Exhibit 10.1
CREDIT AGREEMENT
Dated as of June 5, 2007
between
iRobot Corporation
and
BANK OF AMERICA, N.A.
 
 

 

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TABLE OF CONTENTS

          Section   Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
    1  
1.01 Defined Terms
    1  
1.02 Other Interpretive Provisions
    13  
1.03 Accounting Terms
    13  
1.04 Rounding
    14  
1.05 References to Agreements and Laws
    14  
1.06 Times of Day
    14  
1.07 Letter of Credit Amounts
    14  
 
       
ARTICLE II. THE COMMITMENT AND CREDIT EXTENSIONS
    14  
2.01 Loans
    14  
2.02 Borrowings, Conversions and Continuations of Loans
    15  
2.03 Letters of Credit
    16  
2.04 Prepayments
    21  
2.05 Termination or Reduction of Commitment
    22  
2.06 Repayment of Loans
    22  
2.07 Interest
    22  
2.08 Fees
    23  
2.09 Computation of Interest and Fees
    23  
2.10 Evidence of Debt
    23  
2.11 Payments Generally
    23  
 
       
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
    24  
3.01 Taxes
    24  
3.02 Illegality
    25  
3.03 Inability to Determine Eurodollar Rate
    25  
3.04 Increased Cost and Reduced Return; Capital Adequacy
    25  
3.05 Funding Losses
    26  
3.06 Requests for Compensation
    26  
3.07 Survival
    26  
 
       
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
    26  
4.01 Conditions of Initial Credit Extension
    26  
4.02 Conditions to all Credit Extensions
    28  
 
       
ARTICLE V. REPRESENTATIONS AND WARRANTIES
    28  
5.01 Existence, Qualification and Power; Compliance with Laws
    28  
5.02 Authorization; No Contravention
    29  
5.03 Governmental Authorization; Other Consents
    29  
5.04 Binding Effect
    29  
5.05 Financial Statements; No Material Adverse Effect
    29  
5.06 Litigation
    30  
5.07 No Default
    30  
5.08 Ownership of Property; Liens
    30  
5.09 Environmental Compliance
    30  
5.10 Insurance
    30  
5.11 Taxes
    30  

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          Section   Page
5.12 ERISA Compliance
    31  
5.13 Subsidiaries
    31  
5.14 Margin Regulations; Investment Company Act
    31  
5.15 Disclosure
    32  
5.16 Compliance with Laws
    32  
5.17 Intellectual Property; Licenses, Etc.
    32  
 
       
ARTICLE VI. AFFIRMATIVE COVENANTS
    32  
6.01 Financial Statements
    32  
6.02 Certificates; Other Information
    33  
6.03 Notices
    34  
6.04 Payment of Obligations
    35  
6.05 Preservation of Existence, Etc.
    35  
6.06 Maintenance of Properties
    35  
6.07 Maintenance of Insurance
    35  
6.08 Compliance with Laws
    35  
6.09 Books and Records
    35  
6.10 Inspection Rights
    36  
6.11 Use of Proceeds
    36  
 
       
ARTICLE VII. NEGATIVE COVENANTS
    36  
7.01 Liens
    36  
7.02 Investments
    37  
7.03 Indebtedness
    37  
7.04 Fundamental Changes
    38  
7.05 Dispositions
    38  
7.06 Restricted Payments
    39  
7.07 Change in Nature of Business
    39  
7.08 Transactions with Affiliates
    39  
7.09 Burdensome Agreements
    40  
7.10 Use of Proceeds
    40  
7.11 Financial Covenants
    40  
 
       
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
    40  
8.01 Events of Default
    40  
8.02 Remedies Upon Event of Default
    42  
8.03 Application of Funds
    43  
 
       
ARTICLE IX. MISCELLANEOUS
    43  
9.01 Amendments; Etc.
    43  
9.02 Notices and Other Communications; Facsimile Copies
    43  
9.03 No Waiver; Cumulative Remedies
    44  
9.04 Attorney Costs, Expenses and Taxes
    44  
9.05 Indemnification by the Borrower
    44  
9.06 Payments Set Aside
    45  
9.07 Successors and Assigns
    45  
9.08 Confidentiality
    47  
9.09 Set-off
    48  
9.10 Interest Rate Limitation
    48  
9.11 Counterparts
    49  
9.12 Integration
    49  
9.13 Survival of Representations and Warranties
    49  

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          Section   Page
9.14 Severability
    49  
9.15 Governing Law
    49  
9.16 Waiver of Right to Trial by Jury
    50  
9.17 Dispute Resolution Provision
    50  
9.18 USA Patriot Act Notice
    52  
9.19 Time of the Essence
    52  
9.20 ENTIRE AGREEMENT
    52  
 
       
SIGNATURES
    S-1  
 
       
SCHEDULES
       
 
       
5.05 Supplement to Interim Financial Statements
       
5.06 Litigation
       
5.09 Environmental Matters
       
5.13 Subsidiaries and Other Equity Investments
       
5.18 Intellectual Property Matters
       
7.01 Existing Liens
       
7.03 Existing Indebtedness
       
9.02 Lending Office, Addresses for Notices
       
 
       
EXHIBITS
       
 
       
Form of
       
 
       
A Loan Notice
       
B Note
       
C Compliance Certificate
       
E Opinion Matters
       

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CREDIT AGREEMENT
     This CREDIT AGREEMENT (“Agreement”) is entered into as of June 5, 2007 by
and between iRobot Corporation, a Delaware corporation (the “Borrower”) and BANK
OF AMERICA, N.A. (the “Lender”).
     The Borrower has requested that the Lender provide a revolving credit
facility, and the Lender is willing to do so on the terms and conditions set
forth herein.
     In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
     1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
     “Affiliate” means, with respect to any 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. “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. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
     “Agreement” means this Credit Agreement.
     “Applicable Rate” means a per annum rate equal to:

  (a)   with respect to Base Rate Loans, 1.0%;     (b)   with respect to
Eurodollar Rate Loans and Letters of Credit, 1.25%.

     “Attorney Costs” means and includes all reasonable documented fees,
expenses and disbursements of any law firm or other external counsel and,
without duplication, the allocated cost of internal legal services and all
expenses and disbursements of internal counsel.
     “Attributable Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

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     “Audited Financial Statements” means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2006, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
     “Availability Period” means the period from and including the Closing Date
to the earlier of (a) the Maturity Date and (b) the date of termination of the
Commitment.
     “Base Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by the Lender as
its “prime rate.” The “prime rate” is a rate set by the Lender based upon
various factors including the Lender’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by the Lender shall take effect at the opening
of business on the day specified in the public announcement of such change.
     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.
     “Borrower” has the meaning specified in the introductory paragraph hereto.
     “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Lending Office is located and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.
     “Cash Collateralize” has the meaning specified in Section 2.03(f).
     “Closing Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived by the Lender.
     “Code” means the Internal Revenue Code of 1986.
     “Commitment” means the obligation of the Lender to make Loans and L/C
Credit Extensions hereunder in an aggregate principal amount at any one time not
to exceed Thirty Five Million ($35,000,000) Dollars, as such amount may be
adjusted from time to time in accordance with this Agreement.
     “Compensating Balances” has the meaning specified in Section 2.08(a).
     “Compliance Certificate” means a certificate substantially in the form of
Exhibit C.
     “Consolidated Tangible Net Worth” means, as of any date of determination,
for the Borrower and its Subsidiaries on a consolidated basis, Shareholders’
Equity of the Borrower and its Subsidiaries on that date minus the Intangible
Assets of the Borrower and its Subsidiaries on that date.

