Exhibit 10.1

 

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CREDIT AGREEMENT

 

dated as of

 

December 22, 2005

 

among

 

JUPITERMEDIA CORPORATION

 

The Lenders Party Hereto,

 

LASALLE BANK NATIONAL ASSOCIATION,

 

as Syndication Agent,

 

KEYBANK NATIONAL ASSOCIATION,

 

as Documentation Agent

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

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Table of Contents

 

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ARTICLE I.      Definitions     

SECTION 1.01.

   Defined Terms    1

SECTION 1.02.

   Classification of Loans and Borrowings    21

SECTION 1.03.

   Terms Generally    21

SECTION 1.04.

   Accounting Terms; GAAP    21 ARTICLE II.      The Credits     

SECTION 2.01.

   Term Commitments    22

SECTION 2.02.

   Procedure for Term Loan Borrowings    22

SECTION 2.03.

   Revolving Commitments    22

SECTION 2.04.

   Procedure for Revolving Loan Borrowing    23

SECTION 2.05.

   Swingline Commitment    24

SECTION 2.06.

   Procedure for Swingline Borrowing, Refunding of Swingline Loans    24

SECTION 2.07.

   Interest Elections    26

SECTION 2.08.

   Repayment of Loans; Evidence of Debt.    27

SECTION 2.09.

   Termination or Reduction of Revolving Commitments    28

SECTION 2.10.

   Optional Prepayments    28

SECTION 2.11.

   Mandatory Prepayments    28

SECTION 2.12.

   Fees    29

SECTION 2.13.

   Interest    29

SECTION 2.14.

   Alternate Rate of Interest    30

SECTION 2.15.

   Increased Costs    30

SECTION 2.16.

   Break Funding Payments    31

SECTION 2.17.

   Taxes    32

SECTION 2.18.

   Payments Generally; Pro Rata Treatment; Sharing of Set-offs    33

SECTION 2.19.

   Mitigation Obligations; Replacement of Lenders    35

 

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ARTICLE III.      Letters of Credit     

SECTION 3.01.

   L/C Commitment    36

SECTION 3.02.

   Procedure for Issuance of Letter of Credit    37

SECTION 3.03.

   Fees and Other Charges    37

SECTION 3.04.

   L/C Participations    37

SECTION 3.05.

   Reimbursement Obligation of the Borrower    38

SECTION 3.06.

   Obligations Absolute    39

SECTION 3.07.

   Letter of Credit Payments    39

SECTION 3.08.

   Applications    39 ARTICLE IV.      Representations and Warranties     

SECTION 4.01.

   Organization; Powers    40

SECTION 4.02.

   Authorization; Enforceability    40

SECTION 4.03.

   Governmental Approvals; No Conflicts    40

SECTION 4.04.

   Financial Condition; No Material Adverse Change    40

SECTION 4.05.

   Properties    41

SECTION 4.06.

   Litigation and Environmental Matters    41

SECTION 4.07.

   Compliance with Laws and Agreements    42

SECTION 4.08.

   Investment and Holding Company Status    42

SECTION 4.09.

   Taxes    42

SECTION 4.10.

   ERISA    42

SECTION 4.11.

   Disclosure    42

SECTION 4.12.

   Security Documents    43

SECTION 4.13.

   Solvency    43 ARTICLE V.      Conditions     

SECTION 5.01.

   Conditions to Initial Extension of Credit    43

SECTION 5.02.

   Conditions to Each Extension of Credit    46 ARTICLE VI.      Affirmative
Covenants     

SECTION 6.01.

   Financial Statements and Other Information    46

SECTION 6.02.

   Notices of Material Events    47

SECTION 6.03.

   Existence; Conduct of Business    48

SECTION 6.04.

   Payment of Obligations    48

SECTION 6.05.

   Maintenance of Properties; Insurance    48

SECTION 6.06.

   Books and Records; Inspection Rights    49

SECTION 6.07.

   Compliance with Laws    49

SECTION 6.08.

   Use of Proceeds    49

SECTION 6.09.

   Additional Material Subsidiaries    49

 

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SECTION 6.10.

   Further Assurances    50 ARTICLE VII.      Negative Covenants     

SECTION 7.01.

   Indebtedness    50

SECTION 7.02.

   Liens    51

SECTION 7.03.

   Fundamental Changes    52

SECTION 7.04.

   Investments, Loans, Advances, Guarantees and Acquisitions    53

SECTION 7.05.

   Swap Agreements    54

SECTION 7.06.

   Restricted Payments    54

SECTION 7.07.

   Disposition of Assets    55

SECTION 7.08.

   Transactions with Affiliates    55

SECTION 7.09.

   Restrictive Agreements    55

SECTION 7.10.

   Issuances of Equity Interests by Subsidiaries    56

SECTION 7.11.

   Amendment of Material Documents    56

SECTION 7.12.

   Changes in Fiscal Periods    56

SECTION 7.13.

   Leases    56

SECTION 7.14.

   Capital Expenditures    56

SECTION 7.15.

   Leverage Ratio    57

SECTION 7.16.

   No Net Losses    57

SECTION 7.17.

   Net Worth    57 ARTICLE VIII.      Events of Default      ARTICLE IX.     
The Administrative Agent      ARTICLE X.      Miscellaneous     

SECTION 10.01.

   Notices    62

SECTION 10.02.

   Waivers; Amendments    63

SECTION 10.03.

   Expenses; Indemnity; Damage Waiver    64

SECTION 10.04.

   Successors and Assigns    65

SECTION 10.05.

   Survival    67

SECTION 10.06.

   Counterparts; Integration; Effectiveness    68

SECTION 10.07.

   Severability    68

SECTION 10.08.

   Right of Setoff    68

 

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SECTION 10.09.

   Governing Law; Jurisdiction; Consent to Service of Process    68

SECTION 10.10.

   WAIVER OF JURY TRIAL    69

SECTION 10.11.

   Headings    69

SECTION 10.12.

   Confidentiality    69

SECTION 10.13.

   Interest Rate Limitation    70

SECTION 10.14.

   USA PATRIOT Act    70

 

SCHEDULES:

 

Schedule 2.01 — Commitments

Schedule 4.01 — Subsidiaries

Schedule 4.06 — Disclosed Matters

Schedule 7.01 — Existing Indebtedness

Schedule 7.02 — Existing Liens

Schedule 7.04 — Existing Investments

Schedule 7.09 — Existing Restrictions

Schedule 7.10 — Existing Equity Interest Commitments

 

EXHIBITS:

 

Exhibit A – Form of Assignment and Assumption

Exhibit B1 – Form of Opinion of Counsel to the Loan Parties

Exhibit B2 – Form of Opinion of Delaware Counsel to the Loan Parties

Exhibit B3 – Form of Opinion of Arizona Counsel to the Loan Parties

Exhibit B4 – Form of Opinion of California Counsel to the Loan Parties

Exhibit C – Form of Guarantee Agreement

Exhibit D – Form of Security Agreement

Exhibit E – Form of Pledge Agreement

Exhibit F-1 – Form of New Lender Supplement

Exhibit F-2 – Form of Increased Revolving Facility Activation Notice

Exhibit G – Form of Borrowing Request

Exhibit H – Form of Compliance Certificate

 

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CREDIT AGREEMENT, dated as of December 22, 2005, among JUPITERMEDIA CORPORATION,
LASALLE BANK NATIONAL ASSOCIATION, as Syndication Agent, KEYBANK NATIONAL
ASSOCIATION, as Documentation Agent, the LENDERS party hereto, and JPMORGAN
CHASE BANK, N.A., as Administrative Agent.

 

The parties hereto hereby agree as follows:

 

ARTICLE I.

 

Definitions

 

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

 

“Act” has the meaning assigned to such term in Section 10.14.

 

“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 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.

 

“Agreement” means this Credit Agreement, dated as of December 22, 2005, among
the Borrower, the Lenders and the Administrative Agent, as amended,
supplemented, restated or otherwise modified from time to time.

 

“Aggregate Exposure” means with respect to any Lender at any time, an amount
equal to (a) until the Effective Date, the aggregate amount of such Lender’s
Commitments at such time and (b) thereafter, the sum of (i) the aggregate then
unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such
Lender’s Revolving Commitment then in effect or, if the Revolving Commitments
have been terminated, the amount of such Lender’s Revolving Extensions of Credit
then outstanding.

 

“Aggregate Exposure Percentage” means with respect to any Lender at any time,
the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at
such time to the Aggregate Exposure of all Lenders at such time.

 

“Applicable Rate” means the rate determined pursuant to the Pricing Grid.

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“Application” means an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.

 

“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.

 

“Asset Sale” means any Disposition of property or series of related Dispositions
of property (excluding any such Disposition permitted by clause (a), (b) or
(c) of Section 7.07) that yields gross proceeds to the Borrower or any
Subsidiary (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.

 

“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 10.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Available Revolving Commitment” means as to any Revolving Lender at any time,
an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding; provided, that in calculating any Lender’s Revolving Extensions of
Credit for the purpose of determining such Lender’s Available Revolving
Commitment pursuant to Section 2.12(b), the aggregate principal amount of
Swingline Loans then outstanding shall be deemed to be zero.

 

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

 

“Borrower” means Jupitermedia Corporation, a Delaware corporation.

 

“Borrowing” means Loans of the same 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 Date” means any Business Day specified by the Borrower as a date on
which the Borrower requests the relevant Lenders to make Loans hereunder.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Sections 2.02 or 2.04, as the case may be, substantially in the
form of, and containing the information prescribed by, Exhibit G, delivered to
the Administrative Agent.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain

 

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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.

 

“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) other than
Alan Meckler or any member of his immediate family or any Affiliate of any of
them, any trust established for the benefit of any of them or of which any of
them is trustee (collectively, the “AM Group”) of Equity Interests representing
more than 30% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Borrower and the percentage of aggregate
voting power owned by such Person or group exceeds the percentage of ordinary
voting power owned by the AM Group; (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 occurrence of a “change of
control” (or similar event, howsoever defined) under and as defined in any
indenture or other agreement in respect of any Material Indebtedness to which
any Loan Party is a party.

 

“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, for purposes of
Section 2.15(b), by any lending office of such Lender or by such Lender’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.

 

“Charges” has the meaning set forth in Section 10.13.

 

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

 

“Collateral” means all of the right, title and interest of each Loan Party in
and to the property in which such Person has granted a Lien to the
Administrative Agent for its benefit and the ratable benefit of the Lenders
under any Loan Document.

 

“Commitment” means, with respect to each Lender, such Lender’s Revolving Credit
Commitment and Term Loan Commitment.

 

“Commitment Fee” has the meaning assigned to such term in Section 2.12.

