Exhibit 10.32

EXECUTION COPY

 

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CREDIT AGREEMENT

dated as of

February 28, 2007

among

CDI CORP.

and

CDI CORPORATION,

as Borrowers,

The GUARANTORS Party Hereto,

The LENDERS Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

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TABLE OF CONTENTS

 

     Page

    ARTICLE I

   1

    DEFINITIONS

   1

SECTION 1.01. Defined Terms

   1

SECTION 1.02. Terms Generally

   16

SECTION 1.03. Accounting Terms; GAAP

   17

    ARTICLE II

   17

    THE CREDITS

   17

SECTION 2.01. The Commitments

   17

SECTION 2.02. Loans and Borrowings.

   19

SECTION 2.03. Requests for Borrowings.

   19

SECTION 2.04. Funding of Borrowings.

   20

SECTION 2.05. Interest Elections.

   21

SECTION 2.06. Termination and Reduction of the Commitments.

   22

SECTION 2.07. Repayment of Loans; Evidence of Debt.

   23

SECTION 2.08. Prepayment of Loans.

   23

SECTION 2.09. Fees.

   24

SECTION 2.10. Interest.

   24

SECTION 2.11. Alternate Rate of Interest

   25

SECTION 2.12. Increased Costs.

   26

SECTION 2.13. Break Funding Payments

   27

SECTION 2.14. Taxes.

   27

SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

   28

SECTION 2.16. Mitigation Obligations; Replacement of Lenders.

   30

    ARTICLE III

   31

    GUARANTEE

   31

SECTION 3.01. Guarantee

   31

SECTION 3.02. Obligations Unconditional

   31

SECTION 3.03. Reinstatement

   32

SECTION 3.04. Subrogation

   32

SECTION 3.05. Remedies

   32

SECTION 3.06. Instrument for the Payment of Money

   33

SECTION 3.07. Continuing Guarantee

   33

SECTION 3.08. Rights of Contribution

   33

SECTION 3.09. General Limitation on Guarantee Obligations

   34

 

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    ARTICLE IV

   34

    REPRESENTATIONS AND WARRANTIES

   34

SECTION 4.01. Organization; Powers

   34

SECTION 4.02. Authorization; Enforceability

   34

SECTION 4.03. Governmental Approvals; No Conflicts

   34

SECTION 4.04. Financial Condition; No Material Adverse Change.

   35

SECTION 4.05. Properties.

   35

SECTION 4.06. Litigation and Environmental Matters.

   35

SECTION 4.07. Compliance with Laws and Contractual Obligations

   36

SECTION 4.08. Investment Company Act Status

   36

SECTION 4.09. Taxes

   36

SECTION 4.10. ERISA

   36

SECTION 4.11. Disclosure

   37

SECTION 4.12. Use of Credit

   37

SECTION 4.13. Liens

   37

    ARTICLE V

   37

    CONDITIONS

   37

SECTION 5.01. Conditions of Initial Credit Extensions

   37

SECTION 5.02. Each Credit Event

   38

    ARTICLE VI

   39

    AFFIRMATIVE COVENANTS

   39

SECTION 6.01. Financial Statements and Other Information

   39

SECTION 6.02. Notices of Material Events

   40

SECTION 6.03. Existence; Conduct of Business

   41

SECTION 6.04. Payment of Taxes and Other Obligations

   41

SECTION 6.05. Maintenance of Properties

   41

SECTION 6.06. Maintenance of Insurance

   41

SECTION 6.07. Books and Records

   41

SECTION 6.08. Inspection Rights

   41

SECTION 6.09. Compliance with Laws

   42

SECTION 6.10. Use of Proceeds

   42

SECTION 6.11. Additional Subsidiary Guarantors

   42

    ARTICLE VII

   42

    NEGATIVE COVENANTS

   42

SECTION 7.01. Subsidiary Indebtedness

   42

SECTION 7.02. Liens

   43

SECTION 7.03. Mergers, Consolidations, Etc.

   44

 

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SECTION 7.04. Dispositions

   44

SECTION 7.05. Lines of Business

   45

SECTION 7.06. Investments and Acquisitions

   45

SECTION 7.07. Restricted Payments

   46

SECTION 7.08. Transactions with Affiliates

   47

SECTION 7.09. Restrictive Agreements

   47

SECTION 7.10. Swap Agreements

   48

SECTION 7.11. Financial Covenants.

   48

SECTION 7.12. Modifications of Organizational Documents

   48

    ARTICLE VIII

   48

    EVENTS OF DEFAULT

   48

    ARTICLE IX

   51

    THE ADMINISTRATIVE AGENT

   51

    ARTICLE X

   53

    MISCELLANEOUS

   53

SECTION 10.01. Notices

   53

SECTION 10.02. Waivers; Amendments.

   53

SECTION 10.03. Expenses; Indemnity; Damage Waiver.

   54

SECTION 10.04. Successors and Assigns.

   56

SECTION 10.05. Survival

   58

SECTION 10.06. Counterparts; Integration; Effectiveness

   59

SECTION 10.07. Severability

   59

SECTION 10.08. Right of Setoff

   59

SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.

   60

SECTION 10.10. WAIVER OF JURY TRIAL

   60

SECTION 10.11. Headings

   60

SECTION 10.12. Confidentiality

   61

SECTION 10.13. USA PATRIOT Act

   62

SECTION 10.14. Authorization of Company

   62

 

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SCHEDULE 1.01   – Commitments    SCHEDULE 1.02   – Immaterial Subsidiaries   
SCHEDULE 4.06(a)   – Litigation    SCHEDULE 4.06(b)   – Environmental Matters   
SCHEDULE 7.01   – Existing Indebtedness    SCHEDULE 7.02   – Existing Liens   
SCHEDULE 7.06   – Existing Investments    SCHEDULE 7.09   – Restrictive
Agreements    SCHEDULE 10.01   – Addresses for Notices   

EXHIBIT A   -  Form of Assignment and Assumption EXHIBIT B   -  Form of Note
EXHIBIT C   -  Form of Guarantee Assumption Agreement EXHIBIT D   -  Form of
Opinion of Counsel to the Loan Parties EXHIBIT E   -  Form of Opinion of Special
New York Counsel to      JPMorgan Chase Bank, N.A.

 

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CREDIT AGREEMENT, dated as of February 28, 2007, among CDI CORP., a Pennsylvania
Corporation, CDI CORPORATION, a Pennsylvania corporation, the GUARANTORS party
hereto, the LENDERS party thereto and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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

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

“Acquisition” mean the acquisition by the Company or any other Loan Party of
(a) all of the Capital Stock of any other Person, (b) all or substantially all
of the assets of any other Person or (c) assets constituting one or more
business units of any other Person.

“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 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMCB, 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.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 0.50%. Any change in the Alternate Base Rate due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that, if the
Commitments have terminated or expired, the Applicable Percentages shall be
determined on the basis of the percentage of the total Credit Exposures
represented by such Lender’s Credit Exposure.

 

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“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the facility fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurodollar Spread” or “Facility Fee Rate”, respectively, based
upon the Consolidated Leverage Ratio as of the most recent determination date
(or, at any time prior to the delivery of the Company’s consolidated financial
statements for the fiscal year ending on or nearest to December 31, 2006, as of
September 30, 2006):

 

Consolidated Leverage
Ratio:  

ABR

Spread

   

Eurodollar

Spread

   

Facility

Fee Rate

  Category 1
Greater than or equal to
2.00:1.00   0.225 %   1.225 %   0.225 % Category 2
Greater than or equal to
1.50:1.00 but less than
2.00:1.00   0 %   1.00 %   0.20 % Category 3
Greater than or equal to
1.00:1.00 but less than
1.50:1.00   0 %   0.80 %   0.15 % Category 4
Less than 1.00:1.00   0 %   0.575 %   0.125 %

For purposes of the foregoing, (i) the Consolidated Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Company based upon the
Company’s consolidated financial statements delivered pursuant to
Section 6.01(a) or (b) (and the related compliance certificate delivered
pursuant to Section 6.01(c)) and (ii) each change in the Applicable Rate
resulting from a change in the Consolidated Leverage Ratio shall be effective
during the period commencing on and including the date three Business Days after
delivery to the Administrative Agent of such consolidated financial statements
and compliance certificate indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the

 

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Consolidated Leverage Ratio shall be deemed to be in Category 1 (A) at any time
that an Event of Default has occurred and is continuing or (B) if the Company
fails to deliver the consolidated financial statements (and related compliance
certificate) required to be delivered by it pursuant to
Section 6.01(a), (b) and/or (c), as the case may be, during the period from the
expiration of the time for delivery thereof specified in such sections until
such financial statements and compliance certificate are delivered.

