Exhibit 10.1

EXECUTION COPY

 

 

 

CREDIT AGREEMENT

dated as of

October 29, 2010

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

     19   

SECTION 1.03. Accounting Terms; GAAP

     19   

ARTICLE II

     20   

THE CREDITS

     20   

SECTION 2.01. The Commitments

     20   

SECTION 2.02. Loans and Borrowings

     21   

SECTION 2.03. Requests for Borrowings

     22   

SECTION 2.04. Funding of Borrowings

     23   

SECTION 2.05. Interest Elections

     23   

SECTION 2.06. Termination and Reduction of the Commitments

     25   

SECTION 2.07. Repayment of Loans; Evidence of Debt

     25   

SECTION 2.08. Prepayment of Loans

     26   

SECTION 2.09. Fees

     26   

SECTION 2.10. Interest

     27   

SECTION 2.11. Alternate Rate of Interest

     28   

SECTION 2.12. Increased Costs

     29   

SECTION 2.13. Break Funding Payments

     30   

SECTION 2.14. Taxes

     30   

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

     32   

SECTION 2.16. Mitigation Obligations; Replacement of Lenders

     34   

SECTION 2.17. Letters of Credit

     35   

ARTICLE III

     39   

GUARANTEE

     39   

SECTION 3.01. Guarantee

     39   

SECTION 3.02. Obligations Unconditional

     39   

SECTION 3.03. Reinstatement

     40   

SECTION 3.04. Subrogation

     40   

SECTION 3.05. Remedies

     41   

SECTION 3.06. Instrument for the Payment of Money

     41   

SECTION 3.07. Continuing Guarantee

     41   

SECTION 3.08. Rights of Contribution

     41   

SECTION 3.09. General Limitation on Guarantee Obligations

     42   

ARTICLE IV

     42   

REPRESENTATIONS AND WARRANTIES

     42   

SECTION 4.01. Organization; Powers

     42   

SECTION 4.02. Authorization; Enforceability

     42   

SECTION 4.03. Governmental Approvals; No Conflicts

     42   

SECTION 4.04. Financial Condition; No Material Adverse Change

     43   

 

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SECTION 4.05. Properties

     43   

SECTION 4.06. Litigation and Environmental Matters

     43   

SECTION 4.07. Compliance with Laws and Contractual Obligations

     44   

SECTION 4.08. Investment Company Act Status

     44   

SECTION 4.09. Taxes

     44   

SECTION 4.10. ERISA

     44   

SECTION 4.11. Disclosure

     44   

SECTION 4.12. Use of Credit

     45   

SECTION 4.13. Liens

     45   

ARTICLE V

     45   

CONDITIONS

     45   

SECTION 5.01. Effective Date

     45   

SECTION 5.02. Each Credit Event

     46   

ARTICLE VI

     46   

AFFIRMATIVE COVENANTS

     46   

SECTION 6.01. Financial Statements and Other Information

     46   

SECTION 6.02. Notices of Material Events

     48   

SECTION 6.03. Existence; Conduct of Business

     48   

SECTION 6.04. Payment of Taxes and Other Obligations

     48   

SECTION 6.05. Maintenance of Properties

     48   

SECTION 6.06. Maintenance of Insurance

     49   

SECTION 6.07. Books and Records

     49   

SECTION 6.08. Inspection Rights

     49   

SECTION 6.09. Compliance with Laws

     49   

SECTION 6.10. Use of Proceeds

     49   

SECTION 6.11. Additional Subsidiary Guarantors

     49   

ARTICLE VII

     50   

NEGATIVE COVENANTS

     50   

SECTION 7.01. Subsidiary Indebtedness

     50   

SECTION 7.02. Liens

     50   

SECTION 7.03. Mergers, Consolidations, Etc.

     51   

SECTION 7.04. Dispositions

     52   

SECTION 7.05. Lines of Business

     52   

SECTION 7.06. Investments and Acquisitions

     52   

SECTION 7.07. Restricted Payments

     54   

SECTION 7.08. Transactions with Affiliates

     54   

SECTION 7.09. Restrictive Agreements

     54   

SECTION 7.10. Swap Agreements

     55   

SECTION 7.11. Financial Covenants.