 

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“Commitment Fee Rate” means the commitment fee rate as determined by the Pricing
Grid.

 

“Compliance Certificate” means a certificate duly executed by a Financial
Officer of the Borrower, substantially in the form of Exhibit H.

 

“Consolidated Adjusted Net Income” means, for any period, Consolidated Net
Income for such period plus, to the extent deducted from revenues in determining
Consolidated Net Income for such period, the aggregate amount of non-cash
restricted stock and stock option expense, all as determined on a consolidated
basis with respect to the Borrower and the Subsidiaries in accordance with GAAP.

 

“Consolidated Capital Expenditures” means, for any period, the dollar amount of
gross expenditures (including cash payments during such period in respect to
Capital Lease Obligations but excluding Permitted Acquisitions) made by the
Borrower and the Subsidiaries for the acquisition of any fixed assets, real
property, plant and equipment, and all renewals, improvements and replacements
thereto incurred during such period in each case which are required to be
capitalized for financial reporting purposes in accordance with GAAP.

 

“Consolidated EBITDA” means, for any period, Consolidated Adjusted Net Income
for such period, plus, without duplication and to the extent deducted from
revenues in determining Consolidated Adjusted Net Income for such period, the
sum of (a) the aggregate amount of Consolidated Interest Expense for such period
(plus the amortization of loan acquisition costs), plus (b) the aggregate amount
of income tax expense for such period, plus (c) the aggregate amount of
depreciation and amortization for such period, plus (d) any non-recurring fees,
cash charges and other cash expenses (including restructuring and integration
costs) made or incurred in connection with the Dynamic Acquisition or the
PictureArts Acquisition that are paid or otherwise accounted for within 180 days
of the consummation of the Dynamic Acquisition or the PictureArts Acquisition,
as the case may be, but not to exceed $2,000,000 in the aggregate, all as
determined on a consolidated basis with respect to the Borrower and the
Subsidiaries in accordance with GAAP. For the purposes of determining
Consolidated EBITDA for any period during which there was an acquisition of a
Person (or part thereof), Consolidated EBITDA for such period shall be
calculated after giving pro forma effect to such acquisition as though it had
occurred on the first day of such period.

 

“Consolidated Indebtedness” means, as of any date of determination, the
aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, as determined on a consolidated basis in accordance
with GAAP.

 

“Consolidated Interest Expense” means, for any period, the interest expense,
both expensed and capitalized (including the interest component in respect of
Capital Lease Obligations), accrued or paid by the Borrower and the Subsidiaries
during such period, as determined on a consolidated basis in accordance with
GAAP.

 

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“Consolidated Net Income” means, for any period, net income or loss of the
Borrower and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income
attributable to interests in minority investments, except to the extent of the
amount of dividends or other distributions actually paid to a member of the
Borrower’s consolidated group during such period and (b) any foreign exchange
gains and losses.

 

“Consolidated Net Worth” means, at any date of determination thereof, the result
of (a) all assets as shown on a consolidated balance sheet of the Borrower and
the Subsidiaries, minus (b) all liabilities as shown on a consolidated balance
sheet of the Borrower and the Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.

 

“Consolidated Subordinated Indebtedness” means any Indebtedness (including any
convertible Indebtedness) of the Borrower having no scheduled principal payments
prior to the Term Maturity Date and that is otherwise subordinated to the
obligations owed to each of the Lenders on terms and conditions acceptable to
the Required Lenders in their reasonable discretion.

 

“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.

 

“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 4.06.

 

“Disposition” means with respect to any property, any sale, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof. The terms
“Dispose” and “Disposed of” shall have correlative meanings.

 

“Documentation Agent” means KeyBank National Association, in its capacity as
documentation agent hereunder.

 

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

 

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

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any jurisdiction in the United States.

 

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“Dynamic Acquisition” means the acquisition by JupiterImages Corporation, a
Wholly-Owned Subsidiary of the Borrower, of 100% of the outstanding membership
interests of Creatas, L.L.C. from Moffly-Creatas Investors, LLC, MCG Capital
Corporation and Creatas Management Investors LLC.

 

“Effective Date” means the date on which the conditions specified in Article V
are satisfied (or waived in accordance with Section 10.02).

 

“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 threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

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

 

“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 Domestic Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Domestic 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 Domestic 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 Domestic Plan; (e) the receipt by the Borrower
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an

 

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intention to terminate any Domestic Plan or Domestic Plans or to appoint a
trustee to administer any Domestic 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 Domestic Plan or Multiemployer Plan; (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; or (h) any Foreign Plan Event.

 

“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 VIII.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) Taxes imposed on (or measured by) its net income
by the United States of America (or any political subdivision thereof), or its
worldwide gross or net income by the jurisdiction under the laws of which such
recipient is organized, in which such recipient is deemed to be doing business,
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 and (c) in the case of a Lender or the Administrative Agent (other
than an assignee pursuant to a request by the Borrower under Section 2.19(b)),
any withholding tax that is (i) imposed on amounts payable to a Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or designates
a new lending office), 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 2.17(a) or (ii) attributable
to such Lender’s or the Administrative Agent’s failure to comply with
Section 2.17(e).

 

“Existing Credit Agreement” means the Amended and Restated Credit Agreement,
dated as of July 18, 2005, among the Borrower, the lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent.

 

“Facility” means each of (a) the Term Commitments and the Term Loans made
thereunder (the “Term Facility”) and (b) the Revolving Commitments and the
extensions of credit made thereunder (the “Revolving Facility”).

 

“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 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.

 

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“Fee Letter” means the fee letter, dated October 5, 2005, between the Borrower,
JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc.

 

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

 

“Fiscal Quarter Net Worth Increase Amounts” means, with respect to each fiscal
quarter of the Borrower, the sum of (a) the greater of (i) Zero Dollars ($0) and
(ii) 50% of Consolidated Net Income for such fiscal quarter, plus (b) 50% of the
proceeds (net of underwriting commissions and discounts and fees and expenses)
from the issuance of Equity Interests of the Borrower or any Wholly-Owned
Subsidiary during such fiscal quarter, plus (c) 50% of the aggregate market
value of Equity Interests of the Borrower issued in a Permitted Acquisition
during such fiscal quarter.

 

“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.

 

“Foreign Plan” means any pension plan or other deferred compensation plan,
program or arrangement maintained by any Foreign Subsidiary which is subject to
funding rules comparable to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA.

 

“Foreign Plan Event” means, with respect to any Foreign Plan, (a) the existence
of unfunded liabilities in excess of the amount permitted under any applicable
law, (b) the failure to make the required contributions or payments, under any
applicable law, on or before the due date for such contributions or payments,
(c) the receipt of a notice by a Governmental Authority relating to the
intention to terminate any such Foreign Plan or to appoint a trustee to
administer any such Foreign Plan, or to the insolvency of any such Foreign Plan,
or (d) the incurrence of any liability of the Borrower or any Subsidiary under
applicable law on account of the complete or partial termination of such Foreign
Plan or the complete or partial withdrawal of any participating employer
therein.

 

“Foreign Subsidiary” means any Subsidiary that is not organized under the laws
of any jurisdiction in the United States of America.

 

“Funding Office” means the office of the Administrative Agent specified in
Section 10.01 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

8

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“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 material 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 material 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 material 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 material 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.

 

“Guarantee Agreement” means the Guarantee Agreement, substantially in the form
of Exhibit C, dated as of December 22, 2005, among the Guarantors party thereto
and the Administrative Agent, as amended, supplemented, restated or otherwise
modified from time to time, whereby such Guarantors guarantee the obligations
under the Loan Documents.

 

“Guarantors” means the Subsidiaries that are or become parties to the Guarantee
Agreement.

 

“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.

 

“Increased Revolving Facility Activation Notice” means a notice substantially in
the form of Exhibit F-2.

 

“Increased Revolving Facility Effective Date” means any Business Day designated
as such in an Increased Revolving Facility Activation Notice.

 

“Increasing Lender” has the meaning assigned to such term in Section 2.03(b).

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under

 

9

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conditional sale or other title retention agreements relating to property
acquired by such Person, (d) 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), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed (it being understood that, unless such Person shall have assumed
such obligations, the amount of such Indebtedness shall be the lesser of (x) the
fair market value of the property securing such Indebtedness and (y) the stated
principal amount of such Indebtedness), (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person and all
obligations of such Person under Synthetic Leases, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (i) the net obligations of such
Person in respect of Swap Agreements, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances and (k) all
obligations of such Person arising with respect to Equity Interests which are
redeemable by such Person. 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.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

 

“Interest Payment Date” means (a) with respect to any Prime Loan (other than any
Swingline Loan), the last day of each March, June, September and December,
(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 and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

 

“Interest Period” means (a) 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, three or six months
thereafter, or nine or twelve months thereafter if available to all Lenders, as
the Borrower may elect, 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

 

10

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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.

 

“Issuing Lender” means JPMorgan Chase Bank, N.A., or any affiliate thereof, in
its capacity as issuer of any Letter of Credit.

 

“Letters of Credit” has the meaning assigned to such term in Section 3.01.

 

“L/C Commitment” means $2,000,000.

 

“L/C Obligations” means at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.05.

 

“L/C Participants” means all the Revolving Lenders other than the Issuing
Lender.

 

“Lenders” means the Persons listed on Schedule 2.01 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.

 

“Leverage Ratio” means the ratio of (a) Consolidated Indebtedness as of such
date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Borrower most recently ended as of such date.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market 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 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

 

11

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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” means any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents” means this Agreement, the Guarantee Agreement, each Security
Document, each promissory note issued pursuant to Section 2.08(f) and each Swap
Agreement between a Loan Party and a Lender or an Affiliate of a Lender, as each
may be amended or supplemented from time to time.

 

“Loan Parties” means the Borrower and the Guarantors.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
results of operations, properties or financial condition of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform, or
the enforceability of any Loan Party of, any of its obligations under any Loan
Document or (c) the rights of or benefits available to the Lenders under any
Loan Document.

 

“Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Swap 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
Swap Agreement at any time shall be zero prior to the time any counterparty to
such Swap Agreement shall be entitled to terminate such Swap Agreement and,
thereafter, shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.

 

“Material Subsidiary” means any Subsidiary, including its subsidiaries, which
meets either of the following conditions: (i) for the period of four consecutive
fiscal quarters of the Borrower most recently ended, the gross revenues of such
Subsidiary (and its subsidiaries) and all other Subsidiaries that are not
Material Subsidiaries exceed fifteen percent (15%) of the gross revenues of the
Borrower and the Subsidiaries, as determined in accordance with GAAP or (ii) as
of the end of the most recently ended fiscal quarter of the Borrower, the gross
assets of such Subsidiary (and its subsidiaries) and all other Subsidiaries that
are not Material Subsidiaries exceed fifteen percent (15%) of the total assets
of the Borrower and the Subsidiaries, as determined in accordance with GAAP.

