EXHIBIT 10.39

AMENDED AND RESTATED CREDIT AGREEMENT

by and among

THE TRIZETTO GROUP, INC.

and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, INC.

as the Arranger and Administrative Agent

Dated as of January 10, 2007

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

TABLE OF CONTENTS

 

               Page 1.    DEFINITIONS AND CONSTRUCTION    1    1.1   

Definitions

   1    1.2   

Accounting Terms

   1    1.3   

Code

   2    1.4   

Construction

   2    1.5   

Schedules and Exhibits

   2 2.    LOAN AND TERMS OF PAYMENT    2    2.1   

Revolver Advances

   2    2.2   

Term Loan

   3    2.3   

Borrowing Procedures and Settlements

   3    2.4   

Payments

   8    2.5   

Overadvances

   11    2.6   

Interest Rates: Rates, Payments, and Calculations

   11    2.7   

Cash Management

   12    2.8   

Crediting Payments

   13    2.9   

Designated Account

   13    2.10   

Maintenance of Loan Account; Statements of Obligations

   14    2.11   

Fees

   14    2.12   

Letter of Credit

   14    2.13   

LIBOR Option

   17    2.14   

Capital Requirements

   19    2.15   

Joint and Several Liability of Borrowers

   19 3.    CONDITIONS; TERM OF AGREEMENT    21    3.1   

Conditions Precedent to the Initial Extension of Credit

   21    3.2   

Conditions Precedent to all Extensions of Credit

   21    3.3   

Term

   21    3.4   

Effect of Termination

   21    3.5   

Early Termination by Borrowers

   22 4.    REPRESENTATIONS AND WARRANTIES    22    4.1   

No Encumbrances

   22    4.2   

Intentionally Omitted

   22    4.3   

Inventory

   22    4.4   

Equipment

   23    4.5   

Location of Inventory and Equipment

   23    4.6   

Inventory Records

   23    4.7   

State of Incorporation; Location of Chief Executive Office; Organizational
Identification Number;

Commercial Tort Claims

   23    4.8   

Due Organization and Qualification; Subsidiaries

   23    4.9   

Due Authorization; No Conflict

   24    4.10   

Litigation

   24    4.11   

No Material Adverse Change

   24    4.12   

Fraudulent Transfer

   25    4.13   

Employee Benefits

   25    4.14   

Environmental Condition

   25    4.15   

Intellectual Property

   25    4.16   

Leases

   25

 

i

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

TABLE OF CONTENTS

(continued)

 

               Page    4.17   

Deposit Accounts and Securities Accounts

   25    4.18   

Complete Disclosure

   25    4.19   

Indebtedness

   26    4.20   

Inactive Borrowers

   26    4.21   

Material Contracts

   26    4.22   

Merger Documents

   26 5.    AFFIRMATIVE COVENANTS    26    5.1   

Accounting System

   26    5.2   

Collateral Reporting

   26    5.3   

Financial Statements, Reports, Certificates

   26    5.4   

Intentionally Omitted

   27    5.5   

Inspection

   27    5.6   

Maintenance of Properties

   27    5.7   

Taxes

   27    5.8   

Insurance

   27    5.9   

Location of Inventory and Equipment

   28    5.10   

Compliance with Laws

   28    5.11   

Leases

   28    5.12   

Existence

   28    5.13   

Environmental

   28    5.14   

Disclosure Updates

   29    5.15   

Control Agreements

   29    5.16   

Formation of Subsidiaries

   29    5.17   

Intentionally Omitted

   29    5.18   

Post-Closing Covenants

   29    5.19   

Copyrights

   29    5.20   

Assignability of Contracts

   29    5.21   

Billing Procedures

   30 6.    NEGATIVE COVENANTS    30    6.1   

Indebtedness

   30    6.2   

Liens

   31    6.3   

Restrictions on Fundamental Changes

   31    6.4   

Disposal of Assets

   31    6.5   

Change Name

   31    6.6   

Nature of Business

   31    6.7   

Prepayments and Amendments

   31    6.8   

Change of Control

   32    6.9   

Consignments

   32    6.10   

Distributions

   32    6.11   

Accounting Methods

   32    6.12   

Investments

   32    6.13   

Transactions with Affiliates

   32    6.14   

Use of Proceeds

   33    6.15   

Inventory and Equipment with Bailees

   33    6.16   

Financial Covenants

   33

 

ii

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

TABLE OF CONTENTS

(continued)

 

          Page 7.    EVENTS OF DEFAULT    34 8.    THE LENDER GROUP’S RIGHTS AND
REMEDIES    36    8.1   

Rights and Remedies

   36    8.2   

Remedies Cumulative

   36 9.    TAXES AND EXPENSES    36 10.    WAIVERS; INDEMNIFICATION    37   
10.1   

Demand; Protest; etc

   37    10.2   

The Lender Group’s Liability for Borrower Collateral

   37    10.3   

Indemnification

   37 11.    NOTICES    37 12.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER   
38 13.    ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS    41    13.1   

Assignments and Participations

   41    13.2   

Successors

   43 14.    AMENDMENTS; WAIVERS    43    14.1   

Amendments and Waivers

   43    14.2   

Replacement of Holdout Lender

   44    14.3   

No Waivers; Cumulative Remedies

   45 15.    AGENT; THE LENDER GROUP    45    15.1   

Appointment and Authorization of Agent

   45    15.2   

Delegation of Duties

   46    15.3   

Liability of Agent

   46    15.4   

Reliance by Agent

   46    15.5   

Notice of Default or Event of Default

   46    15.6   

Credit Decision

   47    15.7   

Costs and Expenses; Indemnification

   47    15.8   

Agent in Individual Capacity

   48    15.9   

Successor Agent

   48    15.10   

Lender in Individual Capacity

   48    15.11   

Withholding Taxes

   48    15.12   

Collateral Matters

   50    15.13   

Restrictions on Actions by Lenders; Sharing of Payments

   51    15.14   

Agency for Perfection

   51    15.15   

Payments by Agent to the Lenders

   51    15.16   

Concerning the Collateral and Related Loan Documents

   51    15.17   

Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;

Other Reports and Information

   52    15.18   

Several Obligations; No Liability

   52    15.19   

Bank Product Providers

   53 16.    GENERAL PROVISIONS    53    16.1   

Effectiveness

   53    16.2   

Section Headings

   53

 

iii

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

TABLE OF CONTENTS

(continued)

 

              Page   16.3   

Interpretation

   53   16.4   

Severability of Provisions

   53   16.5   

Counterparts; Electronic Execution

   53   16.6   

Revival and Reinstatement of Obligations

   53   16.7   

Confidentiality

   54   16.8   

Lender Group Expenses

   54   16.9   

USA PATRIOT Act

   54   16.10   

Integration

   54   16.11   

Parent as Agent for Borrowers

   54   16.12   

Changes in Accounting Policies

   55   16.13   

Amendment and Restatement of Original Loan Agreement

   55

 

iv

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

TABLE OF CONTENTS

(continued)

EXHIBITS AND SCHEDULES

 

Exhibit A-1    Form of Assignment and Acceptance Exhibit C-1    Form of
Compliance Certificate Exhibit L-1    Form of LIBOR Notice Schedule A-1   
Agent’s Account Schedule C-1    Commitments Schedule D-1    Designated Account
Schedule P-1    Permitted Liens Schedule 1.1    Definitions Schedule 2.7(a)   
Cash Management Banks Schedule 3.1    Conditions Precedent Schedule 4.5   
Locations of Inventory and Equipment Schedule 4.7(a)    States of Organization
Schedule 4.7(b)    Chief Executive Offices Schedule 4.7(c)    Organizational
Identification Numbers Schedule 4.7(d)    Commercial Tort Claims Schedule 4.8(b)
   Capitalization of Borrowers Schedule 4.8(c)    Capitalization of Borrowers’
Subsidiaries Schedule 4.14    Environmental Matters Schedule 4.15   
Intellectual Property Schedule 4.17    Deposit Accounts and Securities Accounts
Schedule 4.19    Permitted Indebtedness Schedule 5.2    Collateral Reporting
Schedule 5.3    Financial Statements, Reports, Certificates Schedule 5.18   
Conditions Subsequent

v

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

CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), is entered into
as of January 10, 2007, by and among the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
permitted assigns, are referred to hereinafter each individually as a “Lender”
and collectively as the “Lenders”), and WELLS FARGO FOOTHILL, INC., a California
corporation, as the arranger and administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, “Agent”),
and THE TRIZETTO GROUP, INC., a Delaware corporation (“Parent”), and each of
Parent’s Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”).

W I T N E S S E T H

WHEREAS, Agent, the Lenders, Parent, and certain of the Borrowers are parties to
that certain Credit Agreement, dated as of December 21, 2004 (as amended,
supplemented, or otherwise modified from time to time prior to the date hereof,
the “Original Credit Agreement”), pursuant to which Agent and certain of the
Lenders provided to certain of the Borrowers a revolving loan facility in an
aggregate principal amount of $100,000,000;

WHEREAS, Parent has formed Quartz Acquisition Corp., a Delaware corporation
(“Acquico”), and Acquico, Parent, Michael Lee, in his capacity as
representative, and Quality Care Solutions, Inc. a Nevada corporation (“QCSI”),
have entered into that certain Agreement and Plan of Merger, dated as of
September 12, 2006 (the “Merger Agreement”), pursuant to which Acquico will
merge with and into QCSI with QCSI as the surviving entity (the “QCSI Merger”);

WHEREAS, in order to (a) partially finance the QCSI Merger, (b) pay
transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, the Merger Documents, and the transactions
contemplated hereby and thereby, and (c) finance ongoing working capital,
capital expenditure, and general corporate needs of Borrowers, Borrowers have
requested that the Original Credit Agreement be amended in its entirety to,
among other things (i) restate the existing revolving loan facility in an
aggregate principal amount of up to $100,000,000 and (ii) provide Borrowers with
a the term loan facility in the principal amount of up to $150,000,000; and

WHEREAS, subject to the foregoing, Agent and the Lenders are willing to so amend
and restate the Original Credit Agreement in accordance with the terms and
conditions hereof; it being understood that no repayment of the outstanding
amounts payable under the Original Credit Agreement as of the Closing Date is
being effected hereby but merely an amendment and restatement in accordance with
the terms hereof.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to amend
and restate the Original Credit Agreement in its entirety as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Borrowers” or the term “Parent” is used in respect of a financial covenant or a
related definition, it shall be understood to mean Parent and its Subsidiaries
on a consolidated basis unless the context clearly requires otherwise.

 

1

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

1.3 Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein,
provided, however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code,
the definition of such term contained in Article 9 of the Code shall govern.

1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein or in any
other Loan Document to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Obligations other than contingent
indemnification Obligations and other than any Bank Product Obligations that, at
such time, are allowed by the applicable Bank Product Provider to remain
outstanding and that are not required by the provisions of this Agreement to be
repaid or cash collateralized. Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in the other Loan Documents shall be satisfied by
the transmission of a Record.

1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

2. LOAN AND TERMS OF PAYMENT.

2.1 Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make advances (“Advances”) to Borrowers in
an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share
of an amount equal to, as of any date of determination, the difference of:
(A) the lesser of: (i) the EBITDA Revolver Limiter or (ii) the Maximum Revolver
Amount minus (B) the sum of: (1) Letter of Credit Usage at such time, (2) the
Bank Product Reserve, and (3) the aggregate amount of reserves, if any,
established by Agent under Section 2.1(b).

(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Maximum Revolver Amount, including reserves (i) with
respect to (A) sums that Borrowers are required to pay by any Section of this
Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and have failed to pay, and (B) amounts due and owing by Borrowers
to any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted
Discretion of Agent likely would have a priority superior to the Agent’s Liens
(such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics, materialmen, laborers,

 

2

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

or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral, and (ii) after the occurrence and during the continuance of an Event
of Default, with respect to such other matters as Agent in its Permitted
Discretion shall deem necessary or appropriate.

(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Advances,
together with interest accrued thereon, shall be due and payable on the Maturity
Date or, if earlier, on the date on which they are declared due and payable
pursuant to the terms of this Agreement.

2.2 Term Loan.

(a) Subject to and upon the terms and conditions of this Agreement, each Lender
with a Term Loan Commitment agrees (severally, not jointly or jointly and
severally) to make one or more term loans (collectively, all such term loans by
all such Lenders, the “Term Loan”) to Borrowers in an aggregate principal amount
equal to such Lender’s Pro Rata Share of the Term Loan Amount. The Term Loan may
be made pursuant to 2 or more draws by the Borrowers (each a “Term Loan Draw”).
The first Term Loan Draw shall be funded on the Closing Date and shall be in a
minimum amount of $75,000,000. Borrowers may request additional Term Loan Draws
at any time after the Closing Date through and including June 30, 2007. The
aggregate outstanding amount of all Term Loan Draws shall not exceed the Term
Loan Amount. The maximum amount of any Term Loan Draw may not exceed, when
funded, the Term Loan Availability on such date. Each Term Loan Draw shall be in
a minimum amount of $10,000,000 and integral multiples of $500,000 in excess
thereof, or the remaining unfunded amount of the Term Loan.

(b) Commencing on July 1, 2007 and continuing on the first day of each calendar
quarter thereafter through the Maturity Date, Borrowers shall repay the Term
Loan in an amount equal to the quotient obtained by dividing (a) the outstanding
principal balance of the Term Loan as of the end of business on June 30, 2007 by
(b) 28. The outstanding unpaid principal balance and all accrued and unpaid
interest on the Term Loan shall be due and payable on the earliest of (i) the
Maturity Date, (ii) the date of the acceleration of the Term Loan in accordance
with the terms hereof, and (iii) the date of termination of this Agreement
pursuant to Section 8.1(c). All principal of, interest on, and other amounts
payable in respect of the Term Loan shall constitute Obligations.

(c) Borrowers may make voluntary prepayments of principal with respect to the
Term Loan from time to time so long as: (i) Administrative Borrower provides
Agent not less than 3 Business Days prior written notice of such prepayment, and
(ii) the amount of any prepayment is in a minimum amount of $100,000 and
integral multiples thereof, or the remaining principal balance of the Term Loan,
if less. Any such voluntary prepayments shall be applied to installments due
thereunder in the inverse order of their maturity. Amounts repaid under the Term
Loan may not be reborrowed.

2.3 Borrowing Procedures and Settlements.

(a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent (the “Borrowing
Notice”). With respect to Borrowings constituting Advances, unless Swing Lender
is not obligated to make a Swing Loan pursuant to Section 2.3(b), such Borrowing
Notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day that is the requested Funding Date; provided, however, that if
Swing Lender is not obligated to make a Swing Loan as to a requested Borrowing
constituting and Advance, such Borrowing Notice must be received by Agent no
later than 10:00 a.m. (California time) on the Business Day prior to the date
that is the requested Funding Date. With respect to Borrowings constituting Term
Loan Draws, the Borrowing Notice must be received by Agent no later than 10:00
a.m. (California time) on the

 

3

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

Business Day that is 10 days prior to the requested Funding Date. Every
Borrowing Notice must specify: (i) the type of Borrowing (Advances or Term Loan
Draw), (ii) the amount of such Borrowing, and (iii) the requested Funding Date,
which shall be a Business Day. At Agent’s election, solely with respect to
Borrowings constituting Advances, in lieu of delivering the Borrowing Notice,
any Authorized Person may give Agent telephonic notice of such request by the
required time. In such circumstances, Borrowers agree that any such telephonic
notice will be confirmed with a Borrowing Notice within 24 hours of the giving
of such telephonic notice, but the failure to provide such Borrowing Notice as
confirmation shall not affect the validity of the request.

(b) Making of Swing Loans. In the case of a request for an Advance and so long
as either (i) the aggregate amount of Swing Loans made since the last Settlement
Date plus the amount of the requested Advance does not exceed $15,000,000, or
(ii) Swing Lender, in its sole discretion, shall agree to make a Swing Loan
notwithstanding the foregoing limitation, Swing Lender, as a Lender, shall make
an Advance in the amount of such requested Advance (any such Advance made solely
by Swing Lender as a Lender pursuant to this Section 2.3(b) being referred to as
a “Swing Loan” and such Advances being referred to collectively as “Swing
Loans”) available to Borrowers on the Funding Date applicable thereto by
transferring immediately available funds to Borrowers’ Designated Account. Each
Swing Loan shall be deemed to be an Advance hereunder and shall be subject to
all the terms and conditions applicable to other Advances, except that all
payments on any Swing Loan shall be payable to Swing Lender as a Lender solely
for its own account. Subject to the provisions of Section 2.3(d)(ii), Swing
Lender as a Lender shall not make and shall not be obligated to make any Swing
Loan if Swing Lender has actual knowledge that (i) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (ii) the requested
Borrowing would exceed the Availability on such Funding Date. Swing Lender as a
Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be
secured by the Agent’s Liens, constitute Obligations hereunder, and bear
interest at the rate applicable from time to time to Advances.

(c) Making of Loans.

(i) In the event that Swing Lender is not obligated to make a Swing Loan, then
promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a),
Agent shall notify the Lenders, not later than 1:00 p.m. (California time) on
the Business Day: (i) immediately preceding the Funding Date applicable thereto,
with respect to Borrowings constituting Advances, and (ii) that is 10 days prior
to the requested Funding Date, with respect to Borrowings constituting Term Loan
Draws. Such notice may be made by telecopy, telephone, or other similar form of
transmission. Each Lender shall make the amount of such Lender’s Pro Rata Share
of the requested Borrowing available to Agent in immediately available funds, to
Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date
applicable thereto. After Agent’s receipt of the proceeds of such Advances,
Agent shall make the proceeds thereof available to Administrative Borrower on
the applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to Administrative Borrower’s Designated Account;
provided, however, that, subject to the provisions of Section 2.3(d)(ii), Agent
shall not request any Lender to make, and no Lender shall have the obligation to
make, any Advance or Term Loan Draw if Agent shall have actual knowledge that
(1) one or more of the applicable conditions precedent set forth in Section 3
will not be satisfied on the requested Funding Date for the applicable Borrowing
unless such condition has been waived, or (2) the requested Borrowing would
exceed the Availability or the Term Loan Availability, as applicable, on such
Funding Date.

(ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California
time) on the date of a Borrowing, that such Lender will not make available as
and when required hereunder to Agent for the account of Borrowers the amount of
that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender
has made or will make such amount available to Agent in immediately

 

4

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

available funds on the Funding Date and Agent may (but shall not be so
required), in reliance upon such assumption, make available to Borrowers on such
date a corresponding amount. If and to the extent any Lender shall not have made
its full amount available to Agent in immediately available funds and Agent in
such circumstances has made available to Borrowers such amount, that Lender
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest error.
If such amount is so made available, such payment to Agent shall constitute such
Lender’s Advance or Term Loan Draw, as applicable, on the date of Borrowing for
all purposes of this Agreement. If such amount is not made available to Agent on
the Business Day following the Funding Date, Agent will notify Administrative
Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay
such amount to Agent for Agent’s account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Advances or Term Loan Draws, as
applicable, composing such Borrowing. The failure of any Lender to make any
Advance or Term Loan Draw, as applicable, on any Funding Date shall not relieve
any other Lender of any obligation hereunder to make an Advance or Term Loan
Draw, as applicable, on such Funding Date, but no Lender shall be responsible
for the failure of any other Lender to make the Advance or Term Loan Draw, as
applicable, to be made by such other Lender on any Funding Date.