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     “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” has the meaning specified in the definition of “Affiliate.”
     “Credit Extension” means each of the following: (a) a borrowing of a Loan
and (b) an L/C Credit Extension.
     “Current Assets” means the aggregate of cash plus short term marketable
securities plus accounts receivable.
     “Current Liabilities” means the current portion of the Borrower’s
obligations for borrowed money (including Obligations hereunder).
     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
     “Default” means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
     “Default Rate” means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
     “Disposition” or “Dispose” means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
     “Dollar” and “$” mean lawful money of the United States.
     “Domestic Subsidiary” means any Subsidiary that is organized under the laws
of any political subdivision of the United States.
     “Eligible Assignee” has the meaning specified in Section 9.07(f).
     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

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     “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries 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.
     “ERISA” means the Employee Retirement Income Security Act of 1974.
     “ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
     “Eurodollar Base Rate” has the meaning specified in the definition of
Eurodollar Rate.
     “Eurodollar Rate” means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Lender pursuant to the
following formula:

         
 
Eurodollar Rate =     Eurodollar Base Rate      
 
        1.00 – Eurodollar Reserve Percentage    

          Where,
          “Eurodollar Base Rate” means, for such Interest Period:
     (a) the rate per annum equal to the rate determined by the Lender to be the
offered rate that appears on the page of the Telerate screen (or any successor
thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

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     (b) if the rate referenced in the preceding clause (a) does not appear on
such page or service or such page or service shall not be available, the rate
per annum equal to the rate determined by the Lender to be the offered rate on
such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or
     (c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Lender as the rate of interest
at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Rate Loan
being made, continued or converted and with a term equivalent to such Interest
Period would be offered by the Lender’s London Branch to major banks in the
London interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest Period.
     “Eurodollar Reserve Percentage” means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day applicable to the Lender under regulations
issued from time to time by the FRB for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar
Rate Loan shall be adjusted automatically as of the effective date of any change
in the Eurodollar Reserve Percentage.
     “Eurodollar Rate Loan” means a Loan that bears interest based on the
Eurodollar Rate.
     “Event of Default” has the meaning specified in Section 8.01.
          “Existing Letters of Credit” means the Two Million Dollar
($2,000,000.00) letter of credit issued on April 6, 2007 on behalf of the
Borrower for the benefit of Boston Properties Limited Partership.
          “Federal Funds Rate” means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Lender
on such day on such transactions as determined by the Lender.
          “FRB” means the Board of Governors of the Federal Reserve System of
the United States.

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     “GAAP” means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
     “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
     “Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.
     “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.
     “Honor Date” has the meaning specified in Section 2.03(c)(i).
     “Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
     (a) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

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     (b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
     (c) net obligations of such Person under any Swap Contract;
     (d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);
     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
     (f) capital leases and Synthetic Lease Obligations; and
     (g) all Guarantees of such Person in respect of any of the foregoing.
     For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
     “Indemnified Liabilities” has the meaning specified in Section 9.05.
     “Indemnitees” has the meaning specified in Section 9.05.
     “Intangible Assets” means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
calendar month and the Maturity Date.
     “Interest Period” means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three, six
or twelve (to the extent available) months thereafter, as selected by the
Borrower in its Loan Notice; provided that:

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     (i) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
     (ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
     (iii) no Interest Period shall extend beyond the Maturity Date.
     “Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
     “IP Rights” has the meaning specified in Section 5.18.
     “IRS” means the United States Internal Revenue Service.
     “Laws” means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
     “L/C Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
     “L/C Obligations” means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
unreimbursed drawings under all Letters of Credit.
     “Lender Lease Loan” means the lease financing to be provided by Banc of
America Leasing & Capital, LLC or is designee.
     “Lending Office” means the office or offices of the Lender described as
such on Schedule 9.02, or such other office or offices as the Lender may from
time to time notify the Borrower.

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     “Letter of Credit” means any letter of credit issued hereunder and shall
include the Existing Letters of Credit.
     “Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the Lender.
     “Letter of Credit Expiration Date” means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
     “Letter of Credit Sublimit” means an amount equal to Five Million
($5,000,000.00) Dollars. The Letter of Credit Sublimit is part of, and not in
addition to, the Commitment.
     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
     “Loan” has the meaning specified in Section 2.01.
     “Loan Documents” means this Agreement and the Note.
     “Loan Notice” means a notice of (a) a borrowing of a Loan, (b) a conversion
of a Loan from one Type to the other, or (c) a continuation of a Eurodollar Rate
Loan as the same Type, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit A.
     “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the operations, business or, condition (financial
or otherwise) of the Borrower or the Borrower and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of the Borrower to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Borrower of the Loan Documents to which it is a party.
     “Maturity Date” means June 5, 2010.
     “Multiemployer Plan” means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
     “Note” means a promissory note made by the Borrower in favor of the Lender
evidencing Loans made by the Lender, substantially in the form of Exhibit B.
     “Obligations” means all advances to, and debts, liabilities, obligations
(including, without limitation, for reimbursement in connection with guaranties
and letters of credit or in connection with any depository, cash management
and/or treasury management services or products provided by the Lender or any of
its affiliates to the Borrower including ePayables Solution), agreements,
undertakings, covenants and duties of, the Borrower arising under any Loan

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Document, Swap Contract, or otherwise with respect to any Loan or Letter of
Credit, or under the Lender’s Treasury Services Terms and Conditions, or under
any other agreements or documents of every kind relating to any depository,
treasury services products or cash management services provided by the Lender
for the benefit of or otherwise in respect of the Borrower (including all
renewals, extensions, amendments), including with limitation all interest, fees,
charges, and amounts chargeable to Borrower, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against the Borrower or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.
     “Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
     “Outstanding Amount” means (i) with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans occurring on such date; and
(ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.
     “Participant” has the meaning specified in Section 9.07(c).
     “PBGC” means the Pension Benefit Guaranty Corporation.
     “Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
     “Permitted Acquisition” means an acquisition of the capital stock or the
property of another Person, whether or not involving a merger or consolidation
with such other Person by the Borrower (so long as the Borrower is the surviving
entity) or any Subsidiary of the Borrower, provided that (i) any Person acquired
is in

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substantially the same field of business as the Borrower or any Subsidiary of
the Borrower (or any reasonable extensions or expansions thereof) and any
property acquired (or the property of the Person acquired) in such acquisition
is used or useful in the same business as the Borrower or its Subsidiaries were
engaged in on the Closing Date (or any reasonable extensions or expansions
thereof), (ii) no Indebtedness is assumed or incurred in connection with the
acquisition other than Indebtedness permitted under clause (iv) hereof or
Section 7.03, (iii) the acquisition is “friendly” or non-hostile in nature,
(iv) the total purchase price for all such acquisitions in the aggregate during
the term of this Agreement not exceed $15,000,000.00 inclusive of any unsecured
indebtedness assumed in connection with such acquisitions; and (v) the Borrower
shall have delivered to the Lender a pro forma compliance certificate
demonstrating compliance with Section 7.11, inclusive (after giving effect to
such acquisition on a pro forma basis) and certifying that no Default or Event
of Default would exist after giving effect to such acquisition.
     “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
     “Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
     “Quick Ratio” means the ratio of Current Assets to Current Liabilities.
     “Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
     “Request for Credit Extension” means (a) with respect to a borrowing,
conversion or continuation of a Loan, a Loan Notice, and (b) with respect to an
L/C Credit Extension, a Letter of Credit Application.
     “Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of the Borrower. Any
document delivered hereunder that is signed by a Responsible Officer of the
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
the Borrower.
     “Restricted Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest.
     “SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

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     “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.
     “Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower.
     “Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
     “Swap Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or any Affiliate of
the Lender).
     “Synthetic Lease Obligation” means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
     “Threshold Amount” means Two Million Five Hundred Thousand Dollars
($2,500,000.00).

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     “Total Outstandings” means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
     “Type” means, with respect to a Loan, its character as a Base Rate Loan or
a Eurodollar Rate Loan.
     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
     “United States” and “U.S.” mean the United States of America.
     1.02 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
     (a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
     (b) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
     (ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
     (iii) The term “including” is by way of example and not limitation.
     (iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
     (c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”
     (d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 Accounting Terms. (a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

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     (b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Lender shall so request, the Lender and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Lender), provided that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Borrower shall provide to the Lender financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
     1.04 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
     1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
     1.06 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
     1.07 Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.
ARTICLE II.
THE COMMITMENT AND CREDIT EXTENSIONS
     2.01 Loans. Subject to the terms and conditions set forth herein, the
Lender agrees to make loans (each such loan, a “Loan”) to the Borrower from time
to time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of the Commitment;
provided, however, that after giving effect to any borrowing, the Total
Outstandings shall not exceed the Commitment. Within the limits of the
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.01, prepay under Section 2.04, and reborrow
under this Section 2.01. A Loan may be a Base Rate Loan or a Eurodollar Rate
Loan, as further provided herein.