 

“Maximum Rate” has the meaning set forth in Section 10.13.

 

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

 

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

 

12

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“New Lenders” has the meaning assigned to such term in Section 2.03(c).

 

“New Lender Supplement” has the meaning assigned to such term in Section
2.03(c).

 

“Other Taxes” means any and all present or future recording, stamp, documentary,
excise or property or similar taxes, charges or levies (but not any tax on any
transfer or assignment of, or any participation in, the Loans (or a portion
thereof) or this Agreement) arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.

 

“Participant” has the meaning set forth in Section 10.04.

 

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

 

“Permitted Acquisition” means (a) any acquisition, whether by purchase, merger,
consolidation or otherwise, if immediately after giving effect thereto: (i) such
acquisition is of all or substantially all the assets of, or Equity Interests
in, a Person or division or line of business or other business unit of a Person
and relates to the business conducted by the Borrower and the Subsidiaries as of
the date hereof or in a business reasonably related thereto; (ii) no Default
shall have occurred and be continuing or would result therefrom; (iii) all
transactions related thereto shall be consummated in accordance with applicable
laws; (iv) any acquired or newly formed Person shall be a Subsidiary and all
actions required to be taken, if any, with respect to such acquired or newly
formed Subsidiary under Section 6.09 shall have been taken; and (v) the Borrower
and the Subsidiaries shall be in compliance, on a pro forma basis after giving
effect to such acquisition or formation, with the covenants contained in Section
7.15 through Section 7.17, inclusive, recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower as if, for the purposes of
calculating Consolidated Indebtedness, Consolidated Adjusted Net Income,
Consolidated Net Worth and Consolidated EBITDA, such acquisition and related
financings or other transactions had occurred on the first day of the period for
testing such compliance and (b) the acquisition of Stock Image SAS or Animation
Factory, Inc., whether by purchase, merger, consolidation or otherwise; provided
that, the conditions in clauses (a)(ii) through (a)(v) above are met with
respect to such acquisition and provided further that the aggregate
consideration (including concurrent repayment or assumption on any indebtedness
and related investments) paid in respect of such acquisitions shall not exceed
$22,500,000.

 

“Permitted Encumbrances” means:

 

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 6.04;

 

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s 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 6.04;

 

13

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

 

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

 

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

 

(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;

 

(g) any interest or title of a licensor, lessor or sublessor under any license
or lease agreement pursuant to which rights are granted to the Borrower or any
Subsidiary;

 

(h) licenses, leases or subleases granted by the Borrower or any Subsidiary to
third persons in the ordinary course of business not interfering in any material
respect with the business of the Borrower or any Subsidiary;

 

(i) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Borrower or any
Subsidiary in the ordinary course of business;

 

(j) Liens that are contractual or statutory setoff rights arising in the
ordinary course of business with financial institutions, relating to pooled
deposit accounts or sweep accounts of the Borrower and the Subsidiaries to
permit satisfaction of overdraft or similar obligations incurred in the ordinary
course of business or relating to purchase orders or other agreements entered
into with customers of the Borrower or any Subsidiary in the ordinary course of
business; and

 

(k) Liens solely on any cash earnest money deposits by the Borrower or any
Subsidiary in connection with any letter of intent or purchase agreement
permitted under this Agreement;

 

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;

 

14

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(b) investments in commercial paper maturing within one year 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;

 

(c) investments in certificates of deposit, overnight bank deposits or banker’s
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
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;

 

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000;

 

(f) with respect to a Foreign Subsidiary, securities issued by any foreign
government or any political subdivision of any foreign government or any public
instrumentality thereof in the jurisdiction of domicile of such Foreign
Subsidiary having maturities of not more than one year from the date of
acquisition thereof and, at the time of acquisition, having the highest credit
rating obtainable from S&P or from Moody’s; and

 

(g) solely with respect to any Foreign Subsidiary, non-dollar denominated
(i) certificates of deposit of, bankers acceptances of, or time deposits with,
any commercial bank which is organized and existing under the laws of the
country in which such Foreign Subsidiary maintains its chief executive office
and principal place of business provided such country is a member of the
Organization for Economic Cooperation and Development, and whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody’s is at least P-1 or the equivalent thereof (any such bank being an
“Approved Foreign Bank”) and maturing within 12 months of the date of
acquisition and (ii) equivalents of demand deposit accounts which are maintained
with an Approved Foreign Bank.

 

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

 

“PictureArts Acquisition” means the acquisition by JupiterImages Corporation, a
Wholly-Owned Subsidiary of the Borrower, of 100% of the outstanding membership
interests of PictureArts Corporation from Jeffrey Burke and Lorraine Triolo.

 

15

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“Pledge Agreement” means the Pledge Agreement, substantially in the form of
Exhibit D, dated as of December 22, 2005, among the Borrower, the Subsidiaries
party thereto and the Administrative Agent, as amended, supplemented, restated
or otherwise modified from time to time, whereby the Borrower and the
Subsidiaries party thereto grant to the Administrative Agent a first-priority
Lien on Indebtedness and Equity Interests held by them to secure the obligations
under the Loan Documents.

 

“Pricing Grid” means the table set forth below:

 

Leverage Ratio

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

   Eurodollar
Margin

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

    Prime Margin

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

    Commitment
Fee

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

 

< 0.50 to 1.0

   1.50 %   0.50 %   0.25 %

> 0.50 to 1.0 but < 1.0 to 1.0

   1.75 %   0.75 %   0.25 %

> 1.0 to 1.0 but < 1.50 to 1.0

   2.25 %   1.25 %   0.375 %

> 1.50 to 1.0

   2.75 %   1.75 %   0.50 %

 

“Prime”, 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 Prime Rate.

 

“Prime Rate” means, for any day, the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in
effect on such day 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
publicly announced as being effective.

 

“Recovery Event” means any settlement of or payment in excess of $500,000 in
respect of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of the Borrower or any Subsidiary.

 

“Refunded Swingline Loans” has the meaning set forth in Section 2.06.

 

“Register” has the meaning set forth in Section 10.04.

 

“Regulation S-X” means Regulation S-X of the Securities Act of 1933, as amended.

 

“Reinvestment Deferred Amount” means with respect to any Reinvestment Event, the
aggregate net cash proceeds received by the Borrower or any Wholly-Owned
Subsidiary in connection therewith that are not applied to prepay the Term Loans
as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event” means any Asset Sale or Recovery Event in respect of which
the Borrower has delivered a Reinvestment Notice.

 

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“Reinvestment Notice” means a written notice executed by a Responsible Officer
stating that no Event of Default has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary) intends and expects to
use all or a specified portion of the net cash proceeds of an Asset Sale or
Recovery Event to acquire or repair assets useful in its business.

 

“Reinvestment Prepayment Amount” means with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended prior
to the relevant Reinvestment Prepayment Date to acquire or repair assets useful
in the Borrower’s business.

 

“Reinvestment Prepayment Date” means with respect to any Reinvestment Event, the
earlier of (a) the date occurring one year after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire or repair assets useful in the Borrower’s business
with all or any portion of the relevant Reinvestment Deferred Amount.

 

“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, the holders of more than 50% of (a) until
the Effective Date, the Commitments then in effect and (b) thereafter, the sum
of (i) the aggregate unpaid principal amount of the Term Loans then outstanding
and (ii) the Total Revolving Commitments then in effect or, if the Revolving
Commitments have been terminated, the Total Revolving Extensions of Credit then
outstanding.

 

“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Officer” means the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.

 

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

 

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

 

17

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“Revolving Commitment” means, as to any Lender, the obligation of such Lender,
if any, to make Revolving Loans and participate in Swingline Loans and Letters
of Credit in an aggregate principal and/or face amount not to exceed the amount
set forth under the heading “Revolving Commitment” opposite such Lender’s name
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the Revolving
Commitments is $50,000,000.

 

“Revolving Commitment Period” means the period from and including the Effective
Date to the Revolving Termination Date.

 

“Revolving Extensions of Credit” means as to any Revolving Lender at any time,
an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender’s
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender’s Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.

 

“Revolving Lender” means each Lender that has a Revolving Commitment or that
holds Revolving Loans.

 

“Revolving Loan” has the meaning assigned to such term in Section 2.03.

 

“Revolving Percentage” means, as to any Revolving Lender at any time, the
percentage which such Lender’s Revolving Commitment then constitutes of the
Total Revolving Commitments or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender’s Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding, provided,
that, in the event that the Revolving Loans are paid in full prior to the
reduction to zero of the Total Revolving Extensions of Credit, the Revolving
Percentages shall be determined in a manner designed to ensure that the other
outstanding Revolving Extensions of Credit shall be held by the Revolving
Lenders on a comparable basis.

 

“Revolving Termination Date” means December 22, 2008.

 

“S&P” means Standard & Poor’s Rating Services.

 

“SEC Documents” means the Borrower Annual Report on Form 10-K for the year ended
December 31, 2004 and all forms, reports, schedules, statements and other
documents required to be filed by the Borrower under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, from and after
the filing thereof.

 

“Security Agreement” means the Security Agreement, substantially in the form of
Exhibit E, dated as of December 22, 2005, among the Borrower, the Subsidiaries
party thereto and the Administrative Agent, as amended, supplemented, restated
or otherwise modified from time to time, whereby the Borrower and the
Subsidiaries party thereto each grant to the Administrative Agent a
first-priority Lien on its personal property to secure the obligations under the
Loan Documents.

 

18

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“Security Documents” means the Security Agreement, the Pledge Agreement and each
other security agreement, document and instrument from time to time executed and
delivered to the Administrative Agent, pursuant to the terms of the Loan
Documents.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
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.

 

“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.

 

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

 

“Swingline Commitment” means the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.05 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.

 

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“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as the
lender of Swingline Loans.

 

“Swingline Loans” has the meaning assigned to such term in Section 2.05.

 

“Swingline Participation Amount” has the meaning assigned to such term in
Section 2.06.

 

“Syndication Agent” means LaSalle Bank National Association, in its capacity as
syndication agent hereunder.

 

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP.

 

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

 

“Term Lender” means each Lender that has a Term Commitment or that holds a Term
Loan.

 

“Term Loan” has the meaning assigned to such term in Section 2.01.

 

“Term Loan Borrowing” means a Borrowing comprised of Term Loans.

 

“Term Loan Commitment” means, with respect to each Lender, the commitment of
such Lender to make Term Loans hereunder as set forth on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender assumed its Term
Commitment, as applicable. The original aggregate amount of the Term Loan
Commitments is $50,000,000.

 

“Term Maturity Date” means December 22, 2008.