“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.

“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.

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

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

“Borrower” means the Company or the Subsidiary Borrower, as applicable.

“Borrowing” means (a) all ABR Loans made, converted or continued on the same
date or (b) all Eurodollar Loans as to which the same Interest Period is in
effect.

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

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; 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 Expenditures” means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by the Company or any of its Subsidiaries to acquire or construct fixed assets,
plant and equipment (including renewals, improvements and replacements, but
excluding tenant improvements and leasehold allowances) during such period
computed in accordance with GAAP.

 

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“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.

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalent” means:

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

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

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market or similar 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 or any member
nation of the European Union which has a combined capital and surplus and
undivided profits of not less than $500,000,000 (or the equivalent in foreign
currencies);

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

(e) money market funds that (i) comply with the criteria set forth in SEC 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; and

(f) debt securities with average maturities of one year or less from the date of
acquisition thereof issued or fully guaranteed by any State of the United States
of America having a rating of at least A by S&P and A2 by Moody’s.

“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 Exchange Act and the rules of the SEC thereunder as in effect on
the date hereof) (other than the Permitted

 

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Holders) of shares representing a majority of the aggregate ordinary voting
power represented by the issued and outstanding Capital Stock of the Company or
(b) the occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Company by Persons who were neither (i) nominated by
the board of directors of the Company nor (ii) appointed by directors so
nominated.

“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 2.12(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.

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

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender’s Commitment is set
forth on Schedule 1.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Commitments is $45,000,000.

“Commitment Termination Date” means February 27, 2008.

“Company” means CDI Corp., a Pennsylvania corporation.

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) Consolidated Interest Expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs and (e) any extraordinary, unusual
or non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, non-cash losses on sales of assets outside of the
ordinary course of business), and minus, (a) to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (i) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (ii) any other non-cash income, (b) any
cash payments made during such period in respect of items described in
clause (e) above subsequent to the fiscal quarter in which the relevant non-cash
expenses or losses were reflected as a charge in the statement of Consolidated
Net Income and

 

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(c) to the extent not already deducted in calculating such Consolidated Net
Income for such period, any cash payments made in respect of item (1) on
Schedule 4.06(b), all as determined on a consolidated basis. For the purposes of
calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of the
Consolidated Leverage Ratio, (x) if at any time during such Reference Period the
Company or any Subsidiary shall have made any Disposition of property or series
of related Dispositions of property constituting an operating unit that yields
gross proceeds to the Company or any of its Subsidiaries in excess of
$5,000,000, the Consolidated EBITDA for such Reference Period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
property that is the subject of such Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (y) if during such Reference
Period the Company or any Subsidiary shall have made an Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Acquisition occurred on the first day of
such Reference Period.

“Consolidated Fixed Charge Coverage Ratio” means, at any date, the ratio of
(a) Consolidated EBITDA for the period of four consecutive fiscal quarters of
the Company ended on or most recently ended prior to such date, plus, without
duplication and to the extent reflected as a charge in the statement of
Consolidated Net Income for such period, Consolidated Lease Expenses for such
period, minus cash Capital Expenditures for such period to (b) the sum of
(i) Consolidated Interest Expense for such period plus (ii) Consolidated Lease
Expenses for such period.

“Consolidated Interest Expense” means, for any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Company and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Company and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP),
minus interest income of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.

“Consolidated Lease Expenses” means, for any period, the aggregate amount of
fixed and contingent rentals payable by the Company or any Subsidiary for such
period with respect to operating leases of real and personal property,
determined on a consolidated basis in accordance with GAAP.

“Consolidated Leverage Ratio” means, at any date, the ratio of (a) the aggregate
principal amount of all Indebtedness of the Company and its Subsidiaries (which,
for avoidance of doubt, shall not include any intercompany Indebtedness between
any of such entities) on such day to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters of the Company ended on or most recently ended
prior to such date.

“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of the Company and its Subsidiaries, determined on a consolidated basis in
accordance

 

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with GAAP; provided that there shall be excluded (a) the income (or loss) of any
Person (other than a Subsidiary of the Company) in which the Company or any of
its Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Company or such Subsidiary in the form of
dividends or similar distributions and (b) the undistributed earnings of any
Subsidiary of the Company (other than a Loan Party) to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.

“Consolidated Net Worth” means, at any date, the sum of all amounts that would,
in conformity with GAAP, be included on a consolidated balance sheet of the
Company and its Subsidiaries under stockholders’ equity at such date.

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

“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.

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

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

“Disclosed Matters” means the actions, suits and proceedings disclosed in
Schedule 4.06(a) and the environmental matters disclosed in Schedule 4.06(b).

“Disposition” means, with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof
(excluding the sale by the Company of its own Capital Stock).

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

“Domestic Subsidiary” means any Subsidiary of the Company organized or
incorporated under the laws of any jurisdiction within the United States of
America.

“Effective Date” means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees or injunctions issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, the management,
release or threatened release of any Hazardous Material or to health and safety
matters related to exposure to any Hazardous Material.

 

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“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company 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 Rights” means, with respect to any Person, any subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including
any shareholders’ or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of Capital Stock of any class or type of such Person.

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

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

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

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

 

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

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“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 any Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed on any Lender by the United
States of America and (c) in the case of a Non-U.S. Lender (other than an
assignee pursuant to a request by the Company under Section 2.16(b)), any
withholding tax that is imposed on amounts payable to such Non-U.S. Lender at
the time such Non-U.S. Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Non-U.S. Lender’s failure to
comply with Section 2.14(e), except to the extent that such Non-U.S. 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 applicable
Borrower with respect to such withholding tax pursuant to Section 2.14(a).

“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.

“Foreign Subsidiary” means any Subsidiary of the Company that is not a Domestic
Subsidiary.

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

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

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of)

 

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such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment thereof, (b) to purchase
or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement
substantially in the form of Exhibit C executed and delivered by a Domestic
Subsidiary that, pursuant to Section 6.11, is required to become a “Subsidiary
Guarantor” hereunder.

“Guaranteed Obligations” has the meaning set forth in Section 3.01.

“Guarantors” means (a) each Domestic Subsidiary of the Company that is listed
under the caption “Subsidiary Guarantors” on the signature pages hereof and
(b) each other Domestic Subsidiary of the Company that shall become a Subsidiary
Guarantor pursuant to Section 6.11.

“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.

“Immaterial Subsidiary” means (a) as of the Effective Date, any Subsidiary
disclosed in Schedule 1.02 and (b) at any time thereafter, any Subsidiary
designated as such by the Borrower in a certificate delivered by the Borrower to
the Administrative Agent (and which designation has not been rescinded in a
subsequent certificate of the Borrower delivered to the Administrative Agent),
provided that (i) no Subsidiary shall be (or may be designated as) an Immaterial
Subsidiary if it has aggregate assets or revenues of more than 10% of the
consolidated assets or revenues of the Company and its Subsidiaries,
(ii) neither the assets of, nor the aggregate revenues of, all Immaterial
Subsidiaries may exceed 20% of the consolidated assets or revenues of the
Company and its Subsidiaries, in each case determined as of the end of (or, with
respect to such revenues, for the period of four fiscal quarters ending with)
the fiscal quarter or fiscal year most recently ended for which financial
statements are available and (iii) neither Todays Staffing Inc. nor Management
Recruiters International Inc. may be designated as Immaterial Subsidiary.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property

 

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acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances and (k) the
liquidation value of all mandatorily redeemable preferred Capital Stock of such
Person; provided that the term “Indebtedness” shall not include accounts payable
of less than one year arising in the ordinary course of business. 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 a Borrower to convert or continue
a Borrowing in accordance with Section 2.05.

“Interest Payment Date” means (a) with respect to any ABR Loan, each Quarterly
Date and (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable thereto and, in the case of any Eurodollar Loan with an
Interest Period of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at intervals of three-months’ duration
after the first day of such Interest Period.

“Interest Period” means, 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, as the applicable 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 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.

“Investment” means, by any Person, (a) the amount paid or committed to be paid,
or the value of property or services contributed or committed to be contributed,
by such Person for or in connection with the acquisition by such Person of any
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person and (b) the amount of any advance, loan or
extension of credit by such Person, to any other Person, or guaranty or other
similar obligation of such Person with respect to any Indebtedness of such

 

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other Person, and (without duplication) any amount committed to be advanced,
loaned, or extended by such Person to any other Person, or any amount the
payment of which is committed to be assured by a guaranty or similar obligation
by such Person for the benefit of, such other Person; provided that the term
“Investment” shall not include (i) extensions of credit in the nature of
accounts receivable or note receivables arising from the sale of goods and
services in the ordinary course of business and (ii) the endorsement, in the
ordinary course of collection, of instruments payable to a Person or its order.