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     2.02 Borrowings, Conversions and Continuations of Loans.
     (a) Each borrowing, each conversion of a Loan from one Type to the other,
and each continuation of a Eurodollar Rate Loan shall be made upon the
Borrower’s irrevocable notice to the Lender, which may be given by telephone.
Each such notice must be received by the Lender not later than 1:00 p.m.
(i) three Business Days prior to the requested date of any borrowing of,
conversion to or continuation of a Eurodollar Rate Loan or of any conversion of
a Eurodollar Rate Loan to a Base Rate Loan, and (ii) on the requested date of
any borrowing of a Base Rate Loan. Notwithstanding anything to the contrary
contained herein, but subject to the provisions of Section 9.02(d), any such
telephonic notice may be given by an individual who has been authorized in
writing to do so by a Responsible Officer of the Borrower. Each such telephonic
notice must be confirmed promptly by delivery to the Lender of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each borrowing of, conversion to or continuation of a Eurodollar Rate
Loan shall be in a principal amount of $250,000 or a whole multiple of $50,000
in excess thereof. Except as provided in Section 2.03(c), each borrowing of or
conversion to a Base Rate Loan shall be in a principal amount of $100,000 or a
whole multiple of $50,000 in excess thereof. Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
borrowing, a conversion of a Loan from one Type to the other, or a continuation
of a Eurodollar Rate Loan, (ii) the requested date of the borrowing, conversion
or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of the Loan to be borrowed, converted or continued, (iv) the
Type of Loan to be borrowed or to which an existing Loan is to be converted, and
(v) if applicable, the duration of the Interest Period with respect thereto. If
the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the
applicable Loan shall be made as, or converted to, a Base Rate Loan. Any such
automatic conversion to a Base Rate Loan shall be effective as of the last day
of the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loan. If the Borrower requests a borrowing of, conversion to, or
continuation of a Eurodollar Rate Loan in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.
     (b) Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if a borrowing is the initial Credit Extension,
Section 4.01), the Lender shall make the proceeds of each Loan available to the
Borrower either by (i) crediting the account of the Borrower on the books of the
Lender with the amount of such proceeds or (ii) wire transfer of such proceeds,
in each case in accordance with instructions provided to (and reasonably
acceptable to) the Lender by the Borrower; provided, however, that if on the
date of the Loan Notice with respect to such borrowing is given, there are
drawings under Letters of Credit that have not been reimbursed by the Borrower,
then the proceeds of such borrowing shall be applied, first, to the payment in
full of any such unreimbursed drawings, and second, to the Borrower as provided
above.
     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate

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Loan. During the existence of an Event of Default, no Loan may be requested as,
converted to or continued as Eurodollar Rate Loans without the consent of the
Lender.
     (d) The Lender shall promptly notify the Borrower of the interest rate
applicable to any Interest Period for a Eurodollar Rate Loan upon determination
of such interest rate. The determination of the Eurodollar Rate by the Lender
shall be conclusive in the absence of demonstrable error. At any time that a
Base Rate Loan is outstanding, the Lender shall notify the Borrower of any
change in the Lender’s prime rate used in determining the Base Rate promptly
following the public announcement of such change.
     (e) After giving effect to all borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than eight (8) Interest Periods in effect.
     2.03 Letters of Credit.
     (a) The Letter of Credit Commitment.
     (i) Subject to the terms and conditions set forth herein, the Lender agrees
(A) from time to time on any Business Day during the period from the Closing
Date until the Letter of Credit Expiration Date, to issue Letters of Credit for
the account of the Borrower, and to amend or renew Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (B) to honor drafts
under the Letters of Credit; provided that the Lender shall not be obligated to
make any L/C Credit Extension with respect to any Letter of Credit if as of the
date of such L/C Credit Extension, (y) the Total Outstandings would exceed the
Commitment or (z) the Outstanding Amount of the L/C Obligations would exceed the
Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall
be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed. All Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.
     (ii) The Lender shall be under no obligation to issue any Letter of Credit
if:
     (A) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Lender from
issuing such Letter of Credit, or any Law applicable to the Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Lender shall prohibit, or
request that the Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the Lender
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Lender is not otherwise compensated

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hereunder) not in effect on the Closing Date, or shall impose upon the Lender
any unreimbursed loss, cost or expense which was not applicable on the Closing
Date and which the Lender in good faith deems material to it;
     (B) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance
or last renewal;
     (C) the expiry date of such requested Letter of Credit would occur after
the Letter of Credit Expiration Date;
     (D) the issuance of such Letter of Credit would violate one or more
policies of the Lender; or
     (E) such Letter of Credit is in an initial amount less than $100,000, or is
to denominated in a currency other than Dollars.
     (iii) The Lender shall be under no obligation to amend any Letter of Credit
if (A) the Lender would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
     (b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
     (i) Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Borrower delivered to the Lender in the form of a Letter
of Credit Application, appropriately completed and signed by a Responsible
Officer of the Borrower. Such L/C Application must be received by the Lender not
later than 1:00 p.m., at least two Business Days (or such later date and time as
the Lender may agree in a particular instance in its sole discretion) prior to
the proposed issuance date or date of amendment, as the case may be. In the case
of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail reasonably satisfactory to
the Lender: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the documents
to be presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the Lender may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail reasonably
satisfactory to the Lender (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the Lender may
require.

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     (ii) Upon the Lender’s determination that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the Lender shall, on the requested date, issue a
Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the Lender’s
usual and customary business practices.
     (iii) If the Borrower so requests in any applicable Letter of Credit
Application, the Lender may, in its sole and absolute discretion, agree to issue
a Letter of Credit that has (A) automatic renewal provisions (each, an
“Auto-Renewal Letter of Credit”) or (B) an expiry date of more than twelve
months after the date of issuance; provided that any such Auto-Renewal Letter of
Credit must permit the Lender to prevent any such renewal at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the Lender, the Borrower shall
not be required to make a specific request to the Lender for any such renewal.
Once an Auto-Renewal Letter of Credit has been issued, the Lender shall, subject
to the terms and conditions set forth herein, permit the renewal of such Letter
of Credit to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the Lender shall have no obligation to permit the
renewal of any Auto-Renewal Letter of Credit at any time if it has determined
that it would have no obligation at such time to issue such Letter of Credit in
its renewed form under the terms hereof (by reason of the provisions of
Section 2.03(a)(ii) or otherwise).
     (iv) Promptly after its delivery of any Letter of Credit or any amendment
to a Letter of Credit to an advising bank with respect thereto or to the
beneficiary thereof, the Lender will also deliver to the Borrower a true and
complete copy of such Letter of Credit or amendment.
     (c) Drawings and Reimbursements.
     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the Lender shall notify the Borrower
thereof. Not later than 1:00 p.m. on the date of any payment by the Lender under
a Letter of Credit (each such date, an “Honor Date”), of which payment the
Lender has provided notice to the Borrower, the Borrower shall reimburse the
Lender in an amount equal to the amount of such drawing. If the Borrower fails
to so reimburse the Lender, the Borrower shall be deemed to have requested a
borrowing of a Base Rate Loan to be disbursed on the Honor Date in an amount
equal to the amount of such unreimbursed drawing, without regard to the minimum
and multiples specified in Section 2.02 for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized portion of the Commitment and
the conditions set forth in Section 4.02 (other than the delivery of a Loan
Notice).

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     (ii) If the Borrower fails to reimburse the Lender for any drawing under
any Letter of Credit (whether by means of a borrowing or otherwise), such
unreimbursed amount shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate.
     (d) Obligations Absolute. The obligation of the Borrower to reimburse the
Lender for each drawing under each Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
     (i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;
     (ii) the existence of any claim, counterclaim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated hereby or by
such Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
     (iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;
     (iv) any payment by the Lender under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the Lender under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law, in each such case, other than any
such payment resulting from the gross negligence or willful misconduct of the
Lender; or
     (v) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower.
     The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly notify the Lender. The Borrower shall be conclusively
deemed to have waived any such claim against the Lender and its correspondents
unless such notice is given as aforesaid.