 

“Term Percentage” means, as to any Term Lender at any time, the percentage which
such Lender’s Term Commitment then constitutes of the aggregate Term Commitments
(or, at any time after the Effective Date, the percentage which the aggregate
principal amount of such Lender’s Term Loans then outstanding constitutes of the
aggregate principal amount of the Term Loans then outstanding).

 

“Total Revolving Commitments” means, at any time, the aggregate amount of the
Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit” means, at any time, the aggregate amount
of the Revolving Extensions of Credit of the Revolving Lenders outstanding at
such time.

 

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“Transactions” means the execution, delivery and performance by each of the Loan
Parties of each of the Loan Documents to which it is a party, the borrowing of
Loans and the use of the proceeds thereof.

 

“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 Prime Rate.

 

“Wholly-Owned Subsidiary” means a Subsidiary all the Equity Interests of which
(other than directors’ qualifying shares) are owned by the Borrower and/or one
or more other Wholly-Owned Subsidiaries.

 

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

 

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

 

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted 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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ARTICLE II.

 

The Credits

 

SECTION 2.01. Term Commitments. Subject to the terms and conditions set forth
herein, each Term Lender severally agrees to make a term loan (a “Term Loan”) to
the Borrower on the Effective Date in a principal amount equal to such Lender’s
Term Commitment. The Term Loans may from time to time be Eurodollar Loans or
Prime Loans or a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.02 and 2.07.
Immediately following the making of the Term Loans, the Term Commitments shall
be terminated on the Effective Date and shall not be reinstated.

 

SECTION 2.02. Procedure for Term Loan Borrowings. (a) The Borrower shall provide
the Administrative Agent an irrevocable written Borrowing Request (which notice
must by received by (x) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the Effective Date or
(y) in the case of a Prime Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the Effective Date), requesting that the Term
Lenders make the Term Loans on the Effective Date.

 

(b) Upon receipt of the Borrowing Request, the Administrative Agent shall
promptly notify each Term Lender thereof. Each Term Lender shall make the Term
Loan or Term Loans to be made by it hereunder on the Effective Date by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Term Lenders. The Administrative Agent will make such
Term 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 New York City and designated by the Borrower in the
Borrowing Request.

 

SECTION 2.03. Revolving Commitments.

 

(a) Subject to the terms and conditions set forth herein, each Revolving Lender
severally agrees to make revolving credit loans (“Revolving Loans”) to the
Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Revolving Lender’s Revolving Percentage of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline Loans then
outstanding, does not exceed the amount of such Lender’s Revolving Commitment.
During the Revolving Commitment Period the Borrower may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Loans may from time to time be Eurodollar Loans or Prime Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.04 and 2.07.

 

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(b) The Borrower (subject to the approval of its board of directors (or any
committee thereof)) and any one or more Lenders (including New Lenders) may, at
any time after the Effective Date, so long as no Default or Event of Default
shall have occurred and be continuing, agree that each such Lender shall
increase the amount of its Revolving Commitment (any Lender so increasing the
amount of its Revolving Commitment, an “Increasing Lender”) or obtain a new
Revolving Commitment by executing and delivering to the Administrative Agent an
Increased Revolving Facility Activation Notice specifying (i) the amount of such
increase and (ii) the applicable Increased Revolving Facility Effective Date.
Notwithstanding the foregoing, (i) the Total Revolving Commitments may not be
increased by more than $20,000,000 and (ii) each increase effected pursuant to
this paragraph shall be in a minimum amount of at least $3,000,000. No Lender
shall have any obligation to participate in any increase described in this
paragraph unless it agrees in writing to do so in its sole discretion.

 

(c) Any additional bank, financial institution or other entity which, with the
consent of the Borrower and the Administrative Agent (which consent shall not be
unreasonably withheld), elects to become a “Revolving Lender” under this
Agreement in connection with any transaction described in Section 2.03(b) shall
execute a New Lender Supplement (each, a “New Lender Supplement”), substantially
in the form of Exhibit F-1, whereupon such bank, financial institution or other
entity (a “New Lender”) shall become a Revolving Lender for all purposes and to
the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement.

 

(d) If, immediately prior to any increase pursuant to Section 2.03(b) above,
there are any Revolving Extensions of Credit outstanding, the Administrative
Agent with the consent of the Borrower, shall be permitted to adjust the
provisions hereof relating to borrowings, continuations and conversions,
Interest Periods and prepayments in order to effect within a reasonable period
of time ratable participation by each Increasing Lender and each New Lender with
the other Revolving Lenders in the outstanding Revolving Extensions of Credit,
including each tranche of the Revolving Loans. Any prepayment of Revolving Loans
that are Eurodollar Loans as a result of any such adjustments or otherwise shall
in any event be subject to the provisions of Section 2.16.

 

SECTION 2.04. Procedure for Revolving Loan Borrowing. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall provide the Administrative Agent
an irrevocable written Borrowing Request (which notice must by received by the
Administrative Agent (x) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the requested
Borrowing Date or (y) in the case of a Prime Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the requested Borrowing Date),
(provided that any such notice of a borrowing of Prime Loans under the Revolving
Facility to finance payments required by Section 3.05 may be given not later
than 10:00 a.m., New York City time, on the date of the proposed borrowing).
Each borrowing under the Revolving Commitments shall be in an amount equal to
(x) in the case of Prime Loans, $500,000 or an integral multiple of $100,000 in
excess of $500,000 (or, if the then aggregate Available Revolving Commitments
are less than $500,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $1,000,000 or an integral multiple of $500,000 in excess of $1,000,000;
provided, that the Swingline Lender may request, on behalf of the Borrower,
borrowings under the Revolving Commitments that are Prime Loans in other amounts
pursuant to Section 2.06.

 

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SECTION 2.05. Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans (“Swingline
Loans”) to the Borrower; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender’s other outstanding
Revolving Loans, may exceed the Swingline Commitment then in effect) and
(ii) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be Prime Loans only.

 

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Revolving Termination Date
and the first date after such Swingline Loan is made that is the 15th or last
day of a calendar month and is at least two Business Days after such Swingline
Loan is made; provided that on each date that a Revolving Loan is borrowed, the
Borrower shall repay all Swingline Loans then outstanding.

 

SECTION 2.06. Procedure for Swingline Borrowing, Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in a notice in respect
of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.

 

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one Business Day’s notice
given by the Swingline Lender no later than 12:00 Noon, New York City time,
request each Revolving Lender to make, and each Revolving Lender hereby agrees
to make, a Revolving Loan, in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the
“Refunded Swingline Loans”) outstanding on the date of such notice, to repay the
Swingline

 

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Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower’s accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.

 

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.06(b), one of the events described in Article VIII(h) or
VIII(i) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 2.06(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 2.06(b), purchase for cash an
undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the “Swingline Participation Amount”)
equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of
the aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.

 

(d) Whenever, at any time after the Swingline Lender has received from any
Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

 

(e) Each Revolving Lender’s obligation to make the Loans referred to in Section
2.06(b) and to purchase participating interests pursuant to Section 2.06(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Article V, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower,
any other Loan Party or any other Revolving Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

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SECTION 2.07. Interest Elections. (a) The initial Borrowings shall be of the
Types specified in the initial Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have initial Interest Periods as specified in the
initial Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowings to different Types or to continue such Borrowings 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 Borrowings, 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 Sections 2.02 or 2.04, as applicable, 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 in a form approved by the Administrative Agent and signed by the
Borrower.

 

(c) Each telephonic and written Interest Election Request shall specify the
following information:

 

(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 a Prime Borrowing or a Eurodollar
Borrowing; and

 

(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,

 

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unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to a Prime 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 a Prime Borrowing at the end of the Interest Period applicable thereto.

 

(f) 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 $1,000,000. At the time that each Prime Borrowing is
made, such Borrowing shall be in an aggregate amount that is not less than
$500,000. Borrowings of more than one Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.

 

(g) 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 Term
Maturity Date or Revolving Termination Date, as applicable.

 

SECTION 2.08. Repayment of Loans; Evidence of Debt.

 

(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Term Lender the aggregate principal amount of the
Term Loans in 12 consecutive quarterly installments of (i) $4,000,000, in the
case of each of the first 11 installments, each such installment to be payable
on the last day of each March, June, September and December commencing on
March 31, 2006 and ending on September 30, 2008 and (ii) $6,000,000, in the case
of the 12th installment, payable on the Term Maturity Date.

 

(b) The Borrower shall repay all outstanding Revolving Loans in full on the
Revolving Termination 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 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.

 

(e) The entries made in the accounts maintained pursuant to paragraph (a) or (b)
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.

 

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(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

SECTION 2.09. Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of the Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.

 

SECTION 2.10. Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay, without penalty, any Borrowing in whole or
in part, upon irrevocable notice delivered to the Administrative Agent by
telephone (confirmed by telecopy) no later than 11:00 a.m., New York City time,
three Business Days prior thereto, in the case of a Eurodollar Borrowing, and no
later than 11:00 a.m., New York City time, one Business Day prior thereto, in
the case of a Prime Borrowing, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or Prime Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.16. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are Prime Loans and Swingline Loans) accrued interest to
such date on the amount prepaid. Each optional partial prepayment of Term Loans
or Revolving Loans shall be in an amount that would be permitted in the case of
an advance of a Borrowing of Term Loans or Revolving Loans of the same Type as
provided in Sections 2.02 or 2.04, as applicable. Partial prepayments of
Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.

 

SECTION 2.11. Mandatory Prepayments. The following amounts shall be applied to
prepay the Term Loans:

 

(i) On the date on which the Borrower or any Wholly-Owned Subsidiary shall
receive cash consideration from the sale or issuance of any Equity Interests in
the Borrower or any Subsidiary (other than any such sale or

 

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issuance in connection with the exercise of options by employees, directors and
consultants for cash consideration of up to $3,000,000 in any fiscal year), 50%
of the net cash proceeds thereof; provided that the foregoing percentage shall
be reduced to (i) 25% if, on a pro forma basis after giving effect to such sale
or issuance, the Leverage Ratio on the date of such sale or issuance is not
greater than 1.0 to 1.0 and (ii) 0% if such Leverage Ratio is not greater than
0.5 to 1.0.

 

(ii) On the date any Indebtedness shall be issued or incurred by the Borrower or
any Wholly-Owned Subsidiary (excluding any Indebtedness incurred in accordance
with Section 7.01), an amount equal to 100% of the net cash proceeds thereof.

 

(iii) On the date the Borrower or any Wholly-Owned Subsidiary shall receive cash
consideration from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof, 100% of the net cash proceeds
thereof; provided, that, notwithstanding the foregoing, (i) the aggregate net
cash proceeds of Asset Sales that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $1,250,000 in any fiscal year
of the Borrower and (ii) on each Reinvestment Prepayment Date, an amount equal
to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment
Event shall be applied toward the prepayment of the Term Loans.

