Exhibit 10.49


 




 





Credit
Agreement


 


 


among


 


WIRELESS FACILITIES, INC.,


 


 


KEYBANK NATIONAL
ASSOCIATION,


 


AS
ADMINISTRATIVE AGENT,

LENDER AND 

LETTER OF CREDIT ISSUING LENDER


 


 


and


 


THE OTHER FINANCIAL

INSTITUTIONS PARTIES HERETO


 


 


with


 


KEYBANC CAPITAL MARKETS,


 


AS
DESIGNATED SOLE ARRANGER AND

SOLE BOOK MANAGER


 


 


Dated as of March 16, 2005


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION I

  	
   

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
  1.2

  	
  Use of Certain Terms

  	
  22

  
	
  1.3

  	
  Accounting Terms

  	
  22

  
	
  1.4

  	
  Rounding

  	
  22

  
	
  1.5

  	
  Exhibits and Schedules

  	
  23

  
	
  1.6

  	
  References to Agreements and Laws

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION II

  	
   

  	
  THE COMMITMENTS AND EXTENSIONS OF CREDIT

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  Loans; Maximum Amounts

  	
  23

  
	
  2.2

  	
  Borrowings, Conversions and Continuations of Loans

  	
  24

  
	
  2.3

  	
  Letters of Credit

  	
  24

  
	
  2.4

  	
  Prepayments

  	
  29

  
	
  2.5

  	
  Reduction or Termination of Commitments

  	
  29

  
	
  2.6

  	
  Principal and Interest

  	
  29

  
	
  2.7

  	
  Fees

  	
  30

  
	
  2.8

  	
  Computation of Interest and Fees

  	
  30

  
	
  2.9

  	
  Making Payments

  	
  31

  
	
  2.10

  	
  Funding Sources

  	
  32

  
	
  2.11

  	
  Collateral

  	
  32

  
	
  2.12

  	
  Additional Loan Commitments

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION III

  	
   

  	
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Taxes

  	
  34

  
	
  3.2

  	
  Illegality

  	
  36

  
	
  3.3

  	
  Inability to Determine Rates

  	
  36

  
	
  3.4

  	
  Increased Cost and Reduced Return; Capital Adequacy

  	
  36

  
	
  3.5

  	
  Breakfunding Costs

  	
  37

  
	
  3.6

  	
  Matters Applicable to all Requests for Compensation

  	
  38

  
	
  3.7

  	
  Survival

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION IV

  	
   

  	
  CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Conditions of Initial Extension of Credit

  	
  38

  
	
  4.2

  	
  Conditions to all Extensions of Credit

  	
  40

  



 


i

















 


	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION V

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Existence and Qualification; Power; Compliance with
  Laws

  	
  41

  
	
  5.2

  	
  Power; Authorization; Enforceable Obligations

  	
  41

  
	
  5.3

  	
  No Legal Bar

  	
  41

  
	
  5.4

  	
  Financial Statements; No Material Adverse Effect

  	
  42

  
	
  5.5

  	
  Litigation

  	
  42

  
	
  5.6

  	
  No Default; Continued Business

  	
  42

  
	
  5.7

  	
  Ownership of Property; Liens

  	
  43

  
	
  5.8

  	
  Taxes

  	
  43

  
	
  5.9

  	
  Margin Regulations; Investment Company Act; Public
  Utility Holding Company Act

  	
  43

  
	
  5.10

  	
  ERISA Compliance

  	
  43

  
	
  5.11

  	
  Intangible Assets

  	
  44

  
	
  5.12

  	
  Compliance With Laws

  	
  44

  
	
  5.13

  	
  Environmental Compliance

  	
  44

  
	
  5.14

  	
  Insurance

  	
  44

  
	
  5.15

  	
  Swap Obligations

  	
  44

  
	
  5.16

  	
  Solvency

  	
  44

  
	
  5.17

  	
  Disclosure

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VI

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Financial Statements

  	
  45

  
	
  6.2

  	
  Certificates, Notices and Other Information

  	
  46

  
	
  6.3

  	
  Payment of Taxes

  	
  47

  
	
  6.4

  	
  Preservation of Existence

  	
  47

  
	
  6.5

  	
  Maintenance of Properties

  	
  47

  
	
  6.6

  	
  Maintenance of Insurance

  	
  47

  
	
  6.7

  	
  Compliance With Laws

  	
  47

  
	
  6.8

  	
  Inspection Rights

  	
  48

  
	
  6.9

  	
  Keeping of Records and Books of Account

  	
  48

  
	
  6.10

  	
  Compliance with ERISA

  	
  48

  
	
  6.11

  	
  Compliance With Agreements

  	
  48

  



 


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  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  6.12

  	
  Subsidiary Guaranties and Pledge of Ownership
  Interests

  	
  48

  
	
  6.13

  	
  Use of Proceeds

  	
  50

  
	
  6.14

  	
  Restrictive Agreements

  	
  50

  
	
  6.15

  	
  Guaranty Under Material Indebtedness Agreement

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VII

  	
   

  	
  NEGATIVE COVENANTS

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Indebtedness

  	
  50

  
	
  7.2

  	
  Liens

  	
  52

  
	
  7.3

  	
  Fundamental Changes

  	
  53

  
	
  7.4

  	
  Dispositions

  	
  53

  
	
  7.5

  	
  Investments

  	
  53

  
	
  7.6

  	
  Restricted Payments

  	
  54

  
	
  7.7

  	
  ERISA

  	
  55

  
	
  7.8

  	
  Change in Nature of Business

  	
  55

  
	
  7.9

  	
  Transactions with Affiliates

  	
  55

  
	
  7.10

  	
  Use of Proceeds

  	
  56

  
	
  7.11

  	
  Certain Indebtedness Payments, Etc

  	
  56

  
	
  7.12

  	
  Financial Covenants

  	
  56

  
	
  7.13

  	
  Accounting Changes

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VIII

  	
   

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Events of Default

  	
  57

  
	
  8.2

  	
  Certain Financial Covenant Defaults

  	
  59

  
	
  8.3

  	
  Remedies Upon Event of Default

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION IX

  	
   

  	
  ADMINISTRATIVE AGENT

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
  Appointment and Authorization of Administrative
  Agent

  	
  60

  
	
  9.2

  	
  Delegation of Duties

  	
  61

  
	
  9.3

  	
  Liability of Administrative Agent

  	
  61

  
	
  9.4

  	
  Reliance by Administrative Agent

  	
  62

  
	
  9.5

  	
  Notice of Default

  	
  62

  
	
  9.6

  	
  Credit Decision; Disclosure of Information by
  Administrative Agent

  	
  63

  
	
  9.7

  	
  Indemnification of Administrative Agent

  	
  63

  
	
  9.8

  	
  Administrative Agent in Individual Capacity

  	
  64

  



 


iii

















 


	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  9.9

  	
  Successor Administrative Agent

  	
  64

  
	
  9.10

  	
  Designation of Arranger; No Affiliate Liability

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION X

  	
   

  	
  MISCELLANEOUS

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  Amendments; Consents

  	
  65

  
	
  10.2

  	
  Transmission and Effectiveness of Communications
  and Signatures

  	
  66

  
	
  10.3

  	
  Attorney Costs, Expenses and Taxes

  	
  67

  
	
  10.4

  	
  Binding Effect; Assignment

  	
  67

  
	
  10.5

  	
  Set-off

  	
  69

  
	
  10.6

  	
  Sharing of Payments

  	
  69

  
	
  10.7

  	
  No Setoff

  	
  70

  
	
  10.8

  	
  No Waiver; Cumulative Remedies

  	
  70

  
	
  10.9

  	
  Usury

  	
  70

  
	
  10.10

  	
  Counterparts

  	
  71

  
	
  10.11

  	
  Integration

  	
  71

  
	
  10.12

  	
  Nature of Lenders’ Obligations

  	
  71

  
	
  10.13

  	
  Survival of Representations and Warranties

  	
  71

  
	
  10.14

  	
  Indemnity by Borrower

  	
  71

  
	
  10.15

  	
  Nonliability of Lender

  	
  72

  
	
  10.16

  	
  No Third Parties Benefited

  	
  73

  
	
  10.17

  	
  Severability

  	
  73

  
	
  10.18

  	
  Confidentiality

  	
  73

  
	
  10.19

  	
  Further Assurances

  	
  74

  
	
  10.20

  	
  Headings

  	
  74

  
	
  10.21

  	
  Time of the Essence

  	
  74

  
	
  10.22

  	
  Foreign Lenders

  	
  74

  
	
  10.23

  	
  Governing Law

  	
  75

  
	
  10.24

  	
  Waiver of Right to Trial by Jury

  	
  76

  
	
  10.25

  	
  Entire Agreement

  	
  76

  



 


iv

















 


EXHIBITS


 


Forms of:


 


	
  A

  	
   

  	
  Request for
  Extension of Credit

  
	
  B

  	
   

  	
  Compliance
  Certificate

  
	
  C

  	
   

  	
  Form of
  Note

  
	
  D

  	
   

  	
  Notice of
  Assignment and Acceptance

  
	
  E-1

  	
   

  	
  Form of
  General Security Agreement

  
	
  E-2

  	
   

  	
  Form of
  Intellectual Property Security Agreement

  
	
  E-3

  	
   

  	
  Form of UK
  Pledge Agreement

  
	
  E-4

  	
   

  	
  Form of
  Mexican Pledge Agreement

  
	
  F

  	
   

  	
  Form of
  Multi-Party Guaranty

  
	
  G

  	
   

  	
  Acceptance
  Letter

  
	
  H

  	
   

  	
  Opinions of
  Counsel

  



 

















 


SCHEDULES


 


	
  2.1

  	
   

  	
  Commitments and
  Pro Rata Shares

  
	
  7.1

  	
   

  	
  Existing
  Indebtedness and Liens

  
	
  10.2

  	
   

  	
  Offshore and
  Domestic Lending Offices, Addresses for Notices

  



 

















 


CREDIT AGREEMENT


 


This CREDIT AGREEMENT (“Agreement”)
is entered into as of March 16, 2005, by and among
WIRELESS FACILITIES, INC., a Delaware corporation (“Borrower”), KEYBANK NATIONAL
ASSOCIATION, as Administrative Agent, as a Lender and as Issuing Lender
hereunder, such other lenders as shall from time to time be party hereto with
KEYBANC CAPITAL MARKETS as designated Sole Arranger and Sole Book Manager
hereunder.


 


RECITAL


 


Borrower has requested that Lenders and Issuing Lender
provide a revolving line of credit, and Lenders, Issuing Lender and
Administrative Agent are willing to do so on the terms and conditions set forth
herein.


 


In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:


 


SECTION I

DEFINITIONS AND ACCOUNTING TERMS


 


1.1                  Defined Terms. As
used in this Agreement, the following terms shall have the meanings set forth
below:


 


“Acquisition” means any transaction or series of
related transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any line of business or any division of a Person, (b) the
acquisition of in excess of 50% of the capital stock, partnership interests or
equity of any Person, or otherwise causing any Person to become a Subsidiary,
or (c) a merger or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary).


 


“Administrative Agent” means KeyBank National
Association, in its capacity as administrative agent under any of the Loan
Documents, or any successor administrative agent.


 


“Administrative Agent’s Office” means
Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.2,
or such other address or account as Administrative Agent hereafter may designate
by written notice to Borrower and Lenders.


 


“Administrative Agent-Related Persons” means
Administrative Agent (including any successor agent), together with its
Affiliates (including, in the case of KeyBank, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.


 


“Affiliate” means any Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with another Person. A Person shall be deemed to be “controlled by” any
other Person if such other Person possesses, directly or indirectly, power (a) to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.


 


1

















 


“Agreement” means this Credit Agreement, as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time.


 


“Applicable Margin” means the following amounts
per annum (expressed in basis points per annum), based upon the Total Leverage
Ratio:


 


	
  Total Leverage Ratio

  	
   

  	
  Offshore Rate

  Margin (bps)

  	
   

  	
  Base Rate Margin

  (bps)

  	
   

  	
  Commitment Fee

  (bps)

  	
   

  
	
  X >
  2.25

  	
   

  	
   

  	
  250.0

  	
   

  	
  25.0

  	
   

  	
  45.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X is >
  1.25 but < 2.25

  	
   

  	
   

  	
  200.0

  	
   

  	
  0.0

  	
   

  	
  40.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X is >
  0.5 but < 1.25

  	
   

  	
   

  	
  150.0

  	
   

  	
  0.0

  	
   

  	
  32.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X < 0.5

  	
   

  	
   

  	
  125.0

  	
   

  	
  0.0

  	
   

  	
  25.0

  	
   

  



 


For purposes of Borrower’s payment of interest in
accordance with Section 2.6 and the commitment fee specified in Section 2.7(a),
each Applicable Margin calculated in accordance with the most recent Compliance
Certificate received by Administrative Agent shall be in effect from the date
such Compliance Certificate is received by Administrative Agent to but
excluding the date the next Compliance Certificate is received; provided,
however, that the Applicable Margin from the Closing Date until Administrative
Agent’s receipt of Borrower’s first Compliance Certificate shall be the amounts
set forth above as applying when the Total Leverage Ratio is [X <0.5].


 


“Applicable Payment Date” means, (a) as to
any Offshore Rate Loan, the last day of the relevant Interest Period or every
ninety days, whichever is earlier, any date that such Loan is prepaid or
converted in whole or in part and the Maturity Date; and (b) as to
any other Obligations, the last Business Day of each calendar quarter and the
Maturity Date; provided, further, that interest accruing at the Default Rate
shall be payable from time to time upon demand of Administrative Agent.


 


“Arranger” means KeyBanc Capital Markets, in
its capacity as “Sole Arranger” and “Sole Book Manager.”


 


“Assignment and Acceptance” means an Assignment
and Acceptance substantially in the form of Exhibit D.


 


“Attorney Costs” means and includes all
reasonable attorney’s and other fees and disbursements of any law firm or other
external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel.


 


“Audited Financial Statements” means the
audited consolidated balance sheet, income statement and cash flows of Borrower
and its Subsidiaries for each 52 or 53 week year, as applicable, on or about December 31.


 


2

















 


“Base Rate” means a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the
rate of interest in effect for such day as publicly announced from time to time
by KeyBank as its “prime rate.” Such prime rate is a rate set by KeyBank based
upon various factors including KeyBank’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such prime rate announced by KeyBank shall take effect at
the opening of business on the day specified in the public announcement of such
change. If KeyBank ceases to establish or publish a prime rate, the applicable
Base Rate thereafter shall be instead the prime rate reported in The Wall
Street Journal (or the average prime rate if a high and a low prime rate are
therein reported).


 


“Base Rate Loan” means a Loan made in not less
than the Minimum Amount pursuant to Requisite Notice to Administrative Agent by
delivering a Request for Extension of Credit not later than the Requisite Time
and specified to be a Base Rate Loan or if not designated otherwise. Interest
on each Base Rate Loan shall be calculated using the Applicable Margin for the
Base Rate effective as of the date of the advance of such Base Rate.


 


“Borrower” has the meaning set forth in the
introductory paragraph hereto.


 


“Borrowing” and “Borrow” each mean a
borrowing of Loans hereunder.


 


“Borrowing Date” means the date that a Loan is
made, which shall be a Business Day.


 


“Business Day” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banks in Cleveland,
Ohio; New York, New York; San Francisco, California; or (if interest is being
determined by reference to the Offshore Rate) London, England are generally
authorized or obligated, by law or executive order, to close.


 


“Capital Leases” means any and all leases under
which certain obligations are required to be capitalized on the books of a
lessee in accordance with GAAP.


 


“Cash Acquisition Consideration” means the
amount of cash paid or payable prior to the Maturity Date in connection with an
Acquisition including, without limitation, (a) all amounts recorded on the
books of Borrower or any Subsidiary as deferred liabilities (whether or not
characterized as an earn-out) determined as of the Acquisiton date, (b) contingent
liabilities (whether or not characterized as an earn-out) determined as of the
date paid, (c) Indebtedness assumed or incurred in connection with such
Acquisiton and (d) Indebtedness of such Persons as are acquired in such Acquisition.


 


“Change of Control” means (a) the
acquisition of, or, if earlier, the shareholder or director approval of the
acquisition of, ownership or voting control, directly or indirectly,
beneficially or of record, on or after the Closing Date, by any Person or group
(within the meaning of Rule 13d-3 of the SEC under the Securities Exchange
Act of 1934, as then in effect), of shares representing more than forty-five
percent 45% of the aggregate ordinary Voting Power represented by the issued
and outstanding capital stock of Borrower; (b) during any period of twelve
(12) consecutive months, the occupation of a majority of the seats (other than
vacant seats) on the board of directors or other governing body of Borrower by
Persons who were neither (i) nominated by the board of directors or other
governing body of Borrower nor


 


3

















 


(ii) appointed by directors so nominated; or (c) the
occurrence of a change in control, or other similar provision, as defined in any
Material Indebtedness Agreement (triggering a default or mandatory prepayment,
which default or mandatory prepayment has not been waived in writing).


 


“Closing Date” means the date all the
conditions precedent in Section 4.1 are satisfied or waived in accordance
with Section 4.1.


 


“Code” means the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute thereto.


 


“Comerica Letters of Credit” means (i) Letter
of Credit No. 575012 issued by Comerica Bank on June 13, 2002 in favor
of Safety National Casualty Corporation in the original amount of $100,000 (and
since increased to $700,000) for the account of Borrower; (ii) Letter of
Credit No. 598836-44 issued by Comerica Bank on January 26, 2005 in
favor of Insurance Company of North America, Pacific Employers Insurance
Company, Westchester Fire Insurance Company, and Indemnity Insurance Company of
North America in the original amount of $500,000 for the account of Borrower;
and (iii) Letter of Credit No. 593737-44 issued by Comerica Bank on July 19,
2004 in favor of Nortel Networks Israel (Sales and Marketing ) Ltd. in the
original amount of $300,000 for the account of Wireless Facilities
International Limited.


 


“Commitment” means, for each Lender, the amount
set forth opposite such Lender’s name on Schedule 2.1. as such amount may be
reduced or adjusted from time to time in accordance with the terms of this
Agreement (collectively, the “combined Commitments”).


 


“Commitment Fee” has the meaning set
forth in Section 2.7 hereof.


 


“Compliance Certificate” means a certificate
substantially in the form of Exhibit B, properly completed and signed
by a Responsible Officer of Borrower.


 


“Consolidated EBITDA” means the sum of the
following, provided that the items contained in clauses (b)-(f) below
shall be added to (a) only to the extent they have been deducted in the
calculation of Consolidated Net Income and consolidated statement of cash flows
and provided, further, that for the quarter ended September 30, 2004
Consolidated EBITDA shall mean the sum of Consolidated Net Income, Consolidated
Interest Charges, the amount of taxes, based on or measured by income, used or
included in the determination of such Consolidated Net Income, the amount of
depreciation and amortization expense deducted in determining such Consolidated
Net Income and $23,100,000.


 


(a)                      Consolidated Net Income, provided
that, all items of gain, income, loss or expense that are properly classified
as extraordinary in accordance with GAAP or are unusual or non-recurring (but
do not fall within clauses (b)-(f) below), the cash portion of which items
shall be limited to a maximum of $7,500,000 in net expense over the prior four
fiscal quarter period, shall be excluded from such Consolidated Net Income;


 


(b)                      Consolidated Interest Charges;


 


(c)                      The amount of taxes, based on or
measured by income, used or included in the determination of such Consolidated
Net Income;


 


4

















 


(d)                      The amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income,
including any impairment of goodwill or other purchased intangibles as defined
under FAS 141 or FAS 142;


 


(e)                      The amount non-cash or
non-recurring costs from discontinued operations; and


 


(f)                        the amount of earn-out or
similar payments required to be reported as compensation expense instead of
goodwill be excluded from such Consolidated Net Income.


 


“Consolidated Interest Charges” means, for any
period, for Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, premium payments, fees, charges and related expenses payable by
Borrower and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
(b) the portion of rent payable by Borrower and its Subsidiaries with
respect to such period under Capital Leases that is treated as interest in
accordance with GAAP and (c) the portion of rent under any Synthetic Lease
Obligation that would be treated as interest in accordance with GAAP if the
Synthetic Lease Obligation were treated as a Capital Lease under GAAP.


 


“Consolidated Net Income” means, for any
period, for Borrower and its Subsidiaries on a consolidated basis, net income
of Borrower and its Subsidiaries in accordance with GAAP adjusted to include (a) the
net income of TLA and DSI, together with each other Person (or business
division, business unit or substantially all of the assets of another Person),
in each case acquired in connection with a Permitted Acquisition, as if the
acquisition of TLA, DSI and any such Permitted Acquisition, had been
consummated on the first day of the applicable measuring period and (b) all
pro-forma cost savings in connection with any such Permitted Acquisition is
approved by the Administrative Agent at the time of Acquisition, such approval
not to be unreasonably withheld.


 


“Continuation” and “Continue” mean, with
respect to any Offshore Rate Loan, the continuation of such Offshore Rate Loan
as an Offshore Rate Loan on the last day of the Interest Period for such Loan.


 


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


 


“Conversion” and “Convert” mean, with
respect to any Loan, the conversion of such Loan from or into another type of
Loan.


 


“Credit Party” means Borrower and each Guarantor.


 


“Debtor Relief Laws” means the Bankruptcy Code
of the United States of America, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief


 


5

















 


Laws of the United States of America or other applicable jurisdictions
from time to time in effect affecting the rights of creditors generally.