“JPMCB” means JPMorgan Chase Bank, N.A.

“Lender” means the Persons listed on Schedule 1.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption. As of the Effective Date, JPMCB is the only Lender hereunder.

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

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

“Loan Documents” means, collectively, this Agreement, the promissory notes (if
any) executed and delivered pursuant to Section 2.07(e) and each Guarantee
Assumption Agreement.

“Loan Parties” means the Borrowers and the Guarantors.

“Loans” means the loans made by the Lenders to the Borrowers pursuant to
Section 2.01.

 

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“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X
of the Board.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the Company
and its Subsidiaries taken as a whole, (b) the ability of the Loan Parties to
perform their respective obligations hereunder and under the other Loan
Documents or (c) the validity or enforceability of this Agreement or any other
Loan Document or the rights or remedies of the Administrative Agent and the
Lenders hereunder or thereunder.

“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
Company and its Subsidiaries in an aggregate principal amount exceeding
$10,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Company or any Subsidiary in respect of any
Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Company or such Subsidiary would be required
to pay if such Swap Agreement were terminated at such time.

“Material Subsidiary” means any Subsidiary other than an Immaterial Subsidiary.

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

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

“Non-U.S. Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

“Obligations” means, collectively, (a) all of the Indebtedness, liabilities and
obligations of any Loan Party to the Administrative Agent or the Lenders arising
under the Loan Documents, in each case whether fixed, contingent (including, in
the case of any Guarantor, the Obligations of such Guarantor under Article III),
now existing or hereafter arising, created, assumed, incurred or acquired, and
whether before or after the occurrence of any Event of Default under
clause (h) or (i) of Article VIII and including any obligation or liability in
respect of any breach of any representation or warranty and all post-petition
interest and funding losses, whether or not allowed as a claim in any proceeding
arising in connection with such an event, (b) all obligations of any Loan Party
owing to any Lender or any Affiliate of any Lender under any treasury management
services agreement, any service terms or any service agreements, including
electronic payments service terms and/or automated clearing house agreements,
and all overdrafts on any account which any Loan Party maintains with any Lender
or any Affiliate of any Lender and (c) all obligations of any Loan Party owing
to any Lender or any Affiliate of any Lender under (i) interest rate swap
agreements (whether from fixed to floating or from floating to fixed), interest
rate cap agreements and interest rate collar agreements, (ii) other agreements
or arrangements designed to manage interest rates or interest rate risk and
(iii) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates or commodity prices.

 

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

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

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

“Permitted Holders” means Walter Garrison and his descendants and/or trusts for
their benefit and any other Person Controlled by any of the foregoing.

“Permitted Liens” 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, landlords’, 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; (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 Company or
any Subsidiary; and (g) leases (including subleases) entered into in the
ordinary course of business by the Company or any Subsidiary as lessor that does
not interfere with the ordinary conduct of business of the Company or any
Subsidiary; provided that the term “Permitted Liens” shall not include any Lien
securing Indebtedness.

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

“Plan” means any employee pension benefit plan (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 Company or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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

 

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“Quarterly Dates” means the last Business Day of March, June, September and
December, in each year, the first of which shall be the first such day after the
date hereof.

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

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

“Required Lenders” means, at any time, Lenders having Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Credit
Exposures and unused Commitments at such time; provided that, if at any time
there shall be only one Lender hereunder, “Required Lenders” shall mean such
Lender.

“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, chief
financial officer, controller or general counsel of the Company, but in any
event, with respect to financial matters, the chief financial officer of the
Company.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock of the Company
or any of its Subsidiaries, 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 Capital Stock of the Company or any option, warrant or other right to
acquire any such Capital Stock of the Company.

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

“SEC” means the Securities and Exchange Commission, or any regulatory body that
succeeds to the functions thereof.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration,

 

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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. Unless otherwise specified,
“Subsidiary” means a Subsidiary of the Company.

“Subsidiary Borrower” means CDI Corporation, a Pennsylvania corporation.

“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 Company or any
Subsidiary shall be a Swap Agreement.

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

“Transactions” means the execution, delivery and performance by each Loan Party
of this Agreement and the other Loan Documents to which such Loan Party is
intended to be a party, and the borrowing of Loans hereunder and the use of
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 Alternate Base Rate.

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

SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without

 

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limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Company notifies the Administrative Agent that the Company 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 Company 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. To enable the ready and consistent
determination of compliance with the covenants set forth in Article VII, the
Company will not permit the fiscal year of the Company to end on a day other
than December 31.

ARTICLE II

THE CREDITS

SECTION 2.01. The Commitments.

(a) Loans. Subject to the terms and conditions set forth herein, each Lender
agrees to make Loans to any of the Borrowers from time to time during the
Availability Period in an aggregate principal amount that will not result in
(i) such Lender’s Credit Exposure exceeding such Lender’s Commitment or (ii) the
total Credit Exposures exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Loans.

(b) Joint and Several Obligations of Borrowers. The Borrowers are interdependent
for their operational and financial needs. Each Borrower (the “Joint and Several
Borrowers”) jointly and severally irrevocably and unconditionally accepts, not
merely as a surety

 

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but also as a co-debtor, joint and several liability with the other Joint and
Several Borrower with respect to the payment and performance of all of the
Obligations under the Loan Documents, it being the intention of the parties
hereto that all the obligations of the Joint and Several Borrowers under the
Loan Documents shall be the joint and several obligations of each Joint and
Several Borrower without preferences or distinction among them, and each Joint
and Several Borrower further agrees that if any of the Obligations is not paid
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise), the Joint and Several Borrowers will, jointly and
severally, promptly pay the same. All the Joint and Several Borrowers
acknowledge and agree that the delivery of funds to any Borrower under this
Agreement shall constitute valuable consideration and reasonably equivalent
value to all the Joint and Several Borrowers for the purpose of binding them and
their assets on a joint and several basis for the obligations hereunder. The
joint and several obligations of each Joint and Several Borrower hereunder are
of payment and not of collection and are independent of the obligations of any
other Borrower and a separate action or actions may be brought against a
Borrower whether or not action is brought against any other Borrower. The
Administrative Agent may enforce this Agreement and the other Loan Documents
against any Borrower without first making demand upon or instituting collection
proceedings against any other Borrower. Each Joint and Several Borrower hereby
waives promptness, diligence, notice of acceptance and any other notice with
respect to the obligations of any other Borrower and any requirement that any
Lender or the Administrative Agent protect, secure, perfect or insure any
security interest or Lien, or any property subject thereto, or exhaust any right
or take any action against any other Borrower or entity.

The unconditional liability of each Joint and Several Borrower for the
Obligations of the other Borrower shall not be impaired by any event whatsoever,
including, but not limited to, the merger, consolidation, dissolution, cessation
of business or liquidation of any other Borrower; the financial decline or
bankruptcy of any other Borrower; the failure of any other party to guarantee
the Obligations or to provide collateral therefor; the Lenders’ compromise or
settlement with or without release of any other Borrower; the Administrative
Agent’s release of any collateral for the Obligations, with or without notice to
any Borrower; the Administrative Agent’s or the Lenders’ failure to file suit
against any Borrower (regardless of whether such Borrower is becoming insolvent,
is believed to be about to leave the state or jurisdiction or any other
circumstance); the Administrative Agent’s or the Lenders’ failure to give any
Borrower notice of default; the unenforceability of the obligations against any
other Borrower or any other Loan Party due to bankruptcy discharge,
counterclaim, or for any other reason; the Administrative Agent’s or the
Lenders’ failure to undertake or exercise diligence in collection efforts
against any party or property; the termination of any relationship of any
Borrower with any other Borrower, including, but not limited to, any
relationship of commerce or ownership; any Borrower’s use of the credit extended
for any purpose whatsoever. Each Joint and Several Borrower agrees not to seek
payment directly or indirectly from any other Borrower or any other Loan Party
through a claim of indemnity, contribution, or otherwise with respect to the
Obligations, until all of the Obligations has been repaid in full and the
Commitments have terminated. In any action or proceeding involving any state
corporate law, or any state or Federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of any
Joint and Several Borrower would otherwise be held or determined to be void,
invalid or unenforceable, or subordinated to the claims of any other

 

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creditors, on account of the amount of its liability, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Joint and Several Borrower, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

SECTION 2.02. Loans and Borrowings.

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

(b) Type of Loans. Subject to Section 2.11, each Borrowing by any Borrower shall
be comprised entirely of ABR Loans or of Eurodollar Loans as such Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement.