     55   

SECTION 7.12. Modifications of Organizational Documents

     56   

ARTICLE VIII

     56   

EVENTS OF DEFAULT

     56   

ARTICLE IX

     58   

THE ADMINISTRATIVE AGENT

     58   

ARTICLE X

     60   

 

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MISCELLANEOUS

     60   

SECTION 10.01. Notices

     60   

SECTION 10.02. Waivers; Amendments

     61   

SECTION 10.03. Expenses; Indemnity; Damage Waiver

     62   

SECTION 10.04. Successors and Assigns

     63   

SECTION 10.05. Survival

     66   

SECTION 10.06. Counterparts; Integration; Effectiveness

     67   

SECTION 10.07. Severability

     67   

SECTION 10.08. Right of Setoff

     67   

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

     67   

SECTION 10.10. WAIVER OF JURY TRIAL

     68   

SECTION 10.11. Headings

     68   

SECTION 10.12. Confidentiality

     68   

SECTION 10.13. USA PATRIOT Act

     69   

SECTION 10.14. Authorization of Company

     70   

 

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CREDIT AGREEMENT, dated as of October 29, 2010 (the “Agreement”), among CDI
CORP., a Pennsylvania corporation, CDI CORPORATION, a Pennsylvania corporation,
the GUARANTORS party hereto, the LENDERS party hereto and JPMORGAN CHASE BANK,
N.A., as Administrative Agent.

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 greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page
of such page) at approximately 11:00 a.m. London time on such day. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively.

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“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.

“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, 2010, as of
September 30, 2010):

 

Consolidated Leverage Ratio:

   ABR
Spread     Eurodollar
Spread     Facility
Fee Rate  

Category 1

Greater than or equal to 1.75:1.00

     0 %      2.75 %      0.375 % 

Category 2

Greater than or equal to 1.00:1.00 but less than 1.75:1.00

     0 %      2.50 %      0.30 % 

Category 3

Greater than or equal to 0.00: 1.00 but less than 1.00: 1.00

     0 %      2.25 %      0.25 % 

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 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

 

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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. For
avoidance of doubt, the Applicable Rate with respect to any Eurodollar Loan or
ABR Loan or the facility fees payable hereunder, (i) for any day prior to the
Restatement Effective Date, shall be determined in accordance with the
definition of “Applicable Rate” under the Existing Credit Agreement as in effect
immediately prior to the Restatement Effective Date and (ii) for any day from
and after the Restatement Effective Date, shall be determined in accordance with
this definition (after giving effect to this Agreement).

“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.

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

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

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

 

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“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.

“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” means lawful currency of the United States of America.

“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;

 

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(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market 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 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
Effective Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Effective Date 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 Effective Date.

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

“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be or become
subject to a security interest or Lien in favor of the Administrative Agent for
the benefit of the Lenders, to secure the Secured Obligations.

 

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“Collateral Documents” means, collectively the Security Agreement and any of the
other documents granting a Lien upon the Collateral as security for payment of
the Secured Obligations.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit 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 aggregate amount of the Commitments is
$35,000,000 as of the Effective Date.

“Commitment Fee” means a total fee of $30,000, which has been fully earned by
JPMCB on the Effective Date but which will be payable to JPMCB as follows:
$15,000 on or before the Effective Date and $15,000 on or before April 29, 2011,
unless the Commitment is refinanced by JPMCB.

“Commitment Termination Date” means October 28, 2011.

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

“Consolidated Aggregate Liquidity” means, the difference between (i) the
aggregate (without duplication) of the unpledged and unrestricted Cash and Cash
Equivalents of the Company and its Subsidiaries as of any date of determination
plus (ii) the amount of unused Commitments at such time.

“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 (however, no deduction will be made for the payments contemplated in
Schedule 4.06(a)), all as determined on a consolidated basis. For the purposes
of calculating Consolidated EBITDA for

 

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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, plus (iii) tax expenses paid in cash 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 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

 

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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 sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such
time.