 


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


 


“Default Rate” means an interest rate equal to
the Base Rate plus the applicable margin specified in the definition of
Applicable Margin, if any, applicable to Base Rate Loans, plus 2% per annum;
provided, however, that with respect to an Offshore Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate otherwise applicable to
such Loan, plus the Applicable Margin specified for Offshore Rate Loans, plus
2% per annum, in each case to the fullest extent permitted by applicable Laws.


 


“Delmarva” means Delmarva Systems Corporation.


 


“Disclosure Letter” means that Disclosure
Letter of even date herewith and delivered to Administrative Agent together with
this Agreement.


 


“Disposition” or “Dispose” mean the
sale, transfer, License Disposition or other disposition (including any sale
and leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal with or without recourse of any notes or
accounts receivable or any rights and claims associated therewith; provided,
however, that an issuance by Borrower of its Equity Securities shall not be a
Disposition.


 


“Dollar,” “USD” and “$” mean
lawful money of the United States of America.


 


“Domestic Subsidiary” means a Subsidiary that
is not a Foreign Subsidiary.


 


“DSI” means Defense Systems, Incorporated.


 


“Eligible Assignee” means (a) a financial
institution organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least $100,000,000; (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 having a combined capital and surplus of
at least $ 100,000,000, provided that such bank is acting through a branch or
agency located in the United States; (c) a Person that is primarily
engaged in the business of commercial banking and that is (i) a Subsidiary
of a Lender, (ii) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; (d) another
Lender; (e) any other entity which is an “accredited investor” (as defined
in Regulation D under the Securities Act of 1933, as amended) which extends
credit or buys loans as one of its businesses, including but not limited to,
insurance companies, mutual funds and lease financing companies; or (f) other
lenders or institutional investors consented to in writing in advance by
Administrative Agent and Borrower. Neither Borrower nor any Affiliate of
Borrower shall be an Eligible Assignee.


 


“Employee Benefits Plan” means a 401k plan,
employee stock purchase program, deferred compensation program or similar
programs from time to time maintained by Borrower or any of its Subsidiaries.


 


6

















 


“ENCO Systems” means collectively ENCO Systems, Inc.
and ENCO Systems Partnership, Ltd.


 


“Environmental Laws” means all Laws relating to
environmental, health, safety and land use matters applicable to any property
of Borrower.


 


“Equity Securities” of any Person means (a) all
common stock, preferred stock, participations, shares, partnership interests or
other equity interests in such Person (regardless of how designated and whether
or not voting or non-voting) and (b) all warrants, options and other
rights to acquire any of the foregoing, other than convertible debt securities
which have not been converted into common stock, preferred stock,
participations, shares, partnership interests or other equity interests in any
such Person.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, or any successor Federal
statute.


 


“ERISA Affiliate” means any trade or business
(whether or not incorporated) under common control with Borrower within the
meaning of Sections 414(b) or (c) of the Code (and Sections 414(m)
and (o) of the Code for purposes of provisions relating to Section 412 of
the Code).


 


“ERISA Event” means (a) a Reportable Event
with respect to a Pension Plan; (b) a withdrawal by Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section 4001
(a)(2) of ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (d) the
filing with the PBGC of a notice of intent to terminate, the treatment of a
Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA, upon Borrower or any ERISA Affiliate.


 


“Escrowed Securities” means Thomas Collateral,
the Cuculic/Horn Collateral, and the Suntech Collateral, as such terms are
defined in Section 1 of the General Security Agreement.


 


“Eurodollar Reserve Percentage” means, for any
day during any Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next l/100th of 1%) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to as “Eurocurrency liabilities”).


 


“Event of Default” means any of the events
specified in Section 8.


 


7

















 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, or any successor federal statute.


 


“Extension of Credit” means (a) a
Borrowing, Conversion or Continuation of Loans and (b) a Letter of Credit
Action wherein a new Letter of Credit is issued or which has the effect of
increasing the amount of, extending the maturity of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of
drawings thereunder.


 


“Federal Funds Rate” means, for any day, the
rate per annum (rounded upwards to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
charged to KeyBank on such day on such transactions as determined by Administrative
Agent.


 


“First-Tier Material Foreign Subsidiary” means
a direct Foreign Subsidiary of either Borrower or a Domestic Subsidiary that is
also a Material Subsidiary.


 


“Fixed Charge Coverage Ratio” means as of any
date of determination the ratio of (a) Borrower’s Consolidated EBITDA for
the preceding four fiscal quarters most recently ended plus consolidated
operating lease expenses (as determined in accordance with GAAP) during such
period to (b) the sum of Borrower’s consolidated capital expenditures,
Consolidated Interest Charges, and consolidated operating lease expenses and
consolidated cash income taxes paid (less cash income tax refunds actually
received) (all as determined in accordance with GAAP) for the four fiscal
quarters most recently ended.


 


“Foreign Subsidiary” shall mean a Subsidiary
that is organized outside of the United States of America.


 


“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a significant segment of the
accounting profession, that are applicable to the circumstances as of the date
of determination, consistently applied, provided, however, that for purposes of
calculating the Senior Leverage Ratio, the Total Leverage Ratio, the Liquidity
Ratio and the Fixed Charge Coverage Ratio (and in each case the components
thereof), GAAP shall mean GAAP as in effect and applied on the Closing Date,
without giving effect to any subsequent change in such principles.


 


“General Security Agreement” means that certain
Security Agreement dated as of the date hereof, in favor of Administrative
Agent (for the account of each Lender in accordance with its Pro Rata Share) by
Borrower and each Guarantor in the form of Exhibit E-l hereto.


 


“Governmental Authority” means (a) any
international, foreign, federal, state, county or municipal government, or
political subdivision thereof, (b) any governmental or quasi-


 


8

















 


governmental agency, authority, board, bureau, commission, department,
instrumentality, central bank or public body, or (c) any court,
administrative tribunal or public utility.


 


“Guaranty Obligation” means, as to any Person,
any (a) guaranty by such Person of Indebtedness of, or other obligation
payable or performable by, any other Person or (b) assurance, agreement,
letter of responsibility, letter of awareness, undertaking or arrangement given
by such Person to an obligee of any other Person with respect to the payment or
performance of an obligation by, or the financial condition of, such other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person or any “keep-well”
or other arrangement of whatever nature, in each such case, given for the
purpose of assuring or holding harmless such obligee against loss with respect
to any obligation of such other Person; provided, however, that the term
Guaranty Obligation shall not include performance bond guarantees or
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation,
or portion thereof, covered by such Guaranty Obligation or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the Person in good faith.


 


“Guarantor” shall mean each Person signatory as
an obligor under the Multi-Party Guaranty or any other Person that shall become
an obligor thereunder after the Closing Date.


 


“Hazardous Substance” means any substance,
material or waste, including asbestos and petroleum (including crude oil or any
fraction thereof), which is or becomes designated, classified or regulated as “toxic,”
“hazardous,” a “pollutant” or similar designation under any Laws.


 


“Indebtedness” means:


 


(a)                      all obligations of such Person
for borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;


 


(b)                      any direct or contingent
obligations of such Person arising under letters of credit (including standby
and commercial), banker’s acceptances, bank guaranties, surety bonds and
similar instruments, but excluding performance bonds and guaranties thereof
(whether in the form of a letter of credit or otherwise) entered into in
the ordinary course of business;


 


(c)                      net obligations under any Swap
Contract in an amount equal to the Swap Termination Value of such Swap
Contract;


 


(d)                      with or without recourse, all
obligations of such Person to pay the deferred purchase price of property or
services, and indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements);


 


9

















 


(e)                      Capital Leases or Synthetic Lease
Obligations, where (i) the amount of Indebtedness in the case of Capital
Leases shall be the amount of the capitalized lease liability appearing on
Borrower’s financial statements delivered in accordance with Sections 6.1 (a) and
(b) of this Agreement and (ii) the amount of Indebtedness in the case
of Synthetic Lease Obligations shall be the sum of all outstanding principal
advances and any other sums advanced and outstanding pursuant to the Synthetic
Lease Obligations;


 


(f)                        all obligations under asset
securitization financing transactions, including recourse sales of receivables
but exclusive of nonrecourse sales of receivables; and


 


(g)                     all Guaranty Obligations of such
Person in respect of any of the foregoing obligations of any other Person.


 


For all purposes of this Agreement, the Indebtedness
of any Person shall include, the Indebtedness of any partnership or joint
venture (to the extent the joint venture consists of a legal entity where a joint
venturer has pass-through liability for all of the debts of the joint venture)
in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person (subject to
customary recourse exceptions acceptable to Requisite Lenders).


 


“Indemnified Liabilities” has the meaning set
forth in Section 10.14.


 


“Indemnitees” has the meaning set forth in Section 10.14.


 


“Interest Period” means for each Offshore Rate
Loan, (i) initially, the period commencing on the date such Offshore Rate
Loan is disbursed or Continued or Converted into such Offshore Rate Loan, and (ii) thereafter,
the period commencing on the last day of the preceding Interest Period, and
ending, in each case, on the earlier of (x) the scheduled Maturity Date, or (y)
one, two, three or six months thereafter, as elected by Borrower; provided
that:


 


(a)                      any Interest Period that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day;


 


(b)                      any Interest Period which begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and


 


(c)                      unless Administrative Agent
otherwise consents, there may not be more than five (5) Interest
Periods for Offshore Rate Loans in effect at any time.


 


“Intellectual Property Security Agreement”
means that certain Intellectual Property Security Agreement dated as of the
date hereof, in favor of Administrative Agent (for the account of each Lender
in accordance with its Pro Rata Share) by Borrower and each. Guarantor in the form attached
to the Form of General Security Agreement in Exhibit E-2 hereto


 


10

















 


“Investment” means, as to any Person, any
investment by such Person, whether by means of the purchase or other
acquisition of stock or other securities of any other Person or by means of a
loan, creating a debt, capital contribution, guaranty or other debt or equity
participation or interest in any other Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.


 


“IRS” means the United States Internal Revenue
Service.


 


“Issuing Lender” means KeyBank National
Association, or any other Lender, who from time to time effects a Letter of
Credit Action in accordance with the terms of this Agreement.


 


“KeyBank” means KeyBank National Association.


 


“Laws” or “Law” means all international,
foreign, federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of
law.


 


“Lender” means each lender from time to time
party hereto and, as the context requires, Issuing Lender.


 


“Lending Office” means, as to any Lender, the
office or offices of such Lender described as such on Schedule 10.2, or
such other office or offices as a Lender may from time to time notify
Administrative Agent.


 


“Letter of Credit” means any standby letter of
credit issued or outstanding hereunder. A Letter of Credit may be a
performance letter of credit or a financial letter of credit.


 


“Letter of Credit Action” means the issuance,
supplement, amendment, renewal, extension, modification or other action
relating to a Letter of Credit hereunder.


 


“Letter of Credit Application” means an
application for a Letter of Credit Action from time to time in use by Issuing
Lender.


 


“Letter of Credit Expiration Date” means the
scheduled Maturity Date.


 


“Letter of Credit Sublimit” means an amount
equal to $12,500,000. The Letter of Credit Sublimit is part of, and not in
addition to, the combined Commitments.


 


“Letter of Credit Usage” means, as at any date
of determination, the aggregate amount available to be drawn under all
outstanding Letters of Credit plus the aggregate amount of all drawings under
the Letters of Credit not reimbursed by Borrower or converted into Loans.


 


11

















 


“License Disposition” means, in respect of any
patent, trademark, copyright, mask work, trade secret or other intellectual
property right owned or held by Borrower or any of its Subsidiaries (the “IP Holder”) which
is material to Borrower or any of its Subsidiaries (together, “Material IP”), (i) the
granting by the IP Holder of an exclusive license across all or substantially
all fields, uses or regions to any Person other than Borrower or another
Subsidiary, (ii) the granting of any license by the IP Holder that conveys
directly or indirectly to any Person other than Borrower or its Subsidiaries
all or substantially all of the economic value of such Material IP, or (iii) the
abandonment by the IP Holder of such Material IP.


 


“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement (including in the nature of,
cash collateral accounts or security interests), encumbrance, lien (statutory
or other), fixed or floating charge, or other security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the Uniform Commercial
Code or comparable Laws of any jurisdiction), including the interest of a
purchaser of accounts receivable.


 


“Liquidity Ratio” means as of any date of
determination, for Borrower and its Subsidiaries on a consolidated basis and in
accordance with GAAP, the ratio of (a) the sum of cash on hand, cash
equivalents, marketable securities, and billed and unbilled accounts receivable
(excluding accounts receivable owing from any Affiliate, shareholder or
employee of Borrower or any of its Subsidiaries) to (b) current
liabilities; provided that for all periods ending in the four fiscal quarter
period prior to the Maturity Date, current liabilities shall exclude the
Obligations.


 


“Loan” means any advance made by any Lender to
Borrower as provided in Section 2 (collectively, the “Loans”).


 


“Loan Documents” means this Agreement and each
Note, the Multi-Party Guaranty, the Security Documents, each Letter of Credit
Application, each Request for Extension of Credit, each certificate, each fee
letter, and each other instrument or agreement from time to time executed by
Borrower or any of its Subsidiaries or any Responsible Officer and delivered in
connection with this Agreement.


 


“Material Adverse Effect” means any set of
circumstances or events which (a) has any material adverse effect upon the
validity or enforceability of any Loan Document or the rights and remedies of
Administrative Agent and Lenders hereunder or thereunder, (b) is material
and adverse to the prospects, financial condition, business, assets or
operations of Borrower and its Subsidiaries, taken as a whole, (c) has any
material adverse effect upon the value or condition of the Collateral, or (d) materially
impairs the ability of and Credit Party to perform the Obligations.


 


“Material Indebtedness Agreement” shall mean
any debt instrument, lease (capital, operating or otherwise), guaranty,
contract, commitment, agreement or other arrangement evidencing any
Indebtedness of any Company or the Companies in excess of the Threshold Amount.


 


12

















 


“Material Subsidiary” means each Subsidiary of
Borrower that has (a) assets as of the end of most recent fiscal year of
Borrower in excess of $2,000,000 or (b) net revenues in excess of
$5,000,000 for the most recent fiscal year of Borrower.


 


“Maturity Date” means (a) March 16,
2008, or (b) such earlier date upon which the combined Commitments may be
terminated in accordance with the terms of this Agreement.


 


“Mexican Pledge Agreement” means that certain
Pledge Agreement dated as of the date hereof, in favor of Administrative Agent
(for the account of each Lender in accordance with its Pro Rata Share) by
Borrower in the form of Exhibit E-4 hereto.


 


“Minimum Amount” means, with respect to each of
the following actions, the minimum amount and any multiples in excess thereof
set forth opposite such action:


 


	
  Type of Action

  	
   

  	
  Minimum Amount

  	
   

  	
  Multiples in

  excess thereof

  	
   

  
	
  Borrowing or prepayment
  of, or Conversion into, Base Rate Loans

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Borrowing,
  prepayment or Continuation of, or Conversion into, Offshore Rate Loans

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Letter of Credit Action

  	
   

  	
  $

  	
  100,000

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reduction or Increase
  in Commitment

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  1,000,000

  	
   

  



 


“Multiemployer Plan” means any employee benefit
plan of the type described in Section 4001(a)(3)of ERISA.


 


“Multi-Party Guaranty” means that Multi-Party
Guaranty in the form attached hereto as Exhibit F.


 


“Note” means a promissory note made by Borrower
in favor of a Lender evidencing the Loans made by such Lender, substantially in
the form of Exhibit C (collectively, the “Notes”).


 


“Obligations” means all advances to, and debts,
liabilities, obligations, covenants and duties of, Borrower arising under any
Loan Document, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest that accrues after the commencement of
any proceeding under any Debtor Relief Laws by or against Borrower or any
Subsidiary or Affiliate of Borrower.


 


“Offshore Rate” means for any Interest Period
with respect to each Offshore Rate Loan comprising part of the same
Borrowing, a rate per annum determined by Administrative Agent as the offered
rate for Dollar deposits in the approximate amount of the requested Offshore
Rate Loan and having a maturity comparable to such Interest Period, which rate
appears (i) on the


 


13

















 


British Bankers’ Association internet web page (http://www.bba.org.uk/public/libor/),
or via (ii) Reuters (BBALIBORS), Bloomberg, Moneyline Telerate (Page 3750)
or any other information provider of the British Bankers’ Association daily
Libor rates as of 11:00 A.M., London time, on the date (an “Interest
Determination Date”) which is the second day on which banks are open for
interbank deposits in London prior to the commencement of such Interest Period.
If, on the Interest Determination Date for such Interest Period, the
Administrative Agent is unable to obtain any quotation as provided above, the
Offshore Rate for the relevant Interest Period shall be the rate per annum that
the Administrative Agent determines in good faith to be the arithmetic mean
(rounded, if necessary, to the nearest sixth decimal place) of all the per
annum rates of interest at which deposits in Dollars in an amount comparable to
the requested Offshore Rate Loan in Dollars in respect of which the Offshore
Rate is then being determined for a period comparable to such Interest Period
are offered by Administrative Agent to prime banks in the London interbank
market at approximately 11:00 A.M., London time on such Interest
Determination Date. The Administrative Agent shall provide to Borrower, upon
request, details as to the manner in which the Offshore Rate is calculated, but
such calculation shall be conclusive and binding absent manifest error. The
Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage by dividing (i) the Offshore Rate by (ii) one minus the
Eurodollar Reserve Percentage. The determination of the Eurodollar Reserve
Percentage and the Offshore Rate by Administrative Agent shall be conclusive in
the absence of manifest error.


 


“Offshore Rate Loan” means a Loan made in not
less than the Minimum Amount pursuant to Requisite Notice to Administrative
Agent and by deliverance of a Request for Extension of Credit not later than
the Requisite Time and specified to be a Offshore Rate Loan. Interest on each
Offshore Rate Loan shall be calculated using the Applicable Margin for the
Offshore Rate effective as of the date of the advance of such Offshore Rate.


 


“Ordinary Course Dispositions” means:


 


(a)                      Dispositions of surplus equipment
or damaged, obsolete or worn out property, whether now owned or hereafter
acquired, in the ordinary course of business;


 


(b)                      Dispositions of cash, cash
equivalents or inventory in the ordinary course of business;


 


(c)                      Dispositions of property to the
extent that such property is exchanged for credit against the purchase price of
similar replacement property, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement property or where
Borrower or its Subsidiary determine in good faith that the failure to replace
such equipment will not be detrimental to the business of Borrower or such
Subsidiary;


 


(d)                      Dispositions of assets or property
by any Subsidiary of Borrower to Borrower or another Subsidiary of Borrower, or
by Borrower to any Subsidiary of Borrower;


 


(e)                      Dispositions which constitute the
making or liquidating of Permitted Investments; and


 


14

















 


(f)                        Dispositions which constitute
the incurrence (but not the enforcement) of Permitted Liens;


 


provided, however, that, other than with respect to Dispositions of the
types described in clauses (a) and (c) of this definition, no such
Disposition shall be for significantly less than the fair market value of the
property being disposed of.


 


“Ordinary Course Indebtedness” means:


 


(a)                      Intercompany Guaranty Obligations
of Borrower or any of its Subsidiaries guarantying Indebtedness otherwise permitted
hereunder of Borrower or any Subsidiary of Borrower;


 


(b)                      Indebtedness arising from the
honoring of a check, draft or similar instrument against insufficient funds or
from the endorsement of instruments for collection in the ordinary course of
Borrower’s or any Subsidiary’s’ Subsidiary’s business;


 


(c)                      Permitted Swap Obligations;


 


(d)                      Indebtedness of Borrower or any
of its Subsidiaries with respect to surety, appeal, indemnity, performance or
other similar bonds in the ordinary course of business with respect to
agreements providing for indemnification, adjustment of purchase price, earnest
money or similar obligations in connection with Acquisitions or Dispositions
otherwise permitted by this Agreement; and


 


(e)                      Indebtedness with respect to cash
deposited by customers to obtain the right to delivery of future goods or
services.


 


“Ordinary Course Investments” means Investments consisting of:


 


(a)                      Investments in other assets
properly classified as “marketable securities” or “cash” or “cash equivalents”
under GAAP, and which conform to the investment policies adopted by the
Board of Directors of Borrower from time to time;


 


(b)                      Advances to officers, directors
and employees of Borrower and its Subsidiaries for travel, entertainment,
relocation and analogous ordinary business purposes;


 


(c)                      Investments of Borrower in any of
its Subsidiaries and Investments of any Subsidiary of Borrower in Borrower or
another Subsidiary of Borrower;


 


(d)                      Extensions of credit to customers
or suppliers of Borrower and its Subsidiaries in the ordinary course of
business and any Investments received in satisfaction or partial satisfaction
thereof;


 


(e)                      Guaranty Obligations permitted by
Section 7.1.


 


15

















 


(f)                        Investments received by Borrower
or any of its Subsidiaries as distributions on claims in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;


 


(g)                     Investments of any Subsidiary
existing at the time it becomes a Subsidiary of Borrower, provided that such
Investments were not made in anticipation of such Person becoming a Subsidiary
of Borrower; and


 


(h)                     Investments consisting of loans to
employees, officers and directors, the proceeds of which shall be used to
purchase Equity Securities of Borrower or its Subsidiaries and other loans to
non-executive officers and employees.