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in
the absence of such transfer to the Defaulting Lender, Agent shall transfer any
such payments to each other non-Defaulting Lender member of the Lender Group
ratably in accordance with their Commitments (but only to the extent that such
Defaulting Lender’s Advance or Term Loan Draw, as applicable, was funded by the
other members of the Lender Group) or, if so directed by Administrative Borrower
and if no Default or Event of Default had occurred and is continuing (and to the
extent such Defaulting Lender’s Advance or Term Loan Draw, as applicable, was
not funded by the Lender Group), retain same to be re-advanced to Borrowers as
if such Defaulting Lender had made to Borrowers Advances or Term Loan Draws, as
applicable. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting Lender shall be
deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero. This Section shall remain effective with respect to such Lender until
(x) the Obligations under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender’s default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance or Term Loan Draw, as applicable, and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender
of this Agreement and shall entitle Administrative Borrower at its option, upon
written notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be an Eligible
Transferee. In connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced hereunder, and
agrees to execute and deliver a completed form of Assignment and Acceptance in
favor of the substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) and shall cease to be
party hereto, subject only to being repaid its share of the outstanding
Obligations (other than Bank Product Obligations) without any premium or penalty
of any kind whatsoever; provided however, that any such assumption of the
Commitment of such Defaulting Lender shall not be deemed to constitute a waiver
of any of the Lender Groups’ or Borrowers’ rights or remedies against any such
Defaulting Lender arising out of or in relation to such failure to fund.

 

5

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

(d) Protective Advances and Optional Overadvances.

(i) Agent hereby is authorized by Borrowers and the Lenders, from time to time
in Agent’s sole discretion, (A) after the occurrence and during the continuance
of a Default or an Event of Default, or (B) at any time that any of the other
applicable conditions precedent set forth in Section 3 are not satisfied, to
make Advances to Borrowers on behalf of the Lenders that Agent, in its Permitted
Discretion deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (3) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 10 (any of the Advances described in this Section 2.3(d)(i) shall be
referred to as “Protective Advances”). Notwithstanding anything to the contrary
contained in this Agreement, the aggregate amount of Protective Advances and
Overadvances outstanding under this Agreement shall not exceed, at any one time,
$7,500,000.

(ii) Any contrary provision of this Agreement notwithstanding, subject to the
last sentence of clause (d)(i) above, the Lenders hereby authorize Agent or
Swing Lender, as applicable, and either Agent or Swing Lender, as applicable,
may, but is not obligated to, knowingly and intentionally, continue to make
Advances (including Swing Loans) to Borrowers notwithstanding that an
Overadvance exists or thereby would be created, so long as after giving effect
to such Advances, the outstanding Revolver Usage (except for and excluding
amounts charged to the Loan Account for interest, fees, or Lender Group
Expenses) does not exceed the Maximum Revolver Amount. In the event Agent
obtains actual knowledge that the Revolver Usage exceeds the amounts permitted
by the immediately foregoing provisions, regardless of the amount of, or reason
for, such excess, Agent shall notify the Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers intended to reduce, within
a reasonable time, the outstanding principal amount of the Advances to Borrowers
to an amount permitted by the preceding paragraph. In such circumstances, if any
Lender with a Revolver Commitment disagrees over the proposed terms of reduction
or repayment of any Overadvance, the terms of reduction or repayment thereof
shall be implemented according to the determination of the Required Lenders.
Each Lender with a Revolver Commitment shall be obligated to settle with Agent
as provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of
any unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.3(d)(ii), and any
Overadvances resulting from the charging to the Loan Account of interest, fees,
or Lender Group Expenses.

(iii) Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be
eligible to be a LIBOR Rate Loan and all payments on the Protective Advances
shall be payable to Agent solely for its own account. The Protective Advances
and Overadvances shall be repayable on demand, secured by the Agent’s Liens,
constitute Obligations hereunder, and bear interest at the rate applicable from
time to time to Advances. The provisions of this Section 2.3(d) are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended
to benefit any Borrower in any way.

(e) Settlement. It is agreed that each Lender’s funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agent, Swing
Lender, and the other Lenders agree (which agreement shall not be for the
benefit of any Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:

 

6

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

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on behalf of
Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with
respect to the outstanding Protective Advances, and (3) with respect to
Borrowers’ Collections received, as to each by notifying the Lenders by
telecopy, telephone, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement (the date of such
requested Settlement being the “Settlement Date”). Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances,
Swing Loans, and Protective Advances for the period since the prior Settlement
Date. Subject to the terms and conditions contained herein (including
Section 2.3(b)(iii)): (y) if a Lender’s balance of the Advances (including Swing
Loans and Protective Advances) exceeds such Lender’s Pro Rata Share of the
Advances (including Swing Loans and Protective Advances) as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m. (California time) on the
Settlement Date, transfer in immediately available funds to a Deposit Account of
such Lender (as such Lender may designate), an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata
Share of the Advances (including Swing Loans and Protective Advances), and
(z) if a Lender’s balance of the Advances (including Swing Loans and Protective
Advances) is less than such Lender’s Pro Rata Share of the Advances (including
Swing Loans and Protective Advances) as of a Settlement Date, such Lender shall
no later than 12:00 p.m. (California time) on the Settlement Date transfer in
immediately available funds to the Agent’s Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances (including Swing Loans and Protective
Advances). Such amounts made available to Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the
applicable Swing Loans or Protective Advances and, together with the portion of
such Swing Loans or Protective Advances representing Swing Lender’s Pro Rata
Share thereof, shall constitute Advances of such Lenders. If any such amount is
not made available to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and
Protective Advances is less than, equal to, or greater than such Lender’s Pro
Rata Share of the Advances, Swing Loans, and Protective Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. To the extent that a net amount
is owed to any such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.

(iii) Between Settlement Dates, Agent, to the extent no Protective Advances or
Swing Loans are outstanding, may pay over to Swing Lender any payments received
by Agent, that in accordance with the terms of this Agreement would be applied
to the reduction of the Advances, for application to Swing Lender’s Pro Rata
Share of the Advances. If, as of any Settlement Date, Collections of Borrowers
received since the then immediately preceding Settlement Date have been applied
to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as
provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to
the outstanding Advances of such Lenders, an amount such that each Lender shall,
upon receipt of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Advances. During the period between Settlement Dates, Swing Lender
with respect to Swing Loans, Agent with respect to Protective Advances, and each
Lender (subject to the effect of agreements between Agent and individual
Lenders) with respect to the Advances other than Swing Loans and Protective
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the daily amount of funds employed by Swing Lender,
Agent, or the Lenders, as applicable.

 

7

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

(f) Notation. Agent shall record on its books the principal amount of the
Advances owing to each Lender, including the Swing Loans owing to Swing Lender,
and Protective Advances owing to Agent, and the interests therein of each
Lender, from time to time and such records shall, absent manifest error,
conclusively be presumed to be correct and accurate.

(g) Lenders’ Failure to Perform. All Advances (other than Swing Loans and
Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.

2.4 Payments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to Agent’s Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 11:00 a.m. (California
time) on the date specified herein. Any payment received by Agent later than
11:00 a.m. (California time), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.

(ii) Unless Agent receives notice from Administrative Borrower prior to the date
on which any payment is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Event of Default has occurred and is continuing and except as
otherwise provided with respect to Defaulting Lenders, all principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and all payments of fees and expenses (other than fees or
expenses that are for Agent’s separate account) shall be apportioned ratably
among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee or expense relates. All payments to be made
hereunder by Borrowers shall be remitted to Agent and all (subject to
Section 2.4(b)(iv)) such payments, and all proceeds of Collateral received by
Agent, shall be applied, so long as no Event of Default has occurred and is
continuing, to reduce the balance of the Advances outstanding and, thereafter,
to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.

 

8

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

(ii) At any time that an Event of Default has occurred and is continuing and
except as otherwise provided with respect to Defaulting Lenders, all payments
remitted to Agent and all proceeds of Collateral received by Agent shall be
applied as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,

(B) second, to pay any fees or premiums then due to Agent under the Loan
Documents until paid in full,

(C) third, to pay interest due in respect of all Protective Advances until paid
in full,

(D) fourth, to pay the principal of all Protective Advances until paid in full,

(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents, until paid in full,

(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders
under the Loan Documents until paid in full,

(G) seventh, ratably to pay interest due in respect of the Advances (other than
Protective Advances), the Swing Loans, and the Term Loan until paid in full,

(H) eighth, ratably (i) to pay the principal of all Swing Loans until paid in
full, (ii) to pay the outstanding principal balance of the Term Loan (in the
inverse order of the maturity of the installments due thereunder) until the Term
Loan is paid in full, (iii) to pay the principal of all Advances until paid in
full, (iv) to Agent, to be held by Agent, for the ratable benefit of Issuing
Lender and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the Letter of Credit Usage, and (v) to Agent, to be held by
Agent, for the benefit of the Bank Product Providers, as cash collateral in an
amount up to the amount of the Bank Product Reserve established prior to the
occurrence of, and not in contemplation of, the subject Event of Default,

(I) ninth, to pay any other Obligations (including the provision of amounts to
Agent, to be held by Agent, for the benefit of the Bank Product Providers, as
cash collateral in an amount up to the amount determined by Agent in its
Permitted Discretion as the amount necessary to secure Borrowers’ and their
Subsidiaries’ obligations in respect of Bank Products), and

(J) tenth, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable
wire instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e).

(iv) In each instance, so long as no Event of Default has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by Borrowers
to Agent and specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement.

 

9

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

(v) For purposes of Section 2.4(b)(ii), “paid in full” means payment of all
amounts owing under the Loan Documents according to the terms thereof, including
loan fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not any
of the foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.

(vi) In the event of a direct conflict between the priority provisions of this
Section 2.4 and any other provision contained in any other Loan Document, it is
the intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.4 shall control and
govern.

(c) Mandatory Prepayments.

(i) If, at any time (A) the sum of the outstanding principal balance of the Term
Loan on such date plus the Revolver Usage on such date exceeds (B) the product
of (I) the Applicable EBITDA Multiplier times (II) TTM EBITDA calculated as of
the most recent month for which financial statements have been delivered
pursuant to Section 5.3 (such product being referred to as the “Loan Limit” and
such excess being referred to as the “Limiter Excess”), then Borrowers shall,
prepay the Obligations in accordance with Section 2.4(d) in an aggregate amount
equal to the Limiter Excess immediately after the earlier of: (i) obtaining
knowledge that the Obligations have exceeded the Loan Limit or (ii) receiving
notice from Agent that the Obligations have exceeded the Loan Limit.

(ii) Immediately upon the receipt by Borrowers or any of their Subsidiaries of
the proceeds of any voluntary or involuntary sale or disposition by Borrowers or
any of their Subsidiaries of property or assets (including casualty losses or
condemnations but excluding: (y) sales or dispositions which qualify as
Permitted Dispositions under clauses (a), (b), (c), (d), or (f) of the
definition of Permitted Dispositions and (z) proceeds from sale-leaseback
transactions in an amount that does not exceed $3,000,000 in the aggregate in
any one fiscal year of Parent), Borrowers shall prepay the outstanding principal
amount of the Obligations in accordance with Section 2.4(d) in an amount equal
to 100% of the Net Cash Proceeds (including condemnation awards and payments in
lieu thereof) received by such Person in connection with such sales or
dispositions; provided that so long as (A) no Default or Event of Default shall
have occurred and is continuing, (B) Administrative Borrower shall have given
Agent prior written notice of Borrowers’ intention to apply such monies to the
costs of replacement of the properties or assets that are the subject of such
sale or disposition or the cost of purchase or construction of other assets
useful in the business of Borrowers or their Subsidiaries, (C) the monies are
held in a cash collateral account in which Agent has a perfected first-priority
security interest, (D) Borrowers or their Subsidiaries, as applicable, complete
such replacement, purchase, or construction within 180 days after the initial
receipt of such monies, and (E) the aggregate amount of Net Cash Proceeds that
are reinvested in any 12 consecutive month period does not exceed $1,000,000,
Borrowers and their Subsidiaries shall have the option to apply such monies to
the costs of replacement of the property or assets that are the subject of such
sale or disposition or the costs of purchase or construction of other assets
useful in the business of Borrowers and their Subsidiaries unless and to the
extent that such applicable period shall have expired without such replacement,
purchase or construction being made or completed, or an Event of Default shall
have occurred, in which case, any amounts remaining in the cash collateral
account shall be paid to Agent and applied in accordance with Section 2.4(d).
Nothing contained in this Section 2.4(c)(ii) shall permit Borrowers or any of
their Subsidiaries to sell or otherwise dispose of any property or assets other
than in accordance with Section 6.4.

(iii) Immediately upon the receipt by Borrowers or any of their Subsidiaries of
any Extraordinary Receipts (other than indemnification payments received in
connection with the Merger Agreement or any other merger or stock purchase
agreement with respect to a Permitted Acquisition to the extent that such
Extraordinary Receipts are paid to a Person that is not an Affiliate of Parent

 

10

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

or any of its Subsidiaries or received by Parent or such Subsidiary as
reimbursement for any payment previously made by such Person), Borrowers shall
prepay the outstanding principal amount of the Obligations in accordance with
Section 2.4(d) in an amount equal to 100% of such Extraordinary Receipts, net of
any reasonable expenses incurred in collecting such Extraordinary Receipts.

(iv) Immediately upon the issuance or incurrence by Borrowers or any of their
Subsidiaries of any Indebtedness (other than Indebtedness permitted under
Section 6.1(a), (c), (d), (i), (k), or (l)), the issuance by Borrowers or any of
their Subsidiaries of any shares of Borrowers’ Stock or their Subsidiaries’
Stock (other than: (y) in the event that Borrowers or any of Subsidiary of a
Borrower forms a Subsidiary in accordance with the terms hereof, the issuance by
such Subsidiary of Stock to a Borrower or such Subsidiary, as applicable or
(z) the issuance of Parent’s Stock in the ordinary course of any Active
Borrower’s business, consistent with such Active Borrower’s or Parent’s past
practice, to such Active Borrower’s employees and service providers), Borrowers
shall prepay the outstanding principal amount of the Obligations in accordance
with Section 2.4(d) in an amount equal to 100% of the Net Cash Proceeds received
by such Person in connection with such issuance or incurrence. The provisions of
this Section 2.4(c)(iv) shall not be deemed to be implied consent to any such
issuance or incurrence otherwise prohibited by the terms and conditions of this
Agreement.

(d) Application of Payments. Each prepayment pursuant to Section 2.4(c) above
shall (A) so long as no Event of Default shall have occurred and be continuing,
first, to the outstanding principal amount of the Term Loan until paid in full,
second, to the outstanding principal amount of the Advances until paid in full,
and (B) if an Event of Default shall have occurred and be continuing, be applied
in the manner set forth in Section 2.4(b)(ii). Each such prepayment of the Term
Loan shall be applied against the remaining installments of principal of the
Term Loan in the inverse order of maturity.

2.5 Overadvances. If, at any time or for any reason, the amount of Obligations
owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.12 is
greater than any of the limitations set forth in Section 2.1, or Section 2.12,
as applicable (an “Overadvance”), Borrowers immediately shall pay to Agent, in
cash, the amount of such excess which amount shall be used by Agent to reduce
the Obligations in accordance with the priorities set forth in Section 2.4(b),
provided, however, that: (i) any intentional Overadvance described in
Section 2.3(d)(ii) shall be repaid in accordance with the terms agreed upon by
the Lenders pursuant to the terms of that Section and (ii) the amount of
Advances that exceed the EBITDA Revolver Limiter shall be repaid in accordance
with Section 2.4(d). In addition, Borrowers hereby promise to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full as and when due and payable under the terms of this Agreement
and the other Loan Documents.

2.6 Interest Rates: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in clause (c) below, all Obligations
(except for Bank Product Obligations) whether or not charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof as
follows (i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate
equal to the LIBOR Rate plus the Applicable Margin for LIBOR Rate Loans, and
(ii) otherwise, at a per annum rate equal to the Base Rate plus the Applicable
Margin for Base Rate Loans.

The foregoing notwithstanding, at no time shall any portion of the Obligations
(other than Bank Product Obligations) bear interest on the Daily Balance thereof
at a per annum rate less than 5.00%. To the extent that interest accrued
hereunder at the rate set forth herein would be less than the foregoing minimum
daily rate, the interest rate chargeable hereunder for such day automatically
shall be deemed increased to the minimum rate.

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any agreements between Agent
and individual Lenders),

 

11

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

a Letter of Credit fee (in addition to the charges, commissions, fees, and costs
set forth in Section 2.12(e)) which shall accrue at a rate per annum equal to
the Applicable Margin with respect to LIBOR Rate Loans times the Daily Balance
of the undrawn amount of all outstanding Letters of Credit.

(c) Default Rate. Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders), all Obligations
(except for Bank Product Obligations) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof at
a per annum rate equal to 4 percentage points above the per annum rate otherwise
applicable hereunder, and

(d) Payment. Except as provided to the contrary in Section 2.11 or
Section 2.13(a), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to charge
all interest and fees (when due and payable), all Lender Group Expenses (as and
when incurred), all charges, commissions, fees and costs provided for in
Section 2.12(e) (as and when accrued or incurred), all fees and costs provided
for in Section 2.11 (as and when accrued or incurred), and all other payments as
and when due and payable under any Loan Document (including the amounts due and
payable with respect to the Term Loan and including any amounts due and payable
to the Bank Product Providers in respect of Bank Products up to the amount of
the Bank Product Reserve) to Borrowers’ Loan Account, which amounts thereafter
shall constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans. Any interest not paid when due
shall be compounded by being charged to the Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans.

(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days
elapsed. In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.

2.7 Cash Management.

(a) Borrowers shall (i) establish and maintain cash management services of a
type and on terms satisfactory to Agent at one or more of the banks set forth on
Schedule 2.7(a) (each a “Cash Management Bank”), and shall request in writing
and otherwise take such reasonable steps to ensure that all of the Borrowers’
Account Debtors forward payment of the amounts owed by them directly to such
Cash Management Bank, and (ii) deposit or cause to be deposited promptly, and in
any event no later than the first Business Day after the date of receipt
thereof, all of their Collections (including those sent directly by their
Account Debtors to Borrowers) into a bank account in Agent’s name (a “Cash
Management Account”) at one of the Cash Management Banks.

 

12

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

(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and the applicable Borrower, in form and substance
acceptable to Agent and Administrative Borrower. Each such Cash Management
Agreement shall provide, among other things, that (i) if Agent has given the
Cash Management Bank a notice of exclusive control (which shall not be given
prior to the occurrence of an Event of Default), the Cash Management Bank will
comply with any instructions originated by Agent directing the disposition of
the funds in such Cash Management Account without further consent by any
Borrower, as applicable, (ii) the Cash Management Bank has no rights of setoff
or recoupment or any other claim against the applicable Cash Management Account,
other than for payment of its service fees and other charges directly related to
the administration of such Cash Management Account and for returned checks or
other items of payment, and (iii) if Agent has a given the Cash Management Bank
a notice of exclusive control (which shall not be given prior to the occurrence
of an Event of Default), it will forward by daily sweep all amounts in the
applicable Cash Management Account to the Agent’s Account.