“Credit Party” means the Administrative Agent, the Issuing Bank or any other
Lender.

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

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

 

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“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.

“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.

 

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“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.

“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,
the Issuing 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.

 

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“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) 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.

 

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“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 15% 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 35% 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) Management Recruiters International Inc. may
not be designated as an 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
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.

 

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“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 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.

“Issuing Lender” means JPMCB.

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

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

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.

“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.

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

 

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“Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time to time.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any
successor or substitute page of such service, providing rate quotations of
interest rates applicable to dollar deposits in the London interbank market
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time) 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), the Collateral
Documents, each Guarantee Assumption Agreement and the Letter of Credit
Documents.

“Loan Parties” means the Borrowers and the Guarantors.

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

“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.

 

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“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), 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.

“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.

 

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“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 Investments means (a) all items which qualify as a “Cash Equivalent”
hereunder; (b) short-term tax exempt debt obligations of Governmental
Authorities consisting of municipal notes, commercial paper, auction rate notes
and floating rate notes rated A1/P1 by S&P or Moody’s, municipal notes rated
SP1/MIG-1 or better and bonds rated AA or better; (c) corporate debt instruments
(including Rule 144A debt securities) which are denominated and payable in
Dollars and are rated by S&P or Moody’s A3/A- or better or, in the case of
commercial paper, A2/P2 or better; and (d) auction preferred stock and auction
rate certificates rated at least AA/Aa by S&P or Moody’s that have not more than
180 days until the next auction at date of purchase.

“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; (g) Liens created under the Loan Documents; and (h) 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 other than
Liens securing the Loans.

“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.

“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Obligations owing to one or more Lenders or
their respective Affiliates; provided that at or prior to the time that any
transaction relating to such Swap Obligation is executed, the Lender party
thereto (other than JPMCB) shall have delivered written notice to the
Administrative Agent that such a transaction has been entered into and that it
constitutes a Secured Obligation entitled to the benefits of the Collateral
Documents.

 

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“Security Agreement” means that certain Pledge and Security Agreement, dated as
of the date hereof, between the Loan Parties and the Administrative Agent, for
the benefit of Lenders, and any other pledge or security agreement entered into
after the date of this Agreement and by any other Loan Party (as required by
this Agreement or any other Loan Document), or any other Person, as the same may
be amended, restated or otherwise modified from time to time.

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

“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.

“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.

 

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“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, the borrowing of Loans, the use of proceeds thereof and
the issuance of Letters of Credit hereunder.

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

 

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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 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

 

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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 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 or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.17(f). 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.

 

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(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; provided that any such notice of an ABR Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.17(f) may be given not later than 10:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery, telecopy or
e-mail to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by such Borrower.

(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.

 

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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; provided that ABR Borrowings made to finance the reimbursement of an LC
Disbursement as provided in Section 2.17(f) shall be remitted by the
Administrative Agent to the Issuing Lender.

(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, 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

 

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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).

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.

 

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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.

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

 

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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 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).

 

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(b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative
Agent for account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at a rate per annum
equal to the Applicable Rate applicable to interest on Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) (only if there shall be more than one Lender
hereunder) to the Issuing Lender a fronting fee, which shall accrue at the rate
of 0.125% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the Commitments and the date on which there ceases to be
any LC Exposure, as well as the Issuing Lender’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees, if any,
accrued through and including each Quarterly Date shall be payable on the third
Business Day following such Quarterly Date, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Commitments terminate and any such fees accruing after the
date on which the Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Lender pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

(c) 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 (or to the Issuing
Lender, in the case of fees payable to it) for distribution, in the case of
facility fees or participation fees, to the Lenders entitled thereto. 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 the Issuing Lender; or

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

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

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

(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts, necessary to compensate such Lender
or the Issuing 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 or the
Issuing Lender, as the case may be, 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 or the Issuing
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s or the Issuing Lender’s right to demand such
compensation; provided that the

 

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Borrowers shall not be required to compensate a Lender or the Issuing Lender
pursuant to this Section for any increased costs or reductions incurred more
than 90 days prior to the date that such Lender or the Issuing Lender, as the
case may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing 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.