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     (e) Role of Lender. The Borrower agrees that, in paying any drawing under a
Letter of Credit, the Lender shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the Lender, any of its Affiliates, any of the respective
officers, directors, employees, agents or attorneys-in-fact of the Lender and
its Affiliates, nor any of the respective correspondents, participants or
assignees of the Lender shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(d); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the Lender, and the Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Lender’s willful misconduct or gross negligence or the Lender’s
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the Lender may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the Lender shall
not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
     (f) Cash Collateral. Upon the request of the Lender, (i) if the Lender has
honored any full or partial drawing request under any Letter of Credit and such
drawing has not been reimbursed on the applicable Honor Date in accordance with
Section 2.03(c), or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or wholly
undrawn, the Borrower shall promptly Cash Collateralize the then Outstanding
Amount of all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the applicable Honor Date or the Letter of Credit Expiration
Date, as the case may be). For purposes hereof, “Cash Collateralize” means to
pledge and deposit with or deliver to the Lender, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance reasonably to the Lender. Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Lender a security
interest in all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing. Cash collateral shall be maintained in blocked,
non-interest bearing deposit accounts at the Lender.
     (g) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
the Lender and the Borrower when a Letter of Credit is issued (i) the rules of
the “International Standby Practices 1998” published by the Institute of
International

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Banking Law & Practice (or such later version thereof as may be in effect at the
time of issuance) shall apply to each standby Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the “ICC”) at the
time of issuance (including the ICC decision published by the Commission on
Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
     (h) Letter of Credit Fees. The Borrower shall pay to the Lender a Letter of
Credit fee for each Letter of Credit equal to the Applicable Rate times the
daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.
     (i) Documentary and Processing Charges Payable to Lender. The Borrower
shall pay to the Lender the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the Lender
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
     (j) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
     2.04 Prepayments.
     (a) The Borrower may, upon notice to the Lender, at any time or from time
to time voluntarily prepay any Loan in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Lender not later
than 1:00 p.m. (A) three Business Days prior to any date of prepayment of a
Eurodollar Rate Loan, and (B) on the date of prepayment of a Base Rate Loan;
(ii) any prepayment of a Eurodollar Rate Loan shall be in a principal amount of
$250,000 or a whole multiple of $50,000 in excess thereof; and (iii) any
prepayment of a Base Rate Loan shall be in a principal amount of $100,000 or a
whole multiple of $50,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loan(s) to be prepaid.
If such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Eurodollar Rate Loan shall be
accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05.

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     (b) If for any reason the Total Outstandings at any time exceed the
Commitment then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless after
the prepayment in full of the Loans the Total Outstandings exceed the Commitment
then in effect.
     2.05 Termination or Reduction of Commitment. The Borrower may, upon notice
to the Lender, terminate the Commitment, or from time to time permanently reduce
the Commitment; provided that (i) any such notice shall be received by the
Lender not later than 1:00 p.m., five Business Days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $250,000 or any whole multiple of $50,000 in excess thereof,
(iii) the Borrower shall not terminate or reduce the Commitment if, after giving
effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Commitment, and (iv) if, after giving effect to
any reduction of the Commitment, the Letter of Credit Sublimit exceeds the
amount of the Commitment, such Sublimit shall be automatically reduced by the
amount of such excess.
     2.06 Repayment of Loans. The Borrower shall repay to the Lender on the
Maturity Date the aggregate principal amount of Loans outstanding on such date.
     2.07 Interest.
     (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate minus the Applicable
Rate.
     (b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
     (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

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     2.08 Fees.
     In addition to certain fees described in subsections (h) and (i) of
Section 2.03 Borrower shall maintain on deposit with the Lender collected funds
equal to the greater of: (a) forty percent (40%) of total cash or cash
equivalents of the Borrower available for investment; or (b) Ten Million
($10,000,000.00) Dollars (the “Compensating Balances”). If the Borrower fails to
maintain the Compensating Balances, the Lender reserves the right to adjust the
Applicable Rate to compensate the Lender for its loss of its required rate of
return.
     2.09 Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by the Lender’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.11(a), bear
interest for one day.
     2.10 Evidence of Debt. The Credit Extensions made by the Lender shall be
evidenced by one or more accounts or records maintained by the Lender in the
ordinary course of business. The accounts or records maintained by the Lender
shall be conclusive absent demonstrable error of the amount of the Credit
Extensions made by the Lender to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. Upon the request of the Lender,
the Borrower shall execute and deliver to the Lender a Note, which shall
evidence the Lender’s Loans in addition to such accounts or records. The Lender
may attach schedules to the Note and endorse thereon the date, Type, amount and
maturity of each Loan and payments with respect thereto.
     2.11 Payments Generally.
     (a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Lender at the applicable Lending Office in Dollars and in
immediately available funds not later than 3:00 p.m. on the date specified
herein. All payments received by the Lender after 3:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.
     (b) If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.
     (c) Nothing herein shall be deemed to obligate the Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by the

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Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
     3.01 Taxes.
     (a) Any and all payments by the Borrower to or for the account of the
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Lender is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as “Taxes”). If the Borrower shall be required by any Laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the Lender,
(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 Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to the Lender the original or a certified copy of a receipt evidencing
payment thereof.
     (b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).
     (c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Lender, the Borrower shall also pay to the Lender, at the time interest is paid,
such additional amount that the Lender reasonably specifies is necessary to
preserve the after-tax yield (after factoring in all taxes, including taxes
imposed on or measured by net income) that the Lender would have received if
such Taxes or Other Taxes had not been imposed.
     (d) The Borrower agrees to indemnify the Lender for (i) the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section) paid by the Lender,
(ii) amounts payable under Section 3.01(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the

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relevant Governmental Authority, other than Taxes or liability resulting from
the Lender’s gross negligence or willful misconduct. Payment under this
subsection (d) shall be made within 30 days after the date the Lender makes a
demand therefor.
     3.02 Illegality. If the Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for the Lender or its Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
then, on notice thereof by the Lender to the Borrower, any obligation of the
Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans
to Eurodollar Rate Loans shall be suspended until the Lender notifies the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from the
Lender, prepay or, if applicable, convert all Eurodollar Rate Loans to Base Rate
Loans, either on the last day of the Interest Period therefor, if the Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such Eurodollar
Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay
accrued interest on the amount so prepaid or converted. The Lender agrees to
designate a different Lending Office if such designation will avoid the need for
such notice and will not, in the good faith judgment of the Lender, otherwise be
materially disadvantageous to the Lender.
     3.03 Inability to Determine Eurodollar Rate. If the Lender determines that
for any reason adequate and reasonable means do not exist for determining the
Eurodollar Base Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan, or that the Eurodollar Base Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to the Lender of funding such Loan,
the Lender will promptly so notify the Borrower. Thereafter, the obligation of
the Lender to make or maintain Eurodollar Rate Loans shall be suspended until
the Lender revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a borrowing of, conversion to or continuation of
a Eurodollar Rate Loan or, failing that, will be deemed to have converted such
request into a request for a borrowing of a Base Rate Loan in the amount
specified therein.
     3.04 Increased Cost and Reduced Return; Capital Adequacy.
     (a) If the Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or the Lender’s compliance
therewith, there shall be any increase in the cost to the Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or issuing Letters
of Credit, or a reduction in the amount received or receivable by the Lender in
connection with any of the foregoing (excluding for purposes of this subsection
(a) any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis
of taxation of overall net income or overall gross income by the United States
or any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which the Lender is organized or has its Lending Office, and
(iii) reserve requirements utilized in the determination of the Eurodollar
Rate), then from time to time upon demand of the Lender, the Borrower shall pay
to the Lender such additional amounts as will compensate the Lender for such
increased cost or reduction.