(c) So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be reasonably satisfactory to Agent, and
(ii) prior to the time of the opening of such Cash Management Account, the
applicable Borrower and such prospective Cash Management Bank shall have
executed and delivered to Agent a Cash Management Agreement. The applicable
Borrower shall close any of their Cash Management Accounts (and establish
replacement cash management accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days of notice from Agent that the
creditworthiness of any Cash Management Bank is no longer acceptable in Agent’s
reasonable judgment, or as promptly as practicable and in any event within 60
days of notice from Agent that the operating performance, funds transfer, or
availability procedures or performance of the Cash Management Bank with respect
to Cash Management Accounts or Agent’s liability under any Cash Management
Agreement with such Cash Management Bank is no longer acceptable in Agent’s
reasonable judgment.

(d) The Cash Management Accounts shall be cash collateral accounts subject to
Control Agreements.

2.8 Crediting Payments. The receipt of any payment item by Agent (whether from
transfers to Agent by the Cash Management Banks pursuant to the Cash Management
Agreements or otherwise) shall not be considered a payment on account unless
such payment item is a wire transfer of immediately available federal funds made
to the Agent’s Account or unless and until such payment item is honored when
presented for payment. Should any payment item not be honored when presented for
payment, then Borrowers shall be deemed not to have made such payment and
interest shall be calculated accordingly. Anything to the contrary contained
herein notwithstanding, any payment item shall be deemed received by Agent only
if it is received into the Agent’s Account on a Business Day on or before 11:00
a.m. (California time). If any payment item is received into the Agent’s Account
on a non-Business Day or after 11:00 a.m. (California time) on a Business Day,
it shall be deemed to have been received by Agent as of the opening of business
on the immediately following Business Day. The parties acknowledge and agree
that the economic benefit of the foregoing provisions of this Section 2.8 shall
be for the exclusive benefit of Agent.

2.9 Designated Account. Agent is authorized to make the Advances and the Term
Loan Draws under this Agreement based upon telephonic (but solely with respect
to Advances) or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section 2.6(d).
Administrative Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrowers and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Administrative Borrower, any Advance,
Protective Advance, or Swing Loan requested by Borrowers and made by Agent or
the Lenders hereunder shall be made to the Designated Account.

 

13

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

2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with the Term Loan Draws and all Advances
(including Protective Advances and Swing Loans) made by Agent, Swing Lender, or
the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued
by Issuing Lender for Borrowers’ account, and with all other payment Obligations
hereunder or under the other Loan Documents (except for Bank Product
Obligations), including, accrued interest, fees and expenses, and Lender Group
Expenses. In accordance with Section 2.8, the Loan Account will be credited with
all payments received by Agent from Borrowers or for Borrowers’ account,
including all amounts received in the Agent’s Account from any Cash Management
Bank. Agent shall render statements regarding the Loan Account to Administrative
Borrower, including principal, interest, fees, and including an itemization of
all charges and expenses constituting Lender Group Expenses owing, and such
statements, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between Borrowers and the Lender
Group unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.

2.11 Fees.

(a) Unused Revolver Commitment Fee. On the first day of each month prior to the
Termination Date and on the Termination Date, an unused line fee in an amount
equal to 0.30% per annum times the result of (i) the Maximum Revolver Amount,
less (ii) the average Daily Balance of Advances that were outstanding during the
immediately preceding month, provided, however, that the unused line fee due on
the Termination Date shall be calculated based on the average Daily Balances
during the period from and including the first day of the month in which the
Termination Date occurs up to and including the Termination Date.

(b) Unused Term Loan Commitment Fee. On the first day of each month commencing
on the first Business Day of the month following the Closing Date and continuing
through July 1, 2007, an unused term loan commitment fee in an amount equal to
0.30% per annum times the result of (i) the Term Loan Amount, less (ii) the
outstanding balance of the Term Loan on such date.

(c) Fee Letter Fees. In addition to the fees set forth in (a) and (b) above,
Borrowers shall pay to Agent, as and when due and payable under the terms of the
Fee Letter, the fees set forth in the Fee Letter.

2.12 Letter of Credit.

(a) Subject to the terms and conditions of this Agreement, the Issuing Lender
agrees to issue letters of credit for the account of Borrowers (each, an “L/C”)
or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an “L/C Undertaking”) with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Wells Fargo) for the account of
Borrowers. Each request for the issuance of a Letter of Credit or the amendment,
renewal, or extension of any outstanding Letter of Credit, shall be made in
writing by an Authorized Person and delivered to the Issuing Lender and Agent
via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance satisfactory to the
Issuing Lender in its Permitted Discretion and shall specify (i) the amount of
such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration date of such Letter of
Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and (v) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. If requested by the Issuing Lender, Borrowers also

 

14

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

shall be an applicant under the application with respect to any Underlying
Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing
Lender shall have no obligation to issue a Letter of Credit if any of the
following would result after giving effect to the issuance of such requested
Letter of Credit:

(i) the Letter of Credit Usage would exceed the EBITDA Revolver Limiter less the
outstanding amount of Advances, or

(ii) the Letter of Credit Usage would exceed $5,000,000, or

(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less
the outstanding amount of Advances less the Bank Product Reserve, and less the
aggregate amount of reserves, if any, established by Agent under Section 2.1(b).

Borrowers and the Lender Group acknowledge and agree that certain Underlying
Letters of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date. Each Letter of Credit (and corresponding
Underlying Letter of Credit) shall be in form and substance acceptable to the
Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in Dollars. If
Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers
immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to
Agent an amount equal to such L/C Disbursement not later than 11:00 a.m.,
California time, on the date that such L/C Disbursement is made, if
Administrative Borrower shall have received written or telephonic notice of such
L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Administrative Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on the Business Day
that Administrative Borrower receives such notice, if such notice is received
prior to 10:00 a.m., California time, on the date of receipt, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, initially, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans.
To the extent an L/C Disbursement is deemed to be an Advance hereunder,
Borrowers’ obligation to reimburse such L/C Disbursement shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.12(b) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interests may appear.

(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrowers had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such Lender’s Pro Rata Share of any payments made by the Issuing Lender under
such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not
reimbursed by Borrowers on the date due as provided in Section 2.12(a), or of
any reimbursement payment required to be refunded to Borrowers for any reason.
Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the
Issuing Lender pursuant to this Section 2.12(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an

 

15

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

Event of Default or Default or the failure to satisfy any condition set forth in
Section 3. If any such Lender fails to make available to Agent the amount of
such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender
in respect of such Letter of Credit as provided in this Section, such Lender
shall be deemed to be a Defaulting Lender and Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.

(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer’s regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by
Issuing Lender to or for such Borrower’s account, even though this
interpretation may be different from such Borrower’s own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers’ instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group’s
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.

(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver
to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender’s instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.

(e) Any and all issuance charges, commissions, fees, and costs incurred by the
Issuing Lender relating to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Agent for the account of the Issuing Lender; it being acknowledged
and agreed by each Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Underlying Issuer is .825% per annum times the
undrawn amount of each Underlying Letter of Credit, that such issuance charge
may be changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.

(f) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued hereunder, or

16

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

(ii) there shall be imposed on the Underlying Issuer or the Lender Group any
other condition regarding any Underlying Letter of Credit or any Letter of
Credit issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.

2.13 LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Advances or the Term Loan
be charged (whether at the time when made (unless otherwise provided herein),
upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation
of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the
LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of
(i) the last day of the Interest Period applicable thereto, (ii) the date on
which all or any portion of the Obligations are accelerated pursuant to the
terms hereof, or (iii) the date on which this Agreement is terminated pursuant
to the terms hereof. On the last day of each applicable Interest Period, unless
Administrative Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder. At any time that an Event of Default has occurred and is
continuing, Borrowers no longer shall have the option to request that Advances
or the Term Loan bear interest at a rate based upon the LIBOR Rate and Agent
shall have the right to convert the interest rate on all outstanding LIBOR Rate
Loans to the rate then applicable to Base Rate Loans hereunder.

(b) LIBOR Election.

(i) Administrative Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of Administrative Borrower’s election of the LIBOR
Option for a permitted portion of the Advances or the Term Loan and an Interest
Period pursuant to this Section shall be made by delivery to Agent of a LIBOR
Notice received by Agent before the LIBOR Deadline, or by telephonic notice
received by Agent before the LIBOR Deadline (to be confirmed by delivery to
Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California time)
on the same day). Promptly upon its receipt of each such LIBOR Notice, Agent
shall provide a copy thereof to each of the affected Lenders.

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (A) the payment of any principal of any
LIBOR Rate Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (B) the conversion of
any LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (C) the failure to borrow, convert, continue or

 

17

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

prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, or expenses, “Funding Losses”). Funding
Losses shall, with respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any, of (1) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert, or continue, for the period that would have been the Interest
Period therefor), minus (2) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Agent or such Lender
would be offered were it to be offered, at the commencement of such period,
Dollar deposits of a comparable amount and period in the London interbank
market. A certificate of Agent or a Lender delivered to Administrative Borrower
setting forth any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.13 shall be conclusive absent manifest error.

(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of
at least $5,000,000 and integral multiples of $1,000,000 in excess thereof.

(c) Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans are converted
or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by Agent of proceeds of Borrowers’ and their
Subsidiaries’ Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders
and their Participants harmless against any and all Funding Losses in accordance
with Section 2.13 (b)(ii).

(d) Special Provisions Applicable to LIBOR Rate.

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including changes in tax
laws (except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding or
maintaining loans bearing interest at the LIBOR Rate. In any such event, the
affected Lender shall give Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
Administrative Borrower may, by notice to such affected Lender (y) require such
Lender to furnish to Administrative Borrower a statement setting forth the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under Section 2.13(b)(ii)).

(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.

 

18

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

(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants,
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues at the LIBOR Rate. The
provisions of this Section shall apply as if each Lender or its Participants had
match funded any Obligation as to which interest is accruing at the LIBOR Rate
by acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.

2.14 Capital Requirements. If, after the date hereof, any Lender determines that
(i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender’s or
such holding company’s capital as a consequence of such Lender’s Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender’s or such holding company’s then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity’s capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender’s calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.

2.15 Joint and Several Liability of Borrowers.

(a) Each Borrower is accepting joint and several liability hereunder and under
the other Loan Documents in consideration of the financial accommodations to be
provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 2.15), it being the intention of the parties hereto
that all the Obligations shall be the joint and several obligations of each
Borrower without preferences or distinction among them.

(c) If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or perform, such
Obligation.

(d) The Obligations of each Borrower under the provisions of this Section 2.15
constitute the absolute and unconditional, full recourse Obligations of each
Borrower enforceable against each Borrower to the full extent of its properties
and assets.

 

19

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

(e) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
Agreement). Each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
any Agent or Lender with respect to the failure by any Borrower to comply with
any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.15 afford grounds for terminating, discharging or
relieving any Borrower, in whole or in part, from any of its Obligations under
this Section 2.15, it being the intention of each Borrower that, so long as any
of the Obligations hereunder remain unsatisfied, the Obligations of each
Borrower under this Section 2.15 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each
Borrower under this Section 2.15 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any Agent
or Lender.

(f) Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers’ financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.

(g) The provisions of this Section 2.15 are made for the benefit of Agent,
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all Borrowers as often as occasion
therefor may arise and without requirement on the part of any such Agent,
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 2.15 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this
Section 2.15 will forthwith be reinstated in effect, as though such payment had
not been made.

(h) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to any Agent or Lender hereunder
or under any other Loan Documents are hereby expressly made

 

20

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

subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.

(i) Each Borrower hereby agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the payment of any amounts due
with respect to the indebtedness owing by any Borrower to any other Borrower is
hereby subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, such Borrower will not demand, sue for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).

3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of
each Lender to make its extension of credit provided for hereunder on the
Closing Date, is subject to the fulfillment, to the satisfaction of Agent and
each Lender of each of the conditions precedent set forth on Schedule 3.1 (the
making of such initial extension of credit by a Lender being conclusively deemed
to be its satisfaction or waiver of the conditions precedent).

3.2 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder at any time
(or to extend any portion of the Term Loan or any other credit hereunder) shall
be subject to the following conditions precedent:

(a) the representations and warranties contained in this Agreement or in the
other Loan Documents shall be true and correct in all material respects on and
as of the date of such extension of credit, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date);

(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;

(c) no injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Borrower, Agent, any Lender, or any of their Affiliates; and

(d) no Material Adverse Change shall have occurred.

3.3 Term. This Agreement shall continue in full force and effect for a term
ending on January 5, 2011 (the “Maturity Date”). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.

3.4 Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with
respect to outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without

 

21

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

notice or demand (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing cash
collateral (in an amount determined by Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of the
Bank Product Providers with respect to the Bank Product Obligations). No
termination of this Agreement, however, shall relieve or discharge Borrowers of
their duties, Obligations, or covenants hereunder or under any other Loan
Document and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been paid in full and the Lender Group’s obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and the
Lender Group’s obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Agent will, at Borrowers’ sole expense,
execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, the Agent’s Liens
and all notices of security interests and liens previously filed by Agent with
respect to the Obligations.

3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon
60 days prior written notice by Administrative Borrower to Agent, to terminate
this Agreement by paying to Agent, in cash, the Obligations (including
(a) either (i) providing cash collateral to be held by Agent for the benefit of
those lenders with a Revolver Commitment in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letter of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral (in an amount
determined by Agent as sufficient to satisfy the reasonably estimated credit
exposure) to be held by Agent for the benefit of the Bank Product Providers with
respect to the Bank Products Obligations), in full. If Administrative Borrower
has sent a notice of termination pursuant to the provisions of this Section,
then the Commitments shall terminate and Borrowers shall be obligated to repay
the Obligations (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing cash
collateral (in an amount determined by Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of the
Bank Product Providers with respect to the Bank Products Obligations), in full
on the date set forth as the date of termination of this Agreement in such
notice.

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects, as of the date
hereof, and shall be true, correct, and complete, in all material respects, as
of the Closing Date, and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

4.1 No Encumbrances. Each Borrower has good and indefeasible title to, or a
valid leasehold interest in, their personal property assets and good and
marketable title to, or a valid leasehold interest in, their Real Property, in
each case, free and clear of Liens except for Permitted Liens.

4.2 Intentionally Omitted.

4.3 Inventory. Each item of Inventory is of good and merchantable quality, free
from known defects.

 

22

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

4.4 Equipment. Each material item of Equipment of Borrowers is used or held for
use in their business and is in good working order, ordinary wear and tear and
damage by casualty excepted.

4.5 Location of Inventory and Equipment. Except as permitted by Section 5.9, The
Inventory and Equipment (other than vehicles or Equipment out for repair) of
Borrowers are not stored with a bailee, warehouseman, or similar party and are
located only at, or in-transit between, the locations identified on Schedule 4.5
(as such Schedule may be updated pursuant to Section 5.9).

4.6 Inventory Records. Each Active Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its Inventory and
the book value thereof.

4.7 State of Incorporation; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims.

(a) The jurisdiction of organization of each Borrower is set forth on Schedule
4.7(a).

(b) The chief executive office of each Borrower is located at the address
indicated on Schedule 4.7(b) (as such Schedule may be updated pursuant to
Section 5.9).

(c) Each Borrower’s tax identification numbers and organizational identification
number, if any, are identified on Schedule 4.7(c).

(d) As of the Closing Date, Borrowers do not hold any commercial tort claims,
except as set forth on Schedule 4.7(d).

4.8 Due Organization and Qualification; Subsidiaries.

(a) Each Borrower is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could be expected to
result in a Material Adverse Change.

(b) Set forth on Schedule 4.8(b), is a complete and accurate description of the
authorized capital Stock of each Borrower, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding. Other than as described on Schedule 4.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower’s capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.

(c) Set forth on Schedule 4.8(c), is a complete and accurate list of each
Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by the applicable Borrower. All of the outstanding capital Stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable.

(d) Except as set forth on Schedule 4.8, there are no subscriptions, options,
warrants, or calls relating to any shares of any Borrower’s Subsidiaries’
Capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Borrower or any of its respective
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of any Borrower’s
Subsidiaries’ capital Stock or any security convertible into or exchangeable for
any such capital Stock.

 

23

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

4.9 Due Authorization; No Conflict.

(a) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Borrower.

(b) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of any Borrower, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of Borrower, other than Permitted Liens, or (iv) require any approval
of any Borrower’s interestholders or any approval or consent of any Person under
any material contractual obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and effect.

(c) Other than the filing of financing statements, the execution, delivery, and
performance by each Borrower of this Agreement and the other Loan Documents to
which such Borrower is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than consents or approvals that have been obtained
and that are still in force and effect.

(d) As to each Borrower, this Agreement and the other Loan Documents to which
such Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Borrower will be the legally valid
and binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally.

(e) The Agent’s Liens are validly created, perfected, and first priority Liens,
subject only to Permitted Liens.

4.10 Litigation. Other than those matters disclosed in the Parent’s annual
report on Form 10-K for the year ended December 31, 2005 and Parent’s quarterly
or current reports thereafter filed with the Securities and Exchange Commission
on or before the Closing Date, and other than matters arising after the Closing
Date that reasonably could not be expected to result in a Material Adverse
Change, there are no actions, suits, or proceedings pending or, to the best
knowledge of each Borrower, threatened against any Borrower.

4.11 No Material Adverse Change. All financial statements relating to Active
Borrowers that have been delivered by Active Borrowers to the Lender Group have
been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments) and present fairly in all material respects, Active
Borrowers’ financial condition as of the date thereof and results of operations
for the period then ended. There has not been a Material Adverse Change with
respect to Active Borrowers since the date of the latest financial statements
submitted to Agent on or before the Closing Date.

 

24

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

4.12 Fraudulent Transfer.

(a) Each Active Borrower is Solvent.

(b) No transfer of property is being made by any Borrower and no obligation is
being incurred by any Borrower or in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of Borrowers.

4.13 Employee Benefits. None of Borrowers or any of their ERISA Affiliates
maintains or contributes to any Benefit Plan.

4.14 Environmental Condition. Except as set forth on Schedule 4.14, (a) to
Borrowers’ knowledge, none of Borrowers’ properties or assets has ever been used
by Borrowers, or, to the best of Borrowers’ knowledge, by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such use, production, storage,
handling, treatment, release or transport was in violation, in any material
respect, of any applicable Environmental Law, (b) to Borrowers’ knowledge, none
of Borrowers’ properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) none of Borrowers have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real Property
owned or operated by Borrowers, and (d) none of Borrowers have received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by any Borrower resulting in the releasing or disposing
of Hazardous Materials into the environment.

4.15 Intellectual Property. Except as otherwise disclosed pursuant to
Section 4.10, each Borrower owns, or holds licenses in, all trademarks, trade
names, copyrights that constitute the Required Library, patents, patent rights,
and licenses that are necessary to the conduct of its business as currently
conducted, and attached hereto as Schedule 4.15 (as updated from time to time)
is a true, correct, and complete listing of all material patents, patent
applications, trademarks, trademark applications, copyrights relating to the
Required Library, and copyright registrations as to which such Borrower is the
owner or is an exclusive licensee.