 

SECTION 2.12. Fees. (a) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates as set forth in the Fee letter and in
any other fee agreements with the Administrative Agent and to perform any other
obligations contained therein.

 

(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Revolving Lender a commitment fee (the “Commitment Fee”) for the period
from and including the date hereof to the last day of the Revolving Commitment
Period, computed at the Commitment Fee Rate on the average daily amount of the
Available Revolving Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears.

 

(c) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent. Fees paid shall not be refundable
under any circumstances.

 

SECTION 2.13. Interest.

 

(a) The Loans comprising each Prime Borrowing shall bear interest at the Prime
Rate plus the Applicable Rate.

 

(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 Rate.

 

(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

 

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well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% plus the rate applicable to Prime Loans as provided in
paragraph (a) of this Section.

 

(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and on the Term Maturity Date or Revolving
Termination Date, as applicable; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, 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 Borrowing
prior to the end of the current Interest Period therefor, accrued interest on
such Borrowing 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 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 Prime Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

SECTION 2.14. 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

 

(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 a Prime Borrowing.

 

SECTION 2.15. Increased Costs.

 

(a) If any Change in Law shall:

 

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

 

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(ii) impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;

 

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 of
participating in, or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

 

(b) If any Lender 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 capital or on the capital of such Lender’s holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender, to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

 

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender 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
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 to demand compensation pursuant
to this Section shall not constitute a waiver of such Lender’s right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’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 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any 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 Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, 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 2.19, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event.

 

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Such loss, cost or expense to any Lender shall be deemed to include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such breakage
event for the period from the date of such breakage event to the last day of the
Interest Period in effect (or that would have been in effect) for such
Eurodollar Loan over (ii) the amount of interest likely to be realized by such
Lender in redeploying the funds released or not utilized by reason of such
breakage event for such period, but such loss shall not, in any event, include
any lost profit or loss of applicable margin. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

 

SECTION 2.17. Taxes.

 

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder or under any Loan Document 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, or Lender
(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, and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or under any Loan Document (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; provided, however, that the Borrower
shall not be obligated to make payment pursuant to this Section in respect of
penalties, interest or expenses attributable to any Indemnified Taxes or Other
Taxes if (i) written demand for indemnity hereunder for such Indemnified Taxes
or Other Taxes has not been made by such Administrative Agent or Lender within
60 days from the date on which such Administrative Agent or Lender received
written notice of the imposition of such Indemnified Taxes or Other Taxes by the
relevant Governmental Authority, or (ii) such penalties, interest or expenses
are attributable to the gross negligence or the willful misconduct of such
Administrative Agent or Lender. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender, or by the Administrative
Agent on its own behalf or on behalf of a Lender (accompanied by official
receipts of the relevant Governmental Authority evidencing payment of
Indemnified Taxes or Other Taxes by Lender or Administrative Agent, a copy of
the return reporting such payment, or other evidence of such payment reasonably
satisfactory to the Borrower), shall be conclusive absent manifest error.

 

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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 Lender or Administrative Agent 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 or any other Loan Document 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 thereof.

 

(f) If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.17, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section 2.17(f) shall not be construed to require
the Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.

 

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each Loan Party shall make each payment required to be made by it hereunder
(whether of principal, interest, fees, or of amounts payable under Sections
2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City 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 270
Park Avenue, New York, New York, except that payments pursuant to Sections 2.15,
2.16 or 2.17 and 10.03 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 under
any Loan Document shall be made in dollars.

 

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(b) Each Borrowing by the Borrower from the Lenders hereunder, each payment by
the Borrower on account of any Commitment Fee and any reduction of the
Commitments of the Lenders shall be made pro rata according to the respective
Term Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.

 

(c) Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Term Loans shall be made pro rata according to
the respective outstanding principal amounts of the Term Loans then held by the
Term Lenders; provided that mandatory prepayments of the Term Loans shall be
applied, first, to the scheduled installments of principal due within 12 months
of the prepayment in direct order, and, then, pro rata to the remaining
installments of principal of the Term Loans. Amounts prepaid on account of the
Term Loans may not be reborrowed.

 

(d) Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Revolving Lenders.

 

(e) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, 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 then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

 

(f) 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 resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
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; 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 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.

 

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(g) 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 under any Loan Document 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, but shall not be
required to, in reliance upon such assumption, distribute to the Lenders, the
amount due. In such event, if the Borrower has not in fact made such payment,
then each of the Lenders severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender 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.

 

(h) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender’s share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Prime Loans
under the relevant Facility, on demand, from the Borrower.

 

(i) If any Lender shall fail to make any payment required to be made by it
pursuant to Sections 2.01, 2.03, 2.18(g), 2.18(h) or 10.03(c), 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.

 

SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.15, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Sections
2.15 or 2.17, as the case may be, in the future and (ii) would not subject

 

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such Lender to any unreimbursed cost or expense and would not otherwise be
materially disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender, with the prior written
approval of the Borrower, in connection with any such designation or assignment.
In addition, the Administrative Agent and each Lender shall take all reasonable
actions reasonably requested by the Borrower that are without material risk and
cost to such Administrative Agent or Lender, and consistent with the internal
policies of such Administrative Agent or Lender and applicable legal and
regulatory restrictions, in order to maintain all exemptions, if any, available
to it from withholding taxes (whether available by treaty or existing
administrative waiver) and otherwise to minimize any amounts payable by the
Borrower under Section 2.17.

 

(b) If any Lender requests compensation under Section 2.15, 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 2.17, 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 10.04), 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, 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, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

ARTICLE III.

 

Letters of Credit

 

SECTION 3.01. L/C Commitment.

 

(a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance
on the agreements of the other Revolving Lenders set forth in Section 3.04(a),
agrees to issue letters of credit (“Letters of Credit”) for the account of the
Borrower on any Business Day during the Revolving Commitment Period in such form
as may be approved from time to time by the Issuing Lender; provided that the
Issuing Lender shall have no obligation to issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Commitments
would be less than zero. Each Letter of Credit shall (i) be denominated in
Dollars and (ii) expire no later than the earlier of (x) the first anniversary
of its date of issuance and (y) the date that is five Business Days prior to the
Revolving Termination Date, provided that any Letter of Credit with a one-year
term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above).

 

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(b) The Issuing Lender shall not at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause the Issuing Lender or any
L/C Participant to exceed any limits imposed by, any applicable Requirement of
Law.

 

SECTION 3.02. Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).

 

SECTION 3.03. Fees and Other Charges.

 

(a) The Borrower will pay a fee on all outstanding Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility, shared ratably among the
Revolving Lenders and payable quarterly in arrears. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 0.25% per
annum on the undrawn and unexpired amount of each Letter of Credit, payable
quarterly in arrears.

 

(b) In addition to the foregoing fees, the Borrower shall pay or reimburse the
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.

 

SECTION 3.04. L/C Participations.

 

(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lender to issue Letters of Credit, each
L/C Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions set forth below,
for such L/C Participant’s own account and risk an undivided interest equal to
such L/C Participant’s Revolving Percentage in the Issuing Lender’s obligations
and rights under and in respect of each Letter of Credit and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant agrees with
the Issuing Lender that, if a draft is paid under any Letter of Credit for which
the Issuing Lender is not

 

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reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender’s address for notices specified herein an amount equal to
such L/C Participant’s Revolving Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed. Each L/C Participant’s obligation to
pay such amount shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such L/C Participant may have against the Issuing Lender, the
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Article V, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

 

(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.04(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to
Section 3.04(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Prime Loans under the Revolving Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.

 

(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section 3.04(a), the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.

 

SECTION 3.05. Reimbursement Obligation of the Borrower. If any draft is paid
under any Letter of Credit, the Borrower shall reimburse the Issuing Lender for
the amount of (a) the draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment, not later than 12:00 Noon, New York City time, on (i) the Business Day
that the Borrower receives notice of such draft, if such notice is received on
such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above
does not apply, the

 

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Business Day immediately following the day that the Borrower receives such
notice. Each such payment shall be made to the Issuing Lender at its address for
notices referred to herein in Dollars and in immediately available funds.
Interest shall be payable on any such amounts from the date on which the
relevant draft is paid until payment in full at the rate set forth in (x) until
the Business Day next succeeding the date of the relevant notice,
Section 2.13(a) and (y) thereafter, Section 2.13(c).

 

SECTION 3.06. Obligations Absolute. The Borrower’s obligations under this
Article III shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Section 3.05 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.

 

SECTION 3.07. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.

 

SECTION 3.08. Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Article III, the provisions of this Article III shall apply.

 

ARTICLE IV.

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that as of the date hereof
and as of the Effective Date:

 

SECTION 4.01. 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

 

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requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required. Schedule 4.01 sets forth the correct and complete
list of each Subsidiary indicating (a) its jurisdiction of organization, (b) its
ownership (by holder and percentage interest), (c) its business and primary
geographic scope of operation, (d) the gross revenues and total assets of such
Subsidiary and (e) whether such Subsidiary is a Material Subsidiary.

 

SECTION 4.02. Authorization; Enforceability. The Transactions to be entered by
each Loan Party are with such Loan Party’s corporate, partnership or limited
liability company powers and have been duly authorized by all necessary
corporate, partnership or limited liability company and, if required,
stockholder, partner or member action. Each Loan Document to which any Loan
Party is a party has been duly executed and delivered by such Loan Party and
constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

 

SECTION 4.03. 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, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Borrower or any of the 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 the Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of the Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.

 

SECTION 4.04. Financial Condition; No Material Adverse Change. (a) The Borrower
has heretofore furnished to the Lenders the consolidated balance sheet and the
related statements of income, stockholders’ equity and cash flows (i) as of and
for the fiscal years ended December 31, 2002, December 31, 2003 and December 31,
2004, reported on by Deloitte & Touche LLP, independent public accountants,
(ii) as of and for the fiscal quarter ended March 31, 2005, certified by its
chief financial officer, (iii) as of and for the fiscal quarter and the portion
of the fiscal year ended June 30, 2005, certified by its chief financial officer
and (iv) as of and for the fiscal quarter and the portion of the fiscal year
ended September 30, 2005, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clauses (ii), (iii) and (iv) above.

 

(b) The Borrower has heretofore furnished to the Lenders all financial
statements for completed or pending acquisitions that would be required under
Regulation S-X of the Securities Act of 1933, as amended (“Regulation S-X”) for
an offering of registered securities as of the date hereof.