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     (b) If the Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by the Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of the Lender or any corporation
controlling the Lender as a consequence of the Lender’s obligations hereunder
(taking into consideration its policies with respect to capital adequacy and the
Lender’s desired return on capital), then from time to time upon demand of the
Lender, the Borrower shall pay to the Lender such additional amounts as will
compensate the Lender for such reduction.
     3.05 Funding Losses. Upon demand of the Lender from time to time, the
Borrower shall promptly compensate the Lender for and hold the Lender harmless
from any loss, cost or expense incurred by it as a result of:
     (a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
     (b) any failure by the Borrower (for a reason other than the failure of the
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower,
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by the
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lender under
this Section 3.05, the Lender shall be deemed to have funded each Eurodollar
Rate Loan at the Eurodollar Base Rate used in determining the Eurodollar Rate
for such Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.
     3.06 Requests for Compensation. A certificate of the Lender claiming
compensation under this Article III and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of demonstrable error. In determining such amount, the Lender may
use any reasonable averaging and attribution methods. Any claim for compensation
under this Article III shall be made by the Lender within a reasonable time
after it becomes aware of the circumstances giving rise to such claim.
     3.07 Survival. All of the Borrower’s obligations under this Article III
shall survive termination of the Commitment and repayment of all other
Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
     4.01 Conditions of Initial Credit Extension. The obligation of the Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

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     (a) The Lender’s receipt of the following, each of which shall be originals
or facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the Borrower, each dated the
Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance reasonably
satisfactory to the Lender and its legal counsel:
     (i) executed counterparts of this Agreement, sufficient in number for
distribution to the Lender and the Borrower;
     (ii) if requested by the Lender, a Note executed by the Borrower;
     (iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of the Borrower
as the Lender may reasonably require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
the Borrower is a party;
     (iv) such documents and certifications as the Lender may reasonably require
to evidence that the Borrower is duly organized or formed, and that the Borrower
is validly existing, in good standing and qualified to engage in business in
each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
     (v) a favorable opinion of Goodwin Proctor LLP, counsel to the Borrower,
addressed to the Lender, as to the matters set forth in Exhibit E and such other
matters concerning the Borrower and the Loan Documents as the Lender may
reasonably request;
     (vi) a certificate of a Responsible Officer of the Borrower either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by the Borrower and the
validity against the Borrower of the Loan Documents to which it is a party, and
such consents, licenses and approvals shall be in full force and effect, or
(B) stating that no such consents, licenses or approvals are so required;
     (vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b) have
been satisfied, and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect;;
     (viii) evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect;

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     (ix) such other assurances, certificates, documents, consents or opinions
as the Lender reasonably may require.
     (b) Any fees required to be paid on or before the Closing Date shall have
been paid.
     (c) The Borrower shall have paid all Attorney Costs of the Lender to the
extent invoiced prior to the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Lender).
     4.02 Conditions to all Credit Extensions. The obligation of the Lender to
make any Credit Extension is subject to the following conditions precedent:
     (a) The representations and warranties of the Borrower contained in
Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.
     (b) No Default shall exist, or would result from such proposed Credit
Extension.
     (c) The Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
     Each Request for Credit Extension (other than a Loan Notice requesting only
a conversion of a Loan to the other Type or a continuation of a Eurodollar Rate
Loan) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
     The Borrower represents and warrants to the Lender that:
     5.01 Existence, Qualification and Power; Compliance with Laws. Borrower
(a) is a corporation duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan

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Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
     5.02 Authorization; No Contravention. The execution, delivery and
performance by the Borrower of each Loan Document to which such Person is party,
have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, (i) any Contractual
Obligation to which such Person is a party or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law; except in each case
referred to in clause (b)(i) or (c), to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.
     5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document.
     5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by the
Borrower that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower that is party
thereto in accordance with its terms.
5.05 Financial Statements; No Material Adverse Effect.
     (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
     (b) The unaudited consolidated financial statements of the Borrower and its
Subsidiaries dated March 31, 2007, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the

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case of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments. Schedule 5.05 sets forth all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date of such financial statements as required by SEC
guidelines.
     (c) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
     5.06 Litigation. Except as specifically disclosed in Schedule 5.06, there
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower, threatened in writing, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues that
(a) purport to prevent, hinder or dalay this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
     5.07 No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
     5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.
     5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
     5.10 Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.
     5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed, and have paid
all Federal, state and other

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material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.
     5.12 ERISA Compliance.
     (a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of the Borrower, nothing has occurred which would prevent, or cause the loss of,
such qualification. The Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
     (b) There are no pending or, to the best knowledge of the Borrower,
threatened (in writing) claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
     (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
     5.13 Subsidiaries. The Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part(b) of Schedule 5.13.
     5.14 Margin Regulations; Investment Company Act.
     (a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.

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     (b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.
     5.15 Disclosure. The Borrower has disclosed to the Lender all agreements
and instruments to which it or any of its Subsidiaries is subject that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (in writing) by or on behalf of the Borrower to the Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by or when
taken together with other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
     5.16 Compliance with Laws. Each of the Borrower and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
     5.17 Intellectual Property; Licenses, Etc.
     The Borrower and its Subsidiaries own, or possess the right to use, all of
the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To the
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person. Except as specifically disclosed in
Schedule 5.18, no claim or litigation regarding any of the foregoing is pending
or, to the knowledge of the Borrower, threatened in writing, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
     So long as the Commitment shall be in effect, any Loan or other Obligation
hereunder (other than unasserted contingent indemnification obligations) shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
the Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:
     6.01 Financial Statements. Deliver to the Lender, in form and detail
reasonably satisfactory to the Lender:

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     (a) as soon as available, but in any event within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of
PriceWaterhouseCoopers or another independent certified public accountant of
nationally recognized standing reasonably acceptable to the Lender, which report
and opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like qualification
or exception or any qualification or exception as to the scope of such audit;
     (b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal quarter and for
the portion of the Borrower’s fiscal year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting in all material respects the financial condition, results
of operations, shareholders’ equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and
     (c) as soon as available, but in any event within 90 days after the end of
such fiscal year of the Borrower, a budget for the then current year, in form
and substance reasonably satisfactory to the Lender.
As to any information contained in materials furnished pursuant to Section 6.02,
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described in
subsections (a) and (b) above at the times specified therein.
     6.02 Certificates; Other Information. Deliver to the Lender, in form and
detail reasonably satisfactory to the Lender:
     (a) [Reserved];
     (b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;
     (c) promptly after any request by the Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrower by
independent

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accountants in connection with the accounts or books of the Borrower or any
Subsidiary, or any audit of any of them;
     (d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the Lender
pursuant hereto; and
     (e) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Lender may from time to time reasonably
request.
     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 9.02; provided
that: (i) if the Lender so requests, the Borrower shall deliver paper copies of
such documents to the Lender until a written request to cease delivering paper
copies is given by the Lender and (ii) the Borrower shall notify (which may be
by facsimile or electronic mail) the Lender of the posting of any such
documents. Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Lender.
     6.03 Notices. Promptly notify the Lender:
     (a) of the occurrence of any Event of Default;
     (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
     (c) of the occurrence of any ERISA Event; and
     (d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary;
     Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

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     6.04 Payment of Obligations. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets; (b) all lawful claims which, if unpaid, would by law
become a Lien upon its property; and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument
or agreement evidencing such Indebtedness; except in each case referred to in
clause (a), (b) or (c), unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary.
     6.05 Preservation of Existence, Etc. Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
     6.06 Maintenance of Properties. Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.
     6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days’
prior notice to the Lender of termination, lapse or cancellation of such
insurance.
     6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, write, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
     6.09 Books and Records. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.