4.16 Leases. Borrowers enjoy peaceful and undisturbed possession under all
leases material to their business and to which they are parties or under which
they are operating and all of such material leases are valid and subsisting and
no material default by Borrowers exists under any of them.

4.17 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.17 is a
listing of all of Borrowers’ Deposit Accounts and Securities Accounts,
including, with respect to each bank or securities intermediary (a) the name and
address of such Person, and (b) the account numbers of the Deposit Accounts or
Securities Accounts maintained with such Person.

4.18 Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of Borrowers in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents,
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Borrowers
in writing to Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided. On the Closing
Date, the Closing Date Projections represent, and as of the date on which any
other Projections are delivered to Agent, such additional Projections represent
Borrowers’ good faith estimate of their future performance for the periods
covered thereby.

 

25

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

4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list of all
Indebtedness of each Borrower outstanding immediately prior to the Closing Date
that is to remain outstanding after the Closing Date and such Schedule
accurately reflects the aggregate principal amount of such Indebtedness and
describes the principal terms thereof.

4.20 Inactive Borrowers. Each of the Inactive Borrower is inactive and does not
conduct any business operations, except as may be related to the dissolution of
such Inactive Borrower or the consolidation or merger of such Inactive Borrower
with one or more Active Borrowers as permitted under the terms of this
Agreement.

4.21 Material Contracts. Neither the consummation of the QCSI Merger, nor the
consummation of the transactions contemplated under the Merger Documents, nor
the grant by the Borrowers of security interests in the Collateral as
contemplated hereunder and under the other Loan Documents will conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation or material lease of any
Borrower.

4.22 Merger Documents. Borrowers have delivered to Agent true and correct copies
of the Merger Agreement and the other material documents related to the QCSI
Merger (including all schedules, exhibits, amendments, supplements,
modifications and assignments) (collectively, together with the Merger
Agreement, the “Merger Documents”). The Merger Documents are in full force and
effect as of the Closing Date and have not been terminated, rescinded, or
withdrawn. No Borrower that is party thereto is in default in the performance
of, or compliance with, any provisions of the Merger Documents. The Merger
Documents comply in all material respects with, and contemporaneously with the
funding of the first Term Loan Draw on the Closing Date, the QCSI Merger will be
consummated in accordance with, all applicable laws. The transactions
contemplated by the Merger Documents will be, contemporaneously with the funding
of the first Term Loan Draw on the Closing Date, consummated in accordance with
their respective terms and nothing has come to Borrowers’ attention that would
indicate that any of the representations and warranties contained in the Merger
Documents are not true and correct. To the best knowledge of the Borrowers, none
of the representations or warranties of any other Person in any Merger Document
contain any untrue statement of a material fact or omit any fact necessary to
make such statements therein not misleading.

5. AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrowers shall do all of
the following:

5.1 Accounting System. Maintain a system of accounting that enables Borrowers to
produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent. Borrowers also shall keep a reporting
system that shows all additions, sales, claims, returns, and allowances with
respect to their sales.

5.2 Collateral Reporting. Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports set forth on Schedule 5.2 at
the times specified therein. In addition, each Borrower agrees to cooperate
fully with Agent to facilitate and implement a system of electronic collateral
reporting in order to provide electronic reporting of each of the items set
forth above.

5.3 Financial Statements, Reports, Certificates. Deliver to Agent, with copies
to each Lender, each of the financial statements, reports, or other items set
forth on Schedule 5.3 at the time specified herein. In addition, Parent agrees
that no Subsidiary of Parent will have a fiscal year different from that of
Parent.

 

26

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

5.4 Intentionally Omitted.

5.5 Inspection. Permit Agent, each Lender, and each of their duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent or any such Lender may designate and, so long as no
Default or Event of Default exists, with reasonable prior notice to
Administrative Borrower.

5.6 Maintenance of Properties. Maintain and preserve all of their properties
which are necessary or useful in the proper conduct to their business in good
working order and condition, ordinary wear, tear, and casualty excepted (and
except where the failure to do so could not be expected to result in a Material
Adverse Change), and comply at all times with the provisions of all material
leases to which it is a party as lessee, so as to prevent any loss or forfeiture
thereof or thereunder.

5.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers,
or any of their respective assets to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Borrowers will make timely payment or deposit of all tax payments and
withholding taxes required of them by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof satisfactory to
Agent indicating that the applicable Borrower has made such payments or
deposits.

5.8 Insurance.

(a) At Borrowers’ expense, maintain insurance respecting their assets wherever
located, covering loss or damage by fire, theft, explosion, and all other
hazards and risks as ordinarily are insured against by other Persons engaged in
the same or similar businesses, other than earthquake insurance. Borrowers also
shall maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver copies of all such policies to Agent with an endorsement naming
Agent as the sole loss payee (under a satisfactory lender’s loss payable
endorsement) or additional insured, as appropriate. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever.

(b) Administrative Borrower shall give Agent prompt notice of any loss exceeding
$50,000 covered by such insurance. So long as no Event of Default has occurred
and is continuing, Borrowers shall have the exclusive right to settle any losses
payable under any such insurance policies which are less than $200,000.
Following the occurrence and during the continuation of an Event of Default, or
in the case of any losses payable under such insurance exceeding $200,000, Agent
shall have the exclusive right to settle any losses payable under any such
insurance policies, without any liability to Borrowers whatsoever in respect of
such settlements. Any monies received as payment for any loss under any
insurance policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to Agent to be applied at the option of the Required
Lenders either to the prepayment of the Obligations or to be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to
the Required Lenders for application to the cost of repairs, replacements, or
restorations; provided, however, that, with respect to any such monies in an
aggregate

 

27

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

amount during any 12 consecutive month period not in excess of $200,000, so long
as (A) no Default or Event of Default shall have occurred and is continuing,
(B) Borrowers’ Excess Availability is greater than $5,000,000,
(C) Administrative Borrower shall have given Lender prior written notice of the
Borrowers intention to apply such monies to the costs of repairs, replacement,
or restoration of the property which is the subject of the loss, destruction, or
taking by condemnation, (D) the monies are held in a cash collateral account in
which Lender has a perfected first-priority security interest, and (E) Borrowers
complete such repairs, replacements, or restoration within 180 days after the
initial receipt of such monies, Borrowers shall have the option to apply such
monies to the costs of repairs, replacement, or restoration of the property
which is the subject of the loss, destruction, or taking by condemnation unless
and to the extent that such applicable period shall have expired without such
repairs, replacements, or restoration being made, in which case, any amounts
remaining in the cash collateral account shall be paid to Lender and applied as
set forth above.

5.9 Location of Inventory and Equipment. Keep Borrowers’ Inventory and Equipment
(other than vehicles and Equipment out for repair) only at the locations
identified on Schedule 4.5 and their chief executive offices only at the
locations identified on Schedule 4.7(b); provided, however, that Administrative
Borrower may amend Schedule 4.5 or Schedule 4.7 so long as such amendment occurs
by written notice to Agent not less than 30 days prior to the date on which such
Inventory or Equipment is moved to such new location or such chief executive
office is relocated, so long as such new location is within the continental
United States, and so long as, at the time of such written notification, the
applicable Borrower provides Agent a Collateral Access Agreement with respect
thereto; provided, further, that Borrowers may maintain, at any time, Inventory
and Equipment with an aggregate market value not to exceed $150,000 in locations
other than those identified in Schedule 4.5 so long as such locations are within
the United States.

5.10 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

5.11 Leases. Pay when due all rents and other amounts payable under any material
leases to which any Borrower is a party or by which any Borrower’s properties
and assets are bound, unless such payments are the subject of a Permitted
Protest.

5.12 Existence. At all times preserve and keep in full force and effect each
Borrower’s valid existence and good standing and any rights and franchises
material to their businesses, unless such Borrower has merged into an Active
Borrower pursuant to a Permitted Merger.

5.13 Environmental.

(a) Keep any property owned by any Borrower free of any Environmental Liens or
post bonds or other financial assurances sufficient to satisfy the obligations
or liability evidenced by such Environmental Liens, (b) use all commercially
reasonably efforts to keep any property leased by any Borrower free of any
Environmental Liens or post bonds or other financial assurances sufficient to
satisfy the obligations or liability evidenced by such Environmental Liens,
(c) comply, in all material respects, with Environmental Laws and provide to
Agent documentation of such compliance which Agent reasonably requests,
(d) promptly notify Agent of any release of a Hazardous Material in any
reportable quantity, in violation of applicable Environmental Law, from or onto
property owned or operated by any Borrower and take any Remedial Actions
required to abate said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event within 5 days
of its receipt thereof, provide Agent with written notice of any of the
following: (i) notice that an Environmental Lien has been filed against any of
the real or personal property of any Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against any Borrower, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.

 

28

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

5.14 Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the affect of
amending or modifying this Agreement or any of the Schedules hereto.

5.15 Control Agreements. Take all reasonable steps in order for Agent to obtain
control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the
Code with respect to (subject to the proviso contained in Section 6.12) all of
its Securities Accounts, Deposit Accounts, electronic chattel paper, investment
property, and letter of credit rights.

5.16 Formation of Subsidiaries. At the time that any Borrower forms any direct
or indirect Subsidiary or acquires any direct or indirect Subsidiary after the
Closing Date, such Borrower shall (a) cause such new Subsidiary to provide to
Agent a joinder to this Agreement and the Security Agreement, together with such
other security documents (including Mortgages with respect to any Real Property
of such new Subsidiary), as well as appropriate financing statements (and with
respect to all property subject to a Mortgage, fixture filings), all in form and
substance satisfactory to Agent (including being sufficient to grant Agent a
first priority Lien (subject to Permitted Liens) in and to the assets of such
newly formed or acquired Subsidiary), (b) provide to Agent a pledge agreement
and appropriate certificates and powers or financing statements, hypothecating
all of the direct or beneficial ownership interest in such new Subsidiary, in
form and substance satisfactory to Agent, and (c) provide to Agent all other
documentation, including one or more opinions of counsel satisfactory to Agent,
which in its opinion is appropriate with respect to the execution and delivery
of the applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage). Any document, agreement, or instrument executed or issued pursuant to
this Section 5.16 shall be a Loan Document. Notwithstanding the foregoing:
(i) EBITDA of any entity that becomes a Borrower pursuant to this Section 5.16
shall not be included in the calculation of TTM EBITDA for purposes of
Section 2.4(c)(i) until the Required Lenders have approved such inclusion in
their Permitted Discretion and (ii) the formation or acquisition of foreign
subsidiaries shall not be permitted if joining any such foreign subsidiary as a
Borrower results in: (1) any Lender being required to qualify to do business,
register with any foreign governmental authority or otherwise seek permission or
approval from any foreign governmental authority; (2) the violation of any
foreign law or regulation by any Lender; or (3) any increased costs to such
Lender and such costs are not Lender Group Expenses.

5.17 Intentionally Omitted.

5.18 Post-Closing Covenants. The obligation of the Lender Group (or any member
thereof) to make any Advances hereunder at any time after the periods set forth
in Schedule 5.18 (or to extend any other credit hereunder) shall be subject to
the fulfillment, to the satisfaction of Agent and each Lender (or waiver
thereby) in their Permitted Discretion, of each of the post-closing covenants
set forth on Schedule 5.18 within the prescribed time periods set forth on such
Schedule. The failure by Borrowers to satisfy the post-closing covenants set
forth on Schedule 5.18 within the prescribed time periods shall constitute an
Event of Default.

5.19 Copyrights. Maintain, at all times, the Required Library in accordance with
the Security Agreement.

5.20 Assignability of Contracts. Use commercially reasonable efforts to exclude
from all service contracts and all material intellectual property licenses
entered into after the Closing Date, and from all other agreements or documents
entered into after the Closing Date, any language that would prevent a Borrower
from granting a Lien in such agreements or documents to Agent.

 

29

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

5.21 Billing Procedures. Cause billing and collections with regards to service
contracts and all material intellectual property licenses to be substantially on
the same basis and in accordance with the usual and customary practices of the
Active Borrowers as they exist on the Closing Date.

6. NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Borrowers will not do any of
the following:

6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,

(b) Indebtedness set forth on Schedule 4.19,

(c) Permitted Purchase Money Indebtedness,

(d) Permitted Capitalized Lease Obligations,

(e) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b), (c), (d) and (h) of this Section 6.1 (and continuance or renewal of
any Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Agent’s
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair Borrowers’ creditworthiness,
(ii) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended or add one or more Borrowers as liable with
respect thereto if such additional Borrowers were not liable with respect to the
original Indebtedness, (iii) such refinancings, renewals, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions, that,
taken as a whole, are materially more burdensome or restrictive to the
applicable Borrower, (iv) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the terms
and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or
extended is not recourse to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended,

(f) endorsement of instruments or other payment items for deposit,

(g) Indebtedness composing Permitted Investments

(h) Indebtedness in connection with the issuance by Parent of unsecured
convertible notes (the “Convertible Notes”) more specifically described in the
Prospectus attached hereto as Exhibit D and made a part hereof by this
reference.

(i) Indebtedness under junior subordinated obligations issued by an Active
Borrower; but only so long as: (i) a Default or an Event of Default does not
exist either before or immediately

 

30

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

after incurring such obligations, (ii) no more than $5,000,000 of such
Indebtedness may exist at any one time, and (iii) the terms of such obligations
provide that: (w) the obligations of the applicable Active Borrower under such
obligations are junior and subordinate to the obligations of such Active
Borrower to the Lender Group pursuant to subordination terms acceptable to Agent
in its Permitted Discretion, (x) there shall be no required payment of principal
prior to maturity, (y) there may be cash payments of interest only if no Default
or Event of Default has occurred and is continuing, and (z) the maturity date
shall be no earlier than the date that is 90 days after the Maturity Date;

(j) Intentionally Omitted;

(k) Indebtedness incurred in connection with the financing of insurance premiums
on customary terms and in the ordinary course of business; and

(l) to the extent not included in (a) through (l) above, Indebtedness incurred
in the ordinary course of business and not exceeding $250,000 in the aggregate
outstanding at any one time.

6.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced, renewed, or extended under
Section 6.1(d) and so long as the replacement Liens only encumber those assets
that secured the refinanced, renewed, or extended Indebtedness).

6.3 Restrictions on Fundamental Changes.

(a) Other than the QCSI Merger and Permitted Mergers, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its Stock,

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution),

(c) Except with respect to transactions contemplated in connection with the QCSI
Merger and a Permitted Merger, convey, sell, lease, license, assign, transfer,
or otherwise dispose of, in one transaction or a series of transactions, all or
any substantial part of its assets, or

(d) Except in connection with a Permitted Merger, suspend or go out of a
substantial portion of its or their business.

6.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of any of the assets of any
Borrower.

6.5 Change Name. Change any Borrower’s name, organizational identification
number, state of organization, or organizational identity; provided, however,
that a Borrower may change its name upon at least 30 days prior written notice
by Administrative Borrower to Agent of such change and so long as, at the time
of such written notification, such Borrower provides any financing statements
necessary to perfect and continue perfected the Agent’s Liens.

6.6 Nature of Business. Make any change in the principal nature of their
business.

 

31

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

6.7 Prepayments and Amendments. Except in connection with a refinancing
permitted by Section 6.1(e),

(a) optionally prepay, redeem, defease, purchase, or otherwise acquire (other
than by operation of law as the result of a Permitted Merger or the QCSI Merger)
any Indebtedness of any Borrower, other than prepayments, redemptions, or other
acquisitions with respect to: (i) the Obligations in accordance with this
Agreement, (ii) Indebtedness in the ordinary course of Borrowers’ business but
only so long as: (y) no Default or Event of Default exists before and
immediately after giving effect to such prepayment and (z) such prepayments do
not exceed $200,000 in the aggregate for all Borrowers in any one fiscal year of
Parent, and (iii) Indebtedness under the Convertible Notes so long as: (1) no
Default or Event of Default exists before and immediately after giving effect to
such prepayment and (2) such prepayments are permitted by the terms of the
Convertible Notes and the indenture under which the Convertible Notes are issued
(the “Indenture”),

(b) make any payment on account of Indebtedness that has been contractually
subordinated in right of payment if such payment is not permitted at such time
under the subordination terms and conditions, or

(c) directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Sections 6.1(b),
(c), (g), (h), (i), (j), (k), and (l), if such amendment, modification,
alteration, increase or change would cause such Indebtedness to not be permitted
under such Sections.

6.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.

6.9 Consignments. Consign any of their Inventory or sell any of their Inventory
on bill and hold, sale or return, sale on approval, or other conditional terms
of sale.

6.10 Distributions. Make any distribution or declare or pay any dividends (in
cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of any Borrower’s Stock, of any class, whether now or
hereafter outstanding; except that: (i) a Borrower may make distributions or
declare and pay dividends to another Borrower, (ii) Parent may conduct the Share
Repurchases.

6.11 Accounting Methods. Modify or change their fiscal year or their method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrowers’ accounting records without said accounting
firm or service bureau agreeing to provide Agent information regarding
Borrowers’ financial condition.

6.12 Investments. Except for the QCSI Merger and Permitted Investments, directly
or indirectly, make or acquire any Investment, or incur any liabilities
(including contingent obligations) for or in connection with any Investment;
provided, however, that Administrative Borrower shall not have Permitted
Investments (other than in the Cash Management Accounts) in Deposit Accounts or
Securities Accounts in an aggregate amount in excess of $50,000 at any one time
unless Administrative Borrower, as applicable, and the applicable securities
intermediary or bank have entered into Control Agreements governing such
Permitted Investments in order to perfect (and further establish) the Agent’s
Liens in such Permitted Investments. Subject to the foregoing proviso, Borrowers
shall not establish or maintain any Deposit Account or Securities Account unless
Agent shall have received a Control Agreement in respect of such Deposit Account
or Securities Account.

 

32

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

6.13 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any transaction with any Affiliate of any Borrower except for
(I) transactions that (a) are in the ordinary course of Borrowers’ business,
(b) are upon fair and reasonable terms, (c) if they involve one or more payments
or the transfer of assets by any Borrower in excess of $100,000, are fully
disclosed to Agent, and (d) are no less favorable to Borrowers than would be
obtained in an arm’s length transaction with a non-Affiliate and (II) except for
Share Repurchases. Notwithstanding the foregoing, an Active Borrower may not
make payments, sell or make any other transfers of assets to an Inactive
Borrower.

6.14 Use of Proceeds.

(a) Use the proceeds of the Advances for any purpose other than (i) on the
Closing Date, to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, (ii) to pay the consideration, and
transactional fees, costs and expenses incurred in connection with the QCSI
Merger, and (iii) thereafter, consistent with the terms and conditions hereof,
for its lawful and permitted purposes.

(b) With respect to Active Borrowers, transfer, directly or indirectly any
proceeds of the Advances to any Inactive Borrower.

(c) With respect to Inactive Borrowers, request or receive, directly or
indirectly any proceeds of the Advances from the Lenders of an Active Borrower,
or otherwise.

6.15 Inventory and Equipment with Bailees. Store the Inventory or Equipment of
Borrowers at any time now or hereafter with a bailee, warehouseman, or similar
party.

