEVERAGE RATIO

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APPLICABLE

MARGIN FOR

EURODOLLAR

BORROWINGS

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APPLICABLE

MARGIN FOR ABR

BORROWINGS

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APPLICABLE

COMMITMENT FEE

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Greater than or equal to 2.00 to 1.00

   3.25 %   1.75 %   0.50 %

Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00

   3.00 %   1.50 %   0.50 %

Greater than or equal to 1.00 to 1.00, but less than 1.50 to 1.00

   2.75 %   1.25 %   0.50 %

Less than 1.00 to 1.00

   2.50 %   1.00 %   0.50 %

 

After each adjustment of the Applicable Margin in accordance herewith due to a
change in the Total Leverage Ratio as demonstrated by the Compliance
Certificate, the new Applicable Margin shall apply to all Borrowings made or
outstanding thereafter until the next date that a Compliance Certificate is due
under Section 7.01(c) and demonstrates a change in the Total Leverage Ratio to
an amount so that another Applicable Margin shall be applied. Upon the request
of the Administrative Agent, the Borrower must demonstrate to the reasonable
satisfaction of the Administrative Agent the required applicable Total Leverage
Ratio in order to obtain an adjustment to a lower Applicable Margin. If the
Borrower fails to furnish to the Administrative Agent any Compliance Certificate
by the date required by this Agreement then the maximum Applicable Margin shall
apply at all times after such date for all Borrowings made or outstanding after
such date until the Borrower furnishes the required Compliance Certificate to
the Administrative Agent.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   3

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“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Revolving Credit Commitments represented by such Lender’s Revolving Credit
Commitment. If the Revolving Credit Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Revolving Credit
Commitments most recently in effect, giving effect to any assignments.

 

“Arranger” means J.P. Morgan Securities Inc.

 

“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 12.04), and accepted by the Administrative Agent, in the form of
Exhibit ”H” or any other form approved by the Administrative Agent.

 

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

 

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

 

“Borrower” means Digital Generation Systems, Inc., a Delaware corporation.

 

“Borrowing” means Loans of the same Class and Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

 

“Borrowing Base” means, at any time, an amount equal to eighty percent (80%) of
Eligible Accounts.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit “G” or
any other form approved by the Administrative Agent and the Borrower, together
with all attachments contemplated thereby.

 

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

 

“Borrowing Request Form” means a certificate in substantially the form of
Exhibit ”B-1”, properly completed and signed by the Borrower requesting a
Borrowing or a conversion or continuation of a Borrowing.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Dallas, Texas are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   4

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“Capital Expenditures” means, for any period, the additions to property, plant
and equipment and other capital expenditures of the Loan Parties that are (or
would be) set forth in a consolidated statement of cash flows of the Loan
Parties for such period prepared 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.

 

“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 effect on the date hereof), of shares
representing more than 30% of either the aggregate ordinary voting power or the
aggregate equity value represented by the issued and outstanding capital stock
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 by the board of directors of the Borrower nor (ii) appointed 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 (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 3.01(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

 

“Class” means when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Term
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Credit Commitment or Term Loan Commitment.

 

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

 

“Collateral” has the meaning specified in Section 4.01.

 

“Commitment” means, a Revolving Credit Commitment, a Term Loan Commitment or any
combination thereof (as the context requires).

 

“Commitment Fee” means the commitment fee payable pursuant to Section 2.10.

 

“Compliance Certificate” means a certificate of a Financial Officer of the
Borrower, in the form of Exhibit ”F” hereto.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   5

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“Consolidated EBITDA” means, for each period of determination, (a) EBITDA of the
Loan Parties on a consolidated basis for such period, plus, (b) for any portion
of such period prior to June 11, 2004, Acquired AGT EBITDA for such portion of
such period, plus (c) for any portion of such period prior to the September 1,
2004, Acquired Maythenyi EBITDA for such portion of such period, less (d)
deferred revenues realized by StarGuide for such period, plus (e) any and all
costs incurred by StarGuide in such period in connection with the deferred
revenues subtracted in clause (d) above.

 

“Consolidated Tangible Net Worth” shall mean, at any particular time, all
amounts which, in conformity with GAAP, would be included as stockholders’ or
owners’ equity on a consolidated balance sheet of the Loan Parties; provided,
however, there shall be excluded therefrom: (a) any amount at which Equity
Interests of any Person appear as an asset on the balance sheet of such Person,
(b) goodwill, including any amounts, however designated, that represent the
excess of the purchase price paid for assets or Equity Interests over the value
assigned thereto, (c) patents, trademarks, trade names, and copyrights, (d)
deferred expenses, (e) loans and advances to any stockholder, director, officer,
partner, or employee of the Borrower, any of its Subsidiaries, or any Affiliate
of the Borrower or any of its Subsidiaries, and (f) all other assets which are
properly classified as intangible assets.

 

“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, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Contribution and Indemnification Agreement” means the Third Amended and
Restated Contribution and Indemnification Agreement of the Borrower and each
Guarantor, in substantially the form of Exhibit ”E”, as the same may be amended,
supplemented, or modified from time to time.

 

“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.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 5.06.

 

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

 

“EBITDA” means, for each period of determination for any Person and its
subsidiaries on a consolidated basis, the sum of (a) consolidated net income of
such Person and its subsidiaries for such period (whether positive or negative),
plus, (b) each of the following of such Person and its subsidiaries for such
period to the extent actually deducted in arriving at consolidated net income of
such Person and its subsidiaries for such period and without duplication:
depreciation, amortization, taxes, interest expense and other non-cash charges,
non-recurring charges and extraordinary charges specifically identified as such
as a separate line item on the Borrower’s income statement.

 

“Effective Date” means the date on which the conditions specified in Section
6.01 are satisfied (or waived in accordance with Section 12.02).

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   6

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“Eligible Accounts” means, at any time, all accounts receivable of the Loan
Parties, or any of them, created in the ordinary course of business that are
acceptable to the Administrative Agent in its sole discretion and satisfy the
following conditions:

 

  (a) The account complies with all applicable laws, rules, and regulations,
including, without limitation, usury laws, the Federal Truth in Lending Act, and
Regulation Z of the Board of Governors of the Federal Reserve System;

 

  (b) The account has not been outstanding for more than one hundred twenty
(120) days past the original date of invoice;

 

  (c) The account was created in connection with (i) the sale of goods by any
Loan Party in the ordinary course of business and such sale has been consummated
and such goods have been shipped and delivered and received by the account
debtor, or (ii) the performance of services by any Loan Party in the ordinary
course of business and such services have been completed and accepted by the
account debtor;

 

  (d) The account arises from an enforceable contract, the performance of which
has been completed by any Loan Party;

 

  (e) The account is not a prebilled account and, without limiting the
foregoing, does not consist of or arise from maintenance receivables or
receivables that result in the booking of deferred revenue;

 

  (f) The account does not arise from the sale of any good that is on a
bill-and-hold, guaranteed sale, sale-or-return, sale on approval, consignment,
or any other repurchase or return basis;

 

  (g) A Loan Party has good and indefeasible title to the account and the
account is not subject to any Lien except Liens in favor of the Administrative
Agent;

 

  (h) The account does not arise out of a contract with or order from, an
account debtor that, by its terms, prohibits or makes void or unenforceable the
grant of a security interest by any Loan Party to the Administrative Agent in
and to such account;

 

  (i) The account is not subject to any counterclaim, defense or dispute;

 

  (j) If an account is subject to any setoff, recoupment, contra account, charge
back, credit or any other obligation owed by any Loan Party to such account
debtor or any adjustment, other than normal discounts for prompt payment, only
the amount in excess of such setoff, recoupment, contra account, charge back,
credit, obligation or adjustment shall be eligible;

 

  (k) The account debtor is not insolvent or the subject of any bankruptcy or
insolvency proceeding and has not made an assignment for the benefit of
creditors, suspended normal business operations, dissolved, liquidated,
terminated its existence, ceased to pay its debts as they become due, or
suffered a receiver or trustee to be appointed for any of its assets or affairs;

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   7

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  (l) The account is not evidenced by chattel paper or an instrument;

 

  (m) No default exists under the account by any party thereto;

 

  (n) The account debtor has not returned or refused to retain, or otherwise
notified any Obligor of any dispute concerning, or claimed nonconformity of, any
of the goods from the sale of which the account arose;

 

  (o) The account is not owed by an Affiliate of any Obligor;

 

  (p) The account is payable in dollars by the account debtor;

 

  (q) Either (i) the account debtor is domiciled in the United States of America
or (ii) the account is backed or secured by credit insurance or a letter of
credit satisfactory to the Administrative Agent in all respects and such credit
insurance or letter of credit, as applicable, has been assigned to the
Administrative Agent upon terms acceptable to the Administrative Agent in its
discretion;

 

  (r) The account is not owed by an account debtor with respect to which more
than thirty percent (30%) of the aggregate balances then outstanding on accounts
owed by such account debtor and its Affiliates to the Loan Parties, or any of
them, have been outstanding for more than one hundred twenty (120) days past the
dates of their original invoices;

 

  (s) The account debtor is not the United States of America or any department,
agency, or instrumentality thereof, or any other Governmental Authority, unless
the Federal Assignment of Claims Act of 1940, as amended, or any similar state
statute, as applicable, shall have been complied with.

 

  (t) If the accounts owed by any account debtor represent more than ten percent
(10%) of the aggregate amount of all accounts receivable of the Loan Parties,
only that portion of the accounts owed by such account debtor which does not
exceed such ten percent (10%) limit shall be eligible.

 

“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 or to health
and safety matters.

 

“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

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   8

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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 or ownership interests in a Person.

 

“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.

 

“Eurodollar”, 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 LIBO Rate.

 

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

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   9

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request by the Borrower under Section 2.14(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.12(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.12(a).

 

“Existing Credit Agreement” means that certain Second Amended and Restated
Credit Agreement dated as of August 31, 2004, among Borrower, the Administrative
Agent and the Lenders party thereto, as amended by that certain First Amendment
to Second Amended and Restated Credit Agreement dated as of March 1, 2005, and
as further amended by that certain Second Amendment to Second Amended and
Restated Credit Agreement dated as of March 2, 2005, which Second Amended and
Restated Credit Agreement amended and restated in its entirety that certain
Amended and Restated Credit Agreement dated as of June 10, 2004, which Amended
and Restated Credit Agreement amended and restated in its entirety that certain
Credit Agreement dated as of May 5, 2003, as amended by that certain First
Amendment to Credit Agreement dated as of July 3, 2003.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve The Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average (rounded upwards, if necessary,
to the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

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

 

“Fixed Charge Coverage Ratio” means as of each date of determination, the ratio
of (a) (i) Consolidated EBITDA for the 12-month period ended on such date of
determination, less (ii) Capital Expenditures for the 12-month period ended on
such date of determination, and including, for purposes of this definition,
capital expenditures during such period by or for the Broadcast Division of AGT
and capital expenditures during such period by or for Maythenyi, to (b) the sum
of the following for the 12-month period ended on such date of determination:
(i) regularly scheduled principal payments of Indebtedness of the Loan Parties
scheduled to be paid during such period, whether or not actually paid, plus (ii)
cash interest expense of the Loan Parties for such period, plus (ii) amounts
paid to Media DVX Acquisition Corp. by any Loan Party for payment of regularly
scheduled payments of principal or interest on the Seller Note.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   10

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

 

“GAAP” means 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.

 

“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.

 

“Guarantors” means all of the Subsidiaries of the Borrower as of the Effective
Date (except any Foreign Subsidiary) and each other Subsidiary that at any time
executes a Guaranty in favor of the Administrative Agent and the Lenders.

 

“Guaranty” means the Third Amended and Restated Guaranty of Guarantors in favor
of the Administrative Agent and the Lenders, in substantially the form of
Exhibit “D” hereto, as the same may be amended, supplemented, or modified from
time to time.