 


“Ordinary Course Liens” means:


 


(a)                      Liens pursuant to any Loan
Document;


 


(b)                      Liens for taxes not yet due or
which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;


 


(c)                      carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s, landlord’s or other like Liens arising
in the ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;


 


(d)                      pledges or deposits in connection
with worker’s compensation, unemployment insurance and other social security legislation;


 


(e)                      deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business
(including, without limitation, Liens securing all those obligations described
in clause (d) of the definition of Ordinary Course Indebtedness);


 


(f)                        easements, rights-of-way,
restrictions, Liens granted by a third-party lessor to any Person and other
similar encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of any Person;


 


(g)                     attachment, judgment or other
similar Liens arising in connection with litigation or other legal proceedings
(and not otherwise an Event of Default hereunder) in the ordinary course of
business that is currently being contested in good faith by appropriate
proceedings, adequate reserves have been set aside, and no material property is
subject to a material risk of loss or forfeiture;


 


16

















 


(h)                     Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties and in connection with the importation of goods in the ordinary course
of Borrower’s and its Subsidiaries’ businesses;


 


(i)                        Liens arising solely by virtue
of any statutory or common law provision relating to banker’s liens, rights of
set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by Borrower in excess of those set forth by
regulations promulgated by the Federal Reserve Board, and (ii) such
deposit account is not intended by Borrower or any Subsidiary to provide
collateral to the depository institution;


 


(j)                        Liens on insurance proceeds in
favor of insurance companies with respect to the financing of insurance
premiums; and


 


(k)                    purported Liens evidenced by the
filing of UCC precautionary financing statements relating to operating leases
entered into in the ordinary course of business.


 


“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws; (b) with respect to any limited liability company, the
articles of formation and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership or joint venture agreement and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
secretary of state or other department in the state of its formation, in each
case as amended from time to time.


 


“Outstanding Obligations” means, as of any
date, and giving effect to making any Extensions of Credit requested on such
date and all payments, repayments and prepayments made on such date, (a) when
reference is made to all Lenders, the sum of (i) the aggregate outstanding
principal amount of all Loans, and (ii) all Letter of Credit Usage, and (b) when
reference is made to one Lender, the sum of (i) the aggregate outstanding
principal amount of all Loans made by such Lender, and (ii) such Lender’s
ratable risk participation in all Letter of Credit Usage.


 


“PBGC” means the Pension Benefit Guaranty
Corporation or any successor thereto established under ERISA.


 


“Pension Plan” means any “employee pension
benefit plan” (as such term is defined in Section 3(2) of ERISA),
other than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by Borrower or any ERISA Affiliate or to which Borrower
or any ERISA Affiliate contributes or has an obligation to contribute, or in
the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding five
plan years.


 


“Permitted Acquisition” has the meaning
specified in Section 7.5(e).


 


“Permitted Indebtedness” has the meaning
specified in Section 7.1.


 


17

















 


“Permitted Investments” has the meaning
specified in Section 7.5.


 


“Permitted Liens” has the meaning specified in Section 7.2.


 


“Permitted Swap Obligations” means all
obligations (contingent or otherwise) of Borrower or any of its Subsidiaries
existing or arising under Swap Contracts, provided that such obligations are
(or were) entered into by such Person for the purpose of: (i) directly
mitigating risks associated with liabilities, commitments or assets held or
reasonably anticipated by such Person, or changes in the value of securities
issued by such Person in conjunction with a securities repurchase program not
otherwise prohibited hereunder; or (ii) directly mitigating the dilution
associated with the issuance of convertible securities by Borrower, and not for
purposes of speculation or taking a “market view.”


 


“Person” means any individual, trustee,
corporation, general partnership, limited partnership, limited liability
company, joint stock company, trust, unincorporated organization, bank,
business association, firm, joint venture, Governmental Authority, or
otherwise.


 


“Plan” means any employee benefit plan
maintained or contributed to by Borrower or by any trade or business (whether
or not incorporated) under common control with Borrower as defined in Section 400l(b) of
ERISA and insured by the Pension Benefit Guaranty Corporation under Title IV of
ERISA.


 


“Pro Rata Share” means, with respect to each
Lender, the percentage of the combined Commitments set forth opposite the name
of such Lender on Schedule 2.1, as such share may be adjusted as
contemplated herein.


 


“PT” means Pacific Time.


 


“Reportable Event” means any of the events set
forth in Section 4043(b) of ERISA or the regulations thereunder, a
withdrawal from a Plan described in Section 4063 of ERISA, or a cessation
of operations described in Section 4062(c) of ERISA.


 


“Request for Extension of Credit” means, unless
otherwise specified herein, (a) with respect to a Borrowing, Conversion or
Continuation of Loans, a written request substantially in the form of Exhibit A,
and (b) with respect to a Letter of Credit Action, a Letter of Credit
Application; in each case duly completed and signed by a Responsible Officer of
Borrower and


 


“Requisite Lenders” means, as of any date of
determination: (a) if the Commitments are then in effect, Lenders having
in the aggregate more than 50% of the combined Commitments then in effect and (b) if
the Commitments have then been terminated and there are Outstanding
Obligations, Lenders holding Outstanding Obligations aggregating more than 50%
of such Outstanding Obligations; provided, however, that the voting rights of
any Lender that has failed to fund any amounts when required to do so hereunder
shall be limited to the Outstanding Obligations with respect to such Lender.


 


“Requisite Notice” means, unless otherwise
provided herein, (a) irrevocable written notice to the intended recipient
or (b) except with respect to Letter of Credit Actions (which must be in
writing), irrevocable telephonic notice to the intended recipient, promptly followed
by a


 


18

















 


written notice to such recipient. Such notices shall be (i) delivered
to such recipient at the address or telephone number specified on Schedule 10.2
or as otherwise designated by such recipient by Requisite Notice to
Administrative Agent, and (ii) if made by Borrower, given or made by a
Responsible Officer of Borrower. Any written notice delivered in connection
with any Loan Document shall be in the form, if any, prescribed herein or
therein. Any notice sent by other than hardcopy shall be promptly confirmed by
a telephone call to the recipient and, if requested by Administrative Agent, by
a manually-signed hardcopy thereof.


 


“Requisite Time” means, with respect to any of
the actions listed below, the time and date set forth below opposite such
action:


 


	
  Type
  of Action

  	
   

  	
  Applicable 

  Time

  	
   

  	
  Date of Action

  
	
  Delivery of Request for
  Extension

  of Credit for, or notice for:

  	
   

  	
   

  	
   

  	
   

  
	
  •             Borrowing
  or prepayment of, or Conversion into, Base Rate Loans

  	
   

  	
  10:00 a.m. PT

  	
   

  	
  Same date as such
  Borrowing, prepayment or Conversion

  
	
  •             Borrowing,
  prepayment or Continuation of, or Conversion into, Offshore Rate Loans or Termination
  of Commitment

  	
   

  	
  10:00 a.m. PT

  	
   

  	
  3 Business Days prior
  to such Borrowing, prepayment Continuation or Conversion

  
	
  •             Letter of Credit
  Action

  	
   

  	
  10:00 a.m. PT

  	
   

  	
  2 Business Days prior
  to such action (or such lesser time which is acceptable to Issuing Lender)

  
	
  •             Payments by Lenders
  or Borrower to Administrative Agent

  	
   

  	
  10:00 a.m. PT

  	
   

  	
  On date payment is due

  



 


“Responsible Officer” means the chief executive
officer, president, the chief financial officer, any vice president of finance,
the treasurer or the assistant treasurer of Borrower. Any document or
certificate hereunder that is signed by a Responsible Officer of Borrower shall
be conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
Borrower.


 


“Restricted Payment” means:


 


(a)                      the declaration or payment of any
dividend or distribution by Borrower or any Subsidiary, either in cash or
property, on any shares of Equity Securities of any class of Borrower or
any Subsidiary; and


 


(b)                      any other payment or distribution
by Borrower or any Subsidiary in respect of its Equity Securities, either
directly or indirectly.


 


19

















 


“Security Documents” means the General Security
Agreement, the Intellectual Property Security Agreement, the UK Pledge
Agreement and the Mexican Pledge Agreement.


 


“Senior Debt” means all Indebtedness excluding
Subordinated Debt.


 


“Senior Leverage Ratio” means as of any date of
determination, for Borrower and its Subsidiaries on a consolidated basis, the
ratio of (a) the principal amount of Senior Debt as of such date (but
excluding Indebtedness with respect to earn-out payments incurred pursuant to
the Delmarva Acquisition, the ENCO Systems Acquisition, the Suntech
Acquisition, the TLA Acquisition, the DSI Acquisition or other Permitted
Acquisitions) to (b) Consolidated EBITDA for the period of the four fiscal
quarters ending on, or ending most recently prior to, such date.


 


“Shareholders’ Equity” means, as of any date of
determination for Borrower and its Subsidiaries on a consolidated basis,
shareholders’ equity as of that date determined in accordance with GAAP.


 


“Solvent” means, as to any Person at any time,
that (i) the fair value of the property of such Person is greater than the
amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(32) of the Bankruptcy Code; (ii) the
present fair saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (iii) such Person is able
to realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability
to pay as such debts and liabilities mature; and (v) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person’s property would constitute unreasonably
small capital.


 


“Subordinated Debt” means any Indebtedness of
Borrower or its Subsidiaries in form and substance satisfactory to
Requisite Lenders in their sole and absolute discretion and expressly approved
by Requisite Lenders after the date hereof.


 


“Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned or controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references to a “Subsidiary” or to “Subsidiaries”
in this Agreement shall refer to a Subsidiary or Subsidiaries of Borrower.


 


“Suntech” means Suntech Systems, Inc.


 


“Swap Contract” means (a) any and all rate
swap transactions, basis swaps, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward


 


20

















 


foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject
to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., or any other master agreement.


 


“Swap Termination Value” means, in respect of
any one or more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a) the
amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may include
any Lender).


 


“Synthetic Lease Obligations” means all
monetary obligations of a Person under (a) a so-called synthetic,
off-balance sheet or tax retention lease, or (b) an agreement for the use
or possession of property creating obligations which do not appear on the
balance sheet of such Person but which, upon the insolvency or bankruptcy of
such Person, would be characterized as secured debt of such Person (without
regard for accounting treatment).


 


“Threshold Amount” means $5,000,000.


 


“TLA” means TLA Associates.


 


“To the best knowledge of” means, when
modifying a representation, warranty or other statement of any Person, that the
fact or situation described therein is known by such Person (or, (i) in
the case of Borrower, known by any Responsible Officer or executive officer of
Borrower, or, (ii) in the case of any other Person other than a natural
Person, known by any officer of such Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known by such
Person (or, (i) in the case of Borrower, would have been known by any
Responsible Officer or executive officer of Borrower, or, (ii) in the case
of any other Person other than a natural Person, would have been known by any
executive officer of such Person).


 


“Total Commitments” means an amount equal to
the aggregate amount of all Commitments (i.e., initially $15,000,000), as the
same may increase pursuant to Section 2.12 or decrease pursuant to section 2.5.


 


“Type” of Loan means (a) a Base Rate Loan
and (b) an Offshore Rate Loan.


 


“Total Leverage Ratio” means, as of any date of
determination, for Borrower and its Subsidiaries on a consolidated basis, the
ratio of (a) the principal amount of Indebtedness as of such date (but
excluding Indebtedness with respect to earn-out payments incurred pursuant to
the Delmarva Acquisition, the ENCO Systems Acquisition, the Suntech
Acquisition, the TLA


 


21

















 


Acquisition, the DSI Acquisition or other Permitted Acquisitions) to (b) Consolidated
EBITDA for the period of the four fiscal quarters ending on, or ending most
recently prior to, such date.


 


“UK Agreement” means that certain Charge over
Shares dated as of the date hereof, in favor of Administrative Agent (for the
account of each Lender in accordance with its Pro Rata Share) by Borrower in
the form of Exhibit E-3 hereto.


 


“Unfunded Pension Liability” means the excess
of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.


 


“Voting Power” shall mean, with respect to any
Person, the exclusive ability to control, through the ownership of shares of
capital stock, partnership interests, membership interests or otherwise, the
election of members of the board of directors or other similar governing body
of such Person. The holding of a designated percentage of Voting Power of a
Person means the ownership of shares of capital stock, partnership interests,
membership interests or other interests of such Person sufficient to control
exclusively the election of that percentage of the members of the board of
directors or similar governing body of such Person.


 


1.2                  Use of Certain
Terms.


 


(a)                      All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto or thereto,
unless otherwise defined therein.


 


(b)                      As used herein, unless the
context requires otherwise, the masculine, feminine and neuter genders and the
singular and plural include one another.


 


(c)                      The words “herein” and “hereunder”
and words of similar import when used in any Loan Document shall refer to the
Loan Documents as a whole and not to any particular provision thereof. The term
“including” is by way of example and not limitation. References herein to a
Section, subsection or clause shall, unless the context otherwise
requires, refer to the appropriate Section, subsection or clause in this
Agreement.


 


(d)                      The term “or” is disjunctive; the
term “and” is conjunctive. The term “shall” is mandatory; the term “may” is
permissive.


 


1.3                  Accounting
Terms. All accounting terms not specifically or completely defined in this
Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity
with, GAAP applied on a consistent basis, as in effect from time to time, and
applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.


 


1.4                  Rounding. Any
financial ratios required to be maintained by Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the
other


 


22

















 


component, carrying the result to one place more than the number of
places by which such ratio is expressed in this Agreement and rounding the
result up or down to the nearest number (with a round-up if there is no nearest
number), to the number of places by which such ratio is expressed in this
Agreement.


 


1.5                  Exhibits and
Schedules. All exhibits and schedules to this Agreement, either as
originally existing or as the same may from time to time be supplemented,
modified or amended, are incorporated herein by this reference.


 


1.6                  References to
Agreements and Laws. Unless otherwise expressly provided herein, (a) references
to agreements (including the Loan Documents) and other contractual instruments
shall include all amendments, restatements, extensions, supplements and other
modifications thereto (unless prohibited by any Loan Document), and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.


 


SECTION II

THE COMMITMENTS AND EXTENSIONS OF CREDIT


 


2.1                  Loans; Maximum
Amounts.


 


(a)                      Subject
to the terms and conditions set forth in this Agreement, each Lender severally
agrees to make, Convert and Continue Loans until the Maturity Date in such
amounts as Borrower may from time to time request; provided, however, that
the Outstanding Obligations of all Lenders shall not exceed at any time the
combined Commitments, as the same may be from time to time adjusted in
accordance with this Agreement and there shall be no more than five (5) Offshore
Rate Loans outstanding at any one time. The amount of the combined Commitments
initially totals $15,000,000. Following the date of this Agreement, the amount
of the combined Commitments may be increased by up to $45,000,000 to a
total not to exceed $60,000,000 in the event Administrative Agent, acting in
its sole and absolute discretion, elects to secure additional commitments from
the Existing Lenders or from New Lenders as otherwise provided herein. This is
a revolving credit and, subject to the terms and conditions hereof, Borrower may borrow,
Convert, Continue, prepay and reborrow Loans as set forth herein without
premium or penalty.


 


(b)                      Loans made by each Lender shall
be evidenced by one or more Notes. The date, amount and maturity of each Lender’s
Loans and payments and other particulars with respect thereto may be
endorsed on schedule(s) attached to its Note by each Lender and/or recorded on
one or more loan accounts or records maintained by such Lender in the ordinary
course of business. Such Notes, loan accounts and records shall be conclusive
absent manifest error of the amount of such Loans and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of Borrower to pay any amount owing with
respect to the Loans.


 


23

















 


2.2      Borrowings, Conversions and Continuations
of Loans.


 


(a)       Borrower
may irrevocably request a Borrowing, Conversion or Continuation of Loans in a
Minimum Amount therefor by delivering a Request for Extension of Credit
therefor by Requisite Notice to Administrative Agent not later than the
Requisite Time therefor. All Borrowings, Conversions and Continuations of Loans
shall constitute Base Rate Loans unless properly and timely otherwise
designated as set forth in the prior sentence.


 


(b)       Following receipt of a Request for
Extension of Credit, Administrative Agent shall promptly notify each Lender of
its Pro Rata Share thereof by Requisite Notice. In the case of a Borrowing of
Loans, each Lender shall make the funds for its Loan available to Administrative
Agent at Administrative Agent’s Office not later than the Requisite Time
therefor on the Business Day specified in such Request for Extension of Credit.
Upon satisfaction of the applicable conditions set forth in Section 4.2 (and,
in the case of an initial Extension of Credit hereunder, Section 4.1), all
funds so received shall be made available to Borrower in Dollars.
Administrative Agent shall promptly notify Borrower and Lenders of the interest
rate applicable to any Loan other than a Base Rate Loan upon determination of
same.


 


(c)       Except as otherwise provided herein, an
Offshore Rate Loan may be Continued or Converted only as of the last day of the
Interest Period for such Offshore Rate Loan. During the existence of a Default
or Event of Default, no Loans may be requested as, Converted into or Continued
as Offshore Rate Loans without the consent of Requisite Lenders, and Requisite
Lenders may demand that any or all of the then outstanding Offshore Rate Loans
be Converted immediately into Base Rate Loans.


 


(d)       If a Loan is to be made on the same date
that another Loan is due and payable, Borrower or Lenders, as the case may be,
shall, unless Administrative Agent otherwise requests, make available to
Administrative Agent the net amount of funds giving effect to both such Loans
and the effect for purposes of this Agreement shall be the same as if separate
transfers of funds had been made with respect to each such Loan.


 


(e)       The failure of any Lender to make any
Loan on any date shall not relieve any other Lender of any obligation to make a
Loan on such date, but no Lender shall be responsible for the failure of any
other Lender to so make its Loan.


 


2.3      Letters of Credit.


 


(a)       The
Letter of Credit Sublimit. Subject to the terms and
conditions set forth in this Agreement, until the Letter of Credit Expiration
Date, Issuing Lender shall take such Letter of Credit Actions as Borrower may
from time to time request; provided, however, that (i) the Outstanding
Obligations of each Lender shall not at any time exceed such Lender’s
Commitment; (ii) the Outstanding Obligations of all Lenders shall not at any
time exceed the combined Commitments; and (iii) Letter of Credit Usage shall
not at any time exceed the Letter of Credit Sublimit. Subject to subsection (g)
below and unless


 


24

















 


consented to by
Issuing Lender and Requisite Lenders, no Letter of Credit may expire more than
12 months after the date of its issuance or last renewal.


 


(b)       Letter
of Credit Actions. Subject to the terms and conditions set
forth in this Agreement, until the Letter of Credit Expiration Date, Issuing
Lender shall take such Letter of Credit Actions as Borrower may from time to
time request; provided, however, that the Outstanding Obligations of each
Lender shall not exceed such Lender’s Commitment and the Outstanding
Obligations of all Lenders shall not exceed the combined Commitments at any
time. Subject to subsection (g) below and unless consented to by Issuing Lender
and Requisite Lenders, no Letter of Credit may expire more than twelve (12)
months after the date of its issuance or last renewal; provided, however, that
no Letter of Credit shall expire after the Letter of Credit Expiration Date
unless Borrower shall post cash collateral with respect to such Letter of
Credit in such manner as is reasonably satisfactory to Lender and the amount of
the Letter of Credit does not exceed the Letter of Credit Sublimit.


 


(c)       Requesting
Letter of Credit Actions. Borrower may irrevocably request a
Letter of Credit Action in a Minimum Amount therefor by delivering a Letter of
Credit Application therefor to Issuing Lender, with a copy to Administrative
Agent (who shall notify Lenders) by Requisite Notice not later than the
Requisite Time therefor. Each Letter of Credit Action shall be in a form
acceptable to Issuing Lender in its sole discretion. Unless Administrative
Agent notifies Issuing Lender that such Letter of Credit Action is not
permitted hereunder, or Issuing Lender notifies Administrative Agent that it
has determined that such Letter of Credit Action is contrary to any Laws or
policies of Issuing Lender, Issuing Lender shall, upon satisfaction of the
applicable conditions set forth in Section 4.2 with respect to any Letter of
Credit Action constituting an Extension of Credit, effect such Letter of Credit
Action. This Agreement shall control in the event of any conflict with any
Letter of Credit Application. Upon the issuance of a Letter of Credit, each
Lender shall be deemed to have purchased from Issuing Lender a risk
participation therein in an amount equal to such Lender’s Pro Rata Share times
the amount of such Letter of Credit.


 


(d)       Reimbursement
of Payments Under Letters of Credit. Borrower shall reimburse
Issuing Lender through Administrative Agent for any payment that Issuing Lender
makes under a Letter of Credit on or before the date of such payment; provided,
however, that if the conditions precedent set forth in Section 4.2 can be
satisfied, Borrower may request a Borrowing of Loans pursuant to Section 2.2 to
reimburse Issuing Lender for such payment, or, failing to make such request,
Borrower shall be deemed to have requested a Borrowing of Base Rate Loans on
such payment date pursuant to subsection (e) below.