6.16 Financial Covenants.

(a) Fail to maintain or achieve:

(i) Minimum TTM EBITDA. TTM EBITDA, measured on the last day of each fiscal
quarter, of at least the required amount set forth in the following table for
the applicable measurement date set forth opposite thereto:

 

Applicable Amount

  

Measurement Date

$42,500,000

   June 30, 2006

$47,500,000

   September 30, 2006

$57,200,000

   December 31, 2006

$57,200,000

   March 31, 2007

$57,200,000

   June 30, 2007

$57,200,000

   September 30, 2007

$70,100,000

   December 31, 2007

$70,100,000

   March 31, 2008

$70,100,000

   June 30, 2008

$70,100,000

   September 30, 2008

$83,000,000

  

December 31, 2008 and the last day of

each calendar quarter thereafter

(ii) Minimum Liquidity. Maintain at all times Liquidity of no less than
$15,000,000.

 

33

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

(iii) Minimum TTM Recurring Revenues. TTM Recurring Revenues, measured on the
last day of each fiscal quarter, of at least the required amount set forth in
the following table for the applicable measurement date set forth opposite
thereto:

 

Applicable Amount

  

Measurement Date

$137,000,000

   June 30, 2006

$152,000,000

   September 30, 2006

$162,000,000

   December 31, 2006

$169,000,000

   March 31, 2007

$177,000,000

   June 30, 2007

$183,000,000

   September 30, 2007

$186,000,000

   December 31, 2007

(b) Make:

(i) Capital Expenditures. Capital Expenditures in any fiscal year in excess of
the amount set forth in the following table for the applicable period:

 

Fiscal Year 2006

  

Fiscal Year 2007

  

Fiscal Year 2008

$28,000,000

   $35,000,000    $38,000,000

The covenants contained in Sections 6.16(a)(iii) and (b) shall be established by
Agent for each fiscal quarter ending after December 31, 2007 (or each fiscal
year after fiscal year 2008 with respect to Section 6.16 (b)) based upon
Borrowers’ Projections for the applicable fiscal year, which projections must be
delivered to Agent in accordance with Schedule 5.3. The Projections must
credibly reflect expected performance by Borrowers in each period of each such
fiscal year that is equal to or better than the actual performance for the same
periods in the fiscal year ending 2007, as reflected in the financial statements
delivered to Agent for such fiscal year, and all such projections shall
otherwise be satisfactory to Agent in its reasonable credit judgment. Agent
shall set the future periods’ financial covenants based on 85% (120% with
respect to Section 6.16 (b)) of the applicable statistics and ratios as provided
for in the Projections approved by Agent.

7. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

7.1 If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations);

7.2 If Borrowers:

(a) fail to perform or observe any covenant or other agreement contained in any
of Sections 2.7, 5.2, 5.3, 5.5, 5.8, 5.12, 5.14, 5.16, 5.18, and 6.1 through
6.16 of this Agreement;

(b) fail to perform or observe any covenant or other agreement contained in any
of Sections 5.6, 5.7, 5.9, 5.10, 5.11, and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the date on
which such failure shall first become known to any officer of any Borrower or
(ii) written notice thereof is given to Administrative Borrower by Lender; or

 

34

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

(c) fail to perform or observe any covenant or other agreement contained in this
Agreement, or in any of the other Loan Documents; in each case, other than any
such covenant or agreement that is the subject of another provision of this
Section 7 (in which event such other provision of this Section 7 shall govern),
and such failure continues for a period of 20 days after the earlier of (i) the
date on which such failure shall first become known to any officer of any
Borrower or (ii) written notice thereof is given to Administrative Borrower by
Lender;

7.3 If any material portion of any Borrower’s assets is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any third Person and the same is not discharged before the earlier
of 30 days after the date it first arises or 5 days prior to the date on which
such property or asset is subject to forfeiture by such Borrower;

7.4 If an Insolvency Proceeding is commenced by any Borrower;

7.5 If an Insolvency Proceeding is commenced against any Borrower, and any of
the following events occur: (a) the applicable Borrower consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof; (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
any Borrower, or (e) an order for relief shall have been issued or entered
therein;

7.6 If any Borrower is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs;

7.7 If one or more judgments or other claims involving an aggregate amount of
$200,000, or more (except to the extent fully covered by insurance pursuant to
which the insurer has accepted liability therefor in writing) shall be entered
or filed against any Borrower or with respect to any of their respective assets,
and the same is not released, discharged, bonded against, or stayed pending
appeal before the earlier of 30 days after the date it first arises or 5 days
prior to the date on which such asset is subject to being forfeited by the
applicable Borrower;

7.8 If there is a default in one or more agreements to which any Borrower is a
party with one or more third Persons relative to Indebtedness of any Borrower
involving an aggregate amount of $100,000 or more, and such default (i) occurs
at the final maturity of the obligations thereunder, or (ii) results in a right
by such third Person(s), irrespective of whether exercised, to accelerate the
maturity of the applicable Borrower’s obligations thereunder;

7.9 If any material misstatement or misrepresentation in any warranty,
representation, statement, or Record made to the Lender Group by any Borrower,
or any officer, employee, agent, or director of any Borrower exists when made or
furnished or deemed made to the Lender Group and such material misstatement or
misrepresentation has an adverse impact on the Collateral or the interests of
the Lender Group;

7.10 Intentionally Omitted.

7.11 If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement; or

 

35

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

7.12 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by any Borrower or a proceeding shall be commenced by any Borrower, or
by any Governmental Authority having jurisdiction over any Borrower, seeking to
establish the invalidity or unenforceability thereof, or any Borrower shall deny
that it has any liability or obligation purported to be created under any Loan
Document.

8. THE LENDER GROUP’S RIGHTS AND REMEDIES.

8.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default, the Required Lenders (at their election but without notice of
their election and without demand) may authorize and instruct Agent to do any
one or more of the following on behalf of the Lender Group (and Agent, acting
upon the instructions of the Required Lenders, shall do the same on behalf of
the Lender Group), all of which are authorized by Borrowers:

(a) Declare all or any portion of the Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;

(b) Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other
agreement between Borrowers and the Lender Group;

(c) Terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
the Agent’s Liens in the Collateral and without affecting the Obligations; and

(d) The Lender Group shall have all other rights and remedies available at law
or in equity or pursuant to any other Loan Document.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 7.4 or Section 7.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Borrowers.

8.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.

9. TAXES AND EXPENSES.

If any Borrower fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, Agent, in its sole discretion and without prior
notice to any Borrower,

 

36

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

may do any or all of the following: (a) make payment of the same or any part
thereof (except to the extent that the validity of such assessment or tax is
subject to a Permitted Protest), (b) set up such reserves against the Maximum
Revolver Amount as Agent deems necessary to protect the Lender Group from the
exposure created by such failure, or (c) in the case of the failure to comply
with Section 5.8 hereof, obtain and maintain insurance policies of the type
described in Section 5.8 and take any action with respect to such policies as
Agent deems prudent in its Permitted Discretion. Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement. Agent need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.

10. WAIVERS; INDEMNIFICATION.

10.1 Demand; Protest; etc. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.

10.2 The Lender Group’s Liability for Borrower Collateral. Each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Borrower Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Borrower Collateral shall be borne
by Borrowers.

10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an “Indemnified Person”) harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrowers’ compliance with
the terms of the Loan Documents, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the “Indemnified Liabilities”). The foregoing to the contrary notwithstanding,
Borrowers shall have no obligation to any Indemnified Person under this
Section 10.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

 

37

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

11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by Borrowers
or Agent to the other relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, electronic mail (at such email
addresses as Administrative Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrowers in care of
Administrative Borrower or to Agent, as the case may be, at its address set
forth below:

 

If to Administrative Borrower:    THE TRIZETTO GROUP, INC.    567 San Nicolas
Drive    Suite 360    Newport Beach, California 92660    Attn: James C. Malone
   Fax No.: 949.219.2198 with copies to:    STRADLING YOCCA CARLSON & RAUTH   
660 Newport Center Drive    Suite 1600    Newport Beach, California 92660   
Attn: K.C. Schaaf, Esq.    Fax No.: 949.725.4100 If to Agent:    WELLS FARGO
FOOTHILL, INC.    2450 Colorado Avenue    Suite 300 West    Santa Monica,
California 90404    Attn: Business Finance Division Manager    Fax No.:
310.453.7413 with copies to:    BUCHALTER NEMER    1000 Wilshire Boulevard   
Suite 1500    Los Angeles, California 90017.    Attention: Robert J. Davidson,
Esq.    Fax: 213-896-0400

Agent and Borrowers may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, other
than notices by Agent in connection with enforcement rights against the Borrower
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Borrower Collateral under the provisions of the Code shall be deemed sent when
deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.

 

38

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

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWERS AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 12(b).

(c) BORROWERS AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

(b) REFERENCE PROVISION.

(i) EACH OF BORROWERS, AGENT AND EACH MEMBER OF THE LENDER GROUP PREFER THAT ANY
DISPUTE BETWEEN THEM BE RESOLVED IN LITIGATION SUBJECT TO A JURY TRIAL WAIVER AS
SET FORTH IN THE LOAN DOCUMENTS, BUT THE CALIFORNIA SUPREME COURT HAS HELD THAT
PRE-DISPUTE JURY TRIAL WAIVERS ARE UNENFORCEABLE. THIS REFERENCE PROVISION WILL
BE APPLICABLE UNTIL: (I) THE CALIFORNIA SUPREME COURT HOLDS THAT A PRE-DISPUTE
JURY TRIAL WAIVER PROVISION SIMILAR TO THAT CONTAINED IN THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS IS VALID OR ENFORCEABLE; OR (II) THE CALIFORNIA LEGISLATURE
PASSES LEGISLATION AND THE GOVERNOR OF THE STATE OF CALIFORNIA SIGNS INTO LAW A
STATUTE AUTHORIZING PRE-DISPUTE JURY TRIAL WAIVERS AND AS A RESULT SUCH WAIVERS
BECOME ENFORCEABLE. IN ADDITION, THIS REFERENCE PROVISION, IF NOT ALREADY
APPLICABLE AS OTHERWISE PROVIDED HEREIN, WILL BECOME APPLICABLE, IF A COURT,
CONTRARY TO A CHOICE OF LAW PROVISION CONTAINED IN THE LOAN DOCUMENTS, HOLDS
THAT THE LAWS OF THE STATE OF CALIFORNIA APPLY TO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

 

39

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

(ii) OTHER THAN (I) NONJUDICIAL FORECLOSURE OF SECURITY INTERESTS IN REAL OR
PERSONAL PROPERTY, (II) THE APPOINTMENT OF A RECEIVER OR (III) THE EXERCISE OF
OTHER PROVISIONAL REMEDIES (ANY OF WHICH MAY BE INITIATED PURSUANT TO APPLICABLE
LAW), ANY CONTROVERSY, DISPUTE OR CLAIM (EACH, A “CLAIM”) BETWEEN THE PARTIES
HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
WILL BE RESOLVED BY A REFERENCE PROCEEDING IN CALIFORNIA IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 638 ET SEQ. OF THE CALIFORNIA CODE OF CIVIL PROCEDURE
(“CCP”), OR THEIR SUCCESSOR SECTIONS, WHICH SHALL CONSTITUTE THE EXCLUSIVE
REMEDY FOR THE RESOLUTION OF ANY CLAIM, INCLUDING WHETHER THE CLAIM IS SUBJECT
TO THE REFERENCE PROCEEDING. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN THE
SUPERIOR COURT OR FEDERAL DISTRICT COURT LOCATED IN THE COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA (THE “COURT”).

(iii) THE REFEREE SHALL BE A RETIRED JUDGE OR JUSTICE SELECTED BY MUTUAL WRITTEN
AGREEMENT OF THE PARTIES. IF THE PARTIES DO NOT AGREE, THE REFEREE SHALL BE
SELECTED BY THE PRESIDING JUDGE OF THE COURT (OR HIS OR HER REPRESENTATIVE). A
REQUEST FOR APPOINTMENT OF A REFEREE MAY BE HEARD ON AN EX PARTE OR EXPEDITED
BASIS, AND EACH OF PARENT, BORROWERS, AGENT AND EACH MEMBER OF THE LENDER GROUP
AGREE THAT IRREPARABLE HARM WOULD RESULT IF EX PARTE RELIEF IS NOT GRANTED. THE
REFEREE SHALL BE APPOINTED TO SIT WITH ALL THE POWERS PROVIDED BY LAW. PENDING
APPOINTMENT OF THE REFEREE, THE COURT HAS POWER TO ISSUE TEMPORARY OR
PROVISIONAL REMEDIES.

(iv) EACH OF BORROWERS, AGENT AND EACH MEMBER OF THE LENDER GROUP AGREE THAT
TIME IS OF THE ESSENCE IN CONDUCTING THE REFERENCE PROCEEDINGS. ACCORDINGLY, THE
REFEREE SHALL BE REQUESTED, SUBJECT TO CHANGE IN THE TIME PERIODS SPECIFIED
HEREIN FOR GOOD CAUSE SHOWN, TO (A) SET THE MATTER FOR A STATUS AND
TRIAL-SETTING CONFERENCE WITHIN FIFTEEN (15) DAYS AFTER THE DATE OF SELECTION OF
THE REFEREE, (B) IF PRACTICABLE, TRY ALL ISSUES OF LAW OR FACT WITHIN NINETY
(90) DAYS AFTER THE DATE OF THE CONFERENCE AND (C) REPORT A STATEMENT OF
DECISION WITHIN TWENTY (20) DAYS AFTER THE MATTER HAS BEEN SUBMITTED FOR
DECISION.

(v) THE REFEREE WILL HAVE POWER TO EXPAND OR LIMIT THE AMOUNT AND DURATION OF
DISCOVERY. THE REFEREE MAY SET OR EXTEND DISCOVERY DEADLINES OR CUTOFFS FOR GOOD
CAUSE, INCLUDING A PARTY’S FAILURE TO PROVIDE REQUESTED DISCOVERY FOR ANY REASON
WHATSOEVER. UNLESS OTHERWISE ORDERED BASED UPON GOOD CAUSE SHOWN, NO PARTY TO
SUCH ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION, SHALL BE ENTITLED TO
“PRIORITY” IN CONDUCTING DISCOVERY, DEPOSITIONS MAY BE TAKEN BY ANY PARTY TO
SUCH ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION UPON SEVEN (7) DAYS
WRITTEN NOTICE, AND ALL OTHER DISCOVERY SHALL BE RESPONDED TO WITHIN FIFTEEN
(15) DAYS AFTER SERVICE. ALL DISPUTES RELATING TO DISCOVERY WHICH CANNOT BE
RESOLVED BY THE PARTIES SHALL BE SUBMITTED TO THE REFEREE WHOSE DECISION SHALL
BE FINAL AND BINDING.

 

40

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

(vi) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL
DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING
THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL
OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE
PROCEEDING. ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT
FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT THAT WHEN A PARTY
TO SUCH ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION SO REQUESTS, A
COURT REPORTER WILL BE USED AT ANY HEARING CONDUCTED BEFORE THE REFEREE, AND THE
REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING
SUCH A REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COURT
REPORTER. SUBJECT TO THE REFEREE’S POWER TO AWARD COSTS TO THE PREVAILING PARTY,
THE PARTIES TO ANY SUCH ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION
WILL EQUALLY SHARE THE COST OF THE REFEREE AND THE COURT REPORTER AT TRIAL.

(vii) THE REFEREE SHALL BE REQUIRED TO DETERMINE ALL ISSUES IN ACCORDANCE WITH
EXISTING CASE LAW AND THE STATUTORY LAWS OF THE STATE OF CALIFORNIA. THE RULES
OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA WILL BE
APPLICABLE TO THE REFERENCE PROCEEDING. THE REFEREE SHALL BE EMPOWERED TO ENTER
EQUITABLE AS WELL AS LEGAL RELIEF, PROVIDE ALL TEMPORARY OR PROVISIONAL
REMEDIES, ENTER EQUITABLE ORDERS THAT WILL BE BINDING ON THE PARTIES TO SUCH
ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION AND RULE ON ANY MOTION
WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING WITHOUT LIMITATION MOTIONS FOR
SUMMARY JUDGMENT OR SUMMARY ADJUDICATION. THE REFEREE SHALL ISSUE A DECISION AND
PURSUANT TO CCP §644 THE REFEREE’S DECISION SHALL BE ENTERED BY THE COURT AS A
JUDGMENT OR AN ORDER IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE
COURT. THE FINAL JUDGMENT OR ORDER OR FROM ANY APPEALABLE DECISION OR ORDER
ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS PROVIDED BY LAW. THE PARTIES
TO SUCH ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION RESERVE THE RIGHT
TO FINDINGS OF FACT, CONCLUSIONS OF LAWS, A WRITTEN STATEMENT OF DECISION, AND
THE RIGHT TO MOVE FOR A NEW TRIAL OR A DIFFERENT JUDGMENT, WHICH NEW TRIAL, IF
GRANTED, IS ALSO TO BE A REFERENCE PROCEEDING UNDER THIS PROVISION.

(viii) IF THE ENABLING LEGISLATION WHICH PROVIDES FOR APPOINTMENT OF A REFEREE
IS REPEALED (AND NO SUCCESSOR STATUTE IS ENACTED), ANY DISPUTE BETWEEN THE
PARTIES THAT WOULD OTHERWISE BE DETERMINED BY REFERENCE PROCEDURE WILL BE
RESOLVED AND DETERMINED BY ARBITRATION. THE ARBITRATION WILL BE CONDUCTED BY A
RETIRED JUDGE OR JUSTICE, IN ACCORDANCE WITH THE CALIFORNIA ARBITRATION ACT
§1280 THROUGH §1294.2 OF THE CCP AS AMENDED FROM TIME TO TIME. THE LIMITATIONS
WITH RESPECT TO DISCOVERY SET FORTH ABOVE SHALL APPLY TO ANY SUCH ARBITRATION
PROCEEDING.

(ix) EACH OF BORROWERS, AGENT AND EACH MEMBER OF THE LENDER GROUP RECOGNIZE AND
AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED
BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING WITH COUNSEL OF THEIR OWN
CHOICE, EACH OF PARENT, BORROWERS, AGENT AND EACH MEMBER OF THE LENDER GROUP
KNOWINGLY AND

 

41

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

VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION
WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH ARISES OUT OF OR IS RELATED TO THIS
AGREEMENT OR THE LOAN DOCUMENTS.

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1 Assignments and Participations.

(a) Any Lender may assign and delegate to one or more assignees (each an
“Assignee”) that are Eligible Transferees all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000; provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and (iii) the
assigning Lender or Assignee has paid to Agent for Agent’s separate account a
processing fee in the amount of $3,500, provided, however that the payment of
such processing fee shall not be required with respect to any Assignment where
the Assignee is an Affiliate of the assigning Lender. Anything contained herein
to the contrary notwithstanding, the payment of any fees shall not be required
and the Assignee need not be an Eligible Transferee if such assignment is in
connection with any merger, consolidation, sale, transfer, or other disposition
of all or any substantial portion of the business or loan portfolio of the
assigning Lender.