(c) Minimum Amounts; Limitation on Number of Borrowings. Each Eurodollar
Borrowing shall be in an aggregate amount of $2,000,000 or a larger multiple of
$100,000. Each ABR Borrowing shall be in an aggregate amount equal to $100,000
or a larger multiple of $100,000; provided that an ABR Borrowing may be in an
aggregate amount that is equal to the entire unused amount of the total
Commitments. 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.

(d) Limitations on Interest Periods. Notwithstanding any other provision of this
Agreement, no Borrower shall be entitled to request (or to elect to convert to
or continue as a Eurodollar Borrowing) any Eurodollar Borrowing if the Interest
Period requested with respect thereto would end after the Commitment Termination
Date.

SECTION 2.03. Requests for Borrowings.

(a) Notice by the Borrowers. To request a Borrowing, a Borrower shall notify the
Administrative Agent of such request by telephone (i) in the case of a
Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of
the proposed Borrowing Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery, telecopy or e-mail
to the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by such Borrower.

 

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(b) Content of Borrowing Requests. Each telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

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

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

(iv) in the case of a Eurodollar Borrowing, the Interest Period therefor, which
shall be a period contemplated by the definition of the term “Interest Period”
and permitted under Section 2.02(d); and

(v) the location and number of the applicable Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.04.

(c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

(d) Failure to Elect. If no election as to the Type of a Borrowing is specified,
then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, the requested
Borrowing shall be made instead as an ABR Borrowing.

SECTION 2.04. Funding of Borrowings.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the applicable
Borrower by promptly crediting the amounts so received, in like funds, to an
account of such Borrower designated by such Borrower in the applicable Borrowing
Request.

(b) Presumption by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and such Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon,

 

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for each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of such Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

SECTION 2.05. Interest Elections.

(a) Elections by the Borrowers. The Loans constituting each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the applicable Borrower may
elect to convert such Borrowing to a Borrowing of a different Type or to
continue such Borrowing as a Borrowing of the same Type and, in the case of a
Eurodollar Borrowing, may elect Interest Periods, all as provided in this
Section. The applicable Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

(b) Notice of Elections. To make an election pursuant to this Section, the
applicable Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.03 if such 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, telecopy or e-mail to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by such Borrower.

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

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

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

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a 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” and
permitted under Section 2.02(d).

 

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

(d) Notice by the Administrative Agent to the Lenders. 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) Failure to Elect; Events of Default. If a Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Company, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and
(ii) unless repaid, each Eurodollar Borrowing shall be converted to an
ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.06. Termination and Reduction of the Commitments.

(a) Scheduled Termination. Unless previously terminated, the Commitments shall
terminate on the Commitment Termination Date.

(b) Voluntary Termination or Reduction. The Company may at any time terminate,
or from time to time reduce, the Commitments; provided that (i) each reduction
of the Commitment pursuant to this Section shall be in an amount that is
$5,000,000 or a larger multiple of $1,000,000 and (ii) the Company shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.08, the total Credit
Exposures would exceed the total Commitments. The Company shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under this paragraph (b) at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Company pursuant to this Section shall be irrevocable;
provided that a notice of such termination may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Company (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Commitments shall be permanent.

 

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SECTION 2.07. Repayment of Loans; Evidence of Debt.

(a) Repayment. The Borrowers hereby unconditionally promise to pay to the
Administrative Agent for the account of each Lender the full outstanding
principal amount of such Lender’s Loans, and each such Loan shall mature, on the
Commitment Termination Date.

(b) Maintenance of Records by Lenders. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
each 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.

(c) Maintenance of Records by the Administrative Agent. 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 each Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for account of the
Lenders and each Lender’s share thereof.

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

(e) Promissory Notes. Any Lender may request that Loans made by it to the
Borrowers be evidenced by a promissory note of the Borrowers. In such event, the
Borrowers, at their own expense, 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 substantially in
the form of Exhibit B, and such note shall be evidence of such Loans (and all
amounts payable in respect thereof). 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 2.08. Prepayment of Loans.

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

(b) Notices, Etc. The applicable Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy or email) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City
time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal

 

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amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.06, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.06. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in such Borrowing and (unless the applicable
Borrower shall otherwise direct) shall be made, first, to ABR Loans and, second,
to Eurodollar Loans. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.

SECTION 2.09. Fees.

(a) Facility Fee. The Borrowers agree to pay to the Administrative Agent for the
account of each Lender a facility fee, which shall accrue at the Applicable Rate
on the daily amount of the Commitment of such Lender (whether used or unused)
during the period from and including the Effective Date to but excluding the
date on which such Commitment terminates; provided that, if such Lender
continues to have any Credit Exposure after its Commitment terminates, then such
facility fee shall continue to accrue on the daily amount of such Lender’s
Credit Exposure from and including the date on which its Commitment terminates
to but excluding the date on which such Lender ceases to have any Credit
Exposure. Accrued facility fees shall be payable in arrears on the last day of
March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any facility fees accruing after the date on which the
Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

(c) Administrative Agent Fees. The Borrowers agree to pay to the Administrative
Agent, for its own account, fees (if any) payable in the amounts and at the
times separately agreed upon between the Borrowers and the Administrative Agent.

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

SECTION 2.10. Interest.

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

(b) Eurodollar Loans. 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.

 

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

(d) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

(e) Computation. All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for any 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 for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Eurodollar Loans
included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company 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 the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

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SECTION 2.12. Increased Costs.

(a) Increased Costs Generally. 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

(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 or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the applicable 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) Capital Requirements. 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 Borrowers 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) Certificates from Lenders. 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 (and
the determination of the amount or amounts in reasonable detail) shall be
delivered to the Borrowers and shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. 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 Borrowers shall
not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies the Borrowers 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 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

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SECTION 2.13. 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 (regardless of whether such notice may be revoked under
Section 2.08(b) and is revoked in accordance therewith) or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by any Borrower pursuant to Section 2.16(b),
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section (and the determination of the
amount or amounts in reasonable detail) shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.

SECTION 2.14. Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if a 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) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

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

(c) Indemnification by the Borrowers. Each 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 such Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted

 

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on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability (and the basis for such payment or
liability) delivered to a Borrower by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, such
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) Non-U.S. Lenders. Any Non-U.S. Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such 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 such Borrower as will permit such payments to be
made without withholding or at a reduced rate.

(f) Refunds. 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 a Borrower or with respect to which a Borrower
has paid additional amounts pursuant to this Section, it shall pay over such
refund to such Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by such Borrower under this Section 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 such Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
such 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 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 Company, any Subsidiary or any other Person.

SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) Payments by the Borrowers. Each Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees, or of amounts
payable under Section 2.12, 2.13 or 2.14, or otherwise) or under any other Loan
Document (except as otherwise expressly provided therein) 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

 

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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 an account maintained with the Administrative Agent as
notified to the Borrowers and the Lenders, except those payments pursuant to
Sections 2.12, 2.13, 2.14 and 10.03, which shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder and under any other Loan Document shall be made in Dollars.

(b) Application of Insufficient Payments. 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.

(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each
Borrowing shall be made from the Lenders, pro rata according to the amounts of
the respective Commitments and shall be allocated pro rata among the Lenders
according to the amounts of their respective Commitments (in the case of the
making of Loans) or their respective Loans that are to be included in such
Borrowing (in the case of conversions and continuations of Loans), (ii) each
payment of facility fees under Section 2.09 shall be made for account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.06 shall be applied to the Commitments, pro rata according to
the respective Commitments of the Lenders; (iii) each payment or prepayment of
principal of Loans by any Borrower shall be made for account of the Lenders pro
rata according to the respective unpaid principal amounts of the Loans held by
such Lenders; and (iv) each payment of interest on Loans by any Borrower shall
be made for account of the Lenders pro rata according to the amounts of interest
on such Loans then due and payable to such Lenders.

(d) Sharing of Payments by Lenders. 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, as
applicable, 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, as applicable, 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, as applicable;
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 Borrowers pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a

 

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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 Company or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each 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 such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

(e) Presumptions of Payment. Unless the Administrative Agent shall have received
notice from any Borrower prior to the date on which any payment is due to the
Administrative Agent for account of the Lenders hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event, if such 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.

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

SECTION 2.16. Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.12, or if a Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.12, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.14, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrowers may, at their sole expense

 

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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 Borrowers 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 Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.12 or payments required to be made pursuant to Section 2.14, 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 Borrowers to require such assignment and delegation cease to
apply.