 


(e)       Funding
by Lender When Issuing Lender Not Reimbursed. Upon any
drawing under a Letter of Credit, Issuing Lender shall notify Administrative
Agent and Borrower. If Borrower fails to timely make the payment required
pursuant to subsection (d) above, Issuing Lender shall notify Administrative
Agent of such fact and the amount of such unreimbursed payment. Administrative
Agent shall promptly notify each Lender of its Pro Rata Share of such amount by
Requisite Notice. Each Lender shall make funds


 


25

















 


in an amount equal
its Pro Rata Share of such amount available to Administrative Agent at
Administrative Agent’s Office not later than the Requisite Time therefor on the
Business Day specified by Administrative Agent, Administrative Agent shall remit
the funds so received to Issuing Lender. The obligation of each Lender to so
reimburse Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default or Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of Borrower to reimburse Issuing Lender for the amount of
any payment made by Issuing Lender under any Letter of Credit, together with
interest as provided herein.


 


(f)        Nature
of Lenders’ Funding. If the conditions precedent set forth in
Section 4.2 can be satisfied (except for the giving of a Request for Extension
of Credit) on any date Borrower is obligated to, but fails to, reimburse
Issuing Lender for a drawing under a Letter of Credit, the funding by Lenders
pursuant to the previous subsection shall be deemed to be a Borrowing of Base
Rate Loans (without regard to the Minimum Amount therefor) deemed requested by
Borrower. If the conditions precedent set forth in Section 4.2 cannot be
satisfied on the date Borrower is obligated to, but fails to, reimburse Issuing
Lender for a drawing under a Letter of Credit, the funding by Lenders pursuant
to the previous subsection shall be deemed to be a funding by each Lender of
its risk participation in such Letter of Credit, and each Lender making such
funding shall thereupon acquire a pro rata participation, to the extent of its
reimbursement, an interest in the claim of Issuing Lender against Borrower in
respect of such payment and shall share in accordance with that pro rata
participation, in any payment made by Borrower with respect to such claim. Any
amounts made available by a Lender under its risk participation shall be
payable by Borrower upon demand of Administrative Agent, and shall bear
interest at a rate per annum equal to the Default Rate.


 


(g)       Obligations Absolute. The
obligation of Borrower to pay to Issuing Lender the amount of any payment made
by Issuing Lender under any Letter of Credit shall be absolute, unconditional,
and irrevocable. Without limiting the foregoing, Borrower’s obligation shall
not be affected by any of the following circumstances:


 


(i)        any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto;


 


(ii)       any amendment or waiver of or any consent to departure from
such Letter of Credit, this Agreement, or any other agreement or instrument
relating hereto or thereto;


 


(iii)     the
existence of any claim, setoff, defense, or other rights which Borrower may
have at any time against Issuing Lender, Administrative Agent or any Lender,
any beneficiary of such Letter of Credit (or any persons or entities for whom
any such beneficiary may be acting) or any other Person, whether in connection
with such Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, or any unrelated transactions;


 


26

















 


(iv)      any demand, statement, or any other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever so long as any such document appeared to comply with
the terms of the Letter of Credit;


 


(v)        any payment made by Issuing Lender under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Laws;


 


(vi)      the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented by
documents presented in connection with such Letter of Credit or for any
difference between any such property and the character, quality, quantity,
condition, or value of such property as described in such documents;


 


(vii)     the time, place, manner, order or contents
of shipments or deliveries of property as described in documents presented in
connection with such Letter of Credit or the existence, nature and extent of
any insurance relative thereto;


 


(viii)    the solvency or financial responsibility of
any party issuing any documents in connection with such Letter of Credit;


 


(ix)      any failure or delay in notice of shipments or arrival of any
property;


 


(x)       any error in the transmission of any message relating to such
Letter of Credit not caused by Issuing Lender, or any delay or interruption in
any such message;


 


(xi)      any error, neglect or default of any correspondent of Issuing
Lender in connection with such Letter of Credit;


 


(xii)     any
consequence arising from acts of God, wars, insurrections, civil unrest,
terrorist action, disturbances, labor disputes, emergency conditions or other
causes beyond the control of Issuing Lender;


 


(xiii)   so
long as Issuing Lender in good faith determines that the document appears to
comply with the terms of the Letter of Credit, the form, accuracy, genuineness
or legal effect of any contract or document referred to in any document
submitted to Issuing Lender in connection with such Letter of Credit; and


 


(xiv)    any
other circumstances whatsoever where Issuing Lender has acted in good faith.


 


In addition, Borrower will promptly examine a copy of each Letter of
Credit and amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrower’s instructions or other irregularity, Borrower will
immediately notify Issuing Lender in


 


27

















 


writing. Borrower
shall be conclusively deemed to have waived any such claim against Issuing
Lender and its correspondents unless such notice is given as aforesaid.


 


(h)       Role
of Issuing Lender. Each Lender and Borrower agree that, in
paying any drawing under a Letter of Credit, Issuing Lender shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Administrative
Agent-Related Person nor any of the respective correspondents, participants or
assignees of Issuing Lender shall be liable to any Lender for any action taken
or omitted in connection herewith at the request or with the approval of
Lenders or Requisite Lenders, as applicable; any action taken or omitted in the
absence of gross negligence or willful misconduct; or the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit. Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude Borrower’s pursuing such rights and remedies as it may
have against the beneficiary or transferee at law or under any other agreement.
No Administrative Agent-Related Person, nor any of the respective
correspondents, participants or assignees of Issuing Lender, shall be liable or
responsible for any of the matters described in subsection (g) above. In
furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and Issuing Lender shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.


 


(i)        Applicability
of ISP98 and UCP. Unless otherwise expressly agreed by
Issuing Lender and Borrower when a Letter of Credit is issued and subject to
applicable laws, performance under Letters of Credit by Issuing Lender, its
correspondents, and beneficiaries will be governed by, with respect to standby
Letters of Credit, the rules of the “International Standby Practices 1998”
(ISP98) or such later revision as may be published by the International Chamber
of Commerce (the “ICC”).


 


(j)        Letter
of Credit Fee. On each Applicable Payment Date, Borrower
shall pay to Administrative Agent in arrears, for the account of each Lender in
accordance with its Pro Rata Share, a Letter of Credit fee equal to the
Applicable Margin for Offshore Rate Loans on a per annum basis times the actual
daily maximum amount available to be drawn under each Letter of Credit for the period since the later of the Closing
Date and the previous Applicable Payment Date. If there is any change in the
Applicable Margin during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Margin separately for each period during such
quarter that such Applicable Margin was in effect.


 


(k)       Fronting
Fee and Documentary and Processing Charges Payable to Issuing Lender. On
each Applicable Payment Date, Borrower shall pay to


 


28

















 


Administrative Agent for the sole account of Issuing Lender a fronting
fee in an amount equal to 0.150% per annum on the daily average face amount of
all outstanding Letters of Credit, payable in arrears. In addition, Borrower
shall pay directly to Issuing Lender, upon demand, for its sole account its
customary documentary and processing charges in accordance with its standard
schedule, as from time to time in effect, for any Letter of Credit Action or
other occurrence relating to a Letter of Credit for which such charges are
customarily made. Such fees and charges are nonrefundable.


 


2.4      Prepayments.


 


(a)       Upon Requisite Notice to Administrative Agent not later than the
Requisite Time therefor, Borrower may at any time and from time to time
voluntarily prepay Loans in part in the Minimum Amount therefor or in full
without premium or penalty. Administrative Agent will promptly notify each Lender
thereof and of such Lender’s Pro Rata Share of such prepayment. Any prepayment
of a Loan shall be accompanied by all accrued interest thereon and any
prepayment of an Offshore Rate Loan shall be made together with the amounts set
forth in Section 3.5.


 


(b)       If
for any reason the Outstanding Obligations exceed the combined Commitments as
in effect or as reduced because of any limitation set forth in this Agreement
or otherwise, Borrower shall immediately prepay Loans in an aggregate amount
equal to such excess.


 


2.5      Reduction or Termination of Commitments. Upon Requisite Notice to Administrative Agent
not later than the Requisite Time therefor, Borrower may at any time and from
time to time, without premium or penalty, permanently and irrevocably reduce the
Commitments in a Minimum Amount therefor to an amount not less than the
Outstanding Obligations at such time or terminate the Commitments. Any such
reduction or termination shall be accompanied by payment of all accrued and
unpaid commitment fees with respect to the portion of the Commitments being
reduced or terminated. Administrative Agent shall promptly notify Lenders of
any such request for reduction or termination of the Commitments. Each Lender’s
Commitment shall be reduced by an amount equal to such Lender’s Pro Rata Share
times the amount of such reduction.


 


2.6      Principal and Interest.


 


(a)       Except as otherwise provided hereunder, if not sooner paid, Borrower
agrees to pay the outstanding principal amount of each Loan on the Maturity
Date.


 


(b)       Subject
to subsection (c) below, and unless otherwise specified herein, Borrower shall
pay interest on the unpaid principal amount of each Loan (before and after
default, before and after maturity, before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Laws) from the
date borrowed until paid in full (whether by acceleration or otherwise) on each
Applicable Payment Date at a rate per annum equal to the interest rate
determined in accordance with the definition of such type of Loan, plus the
Applicable Margin specified in the definition in this Agreement of Applicable
Margin with respect to such type of Loan.


 


29

















 


(c)       Notwithstanding
subsection (b) of this Section, while any Event of Default exists or after
acceleration, Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
outstanding Obligations, at the Default Rate.


 


2.7      Fees.


 


(a)       Commitment Fee. Borrower shall pay to Administrative Agent
(for the account of each Lender according to its Pro Rata Share) the respective
commitment fee (the “Commitment Fee”) set forth in the
definition of Applicable Margin, calculated on the average unused amount of the
combined Commitments. The commitment fee shall be calculated and payable
quarterly in arrears on each Applicable Payment Date. The Commitment Fee shall
continue to accrue at all times, including at any time during which one or more
conditions in Section 4 are not met.


 


(b)       Agency and Arrangement Fees. Borrower shall pay to Administrative Agent
and Arranger an administrative agency fee and a structuring and arrangement
fee, respectively, in such amounts and on the Closing Date as set forth in a
separate letter agreement dated March 16, 2005 among Borrower, Administrative
Agent and Arranger (the “Fee Letter”). Such fees are
for the services to be performed by Administrative Agent in acting as
Administrative Agent and for the services of Arranger in structuring and
arranging the credit facilities under this Agreement, respectively, and are
fully earned on the date paid. The Fee Letter may be modified to reflect the
mutual agreement of Borrower, Administrative Agent and Arranger to reflect
those additional fees associated with any increase of the Total Commitment as
may be agreed pursuant to the terms of Section 2.12 hereof. All fees payable
under the Fee Letter are solely for Administrative Agent’s and Arranger’s own
account and are nonrefundable.


 


(c)       Lenders’ Upfront Fee. On the Closing Date, Borrower shall pay to
Administrative Agent for the account of each Lender the balance due of an
upfront fee in the amount set forth in the Fee Letter. Such upfront fees are
consideration for the Commitments by each Lender under this Agreement and is
fully earned on the date paid. The upfront fee paid to each Lender is solely
for its own account and is nonrefundable.


 


2.8      Computation of Interest and Fees. Computation of interest on Base Rate Loans
when the Base Rate is determined by KeyBank’s “prime rate” shall be calculated
on the basis of a year of 365 or 366 days, as the case may be, and the actual
number of days elapsed. Computation of other types of interest and all fees
shall be calculated on the basis of a year of 360 days and the actual number of
days elapsed, which results in a higher yield to Lenders than a method based on
a year of 365 or 366 days. Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, provided that any Loan
that is repaid on the same day on which it is made shall bear interest for one
day.


 


30

















 


2.9      Making Payments.


 


(a)       Except as otherwise provided herein, all payments by Borrower or any
Lender hereunder shall be made to Administrative Agent at Administrative Agent’s
Office not later than the Requisite Time for such type of payment. All payments
received after such Requisite Time shall be deemed received on the next
succeeding Business Day. All payments shall be made in immediately available
funds in lawful money of the United States of America. All payments by Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.


 


(b)       Upon
satisfaction of any applicable terms and conditions set forth herein,
Administrative Agent shall promptly pay amounts received in accordance with the
prior subsection available in like funds as received, as follows: (i) if
payable to Borrower, by crediting such account as Borrower may designate in
writing to Administrative Agent from time to time, and (ii) if payable to any
Lender, by wire transfer to such Lender at its Lending Office. In the case of
amounts held by Administrative Agent that are payable to Borrower, if any
applicable terms and conditions are not so satisfied, Administrative Agent
shall return any funds it is holding that would otherwise be payable to
Borrower to the Lenders making such funds available, without interest.


 


(c)       Subject
to the definition of “Interest Period,” if any payment to be made by Borrower
shall come due on a day other than a Business Day, payment shall instead be
considered due on the next succeeding Business Day, and such extension of time
shall be reflected in computing interest and fees.


 


(d)       Unless
Borrower or any Lender has notified Administrative Agent prior to the date any
payment to be made by it is due, that it does not intend to remit such payment,
Administrative Agent may, in its sole and absolute discretion, assume that
Borrower or Lender, as the case may be, has timely remitted such payment and
may, in its sole and absolute discretion and in reliance thereon, make
available such payment to the Person entitled thereto. If such payment was not
in fact remitted to Administrative Agent in immediately available funds, then:


 


(i)        if
Borrower failed to make such payment, each Lender shall forthwith on demand
repay to Administrative Agent the amount of such assumed payment made available
to such Lender, together with interest thereon in respect of each day from and
including the date such amount was made available by Administrative Agent to
such Lender to the date such amount is repaid to Administrative Agent at the
Federal Funds Rate; and


 


(ii)       if
any Lender failed to make such payment, Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent’s
demand therefor, Administrative Agent promptly shall notify Borrower, and
Borrower shall pay such corresponding amount to Administrative Agent.
Administrative Agent also shall be entitled to recover from such Lender
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made


 


31

















 


available by
Administrative Agent to Borrower to the date such corresponding amount is
recovered by Administrative Agent, (A) from such Lender at a rate per annum
equal to the daily Federal Funds Rate, and (B) from Borrower, at a rate per
annum equal to the interest rate applicable to such Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which Administrative Agent or Borrower
may have against any Lender as a result of any default by such Lender
hereunder.


 


(e)       If Administrative Agent or any Lender is
required at any time to return to Borrower, or to a trustee, receiver,
liquidator, custodian, or any official under any proceeding under Debtor Relief
Laws, any portion of a payments made by Borrower, each Lender shall, on demand
of Administrative Agent, return its share of the amount to be returned, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the daily Federal Funds Rate.


 


2.10    Funding
Sources. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.


 


2.11    Collateral.
Borrower’s Obligations are secured by or will be secured by
the Security Agreement Documents.


 


2.12    Additional
Loan Commitments.


 


(a)       Provided
that no Default of Event of Default shall have occurred and be continuing,
Borrower shall have the option from time to time, by giving written notice (an “Increase Notice”), to
the Administrative Agent on or before the Maturity Date subject to the terms
and conditions set forth in this Agreement, to increase the Total Commitments
by an amount up to $45,000,000 (the amount of the requested increase to be set
forth in the Increase Notice) (which, assuming no previous reduction in the
Commitments, would result in a maximum Total Commitment of $60,000,000). The
increase in the Total Commitment pursuant to any such particular request shall
be at least in the Minimum Amount but in no event greater than $45,000,000 less
any previous increase in the Total Commitment pursuant to this Section and less
any reduction pursuant to Section 2.5 (a “Requested Increase”). The Increase
Notice shall contain such other details with respect to such Requested Increase
as the Administrative Agent shall reasonably request.


 


(b)       Upon receipt of Increase Notice, from
Borrower, Administrative Agent shall promptly send a copy of the Increase
Notice to each Lender. In the event Requisite Lenders, acting in their
respective sole and absolute discretion, instruct Administrative Agent to do
so, Administrative Agent shall act to facilitate the Requested Increase as
expressly set forth in this Section 2.12. Following such instruction of
Requisite Lenders, Administrative Agent shall send a request to each Lender
that each such Lender increase its Commitment by an amount equal to its Pro
Rata Share of the Requested Increase (the “First Request”). Each Lender shall
have the right, but not the obligation, acting in its


 


32

















 


sole and absolute
discretion, to increase its Commitment by an amount equal to its Pro Rata Share
of the Requested Increase, and shall have a period of fifteen (15) days from
the First Request to notify Administrative Agent whether or not such Lender
elects so to increase its Commitment. Any Lender that fails to respond to the
First Request within such fifteen (15)-day period will be deemed to have
elected not to increase their respective Commitment. If all Lenders elect to
increase their respective Commitments by amounts equal to their respective Pro
Rata Share of the Requested Increase, Administrative Agent shall so notify
Borrower and Lenders, and Borrower shall proceed in accordance with Section (c)
below. If any Lender (any such Lender, a “Declining Lender”) shall not
elect or shall be deemed to have elected not to increase its Commitment as
aforesaid, (i) the amount of such Declining Lender’s Commitment shall remain unchanged,
(ii) Administrative Agent shall notify Borrower and each of the other Lenders
as to which Lenders have elected to increase their Commitments and by what
amounts and (iii) if Borrower so requests, Administrative Agent shall either
(A) solicit from the Lenders that elected to increase their respective
Commitments a further increase in their Commitments in an aggregate amount
equal to all or any portion of the aggregate amount of the Declining Lender’s
Pro Rata Share of the Requested Increase (the “Shortfall”) or (B) submit a list of proposed
lenders that are not then a party to this Credit Agreement to Borrower for its
review and approval (such approval not to be unreasonably withheld or delayed)
in order to obtain additional Commitments in an amount equal to the Shortfall.


 


(c)       In
connection with the Requested Increase in the Commitments of some or all of the
Lenders as provided in Section 2.12(b) above, Borrower shall execute a
modification to its Notes (each a “Modified Note”) evidencing such increase, as well as
such other modifications to this Credit Agreement as Administrative Agent shall
reasonably request. In connection with the addition of new lenders as a result
of solicitations by Administrative Agent pursuant to 2.12(b) above (the “New Lenders”), Borrower,
Administrative Agent and each New Lender shall execute an Acceptance Letter in
the form of Exhibit G, Borrower shall execute a Note to each New Lender in the
amount of the New Lender’s Commitment (a “New Note”) and Borrower, Administrative
Agent and the Lenders shall execute such modifications to this Credit Agreement
(including, without limitation, modifications of the financial covenants
contained in Sections 7.12(a) and 7.12(b) hereof) as Administrative Agent shall
reasonably request, whereupon the New Lender shall become, and have the rights
and obligations of a “Lender”, with a Commitment in the amount set forth in
such Acceptance Letter. Each Modified Note and New Note shall constitute a “Note”
for all purposes of this Credit Agreement. Borrower shall also execute and
deliver to Administrative Agent and the Lenders such additional documents,
instruments, certifications and opinions as the Administrative Agent may
require in its sole and absolute discretion, including, without limitation, a
Compliance Certificate, demonstrating compliance with all covenants,
representations and warranties set forth in the Loan Documents after giving
effect to the increase, and any amendments to Security Documents, as
Administrative Agent may request, and Borrower shall pay any updated UCC
searches, all filing costs and fees, Attorney Costs and any and all intangible
taxes or other taxes, assessments or charges or any similar fees, taxes or
expenses arising in connection with such increase.


 


33

















 


(d)       If at the time a New Lender becomes a
Lender (or a Lender increases its Commitment) pursuant to this Section 2.12
there is any principal outstanding under the existing Notes of the previously
admitted Lenders (the “Existing Lenders”), such New Lenders (or Lender increasing
its Commitment) shall remit to Administrative Agent an amount equal to the
Outstanding Percentage (as defined below) multiplied by the Commitment of the
New Lenders (or the amount of the increase in the Commitment of a Lender
increasing its Commitment), which amount shall be deemed advanced under the
Loan of the New Lender (or the Lender increasing its Commitment).
Administrative Agent shall pay such amount to the Existing Lenders in
accordance with the Existing Lenders’ respective Pro Rata Shares (as calculated
immediately prior to the admission of the New Lenders (or the increase in a
Lender’s Commitment), and such payment shall effect an automatic reduction of
the outstanding principal balance under the respective Notes of the Existing
Lenders. For purposes of this Section, the term “Outstanding
Percentage” means the ratio of (i) the aggregate outstanding
principal amount under the Notes of the Existing Lenders, immediately prior to
the admission of the New Lender (or the increase in the Commitment of a
Lender), to (ii) the aggregate of the Commitments of the Existing Lenders (as
increased pursuant to this Section, if applicable) and the New Lenders.
Administrative Agent shall distribute an amended Schedule 2.1, which shall
thereafter be incorporated into this Agreement, to reflect adjustments to
Lenders and their Commitments.


 


(e)       Notwithstanding anything in this Section
2.12 to the contrary, making the Requested Increase is subject to the approval of
Administrative Agent and the Lenders or New Lenders, as applicable, acting in
their sole and absolute discretion, and additional conditions and fees may be
required by them in connection therewith .


 


SECTION III

TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.1      Taxes.