 

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(c) The Borrower has heretofore furnished to the Lenders a pro forma
consolidated balance sheet of the Borrower and its Subsidiaries as at
September 30, 2005 and a pro forma statement of operations for the most recent
fiscal year and interim period and for the 12-month period ending on the last
day of such interim period, in each case adjusted to give effect to the
consummation of the Transactions as if the Transactions, with respect to the pro
forma balance sheet, had occurred on such date or with respect to the pro forma
statements of operations, had occurred on the first day of the most recently
completed fiscal year.

 

(d) Since December 31, 2004, there has been no material adverse change in the
business, results of operations, properties or financial condition of the
Borrower and the Subsidiaries, taken as a whole.

 

SECTION 4.05. Properties. (a) Each of the Borrower and the Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

 

(b) Each of the Borrower and the Subsidiaries owns, has the right to use 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 the 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.

 

SECTION 4.06. 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 the 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 or the Transactions.

 

(b) 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 the Subsidiaries (i) to the knowledge of
the Borrower, 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) to the knowledge of the Borrower, 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 4.07. Compliance with Laws and Agreements. Each of the Borrower and the
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.

 

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SECTION 4.08. Investment and Holding Company Status. Neither the Borrower nor
any of the 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 4.09. Taxes. Each of the Borrower and the 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 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 4.10. 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 Domestic Plan and Foreign 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 Domestic Plan and Foreign Plan, and the present value of all
accumulated benefit obligations of all underfunded Domestic Plans and Foreign
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 4.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the SEC Documents nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) 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, to the extent any such reports, financial
statements, certificates or other information was based upon or constitutes a
forecast or projection, the Borrower represents only that such reports,
financial statements, certificates or other information was prepared in good
faith based upon assumptions believed to be reasonable at the time, and it is
understood that actual results may differ from forecasts or projections.

 

SECTION 4.12. Security Documents. The Security Documents are effective to create
in favor of the Administrative Agent for its benefit and the ratable benefit of
the Lenders a legal, valid and enforceable perfected first-priority Lien on the
Collateral as security for the Obligations.

 

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SECTION 4.13. Solvency. Immediately after the consummation of the Transactions
(a) the fair value of the assets of each Loan Party at a fair valuation will
exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured, considering all financing
alternatives and potential asset sales reasonably available to such Loan Party;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured, considering all financing alternatives and potential asset sales
reasonably available to such Loan Party; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.

 

ARTICLE V.

 

Conditions

 

SECTION 5.01. Conditions to Initial Extension of Credit. The obligations of each
Lender to make the initial extensions of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Effective Date, of the following conditions
precedent:

 

(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party 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) The Administrative Agent (or its counsel) shall have received from each
Guarantor either (i) a counterpart of the Guarantee Agreement signed on behalf
of such party or (ii) written evidence reasonably satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of the Guarantee Agreement) that such Guarantor has signed a
counterpart of the Guarantee Agreement.

 

(c) The Administrative Agent (or its counsel) shall have received from each Loan
Party either (i) a counterpart of the Security Agreement signed on behalf of
such Loan Party or (ii) written evidence reasonably satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of the Security Agreement) that such Loan Party has signed a
counterpart of the Security Agreement.

 

(d) The Administrative Agent (or its counsel) shall have received from each Loan
Party either (i) a counterpart of the Pledge Agreement signed on behalf of such
party or (ii) written evidence reasonably satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of the
Pledge Agreement) that such Loan Party has signed a counterpart of the Pledge
Agreement.

 

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(e) To the extent not previously delivered or filed in connection with the
Existing Credit Agreement, the Administrative Agent shall have received (i) all
documents and instruments, including Uniform Commercial Code financing
statements and patent, trademark and copyright assignments required by law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded so that the Administrative Agent, for its benefit and the ratable
benefit of the Lenders, shall have a legal, valid and enforceable perfected
first-priority Lien on the Collateral, except to the extent contemplated by the
Security Agreement to be delivered after the Effective Date, (ii) searches of
the Uniform Commercial Code, patent, trademark and copyright searches made with
respect to the Loan Parties and evidence that all Liens indicated by such
filings not otherwise permitted hereunder shall have terminated pursuant to
appropriate release documentation, and (iii) available certificates or other
instruments representing all Indebtedness and Equity Interests constituting
Collateral, together with instruments of transfer with respect thereto endorsed
in blank.

 

(f) The Administrative Agent shall have received favorable written opinions
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of (i) Willkie Farr & Gallagher LLP, counsel for the Loan Parties, in the
form of Exhibit B1, (ii) Potter Anderson & Corroon LLP, special Delaware counsel
for the Loan Parties in the form of Exhibit B2, (iii) Mesch, Clark, Rothschild,
P.C., special Arizona counsel for the Loan Parties, in the form of Exhibit B3
and (iv) Fulbright & Jaworski L.L.P., special California counsel for the Loan
Parties, in the form of Exhibit B4. The Borrower hereby requests such counsel to
deliver such opinion.

 

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

 

(h) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
this Section 5.01.

 

(i) The Administrative Agent shall have received certified complete and correct
copies of each of the financial statements referred to in Section 4.04.

 

(j) The Lenders shall have received projections through 2008.

 

(k) Pro forma Consolidated EBITDA of the Borrower for the latest 12-month period
ended on September 30, 2005 shall equal at least $38,000,000 from planned
continuing operations, and the Borrower shall provide support for such
calculation of a nature that is satisfactory to the Administrative Agent.

 

(l) The pro forma Leverage Ratio shall not exceed 2.00 to 1.00 as of
September 30, 2005 (calculated using the most recent pro forma balance sheet
delivered

 

44

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pursuant to Section 4.04 and the pro forma statement of operations for the
12-month period ending on September 30, 2005), and the Borrower shall provide
support for such calculation of a nature that is satisfactory to the
Administrative Agent.

 

(m) The Administrative Agent shall have received evidence of the repayment of
substantially all existing Indebtedness of the Borrower and its Subsidiaries
(including Indebtedness under the Existing Credit Agreement), on terms
satisfactory to the Administrative Agent, and the termination of all commitments
and Liens related thereto.

 

(n) There shall not exist any action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental authority that has or could reasonably be expected to have a
material adverse effect on the Borrower and its Subsidiaries, taken as a whole,
or any of the transactions contemplated hereby.

 

(o) To the extent not previously delivered in connection with the Existing
Credit Agreement, the Administrative Agent shall have received certificates or
other evidence of casualty insurance policies with appropriate loss payable
endorsements indicating assignment of proceeds thereunder to the Administrative
Agent for its benefit and the ratable benefit of the Lenders and certificates or
other evidence of liability insurance with appropriate endorsements indicating
the coverage of the Administrative Agent for its benefit and the ratable benefit
of the Lenders as an additional insured.

 

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

 

(q) All governmental consents and third party approvals necessary to be obtained
in connection with the financing contemplated hereby shall have been obtained on
satisfactory terms and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on the Transactions.

 

(r) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of the Effective Date.

 

(s) At the time of and immediately after giving effect to the Loans pursuant to
Article II, no Default shall have occurred and be continuing.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on
December 30, 2005 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

 

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SECTION 5.02. Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:

 

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct on and as of such date as if made on and as of such date.

 

(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

 

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.02 have been satisfied.

 

ARTICLE VI.

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other obligations payable under the Loan
Documents shall have been paid in full, the Borrower covenants and agrees with
the Lenders that:

 

SECTION 6.01. 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, the
audited consolidated and, if requested, consolidating balance sheets of the
Borrower and the Subsidiaries and related statements of operations,
stockholders’ equity and, in the case of the consolidated statements, 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 such consolidated financial
statements reported on by Deloitte & Touche 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 the Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;

 

(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, the consolidated and, if requested,
consolidating balance sheets and related statements of operations, stockholders’
equity and, in the case of the consolidated statements, cash flows as of the end
of and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as

 

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presenting fairly in all material respects the financial condition and results
of operations of the Borrower and the Subsidiaries in accordance with GAAP
consistently applied, subject to year-end audit adjustments and the absence of
footnotes;

 

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a Compliance Certificate (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 Section 7.13
through Section 7.17, inclusive, and (iii) stating whether any change in GAAP or
in the application thereof has occurred since the date of the audited financial
statements referred to in Section 4.04 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) 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; and

 

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

 

SECTION 6.02. 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 the 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.

 

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

 

SECTION 6.03. Existence; Conduct of Business.

 

(a) The Borrower will, and will cause each of the Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 7.03.

 

(b) The Borrower will, and will cause each of the Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect the rights, licenses, permits, privileges 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 7.03.

 

SECTION 6.04. Payment of Obligations. The Borrower will, and will cause each of
the Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could reasonably be expected to result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 6.05. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of the Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.

 

SECTION 6.06. Books and Records; Inspection Rights. The Borrower will, and will
cause each of the Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and requirements of
law are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of the 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 (but not, except
during the continuance of an Event of Default, more than two times per fiscal
year).

 

SECTION 6.07. Compliance with Laws. The Borrower will, and will cause each of
the Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

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SECTION 6.08. Use of Proceeds. The proceeds of the Loans will be used only for
the payment of certain existing Indebtedness of the Borrower and its
Subsidiaries (including under the Existing Credit Agreement), to pay fees and
expenses related to the Transactions and for the working capital needs and
general corporate purposes of the Borrower and its Subsidiaries (including
acquisitions). 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.

 

SECTION 6.09. Additional Material Subsidiaries.

 

(a) Promptly upon any Domestic Subsidiary becoming a Material Subsidiary, the
Borrower will (i) cause such Domestic Subsidiary to guarantee the obligations
under the Loan Documents, pursuant to a Guarantee substantially in the form of
the Guarantee Agreement or otherwise reasonably satisfactory to the
Administrative Agent, (ii) cause the obligations under the Loan Documents to be
secured be a perfected first-priority lien on all of the personal property of
such Domestic Subsidiary, pursuant to the Security Agreement, the Pledge
Agreement and other documents and instruments consistent with those delivered
under Sections 5.01(c), (d) and (e), (iii) cause all outstanding Equity
Interests of such Domestic Subsidiary owned directly or indirectly by any Loan
Party to be subject to a perfected first-priority Lien, pursuant to the Pledge
Agreement and (iv) deliver such proof of corporate, partnership or limited
liability company action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered pursuant to Article V or as the
Administrative Agent shall have reasonably requested.