ARTICLE III

GUARANTEE

SECTION 3.01. Guarantee. Each Guarantor hereby jointly and severally guarantees
to the Lenders and the Administrative Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations of each Borrower, in each case
strictly in accordance with the terms thereof (such obligations being herein
collectively called the “Guaranteed Obligations”). The Guarantors hereby further
jointly and severally agree that if any Borrower shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

SECTION 3.02. Obligations Unconditional. The obligations of the Guarantors under
Section 3.01 are absolute and unconditional and joint and several, irrespective
of the value, genuineness, validity, regularity or enforceability of the
obligations of the other Loan Parties under this Agreement or any other
agreement or instrument referred to herein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter or impair the
liability of the Guarantors hereunder, which shall remain absolute and
unconditional as described above:

(i) at any time or from time to time, without notice to the Guarantors, the time
for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

 

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(ii) any of the acts mentioned in any of the provisions of this Agreement or any
other agreement or instrument referred to herein shall be done or omitted;

(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be modified, supplemented or amended in
any respect, or any right under this Agreement or any other agreement or
instrument referred to herein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or

(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or any other agreement or instrument referred to
herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.

SECTION 3.03. Reinstatement. The obligations of each Guarantor under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the other Borrowers in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Administrative Agent and each Lender on demand for all
reasonable costs and expenses (including fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

SECTION 3.04. Subrogation. Each Guarantor hereby agrees that, until the payment
and satisfaction in full of all Guaranteed Obligations and the expiration and
termination of the Commitments of the Lenders under this Agreement, it shall not
exercise any right or remedy arising by reason of any performance by it of its
guarantee in Section 3.01, whether by subrogation or otherwise, against the
Company or any other guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.

SECTION 3.05. Remedies. Each Guarantor agrees that, as between such Guarantor
and the Lenders, the obligations of the Borrowers under this Agreement may be
declared to be forthwith due and payable as provided in Article VIII (and shall
be deemed to

 

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have become automatically due and payable in the circumstances provided in
Article VIII) for purposes of Section 3.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against any Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by any Borrower) shall forthwith become due and payable by such Guarantor for
purposes of Section 3.01.

SECTION 3.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Article constitutes an instrument for
the payment of money, and consents and agrees that each Lender and the
Administrative Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
proceed by motion for summary judgment in lieu of complaint pursuant to N.Y.
Civ. Prac. L&R § 3213.

SECTION 3.07. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

SECTION 3.08. Rights of Contribution. The Guarantors hereby agree, as between
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any Guaranteed
Obligations, then each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Guarantor to any Excess Funding Guarantor under this Section 3.08 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Article III and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.

For purposes of this Section 3.08, (i) “Excess Funding Guarantor” means, in
respect of any Guaranteed Obligations, a Guarantor that has paid an amount in
excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess
Payment” means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) “Pro Rata Share” means, for any Guarantor, the ratio
(expressed as a percentage) of (x) the amount by which the aggregate fair
saleable value of all properties of such Guarantor (excluding any shares of
stock or other equity interest of any other Guarantor) exceeds the amount of all
the debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder and any obligations of any other Guarantor that have been
Guaranteed by such Guarantor) to (y) the amount by which the aggregate fair
saleable value of all properties of the Company and all of the Guarantors
exceeds the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Loan Parties hereunder and under the other Loan Documents) of
all of the

 

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Guarantors, determined (A) with respect to any Guarantor that is a party hereto
on the Effective Date, as of the Effective Date, and (B) with respect to any
other Guarantor, as of the date such Guarantor becomes a Guarantor hereunder.

SECTION 3.09. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 3.01
would otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Guarantor, any Lender, the Administrative Agent or any other
Person, be automatically limited and reduced to the highest amount that is valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants (as to itself and, to the extent provided
in this Article, each of its Subsidiaries) to the Lenders that:

SECTION 4.01. Organization; Powers. Each of the Company and its Material
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

SECTION 4.02. Authorization; Enforceability. The Transactions are within each
Borrower’s and each other Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, by all necessary
shareholder action. This Agreement and each of the other Loan Documents have
been duly executed and delivered by each Loan Party thereto and constitutes, or
when executed and delivered by such Loan Party will constitute, a legal, valid
and binding obligation of such Loan Party, enforceable against each Loan Party
in accordance with its terms, 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 for such as have been obtained or
made and are in full force and effect, (b) will not violate any Requirement of
Law, (c) will not violate or result in a default under any Contractual
Obligation upon the Company and its Material Subsidiaries or its or their

 

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respective assets, or give rise to a right thereunder to require any payment to
be made by the Company or any of its Material Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Company or
any of its Material Subsidiaries.

SECTION 4.04. Financial Condition; No Material Adverse Change.

(a) Financial Condition. The Company has heretofore furnished to the Lenders
(i) its consolidated balance sheet and statements of income, stockholders’
equity and cash flows as of and for the fiscal years ended December 31, 2004 and
December 31, 2005, in each case audited by KPMG LLP and (ii) its consolidated
balance sheet and statements of income, stockholders’ equity and cash flows as
of and for the fiscal quarter and the portion of the fiscal year ended
September 30, 2006 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 full footnote
disclosure in the case of the statements referred to in clause (ii) above. There
are no liabilities of the Company or any of its Subsidiaries, fixed or
contingent, which are material in relation to the consolidated financial
condition of the Borrower that are not reflected in such financial statements or
in the notes thereto, other than liabilities arising in the ordinary course of
business since the respective dates of such financial statements.

(b) No Material Adverse Change. Since December 31, 2005, except for matters
disclosed in the Company’s Form 10-Q filings for the first three quarters of
2006 and the Disclosed Matters, there has not occurred any event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

SECTION 4.05. Properties.

(a) Property Generally. Each of the Company and its Material Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, subject only to Liens permitted by
Section 7.02 and 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) Intellectual Property. Each of the Company and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Company and its Subsidiaries does not infringe upon the rights of any other
Person except for any such infringements that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

SECTION 4.06. Litigation and Environmental Matters.

(a) Actions, Suits and Proceedings. There are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries 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 that involve this Agreement or the Transactions.

 

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(b) Environmental Matters. Except for the Disclosed Matters and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability or (iii) has received written notice of any claim
with respect to any Environmental Liability.

(c) Disclosed Matters. 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 Contractual Obligations. Each of the
Company and its Subsidiaries is in compliance with all Requirements of Law
(including Environmental Laws) applicable to it or its property or all
Contractual Obligations binding upon it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

SECTION 4.08. Investment Company Act Status. Neither the Company nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

SECTION 4.09. Taxes. Each of the Company and its Subsidiaries has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Company 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 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 the fair
market value of the assets of such Plan by more than an amount which, if
incurred immediately, could reasonably be expected to result in a Material
Adverse Effect, and the present value of all accumulated benefit obligations of
all underfunded Plans (based on the assumptions used for purposes of Statement
of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of all such underfunded Plans by more than an amount which,
if incurred immediately, could reasonably be expected to result in a Material
Adverse Effect.

 

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SECTION 4.11. Disclosure. None of the written reports, financial statements,
certificates or other written information (other than projections and other
forward looking information) furnished by or on behalf of the Company or any
Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) taken as a whole contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, when
provided, in the light of the circumstances under which they were made, not
materially misleading; provided that, with respect to projected financial
information, each Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time of
preparation thereof.

SECTION 4.12. Use of Credit. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock, and no part of the proceeds of any extension of
credit hereunder will be used to buy or carry any Margin Stock.

SECTION 4.13. Liens. Schedule 7.02 is a complete and correct list of each Lien
securing Indebtedness of any Person outstanding as of the date hereof and
covering any property of the Company or any of its Material Subsidiaries, and
the aggregate Indebtedness secured (or that may be secured) by each such Lien
and the property covered by each such Lien is correctly described in
Schedule 7.02.

ARTICLE V

CONDITIONS

SECTION 5.01. Conditions of Initial Credit Extensions. The obligations of the
Lenders to make its initial Loans hereunder shall not become effective until the
date on which the Administrative Agent shall have received each of the following
documents, each of which shall be satisfactory to the Administrative Agent in
form and substance (or such condition shall have been waived in accordance with
Section 10.02):

(a) Executed Counterparts. 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 to this Agreement) that such party has
signed a counterpart of this Agreement.

(b) Opinion of Counsel to the Loan Parties. A written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of one or
more counsel for the Loan Parties satisfactory to the Administrative Agent,
covering the matters substantially set forth in the form of Exhibit D, and
covering such other matters relating to the Loan Parties, this Agreement or the
Transactions as the Administrative Agent shall reasonably request (and the
Borrowers hereby instruct each such counsel to deliver such opinion to the
Lenders and the Administrative Agent).

 

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(c) Opinion of Special New York Counsel to JPMCB. A written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMCB,
substantially in the form of Exhibit E (and JPMCB hereby instructs such counsel
to deliver such opinion to the Lenders).