 


(a)       Any
and all payments by Borrower to or for the account of Administrative Agent or
any Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of Administrative
Agent and each Lender, (i) taxes imposed on or measured by its net income, (ii)
franchise taxes imposed on it (in lieu of net income taxes) by the jurisdiction
(or any political subdivision thereof) under the Laws of which Administrative
Agent or such Lender, as the case may be, is organized or maintains a lending
office; (iii) any branch profits tax imposed by the United States of America or
any similar tax imposed by another jurisdiction in which Borrower is located;
(iv) applicable withholding tax imposed by Sections 1441 and 1442 of the Code
that is withheld by Administrative Agent from a payment to any Foreign Lender
(as defined in Section 10.21 of this Agreement) pursuant to Section 10.21; and
(v) any penalties, interest, costs and expenses (including Attorney Costs)
imposed on Administrative Agent


 


34

















 


or any Lender
arising from the assertion by any Governmental Authority that Administrative
Agent did not properly withhold any tax or other amount from payments made in
respect of any Foreign Lender (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as “Taxes”). If Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to Administrative Agent or any Lender (other than as a result of a
breach by a Foreign Lender of its obligations under Section 10.22 of this
Agreement, (A) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section), Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (B) Borrower shall make such deductions, (C) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Laws, and (D) within 30 days after the date of such payment,
Borrower shall furnish to Administrative Agent (who shall forward the same to
such Lender) the original or a certified copy of a receipt evidencing payment
thereof.


 


(b)       In addition, Borrower agrees to pay any
and all present or future stamp, court or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from any
payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other Taxes”).


 


(c)       If
Borrower shall be required by the Laws of any jurisdiction outside the United
States to deduct any Taxes from or in respect of any sum payable under any Loan
Document to Administrative Agent or any Lender, Borrower shall also pay to such
Lender or Administrative Agent (for the account of such Lender), at the time
interest is paid, such additional amount that the respective Administrative
Agent or such Lender specifies as necessary to preserve the after tax yield
(after factoring in United States (federal and state) taxes imposed on or measured
by net income) such Lender would have received if such deductions (including
deductions applicable to additional sums payable under this Section ) had not
been made.


 


(d)       Borrower agrees to indemnify, defend and
hold Administrative Agent and each Lender harmless for (i) the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section) paid by
Administrative Agent and such Lender; and (ii) any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto; provided that
(A) Borrower shall not be obligated to indemnify the Administrative Agent or
any Lender for any penalties described in clause (ii) above to the extent the
Administrative Agent or such Lender, as applicable, (1) had actual knowledge of
the existence of the tax, interest, or expense, the non-payment of which gave
rise to such penalties, and (2) failed to give Borrower notice of such tax,
interest or expense within ten (10) Business Days after the Administrative
Agent or such Lender received actual knowledge of the existence thereof; and
(B) except to the extent contemplated in clause (A) of this Section 3.1(d),
nothing contained in this subsection (d) shall be deemed to imply any
obligation on the part of the Administrative Agent or any Lender to provide


 


35

















 


Borrower with the
notice of any such tax, penalty, interest or expense. Payment under this
subsection (d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefor.


 


3.2      Illegality.
If any Lender determines that any Laws have made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable Lending Office to make, maintain or fund Offshore Rate
Loans, or materially restricts the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the applicable offshore Dollar market,
or to determine or charge interest rates based upon the Offshore Rate, then, on
notice thereof by Lender to Borrower through Administrative Agent, any
obligation of such Lender to make Offshore Rate Loans shall be suspended until
such Lender notifies Administrative Agent and Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
Borrower shall, upon demand from such Lender (with a copy to Administrative
Agent), prepay or Convert all Offshore Rate Loans of such Lender, either on the
last day of the Interest Period thereof, if such Lender may lawfully continue
to maintain such Offshore Rate Loans to such day, or immediately, if Lender may
not lawfully continue to maintain such Offshore Rate Loans. Each Lender agrees
to designate a different Lending Office if such designation will avoid the need
for such notice and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender.


 


3.3      Inability
to Determine Rates. If, in connection with any Request for
Extension of Credit involving any Offshore Rate Loan, Administrative Agent
determines that (a) Dollar deposits are not being offered to banks in the
applicable offshore dollar market for the applicable amount and Interest Period
of the requested Offshore Rate Loan, (b) adequate and reasonable means do not
exist for determining the underlying interest rate for such Offshore Rate Loan,
or (c) such underlying interest rate does not adequately and fairly reflect the
cost to Lender of funding such Offshore Rate Loan, Administrative Agent will
promptly notify Borrower and all Lenders. Thereafter, the obligation of all
Lenders to make or maintain such Offshore Rate Loan shall be suspended until
Administrative Agent revokes such notice. Upon receipt of such notice, Borrower
may revoke any pending request for a Borrowing of Offshore Rate Loans or,
failing that, be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.


 


3.4      Increased
Cost and Reduced Return; Capital Adequacy.


 


(a)       If any Lender
determines that any Laws announced after the date hereof:


 


(i)        impose on such Lender any Tax, duty, or
other charge with respect to any Offshore Rate Loans or its obligation to make
Offshore Rate Loans (other than as a result of any change in the rate of
applicable taxes imposed on or measured by the net income of Agent or any
Lender);


 


(ii)       change the basis on which Taxes are
imposed on any amounts payable to such Lender under this Agreement in respect
of any Offshore Rate Loans;


 


(iii)     impose or modify any reserve, special
deposit, or similar requirement (other than the reserve requirement utilized in
the determination of the


 


36

















 


Offshore Rate)
relating to any extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (including its Commitment);
or


 


(iv)      impose on such Lender or on the offshore
Dollar interbank market any other condition affecting this Agreement or any of
such extensions of credit or liabilities or commitments;


 


and the result of
any of the foregoing is to increase the cost to such Lender of making,
Converting into, Continuing, or maintaining any Offshore Rate Loans or to
reduce any sum received or receivable by such Lender under this Agreement with
respect to any Offshore Rate Loans, then from time to time upon demand of such
Lender (with a copy of such demand to Administrative Agent), Borrower shall pay
to such Lender such additional amounts as will compensate such Lender for such
increased cost or reduction (except to the extent that such increased cost or
reduction is an amount subject to Section 3.1, in which case the sum received
or receivable by such Lender shall be increased in accordance with the
provisions of Section 3.1).


 


(b)       If any Lender determines that any change
in or the interpretation of any Laws announced after the date hereof have the
effect of reducing the rate of return on the capital of such Lender or
compliance by such Lender (or its Lending Office) or any corporation
controlling such Lender as a consequence of such Lender’s obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender’s desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to Administrative Agent), Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction; provided, however, that Borrower shall not be required to
pay additional amounts to compensate any Lender for (i) any applicable
withholding tax imposed by Sections 1441 and 1442 of the Code that is withheld
by Administrative Agent from a payment to any Foreign Lender pursuant to
Section 10.22, (ii) any reduction in connection with any penalties, interest,
costs and expenses (including Attorney Costs) arising from the assertion by any
Governmental Authority that Administrative Agent did not properly withhold any
tax or other amount from payments made in respect of any Foreign Lender; or
(iii) any change in the rate of applicable taxes imposed on or measured by net
income.


 


3.5      Breakfunding
Costs. Upon demand of any Lender (with a copy to
Administrative Agent) from time to time, Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:


 


(a)       any Continuation, Conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or


 


(b)       any failure by Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
Continue or Convert any Loan other than a Base Rate Loan on the date or in the
amount notified by Borrower;


 


37

















 


including any loss
of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained. Borrower shall
also pay any customary administrative fees charged by such Lender in connection
with the foregoing.


 


3.6      Matters Applicable to all Requests for
Compensation.


 


(a)       The Administrative Agent or any Lender
claiming compensation under this Section 3, Lender shall deliver to Borrower a
certificate setting forth in reasonable detail the additional amount or amounts
to be paid to it hereunder, which shall be conclusive in the absence of clearly
demonstrable error. In determining such amount, Lenders may use any reasonable
averaging and attribution methods. For purposes of this Section 3, a Lender
shall be deemed to have funded each Offshore Rate Loan at the Offshore Rate for
such Loan by a matching deposit or other borrowing in the offshore Dollar
interbank market, whether or not such Offshore Rate Loan was in fact so funded.


 


(b)       Borrower shall not be obligated to pay
any amount under this Section 3 which arose prior to the date which is 180 days
preceding the date of such demand or is attributable to periods prior to the
date which is 180 days preceding the date of such demand; provided, however,
that in the event any Law is enacted that retroactively imposes any cost or
charge upon the Administrative Agent or any Lender that would otherwise be a
basis for compensation under Sections 3.1 through 3.5, the Administrative Agent
or such Lender may make a demand for such compensation through and including
the date which is 180 days after the date upon which such Law takes effect.


 


(c)       Upon any Lender making a claim for
compensation under Section 3.1 or 3.4, Borrower may remove and replace such
Lender in accordance with Section 10.22.


 


3.7      Survival.
All of Borrower’s obligations under this Section 3 shall survive for
a period of one (1) year after the later of termination of the Commitments, and
payment in full of all Obligations; provided, however, that the obligation of
Borrower to make any payment under this Section 3 is contingent upon the
receipt by Borrower of the certificate described in Section 3.6(a) within the
later of (a) 180 days after the later of the repayment of all Loans, the
termination of all Letters of Credit and the termination of the Commitment, or
(b) in the case of any Law retroactively imposing any cost or charge upon the
Administrative Agent or any Lender, 180 days after the date upon which such Law
takes effect.


 


SECTION IV

CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT


 


4.1      Conditions
of Initial Extension of Credit. The obligation of each Lender
to make its initial Extension of Credit hereunder is subject to satisfaction of
the following conditions precedent:


 


(a)       Unless waived by Administrative Agent and
Lenders, Administrative Agent’s receipt of the following, each of which shall
be originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the applicable
Credit Party, each dated on, or in the case of third-party 


 


38

















 


certificates,
recently before the Closing Date and each in form and substance satisfactory to
Administrative Agent, Lenders and their legal counsel:


 


(i)        executed counterparts of this Agreement,
sufficient in number for distribution to Administrative Agent, Lenders and
Borrower;


 


(ii)       the Notes executed by Borrower in favor of each Lender, each
in a principal amount equal to such Lender’s Commitment;


 


(iii)     the Multi-Party Guaranty;


 


(iv)      the General Security Agreement, together
with such certificates, stock powers, registrations and other supporting
documents as Administrative Agent shall reasonably require;


 


(v)        the Intellectual Property Security
Agreement together with such certificates, stock powers, registrations and
other supporting documents as Administrative Agent shall reasonably require;


 


(vi)      the UK Pledge Agreement together with such
certificates, stock powers, registrations and other supporting documents as
Administrative Agent shall reasonably require;


 


(vii)     the Mexican Pledge Agreement together with
such certificates, stock powers, registrations and other supporting documents
as Administrative Agent shall reasonably require;


 


(viii)    the original Fee Letter;


 


(ix)      such certificates of resolutions or other
action, incumbency certificates and/or other certificates of Responsible
Officers of Borrower as Administrative Agent may require to establish the
identities of and verify the authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer thereof;


 


(x)       such evidence as Administrative Agent and
any Lender may reasonably require to verify that each Credit Party is duly
organized or formed, validly existing, in good standing and qualified to engage
in business in such jurisdiction(s) as specified in Section 5.1, including
certified copies of Borrower’s certificates of good standing and/or
qualification to engage in business, tax clearance certificates, and the like;


 


(xi)      a certificate signed by a Responsible
Officer of each Credit Party (A) that the representations and warranties made
by Borrower herein are true and correct on and as of the Closing Date (except
to the extent such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date),
(B) that Borrower is in compliance with all the terms and provisions of the
Loan Documents to which it is a party, and no Default or Event of Default shall
have


 


39

















 


occurred and be
continuing, and (C) that there has been no event or circumstance since the date
of the Audited Financial Statements which has a Material Adverse Effect;


 


(xii)     opinions of counsel to Borrower in substantially
the form of Exhibit H;


 


(xiii)   with respect to the property owned or leased
by Borrower and each Guarantor Borrower shall have caused to be delivered to
Administrative Agent (i) the results of Uniform Commercial Code lien searches
for the states of California and Delaware and any other state where a Guarantor
is organized or has its chief executive office, satisfactory to Agent and the
Lenders, and (ii) Uniform Commercial Code termination statements reflecting
termination of all financing statements previously filed by any Person except
as expressly permitted hereunder; and


 


(xiv)    such
other assurances, certificates, documents, consents or opinions as
Administrative Agent, Issuing Lender or Requisite Lenders reasonably may
require.


 


(b)       Any fees required to be paid on or before
the Closing Date shall have been paid.


 


(c)       Unless waived by Administrative Agent,
Borrower shall have paid all Attorney Costs of Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts
of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude final settling of accounts between
Borrower and Administrative Agent).


 


(d)       Administrative Agent and its counsel
shall have reviewed any and all outstanding litigation involving Borrower or
its Subsidiaries and shall be satisfied with the same, in its sole and absolute
discretion.


 


4.2      Conditions
to all Extensions of Credit. In addition to any applicable
conditions precedent set forth elsewhere in this Section 4 or in Section 2, the
obligation of each Lender to honor any Request for Extension of Credit other
than a Conversion or Continuation is subject to the following conditions
precedent:


 


(a)       the representations and warranties of
Borrower contained in Section 5 shall be correct on and as of the date of such
Extension of Credit, except to the extent that such representations and
warranties specifically refer to an earlier date;


 


(b)       no Default or Event of Default exists, or
would result from such proposed Extension of Credit;


 


(c)       Administrative Agent shall have timely
received a Request for Extension of Credit by Requisite Notice by the Requisite
Time;


 


40

















 


(d)       The sum of the Outstanding Obligations
plus the advances requested pursuant to the Request for Extension of Credit
shall not exceed the amount available for borrowing in accordance with the most
recent financial statements delivered by Borrower pursuant to Sections 6.1(a)
and (b) of this Agreement; and


 


(e)       Administrative Agent shall have received,
in form and substance satisfactory to it, such other assurances, certificates,
documents or consents related to the foregoing as Administrative Agent and
Requisite Lenders reasonably may require.


 


Each Request for Extension of Credit by Borrower shall be deemed to be
a representation and warranty that the conditions specified in Sections 4.2(a)
and (b) have been satisfied on and as of the date of such Extension of Credit.


 


SECTION V

REPRESENTATIONS AND WARRANTIES


 


Borrower represents and warrants to Administrative Agent and Lenders
that:


 


5.1      Existence
and Qualification; Power; Compliance with Laws. Each Credit
Party is a corporation duly incorporated, validly existing and in good standing
under the Laws of the state of its incorporation, has the corporate power and
authority and the legal right to own, lease and operate its properties and to
conduct its business as currently conducted, is duly qualified and in good
standing under the Laws of its state of incorporation and in all other
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified could not be reasonably expected to have a Material Adverse
Effect, and is in compliance with all Laws except to the extent that
noncompliance could not be reasonably expected to have a Material Adverse
Effect.


 


5.2      Power;
Authorization; Enforceable Obligations. Each Credit Party has
the corporate power and authority and the legal right to make, deliver and
perform each Loan Document to which it is a party and Borrower has the
corporate power and authority to borrow hereunder and has taken all necessary
action to authorize the borrowings on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party. No consent or
authorization of, filing with, or other act by or in respect of any
Governmental Authority or any other Person, is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents. The Loan
Documents have been duly executed and delivered by Borrower, and constitute a
legal, valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their respective terms.


 


5.3      No
Legal Bar. The execution, delivery, and performance by each
Credit Party of the Loan Documents to which it is a party and compliance with
the provisions thereof have been duly authorized by all requisite action on the
part of such Credit Party and do not and will not (a) violate or conflict with,
or result in a breach of, or require any consent under (i) any Organization
Documents of the Credit Parties, (ii) any material applicable Laws, rules, or
regulations or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator, or (iii) any


 


41

















 


material
Contractual Obligation of such Credit Party or any of its Subsidiaries or by
which any of them or any of their property is bound or subject, (b) constitute
a default under any such material agreement or instrument, or (c) result in, or
require, the creation or imposition of any Lien on any of the properties of
such Credit Party or any of its Subsidiaries (other than the Liens granted in
connection herewith).


 


5.4      Financial
Statements; No Material Adverse Effect.


 


(a)       The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present in all material respects the financial condition of Borrower and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(iii) to the extent required by GAAP, show all material indebtedness and other
liabilities, direct or contingent, of Borrower and its Subsidiaries as of the
date thereof.


 


(b)       Since the date of the Audited Financial
Statements, there has been no event or circumstance which has a Material
Adverse Effect except as disclosed in the Disclosure Letter.


 


5.5      Litigation.
Except as disclosed in the Disclosure Letter, there are (a)
no lawsuits, investigations or proceedings of or before an arbitrator or Governmental
Authority pending or, to the best of knowledge of Borrower, threatened by or
against Borrower or any of its Subsidiaries or against any of their properties
or revenues which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect, (b) no orders, writs, injunctions, judgments,
or decrees of any court or government agency or instrumentality to which the
Borrower or any of its Subsidiaries is a party or by which the property or
assets of them are bound, or (c) no grievances, disputes, or controversies
outstanding with any union or other organization of the employees of Borrower
or any of its Subsidiaries, or, to the knowledge of each Company, threats of
work stoppage, strike, or pending demands for collective bargaining, which
could reasonably be expected to cause or result in a Material Adverse Effect.


 


5.6      No
Default; Continued Business. Neither Borrower nor any its
Subsidiaries are in default under or with respect to any Contractual Obligation
which could reasonably be expected to have a Material Adverse Effect, and no
Default or Event of Default has occurred and is continuing or will result from
the consummation of this Agreement or any of the other Loan Documents, or the
making of the Extensions of Credit hereunder. There exists no actual, pending,
or, to Borrower’s knowledge, any threatened termination, cancellation or
limitation of, or any modification or change in the business relationship of
any Company and any customer or supplier, or any group of customers or suppliers,
whose purchases or supplies, individually or in the aggregate, could reasonably
be expected to cause or result in a Material Adverse Effect, and there exists
no present condition or state of facts or circumstances that would have a
Material Adverse Effect or prevent a Company from conducting such business or
the transactions contemplated by this Agreement in substantially the same
manner in which it was previously conducted.


 


42

















 


5.7      Ownership
of Property; Liens. Borrower and its Subsidiaries have valid
fee or leasehold interests in all real property which they use in their
respective businesses, and Borrower and its respective Subsidiaries have good
and marketable title to all their other property, and none of such property is
subject to any Lien, except as permitted in Section 7.2.


 


5.8      Taxes.
Borrower and its Subsidiaries have filed all material tax returns which are
required to be filed, and have paid, or made provision for the payment of, all
taxes with respect to the periods, property or transactions covered by said
returns, or pursuant to any assessment received by Borrower or its respective
Subsidiaries, except (a) such taxes, if any, as are being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
established and maintained, and (b) immaterial taxes; provided, however, that
in each case no material item or portion of property of Borrower or any of its
Subsidiaries is in jeopardy of being seized, levied upon or forfeited.


 


5.9      Margin
Regulations; Investment Company Act; Public Utility Holding Company Act.


 


(a)       Neither Borrower for any of its
Subsidiaries is engaged nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. No part of the
proceeds of any Extensions of Credit hereunder will be used for “purchasing” or
“carrying” “margin stock” as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of Regulations U or X of such Board
of Governors.


 


(b)       Neither Borrower nor any of its
Subsidiaries (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding
Company Act of 1935, or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.


 


5.10    ERISA Compliance.


 


(a)       Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other applicable Laws. Each Plan or other employee
benefit plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination or opinion letter from the IRS or an application
for such a letter is currently being processed by the IRS with respect thereto
and, to the best knowledge of Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification. Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan. There has been no prohibited transaction (which is not
otherwise exempt under Section 4975 of the Code) or violation of the fiduciary
responsibility rules under ERISA with respect to any Plan that has or could
reasonably be expected to have a Material Adverse Effect.


 


43

















 


(b)       (i) No ERISA Event has occurred or, to
the best of knowledge of Borrower or any ERISA Affiliate, is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither Borrower nor any ERISA Affiliate has incurred, or, to the
best of knowledge of Borrower or any ERISA Affiliate, reasonably expects to
incur, any liability (and, to the best of knowledge of Borrower or any ERISA
Affiliate, no event has occurred which, with the giving of notice under Section
4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA.


 


5.11    Intangible
Assets. Borrower and its Subsidiaries own, or possess the
right to use, all trademarks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intangible assets that are used in the conduct
of their respective businesses as now operated or could obtain such right
without causing a Material Adverse Effect, and none of such items, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or intangible asset of any other Person to the
extent that such conflict has or could reasonably be expected to have a
Material Adverse Effect.


 


5.12    Compliance
With Laws. Borrower and its Subsidiaries are in compliance in
all material respects with all material Laws that are applicable such Person.


 


5.13    Environmental
Compliance. Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and
properties, and as a result thereof Borrower has reasonably concluded that such
Environmental Laws and claims do not, individually or in the aggregate, have a
Material Adverse Effect.


 


5.14    Insurance.
The properties of Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Borrower or such Subsidiary operates.


 


5.15    Swap
Obligations. Neither Borrower nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. Borrower has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of
any swap counterparty in determining whether to enter into any Swap Contract.


 


5.16    Solvency.
Borrower has received consideration that is the reasonable
equivalent value of the obligations and liabilities Borrower has incurred in
favor of Administrative Agent and the Lenders. Each Credit Party is Solvent and
no Credit Party will not be Solvent after


 


44

















 


giving effect to
the execution and delivery of the Loan Documents to Administrative Agent and
the Lenders.


 


5.17    Disclosure.
No statement, information, report, representation, or
warranty made by Borrower in any Loan Document or furnished to Lender in
connection with any Loan Document contains any untrue statement of a material
fact or, when viewed together with Borrower’s periodic reports filed under the
Exchange Act and the rules and regulations promulgated thereunder, omits to
state any material fact necessary to make the statements herein or therein not
misleading; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. After due inquiry by
Borrower, there is no known fact that any Credit Party has not disclosed to
Agent and the Lenders that has or is reasonably likely to have a Material
Adverse Effect.