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     6.10 Inspection Rights. Permit representatives and independent contractors
of the Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Lender (or any of its
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes not in contravention of any Law or of any Loan Document.
ARTICLE VII.
NEGATIVE COVENANTS
     So long as the Commitment shall be in effect, any Loan or other Obligation
hereunder (other than unasserted contingent indemnification obligations) shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:
     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
     (a) Liens pursuant to any Loan Document;
     (b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);
     (c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
     (e) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
     (f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to

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judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
     (g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
     (h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;
     (i) Liens securing Indebtedness permitted under Section 7.03(e); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition.
     7.02 Investments. Make any Investments, except:
     (a) Investments held by the Borrower or such Subsidiary in the form of cash
equivalents, short-term marketable securities or intermediate term government
bonds;
     (b) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $1,000,000.00 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
     (c) Investments of the Borrower in any wholly-owned Subsidiary and
Investments of any wholly-owned Subsidiary in the Borrower or in another
wholly-owned Subsidiary;
     (d) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
     (e) Guarantees permitted by Section 7.03; and
     (f) Permitted Acquisitions.
     7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
     (a) Indebtedness under the Loan Documents;
     (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding,

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renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such refinancing and by an amount equal to any existing commitments
unutilized thereunder;
     (c) Guarantees of the Borrower in respect of Indebtedness otherwise
permitted hereunder of the Borrower;
     (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a “market view;” and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
     (e) Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$17,000,000.00 (inclusive of the Lender Lease Loan); and
     (f) unsecured Indebtedness in an aggregate principal amount not to exceed
$500,000.00 at any time outstanding exclusive of unsecured Indebtedness
permitted to be assumed in connection with Permitted Acquisitions.
     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
     (a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that when any wholly-owned Subsidiary is merging
with another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person; and
     (b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
wholly-owned Subsidiary, then the transferee must either be the Borrower or a
wholly-owned Subsidiary.
     7.05 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:
     (a) Dispositions of obsolete, worn out or surplus property, whether now
owned or hereafter acquired, in the ordinary course of business;

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     (b) Dispositions of inventory in the ordinary course of business;
     (c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
     (d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;
     (e) Dispositions permitted by Section 7.04;
     (f) Licenses of IP Rights of similar assets of the Borrower in the ordinary
course of its business.
     provided, however, that any Disposition pursuant to clauses (a) through (e)
shall be for fair market value.
     7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:
     (a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other equity interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);
     (b) the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common equity
interests of such Person; and
     (c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common equity interests or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
equity.
     7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
     7.08 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.

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     7.09 Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability
(i) of any Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.
     7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
     7.11 Financial Covenants.
     (a) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth
at any time to be less than Seventy-Five Million ($75,000,000.00) Dollars.
     (b) Quick Ratio. Permit the Quick Ratio at any time to be less than 1.5:
1.0.
     (c) Minimum Profit. Permit the Borrower’s annual net income (as determined
in accordance with GAAP) before taxes and extraordinary items to be less than
$1.00.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
     8.01 Events of Default. Any of the following shall constitute an Event of
Default:
     (a) Non-Payment. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three days after the same becomes due, any interest on any Loan or
on any L/C Obligation, or any fee due hereunder, or (iii) within five days after
the same becomes due, any other amount payable hereunder or under any other Loan
Document; or
     (b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10
or 6.11 or Article VII; or
     (c) Other Defaults. The Borrower fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

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     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or
     (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or
(ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or
     (f) Insolvency Proceedings, Etc. The Borrower or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
     (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is

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issued or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 30 days after its
issue or levy; or
     (h) Judgments. There is entered against the Borrower or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 30 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or
     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations (other than unasserted
contingent indemnification obligations), ceases to be in full force and effect;
or the Borrower in writing contests in any manner the validity or enforceability
of any Loan Document; or the Borrower denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document.
     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Lender may take any or all of the following actions:
     (a) declare the Commitment to be terminated, whereupon the Commitment shall
be terminated;
     (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
     (c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
     (d) exercise all rights and remedies available to it under the Loan
Documents or applicable law;

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provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the Commitment shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation of the
Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Lender.
     8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Lender in such
order as it elects in its sole discretion.
ARTICLE IX.
MISCELLANEOUS
     9.01 Amendments; Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower therefrom, shall be effective unless in writing signed by the Lender
and the Borrower, as the case may be, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
     9.02 Notices and Other Communications; Facsimile Copies.
     (a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the address, facsimile number or electronic mail address specified
for notices to the applicable party on Schedule 9.02; or to such other address,
facsimile number or electronic mail address as shall be designated by such party
in a notice to the other party. All notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the telephone
number specified for notices to the applicable party on Schedule 9.02, or to
such other telephone number as shall be designated by such party in a notice to
the other party. All such notices and other communications shall be deemed to be
given or made upon the earlier to occur of (i) actual receipt by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when signed for by
or on behalf of the relevant party hereto; (B) if delivered by mail, four
Business Days after deposit in the mails, postage prepaid; (C) if delivered by
facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail when delivered; provided, however, that notices and
other communications to the Lender pursuant to Article II shall not be effective
until actually received by the Lender. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
     (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as

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manually-signed originals and shall be binding on the Borrower and the Lender.
The Lender may also require that any such documents and signatures be confirmed
by a manually-signed original thereof; provided, however, that the failure to
request or deliver the same shall not limit the effectiveness of any facsimile
document or signature.
     (c) Reliance by Lender. The Lender shall be entitled to rely and act upon
any notices (including telephonic Loan Notices) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Lender, its Affiliates, and their respective officers, directors, employees,
agents and attorneys-in-fact from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of the Borrower, other than any such losses, costs, expenses and
liabilities resulting from the Lender’s gross negligence or willful misconduct.
All telephonic notices to and other communications with the Lender may be
recorded by the Lender, and the Borrower hereby consents to such recording.
     9.03 No Waiver; Cumulative Remedies. No failure by the Lender to exercise,
and no delay by the Lender in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
     9.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Lender for all costs and expenses reasonably incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the Lender
for all costs and expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or the other Loan Documents (including all such costs and expenses
incurred during any “workout” or restructuring in respect of the Obligations and
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs. The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses reasonably
incurred by the Lender and the cost of independent public accountants and other
outside experts retained by the Lender. All amounts due under this Section 9.04
shall be payable within thirty days after demand therefor. The agreements in
this Section shall survive the termination of the Commitment and repayment,
satisfaction or discharge of all other Obligations.
     9.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless the Lender, its Affiliates, and their respective directors, officers,
employees, counsel, agents and

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attorneys-in-fact (collectively the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) the Commitment,
any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the 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), (c) any
actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower or, any
Subsidiary or any Environmental Liability related in any way to the Borrower or,
any Subsidiary, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all the
foregoing, collectively, the “Indemnified Liabilities”) provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements 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. No Indemnitee
shall have any liability for any indirect or consequential damages relating to
this Agreement or any other Loan Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date). All
amounts due under this Section 9.05 shall be payable within ten Business Days
after demand therefor. The agreements in this Section shall survive the
termination of the Commitment and the repayment, satisfaction or discharge of
all the other Obligations.
     9.06 Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Lender, or the Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Lender in
its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then,
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred.
     9.07 Successors and Assigns.
     (a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender and the Lender may not assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in accordance with
the provisions of subsection (b) of this Section, (ii)

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by way of participation in accordance with the provisions of subsection (c) of
this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (e) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection
(c) of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
     (b) The Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of the Commitment, the Loans and L/C Obligations at the time owing
to it) pursuant to documentation acceptable to the Lender and the assignee, it
being understood and agreed that with respect to any Letters of Credit
outstanding at the time of any such assignment, the Lender may sell to the
assignee a ratable participation in such Letters of Credit. From and after the
effective date specified in such documentation, such Eligible Assignee shall be
a party to this Agreement and, to the extent of the interest assigned by the
Lender, have the rights and obligations of the Lender under this Agreement, and
the Lender shall, to the extent of the interest so assigned, be released from
its obligations under this Agreement (and, in the case of an assignment of all
of the Lender’s rights and obligations under this Agreement, shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, 9.04 and 9.05 with respect to facts and circumstances occurring
prior to the effective date of such assignment, and shall continue to have all
of the rights provided hereunder to the Lender in its capacity as issuer of any
Letters of Credit outstanding at the time of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver new or replacement Notes to
the Lender and the assignee, and shall execute and deliver any other documents
reasonably necessary or appropriate to give effect to such assignment and to
provide for the administration of this Agreement after giving effect thereto.
     (c) The Lender may at any time, without the consent of, or notice to, the
Borrower, sell participations to any Person (other than a natural person or the
Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of the Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
outstanding Letters of Credit and/or the Loans and/or the reimbursement
obligations in respect of Letters of Credit); provided that (i) the Lender’s
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the Borrower for the performance of such
obligations and (iii) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which the Lender sells
such a participation shall provide that the Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that the Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification that would (i) postpone any
date upon which any payment of money is scheduled to be made to such