(b) From and after the date that Agent notifies the assigning Lender (with a
copy to Administrative Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to Section 10.3 hereof) and be released from any future obligations
under this Agreement (and in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation between
Borrowers and the Assignee; provided, however, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender’s obligations under Article
15 and Section 16.7 of this Agreement.

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (1) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(2) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or the
performance or observance by Borrowers of any of their obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (3) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(4) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this

 

42

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

Agreement, (5) such Assignee appoints and authorizes Agent to take such actions
and to exercise such powers under this Agreement as are delegated to Agent, by
the terms hereof, together with such powers as are reasonably incidental
thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee payment and
the fully executed Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the “Originating Lender”) hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender shall remain a “Lender” for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a “Lender” hereunder or under the other Loan Documents and the
Originating Lender’s obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or
substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrowers hereunder shall be determined as if such Lender had not
sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections of Borrowers, the Collateral, or otherwise in respect of the
Obligations. No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of
Section 16.7, disclose all documents and information which it now or hereafter
may have relating to Borrowers and their respective businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR § 203.24, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.

 

43

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

13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 and, except as expressly required pursuant to
Section 13.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.

14. AMENDMENTS; WAIVERS.

14.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements), and
no consent with respect to any departure by Borrowers therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or by Agent at the written request of the Required Lenders) and Administrative
Borrower (on behalf of all Borrowers) and then any such waiver or consent shall
be effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Administrative Borrower (on behalf of all Borrowers), do any of the following:

(a) increase or extend any Commitment of any Lender,

(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,

(d) change the Pro Rata Share that is required to take any action hereunder,

(e) amend or modify this Section or any provision of this Agreement providing
for consent or other action by all Lenders,

(f) other than as permitted by Section 15.12, release Agent’s Lien in and to any
of the Collateral,

(g) change any of the following definitions: (i) Required Lenders, (ii) Pro Rata
Share, (iii) EBITDA Revolver Limiter, EBITDA Term Loan Limiter, and
(iv) Applicable EBITDA Multiplier.

(h) contractually subordinate any of the Agent’s Liens,

(i) release any Borrower from any obligation for the payment of money,

(j) change the definition of Maximum Credit Amount, or Maximum Revolver Amount,
Term Loan Amount, or change Sections 2.1 (a), (b), (c), 2.4(b), or 2.3(d) or

(k) amend any of the provisions of Section 15.

and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or

 

44

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

Swing Lender, as applicable, under this Agreement or any other Loan Document.
The foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of Borrowers.

14.2 Replacement of Holdout Lender.

(a) If any action to be taken by the Lender Group or Agent hereunder requires
the unanimous consent, authorization, or agreement of all Lenders, and a Lender
(“Holdout Lender”) fails to give its consent, authorization, or agreement, then
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no
right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall
not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Holdout Lender being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance. The replacement of any Holdout Lender shall be made in
accordance with the terms of Section 13.1. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender hereunder and under the other
Loan Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender’s Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.

14.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

15. AGENT; THE LENDER GROUP.

15.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 15. The
provisions of this Section 15 (other than the proviso to Section 15.11(a) and
Sections 15.11(b), (c), and (d)) are solely for the benefit of Agent, and the
Lenders, and Borrowers shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any

 

45

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

Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word “Agent” is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Borrowers, and related matters, (b) execute or file any and
all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents, (c) make Advances, for itself or
on behalf of Lenders as provided in the Loan Documents, (d) exclusively receive,
apply, and distribute the Collections of Borrowers as provided in the Loan
Documents, (e) open and maintain such bank accounts and cash management
arrangements as Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes with respect to the Collateral and the
Collections of Borrowers, (f) perform, exercise, and enforce any and all other
rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections of Borrowers, or otherwise related
to any of same as provided in the Loan Documents, and (g) incur and pay such
Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

15.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

15.3 Liability of Agent. None of the Agent Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or Affiliate of any
Borrower, or any officer or director thereof, contained in this Agreement or in
any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the books and records or properties of Borrowers or the books or records
or properties of any of Borrowers’ Affiliates.

15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are

 

46

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

received, Agent shall act, or refrain from acting, as it deems advisable. If
Agent so requests, it shall first be indemnified to its reasonable satisfaction
by the Lenders against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action. Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the requisite Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.

15.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.” Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 8; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.

15.6 Credit Decision. Each Lender acknowledges that none of the Agent Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of Borrowers and their
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrowers and
any other Person party to a Loan Document, and all applicable bank regulatory
laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrowers and any other Person party
to a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrowers and any other Person party
to a Loan Document that may come into the possession of any of the Agent Related
Persons.

15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Borrowers received by Agent to reimburse Agent for such
out-of-pocket costs and expenses prior to the distribution of any amounts to
Lenders. In the event Agent is not reimbursed for such costs and expenses from
the Collections of Borrowers received by

 

47

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

Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender’s Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall be liable for
the payment to any Agent Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person’s gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender’s Pro Rata Share of any costs or out of pocket expenses
(including attorneys, accountants, advisors, and consultants fees and expenses)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.

15.8 Agent in Individual Capacity. WFF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrowers and Affiliates and any
other Person party to any Loan Documents as though WFF were not Agent hereunder,
and, in each case, without notice to or consent of the other members of the
Lender Group. The other members of the Lender Group acknowledge that, pursuant
to such activities, WFF or its Affiliates may receive information regarding
Borrowers or their Affiliates and any other Person party to any Loan Documents
that is subject to confidentiality obligations in favor of Borrowers or such
other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them. The terms “Lender” and “Lenders”
include WFF in its individual capacity.

15.9 Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent’s resignation hereunder as Agent, the provisions of this Section 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent’s
notice of resignation, the retiring Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.

15.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrowers and
Affiliates and any other Person party to any Loan Documents as though such
Lender were not a Lender hereunder without notice to or consent of the other
members of the Lender Group. The other members of the Lender Group acknowledge
that, pursuant to such activities, such Lender and its respective Affiliates may

 

48

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

receive information regarding Borrowers or their Affiliates and any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them. With respect to the Swing Loans and Protective Advances,
Swing Lender shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the sub-agent of
Agent.

15.11 Withholding Taxes.

(a) All payments made by any Borrower hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, each Borrower shall comply with
the penultimate sentence of this Section 15.11(a). “Taxes” shall mean, any
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of Lender) and all interest, penalties or similar
liabilities with respect thereto. If any Taxes are so levied or imposed, each
Borrower agrees to pay the full amount of such Taxes and such additional amounts
as may be necessary so that every payment of all amounts due under this
Agreement, any note, or Loan Document, including any amount paid pursuant to
this Section 15.11(a) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Borrowers shall not be required to increase any such amounts if, and shall
be reimbursed for any such amounts previously paid to the extent that, the
increase in such amount payable results from Agent’s or such Lender’s own
willful misconduct or gross negligence (as finally determined by a court of
competent jurisdiction). Each Borrower will furnish to Lender as promptly as
possible after the date the payment of any Tax is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by any Borrower.

(b) If a Lender claims an exemption from United States withholding tax, Lender
agrees with and in favor of Agent and any Borrower, to deliver to Agent:

(i) if such Lender claims an exemption from United States withholding tax
pursuant to its portfolio interest exception, (A) a statement of the Lender,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within
the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign
corporation related to any Borrower within the meaning of Section 864(d)(4) of
the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or any Borrower;

(ii) if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed and executed IRS Form
W-8BEN before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or any Borrower;

(iii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before receiving its first payment under this
Agreement and at any other time reasonably requested by Agent or any Borrower;
or

 

49

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

(iv) such other form or forms, including IRS Form W-9, as may be required under
the IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or any Borrower.

Lender agrees promptly to notify Agent and Administrative Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.

(c) If a Lender claims an exemption from withholding tax in a jurisdiction other
than the United States, Lender agrees with and in favor of Agent and Borrowers,
to deliver to Agent any such form or forms, as may be required under the laws of
such jurisdiction as a condition to exemption from, or reduction of, foreign
withholding or backup withholding tax before receiving its first payment under
this Agreement and at any other time reasonably requested by Agent or
Administrative Borrower.

Lender agrees promptly to notify Agent and Administrative Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.

(d) If any Lender claims exemption from, or reduction of, withholding tax and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrowers to such Lender, such Lender agrees
to notify Agent and Administrative Borrower of the percentage amount in which it
is no longer the beneficial owner of Obligations of Borrowers to such Lender. To
the extent of such percentage amount, Agent and Borrowers will treat such
Lender’s documentation provided pursuant to Sections 15.11(b) or 15.11(c) as no
longer valid. With respect to such percentage amount, Lender may provide new
documentation, pursuant to Sections 15.11(b) or 15.11(c), if applicable.

(e) If any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by subsection (b) or (c) of this
Section 15.11 are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.

(f) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender due to a failure on the part of
the Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent, as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section 15.11,
together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.

15.12 Collateral Matters.

(a) The Lenders hereby irrevocably authorize Agent, at its option and in its
sole discretion, to release any Lien on any Collateral (i) upon the termination
of the Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Administrative Borrower
certifies to Agent that the sale or disposition is permitted under Section 6.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which no Borrower owned any interest at the time the Agent’s Lien was granted
nor at any time thereafter, or

 

50

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

(iv) constituting property leased to a Borrower under a lease that has expired
or is terminated in a transaction permitted under this Agreement. Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders, or
(z) otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 15.12; provided, however, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent’s opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.

(b) Agent shall have no obligation whatsoever to any of the Lenders to assure
that the Collateral exists or is owned by Borrowers or is cared for, protected,
or insured or has been encumbered, or that the Agent’s Liens have been properly
or sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission, or event related thereto,
subject to the terms and conditions contained herein, Agent may act in any
manner it may deem appropriate, in its sole discretion given Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that Agent
shall have no other duty or liability whatsoever to any Lender as to any of the
foregoing, except as otherwise provided herein.

15.13 Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
amounts owing by such Lender to Borrowers or any deposit accounts of Borrowers
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so in writing by Agent,
take or cause to be taken any action, including, the commencement of any legal
or equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

15.14 Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or

 

51

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

control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

15.15 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.

15.16 Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

15.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Borrowers and will
rely significantly upon the books and records of Borrowers, as well as on
representations of Borrowers’ personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding Borrowers and their operations, assets, and existing and contemplated
business plans in a confidential manner in accordance with Section 16.7, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the

 

52

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

Loan Documents, to request additional reports or information from Borrowers, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Administrative Borrower the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from
Administrative Borrower, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to Administrative Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.

15.18 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 16.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make credit available hereunder, nor to
advance for it or on its behalf in connection with its Commitment, nor to take
any other action on its behalf hereunder or in connection with the financing
contemplated herein.

15.19 Bank Product Providers. Each Bank Product Provider shall be deemed a party
hereto for purposes of any reference in a Loan Document to the parties for whom
Agent is acting; it being understood and agreed that the rights and benefits of
such Bank Product Provider under the Loan Documents consist exclusively of such
Bank Product Provider’s right to share in payments and collections out of the
Collateral as more fully set forth herein. In connection with any such
distribution of payments and collections, Agent shall be entitled to assume no
amounts are due to any Bank Product Provider unless such Bank Product Provider
has notified Agent in writing of the amount of any such liability owed to it
prior to such distribution.

16. GENERAL PROVISIONS.

16.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrowers, Agent, and each Lender whose signature is provided for on
the signature pages hereof.

16.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

16.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Borrowers, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

16.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

16.5 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and

 

53

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

delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.

16.6 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by any Borrower or the transfer to the Lender Group of any
property should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of Borrowers
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.

16.7 Confidentiality.

(a) Agent and Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Borrowers,
their operations, assets, and existing and contemplated business plans shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except: (a) to attorneys for and other advisors, accountants,
auditors, and consultants to any member of the Lender Group, (b) to Subsidiaries
and Affiliates of any member of the Lender Group (including the Bank Product
Providers), provided that any such Subsidiary or Affiliate shall have agreed to
receive such information hereunder subject to the terms of this Section 16.7,
(c) as may be required by statute, decision, or judicial or administrative
order, rule, or regulation, (d) as may be agreed to in advance by Administrative
Borrower or its Subsidiaries or as requested or required by any Governmental
Authority pursuant to any subpoena or other legal process, (e) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders), (f) in connection
with any assignment, prospective assignment, sale, prospective sale,
participation or prospective participations, or pledge or prospective pledge of
any Lender’s interest under this Agreement, provided that any such assignee,
prospective assignee, purchaser, prospective purchaser, participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, and
(g) in connection with any litigation or other adversary proceeding involving
parties hereto which such litigation or adversary proceeding involves claims
related to the rights or duties of such parties under this Agreement or the
other Loan Documents. The provisions of this Section 16.7 shall survive for 2
years after the payment in full of the Obligations.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may
provide information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services.

16.8 Lender Group Expenses. Borrowers agree to pay any and all Lender Group
Expenses promptly after demand therefor by Agent and agrees that their
obligations contained in this Section 16.8 shall survive payment or satisfaction
in full of all other Obligations.

16.9 USA PATRIOT Act. Each Lender that is subject to the requirements of the USA
Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) hereby notifies

 

54

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

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

16.10 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

16.11 Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints
Parent as the borrowing agent and attorney-in-fact for all Borrowers (the
“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group’s relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 16.9 with respect to any liability that has been finally determined
by a court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Agent-Related Person or Lender-Related
Person, as the case may be.

16.12 Changes in Accounting Policies. In the event the Financial Accounting
Standards Board (or any successor organization) adopts changes to GAAP after the
Closing Date and as a result solely of such changes there is an adverse effect
on Borrowers’ ability to comply with the financial covenants hereunder or there
occurs a reduction of Maximum Revolver Amount, Agent and Lenders agree to review
the effect of such changes and to make such adjustments as Agent and Lenders
deem necessary in their Permitted Discretion.

16.13 Amendment and Restatement of Original Loan Agreement. This Agreement
constitutes an amendment and restatement of the Original Credit Agreement
effective from and after the Closing Date. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby are not
intended by the parties to be, and shall not constitute, a novation or an accord
and satisfaction of the Obligations or any other obligations owing to Agent or
the Lenders under the Original Credit Agreement or any other existing Original
Loan Document. On the Closing Date, the credit facilities and the terms and
conditions thereof described in the Original Credit Agreement shall be amended
and replaced in their entirety by the credit facilities and the terms and
conditions described herein, and all Advances and other Obligations of Borrowers
outstanding as of such date under the Original Credit Agreement shall be deemed
to be Advances and Obligations outstanding under the corresponding facilities
described herein (such that all

 

55

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

Obligations which are outstanding on the Closing Date under the Original Credit
Agreement shall become Obligations under this Agreement), without further action
by any Person. Each of the parties hereto hereby acknowledges and agrees that
the grant of the security interests in the Collateral pursuant to the Security
Agreement and in any other Loan Document (unless explicitly agreed to by Agent
in writing) is not intended to, nor shall it be construed, as constituting a
release of any prior security interests granted by any Borrower in favor of
Agent for the benefit of itself, the Lenders, and the Bank Product Providers in
or to any Collateral or any other Property of such Borrower, but is intended to
constitute a restatement and reconfirmation of the prior security interests
granted by the Borrowers in favor of Agent for the benefit of itself, the
Lenders, and the Bank Product Providers in and to the Collateral and a grant of
a new security interest in any Collateral that is not included in the prior
security grants by the Borrowers and in favor of Agent for the benefit of
itself, the Lenders, and the Bank Product Providers to the extent such grant was
not included in the prior security grants.

[Signature page(s) to follow]

 

56

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

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

 

THE TRIZETTO GROUP, INC., a Delaware corporation By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

DIOGENES, INC.,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

INFOTRUST COMPANY,

an Illinois corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

NOVALIS CORPORATION,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

NOVALIS DEVELOPMENT & LICENSING CORPORATION,

an Indiana corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

 

S-1

Amended and Restated Credit Agreement

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

NOVALIS DEVELOPMENT CORPORATION,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

NOVALIS SERVICES CORPORATION,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

OPTION SERVICES GROUP, INC.,

an Illinois corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

DIGITAL INSURANCE SYSTEMS CORPORATION,

an Ohio corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

FINSERV HEALTH CARE SYSTEMS, INC.,

a New York corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

CREATIVE BUSINESS SOLUTIONS, INC.,

a Texas corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

 

S-2

Amended and Restated Credit Agreement

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

HEALTHCARE MEDIA ENTERPRISES, INC.,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

HEALTH NETWORKS OF AMERICA, INC.,

a Maryland corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

HEALTHWEB, INC.,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

MARGOLIS HEALTH ENTERPRISES, INC.,

a California corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

TRIZETTO APPLICATION SERVICES, INC.,

a Colorado corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

WINTHROP FINANCIAL GROUP, INC.,

an Illinois corporation.

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

 

S-3

Amended and Restated Credit Agreement

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

CAREKEY, INC.,

a Delaware corporation.

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

PLAN DATA MANAGEMENT, INC.,

a Delaware corporation.

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

QUARTZ ACQUISITION CORP.,

a Delaware corporation.

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

QUALITY CARE SOLUTIONS, INC.,

a Nevada corporation (the successor by merger to Quartz Acquisition Corp.)

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

QCSI PUERTO RICO, INC.,

a Delaware corporation

By:  

/s/ James C. Malone

Name:  

James C. Malone

Title:  

Executive Vice President, Chief Financial Officer

 

S-4

Amended and Restated Credit Agreement

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

WELLS FARGO FOOTHILL, INC.,

a California corporation, as Agent and as a Lender

By:

 

/s/ Terri Le

Name:

 

Terri Le

Title:

 

Vice President

 

S-5

Amended and Restated Credit Agreement

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

Schedule 1.1

As used in the Agreement, the following terms shall have the following
definitions:

“Account” means an account (as that term is defined in the Code).

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

“ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic fund transfers through the
direct Federal Reserve Fedline system) provided by a Bank Product Provider for
the account of Administrative Borrower or its Subsidiaries.

“Acquisition” means any Asset Acquisition or any Stock Acquisition.

“Active Borrower” means each Borrower that is not an Inactive Borrower.

“Administrative Borrower” has the meaning specified therefor in Section 16.11.

“Advances” has the meaning specified therefor in Section 2.1(a).

“Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control” means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
provided, however, that, for purposes of Section 6.13: (a) any Person which owns
directly or indirectly 10% or more of the Stock having ordinary voting power for
the election of directors or other members of the governing body of a Person or
10% or more of the partnership or other ownership interests of a Person (other
than as a limited partner of such Person) shall be deemed an Affiliate of such
Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership (formed under the laws
of any jurisdiction) or joint venture in which a Person is a partner or joint
venturer shall be deemed an Affiliate of such Person.

“Agent” has the meaning specified therefor in the preamble to the Agreement.

“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1.

“Agent’s Liens” means the Liens granted by Borrowers or their Subsidiaries to
Agent under the Loan Documents.