 

“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.

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

 

“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

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   11

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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), (f) all obligations secured by (or for which the holder of such
obligations has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have 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 in respect of letters
of credit, letters of guaranty, bankers’ acceptances, surety or other bonds and
similar instruments, (j) all liabilities of such Person in respect of unfunded
vested benefits under any Plan and (k) payment obligations with respect to
Hedging Agreements, provided that for purposes of this definition, the amount of
the obligation of any Person under any Hedging Agreement shall be the amount
determined, in respect thereof as of the end of the most recently ended fiscal
quarter of such Person, based on the assumption that such Hedging Agreement has
terminated at the end of such fiscal quarter, and in making such determination,
if such Hedging Agreement provides for the netting of amounts payable by and to
each party thereto or if any Hedging Agreement provides for the simultaneous
payment of amounts by and to each party, then in each such case, the amount of
such obligation shall be the net amount so determined. 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.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Initial Adjustment Date” means the date a Compliance Certificate is due under
Section 7.01(c) for Borrower’s fiscal quarter ending June 30, 2005.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.06.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part.

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two or three months
thereafter, as the Borrower may elect, and 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 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
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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   12

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“Issuing Bank” means JPMorgan Chase Bank, N.A. in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.04(i). 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.

 

“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 aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
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 Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of
such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

 

“Lenders” means the Persons listed on Schedule 1.01 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.

 

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

 

“Letter of Credit Request Form” means a certificate, in substantially the form
of Exhibit “B-2” hereto, properly completed and signed by the Borrower
requesting the issuance of a Letter of Credit (or the amendment, renewal, or
extension of an outstanding Letter of Credit).

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   13

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London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, 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 securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement and all promissory notes, security
agreements, pledge agreements, deeds of trust, assignments, guaranties,
subordination agreements, intercreditor agreements, and other instruments,
documents, and agreements executed and delivered pursuant to or in connection
with this Agreement, as such instruments, documents, and agreements may be
amended, modified, renewed, extended, or supplemented from time to time.

 

“Loan Parties” means Borrower and its Subsidiaries other than Media DVX
Acquisition Corp.

 

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

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, operations, condition (financial or otherwise) or prospects,
of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to pay and perform any of the Obligations, (c) the ability of the
Guarantors, collectively, to pay and perform any of the Obligations, (d) any of
the rights of or benefits available to the Administrative Agent and the Lenders
under this Agreement or any of the other Loan Documents, or (e) the validity or
enforceability of this Agreement or any of the other Loan Documents.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), including obligations in respect of one or more Hedging Agreements, of
any one or more of the Borrower and its Subsidiaries in an aggregate principal
amount exceeding $1,000,000. For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the amount of its payment
obligations thereunder determined as provided in clause (k) of the definition of
“Indebtedness” set forth in this Section 1.01.

 

“Maximum Rate” means, at any time and with respect to any Lender, the maximum
rate of interest under applicable law that such Lender may charge the Borrower.
The Maximum Rate shall be calculated in a manner that takes into account any and
all fees, payments, and other charges in respect of the Loan Documents that
constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the time of
such change in the Maximum Rate. For purposes of determining the Maximum Rate
under Texas law, the applicable rate ceiling shall be the weekly ceiling
described in, and computed in accordance with, Chapter 303 of the Texas Finance
Code.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   14

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“Maythenyi” means Maythenyi, Inc. a Florida corporation, all or substantially
all of the assets of which were acquired by Maythenyi Acquisition Corp.

 

“Maythenyi Acquisition Corp.” means DG Systems Acquisition II Corporation, a
Delaware corporation and a wholly-owned Subsidiary of the Borrower.

 

“Media DVX” means Media DVX, Inc., a Delaware corporation.

 

“Media DVX Acquisition” means the acquisition of all or substantially all of the
assets of Media DVX by Media DVX Acquisition Corp. pursuant to the Media DVX
Purchase and Sale Agreement.

 

“Media DVX Acquisition Corp.” means DG Systems Acquisition III Corporation, a
Delaware corporation and a wholly-owned Subsidiary of the Borrower.

 

“Media DVX Purchase and Sale Agreement” means that certain Asset Purchase
Agreement dated as of April 15, 2005, among the Borrower, Media DVX Acquisition
Corp., Media DVX and Starnet, L.P.

 

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

 

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

 

“Net Proceeds” from any issuance, sale or other disposition of any shares of
equity securities (or any securities convertible or exchangeable for any such
shares, or any rights, warrants, or options to subscribe for or purchase any
such shares) means the amount equal to (a) the aggregate gross proceeds of such
issuance, sale or other disposition, less (b) the following: (i) placement agent
fees, (ii) underwriting discounts and commissions, (iii) bank and other lender
fees, and (iv) legal fees and other expenses payable by the issuer in connection
with such issuance, sale or other disposition.

 

“Notes” means the Revolving Credit Notes and the Term Notes.

 

“Obligations” means all obligations, indebtedness, and liabilities of the
Borrower and the Subsidiaries, or any of them, to the Administrative Agent, the
Issuing Bank, the Arranger and the Lenders, or any of them, arising pursuant to
any of the Loan Documents or Hedging Agreements, now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, and all interest
accruing thereon and all attorneys’ fees and other expenses incurred in the
enforcement or collection thereof.

 

“Obligors” means the Borrower and the Guarantors.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   15

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

 

“Permitted Encumbrances” means:

 

  (a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 7.04;

 

  (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlords’ and other like Liens imposed by law, 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 7.04;

 

  (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 (j) of Article X; and

 

  (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;

 

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

 

“Permitted Investments” means:

 

  (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

  (b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   16

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  (c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market and other deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

  (d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

 

  (e) investments in loan participations offered by a Lender or any Affiliate of
a Lender maturing within 30 days from the date of acquisition thereof and
having, at such date of acquisition, a rating that is deemed to be investment
grade or better from either S&P or Moody’s.

 

“Permitted Media DVX Payments” means payments of any kind by any Loan Party to
Media DVX Acquisition Corp. permitted by Section 8.15.

 

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

 

“Plan” means any employee pension benefit 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.

 

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

 

“Register” has the meaning set forth in Section 12.04.

 

“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.

 

“Required Lenders” means, at any time, Lenders having Revolving Credit
Exposures, Term Loans and unused Commitments representing more than 66 2/3% of
the sum of the total Revolving Credit Exposures, outstanding Term Loans and
unused Commitments at such time.

 

“Restricted Indebtedness” means Indebtedness of the Borrower or any Subsidiary,
the payment, prepayment, redemption, repurchase or defeasance of which is
restricted under Section 8.06.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of the
Borrower or any

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   17

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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 Equity
Interests of the Borrower or any Subsidiary or any option, warrant or other
right to acquire any Equity Interests of the Borrower or any Subsidiary.

 

“Revolving Credit Availability” means, at any time, the lesser of the Borrowing
Base then in effect and the aggregate amount of the Lenders’ Revolving Credit
Commitments.

 

“Revolving Credit Commitment” means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans and to acquire participations in Letters
of Credit 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 from time to time pursuant to Section 2.07, (b) increased
pursuant to Section 2.15, and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 12.04. The
initial amount of each Lender’s Revolving Credit Commitment is set forth on
Schedule 1.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Revolving Credit Commitment, as applicable. The initial
aggregate amount of the Lenders’ Revolving Credit Commitments is $15,000,000.

 

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

 

“Revolving Credit Maturity Date” means October 15, 2008.

 

“Revolving Credit Note” means a promissory note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit ”A-1” hereto, and all
extensions, renewals, and modifications thereof and all substitutions therefor.

 

“Revolving Loan” means a Loan made pursuant to clause (b) of Section 2.01
hereof.

 

“S&P” means Standard & Poor’s.

 

“Security Agreement” means the Third Amended and Restated Security Agreement of
the Loan Parties in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders, in substantially the form of Exhibit ”C”
hereto, as the same may be amended, supplemented or modified from time to time.

 

“Seller Note” means that certain promissory note of even date herewith in the
original principal amount of $6,500,000, payable to Media DVX and executed by
Media DVX Acquisition Corp. pursuant to the Media DVX Purchase and Sale
Agreement, evidencing a portion of the purchase price for the Media DVX
Acquisition.

 

“Senior Debt” means all Indebtedness of the Loan Parties on a consolidated basis
other than Subordinated Debt.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   18

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“Senior Leverage Ratio” means, as of each date of determination, the ratio of
(i) Senior Debt as of such date of determination to (ii) Consolidated EBITDA for
the 12-month period ended as of such date of determination.

 

“Solvent” means, as to any Person, that (a) the aggregate fair market value of
its assets exceeds its liabilities, (b) it has sufficient cash flow to enable it
to pay its Indebtedness as such Indebtedness matures, and (c) it does not have
unreasonably small capital to conduct its business.

 

“StarGuide” means StarGuide Digital Networks, Inc., a Nevada corporation and a
wholly-owned Subsidiary of the Borrower.

 

“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 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. Eurodollar 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.

 

“Subordinated Debt” means all Indebtedness of the Borrower and its Subsidiaries
subordinated in right of payment to the Obligations pursuant to documents
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to the Administrative Agent and the Required Lenders.

 

“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.

 

“Synthetic Purchase Agreement” means any swap, derivative or other agreement or
combination of agreements pursuant to which the Borrower or a Subsidiary is or
may become obligated to make (i) any payment in connection with a purchase by
any third party from a Person other than the Borrower or a Subsidiary of any
Equity Interest in the Borrower or any Subsidiary, any warrants, options or
other rights to acquire any Equity Interests of the Borrower

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   19

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or any Subsidiary, or any Restricted Indebtedness or (ii) any payment (other
than on account of a permitted purchase by it of any Equity Interests in the
Borrower or any Subsidiary, any warrants, options or other rights to acquire any
Equity Interests of the Borrower or any Subsidiary, or any Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest in the Borrower or any Subsidiary, any
warrants, options or other rights to acquire any Equity Interests of the
Borrower or any Subsidiary, or any Restricted Indebtedness; provided that no
phantom stock or similar plan providing for payments only to current or former
directors, officers or employees of the Borrower or the Subsidiaries (or their
heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Term Lenders” means those Lenders that have a Term Loan Commitment.

 

“Term Loan” means a Loan made pursuant to clause (a) of Section 2.01 hereof.

 

“Term Loan Commitment” means, with respect to each Term Lender as of the
Effective Date, the commitment of such Term Lender to make a Term Loan hereunder
on the Effective Date, expressed as an amount representing the maximum aggregate
amount of the Term Loan to be made by such Lender hereunder. The initial amount
of each Term Lender’s Term Loan Commitment is set forth on Schedule 1.01. The
initial aggregate amount of the Term Lenders’ Term Loan Commitments is
$15,000,000.

 

“Term Loan Maturity Date” means March 31, 2008.

 

“Term Note” means a promissory note of the Borrower payable to the order of a
Term Lender, in substantially the form of Exhibit ”A-2” hereto, and all
extensions, renewals, and

 

“Total Leverage Ratio” means, as of each date of determination, the ratio of (i)
Indebtedness of the Loan Parties on a consolidated basis, plus the lesser of (a)
$4,000,000, minus any and all Permitted Media DVX Payments that have been paid
and applied to reduce the principal balance of the Seller Note, or (b) the
outstanding balance of the Seller Note, as of such date of determination to (ii)
Consolidated EBITDA for the 12-month period ended on such date of determination.

 

“Transactions” means (a) the execution, delivery and performance by the Borrower
and each Guarantor of this Agreement and the other Loan Documents to which it is
a party, the borrowing of Loans and the use of the proceeds thereof, and (b) the
Media DVX Acquisition.

 

“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 LIBO Rate or the Alternate Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect in the State of Texas.