 


SECTION VI

AFFIRMATIVE COVENANTS


 


So long as any Obligation (excluding inchoate indemnity obligations)
remains unpaid or unperformed, or any portion of the Commitments remain
outstanding, Borrower shall, and shall (except in the case of Borrower’s
reporting covenants set forth in Sections 6.1 and 6.2(a)-(c), cause each
Subsidiary, to:


 


6.1      Financial
Statements. Deliver to Administrative Agent and each Lender,
in form and detail satisfactory to Administrative Agent and Requisite Lenders:


 


(a)       as soon as available, but in any event
within 90 days after the end of each fiscal year of Borrower (except for the
fiscal year ending December 2004 for which Borrower shall have 120 days after
the end of such fiscal year), a consolidated balance sheet, a consolidated
statement of income and a consolidated cash flow statement of Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail, audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing, which report and
opinion shall be prepared in accordance with GAAP and shall not be subject to
any qualifications or exceptions as to the scope of the audit nor to any
qualifications and exceptions not reasonably acceptable to Requisite Lenders;


 


(b)       as soon as available, but in any event
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year of Borrower, a consolidated balance sheet, a consolidated statement
of income and a consolidated cash flow statement of Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the for such fiscal
quarter and for the portion of Borrower’s fiscal year then ended, setting forth
in each case in comparative form the figures for the corresponding fiscal quarter
of the previous fiscal year and the corresponding portion of the previous
fiscal year, all in reasonable detail and certified by a Responsible Officer of
Borrower as fairly presenting in all material respects the financial condition,
results of operations and cash flows of Borrower and its


 


45

















 


Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes; and


 


(c)       Reports required to be delivered pursuant
to clauses (a) and (b) of this Section 6.1 shall be deemed to have been
delivered on the date on which Borrower posts such reports on Borrower’s
internet website at the website address listed on Schedule 10.2 hereof or when
such report is posted on the Securities and Exchange Commission’s website at
www.sec.gov.; provided that (x) Borrower shall notify Administrative Agent of
the posting of any such new material, and (y) in every instance Borrower shall
provide paper copies of the Compliance Certificates required by clause (a) of
Section 6.2 to Administrative Agent and each Lender. Except for the Compliance
Certificates referred to in such clause (a) of Section 6.2, Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the reports referred to in clauses (a) and (b) of this Section 6.1, and in any
event shall have no responsibility to monitor compliance by Borrower with any
such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such reports.


 


6.2      Certificates,
Notices and Other Information. Deliver to Administrative
Agent and each Lender, in form and detail satisfactory to Administrative Agent
and Requisite Lenders:


 


(a)       within five (5) days after the delivery
of the financial statements referred to in Sections 6.1 (a) and (b), a duly
completed Compliance Certificate signed by a Responsible Officer of Borrower;


 


(b)       promptly after the same are available,
copies of each annual report, proxy or financial statement or other report or
communication sent to the stockholders of Borrower, and copies of all annual,
regular, periodic and special reports and registration statements which
Borrower may file or be required to file with the Securities and Exchange
Commission under Sections 13 or 15(d) of the Exchange Act, and not otherwise
required to be delivered to Administrative Agent pursuant hereto;


 


(c)       promptly after the occurrence thereof,
notice of any Default or Event of Default;


 


(d)       notice of any change in accounting
policies or financial reporting practices by Borrower or any Subsidiary that is
material to Borrower or to Borrower and its Subsidiaries on a consolidated
basis;


 


(e)       promptly after the commencement thereof,
notice of any litigation, investigation or proceeding affecting Borrower where
the reasonably expected damages to Borrower exceed the Threshold Amount, or in
which injunctive relief or similar relief is sought, which relief, if granted,
could reasonably be expected to have a Material Adverse Effect;


 


(f)        promptly after the occurrence thereof,
notice of any Reportable Event with respect to any Plan or the intent to
terminate any Plan, or the institution of proceedings or the taking or expected
taking of any other action to terminate any Plan or withdraw from any Plan;


 


46

















 


(g)       promptly after the occurrence thereof,
notice of any Material Adverse Effect; and


 


(h)       promptly, such other data and information
as from time to time may be reasonably requested by Lender.


 


Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action Borrower has taken and
proposes to take with respect thereto. The annual reports, proxies, financial
statements or other communications required by Section 6.2(c) above shall be
deemed to have been delivered on the date on which Borrower posts such reports
on Borrower’s website on the Internet at the website address listed on Schedule
10.2 hereof or when such report is posted on the Securities and Exchange
Commission’s website at www.sec.gov.; provided that Borrower shall notify
Administrative Agent of the posting of any such new material. Lender shall have
no obligation to request the delivery or to maintain copies of the reports and
communications referred to in Section 6.2(c), and in any event shall have no
responsibility to monitor compliance by Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery
to it or maintaining its copies of such reports and communications.


 


6.3      Payment
of Taxes. Pay and discharge when due all material taxes,
assessments, and governmental charges, except for any such tax, assessment,
charge, or levy which is an Ordinary Course Lien under subsection (b) of the
definition of such term.


 


6.4      Preservation
of Existence. Preserve and maintain its existence, licenses,
permits, rights, franchises and privileges necessary or desirable in the normal
conduct of its business, except (i) as permitted by Section 7.3, or (ii) where
failure to do so would not reasonably be expected to have a Material Adverse
Effect.


 


6.5      Maintenance
of Properties. Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good order and condition, subject to wear and tear in the ordinary course of
business, and not permit any waste of its properties, except where failure to
do so would not reasonably be expected to have a Material Adverse Effect.


 


6.6      Maintenance
of Insurance. Maintain liability and casualty insurance with
responsible insurance companies reasonably satisfactory to Lender in such
amounts and against such risks as is customary for similarly situated
businesses.


 


6.7      Compliance
With Laws.


 


(a)       Comply
with the requirements of all applicable Laws and orders of any Governmental
Authority, noncompliance with which would reasonably be expected to have a
Material Adverse Effect.


 


(b)       Conduct its operations and keep and
maintain its property in material compliance with all Environmental Laws.


 


47

















 


6.8      Inspection
Rights. At any time during regular business hours and as
often as reasonably requested upon reasonable notice, permit Administrative
Agent or any Lender, or any employee, agent or representative thereof, to
examine, audit and make copies and abstracts from Borrower’s records and books
of account and to visit and inspect its properties and to discuss its affairs,
finances and accounts with any of its officers and key employees, and, upon
request, furnish promptly to Administrative Agent or any Lender true copies of
all financial information and internal management reports made available to
their senior management. Notwithstanding any provision of this Agreement to the
contrary, so long as no Default or Event of Default shall have occurred and be
continuing, neither Borrower nor any of its Subsidiaries shall be required to disclose,
permit the inspection, examination, photocopying or making extracts of, or
discuss, any document, information or other matter that (i) constitutes
non-financial trade secrets or non-financial proprietary information, or (ii)
the disclosure of which to any Lender, or their designated representative, is
then prohibited by law or any agreement binding on Borrower or any of its
Subsidiaries that was not entered into by Borrower or any such Subsidiary for
the purpose of concealing information from the Lenders. Borrower shall,
however, furnish to Administrative Agent such information concerning Borrower’s
intellectual property (including, without limitation, application and
registration numbers for any filings in connection with such intellectual
property) as is reasonably necessary to permit Administrative Agent (on behalf
of itself and the other Lenders) to perfect a security interest in such
intellectual property.


 


6.9      Keeping
of Records and Books of Account. Keep records and books of
account adequate to prepare financial statements in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Borrower or any applicable Subsidiary.


 


6.10    Compliance
with ERISA. Cause, and cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable Laws; (b) to take
all actions to cause each Plan which is qualified under Section 401 (a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.


 


6.11    Compliance
With Agreements. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, except for
any such Contractual Obligations (a) the nonperformance of which would not
cause a Default or Event of Default, (b) then being contested by any of them in
good faith by appropriate proceedings, or (c) if the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.


 


6.12    Subsidiary
Guaranties and Pledge of Ownership Interests.


 


(a)       Domestic
Subsidiaries. In the event that the aggregate gross revenues
or assets for any fiscal year, commencing with the fiscal year ending nearest
December 31, 2005, of Borrower and Guarantors, when taken together with the
aggregate gross revenues and assets of Borrower’s Foreign Subsidiaries as to
which 65% of the ownership interests thereof have been pledged in favor of
Administrative Agent for the benefit of Lenders, is less than 90% of the
aggregate gross revenues or assets of Borrower and its Subsidiaries on a
consolidated basis for such fiscal year, Borrower will, within 90 days after
the end of such fiscal year, cause one or more additional Domestic


 


48

















 


Subsidiaries to
execute and deliver to Administrative Agent a joinder to the Multi-Party
Guaranty and to the General Security Agreement along with any such other
supporting documentation, certificates (accompanied by irrevocable undated
stock powers, duly endorsed in blank), corporate governance and authorization
documents as may be deemed reasonably necessary or advisable by Administrative
Agent such that the aggregate gross revenues and assets for such fiscal year of
Borrower and Guarantors, when taken together with the aggregate gross revenues
and assets of Borrower’s Foreign Subsidiaries as to which 65% of the ownership
interests thereof have been pledged in favor of Administrative Agent for the
benefit of Lenders, equal to at least 90% of the aggregate gross revenues and
assets of Borrower and its Subsidiaries on a consolidated basis for such fiscal
year. In addition, in the event that (i) any Domestic Subsidiary becomes a
Material Subsidiary after the date hereof, and such Domestic Subsidiary has not
previously executed the Multi-Party Guaranty and General Security Agreement, or
(ii) any Domestic Subsidiary of Company that has not previously executed a
joinder to Multi-Party Guaranty and General Security Agreement becomes a
guarantor in respect of the obligations of Borrower or any Subsidiary under any
Material Indebtedness Agreement, Borrower will promptly cause such Domestic
Subsidiary to execute and deliver to Administrative Agent a joinder to the
Multi-Party Guaranty and the General Security Agreement along with any such
other supporting documentation, certificates (accompanied by irrevocable
undated stock powers, duly endorsed in blank), corporate governance and
authorization documents as may be deemed necessary or advisable by
Administrative Agent. Notwithstanding anything in this Section 6.12(a) to the
contrary, Borrower will not be required to deliver to Administrative Agent share
or stock certificates evidencing Escrowed Securities until such time as such
Escrowed Securities are eligible for release from the escrow to Borrower.


 


(b)       Foreign
Subsidiary Stock Pledge. In addition, with respect to each
First-Tier Material Foreign Subsidiary as to which 65% of the ownership
interests therein have not previously been pledged to Administrative Agent,
Borrower shall and shall cause its Domestic Subsidiaries to, within 90 days
after the end of such fiscal year (unless a longer period is agreed to by
Administrative Agent), (i) pledge to Administrative Agent, for the benefit of
the Lenders, 65% of the ownership interest owned by a Credit Party pursuant to
the General Security Agreement, and (ii) deliver to Agent, for the benefit of
the Lenders, the outstanding shares certificates (or other evidence of equity),
as applicable, evidencing such pledged ownership interest.


 


(c)       Perfection
or Registration of Interest in Foreign Shares Pledged. With
respect to any ownership interests of Borrower’s Foreign Subsidiaries pledged
to Administrative Agent, for the benefit of the Lenders, Agent shall at all
times, in the discretion of Agent or the Required Lenders, have the right to
perfect, at Borrower’s sole cost, payable upon request therefor (including,
without limitation, any foreign counsel, or foreign notary, filing,
registration or similar, fees, costs or expenses), its security interest in
such shares in the respective foreign jurisdiction; provided, however, that, if
Administrative Agent, in its reasonable discretion after consultation with
Borrower, determines that the cost of perfecting, in a foreign jurisdiction,
the security interest of Administrative Agent, for the benefit of the Lenders,
in the such ownership interests relating to any First-Tier Material Foreign
Subsidiary is impractical or cost-prohibitive,


 


49

















 


then
Administrative Agent may agree to forego the foreign perfection of such
security interest.


 


6.13    Use
of Proceeds. Use the proceeds of Extensions of Credit for
lawful general corporate purposes including working capital and general
corporate purposes, including Acquisitions, not otherwise in contravention of
this Agreement.


 


6.14    Restrictive
Agreements. Except as set forth in this Agreement, Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (a) make,
directly or indirectly, any dividend, return of capital or other distribution
to Borrower or to any other Subsidiary, (b) make, directly or indirectly, loans
or advances or capital contributions to Borrower or (c) transfer, directly or
indirectly, any of the properties or assets of such Subsidiary to Borrower;
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary non-assignment provisions in leases or other
agreements entered in the ordinary course of business and consistent with past
practices, or (iii) customary restrictions in security agreements or mortgages
securing Indebtedness or capital leases, of a Company to the extent such
restrictions shall only restrict the transfer of the property subject to such
security agreement, mortgage or lease.


 


6.15    Guaranty
Under Material Indebtedness Agreement. No Domestic Subsidiary
of Borrower shall be or become liable as an obligor under any Material
Indebtedness Agreement unless such Subsidiary shall also be a Guarantor under
this Agreement prior to or concurrently therewith. No Foreign Subsidiary of
Borrower shall be or become liable as an obligor under any Material
Indebtedness Agreement unless 65% of the ownership interests thereof have been
pledged in favor of Administrative Agent for the benefit of Lenders.


 


SECTION VII

NEGATIVE COVENANTS


 


So long as any Obligations remain unpaid or unperformed, or any portion
of the Commitments remain outstanding, Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly:


 


7.1      Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness
except for the following (“Permitted Indebtedness”):


 


(a)       Indebtedness under the Loan Documents;


 


(b)       Indebtedness outstanding on the date hereof and listed on
Schedule 7.1 hereto and any refinancings, refundings, renewals or extensions
thereof, provided that (i) the amount of such Indebtedness is not increased at
the time of such refinancing, refunding, renewal or extension except by an
amount equal to the premium or other amount paid, and fees and expenses
incurred, in connection with such refinancing and by an amount equal to any
utilized commitments thereunder, and (ii) the weighted average life of the
principal payments pursuant to such refinanced, refunded, renewed or extended
Indebtedness shall be no shorter than the weighted average life of such
payments


 


50

















 


pursuant to such
Indebtedness immediately prior to such refinancing, refunding, renewal or
extension;


 


(c)       Ordinary Course Indebtedness;


 


(d)       Indebtedness of Borrower and its Subsidiaries under loans and
Capital Leases incurred by Borrower or any of its Subsidiaries to finance the
acquisition by such Person of real property, improvements, fixtures, equipment
or other fixed assets (together with attachments, ascensions, additions, “soft
costs” and proceeds thereof), provided that in each case, (i) such Indebtedness
is incurred by such Person at the time of, or not later than six (6) months
after, the acquisition by such Person of the property so financed, (ii) such
Indebtedness does not exceed the purchase price of the property so financed,
and (iii) the aggregate of all such Indebtedness at any time outstanding does
not exceed the Threshold Amount;


 


(e)       Indebtedness of Borrower and its Subsidiaries under initial or
successive refinancings, refundings, renewals or extensions of any Indebtedness
permitted by subsections (c) and (d) above, provided that (i) the amount of
such Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to the premium or other amount
paid, and fees and expenses incurred, in connection with such refinancing, and
(ii) the weighted average life of the principal payments pursuant to such
refinanced, refunded, renewed or extended Indebtedness shall be no shorter than
the weighted average life of such payments pursuant to such Indebtedness
immediately prior to such refinancing, refunding, renewal or extension;


 


(f)        Indebtedness of Borrower to any of Borrower’s Subsidiaries,
Indebtedness of any of Borrower’s Subsidiaries to Borrower or Indebtedness of
any of Borrower’s Subsidiaries to any of Borrower’s other Subsidiaries;


 


(g)       Subordinated Debt as the same shall have been approved by Requisite
Lenders;


 


(h)       Indebtedness which may arise as a result of any invalidity of
receivables sold as described in Section 7.4(b), or in similar transactions as
approved by Administrative Agent, provided (i) the aggregate of all such
Indebtedness at any time outstanding does not exceed $15,000,000 and (ii) such
Indebtedness is subordinated to the Obligations hereunder pursuant to a
subordination agreement in form and substance satisfactory to Administrative
Agent;


 


(i)        Indebtedness incurred in favor of sellers in connection with
Permitted Acquisitions, but only to the extent permitted in the definition
thereof; and


 


(j)        Other Indebtedness not included in (a) through (i) above and
not exceeding, in the aggregate at any one time the Threshold Amount;


 


provided, however,
that in no event shall Permitted Indebtedness include any replacement letters
of credit with Comerica Bank or any other financial institution (other than
Issuing Lender) upon expiration of the Comerica Letters of Credit. Borrower
shall not permit Comerica Bank to


 


51

















 


automatically
extend or automatically renew any of the Comerica Letters of Credit, and each
Comerica Letter of Credit shall expire at the end of its current expiry date.


 


7.2      Liens.
Incur, assume or suffer to exist, any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for the following (“Permitted Liens”):


 


(a)       Liens existing on the date hereof and listed on Schedule 7.1
and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations
secured or benefited thereby is permitted by Section 7.1 (a);


 


(b)       Ordinary Course Liens;


 


(c)       Liens on the property or assets of any Person which becomes a
Subsidiary of Borrower after the date of this Agreement or acquired after the
date of this Agreement, provided that (i) such Liens exist at the time such
Person became a Subsidiary or the assets were acquired, and (ii) such Liens
were not created in contemplation of the acquisition of such Person or assets;


 


(d)       Rights of vendors or lessors under conditional sale
agreements, Capital Leases or other agreements relating to Indebtedness
described in Section 7.1(d) or other title retention agreements, provided that
in each case, (i) such rights secure or otherwise relate to Permitted
Indebtedness, (ii) such rights do not extend to any property other than
property acquired with the proceeds of such Permitted Indebtedness (together
with accessions, additions, replacements and proceeds thereof), and (iii) such
rights do not secure any Indebtedness other than Permitted Indebtedness;


 


(e)       Liens incurred in connection with leases, subleases, licenses
and sublicenses granted to Persons not interfering in any material respect with
the business of Borrower and its Subsidiaries and any interest or title of a
lessee or licensee under any such leases, subleases, licenses or sublicenses;


 


(f)        Liens arising in connection with judgments not constituting
an Event of Default pursuant to Section 8.1(h);


 


(g)       Liens securing Indebtedness permitted under Section 7.1(h) on
selected assets as shall be reasonably necessary, in the judgment of
Administrative Agent, to support the sale receivables of Foreign Subsidiaries
to the extent permitted under Section 7.4(b);


 


(h)       Liens not otherwise permitted hereunder on the property or
assets of Borrower and any of its Subsidiaries securing Indebtedness, provided
the aggregate Indebtedness secured thereby does not exceed the Threshold
Amount;


 


provided, however,
that in no event shall any Lien be permitted to exist on, or in respect of, any
depositary or investment account containing any cash or cash equivalent of
Borrower or any of its Domestic Subsidiaries, except for Liens in favor of the
entity (and its affiliates) with which


 


52

















 


any such
depository or investment account is maintained; and provided further, however,
that in no event shall Permitted Liens include any liens on any cash collateral
account to secure the reimbursement obligations of Borrower or any of its
Subsidiaries with respect to replacement letters of credit with Comerica Bank
or any other financial institution (other than Issuing Lender) upon expiration
of the Comerica Letters of Credit.


 


7.3      Fundamental
Changes. Merge or consolidate with or into any Person or liquidate,
wind-up or dissolve itself, or permit or suffer any liquidation or dissolution
or sell all or substantially all of its assets, except that:


 


(a)       any Subsidiary may merge with (i)
Borrower, provided that Borrower shall be the continuing or surviving
corporation, (ii) any Guarantor Subsidiary or, if such Subsidiary is not a
Guarantor, with any other Subsidiary, and (iii) any joint venture, partnership
or other Person, so long as such joint venture, partnership and other Person
will, as a result of making such merger and all other contemporaneous related
transactions, becomes a Subsidiary;


 


(b)       any Subsidiary may sell or transfer all
or substantially all of its assets (through voluntary liquidation, dissolution
or winding up or otherwise), to Borrower or to another Subsidiary that is a
Guarantor or, if the selling or transferring Subsidiary is not a Guarantor, to
any other Subsidiary;


 


(c)       Borrower may merge into or consolidate
with any other Person, provided that (i) Borrower is the surviving corporation,
and (ii) immediately after giving effect to such merger or consolidation, no
Default or Event of Default shall have occurred and be continuing; and


 


(d)       any Subsidiary may merge or consolidate
with or into any other Person or sell all or substantially all of its assets to
the extent such transaction is a Disposition otherwise permitted under Section
7.4 or an Investment otherwise permitted under Section 7.5 and immediately
after giving effect to such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing.


 


7.4      Dispositions.
Make any Dispositions, except:


 


(a)       Ordinary Course Dispositions;


 


(b)       True sales of the accounts receivable of
Foreign Subsidiaries, or similar arrangements approved by Administrative Agent,
entered into to finance the operations of Borrower’s Foreign Subsidiaries; and


 


(c)       Dispositions permitted by Section 7.3;
and


 


(d)       Other Dispositions of Property having an
aggregate net book value from the date hereof not exceeding the Threshold
Amount.