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Participant, or (ii) reduce the principal, interest, fees or other amounts
payable to such Participant. Subject to subsection (d) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were the Lender and had
acquired its interest by assignment pursuant to subsection (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.09 as though it were the Lender.
     (d) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent. A Participant that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Code shall not be entitled to the benefits of
Section 3.01 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
provide to the Lender such tax forms prescribed by the IRS as are necessary or
desirable to establish an exemption from, or reduction of, U.S. withholding tax.
     (e) The Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under the Note, if
any) to secure obligations of the Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release the Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for the Lender as a party hereto.
     (f) As used herein, the following terms have the following meanings:
     “Eligible Assignee” means (a) an Affiliate of the Lender; (b) an Approved
Fund; and (c) any other Person (other than a natural person) approved by the
Borrower (such approval not to be unreasonably withheld or delayed); provided
that no such approval shall be required if an Event of Default has occurred and
is continuing.
     “Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
     “Approved Fund” means any Fund that is administered or managed by (a) the
Lender or (b) an Affiliate of the Lender.
     9.08 Confidentiality. The Lender agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party

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hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any 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 Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Lender on a nonconfidential basis
from a source other than the Borrower. For purposes of this Section,
“Information” means all information received from the Borrower relating to the
Borrower or any of its businesses, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by the
Borrower, provided that, in the case of information received from the Borrower
after the date hereof, such information either (x) consists of financial
statements or (y) is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
     9.09 Set-off. In addition to any rights and remedies of the Lender provided
by law, upon the occurrence and during the continuance of any Event of Default,
the Lender is authorized at any time and from time to time, without prior notice
to the Borrower, any such notice being waived by the Borrower 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 by, and other
indebtedness at any time owing by, the Lender to or for the credit or the
account of the Borrower against any and all Obligations then due and owing to
the Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Lender shall have made demand under
this Agreement or any other Loan Document and although such Obligations may be
denominated in a currency different from that of the applicable deposit or
indebtedness. The Lender agrees promptly to notify the Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
     9.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Lender exceeds the Maximum Rate, the
Lender may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

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     9.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
     9.12 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Lender in any other Loan Document shall not be deemed a
conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof.
     9.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.
     9.14 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
     9.15 Governing Law.
     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE LENDER SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS SITTING IN THE CITY OF BOSTON OR OF THE UNITED STATES FOR THE
EASTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE BORROWER AND THE LENDER EACH CONSENTS, FOR

49

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ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE BORROWER AND THE LENDER EACH IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER AND THE LENDER EACH WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
     9.16 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
     9.17 Dispute Resolution Provision.
     This paragraph, including the subparagraphs below, is referred to as the
“Dispute Resolution Provision.” This Dispute Resolution Provision is a material
inducement for the parties entering into this agreement.
     (a) This Dispute Resolution Provision concerns the resolution of any
controversies or claims between the parties, whether arising in contract, tort
or by statute, including but not limited to controversies or claims that arise
out of or relate to: (i) this agreement (including any renewals, extensions or
modifications); or (ii) any document related to this agreement (collectively a
“Claim”). For the purposes of this Dispute Resolution Provision only, the term
“parties” shall include any parent corporation, subsidiary or affiliate of the
Lender involved in the servicing, management or administration of any obligation
described or evidenced by this agreement.
     (b) At the request of any party to this agreement, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U.S. Code) (the “Act”). The Act will apply even though this agreement
provides that it is governed by the law of a specified state.

50

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     (c) Arbitration proceedings will be determined in accordance with the Act,
the then-current rules and procedures for the arbitration of financial services
disputes of the American Arbitration Association or any successor thereof
(“AAA”), and the terms of this Dispute Resolution Provision. In the event of any
inconsistency, the terms of this Dispute Resolution Provision shall control. If
AAA is unwilling or unable to (i) serve as the provider of arbitration or
(ii) enforce any provision of this arbitration clause, the Lender may designate
another arbitration organization with similar procedures to serve as the
provider of arbitration.
     (d) The arbitration shall be administered by AAA and conducted, unless
otherwise required by law, in any U.S. state where real or tangible personal
property collateral for this credit is located or if there is no such
collateral, in the state specified in the governing law section of this
agreement. All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million Dollars ($5,000,000), upon the request of any party, the
Claims shall be decided by three arbitrators. All arbitration hearings shall
commence within ninety (90) days of the demand for arbitration and close within
ninety (90) days of commencement and the award of the arbitrator(s) shall be
issued within thirty (30) days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide
a concise written statement of reasons for the award. The arbitration award may
be submitted to any court having jurisdiction to be confirmed and have judgment
entered and enforced.
     (e) The arbitrator(s) will give effect to statutes of limitation in
determining any Claim and may dismiss the arbitration on the basis that the
Claim is barred. For purposes of the application of any statutes of limitation,
the service on AAA under applicable AAA rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s), except as set forth at subparagraph (h) of this Dispute
Resolution Provision. The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this agreement.
     (f) This paragraph does not limit the right of any party to: (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate judicial
or non-judicial foreclosure against any real or personal property collateral;
(iii) exercise any judicial or power of sale rights, or (iv) act in a court of
law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary
remedies.
     (g) The filing of a court action is not intended to constitute a waiver of
the right of any party, including the suing party, thereafter to require
submittal of the Claim to arbitration.
     (h) Any arbitration or trial by a judge of any Claim will take place on an
individual basis without resort to any form of class or representative action
(the “Class Action Waiver”). Regardless of anything else in this Dispute
Resolution Provision, the validity and effect of the Class Action Waiver may be
determined only by a court and not by an arbitrator. The parties to this
Agreement acknowledge that the Class Action Waiver is material and essential to
the arbitration of any disputes between the parties and is nonseverable from the
agreement to arbitrate Claims. If the Class Action Waiver is limited, voided or
found unenforceable, then the parties’ agreement to arbitrate shall be null and
void with respect to such proceeding, subject to

51

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

 

the right to appeal the limitation or invalidation of the Class Action Waiver.
The Parties acknowledge and agree that under no circumstances will a class
action be arbitrated.
     (i) By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim. Furthermore, without intending in any way to limit this agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim. This waiver of jury trial shall remain in effect even if the
Class Action Waiver is limited, voided or found unenforceable. WHETHER THE CLAIM
IS DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND
UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE
RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.
     9.18 USA Patriot Act Notice. The Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow the Lender to identify the Borrower in accordance with the Act.
     9.19 Time of the Essence.
     Time is of the essence of the Loan Documents.
     9.20 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.

52

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                  iROBOT CORPORATION
 
           
 
  By:   /s/ Geoffrey P. Clear    
 
                Name:  Geoffrey P. Clear     Title:     Chief Financial Officer

53

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                  BANK OF AMERICA, N.A.
 
           
 
  By:   /s/ Richard J. MacDonald    
 
                Name:  Richard J. MacDonald     Title:     Vice President

54

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SCHEDULE 5.05
SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS
NONE
Schedule 5.05

 

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SCHEDULE 5.06
LITIGATION
NONE
Schedule 5.06

 

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SCHEDULE 5.09
ENVIRONMENTAL MATTERS
NONE
Schedule 5.09

 

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SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries.

  a.   iRobot Securities Corporation, a Massachusetts securities corporation
(FID: 203-911-125)     b.   iRobot US Holdings, Inc., a Delaware corporation
(FID: 20-3635237)     c.   iRobot Holdings LLC, a Delaware corporation (FID:
20-3635307)     d.   iRobot (India) Private Limited, an Indian corporation (No.:
U72200KA2005PTC037429)     e.   iRobot Corporation a registered office in Hong
Kong (No. 33844790-000-08-05-3)     f.   Shenzhen iRobot Robot Technology
Consulting Company Limited

Part (b). Other Equity Investments.
NONE
Schedule 5.13

 

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SCHEDULE 5.18
INTELLECTUAL PROPERTY MATTERS
NONE
Schedule 5.18

 

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SCHEDULE 7.01
EXISTING LIENS
     Security interest in accounts arising from the Borrower’s sales of good or
performance of services to Brookstone Purchasing, Inc., granted to The CIT Group
Commercial Services, Inc. pursuant to UCC financing statement no. 61164292 filed
with the Delaware Secretary of State on April 6, 2006.
Schedule 7.01