 

“Verance” means Verance Corporation.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   20

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“Verance Investment” means an investment in Verance in an aggregate amount not
to exceed $5,000,000, in two installments not to exceed $2,500,000 each, the
first such installment having been paid prior to the date hereof and the second
such installment to be paid on or before July 31, 2005, for the purchase of
Verance Stock in connection with an agreement between Verance and the Borrower
pursuant to which (1) the Borrower and Verance will jointly market Verance’s
verification and reconciliation services, (2) Verance will grant to the Borrower
an exclusive license to use and market Verance’s ACE Embedder software,
watermark detection software and other software used to perform the verification
and reconciliation services within Borrower’s market, and (3) Verance will
provide the Borrower the limited right to be the only third party that will
market Verance’s verification and reconciliation services in North America

 

“Verance Stock” means convertible, participating preferred stock in Verance,
which stock shall be subject to a first priority perfected security interest in
favor of the Administrative Agent pursuant to the Security Agreement.

 

“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.

 

SECTION 1.02 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.

 

SECTION 1.03 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 on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   21

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SECTION 1.04 UCC Changes. All terms used herein which are defined in the UCC
shall, unless otherwise provided, have the meanings ascribed to them in the UCC
both as in effect on the date of this Agreement and as hereafter amended. The
parties intend that the terms used herein which are defined in the UCC have, at
all times, the broadest and most inclusive meanings possible. Accordingly, if
the UCC shall in the future be amended or held by a court to define any term
used herein more broadly or inclusively than the UCC in effect on the date of
this Agreement, then such term as used herein shall be given such broadened
meaning. If the UCC shall in the future be amended or held by a court to define
any term used herein more narrowly, or less inclusively, than the UCC in effect
on the date of this Agreement, such amendment or holding shall be disregarded in
defining terms used in this Agreement.

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
(a) each Term Lender agrees to make a Term Loan to the Borrower on the Effective
Date in a principal amount not exceeding its Term Loan Commitment, and (b) each
Lender agrees to make Revolving Loans to the Borrower from time to time during
the Availability Period in an aggregate principal amount that will not result in
(i) such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving
Credit Commitment, or (ii) the sum of the total Revolving Credit Exposures
exceeding the Revolving Credit Availability. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans. Amounts repaid in respect of the Term Loans
may not be reborrowed.

 

SECTION 2.02 Loans and Borrowings.

 

  (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. 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 Sections 3.02, 3.03 and 3.04, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   22

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  (c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$100,000 and not less than $500,000. At the time that each ABR Revolving Loan
Borrowing is made, such Borrowing shall be not less than $500,000 provided that
an ABR Revolving Loan Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Revolving Credit Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.04(e). Borrowings of more than one Type or Class may be outstanding at
the same time; provided that there shall not at any time be more than a total of
eight Eurodollar Borrowings outstanding.

 

  (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 Revolving
Credit Maturity Date or Term Loan Maturity Date, as applicable.

 

SECTION 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., Dallas, Texas time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., Dallas, Texas time, on the same
Business Day as the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly on the
same day that such telephonic Borrowing Request is made by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request by means of
a Borrowing Request Form signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

 

  (i) the aggregate amount of the requested Borrowing;

 

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

 

  (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

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

 

  (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar 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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   23

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SECTION 2.04 Letters of Credit.

 

  (a) General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit denominated and payable
in dollars for its own account, 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 the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

 

  (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 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 by means of a Letter of Credit Request
Form 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 and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the 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 the
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 $2,500,000 and (ii) the total Revolving Loan Borrowings and LC Exposure
shall not exceed the Revolving Credit Availability.

 

  (c) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Revolving Credit 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 Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   24

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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 Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the 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 Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, Dallas, Texas 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., Dallas, Texas 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, Dallas, Texas time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., Dallas, Texas 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 Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an
ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
the Borrower’s obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the 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 Borrower, in the same
manner as provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 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 Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made 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 as contemplated above) shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   25

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  (f) Obligations Absolute. The 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 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 Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the 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

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   26

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Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the 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 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 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 Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.11(c) 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 (d) 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. The 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 the 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 2.10(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) 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.

 

  (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 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 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 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 the
Borrower described in clause (g) or (h) of Article X. The Borrower also shall
deposit cash

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   27

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collateral pursuant to this paragraph as and to the extent required by Section
2.09(e). Each 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 the Required Lenders), be applied to satisfy other Obligations. 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. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to Section
2.09(e), such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower as and to the extent that, after giving effect to such return,
the Borrower would remain in compliance with Section 2.09(e) and no Default
shall have occurred and be continuing.

 

SECTION 2.05 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 2:00
p.m., Dallas, Texas time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in Dallas, Texas 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
2.04(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 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 Borrower severally agree to pay to the Administrative

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   28

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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
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, 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 or (ii) in the case of the 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 2.06 Interest Elections.

 

  (a) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar 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 or to continue
such Borrowing and, in the case of a Eurodollar 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.

 

  (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 Borrowing of the Type 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 or
telecopy to the Administrative Agent of a written Interest Election Request by
means of a Borrowing Request Form signed by the Borrower.

 

  (c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02 and 2.03:

 

  (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
Eurodollar Borrowing; and

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   29

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  (iv) if the resulting Borrowing is a Eurodollar 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”.

 

If any such Interest Election Request requests a Eurodollar 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 Eurodollar 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. 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 Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

 

  (f) A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of the outstanding Eurodollar Borrowings of such
Class with Interest Periods ending on or prior to such scheduled repayment date
plus the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of the Loans of such Class
required to be repaid on such scheduled repayment date.

 

SECTION 2.07 Termination and Reduction of Commitments.

 

  (a) Unless previously terminated, (i) the Term Loan Commitments shall
terminate at 5:00 p.m., Dallas, Texas time, on the Effective Date and (ii) the
Revolving Credit Commitments shall terminate on the Revolving Credit Maturity
Date.

 

  (b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments of any Class; provided that (i) each reduction of the Commitments of
any Class shall be in an amount that is an integral multiple of $500,000 and not
less than $1,000,000, or if less, the amount of such Commitment, and (ii) the
Borrower shall not terminate or reduce the Revolving Credit Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.09, the Revolving Credit Exposures would exceed the
total Revolving Credit Commitments.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   30

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  (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
two 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 Revolving
Credit 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 of any Class shall be
permanent. Each reduction of the Commitments of any Class shall be made ratably
among the Lenders in accordance with their respective Commitments of such Class.

 

SECTION 2.08 Repayment of Loans; Evidence of Debt.

 

  (a) The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Revolving Credit Maturity Date, and (ii) to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Term Loan as provided in paragraph (b) of this Section.

 

  (b) The Borrower shall repay Term Loan Borrowings in equal quarterly
installments of $1,250,000 each, the first such installment to be due and
payable on June 30, 2005, with like successive installments of principal to be
due and payable on the last day of each September, December, March and June
thereafter. To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date.

 

  (c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower 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.

 

  (d) 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 Borrower 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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   31

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  (e) The entries made in the accounts maintained pursuant to paragraph (e) or
(f) 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 Borrower to repay the Loans in
accordance with the terms of this Agreement.

 

  (f) The obligation of the Borrower to repay each Lender for Revolving Loans
made by such Lender and interest thereon shall be evidenced by a Revolving
Credit Note executed by the Borrower, payable to the order of such Lender, in
the principal amount of such Lender’s Revolving Credit Commitment as in effect
on the date hereof, and initially dated the date hereof.

 

  (g) The obligation of the Borrower to repay each Lender for Term Loans made by
such Lender and interest thereon shall be evidenced by a Term Note executed by
the Borrower and payable to the order of such Lender.

 

SECTION 2.09 Prepayment of Loans.

 

  (a) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to the requirements of this
Section.

 

  (b) Prior to any optional or mandatory prepayment of Borrowings hereunder, the
Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(c) of this Section.

 

  (c) The Borrower shall notify the Administrative Agent by telephone (confirmed
by telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing that will be made before the last day of the applicable
Interest Period and shall pay all amounts required to be paid by Section 3.05
concurrently with such prepayment. Such notice shall be given not later than
11:00 a.m., Dallas, Texas time, two Business Days before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal 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
2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02. Each prepayment of a 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 2.11.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   32

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  (d) Each prepayment of any Term Loan Borrowing that does not result in
prepayment in full of all Term Loans shall be applied (i) ratably to all Term
Loans based on the respective outstanding principal balances of the Term Loans,
(ii) ratably to the Lenders holding any Term Loans based on the respective
outstanding principal balances of the Term Loans held by each such Lender, and
(iii) to scheduled repayments of each of the Term Loan Borrowings to be made
pursuant to Section 2.08 in inverse order of maturity. Borrower may at any time
prepay all of the Term Loans in whole, provided such prepayment is otherwise
made in accordance with the terms and conditions set forth in this Agreement.

 

  (e) If at any time the total Revolving Credit Exposures exceeds the Revolving
Credit Availability, the Borrower shall promptly prepay the outstanding
Borrowings by the amount of the excess (or, if no such Borrowings are
outstanding, deposit cash collateral in an account with the Administrative Agent
pursuant to Section 2.04(j) in an aggregate amount equal to such excess).

 

SECTION 2.10 Fees.

 

  (a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender (pro rata in accordance with the Revolving Credit Commitment of each
Lender) a Commitment Fee in the amount of the product of the daily average
unused amount of the Revolving Credit Commitments times the applicable rate per
annum set forth in the definition of Applicable Margin. For purposes of
calculating the Commitment Fee hereunder, the Revolving Credit Commitments shall
be deemed utilized by the amount of all Revolving Loan Borrowings and LC
Exposure. Accrued Commitment Fees payable under this Section shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Revolving Credit 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 its participations in all
outstanding Letters of Credit, which shall accrue at the rate per annum equal to
the Applicable Margin then in effect for Eurodollar Borrowings as set forth in
the definition of Applicable Margin 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 Revolving Credit
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 of 1/8% per annum 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 Revolving Credit Commitments and the date on which
there ceases to be

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   33

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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 Revolving Credit Commitments terminate
and any such fees accruing after the date on which the Revolving Credit
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).

 

  (c) The Borrower agrees to pay to the Administrative Agent, for its own
account, 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 Commitment Fees, to
the Lenders. Fees paid shall not be refundable under any circumstances.

 

SECTION 2.11 Interest.

 

  (a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Margin.

 

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

 

  (c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower 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, including interest and
fees, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section.

 

  (d)

Accrued interest on each Loan shall be payable in arrears (1) on each Interest
Payment Date for such Loan, (2) in the case of Revolving Loans, upon the earlier
of the Revolving Credit Maturity Date and the date of termination of the
Revolving Credit Commitments, and (3) in the case of Term Loans, upon the Term
Loan Maturity Date; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   34

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repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
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 and (iii) in the event of any conversion of any
Eurodollar 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.

 

  (e) All interest hereunder shall be computed on the basis of a year of 360
days, except that 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, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

SECTION 2.12 Taxes.

 

  (a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

 

  (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

  (c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other 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 the Borrower by a Lender or Issuing Bank, or
by the Administrative Agent on its own behalf or on behalf of a Lender or
Issuing Bank, shall be conclusive absent manifest error.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   35

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  (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower 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.

 

  (e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

 

SECTION 2.13 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

  (a) The Borrower 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 2.12, 3.01 or 3.05, or otherwise) prior to
12:00 noon, Dallas, Texas time, 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 offices at 712 Main Street, Houston, Texas 77002, except payments to be made
directly to the Issuing Bank and except that payments pursuant to Sections 2.12,
3.01, 3.05 and 12.03 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 shall be made in dollars.

 

  (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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   36

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  (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 Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements 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 Loans
and participations in LC Disbursements of other Lenders 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 Loans and participations in LC Disbursements; 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 the Borrower 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). The Borrower 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 the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

 

  (d) Unless the Administrative Agent shall have received notice from the
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
Borrower will not make such payment, the Administrative Agent may assume that
the 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 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 the 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, 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.