 

(b) Promptly upon any Foreign Subsidiary becoming a Material Subsidiary, the
Borrower and each other Material Subsidiary will (i) cause all of the Equity
Interests of such Foreign Subsidiary to be pledged and delivered (or, in the
case of adverse tax consequences for the Borrower or the Subsidiaries, (x) if
such Equity Interests are held directly by a Domestic Subsidiary, cause 65% of
the voting Equity Interests of such Foreign Subsidiary to be pledged and
delivered and (y) if such Equity Interests are held directly by a Foreign
Subsidiary, cause the highest percentage of such Equity Interests that shall not
create adverse tax consequences for the Borrower or the Subsidiaries to be
pledged and delivered) to the Administrative Agent for its benefit and the
ratable benefit of the Lenders, pursuant to the Pledge Agreement and
(ii) deliver such proof of corporate, partnership or limited liability company
action, incumbency of officers, opinions of counsel and other documents as is
consistent with those delivered pursuant to Article V or as the Administrative
Agent shall have reasonably requested.

 

SECTION 6.10. Further Assurances. The Borrower will, and will cause each of the
Subsidiaries to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), which may be
required under any applicable law, or which the Administrative Agent may
reasonably request, to cause the Administrative Agent, for the benefit of itself
and the ratable benefit of the Lenders, to maintain a legal, valid and
enforceable perfected first priority Lien on the Collateral (subject to the
limitations, exceptions and qualifications set forth in the Loan

 

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Documents), all at the expense of the Borrower. The Borrower will, and will
cause each of the Subsidiaries to, provide to the Administrative Agent, from
time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.

 

ARTICLE VII.

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees and other obligations payable under the Loan
Documents have been paid in full, the Borrower covenants and agrees with the
Lenders that:

 

SECTION 7.01. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:

 

(a) Indebtedness created under the Loan Documents;

 

(b) Indebtedness existing on the date hereof and set forth in Schedule 7.01, but
not any extensions, renewals or replacements of any such Indebtedness;

 

(c) Indebtedness of the Borrower to any Wholly-Owned Subsidiary and of any
Wholly-Owned Subsidiary to the Borrower or any other Wholly-Owned Subsidiary;
provided that, upon request of the Required Lenders, such Indebtedness shall be
evidenced by a promissory note in form and substance reasonably acceptable to
the Required Lenders;

 

(d) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 120
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (d) shall not exceed $2,000,000 at any time outstanding;

 

(e) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) shall not exceed $2,000,000 at any
time outstanding;

 

(f) Indebtedness of the Borrower or any Subsidiary as an account party in
respect of trade letters of credit;

 

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(g) Indebtedness under completion guarantees, performance or surety bonds or
with respect to workers’ compensation claims, in each case incurred in the
ordinary course of business consistent with past practice;

 

(h) Indebtedness under or in respect of Swap Agreements that are not speculative
in nature;

 

(i) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business, so long as such
Indebtedness is extinguished within three Business Days of the incurrence
thereof;

 

(j) Indebtedness incurred by the Borrower or any Subsidiary constituting
reimbursement obligations with respect to letters of credit issued in respect of
workers compensation claims, health, disability or other employee benefits or
property, casualty or liability insurance or self-insurance or other
Indebtedness with respect to reimbursement-type obligations regarding workers
compensation claims; provided, that (i) upon the drawing of such letters of
credit or the incurrence of such Indebtedness, such obligations are reimbursed
within 30 days following such drawing or incurrence and (ii) such letters of
credit are not provided to secure the repayment of other Indebtedness of the
Borrower or any Subsidiary;

 

(k) other Indebtedness of the Borrower and the Subsidiaries in an aggregate
principal amount not exceeding $2,000,000 at any time outstanding; and

 

(l) Consolidated Subordinated Indebtedness.

 

SECTION 7.02. Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:

 

(a) Permitted Encumbrances;

 

(b) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 7.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof;

 

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

 

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(d) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (d) of Section 7.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 120 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (iv) such security interests shall not apply to
any other property or assets of the Borrower or any Subsidiary; and

 

(e) any Lien created under any Loan Document.

 

SECTION 7.03. 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 sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Wholly-Owned Subsidiary in a transaction in which
the surviving entity is a Wholly-Owned Subsidiary, (iii) any Subsidiary may
sell, transfer, lease or otherwise dispose of its assets to the Borrower or to a
Wholly-Owned Subsidiary, (iv) any Subsidiary (other than a Loan Party) may
liquidate or dissolve or sell, transfer, lease or otherwise dispose of its
assets in compliance with Section 7.07 if the Borrower determines in good faith
that such liquidation, dissolution, sale, transfer, lease or other disposition
is in the best interests of the Borrower and is not materially disadvantageous
to the Lenders, (v) any Wholly-Owned Subsidiary may merge into any Person in
order to consummate a Permitted Acquisition permitted by Section 7.04(f) so long
as after giving effect thereto the Person surviving such merger is a
Wholly-Owned Subsidiary; provided that any such merger involving a Person that
is not a Wholly-Owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 7.04.

 

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

 

SECTION 7.04. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any Subsidiary 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 Interest, 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) any assets of any
Person that is not the Borrower or a Subsidiary constituting a business unit (or
any material portion thereof), except:

 

(a) Permitted Investments;

 

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(b) investments by the Borrower and the Subsidiaries existing on the date hereof
and set forth on Schedule 7.04;

 

(c) investments made by the Borrower and the Subsidiaries in the Equity
Interests of any Subsidiary; provided that such Equity Interests shall be
pledged pursuant to the Pledge Agreement to the extent required by this
Agreement;

 

(d) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary; provided that all such loans
or advances made by a Loan Party shall be evidenced by a promissory note pledged
pursuant to the Pledge Agreement;

 

(e) Guarantees constituting Indebtedness permitted by Section 7.01 and
Guarantees by the Borrower of Indebtedness of any Subsidiary permitted by
Section 7.01;

 

(f) Permitted Acquisitions so long as the aggregate cash consideration
(including the concurrent repayment or assumption on any indebtedness and
related investments) paid by the Borrower and the Subsidiaries in respect of any
such Permitted Acquisition and all prior Permitted Acquisitions (other than any
Permitted Acquisition described in clause (b) of the definition thereof) during
the same fiscal quarter of the Borrower and the prior three fiscal quarters of
the Borrower since the Effective Date does not exceed $25,000,000;

 

(g) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

 

(h) the Borrower and the Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined without
regard to any write-downs or write-offs of such loans and advances) shall not
exceed $1,000,000 in the case of cash loans and advances at any time and
advances in the ordinary course of business of payroll payments to employees;

 

(i) the Borrower may enter into Swap Agreements that are not speculative in
nature;

 

(j) the Borrower and the Subsidiaries may acquire and hold receivables owing to
it, if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms (including the dating of
receivables) of the Borrower or such Subsidiary;

 

(k) the Borrower and the Subsidiaries may acquire and hold non-cash
consideration issued by the purchaser of assets in connection with a sale of
such assets to the extent permitted by this Agreement;

 

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(l) investments by the Borrower or any Subsidiary after the Effective Date in
joint ventures that do not exceed $500,000 in any single transaction or
$1,000,000 in the aggregate at any time outstanding; and

 

(m) in addition to investments permitted by paragraphs (a) through (l) above,
additional investments, loans and advances by the Borrower and the Subsidiaries
so long as the aggregate amount invested, loaned or advanced pursuant to this
paragraph (m) (determined without regard to any write-downs or write-offs of
such investments, loans and advances but taking into account repayments,
redemptions, return of capital, etc.) does not exceed $2,000,000 in the
aggregate at any one time outstanding.

 

SECTION 7.05. Swap Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which the Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of the Borrower
or any Subsidiary or Consolidated Subordinated Indebtedness, and (b) Swap
Agreements entered into in order to effectively cap, collar or exchange interest
rates (from fixed to floating rates, from one floating rate to another floating
rate or otherwise) with respect to any interest-bearing liability or investment
of the Borrower or any Subsidiary.

 

SECTION 7.06. Restricted Payments.

 

(a) The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except (i) the Borrower may declare and pay dividends with respect to its common
stock payable solely in additional shares of its common stock, (ii) any
Subsidiary may declare and pay dividends ratably to its equity holders and
(iii) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Borrower and the Subsidiaries.

 

(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) so long as no Default shall
have occurred or would result therefrom, payment of regularly scheduled interest
and principal payments as and when due in respect of any Indebtedness (subject
to any subordination provisions thereof); (iii) prepayment at the consummation
of any Permitted Acquisition of Indebtedness assumed in connection with such
Permitted Acquisition; and (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 and otherwise permitted under the Loan Documents.

 

SECTION 7.07. Disposition of Assets. The Borrower will not, and will not permit
any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including Equity Interests, except:

 

(a) sales of inventory and used or surplus equipment in the ordinary course of
business;

 

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(b) the sale and leaseback of the real property acquired in the Dynamic
Acquisition;

 

(c) sales, transfers and dispositions permitted by Section 7.03;

 

(d) the sale, transfer or sale and leaseback of the real property acquired in
the PictureArts Acquisition; and

 

(e) sales, transfers and dispositions of assets (other than Equity Interests of
a Subsidiary) that are not permitted by any other clause of this Section 7.07 so
long as the fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this clause (e) shall not exceed $1,000,000 during
any four consecutive fiscal quarters of the Borrower.

 

SECTION 7.08. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business, (b) transactions
between or among the Borrower and the Wholly-Owned Subsidiaries not involving
any other Affiliate (in each case to the extent not otherwise prohibited by
other provisions of this Agreement) and (c) Restricted Payments permitted by
Section 7.06.

 

SECTION 7.09. Restrictive Agreements. The Borrower will not, and will not permit
any of Subsidiary 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 Equity Interests 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 of the Loan Documents, (ii) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 7.09 (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 provisions in
leases and other contracts entered into in the ordinary course of business
consistent with past practice restricting the assignment thereof, (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 restricting the assignment thereof.

 

SECTION 7.10. Issuances of Equity Interests by Subsidiaries. The Borrower will
not permit any Subsidiary to issue any additional Equity Interests other than
(a) to a Loan Party, (b) if such Subsidiary is not a Loan Party, to a
Wholly-Owned Subsidiary, (c) any such issuance that does not change the
Borrower’s direct or indirect percentage ownership interest in such Subsidiary
and (d) any such issuance that is permitted pursuant to Section 7.03 or
Section 7.04 or required by any agreement listed on Schedule 7.10 hereto.

 

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SECTION 7.11. Amendment of Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify, waive or exercise (a) any of its
rights under its certificate of incorporation, by-laws, partnership agreement,
operating agreement or other organizational documents, in each case in any
respect materially adverse to the Lenders or (b) any of the terms of any
Consolidated Subordinated Indebtedness, in each case in any respect materially
adverse to the Lenders (for the purposes of this Section 7.11(b) and without
limitation of the scope of the definition of “materially adverse”, any amendment
to increase the principal amount, the interest rate or fees or other amounts
payable, to advance the dates upon which payments are made or to alter any
subordination provision (or any definition related thereto) shall be deemed to
be “materially adverse”).