 

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SCHEDULE 7.03
EXISTING INDEBTEDNESS
NONE
Schedule 7.03

 

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SCHEDULE 9.02
NOTICE ADDRESSES AND LENDING OFFICE
BORROWER:
iRobot Corporation
63 South Avenue
Burlington, Massachusetts 01803
Attention: Joseph P. Mullin
Telephone: (781) 418-3187
Facsimile: (781) 345-0201
Electronic Mail: jmulin@irobot.com
Website Address:    www.irobot.com
with a copy to:
Goodwin Procter LLP
53 State Street
Boston, Massachusetts 02109
Attention: Mark D. Smith
Telephone: (617) 570-1740
Facsimile: (617) 523-1231
Electronic Mail: marksmith@goodwinprocter.com
Website Address:    www.goodwinprocter.com
LENDER
Lending Office for Loans, payments with
respect thereto and payments of fees other than
Letter of Credit fees:
BANK OF AMERICA, N.A.
100 Federal Street
Boston, Massachusetts 02110
Mail Code: MA5-100-07-07
Attn: M. Fay Green
Telephone: (617) 434-2537
Facsimile: (617) 434-2152
Electronic Mail: myrna.f.green@bankofamerica.com
Account No.1093601001000
Ref:Company No.493
ABA# 026009593
with a copy to:
Goulston & Storrs P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Section 9.02 (i)

 

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Attn: James H. Lerner, Esq.
Telephone: (617) 574-3525
Facsimile: (617) 574-7607
Electronic Mail: jlerner@goulstonstorrs.com
Lending Office for Letters of Credit and
payments with respect thereto, including
Letter of Credit fees:
BANK OF AMERICA, N.A
Attn: Kathy Hudson CT2-515-BB12.
Transaction Processing
70 Batterson Park Road
Farmington, CT 06032
Fax Advance and Payment Requests to:
(888) 841-8160
Section 9.02 (ii)

 

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Notices (other than Requests for Credit Extensions):
BANK OF AMERICA, N.A.
100 Federal Street
Boston, Massachusetts 02110
Mail Code: MA5-100-07-06
Attn: Mr. Richard J. MacDonald
Telephone: (617) 434-4288
Facsimile: _(617) 434-8102
Electronic mail: richard.j.macdonald@bankofamerica.com
Section 9.02 (iii)

 

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

 

EXHIBIT A
FORM OF LOAN NOTICE
Date:                     
To: Bank of America, N.A.
Ladies and Gentlemen:
     Reference is made to that certain Credit Agreement, dated as of June 5,
2007 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), between iRobot Corporation, a Delaware corporation,
and Bank of America, N.A..
     The undersigned hereby requests (select one):
     o A Loan                     o A Conversion or Continuation of a Loan

  1.   On       (a Business Day).     2.   In the amount of $     .     3.  
Comprised of          .         [Type of Loan requested]     4.   For a
Eurodollar Rate Loan: with an Interest Period of       months.

     [The borrowing requested herein complies with the proviso to the first
sentence of Section 2.01 of the Agreement.]

                  iRobot Corporation  
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

Exhibit A1

 

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EXHIBIT B
FORM OF NOTE

      $35,000,000.00                       , 2007

     FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay
to the order of BANK OF AMERICA, N.A. (the “Lender”), on the Maturity Date (as
defined in the Credit Agreement referred to below) the principal amount of
Thirty Five Million Dollars ($35,000,000.00), or such lesser principal amount of
Loans (as defined in such Credit Agreement) due and payable by the Borrower to
the Lender on the Maturity Date under that certain Credit Agreement, dated as of
June 5, 2007 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the “Agreement;” the terms defined therein being
used herein as therein defined), between the Borrower and the Lender.
     The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and at such times as are specified in the
Agreement. All payments of principal and interest shall be made to the Lender in
Dollars in immediately available funds at the Lender’s Lending Office. If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.
     This Note is the Note referred to in the Agreement, is entitled to the
benefits thereof and is subject to optional prepayment in whole or in part as
provided therein. Upon the occurrence and continuation of one or more of the
Events of Default specified in the Agreement, all amounts then remaining unpaid
on this Note shall become, or may be declared to be, immediately due and payable
all as provided in the Agreement. Loans made by the Lender shall be evidenced by
one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and
endorse thereon the date, amount and maturity of the Loans and payments with
respect thereto.
     The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
Exhibit B (i)

 

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     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS.

                  iRobot Corporation
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

Exhibit B (ii)

 

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LOANS AND PAYMENTS WITH RESPECT THERETO

                                          Amount of                        
Principal or   Outstanding                 End of   Interest   Principal        
Type of   Amount of   Interest   Paid This   Balance   Notation Date   Loan Made
  Loan Made   Period   Date   This Date   Made By                       
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                  
                                                                    
                                                                    
                                                                  
                                                                    
                                           

Exhibit B (iii)

 

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EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:                     ,
To: Bank of America, N.A.
Ladies and Gentlemen:
     Reference is made to that certain Credit Agreement, dated as of June 5,
2007 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), between iRobot Corporation, a Delaware corporation
(the “Borrower”) and Bank of America, N.A. (the “Lender”).
     The undersigned Responsible Officer hereby certifies as of the date hereof
that he/she is the                                          of the Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Lender on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
     1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
     1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of the
Borrower ended as of the above date. Such financial statements fairly present in
all material respects the financial condition, results of operations and cash
flows of the Borrower and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and
the absence of footnotes.
     2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
     3. A review of the activities of the Borrower during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Borrower performed and observed all its
Obligations under the Loan Documents, and
[select one:]
Exhibit C (i)

 

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     [to the knowledge of the undersigned during such fiscal period, the
Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it.]
—or—
     [the following covenants or conditions have not been performed or observed
and the following is a list of each such Default and its nature and status:]
     4. The representations and warranties of the Borrower contained in
Article V of the Agreement, or which are contained in any document furnished at
any time under or in connection with the Loan Documents, are true and correct in
all material respects on and as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in all material respects as of such earlier
date, and except that for purposes of this Compliance Certificate, the
representations and warranties contained in subsections (a) and (b) of
Section 5.05 of the Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Agreement, including the statements in connection with which
this Compliance Certificate is delivered.
     5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date specified therein.
     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                    ,      .

                  iRobot Corporation
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

Exhibit C (ii)

 

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For the Quarter/Year ended                                         (“Statement
Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)

         
I. Section 7.11(a) — Consolidated Tangible Net Worth.
       
A. Actual Consolidated Tangible Net Worth at Statement Date:
       
1. Shareholders’ Equity:
  $    
 
     
2. Intangible Assets:
  $    
 
     
3. Consolidated Tangible Net Worth (Line I.A1 less Line I.A.2):
  $    
 
     
B. Minimum required Consolidated Tangible Net Worth
  $ 75,000,000.00    
C. Excess (deficient) for covenant compliance (Line I.A — I.B):
  $    
 
     
II. Section 7.11(b) -Quick Ratio.
       
A. Current Assets:
       
1. Cash:
  $    
 
     
2. Marketable Securities:
  $    
 
     
3. Accounts Receivables:
  $    
 
     
4. Inventory:
  $    
 
     
5. Current Assets:(Lines II.A.1 + 2 + 3 - 4):
  $    
 
     
B. Current Liabilities for Subject Period:
  $    
 
     
C. Quick Ratio (Line II.A.5 ¸ Line II.B):
       
 
     
Minimum required:
    1.5 to 1  
III. Section 7.11(c) — Minimum Profit.
       
A. Net Income (exclusive of taxes and extraordinary items)
  $    
 
     
B. Minimum Requirement
  $ 1.00  

Exhibit C (iii)

 

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EXHIBIT E
OPINION MATTERS
     The matters contained in the following Sections of the Credit Agreement
should be covered by the legal opinion:

•   Section 5.01(a), (b) (c) and (d)   •   Section 5.02   •   Section 5.03   •  
Section 5.04   •   Section 5.06   •   Section 5.14(b)

Exhibit E