 

  (e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(d) or (e), 2.05(b), or 2.13(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   37

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SECTION 2.14 Mitigation Obligations; Replacement of Lenders.

 

  (a) If any Lender requests compensation under Section 3.01, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.12, 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 2.12 or 3.01, 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 3.01, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.12, or if any
Lender defaults in its obligation to fund Loans hereunder, 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 12.04), 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 Revolving Credit 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, 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 3.01 or payments required
to be made pursuant to Section 2.12, 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 2.15 Increase of Commitments; Additional Lenders.

 

  (a)

Additional Revolving Loans. So long as no Default has occurred and is
continuing, from time to time after the Effective Date, Borrower may, upon at
least 30 days’ prior written notice to the Administrative Agent (who shall
promptly provide a copy of such notice to each Lender), propose to increase the
aggregate amount of the Revolving Credit Commitments by an amount not to exceed
$10,000,000 (the amount of any such increase, the “Additional Revolving

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   38

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Commitment Amount”) such that after giving effect to such increase, the
aggregate amount of the Lenders’ Revolving Credit Commitments does not exceed
$25,000,000; provided that at no time shall the aggregate amount of the Lenders’
Revolving Credit Commitments plus the aggregate principal amount of all
outstanding Term Loans exceed $40,000,000. Each Lender shall have the right for
a period of 15 days following receipt of such notice, to elect by written notice
to the Borrower and the Administrative Agent to increase its Revolving Credit
Commitment by a principal amount equal to its Applicable Percentage of the
Additional Revolving Commitment Amount. No Lender (or any successor thereto)
shall have any obligation to increase its Revolving Credit Commitment or its
other obligations under this Agreement and the other Loan Documents, and any
decision by a Lender to increase its Revolving Credit Commitment shall be made
in its sole discretion independently from any other Lender.

 

  (b) If any Lender shall not elect to increase its Revolving Credit Commitment
pursuant to subsection (a) of this Section, the Borrower may designate another
bank or other financial institution (which may be, but need not be, one or more
of the existing Lenders) which at the time agrees to, in the case of any such
Person that is an existing Lender, increase its Revolving Credit Commitment and
in the case of any other such Person (an “Additional Revolving Lender”), become
a party to this Agreement; provided, however, that any new bank or financial
institution must be acceptable to the Administrative Agent. The sum of the
increases in the Revolving Credit Commitments of the existing Lenders pursuant
to this subsection (b) plus the Revolving Credit Commitments of the Additional
Revolving Lenders shall not in the aggregate exceed the unsubscribed amount of
the Additional Revolving Commitment Amount.

 

  (c) An increase in the aggregate amount of the Revolving Credit Commitments
pursuant to this Section 2.15 shall become effective upon the receipt by the
Administrative Agent of an agreement in form and substance satisfactory to the
Administrative Agent signed by the Borrower, by each Additional Revolving Lender
and by each other Lender whose Revolving Credit Commitment is to be increased,
setting forth the new Revolving Credit Commitments of such Lenders and setting
forth the agreement of each Additional Revolving Lender to become a party to
this Agreement and to be bound by all the terms and provisions hereof, together
with a replacement or additional Revolving Credit Note, as applicable,
evidencing the new Revolving Credit Commitment of each affected Lender, duly
executed and delivered by the Borrower and such evidence of appropriate
corporate authorization on the part of the Borrower with respect to the increase
in the Revolving Credit Commitments and such opinions of counsel for the
Borrower with respect to the increase in the aggregate amount of Revolving
Credit Commitments as the Administrative Agent may reasonably request. The
Borrower shall pay to the Administrative Agent for the account of each Lender
that increases its Revolving Credit Commitment pursuant to this Section 2.15 and
each Additional Revolving Lender, upfront fees in such amounts as the parties
may agree pursuant to a separate fee letter or otherwise, such fees to be
payable on the effective date of the increase in the aggregate amount of the
Revolving Credit Commitments pursuant to this Section 2.15.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   39

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  (d) Upon the acceptance of any such agreement by the Administrative Agent, the
aggregate amount of the Revolving Credit Commitments shall automatically be
increased by the amount of the Revolving Credit Commitments added through such
agreement and Schedule 1.1 shall automatically be deemed amended to reflect the
Revolving Credit Commitments of all Lenders after giving effect to the addition
of such Revolving Credit Commitments.

 

  (e) Upon any increase in the aggregate amount of the Revolving Credit
Commitments pursuant to this Section 2.15 that is not pro rata among all
Lenders, (i) within five Business Days, in the case of any ABR Loans then
outstanding, and at the end of the then current Interest Period with respect
thereto, in the case of any Eurodollar Loans then outstanding, the Borrower
shall prepay such Loans and, to the extent the Borrower elects to do so and
subject to the conditions specified in Article VI, the Borrower shall reborrow
Loans from the Lenders in proportion to their respective Revolving Credit
Commitments after giving effect to such increase, until such time as all
outstanding Loans are held by the Lenders in such proportion and (y) effective
upon such increase, the amount of the participations held by each Lender in each
Letter of Credit then outstanding shall be adjusted such that, after giving
effect to such adjustments, the Lenders shall hold participations in each such
Letter of Credit in the proportion its respective Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments after giving effect to such
increase.

 

ARTICLE III

 

YIELD PROTECTION AND ILLEGALITY

 

SECTION 3.01 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 LIBO Rate) or the Issuing Bank; or

 

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

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   40

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amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then 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, 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 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), then from time to time the Borrower will pay to such Lender or the
Issuing Bank 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 the
amount shown as due on any such certificate within 10 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 270 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 costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

SECTION 3.02 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

  (a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   41

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  (b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO 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 Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

SECTION 3.03 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its applicable lending
office to (a) honor its obligation to make Eurodollar Borrowings hereunder or
(b) maintain Eurodollar Borrowings hereunder, then such Lender shall promptly
notify the Borrower (with a copy to the Administrative Agent) thereof and such
Lender’s obligation to make or maintain Eurodollar Borrowings and to convert
other Types of Borrowings into Eurodollar Borrowings hereunder shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Borrowings, in which case (i) all Borrowings which would be otherwise made by
such Lender as Eurodollar Borrowings shall be made instead as ABR Borrowings and
all Borrowings which would otherwise be converted into (or continued as)
Eurodollar Borrowings shall be converted instead into (or shall remain as) ABR
Borrowings and (ii) if such Lender so requests by notice to the Borrower (with a
copy to the Administrative Agent), all Eurodollar Borrowings of such Lender
shall be automatically converted into ABR Borrowings on the date specified by
such Lender in such notice.

 

SECTION 3.04 Treatment of Affected Borrowings. If the Eurodollar Borrowings of
any Lender are to be converted pursuant to Section 3.03 hereof, such Lender’s
Eurodollar Borrowings shall be automatically converted into ABR Borrowings on
the last day(s) of the then current Interest Period(s) for such Eurodollar
Borrowings (or on such earlier date as such Lender may specify to the Borrower
with a copy to the Administrative Agent) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.03 hereof
which gave rise to such conversion no longer exist:

 

  (a) To the extent that such Lender’s Eurodollar Borrowings have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Lender’s Eurodollar Borrowings shall be applied instead to its
ABR Borrowings; and

 

  (b) All Borrowings which would otherwise be made or continued by such Lender
as Eurodollar Borrowings shall be made as or converted into ABR Borrowings and
all Borrowings of such Lender which would otherwise be converted into Eurodollar
Borrowings shall be converted instead into (or shall remain as) ABR Borrowings.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   42

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If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.03 hereof which gave rise
to the conversion of such Lender’s Eurodollar Borrowings pursuant to this
Section 3.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Borrowings are
outstanding, such Lender’s ABR Borrowings shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Borrowings to the extent necessary so that, after giving effect
thereto, all Borrowings held by the Lenders holding Eurodollar Borrowings and by
such Lender are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Commitments.

 

SECTION 3.05 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar 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 Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.09(c) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar 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 2.14, 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 Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include 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 LIBO Rate that would have been applicable to such Loan, 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 dollar deposits of a comparable amount and
period from other banks in the eurodollar 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.

 

ARTICLE IV

 

SECURITY

 

SECTION 4.01 Collateral. To secure full and complete payment and performance of
the Obligations, the Borrower shall execute and deliver or cause to be executed
and delivered the documents described below covering the property and collateral
described in this Section 4.01 (which, together with any other property and
collateral which may now or hereafter secure the Obligations or any part
thereof, is sometimes herein called the “Collateral”):

 

  (a)

The Borrower will, and will cause each of the Guarantors other than Media DVX
Acquisition Corp. to, grant to the Administrative Agent, for the benefit of the

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   43

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Administrative Agent, the Issuing Bank and the Lenders, or confirm that the
Administrative Agent possesses, a first priority security interest in all of its
accounts, accounts receivable, contract rights, equipment, machinery, furniture,
fixtures, inventory, chattel paper, documents, instruments, general intangibles,
investment property, deposit accounts, letter-of-credit rights, commercial tort
claims, supporting obligations, intellectual property, and Equity Interests in
its Subsidiaries (other than Media DVX Acquisition Corp.), whether now owned or
hereafter acquired, and all products and cash and noncash proceeds thereof,
pursuant to the Security Agreement; provided that not more than 65% of the
Equity Interests of any Foreign Subsidiary shall be required to be subject to
such security interest.

 

  (b) The Borrower will, and will cause each of its Subsidiaries other than
Media DVX Acquisition Corp. to, execute and deliver and cause to be executed and
delivered such further documents and instruments as the Administrative Agent, in
its sole discretion, deems necessary or desirable to evidence and perfect its
Liens in the Collateral.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent, the Issuing
Bank and the Lenders that after giving effect to the Transactions:

 

SECTION 5.01 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 because of the nature of its activities or
properties such qualification is required.

 

SECTION 5.02 Authorization; Enforceability. The Transactions are within the
powers of the Borrower and the Subsidiaries, respectively, and have been duly
authorized by all necessary action. This Agreement and the other Loan Documents
to which Borrower or any Guarantor is a party have been duly executed and
delivered by such Person and constitutes a legal, valid and binding obligation
of such Person, enforceable in accordance with their respective 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 5.03 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, except such as have been obtained or made
and are in full force and effect and except filings necessary to perfect Liens
created under the Loan Documents, (b) will

 

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not violate any applicable law or regulation or the charter, by-laws 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 their respective assets, or give rise to a right thereunder
to require any payment to be made by the Borrower or any of its Subsidiaries,
except where such violation or default could not reasonably be expected to
result in a Material Adverse Effect, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries,
other than Liens created or imposed by the Loan Documents.

 

SECTION 5.04 Financial Condition; No Material Adverse Change.

 

  (a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders’ equity and cash flows as
of and for the fiscal years ended December 31, 2003 and December 31, 2004,
audited by KPMG LLP, independent public accountants. 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. The financial
statements of Media DVX heretofore furnished to Lenders present fairly, in all
material respects, the financial position and results of operations and cash
flows of Media DVX as of such dates and for such periods indicated therein.

 

  (b) Since December 31, 2004, there has been no material adverse change in the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole, or (to the knowledge of the
Borrower or any Subsidiary) Media DVX.

 

  (c) Except as disclosed in the financial statements referred to above or the
notes thereto and except for Disclosed Matters, after giving effect to the
Transactions, none of the Borrower or its Subsidiaries has, as of the Effective
Date, any material contingent liabilities, unusual long term commitments or
unrealized losses.

 

SECTION 5.05 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, and none of the properties, assets or
leasehold interests of the Borrower or any Subsidiary is subject to any Lien,
except as permitted by Section 8.02.