(d) Corporate Documents. Such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
Transactions and any other legal matters relating to the Loan Parties, this
Agreement or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.

(e) Officer’s Certificate. A certificate, dated the Effective Date and signed by
a senior executive officer of the Company, as to the matters specified in
clauses (a) and (b) of Section 5.02).

(f) Fees and Expenses. All fees and expenses required to be paid hereunder and
invoiced on or before the Effective Date shall have been paid in full in cash to
the Lenders and the Administrative Agent.

(g) Other Documents. Such other documents as the Administrative Agent or special
New York counsel to JPMCB may reasonably request.

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 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
February 28, 2007 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

SECTION 5.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, is subject to the satisfaction of the following
conditions:

(a) the representations and warranties of the Borrowers set forth in Article IV,
and of each Loan Party in each of the other Loan Documents to which it is a
party, shall be true and correct in all material respects (provided that any
such representation and warranty that is qualified by “materiality” or similar
language shall be true and correct in all respects) on and as of the date of
such Loan (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and

(b) at the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing.

 

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Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrowers on the date thereof as to the matters specified in clauses (a)
and (b) of this Section.

ARTICLE VI

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, each Borrower (on behalf of itself and each of its Subsidiaries) covenants
and agrees with the Lenders that:

SECTION 6.01. Financial Statements and Other Information. The Company will
furnish to the Administrative Agent and the Lenders:

(a) as soon as available but in any event within 90 days after the end of each
fiscal year of the Company, the audited consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows of the Company and its
Subsidiaries as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
KPMG LLP or other independent public accountants of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

(b) as soon as available but in any event within 45 days after the end of the
first three fiscal quarters of the Company, the unaudited consolidated balance
sheets and related consolidated statements of income and cash flows of the
Company and its Subsidiaries 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 (or, in the case of the balance sheet, as of
the end of) the corresponding period or periods of the previous fiscal year, all
certified by a Responsible Officer as presenting fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of full footnote disclosure;

(c) concurrently with any delivery of financial statements under clause (a)
or (b) of this Section, a certificate of a Responsible Officer (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 7.11 and (iii) stating whether any change in GAAP or in
the application thereof affecting the financial statements accompanying such
certificate has occurred since the date of the most recent audited

 

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financial statements of the Company referred to in Section 4.04(a) 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) of
this Section, 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 under
Section 7.11 (which certificate may be limited to the extent required by
accounting rules or guidelines);

(e) promptly upon receipt thereof, copies of all material reports submitted to
the Company by its independent certified public accountants in connection with
any annual or interim audit or review of the books of the Company made by such
accountants;

(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company or
any Subsidiary with the SEC, 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 Company to its shareholders generally, as the
case may be; and

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

Notwithstanding the foregoing, the Company’s obligations to deliver documents or
information required under any of clauses (a), (b) and (f) above shall be deemed
to be satisfied upon (i) the relevant documents or information being publicly
available on the Company’s website or other publicly available electronic medium
(such as EDGAR) within the time period required by such clause and thereafter
being continuously so available and (ii) the delivery by the Company of notice
to the Administrative Agent and each of the Lenders (which notice may be given
electronically (such as e-mail)) within the time period required by such clause
that such documents or information are so available.

SECTION 6.02. Notices of Material Events. The Company 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 Company or any
of its Subsidiaries involving amounts exceeding $5,000,000;

(c) the occurrence of any ERISA Event that, individually or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect; and

 

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

Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer 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. The Company will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises necessary for conduct of
its business except where failure to do so could not reasonably be expected to
result in a Material Adverse Effect; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 7.03.

SECTION 6.04. Payment of Taxes and Other Obligations. The Company will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings,
(b) the Company 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. The Company will, and will cause each
of its Subsidiaries to, keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted.

SECTION 6.06. Maintenance of Insurance. The Company will, and will cause each of
its Subsidiaries to, 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 6.07. Books and Records. The Company will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which complete
entries in accordance with GAAP are made of all dealings and transactions in
relation to its business and activities.

SECTION 6.08. Inspection Rights. The Company will, and will cause each of its
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested;
provided that (a) the Company shall pay or reimburse all reasonable
out-of-pocket expenses incurred by the Administrative Agent or any Lender in
connection therewith and (b) the Company shall be permitted to have its
representatives present at any such discussion.

 

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SECTION 6.09. Compliance with Laws. The Company will, and will cause each of its
Subsidiaries to, comply with all Requirements of Law (including any
Environmental Laws) applicable to it or its property, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 6.10. Use of Proceeds. The proceeds of the Loans shall be used for
general corporate purposes of the Company and its Subsidiaries, including the
financing of acquisitions permitted hereunder. 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 6.11. Additional Subsidiary Guarantors. The Company will take such
action, and will cause each of its Domestic Subsidiaries (other than Immaterial
Subsidiaries) to take such action, from time to time as shall be necessary to
ensure that such Domestic Subsidiaries of the Company are “Subsidiary
Guarantors” hereunder. Without limiting the generality of the foregoing, in the
event that (a) the Company or any of its Subsidiaries shall form or acquire any
new Domestic Subsidiary that shall constitute a Subsidiary hereunder (other than
an Immaterial Subsidiary) or (b) any Domestic Subsidiary that is not a Guarantor
hereunder shall cease to be an Immaterial Subsidiary, the Company and its
Subsidiaries will cause such Subsidiary to (i) become a “Guarantor” hereunder
pursuant to a Guarantee Assumption Agreement and (ii) deliver such proof of
corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by the Loan Parties pursuant to
Section 5.01 on the Effective Date as the Administrative Agent shall reasonably
request. The Company will, and will cause each of its Domestic Subsidiaries
(other than Immaterial Subsidiaries) to, take such action from time to time as
shall reasonably be requested by the Administrative Agent to effectuate the
purposes and objectives of this Section.

ARTICLE VII

NEGATIVE COVENANTS

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full,
each Borrower (on behalf of itself and each of its Subsidiaries) covenants and
agrees with the Lenders that:

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

(a) Indebtedness created hereunder;

(b) Indebtedness existing on the date hereof and set forth on Schedule 7.01;

(c) Indebtedness of any Person that becomes a Subsidiary or is merged into a
Subsidiary after the date hereof; provided that such Indebtedness exists at the
time such Person becomes a Subsidiary or is merged into a Subsidiary and is not
created in contemplation of or in connection with such Person becoming or
merging into a Subsidiary;

 

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(d) intercompany Indebtedness permitted under Section 7.06(c);

(e) Guarantees of the obligations of any other Subsidiary made in the ordinary
course of business;

(f) obligations in respect of Swap Agreements permitted by Section 7.10; and

(g) other Indebtedness in an aggregate principal amount not exceeding 10% of
Consolidated Net Worth at any time outstanding.

SECTION 7.02. Liens. The Company will not, and will not permit any of its
Subsidiaries 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 Liens;

(b) any Lien on any property or asset of the Company or any of its Subsidiaries
existing on the date hereof and set forth on Schedule 7.02 (excluding, however,
following the making of the initial Loans hereunder as of the Effective Date,
Liens securing Indebtedness to be repaid with the proceeds of such Loans, as
indicated on Schedule 7.02); provided that (i) no such Lien shall extend to any
other property or asset of the Company or any of its Subsidiaries and (ii) any
such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals, replacements and combinations thereof that do
not increase the outstanding principal amount thereof or commitment therefor, in
each case, as in effect on the date hereof;

(c) Liens on fixed or capital assets acquired, constructed or improved by the
Company or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by this Agreement, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to, at the time of or within 90
days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Company or any Subsidiary;

(d) any Lien existing on any property or asset prior to the acquisition thereof
by the Company 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 security interests secure
Indebtedness permitted by this Agreement, (ii) 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, (iii) such Lien shall not apply to any other
property or assets of the Company or any Subsidiary and

 

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(iv) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case
may be and extensions, renewals and replacements thereof that do not increase
the original outstanding principal amount thereof;

(e) Liens on property of any Foreign Subsidiary securing its Indebtedness and
other obligations in an aggregate principal amount not exceeding (for all
Foreign Subsidiaries) $2,000,000 at any time outstanding; and

(f) Liens on property securing Indebtedness and other obligations in an
aggregate principal amount not exceeding $5,000,000 at any time outstanding.