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, the Lenders or the Issuing 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.

 

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(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, each Lender and the Issuing Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing 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 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 the
Issuing Lender or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing 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 or any other Loan Document 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, a Lender or the Issuing 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, such Lender or the Issuing
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, such Lender or the
Issuing 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, such Lender or the Issuing Lender in the
event the Administrative Agent, such Lender or the Issuing Lender is required to
repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent, any Lender or the Issuing 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.

 

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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 reimbursement
of LC Disbursements, 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 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 as
otherwise expressly provided in the relevant Loan Document and except payments
to be made directly to the Issuing Lender as expressly provided herein and 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 or under any other Loan Document (except
as otherwise expressly provided therein) 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, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

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(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
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the 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 or the Issuing Lender 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 or
the Issuing Lender, as the case may be, the amount due. In such event, if such
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing 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.

 

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(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), 2.15(e)
or 2.17(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 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 and the related Loan Documents 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 and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents, 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.

 

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SECTION 2.17. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, in addition
to the Loans provided for in Section 2.01, the Borrower may request the Issuing
Lender to issue, at any time and from time to time during the Availability
Period, Letters of Credit for its own account in such form as is acceptable to
the Administrative Agent and the Issuing Lender in its reasonable determination.
Letters of Credit issued hereunder shall constitute utilization of the
Commitments.

(b) Notice of Issuance, Amendment, Renewal or Extension. To request the issuance
of a Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), a Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (d) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Issuing Lender, a Borrower also shall submit a letter of credit
application on the Issuing Lender’s standard form in connection with any request
for a Letter of Credit. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by a Borrower to, or entered
into by a Borrower with, the Issuing Lender relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.

(c) Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed
or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the
aggregate LC Exposure shall not exceed $25,000,000 and (ii) the total Credit
Exposures shall not exceed the total Commitments.

(d) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business the date that is five Business Days prior to the Commitment
Termination Date; provided that, notwithstanding the foregoing, the Borrowers
may request the issuance of a Letter of Credit with an initial expiry date which
complies with the foregoing requirments of this paragraph that has automatic
renewal provisions (an “Auto-Renewal Letter of Credit”) (and, in the request for
the issuance of a Letter of Credit, the Borrower shall specify if such Letter of
Credit is an Auto-Renewal Letter of Credit and the proposed initial expiry date
and renewal provisions therefor), subject to the following provisions: (w) the
issuance of an Auto-Renewal Letter of Credit hereunder shall be at the sole and
absolute discretion of the Issuing Lender; (x) without the consent of the
Lenders, no Auto-Renewal Letter of Credit issued hereunder by the Issuing Lender
shall be permitted to be renewed to a date later than the first anniversary of
the Commitment Termination Date; (y) the Issuing Lender may in its sole
discretion give a notice of non-renewal and thereby prevent the renewal of an
Auto-Renewal Letter of Credit pursuant to the terms thereof; and (z) without
limiting the foregoing, if any Auto-Renewal Letter of Credit

 

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shall be outstanding on the date that is 30 days prior to the Commitment
Termination Date (or, in the case of any Auto-Renewal Letter of Credit issued
hereunder after such date, on the Commitment Termination Date), the Borrower
shall provide cash collateral in an amount equal to the undrawn amount of the
Letter(s) of Credit on such date in accordance with Section 2.17(k) (and the
failure to provide such cash collateral on or prior to such date shall
constitute an Event of Default hereunder).

(e) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) by the Issuing Lender, and
without any further action on the part of the Issuing Lender or the Lenders, the
Issuing Lender hereby grants to each Lender, and each Lender hereby acquires
from the Issuing Lender, a participation in such Letter of Credit equal to such
Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments.