 

  (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 such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   45

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  (c) Without limiting the foregoing, the financial statements and other
information furnished to the Lenders regarding the Media DVX Acquisition and
Media DVX are true and correct in all material respects and present a fair and
accurate representation of the assets being acquired pursuant to the Media DVX
Acquisition .

 

SECTION 5.06 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 (other than the Disclosed
Matters) or (ii) that involve this Agreement, any of the other Loan Documents or
the Transactions.

 

  (b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, 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.

 

  (c) Since the date of this Agreement, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.

 

SECTION 5.07 Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon 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. No Default has occurred and is
continuing.

 

SECTION 5.08 Investment and Holding Company Status. Neither the Borrower nor any
of its Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.

 

SECTION 5.09 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 (a) Taxes that are being

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   46

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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 5.10 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 $1,000,000 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 $1,000,000 the fair
market value of the assets of all such underfunded Plans.

 

SECTION 5.11 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. None of the 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) 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 5.12 Indebtedness. The Borrower and its Subsidiaries have no
Indebtedness, except as disclosed on Schedule 8.01 or otherwise permitted by
Section 8.01.

 

SECTION 5.13 Subsidiaries. The Borrower has no Subsidiaries other than those
listed on Schedule 5.13 hereto, and Schedule 5.13 sets forth the jurisdiction of
organization of each Subsidiary and the percentage of the Borrower’s or any
Subsidiary’s ownership of the outstanding voting stock or other ownership or
Equity Interests of each Subsidiary. All of the outstanding Equity Interests of
each Subsidiary have been validly issued, is fully paid, and is nonassessable.
The Borrower shall, from time to time as necessary, deliver to the
Administrative Agent an updated Schedule 5.13 to this Agreement, together with a
certificate of an authorized officer of the Borrower certifying that the
information set forth in such schedule is true, correct and complete as of such
date.

 

SECTION 5.14 Inventory. All inventory of the Borrower and its Subsidiaries has
been and will hereafter be produced in compliance with all applicable laws,
rules, regulations, and governmental standards, including, without limitation,
the minimum wage and overtime provisions of the Fair Labor Standards Act, as
amended (29 U.S.C. §§ 201-219), and the regulations promulgated thereunder,
except any noncompliance that does not have a Material Adverse Effect.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   47

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SECTION 5.15 Patents, Trademarks and Copyrights. Schedule 5.15 sets forth a
true, accurate and complete listing, as of the date hereof, of all patents,
trademarks and copyrights, and applications therefor, of the Borrower and its
Subsidiaries. Except as created or permitted under the Loan Documents, no Lien
exists with respect to the interests of the Borrower or any Subsidiary in any
such patents, trademarks, copyrights or applications, and neither the Borrower
nor any Subsidiary has transferred or subordinated any interest it may have in
such patents, trademarks, copyrights and applications, except for licenses
permitted by Section 8.09(b). The Borrower shall, from time to time as
necessary, deliver to the Administrative Agent an updated Schedule 5.15 to this
Agreement, together with a certificate of an authorized officer of the Borrower
certifying that the information set forth on such schedule is true, correct and
complete as of such date. Upon the request of the Administrative Agent at any
time, the Borrower shall execute and deliver and cause to be executed and
delivered assignments of all patents, trademarks, copyrights and applications
therefor included in the Collateral, in favor of the Administrative Agent for
the benefit of the Administrative Agent and the Lenders, which assignments shall
be in form and substance satisfactory to the Administrative Agent and in proper
form (i) for recording in the U.S. Patent and Trademark Office to properly
reflect the Administrative Agent’s security interest in all U.S. patents,
trademarks and applications therefor included in the Collateral and (ii) for
recording with the U.S. Library of Congress to properly reflect the
Administrative Agent’s security interest in all U.S. copyrights and applications
therefor included in the Collateral.

 

SECTION 5.16 Margin Securities. Neither the Borrower nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any “margin stock”
within the meaning of Regulation T, U or X of the Board, as amended. No part of
the proceeds of any Borrowing will be used, directly or indirectly, to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.

 

SECTION 5.17 Labor Matters. Except for any of the following that would not have
a Material Adverse Effect, (a) there are no actual or threatened strikes, labor
disputes, slow downs, walkouts, work stoppages, or other concerted interruptions
of operations that involve any employees employed at any time in connection with
the business activities or operations at any of the Borrower’s or its
Subsidiaries’ locations, (b) hours worked by and payment made to the employees
of the Borrower or its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable laws, rules and regulations pertaining to
labor matters, (c) all payments due from the Borrower or its Subsidiaries for
employee health and welfare insurance, including, without limitation, workers’
compensation insurance, have been paid or accrued as a liability on its books,
(d) the business activities and operations of the Borrower and its Subsidiaries
are in compliance with the Occupational Safety and Health Act of 1970, 29 U.S.C.
§ 651 et seq. and other applicable health and safety laws, rules and
regulations.

 

SECTION 5.18 Solvency. On the Effective Date and on the date of each Borrowing,
the Borrower and each of its Subsidiaries are, and after giving effect to the
Transactions and the requested Borrowing, will be, Solvent.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   48

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SECTION 5.19 Burdensome Agreements. Neither the Borrower nor any of its
Subsidiaries are a party to any agreements which contain any unusual or
burdensome provisions which are reasonably likely to result in a Material
Adverse Effect.

 

SECTION 5.20 Permits, Licenses, Etc. The Borrower and each of its Subsidiaries
possess all material permits, licenses, patents, patent rights, trademarks,
trademark rights, trade names, trade name rights and copyrights which are
required to conduct their respective businesses.

 

ARTICLE VI

 

CONDITIONS

 

SECTION 6.01 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 the Administrative Agent (or its counsel) has received
(or waived in accordance with Section 12.02) each of the following, in form and
substance satisfactory to the Administrative Agent:

 

  (a) Credit Agreement. Either (i) a counterpart of this Agreement signed on
behalf of each party hereto or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.

 

  (b) Organizational and Authorization Matters. Such documents and certificates
as the Administrative Agent or its counsel may request relating to the
organization, existence and good standing of the Borrower and its Subsidiaries,
the authorization of the Transactions, incumbency of officers, specimen
signatures and any other legal matters relating to the Borrower, its
Subsidiaries, the Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.

 

  (c) Corporate Structure. Evidence of the Borrower’s corporate and subsidiary
structure, which evidence and structure shall be satisfactory to the
Administrative Agent.

 

  (d) Governmental and Third Party Approvals. All governmental and third-party
approvals necessary or advisable, in the judgment of the Administrative Agent,
in connection with the Loans and in connection with the continuing operations of
each of the Borrower and its Subsidiaries.

 

  (e) Financial Statements. The financial statements specified in Section 5.04,
which shall be satisfactory to the Administrative Agent.

 

  (f) Reports and Opinions. An independent auditor’s most recent management
letter and unqualified report and opinion on the Borrower’s financial
statements.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   49

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  (g) Notes. The Notes executed by the Borrower.

 

  (h) Security Agreement. The Security Agreement executed by the Borrower and
the Guarantors other than Media DVX Acquisition Corp.

 

  (i) Financing Statements. Properly completed Uniform Commercial Code financing
statements naming the Borrower and the Guarantors other than Media DVX
Acquisition Corp. as debtors and covering the Collateral.

 

  (j) Equity Interests. The original certificates representing the Equity
Interests included in the Collateral, together with transfer powers duly
executed in blank by the Borrower and the applicable Guarantors.

 

  (k) Instruments and Chattel Paper. The originals of any and all instruments
and chattel paper included in the Collateral, including without limitation, all
promissory notes evidencing all intercompany Indebtedness owed to Borrower or
any Guarantor by Borrower or any Subsidiary, each endorsed to the order of the
Administrative Agent.

 

  (l) Intellectual Property Documentation. Documentation satisfactory to the
Administrative Agent, executed by the appropriate parties, (i) for recording in
the U.S. Patent and Trademark Office to properly reflect the Administrative
Agent’s security interest in all U.S. patents, trademarks and applications
therefor of the Borrower and the Guarantors other than Media DVX Acquisition
Corp., and (ii) for recording with the United States Library of Congress to
properly reflect the Administrative Agent’s security interest in all U.S.
copyrights and applications therefor of the Borrower and the Guarantors other
than Media DVX Acquisition Corp.

 

  (m) Guaranty. The Guaranty executed by each Guarantor.

 

  (n) Contribution and Indemnification Agreement. The Contribution and
Indemnification Agreement executed by the Borrower and each Guarantor.

 

  (o) Field Audit; Due Diligence. Completion and satisfactory results of the
field audit conducted by the Administrative Agent, and completion and
satisfactory results of all due diligence conducted by the Administrative Agent
and each Lender.

 

  (p) Insurance Policies. Certificate(s) of insurance evidencing all insurance
policies required by Section 7.07, together with loss payable endorsements
(where applicable) in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, with respect to all insurance policies
covering Collateral.

 

  (q) Lien Searches. The results of UCC, tax and judgment lien searches showing
all financing statements, other documents or instruments and tax and judgment
liens on file against each of the Borrower and the Guarantors in such
jurisdictions as the Administrative Agent may require, such searches to be as of
a date satisfactory to the Administrative Agent.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   50

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  (r) Opinion of Counsel. A favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of Gardere
Wynne Sewell LLP, counsel for the Borrower and the Subsidiaries, in form and
substance satisfactory to the Administrative Agent. The Borrower hereby requests
such counsel to deliver such opinion.

 

  (s) Indebtedness. All terms of the Material Indebtedness of the Borrower and
its Subsidiaries which shall be satisfactory to the Lenders, and all requisite
consents, approvals and amendments relating to such Material Indebtedness, which
shall be in form and substance satisfactory to the Administrative Agent.

 

  (t) Initial Borrowing Base Certificate. An initial Borrowing Base Certificate
as of March 31, 2005.

 

  (u) Solvency Certificates. Certificates, dated the Effective Date and signed
by a Financial Officer of the Borrower and each of the Subsidiaries certifying
as to the Solvency of the Borrower and each of the Subsidiaries as of the
Effective Date and after giving effect to the Transactions.

 

  (v) Fees and Expenses. All fees and other amounts due and payable on or prior
to the Effective Date, including (1) all fees payable to the Administrative
Agent, the Arranger and each Lender under this Agreement or any separate
agreement or fee letter, and (2) to the extent invoiced, reimbursement or
payment of all attorneys’ fees and out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

 

  (w) Acquisition Documents. Copies of the Media DVX Purchase and Sale Agreement
and other Acquisition Documents relating to the Media DVX Acquisition, certified
by a Financial Officer as complete and correct, which documents and all terms
thereof shall be satisfactory to the Administrative Agent in all respects.

 

  (x) Media DVX Acquisition. Evidence that all consents and approvals required
to be obtained from any Governmental Authority or other Person in connection
with the Media DVX Acquisition shall have been obtained, and all applicable
waiting periods and appeal periods shall have expired, in each case without the
imposition of any burdensome conditions, and that the Media DVX Acquisition
shall have been, or substantially simultaneously with the funding of Loans on
the Effective Date shall be, consummated in accordance with such Acquisition
Documents and applicable law, without any amendment to or waiver of any terms or
conditions of such Acquisition Documents not approved by the Required Lenders.

 

  (y) Seller Note. Copies of the Seller Note and all related documents,
certified by a Financial Officer as complete and correct, which documents and
all terms thereof shall be satisfactory to the Administrative Agent in all
respects.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   51

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  (z) Third Party Agreements. Landlord’s waivers or subordinations for such
locations as the Administrative Agent may require, in form and substance
satisfactory to the Administrative Agent.

 

  (aa) Liens. Evidence that all existing Liens on any assets of the Borrower and
its Subsidiaries (other than those expressly permitted hereby or granted to the
Administrative Agent pursuant to the Loan Documents) have been or simultaneously
with the initial Loan hereunder are being terminated and/or released.