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

“Applicable Margin” means, with respect to Base Rate Loans and LIBOR Rate Loans,
as the case may be, as of any date of determination, the following margins based
upon the most recent Senior Leverage Ratio calculation; provided, however, that
at any time that an Event of Default exists hereunder, the applicable Base Rate
Margin shall be at Level VI:

 

Level

  

Senior Leverage Ratio

  

Margin above

Base Rate

  

Margin above

LIBOR Rate

I    Less than 1.75:1.00    .0%    1.75% II    At least 1.75:1.00 but less than
2.25:1.00    .0%    2.0% III    At least 2.25:1.00 but less than 2.50:1.00   
.5%    2.25% IV    At least 2.50:1.00 but less than 3.00:1.00    1.00%    2.50%
V    At least 3.00:1.00 but less than 3.50:1.00    1.50%    3.00% VI    At least
3.50:1.00    2.00%    3.50%

 

1

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

The Applicable Margins shall be based upon the most recent Senior Leverage Ratio
calculation and shall be redetermined each fiscal quarter of Borrowers as of the
first day of the month following the date Agent receives the certified
calculation of the Senior Leverage Ratio in a Compliance Certificate; provided,
however, that if Borrowers fail to provide the Compliance Certificate when due,
the Applicable Margin shall be the margin in the row styled “Level VI” as of the
first day of the month following the date on which the Compliance Certificate
was required to be delivered until the first day of the month following the date
on which it is delivered (but not retroactively), without constituting a waiver
of any Default or Event of Default caused by the failure to timely deliver the
Compliance Certificate, at which time the Applicable Margin shall be set at a
margin based upon the Senior Leverage Ratio calculation set forth therein. In
the event that the information contained in any Compliance Certificate delivered
pursuant to Schedule 5.3 is shown to be inaccurate, and such inaccuracy, if
corrected, would have led to a different determination of the Applicable Margin
at the time such Compliance Certificate was delivered, the Borrowers shall
immediately (i) re-deliver a correct Compliance Certificate for the applicable
period to the Agent and the Applicable Margin shall be redetermined in
accordance with the definition thereof and (ii) deliver to the Agent full
payment in respect of the accrued additional interest on the Obligations from
the date of delivery of the inaccurate Compliance Certificate, which payment
shall be promptly applied by the Agent in accordance with Section 2.4 (it being
understood that nothing in this definition shall limit the rights of the Lenders
under Section 7). For purposes of this definition, “Senior Leverage Ratio” means
the ratio of (a) the Senior Debt as of such date, to (b) TTM EBITDA as of such
date.

“Applicable EBITDA Multiplier” means, as of any date of determination, the
multiplier set forth in the following table that corresponds to such date:

 

Applicable

EBITDA

Multiplier

  

Date of Determination

3.50    June 30, 2006 through and including December 31, 2006 3.25    January 1,
2007 through and including June 30, 2007 2.75    July 1, 2007 through and
including December 31, 2007 2.50    January 1, 2008 and thereafter

 

2

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

“Asset Acquisition” means the purchase or other acquisition by any Active
Borrower of all or substantially all of the assets of any other Person.

“Assignee” has the meaning specified therefor in Section 13.1(a).

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.

“Authorized Person” means any officer or employee of Administrative Borrower.

“Availability” means, as of any date of determination, the amount that Borrowers
are entitled to borrow as Advances hereunder (after giving effect to all then
outstanding Obligations (other than Bank Product Obligations) and all sublimits
and reserves then applicable hereunder).

“Bank Product” means any financial accommodation extended to Administrative
Borrower or its Subsidiaries by a Bank Product Provider (other than pursuant to
the Agreement) including: (a) credit cards, (b) credit card processing services,
(c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management,
including controlled disbursement, accounts or services, or (g) transactions
under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time
by Administrative Borrower or its Subsidiaries with a Bank Product Provider in
connection with the obtaining of any of the Bank Products.

“Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by Administrative Borrower
or its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that
Administrative Borrower or its Subsidiaries are obligated to reimburse to Agent
or any member of the Lender Group as a result of Agent or such member of the
Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Administrative Borrower or
its Subsidiaries.

“Bank Product Provider” means Wells Fargo or any of its Affiliates.

“Bank Product Reserve” means, as of any date of determination, the lesser of:
(i) $3,000,000 and (ii) the amount of reserves that Agent has established (based
upon the Bank Product Providers’ reasonable determination of the credit exposure
of Administrative Borrower and its Subsidiaries in respect of Bank Products) in
respect of Bank Products then provided or outstanding.

 

3

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

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

“Base LIBOR Rate” means the rate per annum, determined by Agent in accordance
with its customary procedures, and utilizing such electronic or other quotation
sources as it considers appropriate (rounded upwards, if necessary, to the next
1/100%), to be the rate at which Dollar deposits (for delivery on the first day
of the requested Interest Period) are offered to major banks in the London
interbank market 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period
and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base
Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance with
the Agreement, which determination shall be conclusive in the absence of
manifest error.

“Base Rate” means, the rate of interest announced, from time to time, within
Wells Fargo at its principal office in San Francisco as its “prime rate”, with
the understanding that the “prime rate” is one of Wells Fargo’s base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate.

“Base Rate Loan” means the portion of the Advances or the Term Loan that bears
interest at a rate determined by reference to the Base Rate.

“Bear Stearns Collateral Account” means that certain brokerage account
#049-41366 maintained by Parent at Bear Stearns & Co.

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which any Borrower or any Subsidiary or ERISA Affiliate of any
Borrower has been an “employer” (as defined in Section 3(5) of ERISA) within the
past six years, but excluding a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees as set forth in ERISA
Section 303(a)(3).

“Board of Directors” means the board of directors (or comparable managers) of
Parent or any committee thereof duly authorized to act on behalf of the board of
directors (or comparable managers).

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to the Agreement.

“Borrowing” means a borrowing hereunder consisting, as the context requires, of:
(i) Advances made on the same day by the Lenders (or Agent on behalf thereof),
(ii) Advances made by Swing Lender in the case of a Swing Loan, (iv) Advances
made by Agent in the case of a Protective Advance, or (iv) Term Loan Draws
funded by the Lenders, in each case, to Administrative Borrower.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the State of California,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed and including capitalized
software expenditures.

 

4

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

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and
(f) Investments in money market funds substantially all of whose assets are
invested in the types of assets described in clauses (a) through (e) above.

“Cash Management Account” has the meaning specified therefor in Section 2.7(a).

“Cash Management Agreements” means those certain cash management agreements, in
form and substance satisfactory to Agent, each of which is among Administrative
Borrower or one of its Subsidiaries, Agent, and one of the Cash Management
Banks.

“Cash Management Bank” has the meaning specified therefor in Section 2.7(a).

“Change of Control” means that (a) any “person” or “group” (within the meaning
of Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
30%, or more, of the Stock of Parent having the right to vote for the election
of members of the Board of Directors, or (b) a majority of the members of the
Board of Directors do not constitute Continuing Directors.

“Closing Date” means the date of the initial Term Loan Draw hereunder.

“Closing Date Projections” means the Projections delivered to Agent on or about
the Closing Date.

“Code” means the California Uniform Commercial Code, as in effect from time to
time.

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by Administrative Borrower or its Subsidiaries in or
upon which a Lien is granted under any of the Loan Documents.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in Administrative Borrower’s or its Subsidiaries’ books and records, Equipment
or Inventory, in each case, in form and substance satisfactory to Agent.

 

5

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

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

“Commitment” means, with respect to each Lender, its Revolver Commitment, its
Term Loan Commitment, or its Total Commitment, as the context requires, and,
with respect to all Lenders, their Revolver Commitments, their Term Loan
Commitments, or their Total Commitments, as the context requires, in each case
as such Dollar amounts are set forth beside such Lender’s name under the
applicable heading on Schedule C-1 or in the Assignment and Acceptance pursuant
to which such Lender became a Lender hereunder, as such amounts may be reduced
or increased from time to time pursuant to assignments made in accordance with
the provisions of Section 13.1.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Parent to Agent.

“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Closing Date, except for David
Thomas and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent and whose initial assumption of office resulted
from such contest or the settlement thereof.

“Control Agreement” means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by Borrowers, Agent, and the
applicable securities intermediary (with respect to a Securities Account) or
bank (with respect to a Deposit Account).

“Copyright Security Agreement” has the meaning specified therefor in the
Security Agreement.

“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

“Defaulting Lender” means any Lender that fails to make any Advance, fund any
Term Loan Draw, or make any other extension of credit that it is required to
make hereunder on the date that it is required to do so hereunder.

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Advances (inclusive of the Base Rate Margin applicable
thereto).

“Deposit Account” means any deposit account (as that term is defined in the
Code).

“Designated Account” means the Deposit Account of Administrative Borrower
identified on Schedule D-1.

“Designated Account Bank” has the meaning specified therefor in Schedule D-1.

“Dollars” or “$” means United States dollars.

 

6

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

“EBITDA” means, with respect to any fiscal period, Parent’s and its
Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains and
interest income, plus (i) interest expense, plus (ii) income taxes, plus
(iii) non-cash employee compensation consisting of Stock of any Borrower (to the
extent any Borrower is required to recognize such Stock based compensation as an
expense), plus (iv) depreciation and amortization for such period, plus
(v) extraordinary non-cash losses in an amount not to exceed $2,000,000 in any
one fiscal year, plus (vi) the amount actually paid by Borrowers in the 2006
calendar year with respect to the settlement of the McKesson Lawsuit in the
total aggregate amount not to exceed $15,000,000, in each case, as determined in
accordance with GAAP. Notwithstanding the foregoing, the EBITDA calculation
shall not include any pre-QCSI Merger contributions to EBITDA from QCSI.

“EBITDA Revolver Limiter” means, as of any date of determination, the difference
of: (A) product of: (i) the Applicable EBITDA Multiplier multiplied by (ii) TTM
EBITDA calculated as of the most recent month for which financial statements
have been delivered pursuant to Section 5.3, minus (B) the outstanding balance
of the Term Loan.

“EBITDA Term Loan Limiter” means, as of any date of determination, the
difference of: (A) product of: (i) the Applicable EBITDA Multiplier multiplied
by (ii) TTM EBITDA calculated as of the most recent month for which financial
statements have been delivered pursuant to Section 5.3, minus (B) the Revolver
Usage.

“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender, (e) so
long as no Event of Default has occurred and is continuing, any other Person
approved by Agent and Administrative Borrower (which approval of Administrative
Borrower shall not be unreasonably withheld, delayed, or conditioned), and
(f) during the continuation of an Event of Default, any other Person approved by
Agent. Notwithstanding the foregoing, so long as no Default or Event of Default
exists as of any date of determination, “Eligible Transferee” shall not include
any Person Agent knows is an operating company and a direct competitor of
Borrowers, taken as a whole.

“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other communication from any Governmental
Authority, or any third party involving violations of Environmental Laws or
releases of Hazardous Materials from (a) any assets, properties, or businesses
of any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by any Borrower, any
Subsidiary of a Borrower, or any of their predecessors in interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Borrower, relating to the environment, the effect of the environment on employee
health, or Hazardous Materials, in each case as amended from time to time.

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees,

 

7

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

disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand, or Remedial Action
required, by any Governmental Authority or any third party, and which relate to
any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

“Equipment” means equipment (as that term is defined in the Code.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of a Borrower under
IRC Section 414(b), (b) any trade or business subject to ERISA whose employees
are treated as employed by the same employer as the employees of a Borrower
under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any organization subject to ERISA that is a member of an
affiliated service group of which a Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Borrower and whose employees are aggregated with the
employees of a Borrower under IRC Section 414(o).

“Event of Default” has the meaning specified therefor in Section 7.

“Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Borrowers and their Subsidiaries more than 60 days past due date and all book
overdrafts of Borrowers and their Subsidiaries in excess of their historical
practices with respect thereto, in each case as determined by Agent in its
Permitted Discretion.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

“Extraordinary Receipts” means any cash received by Parent or any of its
Subsidiaries not in the ordinary course of business, including (a) foreign,
United States, state or local tax refunds, (b) pension plan reversions,
(c) proceeds of insurance (including key man life insurance and business
interruption insurance, but excluding any casualty insurance) except to the
extent actually used by such Person in accordance with Section 5.8(b),
(d) judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (e) indemnity payments, and (f) any
purchase price adjustment received in connection with any purchase agreement,
but only to the extent that the amount of all such receipts in (a) through
(f) either (1) exceed $1,000,000 in the aggregate in any fiscal year of Parent
or (2) is received while an Event of Default has occurred and its continuing.

“Fee Letter” means that certain amended and restated fee letter between
Borrowers and Agent, in form and substance satisfactory to Agent.

“Funding Date” means the date on which a Borrowing occurs.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

 

8

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

“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means any and all agreements, or documents now existing or
hereafter entered into by Administrative Borrower or any of its Subsidiaries
that provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Administrative Borrower’s or
any of its Subsidiaries’ exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.

“Holdout Lender” has the meaning specified therefor in Section 14.2(a).

“Inactive Borrowers” means Digital Insurance Systems Corporation, an Ohio
corporation, Finserv Health Care Systems, Inc., a New York corporation, Creative
Business Solutions, Inc., a Texas corporation, Healthcare Media Enterprises,
Inc., a Delaware corporation, Health Networks of America, Inc., a Maryland
corporation, HealthWeb, Inc., a Delaware corporation, Margolis Health
Enterprises, Inc., a California corporation, TriZetto Application Services,
Inc., a Colorado corporation, QCSI Puerto Rico, and Winthrop Financial Group,
Inc., an Illinois corporation.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) Capitalized
Lease Obligations, (d) all obligations or liabilities of others secured by a
Lien on any asset of a Person or its Subsidiaries, irrespective of whether such
obligation or liability is assumed, (e) all obligations to pay the deferred
purchase price of assets (other than trade payables incurred in the ordinary
course of business and repayable in accordance with customary trade practices),
(f) all obligations owing under Hedge Agreements, and (g) any obligation
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
of any other Person that constitutes Indebtedness under any of clauses
(a) through (f) above.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3.

“Indemnified Person” has the meaning specified therefor in Section 10.3.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Intercompany Subordination Agreement” means a subordination agreement executed
and delivered by Borrowers and Agent, the form and substance of which is
satisfactory to Agent.

 

9

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

“Interest Expense” means, for any period, the aggregate of the interest expense
of Parent and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1 month, 2 months, or 3 months thereafter; provided,
however, that (a) if any Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended (subject to clauses
(c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at
the applicable rate based upon the LIBOR Rate from and including the first day
of each Interest Period to, but excluding, the day on which any Interest Period
expires, (c) any Interest Period that would 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, (d) with respect to an 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), the Interest Period shall end on the last Business Day of
the applicable calendar month that is 1 month, 2 months, or 3 months after the
date on which the Interest Period began, as applicable, and (e) Borrowers (or
Administrative Borrower on behalf thereof) may not elect an Interest Period
which will end after the Maturity Date.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, or capital contributions (excluding (a) commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

“Issuing Lender” means WFF.

“L/C” has the meaning specified therefor in Section 2.12(a).

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

“L/C Undertaking” has the meaning specified therefor in Section 2.12(a).

“Lender” and “Lenders” have the respective meanings set forth in the preamble to
the Agreement, and shall include any other Person made a party to the Agreement
in accordance with the provisions of Section 13.1.

“Lender Group” means, individually and collectively, each of the Lenders
(including the Issuing Lender) and Agent.

“Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by a Borrower under any of the Loan
Documents that are paid, advanced, or incurred by the Lender Group, (b) fees or
charges paid or incurred by Agent in connection with the Lender Group’s
transactions with Borrowers, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC searches and including searches with
the patent and trademark office, the copyright office, or the department of
motor

 

10

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

vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in the Agreement,
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to Borrowers or other members of the Lender Group (by wire
transfer or otherwise), (d) charges paid or incurred by Agent resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to any inspections or
audits to the extent of the fees and charges (and up to the amount of any
limitation) contained in the Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or the Lender Group’s relationship with any
Borrower, (h) Agent’s and each Lender’s reasonable costs and expenses (including
attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering, syndicating (including rating the Term Loan), or amending the
Loan Documents, and (i) Agent’s and each Lender’s reasonable costs and expenses
(including attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
“workout,” a “restructuring,” or an Insolvency Proceeding concerning any
Borrower in exercising rights or remedies under the Loan Documents), or
defending the Loan Documents, irrespective of whether suit is brought, or in
taking any Remedial Action concerning the Collateral.

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

“Letter of Credit” means an L/C or an L/C Undertaking, as the context requires.

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

“LIBOR Deadline” has the meaning specified therefor in Section 2.13(b)(i).

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

“LIBOR Option” has the meaning specified therefor in Section 2.13(a).

“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate
per annum determined by Agent (rounded upwards, if necessary, to the next
1/100%) by dividing (a) the Base LIBOR Rate for such Interest Period, by
(b) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and
as of the effective day of any change in the Reserve Percentage.

“LIBOR Rate Loan” means each portion of an Advance or the Term Loan that bears
interest at a rate determined by reference to the LIBOR Rate.

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether
(a) such interest is based on the common law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term “Lien” includes the lien or security interest arising from a mortgage,
deed of trust, encumbrance, notice of Lien, levy or assessment, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.

 

11

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

“Liquidity” means, as of any date of determination, the sum of: (i) Qualified
Cash plus (ii) Excess Availability.

“Loan Account” has any meaning specified therefor in Section 2.10.

“Loan Documents” means the Agreement, the Bank Product Agreements, the Cash
Management Agreements, the Control Agreements, the Fee Letter, the Intercompany
Subordination Agreement, the Security Agreement, the Patent Security Agreement,
Trademark Security Agreement, Copyright Security Agreement, any note or notes
executed by a Borrower in connection with the Agreement and payable to a member
of the Lender Group, and any other agreement entered into, now or in the future,
by any Borrower and the Lender Group in connection with the Agreement.

“Loan Limit” has the meaning specified therefor in Section 2.4(c)(i)

“Limiter Excess” has the meaning specified therefor in Section 2.4(c)(i).

“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of Borrowers and their Subsidiaries, taken as a whole,
(b) a material impairment of a Borrower’s or any of its Subsidiaries’ ability to
perform its obligations under the Loan Documents to which it is a party or of
the Lender Group’s ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of
the Agent’s Liens with respect to the Collateral as a result of an action or
failure to act on the part of Borrower.

“Maturity Date” has the meaning specified therefor in Section 3.3.

“Maximum Credit Amount” means $250,000,000.

“Maximum Revolver Amount” means $100,000,000.

“McKesson Lawsuit” means, that certain Civil Action No. 04-1258-SLR, relating to
the complaint filed against Parent, on September 13, 2004, in the District Court
for the District of Delaware, captioned McKesson Information Solutions LLC v.
The TriZetto Group, Inc, wherein McKesson alleged that certain of Parent’s
products infringed on one of McKesson’s patents.

“Merger Agreement” has the meaning specified therefor in the recitals to the
Agreement.

“Merger Documents” has the meaning specified therefor in Section 4.22.

“Mortgages” means, individually and collectively, one or more mortgages, deeds
of trust, or deeds to secure debt, executed and delivered by a Borrower in favor
of Agent, in form and substance satisfactory to Agent, that encumber the Real
Property Collateral.