 


7.5      Investments.
Make any Investments, except for the following (“Permitted Investments”):


 


53

















 


(a)       Investments existing on the Closing Date;


 


(b)       Ordinary Course Investments;


 


(c)       Investments permitted by Section 7.1 or
Section 7.3;


 


(d)       Investments arising from rights received
by Borrower and its Subsidiaries upon the required payment of any permitted
contingent obligations of Borrower and its Subsidiaries;


 


(e)       Investments constituting Acquisitions,
provided that (i) in the case of a merger, amalgamation or other combination
including Borrower, Borrower shall be the surviving entity, (ii) in the case of
a merger, amalgamation or other combination including a Credit Party (other
than Borrower), a Credit Party shall be the surviving entity; (iii) the
business to be acquired shall be similar to the lines of business of the
Borrower and its Subsidiaries, (iv) no Default or Event of Default shall exist
prior to or after giving effect to such Acquisition, (v) if the consideration
paid for such Acquisition is in excess of $5,000,000 Borrower shall have
provided to Agent and each of the Lenders, at least ten (10) Business Days
prior to such Acquisition a certificate of a Responsible Officer of Borrower
showing pro forma compliance with Section 7.12 hereof, both before and after
the proposed Acquisition, (vi) either (a) such Acquisition is not actively opposed
by the board of directors (or similar governing body) of the selling Persons or
the Persons whose equity interests are to be acquired, or (b) the number of
shares of the target Person tendered in response to a tender offer by a Company
shall represent at least ninety percent (90%) of the Voting Power of such
Person, (vii) the Cash Acquisition Consideration associated with the DSI
Acquisition shall not exceed $10,000,000, and (viii) the aggregate Cash
Acquisition Consideration of the Acquisition, when taken together with the Cash
Acquisition Consideration of all other Acquisitions occurring after the date
hereof, shall not exceed $65,000,000, unless otherwise approved by the
Requisite Lenders (each such Acquisition being a “PermittedAcquisition”).


 


(f)        Investments of
Borrower and its Subsidiaries in Permitted Swap Obligations; and


 


(g)       Other Investments not exceeding the
Threshold Amount in the aggregate at any time outstanding.


 


7.6      Restricted Payments. Make
any Restricted Payments, except as follows:


 


(a)       Borrower or any Subsidiary, as
applicable, may pay dividends or other distributions (i) payable solely in
shares of capital stock of Borrower or (ii) payable by a Subsidiary to Borrower
or to a Guarantor Subsidiary;


 


(b)       Borrower may distribute rights pursuant
to a shareholder rights plan or redeem such rights, provided that such
redemption is in accordance with the terms of such shareholder rights plan;


 


54

















 


(c)       Borrower may make Restricted Payments or
purchase its own Equity Securities in connection with or pursuant to any of its
Employee Benefits Plans or in connection with the employment, termination or
compensation of its employees, officers or directors;


 


(d)       Borrower may purchase its own Equity
Securities pursuant to one or more stock repurchase programs, provided that (i)
no Default or Event of Default shall have occurred and be continuing, (ii)
after giving effect to any such repurchases Borrower shall be in compliance
with Section 7.12; and (iii) when combined with the amount of all dividends,
purchases or redemptions made under Section 7.6(e), the total of all such
purchases of Equity Securities shall not exceed the sum of $10,000,000 in the
aggregate over the life of this Agreement;


 


(e)       Borrower or any Subsidiary of Borrower
may declare or pay any dividends in respect of its Equity Securities or
purchase or redeem shares of its Equity Securities or make distributions to
shareholders not otherwise permitted hereunder, provided that (i) the aggregate
amount paid or distributed in any period of four consecutive quarters
(excluding any amounts covered by subsection (b) above) does not exceed 5% of
consolidated assets as determined as of the fiscal quarter immediately
preceding the date of determination; and (ii) when combined with the amount of
all purchases of Equity Securities made under Section 7.6(d) but excluding
those made under Section 7.6(c), the total of all such dividends, purchases or
redemptions shall not exceed the sum of $ 10,000,000 in the aggregate in the
aggregate over the life of this Agreement; and


 


(f)        Borrower may repurchase fractional
shares of capital stock arising out of stock dividends, splits or combinations,
business combinations or conversion of convertible securities.


 


7.7      ERISA.
At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Pension Plan to (a) engage in
any non-exempt “prohibited transaction” (as defined in Section 4975 of the
Code); (b) fail to comply with ERISA or any other applicable Laws; or (c) incur
any material “accumulated funding deficiency” (as defined in Section 302 of
ERISA), which, with respect to each event listed above, when combined with any
other event listed above, has a Material Adverse Effect.


 


7.8      Change
in Nature of Business. Engage, either directly or indirectly
through Affiliates or Acquisitions in any line of business other than the
enterprise software business, any other business incidental or reasonably
related thereto, or any businesses that are, as determined by the Board of
Directors of Borrower, appropriate extensions thereof.


 


7.9      Transactions
with Affiliates. Enter into any transaction of any kind with
any Affiliate (other than transactions among Borrower or any of its
Subsidiaries and any Subsidiary) of Borrower other than arm’s-length
transactions with Affiliates that are otherwise permitted hereunder and except
as follows:


 


55

















 


(a)       reasonable and customary fees in Borrower’s
industry paid to members of the board of directors (or similar governing body)
of Borrower; and


 


(b)       reasonable compensation arrangements and
benefit plans for officers and other employees of Borrower and its Subsidiaries
entered into or maintained in the ordinary course of business; provided that
such transactions do not have a Material Adverse Effect on Borrower or any
Subsidiary.


 


7.10    Use
of  Proceeds. Borrower’s
use of the proceeds of the Loans shall be solely for working capital and other
general corporate purposes of the Companies, for the refinancing of existing
Indebtedness and for Acquisitions, all to the extent permitted hereunder.


 


7.11    Certain
Indebtedness Payments, Etc. Neither Borrower nor any of its
Subsidiaries shall (a) pay, prepay, redeem, purchase, defease or otherwise
satisfy in any manner prior to the scheduled payment thereof any Subordinated
Debt or (b) amend, modify or otherwise change the terms of any document,
instrument or agreement evidencing Subordinated Debt such that such amendment,
modification or change would (i) cause the outstanding aggregate principal
amount of all such Subordinated Debt so amended, modified or changed to be
increased (except as a consequence of the deferral of cash interest payments by
adding such payments to the principal amount thereof) as a consequence of such
amendment, modification or change, (ii) increase the interest rate applicable
thereto, or (iii) accelerate the scheduled payment thereof.


 


7.12    Financial
Covenants.


 


(a)       Maximum
Senior Leverage Ratio. Borrower shall not permit the Senior
Leverage Ratio, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis) to be greater than 1.50 to 1.00.


 


(b)       Maximum
Total Leverage Ratio. Borrower shall not permit the Total
Leverage Ratio, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis) to be greater than 3.00 to 1.00.


 


(c)       Minimum
Liquidity Ratio. Borrower shall not permit the Liquidity
Ratio at any time to be less than 1.35 to 1.00.


 


(d)       Minimum
Fixed Charge Coverage Ratio. Borrower shall not permit the
Fixed Charge Coverage Ratio, determined as of the last day of any fiscal
quarter of Borrower (measured on a rolling four quarter basis) to be less than
1.25 to 1:00.


 


7.13    Accounting
Changes. Change (i) its fiscal year (currently a 52 or 53
week year, as applicable, ending on or about December 31), or (ii) its
accounting practices except as permitted by GAAP.


 


56

















 


SECTION VIII

EVENTS OF DEFAULT AND REMEDIES


 


8.1      Events
of Default. Any one or more of the following events shall
constitute an Event of Default:


 


(a)       Borrower fails to pay any principal on
the date when due; or


 


(b)       Borrower fails to pay interest on any
Outstanding Obligation, the Commitment Fee or any other fees due hereunder
within three (3) Business Days after the date when due; or fails to pay any
other fees or amount payable to Administrative Agent or any Lender under any
Loan Document within five (5) Business Days after the date due; or


 


(c)       Any default occurs in the observance or
performance of any agreement contained in Section 7; or


 


(d)       Any default occurs in the observance or
performance of any agreement contained in Section 6.1 and such default continues
for three (3) days; or


 


(e)       The occurrence of an Event of Default (as
such term is or may hereafter be specifically defined in any other Loan
Document) under any other Loan Document; or Borrower fails to perform or
observe any other covenant or agreement (not specified in subsections (a), (b)
(c) or (d) above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or


 


(f)        Any representation or warranty in any
Loan Document proves to have been incorrect in any material respect when made
or deemed made; or


 


(g)       Any Credit Party (x) defaults on any
payment when due, which remains uncured beyond any applicable cure period, of
principal or interest on any Indebtedness (other than Indebtedness hereunder) having
an aggregate principal amount in excess of the Threshold Amount, or (y)
defaults in the observance or performance of any other agreement or covenant
relating to any Indebtedness (other than Indebtedness hereunder) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur, the effect of which default or other event is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, any Indebtedness in excess of the
Threshold Amount to become payable or cash collateral in respect thereof to be
demanded on account of such default or other event; or (ii) the occurrence
under any Swap Contract of an Early Termination Date (as defined in such Swap
Contract) resulting from (x) any event of default under such Swap Contract as
to which Borrower or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (y) any termination event under any Swap Contract (as defined
therein) as to which Borrower or any Subsidiary is an affected party (as so
defined) (other than termination events resulting solely from changes in the
value of Borrower’s stock price or other rates, prices or indices underlying
any such Swap Contract), and as to which, in


 


57

















 


either event, the
Swap Termination Value owed by Borrower or such Subsidiary as a result thereof
is greater than the Threshold Amount; or


 


(h)       Any Loan Document, at any time after its
execution and delivery and for any reason other than the agreement of all
Lenders or satisfaction in full of all the Obligations, ceases to be in full
force and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect; or any Credit Party denies
that it has any or further liability or obligation under any Loan Document to
which it is a party, or purports to revoke, terminate or rescind any such Loan
Document; or


 


(i)        A final judgment (to the extent not
covered by insurance form a solvent insurer who has accepted tender of defense
and is defending such action) against Borrower or any Material Subsidiary is
entered for the payment of money in excess of the Threshold Amount and such
judgment remains unpaid, unvacated, unbonded or unstayed by appeal or otherwise
for a period of thirty (30) days from the date of its entry, or any
non-monetary final judgment is entered against Borrower that has a Material
Adverse Effect and such judgment remains unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) days from the date of its
entry.


 


(j)        Borrower or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
Debtor Relief Laws, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of that Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under Debtor
Relief Laws relating to any such Person or to all or any part of its property
is instituted without the consent of that Person and continues undismissed or
unstayed for 45 calendar days, or an order for relief is entered in any such
proceeding; or


 


(k)       (i) An ERISA Event occurs with respect to
a Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower or its Subsidiaries under Title
IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of the Threshold Amount; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds the Threshold
Amount; (iii) Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of the Threshold Amount; or (iv) the
events listed in clauses (i), (ii) and (iii) in the aggregate have resulted or
could reasonably be expected to result in liability of Borrower in excess of
the Threshold Amount; or


 


(l)        There occurs (i) any Change of Control,
or (ii) any event relating to a change in the corporate ownership, control or
governance of Borrower or any Subsidiary


 


58

















 


as issuer (“Issuer”) of any notes, bonds, debentures,
Subordinated Debt or other debt securities, the result of which is to cause
Indebtedness evidenced by any such notes, bonds, debentures, Subordinated Debt
or other debt securities to be subject to mandatory redemption or repurchase by
Issuer, provided the outstanding amount of such outstanding Indebtedness
exceeds the Threshold Amount; or


 


(m)      There occurs a change in the assets,
liabilities, financial condition, operations, affairs or prospects of Borrower
and its Subsidiaries, taken as a whole, which in the reasonable determination
of Requisite Lenders has had a Material Adverse Effect.


 


8.2      Certain
Financial Covenant Defaults. In the event that Borrower
determines to restate any of its financial statements and announces the same or
delivers such restated financial statements to Administrative Agent or any
Lender and, after giving effect to such restatement, as of the end of any
fiscal period of Borrower there would exist an Event of Default by virtue of
such restatement due to breach of Section 7.12 as of such fiscal period end
date, such Event of Default shall be deemed to arise as of the end of such
fiscal period. Notwithstanding Section 2.6(c) to the contrary, interest shall
accrue and at the Default Rate in respect of any Event of Default arising
solely by virtue of this Section 8.2 only from the date such restatement is
announced or such restated financial statements are delivered.


 


8.3      Remedies
Upon Event of Default. Without limiting any other rights or
remedies of Administrative Agent or Lenders provided for elsewhere in this
Agreement, or the other Loan Documents, or by applicable Law, or in equity, or
otherwise:


 


(a)       Upon the occurrence, and during the
continuance, of any Event of Default other than an Event of Default described
in Section 8.1(j):


 


(i)        Requisite Lenders may request
Administrative Agent to, and Administrative Agent thereupon shall, terminate
the Commitments and/or declare all or any part of the unpaid principal of all
Loans, all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents to be immediately due and payable, whereupon the same
shall become and be immediately due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of which are
expressly waived by Borrower; and/or


 


(ii)       Issuing Lender, with the approval of
Administrative Agent on behalf of Requisite Lenders, may demand immediate
payment by Borrower of an amount equal to the aggregate amount of all
outstanding Letter of Credit Usage to be held in a blocked Letter of Credit
cash collateral account held with Lender.


 


(b)       Upon the occurrence of any Event of
Default described in Section 8.1 (j):


 


(i)        the Commitments and all other
obligations of Administrative Agent or Lenders shall automatically terminate
without notice to or demand upon Borrower, which are expressly waived by
Borrower;


 


(ii)       the unpaid principal of all Loans, all
interest accrued and unpaid thereon and all other amounts payable under the
Loan Documents shall be immediately


 


59

















 


due and payable,
without protest, presentment, notice of dishonor, demand or further notice of
any kind, all of which are expressly waived by Borrower; and


 


(iii)     an amount equal to the aggregate amount of
all outstanding Letter of Credit Usage shall be immediately due and payable to
Issuing Lender without notice to or demand upon Borrower, which are expressly
waived by Borrower, to be held in a blocked Letter of Credit cash collateral
account held with Lender.


 


(c)       Upon the occurrence of any Event of
Default, Lenders and Administrative Agent, or any of them, without notice to
(except as expressly provided for in any Loan Document) or demand upon
Borrower, which are expressly waived by Borrower (except as to notices
expressly provided for in any Loan Document), may proceed to (but only with the
consent of Requisite Lenders) protect, exercise and enforce their rights and
remedies under the Loan Documents against Borrower and such other rights and
remedies as are provided by Law or equity (including, without limitation, the
provisions of the applicable Uniform Commercial Code).


 


(d)       Except as permitted by Section 10.5, no
Lender may exercise any rights or remedies with respect to the Obligations
without the consent of Requisite Lenders in their sole and absolute discretion.
The order and manner in which Administrative Agent’s and Lenders’ rights and
remedies are to be exercised shall be determined by Requisite Lenders in their
sole and absolute discretion. Regardless of how a Lender may treat payments for
the purpose of its own accounting, for the purpose of computing the Obligations
hereunder, payments shall be applied first, to costs and expenses (including
Attorney Costs) incurred by Administrative Agent and each Lender, second, to the
payment of accrued and unpaid interest on the Loans to and including the date
of such application, third, to the payment of the unpaid principal of the
Loans, and fourth, to the payment of all other amounts (including fees) then
owing to Administrative Agent and Lenders under the Loan Documents, in each
case paid pro rata to each Lender in the same proportions that the aggregate
Obligations owed to each Lender under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all Lenders, without priority or
preference among Lenders. No application of payments will cure any Event of
Default, or prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents, or prevent the exercise, or continued exercise, of
rights or remedies of Administrative Agent and Lenders hereunder or thereunder
or at Law or in equity.


 


SECTION IX

ADMINISTRATIVE AGENT


 


9.1      Appointment and Authorization of
Administrative Agent.


 


(a)       Each
Lender hereby irrevocably (subject to Section 9.9) appoints, designates and
authorizes Administrative Agent to take such 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 it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably


 


60

















 


incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any 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 Administrative
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” in this Agreement with reference to Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.


 


(b)       Issuing Lender shall act on behalf of
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith until such time and except for so long as Administrative
Agent may agree at the request of Requisite Lenders to act for such Issuing
Lender with respect thereto; provided, however, that Issuing Lender shall have
all of the benefits and immunities (i) provided to Administrative Agent in this
Section 9 with respect to any acts taken or omissions suffered by Issuing
Lender in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term “Administrative
Agent” as used in this Section 9 included Issuing Lender with respect to such
acts or omissions, and (ii) as additionally provided in this Agreement with
respect to Issuing Lender.


 


9.2      Delegation
of Duties. Administrative 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. Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.


 


9.3      Liability
of Administrative Agent. No Administrative Agent-Related Person
shall (i) 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 (ii) be responsible in any manner to any Lender for any
recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any officer 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
Administrative 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 Borrower or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Administrative 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 properties, books or
records of Borrower or any of Borrower’s Subsidiaries or Affiliates.


 


61

















 


9.4      Reliance
by Administrative Agent.


 


(a)       Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, 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 Borrower), independent accountants and
other experts selected by Administrative Agent. Administrative Agent shall be
fully justified in failing or refusing to take any action under any other Loan
Document unless it shall first receive such advice or concurrence of Requisite
Lenders as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Administrative 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 Requisite Lenders or all
Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of Lenders. Where
this Agreement expressly permits or prohibits an action unless Requisite Lenders
otherwise determine, and in all other instances, Administrative Agent may, but
shall not be required to, initiate any solicitation for the consent or a vote
of Lenders.


 


(b)       For purposes of determining compliance
with the conditions specified in Section 4.1, each Lender that has executed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by Administrative
Agent to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender.


 


(c)       Each Lender hereby authorizes
Administrative Agent, upon payment of the amount certified by Borrower as the
full and final payment of all principal, interest, fees and other charges
outstanding under this Agreement, and following termination of the Commitments,
to execute with and in favor of Borrower a termination letter that, inter alia,
terminates Borrower’s obligation to observe any or all of the covenants in
Sections 3, 6 and 7 hereof.


 


9.5      Notice
of Default. Administrative 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 and fees
required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default”. Administrative Agent
will notify Lenders of its receipt of any such notice. Administrative Agent
shall take such action with respect to such Default or Event of Default as may
be directed by Requisite Lenders in accordance with Section 8; provided,
however, that unless and until Administrative Agent has received any such
direction, Administrative Agent may (but shall not be obligated to) take such
action, or refrain


 


62

















 


from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of Lenders.


 


9.6      Credit
Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Administrative Agent-Related Person has made
any representation or warranty to it, and that no act by Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender as to any matter, including whether Administrative Agent-
Related Persons have disclosed material information in their possession. Each
Lender, including any Lender by assignment, represents to Administrative Agent
that it has, independently and without reliance upon any Administrative
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 Borrower and its Subsidiaries, 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 Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Administrative 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 Borrower. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Administrative Agent herein,
Administrative 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
Borrower or any of its Subsidiaries which may come into the possession of any
Administrative Agent-Related Person.


 


9.7      Indemnification
of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each
Administrative Agent-Related Person (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
pro rata, and hold harmless each Administrative Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Administrative
Agent-Related Person of any portion of such Indemnified Liabilities resulting
from such Person’s gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of Requisite Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse Administrative Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by Administrative
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
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower. The


 


63

















 


undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Administrative Agent.


 


9.8      Administrative
Agent in Individual Capacity. KeyBank 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 Borrower and its
Subsidiaries and Affiliates as though KeyBank were not Administrative Agent or
Issuing Lender hereunder and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, KeyBank or its Affiliates may
receive information regarding Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of Borrower or such
Affiliate) and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
KeyBank shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not Administrative Agent or
Issuing Lender.


 


9.9      Successor
Administrative Agent. Administrative Agent may, and at the
request of Requisite Lenders shall, resign as Administrative Agent upon 30 days’
notice to Lenders. If Administrative Agent resigns under this Agreement,
Requisite Lenders shall appoint from among Lenders a successor administrative
agent for Lenders which successor administrative agent shall be approved by
Borrower. If no successor administrative agent is appointed prior to the effective
date of the resignation of Administrative Agent, Administrative Agent may
appoint, after consulting with Lenders and Borrower and upon approval of
Borrower (other than at any time as there exists an Event of Default) which
will not be unreasonably withheld, a successor administrative agent from among
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term “Administrative
Agent” shall mean such successor administrative agent and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Section 9 and
Sections 10.3 and 10.11 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent (whether due to absence of Borrower approval or otherwise)
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the
duties of Administrative Agent hereunder until such time, if any, as Requisite
Lenders appoint a successor agent as provided for above. Notwithstanding the foregoing,
however, KeyBank may not be removed as Administrative Agent at the request of
Requisite Lenders unless KeyBank shall also simultaneously be replaced as “Issuing
Lender” hereunder pursuant to documentation in form and substance reasonably
satisfactory to KeyBank. Any Administrative Agent hereunder must hold a
Commitment in an amount not less than the $5,000,000.