 

  (bb) Additional Documentation. Such additional documents and certificates as
the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each of the Borrower and the
Subsidiaries, the authorization of the Transactions, and any other legal matters
relating to the Borrower, the Subsidiaries, this Agreement or the Transactions,
all in form and substance satisfactory to the Administrative Agent and its
counsel.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

 

SECTION 6.02 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) Representations and Warranties. The representations and warranties of the
Borrower set forth in this Agreement and the other Loan 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.

 

  (b) No Default. 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.

 

  (c) Material Adverse Effect. No event, development or circumstance has
occurred or exists that has had or could reasonably be expected to have a
Material Adverse Effect.

 

  (d) Borrowing Request Form. With respect to any Borrowing, the Administrative
Agent shall have received, in accordance with Section 2.03, a Borrowing Request
Form, dated the date of such Borrowing, executed by an authorized officer of the
Borrower.

 

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), (b)
and (c) of this Section.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   52

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ARTICLE VII

 

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 Administrative Agent, the Issuing Bank and the Lenders that:

 

SECTION 7.01 Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:

 

  (a) within 90 days after the end of each fiscal year of the Borrower, (i) its
audited consolidated and unaudited consolidating balance sheet and related
statements of operations, stockholders’ 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 KPMG LLP or other 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; (ii) unaudited
consolidating balance sheet and related statements of operations, stockholders’
equity and cash flows of the Loan Parties as of the end of and for such year;
and (iii) unaudited balance sheet and related statements of operations,
stockholders’ equity and cash flows of Media DVX Acquisition Corp. as of the end
of and for such year.

 

  (b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, consolidated and consolidating balance sheet
and related statements of operations, stockholders’ equity and cash flows of
Loan Parties 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 Loan Parties on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; and (ii) balance
sheet and related statements of operations, stockholders’ equity and cash flows
of Media DVX Acquisition Corp. 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 Media DVX
Acquisition Corp. in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   53

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  (c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a Compliance Certificate of a Financial Officer of the Borrower (i)
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, (ii) setting forth reasonably detailed calculations
demonstrating compliance with the financial covenants set forth herein and (iii)
in the case of clause (b) only, stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

  (d) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);

 

  (e) within 30 days after and as of the end of each calendar month, a completed
Borrowing Base Certificate calculating and certifying the Borrowing Base as of
the last day of such calendar month, signed on behalf of the Borrower by a
Financial Officer;

 

  (f) within 30 days after and as of the end of each calendar month, aging and
reports of accounts receivable of Borrower in form and detail satisfactory to
the Administrative Agent;

 

  (g) 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, or distributed by the Borrower to its
shareholders generally, as the case may be;

 

  (h) as soon as available and in any event within five (5) Business Days after
the date of receipt by the Borrower or any Subsidiary of a management letter
prepared by its independent public accountants with respect to the internal
financial controls of the Borrower and its Subsidiaries, a copy of such letter;
and

 

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

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   54

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SECTION 7.02 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, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

 

  (c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and

 

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

 

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 7.03 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, agreements and franchises material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 8.03.

 

SECTION 7.04 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 or become a Lien on any of
its property, 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 7.05 Maintenance of Properties. The Borrower will, and will cause each
of its Subsidiaries to keep, maintain and preserve all property (tangible and
intangible) material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.

 

SECTION 7.06 Books and Records; Inspection Rights

 

  (a)

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

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   55

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dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative 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.

 

  (b) The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct evaluations and appraisals of the Borrower’s computation of
the Borrowing Base and the assets included in the Borrowing Base, all at such
reasonable times and as often as reasonably requested, including without
limitation an accounts receivable audit to be completed no less frequently than
annually. The Borrower shall pay the reasonable fees and expenses of any
representatives retained by the Administrative Agent to conduct any such
evaluation or appraisal. The Borrower also agrees to modify or adjust the
computation of the Borrowing Base (which may include maintaining additional
reserves or modifying the eligibility criteria for the components of the
Borrowing Base) to the extent required by the Administrative Agent or the
Required Lenders as a result of any such evaluation or appraisal.

 

SECTION 7.07 Insurance. The Borrower will maintain, and will cause each of the
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower and the Subsidiaries
operate, provided that in any event the Borrower will maintain and cause each
Subsidiary to maintain workers’ compensation insurance, property insurance,
comprehensive general liability insurance, products liability insurance, and
business interruption insurance reasonably satisfactory to the Lenders. Each
property insurance policy covering Collateral shall name the Administrative
Agent as loss payee for the benefit of the Lenders and shall provide that such
policy will not be canceled or reduced without thirty (30) days’ prior written
notice to the Administrative Agent.

 

SECTION 7.08 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, and with respect to ERISA will cause each of its ERISA
Affiliates 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.

 

SECTION 7.09 Use of Proceeds and Letters of Credit. The proceeds of the Loans
will be used only (i) to pay a portion of the purchase price for the Media DVX
Acquisition in an amount not to exceed $1,500,000, (ii) to refinance Borrower’s
existing Indebtedness under the Existing Credit Agreement, (iii) to make
Permitted Media DVX Payments, and (iv) for general corporate purposes of the
Loan Parties. 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. Each Letter of
Credit will be issued only to support a transaction that is entered into in the
ordinary course of the Loan Parties’ business.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   56

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SECTION 7.10 Compliance with Agreements. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all agreements,
contracts, and instruments binding on it or affecting its properties or
business.

 

SECTION 7.11 Additional Subsidiaries. If any additional Subsidiary is formed or
acquired after the Effective Date, the Borrower will notify the Administrative
Agent and the Lenders thereof and (a) the Borrower will cause such Subsidiary
(except any Foreign Subsidiary) to become a Guarantor within three Business Days
after such Subsidiary is formed or acquired and promptly take such actions to
create and perfect Liens on such Subsidiary’s assets to secure the Obligations
as the Administrative Agent or the Required Lenders shall reasonably request and
(b) if any Equity Interest in or Indebtedness of such Subsidiary are owned by or
on behalf of the Borrower or any Guarantor, the Borrower will cause such Equity
Interests and promissory notes evidencing such Indebtedness to be pledged to the
Administrative Agent and the Lenders within three Business Days after such
Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary, shares of common stock of such Subsidiary to be pledged may be
limited to 65% of the outstanding shares of common stock of such Subsidiary).

 

SECTION 7.12 Real Property. Upon acquisition of any ownership interest
(excluding leasehold interests) in real property by the Borrower or any
Subsidiary, the Borrower will, and will cause each such Subsidiary to, execute
and deliver to the Administrative Agent such documents as the Administrative
Agent may require, granting a first priority lien to the Administrative Agent
for the benefit of the Lenders on such real property and all improvements and
other property, rights and interests located thereon or related thereto, which
documents shall be in form and substance satisfactory to the Administrative
Agent, together with evidence of the recordation thereof and such title
insurance policies, surveys, appraisals, environmental reports, certificates,
instruments and legal opinions requested by the Administrative Agent in
connection therewith.

 

SECTION 7.13 Environmental Matters. The Borrower shall cause each Subsidiary to
comply in all material respects with all material limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables contained in any Environmental Laws.

 

SECTION 7.14 Further Assurances. The Borrower will, and will cause each
Subsidiary to, execute and deliver such further agreements and instruments and
take such further action as may be requested by the Administrative Agent to
carry out the provisions and purposes of this Agreement and the other Loan
Documents and to create, preserve, and perfect the Liens of the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, in the
Collateral.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   57

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ARTICLE VIII

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or 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 shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the
Administrative Agent, the Issuing Bank and the Lenders that:

 

SECTION 8.01 Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
including without limitation Subordinated Debt, except:

 

  (a) Indebtedness created hereunder;

 

  (b) Indebtedness existing on the date hereof and set forth in Schedule 8.01,
and extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an earlier
maturity date;

 

  (c) Indebtedness of the Borrower to any Guarantor that is a Loan Party and of
any Guarantor that is a Loan Party to the Borrower or any other Guarantor that
is a Loan Party;

 

  (d) Guarantees by the Borrower of Indebtedness of any Guarantor that is a Loan
Party and by any Guarantor that is a Loan Party of Indebtedness of the Borrower
or any other Guarantor that is a Loan Party;

 

  (e) Capital Lease Obligations (including those set forth in Schedule 8.01) in
an aggregate amount not to exceed $3,000,000 at any time outstanding, provided
no Default exists or results therefrom;

 

  (f) Hedging Agreements permitted by Section 8.05;

 

  (g) Indebtedness of Media DVX Acquisition Corp. evidenced by the Seller Note,
provided that (i) none of the Loan Parties shall guarantee or have any
obligation or liability in respect of the Seller Note nor provide any collateral
to secure the Seller Note, except the pledge by the Borrower of the stock of
Media DVX Acquisition Corp. and the Borrower’s obligations in respect of such
pledge, and (ii) the terms of the Seller Note and all related documents shall be
satisfactory to the Administrative Agent in all respects; and

 

  (h) Indebtedness of Media DVX Acquisition Corp. to any Loan Party representing
any Permitted Media DVX Payment.

 

Without in any way limiting the foregoing, no Subordinated Debt shall be
permitted unless and until Required Lenders shall have consented to such
Subordinated Debt and approved all documents and terms related thereto, which
consent and approval may be granted or withheld in the sole and absolute
discretion of Required Lenders.

 

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SECTION 8.02 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
(including without limitation stock or other Equity Interests in any of the
Subsidiaries) 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 that is set forth on Schedule 8.02 and exists as of the date
hereof on any property or asset of the Borrower or any Subsidiary; 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) Liens permitted by clause (e) of Section 8.01;

 

  (d) Liens on assets and stock of Media DVX Acquisition Corp. securing the
Seller Note; and

 

  (e) Liens created under the Loan Documents.

 

SECTION 8.03 Fundamental Changes.

 

  (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 other than Media DVX Acquisition
Corp. may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any Subsidiary that is not a Guarantor may merge
into any wholly-owned Subsidiary in a transaction in which the surviving entity
is a wholly-owned Subsidiary, (iii) any Guarantor that is a Loan Party may be
dissolved, liquidated or merged into Borrower or another Guarantor that is a
Loan Party, so long as such dissolution, liquidation or merger results in all
assets of such Guarantor being owned by the Borrower or another Guarantor that
is a Loan Party, and (iv) any Subsidiary that is not a Guarantor 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 and so long as such liquidation or dissolution
results in all assets of such Subsidiary being owned by the Borrower or a
wholly-owned Subsidiary.

 

  (b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.

 

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SECTION 8.04 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 Equity Interests, 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) all or substantially
all of the assets of any other Person or any assets of any other Person
constituting a business unit or division, except:

 

  (a) Permitted Investments;

 

  (b) Equity Interests existing on the date hereof in the Subsidiaries;

 

  (c) Equity Interests in Subsidiaries formed after the Effective Date provided
that each such Subsidiary becomes a Guarantor and otherwise complies with the
requirements of Section 7.11;

 

  (d) loans or advances made by the Borrower to any Guarantor that is a Loan
Party and made by any Guarantor that is a Loan Party to the Borrower or any
other Guarantor that is a Loan Party;

 

  (e) loans or advances to employees of the Borrower or any Subsidiary not to
exceed $200,000 in the aggregate outstanding at any time, including such loans
and advances outstanding on the Effective Date;

 

  (f) accounts receivable for sales of inventory and other products and services
provided by the Borrower and its Subsidiaries to their respective customers in
the ordinary course of business of the Borrower and its Subsidiaries;

 

  (g) Guarantees constituting Indebtedness permitted by Section 8.01;

 

  (h) the Media DVX Acquisition;

 

  (i) Permitted Media DVX Payments made by means of loans by any Loan Party to
Media DVX Acquisition Corp.; and

 

  (j) the Verance Investment.