“Net Cash Proceeds” means:

(a) with respect to any sale or disposition by a Borrower of property or assets,
the amount of cash proceeds received (directly or indirectly) from time to time
(whether as initial consideration or through the payment of deferred
consideration) by or on behalf of a Borrower, in connection therewith after
deducting therefrom only (i) the amount of any indebtedness secured by any
Permitted Lien on any asset (other

 

12

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

than (A) Indebtedness owing to Agent or any Lender under the Agreement or the
other Loan Documents and (B) Indebtedness assumed by the purchaser or such
asset) which is required to be, and is, repaid in connection with such sale or
disposition, (ii) reasonable fees, commissions, and expenses related thereto and
required to be paid by a Borrower in connection with such sale or disposition
and (iii) taxes paid or payable to any taxing authorities by a Borrower in
connection with such sale or disposition, in each case to the extent, but only
to the extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid or payable to a Person that is not an Affiliate of a
Borrower, and area properly attributable to such transaction; and

(b) with respect to the issuance or incurrence of any Indebtedness by a
Borrower, or the issuance by a Borrower of any shares of its Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of a Borrower in connection with such
issuance or incurrence, after deducting therefrom only (i) reasonable fees,
commissions, and expenses related thereto and required to be paid by a Borrower
in connection with such issuance or incurrence, (ii) taxes paid or payable to
any taxing authorities by a Borrower in connection with such issuance or
incurrence, in each case to the extent, but only to the extent, that the amounts
so deducted are, at the time of receipt of such cash, actually paid or payable
to a Person that is not an Affiliate of a Borrower, and are properly
attributable to such transaction.

“Obligations” means (a) all loans (including the Term Loan), Advances, debts,
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), contingent
reimbursement obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to Borrowers’ Loan Account
pursuant hereto), obligations (including indemnification obligations), fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
lease payments, guaranties, covenants, and duties of any kind and description
owing by Borrowers to the Lender Group pursuant to or evidenced by the Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all Lender
Group Expenses that Borrowers are required to pay or reimburse by the Loan
Documents, by law, or otherwise, and (b) all Bank Product Obligations. Any
reference in the Agreement or in the Loan Documents to the Obligations shall
include all or any portion thereof and any extensions, modifications, renewals,
or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

“Original Credit Agreement” has the meaning specified therefor in the recitals
to the Agreement.

“Original Loan Documents” means the Loan Documents as that term was defined in
the Original Credit Agreement.

“Originating Lender” has the meaning specified therefor in Section 13.1(e).

“Overadvance” has the meaning specified therefor in Section 2.5.

“Parent” has the meaning specified therefor in the preamble to the Agreement.

“Participant” has the meaning specified therefor in Section 13.1(e).

“Patent Security Agreement” has the meaning specified therefor in the Security
Agreement.

“PDM” means Plan Data Management, Inc., a Delaware corporation.

 

13

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

“Permitted Acquisition” means a Permitted Cash Acquisition or a Permitted
Non-Cash Acquisition, as the context requires.

“Permitted Capitalized Lease Obligations” means, as of any date of
determination, Capitalized Lease Obligations incurred after the Closing Date not
to exceed $7,250,000 in the aggregate incurred in any one fiscal year.

“Permitted Cash Acquisition” means any Acquisition made by an Active Borrower as
to which each of the following is applicable (a) such Acquisition does not
qualify as a Permitted Non-Cash Acquisition solely because the consideration
payable in respect of the proposed Acquisition includes some form of
consideration other than solely the common Stock of Parent; (b) no Indebtedness
that is not permitted under Section 6.1 will be incurred as a result of such
Acquisition; (c) both before and after giving effect to payment of any
consideration (other than Stock of Parent) paid in connection with such
Acquisition, Borrowers would have Liquidity in excess of $20,000,000; and
(d) the total consideration (other than Stock of Parent) paid, or obligations
assumed, in connection with all Permitted Cash Acquisitions consummated since
the Closing Date does not exceed $20,000,000 in the aggregate.

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.

“Permitted Dispositions” means (a) sales and other dispositions of Equipment
that is substantially worn, damaged, or obsolete in the ordinary course of
business, (b) sales of Inventory to buyers in the ordinary course of business,
(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (d) the
licensing, on a non-exclusive basis, of Intellectual Property rights in the
ordinary course of business, (e) the transfer of assets by a Borrower to an
Active Borrower, (f) so long as no Default or Event of Default has occurred and
is continuing or would result therefrom, dispositions of assets (other than
Accounts, Intellectual Property, Inventory, or contracts for maintenance
services that are revenue generating) not otherwise permitted in clauses
(a) through (e) so long as made at fair market value and the aggregate amount of
all such dispositions during any fiscal year would not exceed $2,000,000.

“Permitted Investments” means (a) Investments in cash and Cash Equivalents
(other than those maintained in the Bear Stearns Collateral Account),
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) Investments received in settlement of amounts due to a Borrower
effected in the ordinary course of business or owing to a Borrower as a result
of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or
enforcement of any Lien in favor of a Borrower, (e) Permitted Acquisitions,
(f) Investments relating to payments made to customers of a Borrower in
connection with a bona fide customer agreement (the “Customer Rebates”) and
provided: (x) no Default or Event of Default has occurred and is continuing or
would result from the Customer Rebates; (y) both before and after giving effect
to any Customer Rebate, Borrowers would have Liquidity in excess of $30,000,000,
and (z) Customer Rebates do not exceed $10,000,000 in the aggregate; and
(g) Investments in the Bear Stearns Collateral Account, but only so long as the
aggregate value of the Investments in the Bear Stearns Collateral Account does
not at any time exceed $1,000,000 and such account is closed on or before
February 12, 2007 (after such date the Investments in the Bear Stearns
Collateral Account shall cease to be a Permitted Investment).

“Permitted Liens” means (a) Liens held by Agent to secure the Obligations,
(b) Liens for unpaid taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) do not have priority over the
Agent’s Liens and the underlying taxes, assessments, or charges or levies are
the subject of Permitted Protests, (c) judgment Liens that do not constitute an
Event of Default under Section 7.7 of the Agreement, (d) Liens set forth on
Schedule P-1, (e) the interests of lessors under operating leases, (f) purchase
money Liens or the interests of lessors under Capital Leases to the extent that
such Liens or interests secure

 

14

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

Permitted Purchase Money Indebtedness or Permitted Capitalized Lease
Obligations, as applicable, and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (g) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of Borrowers’ business
and not in connection with the borrowing of money, and which Liens either
(i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (h) Liens on amounts deposited in connection with obtaining worker’s
compensation or other unemployment insurance, (i) Liens on amounts deposited in
connection with the making or entering into of bids, tenders, statutory
obligations, government contracts, or leases in the ordinary course of business
and not in connection with the borrowing of money, (j) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (k) with respect to any Real
Property, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof and (l) the
Lien held by JPMorgan Chase Bank, N.A. on assets deposited in the Bear Stearns
collateral account brokerage account #049-41366 maintained at Bear Stearns &
Co., but only so long as the aggregate value of the Investments in the Bear
Stearns Collateral Account does not at any time exceed $1,000,000 and such
account is closed on or before February 12, 2007 (after such date the Lien
referenced in this clause (l) shall cease to be a Permitted Lien).

“Permitted Merger” means the merger of (i) an Active Borrower into an Active
Borrower (ii) an Inactive Borrower into an Active Borrower, so long as (A) no
other provision of this Agreement would be violated thereby, (B) Administrative
Borrower gives the Agent at least 15 days’ prior written notice of such merger,
(C) no Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such merger, (D) the Agent’s rights in any
Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger, and
(E) the surviving entity of any such merger shall be an Active Borrower.

“Permitted Non-Cash Acquisition” means any Acquisition made by an Active
Borrower so long as:

(a) no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition,

(b) the assets being acquired, or the Person whose Stock is being acquired, are
useful in or engaged in, as applicable, the business of the Active Borrowers or
a business reasonably related thereto,

(c) the consideration payable in respect of the proposed Acquisition shall be
comprised solely of common Stock of Parent,

(d) Borrowers have provided Agent with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis, created by adding
the historical combined financial statements of Parent (including the combined
financial statements of any other Person or assets that were the subject of a
prior Permitted Acquisition during the relevant period) and the Projections
delivered to Agent pursuant to Schedule 5.3 to the historical consolidated
financial statements of the Person to be acquired (or the historical financial
statements related to the assets to be acquired) and the financial projections
of the Person being acquired pursuant to the proposed Acquisition (adjusted to
eliminate expense items that would not have been or would not be incurred and to
include income items that would have been or would be recognized, Borrowers
would have been and will continue to be in compliance with the financial
covenants in Section 6.16 for the 12 months ending as of the first fiscal
quarter ended immediately prior to the proposed date of consummation of such
proposed Acquisition and for the period ending on the first fiscal quarter that
is at least 12 months after the proposed date of consummation of such proposed
Acquisition, together with copies of all such historical financial statements
and financial projections of the Person or assets being acquired and a
compliance certificate executed by Parent reflecting the relevant calculations,

 

15

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

(e) Borrowers have provided Agent with written notice of the proposed
Acquisition not less than 10 Business Days prior to the anticipated closing date
of the subject Acquisition together with such documentation that Agent may
require demonstrating that after giving effect to the subject Acquisition,
Parent and its Subsidiaries (taken as a whole) could not reasonably be expected
to suffer a Material Adverse Change as a result of such proposed Acquisition,

(f) in the case of an Asset Acquisition, the subject assets are being acquired
directly by an Active Borrower,

(g) in the case of a Stock Acquisition, the subject Stock is being acquired
directly by an Active Borrower,

(h) in the case of an Asset Acquisition, the relevant Active Borrower shall have
executed and delivered or authorized, as applicable, any and all security
agreements, financing statements, fixture filings, and other documentation
reasonably requested by Agent in order to include the newly acquired assets
within the collateral hypothecated under the Loan Documents,

(i) in the case of a Stock Acquisition, the relevant Active Borrower shall have
complied with each of the provisions of Section 5.16 with respect to the
Subsidiary being acquired

(j) the total consideration (to be paid solely in Stock of Parent) paid, or
obligations assumed, in connection with all Permitted Non-Cash Acquisitions
consummated since the Closing Date shall not exceed $50,000,000 in the
aggregate.

“Permitted Protest” means the right of Administrative Borrower or any Active
Borrower to protest any Lien (other than any Lien that secures the Obligations),
taxes (other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on a Borrower’s or any of its Subsidiaries’
books and records in such amount as is required under GAAP, (b) any such protest
is instituted promptly and prosecuted diligently by Administrative Borrower or
any of its Subsidiaries, as applicable, in good faith, and (c) Agent is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the Agent’s Liens.

“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate
principal amount outstanding at any one time not in excess of $5,000,000.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Parent’s historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.

“Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make Advances and right to receive
payments of principal, interest, fees, costs, and expenses with respect thereto,
(i) prior to the Revolver Commitments being terminated or reduced to zero, the
percentage obtained by dividing (y) such Lender’s Revolver Commitment, by
(z) the aggregate Revolver Commitments of all Lenders, and (ii) from and after
the

 

16

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

time that the Revolver Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the aggregate outstanding principal amount
of such Lender’s Advances by (z) the aggregate outstanding principal amount of
all Advances,

(b) with respect to a Lender’s obligation to participate in Letters of Credit,
to reimburse the Issuing Lender, and right to receive payments of fees with
respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender’s Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated
or reduced to zero, the percentage obtained by dividing (y) the aggregate
outstanding principal amount of such Lender’s Advances by (z) the aggregate
outstanding principal amount of all Advances,

(c) with respect to a Lender’s obligation to make the Term Loan and right to
receive payments of interest, fees, and principal with respect thereto,
(i) prior to the making of first Term Loan Draw, the percentage obtained by
dividing (y) such Lender’s Term Loan Commitment, by (z) the aggregate amount of
all Lenders’ Term Loan Commitments, and (ii) from and after the making of the
first Term Loan Draw, the percentage obtained by dividing (y) the principal
amount of such Lender’s portion of the Term Loan by (z) the outstanding
principal amount of the Term Loan, and

(d) with respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 15.7), the percentage obtained
by dividing (i) such Lender’s Revolver Commitment plus the outstanding principal
amount of such Lender’s portion of the Term Loan, by (ii) the aggregate amount
of Revolver Commitments of all Lenders plus the outstanding principal amount of
the Term Loan; provided, however, that in the event the Revolver Commitments
have been terminated or reduced to zero, Pro Rata Share under this clause shall
be the percentage obtained by dividing (A) the outstanding principal amount of
such Lender’s Advances plus such Lender’s ratable portion of the Risk
Participation Liability with respect to outstanding Letters of Credit plus the
outstanding principal amount of such Lender’s portion of the Term Loan, by
(B) the outstanding principal amount of all Advances plus the aggregate amount
of the Risk Participation Liability with respect to outstanding Letters of
Credit plus the outstanding principal amount of the Term Loan.

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i).

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but excluding Capitalized Lease Obligations), incurred at the time of, or within
20 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof.

“QCSI” means Quality Care Solutions, Inc., a Nevada corporation.

“QCSI Puerto Rico” means, QCSI Puerto Rico, Inc., a Delaware corporation.

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Active Borrowers that is in
Deposit Accounts or in Securities Accounts, or any combination thereof, and
which such Deposit Account or Securities Account is maintained by a branch
office of the bank or securities intermediary located within the United States
and is the subject of a Control Agreement.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Borrower and the improvements thereto.

“Real Property Collateral” means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by a Borrower.

 

17

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

“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.

“Recurring Maintenance Revenues” means, with respect to any period, the revenue
of Active Borrowers for such period that is derived from providing software
maintenance services to their customers pursuant to written software maintenance
contracts (acceptable to Agent), all as reflected on a report prepared in
accordance with Active Borrowers’ historic practices and which report is to be
otherwise satisfactory to Agent.

“Recurring Revenues” means, with respect to any period, the revenue of Active
Borrowers for such period that is derived from providing software hosting,
business process outsourcing, IT outsourcing, and software maintenance services
to their customers pursuant to written contracts (acceptable to Agent), all as
reflected on a report prepared in accordance with Active Borrowers’ historic
practices and which report is to be otherwise satisfactory to Agent.

“Recurring Revenues Certificate” means, the recurring revenues certificate
delivered to Agent pursuant to the terms of Schedule 5.2.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials authorized by Environmental Laws.

“Replacement Lender” has the meaning specified therefor in Section 14.2(a).

“Report” has the meaning specified therefor in Section 15.17.

“Required Availability” means that the sum of (a) Excess Availability, plus
(b) Qualified Cash exceeds $30,000,000.

“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (b) of the definition of Pro Rata Shares) equal or
exceed 50.1%

“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.

“Revolver Commitment” means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender’s name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section 13.1.

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Advances, plus (b) the amount of the Letter of Credit
Usage.

 

18

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

“Risk Participation Liability” means, as to each Letter of Credit, all
reimbursement obligations of Borrowers to the Issuing Lender with respect to an
L/C Undertaking, consisting of (a) the amount available to be drawn or which may
become available to be drawn, (b) all amounts that have been paid by the Issuing
Lender to the Underlying Issuer to the extent not reimbursed by Borrowers,
whether by the making of an Advance or otherwise, and (c) all accrued and unpaid
interest, fees, and expenses payable with respect thereto.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Securities Account” means a “securities account” (as that term is defined in
the Code).

“Security Agreement” means the amended and restated security agreement, in form
and substance satisfactory to Agent, executed and delivered by Borrower to
Agent.

“Senior Debt” means the total amount of Obligations outstanding as of the date
of measurement.

“Settlement” has the meaning specified therefor in Section 2.3(e)(i).

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i).

“Share Repurchases” means a transaction or series of transactions whereby Parent
repurchases Stock of Parent, (i) pursuant to Parent’s Stock repurchase plan
approved by the Board of Directors (the “Plan Share Repurchases”), as long as:
(x) no Default or Event of Default shall have occurred and be continuing either
before or immediately after giving effect to a Plan Share Repurchase, (y) both
before and immediately after giving effect to any Plan Share Repurchase,
Borrowers would have Liquidity in excess of $30,000,000 and (z) the aggregate
amount of consideration paid for such Plan Share Repurchases shall not exceed
$5,000,000; (ii) pursuant to repurchase rights exercisable in connection with
the termination of service of any service provider to any Borrower (the “Other
Share Repurchases”), provided: (y) no Default or Event of Default shall have
occurred and be continuing or would result from any Other Share Repurchase and
(z) the aggregate amount of consideration paid for such Other Share Repurchase
shall not exceed $500,000 in any one fiscal year; and (iii) pursuant to Plan
Share Repurchases (in addition to those permitted under clause (i) above and
referred to herein as the “Additional Plan Share Repurchases”) as long as:
(w) no Default or Event of Default shall have occurred and be continuing either
before or immediately after giving effect to an Additional Plan Share
Repurchase, (x) both before and immediately after giving effect to any
Additional Plan Share Repurchase, Borrowers would have Liquidity in excess of
$40,000,000, (y) the aggregate amount of consideration paid for such Additional
Plan Share Repurchases shall not exceed $50,000,000, and (z) all such Additional
Plan Share Repurchases described in this clause (iii) shall be consummated on or
before June 30, 2007.

“Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.

“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).

“Stock Acquisition” means the purchase or other acquisition by Parent of all of
the Stock of any other Person.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

 

19

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

“Swing Lender” means WFF or any other Lender that, at the request of
Administrative Borrower and with the consent of Agent agrees, in such Lender’s
sole discretion, to become the Swing Lender under Section 2.3(d).

“Swing Loan” has the meaning specified therefor in Section 2.3(d)(i).

“Taxes” has the meaning specified therefor in Section 15.11.

“Term Loan” has the meaning specified therefor in Section 2.2.

“Term Loan Amount” means $150,000,000.

“Term Loan Availability” means, as of any date of determination, the difference
of (A) the lesser of: (i) the EBITDA Term Loan Limit or the (ii) Term Loan
Amount, minus (B) the outstanding amount of the Term Loan.

“Term Loan Commitment” means, with respect to each Lender, its Term Loan
Commitment, and, with respect to all Lenders, their Term Loan Commitments, in
each case as such Dollar amounts are set forth beside such Lender’s name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section 13.1.

“Term Loan Draw” has the meaning specified therefor in Section 2.2.

“Termination Date” means, the date on which all of the Obligations are paid in
full in accordance with the terms of the Agreement and the Commitments of the
Lenders are terminated.

“Total Commitment” means, with respect to each Lender, its Total Commitment,
and, with respect to all Lenders, their Total Commitments, in each case as such
Dollar amounts are set forth beside such Lender’s name under the applicable
heading on Schedule C-1 attached hereto or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1.

“Trademark Security Agreement” has the meaning specified therefor in the
Security Agreement.

“TTM EBITDA” means, as of any date of determination, EBITDA for the most
recently completed 12 month period (which period may include the date of
measurement).

“TTM Recurring Revenues” means, as of any date of determination, the actual
Recurring Revenues for the most recently completed 12 month period (which period
may include the date of measurement), as set forth in the relevant Recurring
Revenues Certificates for such period.

“Underlying Issuer” means a third Person which is the beneficiary of an L/C
Undertaking and which has issued a letter of credit at the request of the
Issuing Lender for the benefit of Borrowers.

“Underlying Letter of Credit” means a letter of credit that has been issued by
an Underlying Issuer.

“United States” means the United States of America.

“Voidable Transfer” has the meaning specified therefor in Section 16.6.

 

20

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

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

“WFF” means Wells Fargo Foothill, Inc., a California corporation.

 

21