In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
account of the Issuing Lender, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Lender promptly upon the request of the Issuing
Lender at any time from the time of such LC Disbursement until such LC
Disbursement is reimbursed by the Borrowers or at any time after any
reimbursement payment is required to be refunded to the Borrowers for any
reason. Such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each such payment shall be made in the same manner as
provided in Section 2.04 with respect to Loans made by such Lender (and
Section 2.04 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the Issuing Lender
the amounts so received by it from the Lenders. Promptly following receipt by
the Administrative Agent of any payment from the Borrowers pursuant to the next
following paragraph, the Administrative Agent shall distribute such payment to
the Issuing Lender or, to the extent that the Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Lender, then to such Lenders
and the Issuing Lender as their interests may appear. Any payment made by a
Lender pursuant to this paragraph to reimburse the Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrowers of
their obligation to reimburse such LC Disbursement.

(f) Reimbursement. If the Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrowers shall reimburse the Issuing Lender
in respect of such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on (i) the Business Day that the Borrowers receive notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Borrowers
receive such notice, if such notice is not received prior to such time, provided
that, if such LC Disbursement is not less than $100,000, the Borrowers may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the

 

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Borrowers’ obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing. If the Borrowers fail to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrowers in respect thereof and
such Lender’s Applicable Percentage thereof.

(g) Obligations Absolute. The Borrowers’ obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Lender under a Letter of Credit against
presentation of a draft or other document that does not comply strictly with the
terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers’ obligations hereunder.

Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit by the
Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that the foregoing
shall not be construed to excuse the Issuing Lender from liability to the
Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by the Borrowers that are caused by
the Issuing Lender’s failure to exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Lender (as
determined by a court of competent jurisdiction by a final and nonappealable
judgment), the Issuing Lender shall be deemed to have exercised care in each
such determination, and that:

(i) the Issuing Lender may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation, regardless of any notice or
information to the contrary, and may make payment upon presentation of documents
that appear on their face to be in substantial compliance with the terms of such
Letter of Credit;

(ii) the Issuing Lender shall have the right, in its sole discretion, to decline
to accept such documents and to make such payment if such documents are not in
strict compliance with the terms of such Letter of Credit; and

 

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(iii) this sentence shall establish the standard of care to be exercised by the
Issuing Lender when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof (and the parties hereto
hereby waive, to the extent permitted by applicable law, any standard of care
inconsistent with the foregoing).

(h) Disbursement Procedures. The Issuing Lender shall, within a reasonable time
following its receipt thereof, examine all documents purporting to represent a
demand for payment under the Letter of Credit. The Issuing Lender shall promptly
after such examination notify the Administrative Agent and the Borrowers by
telephone (confirmed by telecopy) of such demand for payment and whether the
Issuing Lender has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrowers of their obligation to reimburse the Issuing Lender and the Lenders
with respect to any such LC Disbursement.

(i) Interim Interest. If the Issuing Lender shall make any LC Disbursement,
then, unless the Borrowers shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrowers reimburse such LC Disbursement, at
the rate per annum then applicable to ABR Loans; provided that, if the Borrowers
fail to reimburse such LC Disbursement when due pursuant to paragraph (f) of
this Section, then Section 2.10(c) shall apply. Interest accrued pursuant to
this paragraph shall be for account of the Issuing Lender, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph (f)
of this Section to reimburse the Issuing Lender shall be for account of such
Lender to the extent of such payment.

(j) Replacement of the Issuing Lender. The Issuing Lender may be replaced at any
time by written agreement between the Borrowers, the Administrative Agent, the
replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for account of the replaced Issuing Lender pursuant to
Section 2.09(b). From and after the effective date of any such replacement,
(i) the successor Issuing Lender shall have all the rights and obligations of
the Issuing Lender under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term “Issuing Lender” shall
be deemed to refer to such successor and all previous Issuing Lenders, as the
context shall require. After the replacement of an Issuing Lender hereunder, the
replaced Issuing Lender shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Lender under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.

(k) Cash Collateralization. If (i) any Event of Default shall occur and be
continuing, on the Business Day that the Borrowers receive notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing 50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this paragraph or
(ii) the Borrower shall be required to provide cash collateral in respect of any
Letter of Credit pursuant to Section 2.17(d), the Borrowers shall

 

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immediately deposit into an account established and maintained on the books and
records of the Administrative Agent, which account may be a “securities account”
(within the meaning of Section 8-501 of the Uniform Commercial Code as in effect
in the State of New York), in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to any
Borrower described in clause (h) or (i) of Article VIII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrowers under this Agreement.