 

SECTION 8.05 Hedging Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreement; provided, however,
that Borrower and its Subsidiaries shall be permitted to enter into Hedging
Agreements in the ordinary course of business (i) to hedge interest rate risk on
the Loans or (ii) to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management of its
liabilities, so long as no Default exists.

 

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SECTION 8.06 Restricted Payments; Certain Payments of Indebtedness.

 

  (a) The Borrower will not, and will not permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment or incur any obligation, (contingent or otherwise) to do so, except (i)
the Borrower may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock, (ii) Subsidiaries may
declare and pay dividends to the Borrower or any Guarantor that is a Loan Party,
and (iii) the Borrower may repurchase or redeem shares of its common stock
provided that the aggregate amount paid by the Borrower for such repurchases and
redemptions made at any time or after the Effective Date shall not at any time
exceed $2,750,000.

 

  (b) The Borrower will not, and will not permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (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 Indebtedness, except:

 

  (i) payment of Indebtedness created under the Loan Documents;

 

  (ii) payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness, provided that no Default exists or
would result from such payment;

 

  (iii) refinancings of Indebtedness to the extent permitted by Section 8.01;

 

  (iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness,
provided that such sale or transfer is otherwise permitted by this Agreement;

 

  (v) payment or prepayment of Capital Lease Obligations, so long as no Default
exists or would result therefrom; and

 

  (vi) payment when due of obligations under Hedging Agreements.

 

SECTION 8.07 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 as permitted in Section 8.03 and except (a) in the ordinary
course of business 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, (b) transactions between or among the Borrower and
the Guarantors that are Loan Parties not involving any other Affiliate, and (c)
any Restricted Payment permitted by Section 8.06. Notwithstanding the foregoing,
the Borrower will not, and will not permit any of

 

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its Subsidiaries other than Media DVX Acquisition Corp. 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, Media DVX Acquisition Corp, except for Permitted Media DVX
Payments.

 

SECTION 8.08 Restrictive Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, 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 any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 8.08 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope 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 such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of 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 and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.

 

SECTION 8.09 Disposition of Assets. Except as otherwise permitted in Section
8.03, the Borrower will not and will not permit any Subsidiary to sell, lease,
assign, transfer, or otherwise dispose of any of their respective assets
(including without limitation stock or other Equity Interests in any of the
Subsidiaries or any of the voting rights of any such stock or other Equity
Interests); provided, however, that the following dispositions shall be
permitted so long as the Borrower and the Subsidiaries, as applicable, receive
full, fair and reasonable consideration at the time of such disposition at least
equal to the fair market value of such asset being disposed:

 

  (a) dispositions of inventory in the ordinary course of business of the
Borrower and its Subsidiaries;

 

  (b) non-exclusive licenses of intellectual property and leases and licenses of
other property by the Borrower and its Subsidiaries to their respective
customers in connection with providing products and services to such customers
in the ordinary course of business of the Borrower and the Subsidiaries.

 

  (c) sales, transfers and other dispositions to the Borrower or any
wholly-owned Subsidiary that is a Guarantor;

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   62

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  (d) disposition of assets that are worn out, obsolete or no longer used or
useful in the conduct of the business of the Borrower and the Subsidiaries, so
long as such assets are replaced with assets of equal or greater value; and

 

  (e) other asset dispositions which do not exceed $500,000 in the aggregate for
the period commencing on the Effective Date and continuing up to and including
the last day of the term of this Agreement.

 

SECTION 8.10 Sale and Leaseback. The Borrower will not enter into, and will not
permit any Subsidiary to enter into, any arrangement with any Person pursuant to
which it leases from such Person real or personal property that has been or is
to be sold or transferred, directly or indirectly, by it to such Person;
provided that the Borrower and the Subsidiaries will be permitted to enter into
such arrangements involving sales of personal property not to exceed $500,000 in
the aggregate during the period commencing on the Effective Date and continuing
up to and including the last day of the term of this Agreement in connection
with Capital Lease Obligations permitted by Section 8.01(e).

 

SECTION 8.11 Accounting. The Borrower will not, and will not permit any of its
Subsidiaries to, change its fiscal year or make any change (a) in accounting
treatment or reporting practices, except as required by GAAP and disclosed to
the Administrative Agent, or (b) in tax reporting treatment, except as required
by law and disclosed to the Administrative Agent.

 

SECTION 8.12 Amendment of Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify or waive any of its rights or
obligations under its certificate of incorporation, by-laws, other
organizational documents or any documents evidencing or relating to any
Indebtedness of the Borrower or any Subsidiary, unless such amendment,
modification or waiver would not create a Material Adverse Effect. At any time
the Seller Note or any Subordinated Debt exists, the Borrower will not, and will
not permit any Subsidiary to, amend, modify, or waive any of its rights or
obligations under or any terms or provisions of the Seller Note or any
Subordinated Debt or any document evidencing, governing or otherwise relating to
the Seller Note or any Subordinated Debt.

 

SECTION 8.13 Preferred Equity Interests. The Borrower will not, and will not
permit any Subsidiary to, issue any preferred stock or other preferred Equity
Interests.

 

SECTION 8.14 Synthetic Repurchases. The Borrower will not, and will not permit
any Subsidiary to, enter into, or be a party to, or make any payment under, any
Synthetic Purchase Agreement.

 

SECTION 8.15 Permitted Media DVX Payments. Without in any way limiting any other
covenant set forth in this Agreement, the Borrower will not, and will not permit
any Subsidiary other than Media DVX Acquisition Corp. to, make any payment of
any kind whatsoever (whether by means of any loan, advance, capital
contribution, fee or otherwise) or transfer any assets to Media DVX Acquisition
Corp., except for:

 

  (a) payments not to exceed $500,000 in the aggregate during the period from
and including the Effective Date through the first anniversary of the Effective
Date (the “First Year”), to be used for general corporate purposes in the
ordinary course of Media DVX Acquisition Corp.’s business; and

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   63

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  (b) payments not to exceed $4,000,000 in the aggregate, to be used solely for
the purpose of making regularly scheduled payments of principal and interest on
the Seller Note, and provided that such payments shall be made only during the
time periods specified below and shall not exceed the applicable amount
specified below for each such time period:

 

  (i) on or within five (5) Business Days before the due date for the annual
installment of principal and interest due on the Seller Note during the First
Year, an aggregate amount not to exceed $1,500,000;

 

  (ii) on or within five (5) Business Days before the due date for the annual
installment of principal and interest due on the Seller Note during the period
from the first anniversary of the Effective Date through the second anniversary
of the Effective Date, an aggregate amount not to exceed $1,500,000; and

 

  (iii) on or within five (5) Business Days before the due date for the annual
installment of principal and interest due on the Seller Note during the period
from the second anniversary of the Effective Date through the third anniversary
of the Effective Date, an aggregate amount not to exceed $2,000,000.

 

ARTICLE IX

 

FINANCIAL 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, the Borrower covenants and agrees with the Administrative Agent and the
Lenders that:

 

SECTION 9.01 Fixed Charge Coverage Ratio. The Borrower will at all times
maintain or cause to be maintained a Fixed Charge Coverage Ratio of not less
than (a) 1.10 to 1.00 for each fiscal quarter of Borrower ending March 31, 2005,
June 30, 2005 and September 30, 2005, and (b) 1.25 to 1.00 at all other times.

 

SECTION 9.02 Senior Leverage Ratio. At all times, whether or not any
Subordinated Debt is outstanding, the Borrower will maintain or cause to be
maintained a Senior Leverage Ratio of not greater than 1.75 to 1.00.

 

SECTION 9.03 Total Leverage Ratio. The Borrower will at all times maintain or
cause to be maintained a Total Leverage Ratio of not greater than 2.50 to 1.00.

 

SECTION 9.04 Tangible Net Worth. The Borrower will not permit the Consolidated
Tangible Net Worth to be less than the sum of (a) $19,095,000 plus (b) 75% of

 

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consolidated net income of the Loan Parties (without any deduction for losses of
the Loan Parties), for each fiscal quarter of the Borrower ended through the
date of determination beginning with the fiscal quarter ending June 30, 2005,
plus (c) 100% of the Net Proceeds received by the Borrower or any other Loan
Party from any issuance, sale or other disposition of any Equity Interests of
the Borrower or any other Loan Party of any class (or any securities convertible
or exchangeable for any such Equity Interests, or any rights, warrants, or
options to subscribe for or purchase any such Equity Interests).

 

SECTION 9.05 Capital Expenditures. The Borrower will not permit the aggregate
Capital Expenditures of the Loan Parties to exceed (a) $1,200,000 during the
Borrower’s fiscal quarter ending March 31, 2005, or (b) $2,500,000 during the
period of four consecutive fiscal quarters of Borrower ending on March 31, 2006
or any period of four consecutive fiscal quarters of Borrower thereafter.

 

ARTICLE X

 

EVENTS OF DEFAULT

 

SECTION 10.01 Default. If any of the following Events of Default shall occur:

 

  (a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement 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) the Borrower 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 Section)
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for five Business 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 other
Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;

 

  (d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document;

 

  (e) 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;

 

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  (f) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) 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 (f) 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 provided that such sale or transfer is
otherwise permitted by this Agreement;

 

  (g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any 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;

 

  (h) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (g) of this Section, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any 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 for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

 

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

 

  (j) one or more judgments for the payment of money in an aggregate amount in
excess of $1,000,000 shall be rendered against the Borrower, any Subsidiary 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 or any Subsidiary to enforce any such judgment;

 

  (k) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $1,000,000;

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   66

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  (l) a Change in Control shall occur;

 

  (m) Scott K. Ginsburg (or any subsequent replacement in accordance with this
clause) shall cease to be involved in the management of the Borrower, provided
that such cessation shall not be a Default or an Event of Default until the
expiration of 90 days thereafter provided that during such 90-day period the
Borrower shall diligently proceed to replace such Person with an individual
having comparable qualifications and experience as such Person, and provided
further that such cessation shall not be a Default or an Event of Default if
such Person is replaced with an individual having comparable qualifications and
experience as such Person during such 90-day period;

 

  (n) a Material Adverse Effect shall occur;

 

  (o) this Agreement or any other Loan Document shall cease to be in full force
and effect or shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by the Borrower or any Subsidiary or
any of their respective shareholders, or the Borrower or any Guarantor shall
deny that it has any further liability or obligation under any of the Loan
Documents, or any Lien created by the Loan Documents shall for any reason cease
to be a valid, first priority perfected security interest in and Lien upon any
of the Collateral purported to be covered thereby; or

 

  (p) the Borrower or any Subsidiary, or any of their properties, revenues or
assets shall become subject to an order of forfeiture, seizure or divestiture
and the same shall not have been discharged within 30 days from the date of
entry thereof.

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section), 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 Borrower 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 Borrower; and in case of any
event with respect to the Borrower described in clause (g) or (h) of this
Section, 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 Borrower accrued hereunder, shall automatically become
due and payable, without notice, demand, presentment, notice of dishonor, notice
of acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby waived by the
Borrower. If any Event of Default shall occur and be continuing, the
Administrative Agent may exercise all rights and remedies available to it in law
or in equity, under the Loan Documents, or otherwise, including, without
limitation, the right to foreclose or otherwise enforce any Lien granted to the
Administrative Agent for the benefit of itself and the Lenders to secure payment
and performance of the Obligations.

 

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SECTION 10.02 Performance by the Administrative Agent. If the Borrower shall
fail to perform any covenant or agreement contained in any of the Loan
Documents, the Administrative Agent may perform or attempt to perform such
covenant or agreement on behalf of the Borrower. In such event, the Borrower
shall, at the request of the Administrative Agent, promptly pay any amount
expended by the Administrative Agent in connection with such performance or
attempted performance to the Administrative Agent, together with interest
thereon at the Maximum Rate from and including the date of such expenditure to
but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Administrative Agent nor any
Lender shall not have any liability or responsibility for the performance of any
obligation of the Borrower under this Agreement or any other Loan Document.