 

SECTION 7.12. Changes in Fiscal Periods. The Borrower will neither permit its
fiscal year to end on a day other than December 31 nor change its method of
determining fiscal quarters.

 

SECTION 7.13. Leases. The Borrower will not, and will not permit any Subsidiary
to, be or become liable as a lessee under any lease of real or personal property
(other than existing leases and renewals of existing leases) if the annual
rentals under such lease would exceed $1,000,000.

 

SECTION 7.14. Capital Expenditures. The Borrower will not permit Consolidated
Capital Expenditures for any fiscal year of the Borrower to exceed $2,000,000;
provided, that the amount of Consolidated Capital Expenditures permitted in any
fiscal year commencing with the fiscal year ending December 31, 2006 shall be
increased by the amount of unused permitted Consolidated Capital Expenditures
for the immediately preceding fiscal year. Consolidated Capital Expenditures
made pursuant to this Section 7.14 shall be deemed made first in respect of
amounts carried over from the previous fiscal year.

 

SECTION 7.15. Leverage Ratio. The Borrower will not permit the Leverage Ratio as
determined as of the end of any fiscal quarter of the Borrower ending on or
about any date set forth below to be equal to or greater than the ratio set
forth opposite such date:

 

Fiscal Quarter End Date

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

 

Leverage Ratio

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

December 31, 2005   2.75 to 1.00 March 31, 2006   2.50 to 1.00 June 30, 2006  
2.25 to 1.00 September 30, 2006 and thereafter   2.00 to 1.00

 

SECTION 7.16. No Net Losses. The Borrower will not permit Consolidated Adjusted
Net Income to be less than $0 in each of any two fiscal quarters of the Borrower
during any period of four fiscal quarters commencing with the fiscal quarter
ending December 31, 2005.

 

SECTION 7.17. Net Worth. The Borrower will not permit Consolidated Net Worth at
any time to be less than the sum of (a) $175,000,000, plus (b) the aggregate sum
of the Fiscal Quarter Net Worth Increase Amounts calculated for each completed
fiscal quarter of the Borrower commencing with the fiscal quarter ending
December 31, 2005.

 

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ARTICLE VIII.

 

Events of Default

 

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

 

(a) the Borrower shall fail to pay any principal of any Loan 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 payable under any Loan Document, when and as the same shall become
due and payable and such default shall continue unremedied for a period of three
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 any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been false or misleading in any material
respect when made, deemed made or furnished;

 

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Sections 6.01, 6.02(a), 6.03(a) or 6.08 or in Article
VII;

 

(e) the Borrower or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days;

 

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

 

(g) 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 (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

 

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets,

 

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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 Material Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

 

(i) the Borrower or any Material 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 (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material 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;

 

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

 

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $1,000,000 (net of amounts covered by independent third party
insurance as to which the insurer has been notified of such judgment or order
and does not deny coverage and of amounts covered by an indemnity from a Person
that, in the reasonable judgment of the Administrative Agent, is creditworthy)
shall be rendered against the Borrower, any Material 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;

 

(l) 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 an immediate liability of the Borrower
and the Subsidiaries in an aggregate amount exceeding $1,000,000;

 

(m) (i) any Security Document shall for any reason cease to create in favor of
the Administrative Agent for its benefit and the ratable benefit of the Lenders
a legal, valid and enforceable perfected first-priority Lien on the Collateral
as security for the obligations under the Loan Documents; or (ii) any Loan
Document executed by any Loan Party shall at any time for any reason cease to be
in full force and effect or shall be declared null and void, or the validity or
enforceability thereof shall be contested by the Borrower or any Subsidiary or
the Borrower or any Subsidiary shall deny in writing it has any further
liability or obligation thereunder;

 

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(n) the subordination provisions relating to any Consolidated Subordinated
Indebtedness shall fail to be enforceable by the Administrative Agent or the
Lenders in accordance with the terms thereof or the obligations under the Loan
Documents shall fail to constitute “senior indebtedness” (or any other similar
term) under any document, instrument or other agreement evidencing any such
Consolidated Subordinated Indebtedness;

 

(o) the Required Lenders shall have reasonably determined that a material
adverse change has occurred in the business, results of operations, properties
or financial condition of the Borrower and the Subsidiaries taken as a whole
which materially impairs the ability of the Borrower to perform its obligations
under the Loan Documents; or

 

(p) a Change in Control shall occur;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately,
(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
(iii) enforce its rights under the Guarantee Agreement and the Security Document
on behalf of itself as Administrative Agent and the Lenders; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued under the Loan Documents (other than
under a Swap Agreement), shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

 

ARTICLE IX.

 

The Administrative Agent

 

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

 

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

 

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The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. 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 by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 10.02), and
(c) except as expressly set forth in the Loan Documents, 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 the
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 10.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with 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 herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V 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 sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

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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 and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

 

Each Lender acknowledges 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 other Loan Document, any
related agreement or any document furnished hereunder or thereunder.

 

Subject to the foregoing provisions of this Article IX, the Administrative Agent
shall, on behalf of the Lenders, (i) execute each Loan Document on behalf of the
Lenders, (ii) hold and apply the Collateral, and the proceeds thereof, at any
time received by it in accordance with the provisions of the Loan Documents,
(iii) exercise any and all rights, powers and remedies of the Lenders under the
Loan Documents, including the giving of any consent or waiver or the entering
into of any amendment, subject to the provisions of Section 10.02, (iv) execute,
deliver and file financing statements, assignments and other such agreements,
and possess instruments on behalf of the Lenders and (v) in the event of
acceleration of the obligations of the Borrower hereunder, exercise the rights
of the Lenders under the Loan Documents upon and at the direction of the
Required Lenders.

 

ARTICLE X.

 

Miscellaneous

 

SECTION 10.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

 

(i) if to the Borrower, to it at Jupitermedia Corporation, 23 Old Kings Highway
South, Darien, Connecticut 06820, Attention of Christopher J. Baudouin (Telecopy
No. 203-655-4686);

 

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(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 277 Park
Avenue, 16th Floor, New York, New York 10172, Attention of Anthony Galea, with a
copy to JPMorgan Chase Bank, N.A., 2 Corporate Drive, Suite 730, Shelton,
Connecticut, 06484, Attention of David Nackley (Telecopy No. 203-944-8496); and

 

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

 

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

(c) 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 10.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders under the 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 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
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.

 

(b) Neither any Loan Document (other than a Swap Agreement) nor any provision
thereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or
by the Borrower and the Administrative Agent with the consent of the Required
Lenders; 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 reduce the rate of interest thereon, or

 

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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 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) release any Guarantor from its Guarantee
under the Guarantee Agreement or limit its liability in respect of such
Guarantee or the Guarantee Agreement or its obligation to enter into and provide
a Guarantee pursuant to the Guarantee Agreement, without the written consent of
each Lender, (v) release of the Lien of the Administrative Agent on all or
substantially all of the Collateral, without the written consent of each Lender,
(vi) change Sections 2.18(b) through (f) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender, (vii) amend, modify or waive any provision of Section 2.05 or
Section 2.06 without the written consent of the Swingline Lender, (viii) amend,
modify or waive any provision of Article III without the written consent of the
Issuing Lender or (ix) 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 hereunder without the prior written consent of the Administrative Agent.
Notwithstanding the foregoing, the Administrative Agent is hereby irrevocably
authorized by each Lender to take any action requested by the Borrower having
the effect of releasing any Collateral or guarantee obligations to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document or that has been consented to in accordance with this Section 10.02.

 

SECTION 10.03. 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 preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated and (ii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made hereunder, including all such reasonable out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.

 

(b) The Borrower shall indemnify the Administrative Agent 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
reasonable 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 any Loan Document 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 the
use of the proceeds therefrom,

 

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(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrower or any Subsidiary, or any
Environmental Liability related in any way to the Borrower or any Subsidiary, 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 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 or from a breach of this Agreement by such Indemnitee.

 

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent such Lender’s
Aggregate Exposure 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 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, any
Loan Document or any agreement or instrument contemplated thereby, the
Transactions, any Loan or the use of the proceeds thereof.

 

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

 

SECTION 10.04. 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, 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,
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 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 Commitments
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 an
Event of Default has occurred and is continuing, any other assignee;

 

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(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund; and

 

(C) the Issuing Lender; provided that no consent of the Issuing Lender shall be
required for an assignment of all or any portion of a 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, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 (in the case of the Term
Facility) and $2,000,000 (in the case of the Revolving Facility), in each case
unless each of the Borrower and the Administrative Agent otherwise consent,
provided that no such consent of the Borrower shall be required if an Event of
Default has occurred and is continuing;

 

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

 

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

 

(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 2.15, 2.16, 2.17, and 10.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 10.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

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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 Commitments of, and principal amount of the
Loans 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 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 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; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Sections 2.01, 2.03, 2.18(g) or
10.03(c), the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other 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 and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(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 2.15, 2.16
and 2.17 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to

 

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paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.18(g) as
though it were a Lender.

 

(ii) A Participant shall not be entitled to receive any greater payment under
Sections 2.15 or 2.17 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 2.17 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 2.17(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 without limitation 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 10.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties thereto and
shall survive the execution and delivery of the Loan Documents and the making of
any Loans, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Administrative Agent 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 any Loan Document is
outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17, and 10.03 and Article
IX 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 Commitments or the termination of
this Agreement or any provision hereof.

 

SECTION 10.06. Counterparts; Integration; 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. The Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 5.01, 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.

 

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SECTION 10.07. 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 10.08. 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 of and all the obligations of the Borrower now or hereafter existing
under any Loan Document held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. 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 10.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

 

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

 

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

 

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

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SECTION 10.10. 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 ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (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 10.11. 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 10.12. Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and 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 under any
Loan Document or any suit, action or proceeding relating to this Agreement or
the enforcement of rights thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
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
Administrative Agent 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 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. 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 10.13. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed

 

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the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

 

SECTION 10.14. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the 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.

 

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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.

 

JUPITERMEDIA CORPORATION By  

/s/ Christopher J. Baudouin

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

Name:   Christopher J. Baudouin Title:  

Executive Vice President and Chief

Financial Officer

JPMORGAN CHASE BANK, N.A., as

Administrative Agent and as a Lender

By  

/s/ David F. Gibbs

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Name:   David F. Gibbs Title:   Senior Vice President

LASALLE BANK NATIONAL ASSOCIATION,

as Syndication Agent and as a Lender

By  

/s/ Tricia L. Somoles

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

Name:   Tricia L. Somoles Title:    

KEYBANK NATIONAL ASSOCIATION, as

Documentation Agent and as a Lender

By  

/s/ Jennifer A. O’Brien

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

Name:   Jennifer A. O’Brien Title:    

 

SIGNATURE PAGE TO CREDIT AGREEMENT