The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Borrowers’
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Lender for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing 100% of the total LC Exposure), be applied
to satisfy other obligations of the Borrowers under this Agreement. If the
Borrowers are required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrowers within three Business
Days after all Events of Default have been cured or waived. If the Borrowers are
required to provide an amount of cash collateral hereunder pursuant to
Section 2.17(d), such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers within three Business Days after the expiration of the
relevant Letter of Credit and the payment of all outstanding amount with respect
thereto.

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

 

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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;

(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.

 

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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 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

 

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obligations of the Loan Parties hereunder and under the other Loan Documents) of
all of the 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, and each of the
other Loan Documents to which it is a party when executed and delivered by such
Obligor 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
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.

 

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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 year ended December 31, 2009
audited by KPMG LLP and (ii) its consolidated balance sheets and statements of
income, stockholders’ equity and cash flows as of and for the fiscal quarters
and the portions of the fiscal year ended March 31, 2010 and June 30, 2010, in
each case, 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, 2009, except for the matters
disclosed in the Company’s Form 10-Q filings for the first two quarters of 2010
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 Effective Date, 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.

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

 

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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 Effective Date 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. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Lender to issue Letters of Credit 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 each in form and substance reasonably
acceptable to the Administrative Agent (and the Borrowers hereby instruct each
such counsel to deliver such opinion to the Lenders and the Administrative
Agent).

(c) 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.

(d) 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.

 

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(e) Fees and Expenses. The portion of the Commitment Fee due and payable on the
Effective Date and all other 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.

(f) Other Documents. Such other documents as the Administrative Agent or 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.

SECTION 5.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Lender to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a) the representations and warranties of the 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 the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable (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 or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
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, and all Letters of Credit shall have expired or terminated and all LC
Disbursement shall have been reimbursed, 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

 

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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 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

 

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(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 furnish the
documents or information required under any of clauses (a), (b) and (f) above
shall be deemed to be satisfied upon 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.

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

(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.

 

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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.

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.

SECTION 6.12. Commitment Fee. On or before April 29, 2011 Borrowers shall pay to
JPMCB an amount equal to the portion of the Commitment Fee not previously paid
to JPMCB, unless the Commitment is refinanced with JPMCB.

 

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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, and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, 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 Effective Date 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;

(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 Effective Date and set forth 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 Effective Date and extensions, renewals,
replacements and combinations thereof that do not increase the outstanding
principal amount thereof or commitment therefore, 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

 

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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 Effective Date 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 (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).

 

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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;

(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
Effective Date, does not exceed 20% 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) Permitted Investments;

(b) Investments (other than Investments permitted under clauses (a) and (c) of
this Section) existing on the Effective Date 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;

 

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(f) Acquisitions after the Effective Date 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) the aggregate amount of such
Acquisitions after the Effective Date shall not exceed $10,000,000, (iv) with
respect to any Acquisition, the Consolidated Leverage Ratio on the last day of
such period would not have been greater than 2.00 to 1.0 and the Consolidated
Fixed Charge Coverage Ratio on the last day of such period would have been
greater than 1.30 to 1.0 (each as determined on a pro forma basis 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), (v) the
requirements of Section 6.11 applicable to such Person (if any) shall be
satisfied and (vi) 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 (iv) 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) Investments in any joint venture that is not a Subsidiary; provided that
(i) the aggregate amount (valued at cost) of all such Investments shall not
exceed $15,000,000 and (ii) no Default shall have then occurred and be
continuing or would result therefrom; and

(m) other Investments (other than Investments of a type referred to in
Section 7.06(l)) in an aggregate amount (valued at cost) not exceeding
$5,000,000.

 

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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, (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 and (iii) in the event the
Restricted Payment is the payment of a dividend the Consolidated Aggregate
Liquidity of the Company and its Subsidiaries, before such payment is made,
shall be greater than $25,000,000;

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).