 

ARTICLE XI

 

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 of the Loan Documents, 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 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 by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02), 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 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 12.02) 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

 

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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 any Loan Document, (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 in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article VI or elsewhere in any Loan Document, 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 subagents appointed by the
Administrative Agent. The Administrative Agent and any such subagent 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 subagent and to the Related Parties of the
Administrative Agent and any such subagent, 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, with the consent of the
Borrower (which consent shall not be unreasonably withheld, and shall not be
required if any Default exists) 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, after consulting
with the Lenders, the Issuing Bank and the Borrower, appoint a successor
Administrative Agent which shall be a bank with an office in Dallas, Texas, 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 Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 12.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its subagents 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.

 

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Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information 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.

 

ARTICLE XII

 

MISCELLANEOUS

 

SECTION 12.01 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, 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 telecopy, as follows:

 

  (a) if to the Borrower, to it at 750 W. John Carpenter Freeway, Suite 700,
Irving, Texas 75039, Attention of Omar Choucair (Telecopy No. (972) 581-2100);

 

  (b) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 2200 Ross
Avenue, 5th Floor, Dallas, Texas 75201, Attention of David E. Nolet (Telecopy
No. (214) 965-2884), and, for any Borrowing Requests, with a copy to JPMorgan
Chase Bank, N.A., Loan and Agency Services, 1111 Fannin Street, 10th Floor,
Houston, Texas 77002, Attention of Mia Hamilton (Telecopy No. (713) 750-2336);
and

 

  (c) if to the Issuing Bank, to it at 2200 Ross Avenue, 5th Floor, Dallas,
Texas 75201, Attention of David E. Nolet (Telecopy No. (214) 965-2884); and

 

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

 

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

 

SECTION 12.02 Waivers; Amendments.

 

  (a)

No failure or delay by the Administrative Agent, the Issuing Bank or any Lender
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   70

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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 and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by the Borrower or any Subsidiary 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 nor any other Loan Document nor any provision
hereof may be waived, amended or modified except, in the case of this Agreement,
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 or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the other parties thereto; 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 2.13(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) reduce the Commitment of any Lender without the
written consent of such Lender, except as provided in Section 2.07, (vi) release
any Guarantor or any Collateral without the written consent of each Lender,
except in connection with dispositions, mergers or dissolutions expressly
permitted by this Agreement, or (vii) 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, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or the Issuing Bank hereunder without the prior written
consent of the Administrative Agent or the Issuing Bank, as the case may be.

 

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SECTION 12.03 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, the other Loan 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, (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Bank, and, after an
Event of Default, any Lender, including the fees, charges and disbursements of
any counsel for the Administrative Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, 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, (iv) all transfer, stamp, documentary, or other similar taxes,
assessments or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Loan Documents, (v) all costs, out-of-pocket
expenses, assessments and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or Lien
contemplated by this Agreement or any other Loan Document, and (vi) all other
costs and out-of-pocket expenses incurred by the Administrative Agent in
connection with this Agreement, any other Loan Document or the Collateral,
including without limitation costs, fees, expenses and other charges incurred in
connection with performing or obtaining any audit or appraisal in respect of the
Collateral or for any surveys, environmental assessments, title insurance,
filing fees, recording costs and lien searches.

 

  (b)

THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE 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 OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR
RESPECTIVE OBLIGATIONS HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS OR ANY
OTHER TRANSACTIONS CONTEMPLATED HEREBY, (ii) ANY LOAN OR LETTER OF CREDIT OR THE
USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   72

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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 BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT ALTHOUGH
EACH INDEMNITEE SHALL BE INDEMNIFIED FOR SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND EXPENSES ARISING FROM ITS OWN ORDINARY NEGLIGENCE, SUCH
INDEMNITY SHALL NOT, 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 HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

EXPRESS INDEMNITY FOR NEGLIGENCE:

 

PURSUANT TO THIS SECTION 12.03(b), THE BORROWER INDEMNIFIES EACH INDEMNITEE FOR
LOSSES, CLAIMS, LIABILITIES AND EXPENSES ARISING FROM ANY INDEMNITEE’S OWN
ORDINARY NEGLIGENCE.

 

  (c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank 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 or the
Issuing Bank in its capacity as such.

 

  (d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, 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 or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   73

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  (e) All amounts due under this Section shall be payable upon written demand
therefor.

 

SECTION 12.04 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 Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
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 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 assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
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 no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if
a Default has occurred and is continuing, any other assignee; and

 

  (B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of (x) any Revolving Credit Commitment
to an assignee that is a Lender with a Revolving Credit Commitment immediately
prior to giving effect to such assignment or (y) all or any portion of a Term
Loan to a Lender, an Affiliate of a Lender or an Approved Fund;

 

  (C) the Issuing Bank, provided that no consent of the Issuing Bank shall be
required for an assignment of all or any portion of the Term Loan.

 

  (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 or Loans of any Class, the amount

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   74

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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 or, in the case of a Term Loan, $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if a 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,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;

 

  (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, 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.

 

For the purposes of this Section 12.04(b), the term “Approved Fund” has the
following means:

 

“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.

 

  (iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) 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
2.12, 3.01, 3.05 and 12.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph 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.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   75

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  (iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, 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 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 Borrower, 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 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 a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, 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. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph. Each assigning Lender shall
surrender any Revolving Credit Note and Term Note subject to such assignment,
and the Borrower shall execute and deliver to the Administrative Agent in
exchange for the surrendered Notes a new Revolving Credit Note payable to the
order of the assignee in an amount equal to the Revolving Credit Commitment
assumed by such assignee pursuant to such Assignment and Assumption and a new
Term Note payable to the order of the assignee in an amount equal to the
outstanding Term Loans assigned to such assignee pursuant to such Assignment and
Assumption, and, if the assigning Lender has retained a Revolving Credit
Commitment and any Term Loans, a new Revolving Credit Note payable to the order
of the assigning Lender in an amount equal to the Revolving Credit Commitment
retained by it hereunder and a new Term Note in an amount equal to the Term Loan
retained by it hereunder. Such new Notes shall be in an aggregate face amount of
the surrendered Note, shall be dated the effective date of such Assignment and
Assumption, and shall otherwise be in substantially the form of Exhibit “A”
hereto and shall each constitute a “Note” for purposes of the Loan Documents.

 

  (c)

(i) Any Lender may, without the consent of the Borrower, the Administrative
Agent or the Issuing Bank, sell participations to one or more banks or other

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   76

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entities (a “Participant”) 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 (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, 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 the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; 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
12.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.12, 3.01 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13(c) as though it were a
Lender.

 

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.12 or 3.01 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.12 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.12(e) as
though it were a Lender.

 

  (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, 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 12.05 Survival. All covenants, agreements, representations and
warranties made by the Borrower and the Subsidiaries in the Loan Documents and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents 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 Issuing

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   77

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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 2.12, 3.01, 3.05 and 12.03 and Article XI 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 12.06 Counterparts; Effectiveness. 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. Except as provided in Section 6.01, 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.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

SECTION 12.07 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 12.08 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 the Borrower against
any and all of the Obligations, irrespective of whether or not any demand shall
have been made under this Agreement and although such Obligations may be
unmatured. 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 12.09 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. ANY ACTION OR PROCEEDING
AGAINST THE BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. THE BORROWER
HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS,
AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN

 

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INCONVENIENT FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12.01.
NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST
THE BORROWER OR WITH RESPECT TO ANY OF ITS RESPECTIVE PROPERTY IN COURTS IN
OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN
HARRIS COUNTY, TEXAS.

 

SECTION 12.10 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 12.11 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 12.12 Confidentiality. Each of the Administrative 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
Affiliates and to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and 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 regulatory
authority, (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 any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any actual or 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 the 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

 

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Administrative Agent, the Issuing Bank or any Lender on a nonconfidential 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 nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Notwithstanding
anything herein to the contrary, “Information” shall not include, and the
Administrative Agent and each Lender (and each employee, representative or other
agent of the Administrative Agent and each Lender) may disclose to any and all
Persons, without limitation of any kind, any information with respect to the
“tax treatment” and “tax structure” (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to the Administrative Agent or such Lender relating to
such tax treatment and tax structure; provided that with respect to any document
or similar item that in either case contains information concerning such tax
treatment or tax structure of the transactions contemplated hereby as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to such tax treatment or tax structure. 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.

 

SECTION 12.13 Maximum Interest Rate. No provision of this Agreement or of any
other Loan Document shall require the payment or the collection of interest in
excess of the maximum amount permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
the Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event any Lender ever receives, collects, or applies as
interest any such sum, such amount which would be in excess of the maximum
amount permitted by applicable law shall be applied as a payment and reduction
of the principal of the indebtedness evidenced by the Notes; and, if the
principal of the Notes has been paid in full, any remaining excess shall
forthwith be paid to the Borrower. In determining whether or not the interest
paid or payable exceeds the Maximum Rate, the Borrower and each Lender shall, to
the extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the indebtedness evidenced by the
Notes so that interest for the entire term does not exceed the Maximum Rate.

 

SECTION 12.14 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code are specifically declared by
the parties hereto not to be applicable to this Agreement or any of the other
Loan Documents or to the transactions contemplated hereby.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   80

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SECTION 12.15 NO ORAL AGREEMENTS. THIS AGREEMENT, THE NOTES, ANY SEPARATE LETTER
AGREEMENTS WITH RESPECT TO FEES PAYABLE TO THE ADMINISTRATIVE AGENT, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES HERETO AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.

 

SECTION 12.16 No Fiduciary Relationship. The relationship between the Borrower
and each Lender with respect to the Loan Documents and the Transactions is
solely that of debtor and creditor, and neither the Administrative Agent nor any
Lender has any fiduciary or other special relationship with the Borrower with
respect to the Loan Documents and the Transactions, and no term or condition of
any of the Loan Documents shall be construed so as to deem the relationship
between the Borrower and any Lender with respect to the Loan Documents and the
Transactions to be other than that of debtor and creditor.

 

SECTION 12.17 Construction. The Borrower, the Administrative Agent and each
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.

 

SECTION 12.18 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 Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.

 

SECTION 12.19 Release of Claims. The Borrower hereby acknowledges and agrees
that neither it nor any Guarantor or Subsidiary has any and there are no
defenses, counterclaims, offsets, cross-complaints, claims or demands of any
kind or nature whatsoever to or against the Administrative Agent, the Issuing
Bank, any of the Lenders or the terms and provisions of or the obligations of
the Borrower, any Guarantor or any Subsidiary created or evidenced by the
Agreement or any of the other Loan Documents, and that neither the Borrower nor
any of the Guarantors or Subsidiaries has any right to seek affirmative relief
or damages of any kind or nature from the Administrative Agent, the Issuing
Bank, or any of the Lenders. To the extent any such defenses, counterclaims,
offsets, cross-complaints, claims, demands or rights exist, Borrower hereby
waives, and hereby knowingly and voluntarily releases and forever discharges the
Administrative Agent, the Issuing Bank, each of the Lenders and their respective
predecessors, Related Parties, attorneys, successors and assigns, from all
possible claims, demands, actions, causes of action, defenses, counterclaims,
offsets, cross-complaints, damages, costs, expenses and liabilities whatsoever,
whether known or unknown, such waiver and release being with full knowledge and
understanding of the circumstances and effects of such waiver and release and
after having consulted legal counsel with respect thereto.

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   81

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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.

 

DIGITAL GENERATION SYSTEMS, INC.

By:  

 

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Name:   Omar A. Choucair Title:   Chief Financial Officer and Secretary JPMORGAN
CHASE BANK, N.A., as a Lender, as Issuing Bank and as Administrative Agent By:  

 

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Name:   David E. Nolet Title:   Vice President

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT   82