SECTION 7.03. Mergers, Consolidations, Etc. The Company will not, and will not
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except that:

(a) (except as permitted under clause (b) of this Section) the Company may be
merged or consolidated with or into any Person, so long as (i) the Company is
the surviving entity and (ii) at the time of and immediately after giving effect
thereto, no Default shall have occurred and be continuing;

(b) any Subsidiary may be merged or consolidated with or into the Company or any
other Subsidiary, so long as (i) if the Company is party to such transaction,
the Company is the surviving entity or (ii) if a Loan Party (other than the
Company) is party to such transaction, a Loan Party is the surviving entity; and

(c) any Immaterial Subsidiary may be dissolved or liquidated if the Company
determines in good faith such liquidation or dissolution is in the best
interests of the Company and not materially disadvantageous to the Lenders; and

(d) any merger, consolidated or amalgamation consummated to effect an
Acquisition permitted under Section 7.06(f).

SECTION 7.04. Dispositions. The Company will not, and will not permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any part of its business or property,
whether now owned or hereafter acquired (including receivables and leasehold
interests), except:

(a) obsolete or worn-out property, tools or equipment no longer used or useful
in its business;

(b) any inventory or other property sold or disposed of in the ordinary course
of business and for fair consideration;

 

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(c) any Subsidiary of the Company may sell, lease, transfer or otherwise dispose
of any or all of its property to the Company or any wholly owned Subsidiary of
the Company;

(d) the Capital Stock of any Subsidiary may be sold, transferred or otherwise
disposed of to the Company or any wholly owned Subsidiary of the Company; and

(e) Dispositions of property by the Company or any Subsidiary for fair
consideration, the fair market value of which, taken together with the aggregate
fair market value of all such dispositions under this clause (e) after the date
of this Agreement, does not exceed 15% of the consolidated assets of the Company
and its Subsidiaries as of the end of the immediately preceding fiscal year of
the Company.

SECTION 7.05. Lines of Business. The Company will not, and will not permit any
of its Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the
Effective Date and businesses reasonably related or incidental or ancillary
thereto.

SECTION 7.06. Investments and Acquisitions. The Company will not, and will not
permit any of its Subsidiaries to, make or suffer to exist any Investment in any
Person or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:

(a) Cash Equivalents;

(b) Investments (other than Investments permitted under clauses (a) and (c) of
this Section) existing on the date hereof and set forth on Schedule 7.06;

(c) Investments by (i) the Company in any Subsidiary or (ii) any Subsidiary in
the Company or any other Subsidiary (including any Guarantee of Indebtedness of
the Company or any Subsidiary, as applicable); provided that the aggregate
amount of such Investments by the Loan Parties in Subsidiaries that are not
consolidated under GAAP on the Company’s consolidated balance sheet, shall not
exceed $10,000,000;

(d) Indebtedness permitted by Section 7.01;

(e) purchases of inventory and other property to be sold or used in the ordinary
course of business;

(f) Acquisitions after the date hereof by the Company or any Subsidiary;
provided that (i) if any such Acquisition is an acquisition of Capital Stock of
a Person, such Acquisition shall not be opposed by the board of directors (or
similar governing body) of such Person, (ii) no Default shall have then occurred
and be continuing or would result therefrom, (iii) with respect to any
Acquisition the aggregate consideration of which shall exceed $10,000,000, the
Consolidated Leverage Ratio on the last day of such period would not have been
greater than 2.00 to 1.0 (determined on a pro forma basis

 

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after giving effect to such Acquisition as if such Acquisition had occurred on
the first day of the most recent period of four consecutive fiscal quarters),
(iv) the requirements of Section 6.11 applicable to such Person (if any) shall
be satisfied and (v) at least ten days prior to the consummation of any such
Acquisition, the Administrative Agent shall have received a certificate of a
Responsible Officer setting forth the calculations required to determine
compliance with clause (iii) above, if applicable, and certifying that the
conditions set forth in this clause (f) with respect to such Acquisition have
been satisfied.

(g) Investments under Swap Agreements permitted by Section 7.10;

(h) bona fide advances to employees and officers of the Company and its
Subsidiaries for the purpose of paying payroll, travel, relocation and related
expenses incurred for proper business purposes of the Company or such
Subsidiary;

(i) Investments received by the Company and its Subsidiaries in connection with
any Disposition permitted by Section 7.04;

(j) Investments held by any Person that becomes a Subsidiary after the date
hereof; provided that (i) such Investments exist at the time such Person becomes
a Subsidiary and are not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) such Investments shall not be increased
after such time unless such increase is permitted by another clause of this
Section;

(k) Investments (including debt obligations) received by the Borrower and its
Subsidiaries in connection with the bankruptcy or reorganization of suppliers
and/or customers and in good faith settlement of delinquent obligations of, and
other disputes with, customers and/or suppliers arising in the ordinary course
of business;

(l) other Investments in an aggregate amount (valued at cost) not exceeding
$5,000,000.

SECTION 7.07. Restricted Payments. The Company will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that:

(a) the Company may declare and pay dividends with respect to its Capital Stock
payable solely in additional shares of its Capital Stock; and

(b) the Company may make Restricted Payments after the date hereof; provided
that, at the time of such Restricted Payment and immediately after giving effect
thereto, (i) no Default shall have occurred and be continuing and (ii) the
Consolidated Leverage Ratio for the most recent period of four consecutive
fiscal quarters shall not be greater than 2.25 to 1.0;

provided that nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Company to the Company or any other
Subsidiary of the Company or, if applicable, any minority shareholder of such
Subsidiary (in accordance with the percentage of the Capital Stock of such
Subsidiary owned by such minority shareholder).

 

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SECTION 7.08. Transactions with Affiliates. The Company 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) transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Company or such Subsidiary than could be
obtained on an arm’s-length basis from a Person that is not an Affiliate;

(b) transactions between or among the Company and its whol]ly-owned Subsidiaries
not involving any other Affiliate;

(c) any Investment permitted by Section 7.06;

(d) any Restricted Payment permitted by Section 7.07; and

(e) any Affiliate who is a natural person may serve as an employee or director
of any Borrower and receive reasonable compensation for his services in such
capacity.

SECTION 7.09. Restrictive Agreements. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Company or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its Capital Stock or to make or repay loans or advances to the
Company or any other Subsidiary or to Guarantee Indebtedness of the Company or
any other Subsidiary; except:

(i) restrictions and conditions imposed by law or by this Agreement;

(ii) restrictions and conditions existing on the date hereof set forth 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) customary restrictions and conditions contained in agreements relating to
the sale of a Subsidiary pending such sale; provided that such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder;

(iv) (with respect to clause (a) above) (x) 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 (y) customary provisions in leases and other contracts
restricting the assignment thereof; and

 

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(v) (with respect to clause (a) above) provisions in any lease or lease
agreement, or any restrictions or conditions imposed by any landlord,
prohibiting or restricting the granting, creation or incurrence of any liens on
any premises leased by the Company or any of its Subsidiaries.

SECTION 7.10. Swap Agreements. The Company will not, and will not permit any of
its Subsidiaries to, enter into any Swap Agreement, other than Swap Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Company or any Subsidiary is exposed in the conduct of its business or
the management of its liabilities.

SECTION 7.11. Financial Covenants.

(a) Consolidated Leverage Ratio. The Company will not permit the Consolidated
Leverage Ratio to exceed 2.50 to 1.00 as at the end of any fiscal quarter of the
Company.

(b) Consolidated Fixed Charges Ratio. The Company will not permit the
Consolidated Fixed Charge Coverage Ratio to be less than 1.50 to 1.00 as at the
end of any fiscal quarter of the Company.

(c) Consolidated Net Worth. The Company will not at any time permit the
Consolidated Net Worth to be less than the sum of (i) $228,000,000 plus, for
each fiscal quarter ending after the Effective Date, an amount equal to 35% of
the Consolidated Net Income (if positive) for such quarter.

SECTION 7.12. Modifications of Organizational Documents. The Company will not,
and will not permit any of the other Loan Parties to, consent to any
modification, supplement or waiver of any of the provisions of the charter,
by-laws or other organizational documents of the Company or any of its
Subsidiaries that could reasonably be expected to be materially adverse to the
interests of the Lenders, in each case, without the prior consent of the
Required Lenders (or the Administrative Agent, with the approval of the Required
Lenders); provided that the foregoing shall not apply to any modification of the
charter, by-laws or other organizational documents of any Subsidiary effected
solely in connection with the liquidation or dissolution thereof permitted by
Section 7.03.