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 wholly-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;

 

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(ii) restrictions and conditions existing on the Effective Date 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

(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 1.20 to 1.00 as at the
end of any fiscal quarter of the Company.

 

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(c) Consolidated Aggregate Liquidity. The Consolidated Aggregate Liquidity of
the Company and its Subsidiaries shall at the end of each fiscal quarter be
greater than $20,000,000.

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 or any
reimbursement obligation in respect of any LC Disbursement when such amount
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(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);

 

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(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, 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

 

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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 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 and the Issuing Lender 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.

 

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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
or in any other Loan Document), 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 any other Loan Document)
or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Company, a Lender or the Issuing 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 hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such

 

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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, the Issuing Lender 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 and the Issuing
Lender, 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 and under
the other Loan Documents. 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 and under the other Loan Documents,
the provisions of this Article and Section 10.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

Each Lender and the Issuing 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 and the Issuing
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.

Except as otherwise provided in Section 10.02(b) with respect to this Agreement,
the Administrative Agent may, with the prior consent of the Required Lenders
(but not otherwise), consent to any modification, supplement or waiver under of
the Loan Documents.

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

 

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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 or Issuing Lender, as set forth in
Schedule 10.01; and (ii) if to any other Lender or Issuing 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 or Issuing Lender hereunder, notices and other communications to the
Lenders and the Issuing Lender 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 or Issuing 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, the Issuing Lender or any Lender in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Lender 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 or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the Issuing 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 LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender adversely affected thereby;

 

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(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender 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 or the Issuing Lender
hereunder without the prior written consent of the Administrative Agent or the
Issuing Lender, as the case may be,

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
Agent, in connection with the 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), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Lender or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Lender or any Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letter of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations of such Loans or
Letters of Credit.

(b) Indemnification by the Company. The Borrowers shall indemnify the
Administrative Agent and each Lender and the Issuing 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

 

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execution or delivery of this Agreement, any other Loan Documents or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the Transactions or any other transactions contemplated hereby
or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by the Issuing Lender to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the 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 willful 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 or the Issuing
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent or Issuing Lender such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Lender.

(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, any other
Loan Document or any agreement or instrument contemplated hereby or thereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

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

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, the Issuing Lender,
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Lender and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

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(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;

(B) the Administrative Agent; and

(C) the consent of the Issuing Lender shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more Letters of Credit (whether or not then outstanding).

(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;

(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

 

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(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 and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Lender 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, the Issuing Lender 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.

(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

 

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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, the Administrative Agent, the Lenders
and the Issuing Lender 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
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent , the Issuing Lender or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of

 

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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 Letters of Credit and 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 the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 5.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

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, the Issuing Lender and each of their respective
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, the Issuing 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 or any other Loan Document held by such Lender or the Issuing Lender,
irrespective of whether or not such Lender or the Issuing Lender shall have made
any demand under this Agreement or any other Loan Document 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 and the Issuing Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

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

(a) 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

 

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any action or proceeding arising out of or relating to this Agreement or any
other Loan Document, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or in any other Loan Document shall affect any right
that the Administrative Agent, the Issuing Lender or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document 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 or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

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

SECTION 10.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 10.12. Confidentiality. Each of the Administrative Agent, the Issuing
Lender 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

 

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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, the Issuing Lender 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, the Issuing Lender 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 AND THE ISSUING 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 AND THE ISSUING
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.

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.

 

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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, issuances, extensions and renewals of
Letters of Credit, 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 MANAGEMENT RECRUITERS INTERNATIONAL, INC. By   /s/ Mark A.
Kerschner   Name: Mark A. Kerschner   Title: Treasurer MRI CONTRACT STAFFING,
INC. By   /s/ Wesley N. Riemer   Name: Wesley N. Riemer   Title: Vice President

 

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JPMORGAN CHASE BANK, N.A.,

individually and as Administrative Agent,

By   /s/ Devin T. Roccisano   Name: Devin T. Roccisano   Title: Associate

 

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SCHEDULE 1.01

Commitments

 

Name of Lender

   Commitment

JPMorgan Chase Bank, N.A.

   $35,000,000

TOTAL

   $35,000,000