ARTICLE VIII

EVENTS OF DEFAULT

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

(a) any Borrower shall fail to pay any principal of any Loan when such amount
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

 

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

(c) any representation or warranty made or deemed made by or on behalf of the
Company or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof or
waiver hereunder or thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this
Agreement or any other Loan Document or any such amendment, modification or
waiver, shall prove to have been incorrect when made or deemed made in any
material respect;

(d) any Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 6.02, 6.03 (with respect to the existence of any
Borrower) or 6.10 or in Article VII;

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d) of this Article) or any other Loan Document and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Company (given at the request of any Lender);

(f) the Company or any of its Subsidiaries 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 (but
taking in account any applicable grace period provided in the agreement or
instrument governing such Material Indebtedness);

(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
(but taking in account any applicable grace period provided in the agreement or
instrument governing such Material Indebtedness); 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 Company or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian,

 

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sequestrator, conservator or similar official for the Company 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 Company 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 Company 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 Company 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 $15,000,000 (excluding amounts covered by insurance where the insurer
has accepted responsibility) shall be rendered against the Company or any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Company or any Subsidiary to enforce any such
judgment;

(l) an ERISA Event shall have occurred that, in the reasonable judgment of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) the guarantee of any Subsidiary Guarantor shall at any time after its
execution and delivery and 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 any Loan Party, or any Subsidiary Guarantor shall deny
that it has any further liability or obligation thereunder or shall fail to
perform its obligations thereunder;

then, and in every such event (other than any event with respect to any 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 Borrowers, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which

 

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case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrowers; and in case of any
event with respect to any 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 Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers.

ARTICLE IX

THE ADMINISTRATIVE AGENT

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent hereunder and under the other Loan Documents 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 or
thereof, together with such actions and powers as are reasonably incidental
thereto.

The Person 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
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other 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 hereby or by the other
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 provided in
Section 10.02), and (c) except as expressly set forth herein and in the other
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 Company or any of its Subsidiaries that is communicated to or obtained by
the Person 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 provided in Section 10.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and

 

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until written notice thereof is given to the Administrative Agent by the Company
or a Lender, and the Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein or therein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Article V or elsewhere herein or therein, 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 a 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 as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders and the Company. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Company, 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 Lender with an office in New York, New
York or an Affiliate of a Lender. 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
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company 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.

 

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Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Notices.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) of
this Section), all notices and other communications provided for herein shall be
in writing (including by electronic means (such as e-mail)) and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy or other electronic means, (i) if to the
Company, the Subsidiary Borrower, the Administrative Agent or JPMCB as a Lender,
as set forth in Schedule 10.01; and (ii) if to any other Lender, to it at its
address (or telecopy number or (subject to the immediately succeeding sentence)
electronic mail address (if any)) set forth in its Administrative Questionnaire.
Notwithstanding the foregoing, at any time that JPMCB shall not be the only
Lender hereunder, notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications only pursuant to
procedures approved by the Administrative Agent and (in the case of notices
pursuant to Article II) and the applicable Lender.

(b) Change of Address, Etc. 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 (including by electronic
means) 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 or (if
delivered by e-mail) when delivered.

SECTION 10.02. Waivers; Amendments.

(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of

 

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the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by a 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) Amendments. Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Loan Parties and the Required Lenders or by the Loan Parties
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 reduce any fees payable hereunder, without the written consent of
each Lender adversely 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
adversely affected thereby;

(iv) change Section 2.15(b), (c) or (d) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender;

(v) change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; or

(vi) release all or substantially all of the Guarantors from their guarantee
obligations under Article III, without the written consent of each Lender;

and 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.

SECTION 10.03. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers 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
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preparation and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all 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 this Agreement and
the other Loan Documents, including its rights under this Section, or in
connection with the Loans issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations of such
Loans.

(b) Indemnification by the Company. The Borrowers 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 fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that 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 wilful
misconduct of such Indemnitee.

(c) Reimbursement by Lenders. To the extent that the Borrowers fail 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 Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent.

(d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable
law, no Borrower shall assert, and each Borrower hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.

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

 

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SECTION 10.04. Successors and Assigns.

(a) Assignments Generally. 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) no Borrower may 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 any 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) Assignments by Lenders.

(i) Assignments Generally. Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:

(A) the Company; provided that no consent of the Company 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; and

(B) the Administrative Agent.

(ii) Certain Conditions to Assignments. 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 $5,000,000, unless each of the
Company and the Administrative Agent otherwise consent; provided that no such
consent of the Company 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;

 

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(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 in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Company and its
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

(iii) Effectiveness of Assignments. Subject to acceptance and recording thereof
pursuant to paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.13, 2.14 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this Section shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv) Maintenance of Register. The Administrative Agent, acting for this purpose
as an agent of the Borrowers, shall maintain at one of its offices a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of 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 Borrowers, 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
Borrowers and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(v) Acceptance of Assignments by Administrative Agent. Upon its receipt of a
duly completed Assignment and Assumption executed by an assigning Lender and an
assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

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(c) Participations.

(i) Participations Generally. Any Lender may, without the consent of the
Borrowers 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 and the other Loan Documents (including all
or a portion of its Commitment and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement and the other Loan Documents
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. 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 the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; 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 Borrowers agree
that each Participant shall be entitled to the benefits of Sections 2.12, 2.13
and 2.14 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender; provided that such Participant agrees to be subject
to Section 2.15(d) as though it were a Lender.

(ii) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 2.12 or 2.14 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 Borrowers’ prior written consent. A Participant
that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the
benefits of Section 2.14 unless the Borrowers are notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 2.14(e) as though it were a Lender.

(d) Certain Pledges. 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 Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
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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 this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.12, 2.13, 2.14, 3.03 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. This Agreement 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.

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 any Borrower
against any of and all the obligations of any Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured; provided that such Lender shall give notice to the
Company of such set-off promptly after effecting such set-off (it being
understood, however, that failure to give such notice shall not affect the
validity of such set-off). 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.

 

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SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

(b) Submission to Jurisdiction. Each 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 this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Borrower or its properties in
the courts of any jurisdiction.

(c) Waiver of Venue. Each 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 this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Service of Process. 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.

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 THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 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.

 

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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 hereunder
or under any other Loan Document or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any 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 Company and its
Subsidiaries and their respective obligations, (g) with the consent of the
Company 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 a Borrower. For the purposes of this Section, “Information” means all
information received from any Loan Party relating to the Company and its
Subsidiaries and their business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by a Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

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

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

 

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SECTION 10.13. USA PATRIOT Act. Each Lender hereby notifies the Borrowers that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), such Lender may be required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of each Borrower and other information that will
allow such Lender to identify the Borrowers in accordance with said Act.

SECTION 10.14. Authorization of Company. The Subsidiary Borrower hereby
authorizes the Company to give on behalf of the Subsidiary Borrower all notices,
consents and other communications that may be given by the Subsidiary Borrower
under or in connection with this Agreement or any other Loan Document, and to
receive on behalf of the Subsidiary Borrower all notices, consents and other
communications that may be given to the Subsidiary Borrower under or in
connection with this Agreement or any other Loan Document (in each case,
irrespective of whether or not such notice, consent or other communication is
expressly provided elsewhere in this Agreement to be given or received by the
Company on behalf of the Subsidiary Borrower). Such notices, consents and other
communications may include Borrowing Requests, notices as to continuations,
conversions and prepayments of Loans, notices and demands in connection with
Defaults, and notices and demands in connection with the exercise by the
Administrative Agent or any Lender of remedies. Such notices, consents and other
communications may be given by or to the Company in its own name or in the name
of the applicable Subsidiary Borrower. The authority given by each Subsidiary
Borrower in this Section is coupled with an interest and is irrevocable until
all the Commitments have expired or been terminated and all the obligations of
the Subsidiary Borrower under this Agreement and the other Loan Documents have
been paid in full.

[Signature pages follow]

 

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

 

CDI CORP. By  

/s/ Mark A. Kerschner

Name:   Mark A. Kerschner Title:   Executive Vice President & CFO U.S. Federal
Tax Identification No.: 23-2394430 CDI CORPORATION By  

/s/ Mark A. Kerschner

Name:   Mark A. Kerschner Title:   Executive Vice President & CFO

U.S. Federal Tax Identification No.: 23-1341909

 

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SUBSIDIARY GUARANTORS TODAYS STAFFING, INC. By  

/s/ Mark A. Kerschner

Name:   Mark A. Kerschner Title:   Treasurer MANAGEMENT RECRUITERS
INTERNATIONAL, INC. By  

/s/ Mark A. Kerschner

Name:   Mark A. Kerschner Title:   Treasurer MRI CONTRACT STAFFING, INC. By  

/s/ Joseph R. Seiders

Name:   Joseph R. Seiders Title:   Vice President

 

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JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent, By  

/s/ Lee P. Brennan

Name:   Lee P. Brennan Title:   Vice President

 

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SCHEDULE 1.01

Commitments

 

Name of Lender

  

Commitment

JPMorgan Chase Bank, N.A.    $45,000,000    TOTAL    $45,000,000

 

Opinion of Special New York Counsel to JPMCB