 


9.10    Designation
of Arranger; No Affiliate Liability. The parties hereto
hereby designates KeyBanc Capital Markets, an Affiliate of KeyBank as “Sole
Arranger” and “Sole Book Runner” under this Agreement. None of Lenders (or
Affiliates of Lenders) identified from time to time herein by the titles “Sole
Arranger,” “Sole Book Runner,” “Syndication Agent,”


 


64

















 


“Documentation
Agent” or similar titles shall have any right, power, obligation, liability,
responsibility or duty under this Agreement in such capacity. Without limiting
the foregoing, none of Lenders (or Affiliates of Lenders) so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of
Lenders (or Affiliates of Lenders) so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.


 


SECTION X

MISCELLANEOUS


 


10.1    Amendments;
Consents. No amendment, modification, supplement, extension,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, and no consent to any departure by
Borrower therefrom shall be effective unless in writing signed by Requisite
Lenders and acknowledged by Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. Except as otherwise expressly provided herein, without
the approval in writing of Administrative Agent and all Lenders, no amendment,
modification, supplement, termination, waiver or consent may be effective:


 


(a)       To reduce the amount of principal,
principal prepayments or the rate of interest payable on, any Loan, or the
amount of any fee or other amount payable to any Lender under the Loan
Documents (unless such modification is consented to by each Lender entitled to receive
such fee) or to waive an Event of Default consisting of the failure of Borrower
to pay when due principal, interest or any commitment fee;


 


(b)       To postpone any date fixed for any
payment of principal of, prepayment of principal of, or any installment of
interest on, any Loan or any installment of any commitment fee, to extend the
term of, or increase the amount of, any Lender’s Commitment (it being
understood that a waiver of an Event of Default shall not constitute an
extension or increase in the Commitment of any Lender) or modify the Pro Rata
Share of any Lender;


 


(c)       To release collateral in which Lenders
have a security interest to secure the performance of Borrower’s obligations
under the Loan Documents constituting more than 20% of the value of Borrower’s
consolidated assets;


 


(d)       To amend the definition of “Requisite
Lenders” or the provisions of Section 4, Section 9, this Section 10.1 or
Section 10.6;


 


(e)       To amend any provision of this Agreement
that expressly requires the consent or approval of all Lenders; provided,
however, that (i) no amendment, waiver or consent shall, unless in writing and
signed by Issuing Lender in addition to Requisite Lenders or all Lenders, as
the case may be, affect the rights or duties of Issuing Lender, (ii) no amendment,
waiver or consent shall, unless in writing and signed by Administrative Agent
in addition to Requisite Lenders or all Lenders, as the case may be, affect the
rights or duties of Administrative Agent, and (iii) the fee letters may be
amended, or rights or privileges thereunder waived, in a writing executed by
the parties


 


65

















 


thereto. Any
amendment, modification, supplement, termination, waiver or consent pursuant to
this Section shall apply equally to, and shall be binding upon, all Lenders and
Administrative Agent.


 


10.2    Transmission and Effectiveness of
Communications and Signatures.


 


(a)       Modes
of Delivery. Except as otherwise provided in any Loan
Document, notices, requests, demands, directions, agreements and documents
delivered in connection with the Loan Documents (collectively, “communications”) shall be
transmitted by Requisite Notice to the number and address set forth on Schedule
10.2, may be delivered by the following modes of delivery, and shall be
effective as follows:


 




	
  Mode of Delivery

  	
   

  	
  Effective on earlier of actual receipt and:

  
	
   

  	
   

  	
   

  
	
  Courier

  	
   

  	
  Scheduled delivery date

  
	
   

  	
   

  	
   

  
	
  Facsimile

  	
   

  	
  When transmission in legible form complete

  
	
   

  	
   

  	
   

  
	
  Mail

  	
   

  	
  Fourth Business Day after deposit in U.S. mail first
  class postage pre-paid

  
	
   

  	
   

  	
   

  
	
  Personal delivery

  	
   

  	
  When received

  
	
   

  	
   

  	
   

  
	
  Telephone

  	
   

  	
  When conversation completed

  






 


provided, however,
that communications delivered to Administrative Agent pursuant to Section 2
must be in writing and shall not be effective until actually received by
Administrative Agent.


 


(b)       Reliance
by Administrative Agent and Lenders. Administrative Agent and
Lenders shall be entitled to rely and act on any communications purportedly
given by or on behalf of Borrower even if (i) such communications (A) were not
made in a manner specified herein, (B) were incomplete or (C) were not preceded
or followed by any other notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any subsequent related communications
provided for herein. Borrower shall indemnify Administrative Agent and Lenders
from any loss, cost, expense or liability as a result of relying on any
communications permitted herein.


 


(c)       Effectiveness
of Facsimile Documents and Signatures. Documents and agreements
delivered from time to time in connection with the Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as hardcopies with manual signatures and shall be binding on all Borrower and
its Subsidiaries and Administrative Agent and Lenders. Administrative Agent may
also request that any such documents and signature be confirmed by a
manually-signed hardcopy thereof; provided, however, that the failure to
request or deliver any such manually-signed hardcopy shall not affect the
effectiveness of any facsimile documents or signatures.


 


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10.3    Attorney
Costs, Expenses and Taxes. Borrower agrees (a) to pay or
reimburse Administrative Agent for all reasonable costs and expenses incurred
in connection with the development, preparation, negotiation and execution of
the Loan Documents, and the development, preparation, negotiation and execution
of any amendment, waiver, consent, supplement or modification to, any Loan
Documents, and any other documents prepared in connection herewith or
therewith, including all reasonable Attorney Costs, and (b) to pay or reimburse
Administrative Agent and each Lender for all costs and expenses incurred in
connection with any refinancing, restructuring, reorganization (including a
bankruptcy reorganization), collection and enforcement or attempted
enforcement, or preservation of any rights under any Loan Documents, and any
other documents prepared in connection herewith or therewith, or in connection
with any refinancing, or restructuring of any such documents in the nature of a
“workout” or of any insolvency or bankruptcy proceeding, including Attorney
Costs. The foregoing costs and expenses shall include all reasonable search,
filing, and appraisal charges and fees and documentary, stamp or similar taxes
related thereto, and other out-of- pocket expenses incurred by Administrative
Agent or any Lender and the cost of independent public accountants and other
outside experts retained by Administrative Agent or any Lender. Any amount
payable by Borrower under this Section shall bear interest from the tenth
(10th) Business Day following the date of demand for payment at the Default
Rate, unless waived by Administrative Agent. The agreements in this Section
shall survive repayment of all Obligations.


 


10.4    Binding
Effect; Assignment.


 


(a)       This
Agreement and the other Loan Documents to which Borrower is a party will be
binding upon and inure to the benefit of Borrower, Lenders and Administrative
Agent and their respective successors and assigns, except that, Borrower may
not assign its rights hereunder or thereunder or any interest herein or therein
without the prior written consent of all Lenders and any such attempted
assignment shall be void. Any Lender may at any time pledge its Note or any
other instrument evidencing its rights as a Lender under this Agreement to a
Federal Reserve Bank, but no such pledge shall release each such Lender from
its obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.


 


(b)       From time to time following the Closing
Date, each Lender may assign to one or more Eligible Assignees all or any
portion of its Commitment and/or Extensions of Credit; provided that (i) such
assignment, if not to a Lender or an Affiliate of the assigning Lender, shall
be consented to by Borrower at all times other than during the existence of a
Default or Event of Default and by Administrative Agent and Issuing Lender
(which approval of Borrower shall not be unreasonably withheld), (ii) a copy of
a duly signed and completed Assignment and Acceptance shall be delivered to
Administrative Agent, (iii) except in the case of an assignment (A) to an
Affiliate of the assigning Lender or to another Lender or (B) of the entire
remaining Commitment of the assigning Lender, the portion of the Commitment
assigned shall not be less than the Minimum Amount therefor, and (iv) the
effective date of any such assignment shall be as specified in the Assignment
and Acceptance, but not earlier than the date which is five Business Days after
the date Administrative Agent has received the Assignment and Acceptance. Upon
any required consent by Administrative Agent, Issuing Lender and


 


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Borrower to such
assignment and payment of the requisite fee described below, the assignee named
therein shall be a Lender for all purposes of this Agreement, with the Pro Rata
Share therein set forth and, to the extent of such Pro Rata Share, the
assigning Lender shall be released from its further obligations under this
Agreement. Borrower agrees that it shall execute and deliver upon request
(against delivery by the assigning Lender to Borrower of any Note) to such
assignee Lender, one or more Notes evidencing such assignee Lender’s Loans, and
to the assigning Lender if requested, one or more Notes evidencing Loans under
any Commitment retained by the assigning Lender. Administrative Agent’s consent
to any assignment shall not be deemed to constitute any representation or
warranty by any Administrative Agent-Related Person as to any matter. For
purposes hereof, each mutual fund that is an Affiliate of a Lender shall be
deemed to be a single Eligible Assignee, whether or not such fund is managed by
the same fund manager as other mutual funds that are Affiliates of the same
Lender.


 


(c)       After receipt of a completed Assignment
and Acceptance, and receipt of an assignment fee of $3,500 (unless such fee is
waived by the Administrative Agent) from such Eligible Assignee (including in
the case of assignments to Affiliates of assigning Lenders), Administrative
Agent shall, promptly following the effective date thereof, provide to Borrower
and Lenders a revised Schedule 10.2 giving effect thereto.


 


(d)       Each such Lender may from time to time,
without the consent of any other Person, grant participations to one or more
other Person (including another Lender) of all or any portion of its Pro Rata
Share of its Commitment or Extensions of Credit; provided, however, that (i)
such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) participating banks or other financial
institutions shall not be a Lender hereunder for any purpose except, if the
participation agreement so provides, for the purposes of Section 3 (but only to
the extent that the cost of such benefits to Borrower does not exceed the cost
which Borrower would have incurred in respect of such Lender absent the
participation) and subject to Sections 10.5 and 10.6, (iv) Borrower,
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, (v) the participation agreement shall not
restrict an increase in the combined Commitments, or in granting Lender’s Pro
Rata Share, so long as the amount of the participation interest is not affected
thereby, and (iv) the consent of the holder of such participation interest
shall not be required for amendments or waivers of provisions of the Loan
Documents; provided, however, that the assigning Lender may, in any agreement
with a participant, give such participant the right to consent to any matter
which (A) extends the Maturity Date as to such participant or any other date
upon which any payment of money is due to such participant, (B) reduces the
rate of interest owing to such participant, any fee or any other monetary
amount owing to such participant, or (C) reduces the amount of any installment
of principal owing to such participant. Any Lender that sells a participation
to any Person that is a “foreign corporation, partnership or trust” within the
meaning of the Code shall include in its participation agreement with such
Person a covenant by such Person that such Person will comply with the
provisions of Section 10.22 as if such Person were a Lender and


 


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provide that Administrative Agent and Borrower shall be third party
beneficiaries of such covenant.


 


10.5    Set-off.
In addition to any rights and remedies of Administrative Agent and Lenders or
any assignee or participant of any Lender or any Affiliate thereof (each, a “Proceeding Party”) provided by law, upon the occurrence and
during the continuance of any Event of Default, each Proceeding Party is
authorized at any time and from time to time, without prior notice to Borrower,
any such notice being waived by Borrower to the fullest extent permitted by
law, to proceed directly, by right of set-off, banker’s lien, or otherwise,
against any assets of Borrower and its Subsidiaries which may be in the hands
of such Proceeding Party (including all general or special, time or demand,
provisional or other deposits and other indebtedness owing by such Proceeding
Party to or for the credit or the account of Borrower) and apply such assets
against the Obligations, irrespective of whether such Proceeding Party shall
have made any demand therefor and although such Obligations may be unmatured.
Each Lender agrees promptly to notify Borrower and Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.


 


10.6    Sharing
of Payments. Each Lender severally agrees that if it, through
the exercise of any right of setoff, banker’s lien or counterclaim against
Borrower or otherwise, receives payment on account of the Outstanding
Obligations held by it that is ratably more than any other Lender receives in
payment on account of the Outstanding Obligations held by such other Lender,
then, subject to applicable Laws: (a) the Lender exercising the right of
setoff, banker’s lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Lender a participation in the Outstanding Obligations held by the other Lender
and shall pay to the other Lender a purchase price in an amount so that the
share of the Outstanding Obligations held by each Lender after the exercise of
the right of setoff, banker’s lien or counterclaim or receipt of payment shall
be in the same proportion that existed prior to the exercise of the right of
setoff, banker’s lien or counterclaim or receipt of payment; and (b) such other
adjustments and purchases of participations shall be made from time to time as
shall be equitable to ensure that all Lenders share any payment obtained in
respect of the Outstanding Obligations ratably in accordance with each Lender’s
share of the Outstanding Obligations immediately prior to, and without taking
into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Outstanding Obligations pursuant to this Section shall from and after the
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Outstanding Obligations purchased to the same extent as though the purchasing
Lender were the original owner of the Outstanding Obligations purchased.
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation so purchased may exercise any
and all rights of setoff, banker’s lien or counterclaim with respect to the
participation as fully as if Lender were the original owner of the Obligation
purchased.


 


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10.7    No
Setoff. As to any and all funds, securities or other assets
of Borrower which are now or hereafter held by Administrative Agent or any
Lender as collateral pursuant to the Credit Agreement or any other Loan
Document for any of the obligations thereunder (collectively the “Collateral Assets”), Administrative Agent and the Lenders
agree that they shall not exercise any right of setoff or recoupment against
nor shall they assert any security interest in the Collateral Assets in
connection with any other obligation owed to Administrative Agent or any Lender
which is unrelated to the Credit Agreement or the Loan Documents, except for:
(i) recovery for any items deposited with Administrative Agent or any Lender
and returned unpaid or as to which claims have been asserted as to breach of
transfer or presentment warranties, (ii) overdrafts on any account which
generated the funds which constitute part of the Collateral Assets, (iii)
automated clearing house entries, and (iv) Administrative Agent or any Lender’s
usual and customary fees for services rendered in connection with the assets or
bank accounts which constitute the Collateral Assets.


 


10.8    No
Waiver; Cumulative Remedies.


 


(a)       No
failure by any Lender or Administrative Agent to exercise, and no delay by any
Lender or Administrative Agent in exercising, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. Without limiting the generality of the
foregoing, the terms and conditions of Section 4 may be waived in whole or in
part, with or without terms or conditions, in respect of any Extension of
Credit without prejudicing Administrative Agent’s or Lender’s rights to assert
them in whole or in part in respect of any other Extension of Credit.


 


(b)       The rights, remedies, powers and
privileges herein or therein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law. Any decision by
Administrative Agent or any Lender not to require payment of any interest
(including Default Interest), fee, cost or other amount payable under any Loan
Document or to calculate any amount payable by a particular method on any
occasion shall in no way limit or be deemed a waiver of Administrative Agent’s
or Lender’s right to require full payment thereof, or to calculate an amount
payable by another method that is not inconsistent with this Agreement, on any
other or subsequent occasion.


 


(c)       The terms and conditions of Section 9 are
for the sole benefit of Administrative Agent and Lenders.


 


10.9    Usury.
Notwithstanding anything to the contrary contained in any
Loan Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum
Rate”). If Administrative Agent or any
Lender shall receive interest or a fee in an amount that exceeds the Maximum
Rate, the excessive interest or fee shall be applied to the principal of the
Outstanding Obligations or, if it exceeds the unpaid principal, refunded to
Borrower. In determining whether the interest or a fee contracted for, charged,
or received by Administrative Agent or any Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by


 


70

















 


applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations.


 


10.10  Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.


 


10.11  Integration. This
Agreement, together with the other Loan Documents and any letter agreements
referred to herein, comprises the complete and integrated agreement of the
parties on the subject matter hereof and supersedes all prior agreements, written
or oral, on the subject matter hereof. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control and govern; provided that the
inclusion of supplemental rights or remedies in favor of Administrative Agent
or Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.


 


10.12  Nature of Lenders’
Obligations. Nothing contained in this Agreement or any other
Loan Document and no action taken by Administrative Agent or Lenders or any of
them pursuant hereto or thereto may, or may be deemed to, make Lenders a
partnership, an association, a joint venture or other entity, either among
themselves or with Borrower or any Affiliate of Borrower. Each Lender’s
obligation to make any Extension of Credit pursuant hereto is several and not
joint or joint and several, provided that, in the case of the initial Extension
of Credit only, each lender’s obligation is conditioned upon the performance by
all other Lenders of their obligations to make the initial Extension of Credit.
A default by any Lender will not increase the Pro Rata Share attributable to
any other Lender.


 


10.13  Survival of
Representations and Warranties. All representations and
warranties made hereunder and in any Loan Document, certificate or statement
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery thereof but shall terminate the later
of (a) when the Commitments are terminated and (b) when no Obligations remain
outstanding under any Loan Document. Such representations and warranties have
been or will be relied upon by Administrative Agent and each Lender,
notwithstanding any investigation made by Administrative Agent or any Lender or
on their behalf.


 


10.14  Indemnity by
Borrower. Borrower agrees to indemnify, defend, save and hold
harmless each Administrative Agent-Related Person and each Lender and their
respective Affiliates, directors, officers, agents, attorneys and employees
(collectively, the “Indemnitees”) from and against:
(a) any and all claims, demands, actions or causes of action that are asserted
against any Indemnitee by any Person (other than Administrative Agent or any
Lender) relating directly or indirectly to a claim, demand, action or cause of
action that such Person asserts or may assert against Borrower, any of its
Affiliates or any its officers or directors; (b) any and all claims, demands,
actions or causes of action arising out of or relating to, the Loan Documents,


 


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any predecessor
loan documents, the Commitments, the use or contemplated use of the proceeds of
any Loan, property that is the subject of any Material Lease or any other
collateral given to secure the obligations of Borrower under this Agreement, or
the relationship of Borrower, Administrative Agent and Lenders under this
Agreement; (c) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action or cause
of action described in subsection (a) or (b) above; and (d) all liabilities,
claims, actions, loss, damages, including, without limitation, foreseeable and
unforeseeable consequential damages, costs and expenses (including sums paid in
settlement of claims and all consultant, expert and legal fees and expenses of
Indemnitees’ counsel) directly or indirectly arising out of or resulting from
any Hazardous Substance being present at any time in or around any part of
Borrower’s properties (leasehold or fee), or in the soil, groundwater or soil
vapor on or under Borrower’s properties (leasehold or fee), including those
incurred in connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work, or any resulting damages or
injuries to the person or property of any third parties or to any natural
resources; (e) any and all liabilities, losses, costs or expenses (including
Attorney Costs) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or
proceeding, or as a result of the preparation of any defense in connection with
any foregoing claim, demand, action, cause of action or proceeding, in all
cases, whether or not an Indemnitee is a party to such claim, demand, action,
cause of action or proceeding, including those liabilities caused by an
Indemnitee’s own negligence (all the foregoing, collectively, the “Indemnified Liabilities”); provided that no
Indemnitee shall be entitled to indemnification for any loss caused by its own
gross negligence or willful misconduct or for any loss asserted against it by
another Indemnitee.


 


10.15  Nonliability of
Lender.


 


Borrower acknowledges and agrees that:


 


(a)       Any inspections of any property of
Borrower made by or through Administrative Agent or Lenders are for purposes of
administration of the Loan Documents only, and Borrower is not entitled to rely
upon the same (whether or not such inspections are at the expense of Borrower);


 


(b)       By accepting or approving anything
required to be observed, performed, fulfilled or given to Administrative Agent
or Lenders pursuant to the Loan Documents, neither Administrative Agent nor
Lenders shall be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term, provision
or condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto by
Administrative Agent or Lenders;


 


(c)       The relationship between Borrower and
Administrative Agent and Lenders is, and shall at all times remain, solely that
of borrower and lenders; neither Administrative Agent nor Lenders shall under
any circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrower or its Affiliates, or to owe any fiduciary
duty to Borrower or its Affiliates; neither Administrative Agent nor any Lender
undertakes or assumes any responsibility or duty to


 


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Borrower or its
Affiliates to select, review, inspect, supervise, pass judgment upon or inform
Borrower or its Affiliates of any matter in connection with their property or
the operations of Borrower or its Affiliates; Borrower and its Affiliates shall
rely entirely upon their own judgment with respect to such matters; and any
review, inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by Lender in connection with such matters is solely for
the protection of Lenders and neither Borrower nor any other Person is entitled
to rely thereon; and


 


(d)       Neither Administrative Agent nor Lenders
shall be responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to property
caused by the actions, inaction or negligence of Borrower and/or its Affiliates
and Borrower hereby indemnifies and holds Administrative Agent and Lenders
harmless from any such loss, damage, liability or claim.


 


10.16  No Third Parties
Benefited. This Agreement is made for the purpose of defining
and setting forth certain obligations, rights and duties of Borrower,
Administrative Agent and Lenders in connection with the Extensions of Credit,
and is made for the sole benefit of Borrower, Administrative Agent and Lenders,
and Administrative Agent and Lenders’ successors and assigns. Except as
provided in Sections 10.14 and 10.22, no other Person shall have any rights of
any nature hereunder or by reason hereof.


 


10.17  Severability. Any
provision of the Loan Documents that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


10.18  Confidentiality. Administrative
Agent and each Lender shall use any confidential non-public information
concerning Borrower and its Subsidiaries that is furnished to Administrative
Agent or such Lender by or on behalf of Borrower and its Subsidiaries in
connection with the Loan Documents that has been identified in writing as
confidential at the time so furnished (collectively, “Confidential Information”) solely for the purpose of evaluating and
providing products and services to them and administering and enforcing the
Loan Documents, and it will hold the Confidential Information in confidence in
accordance with such Person’s customary procedures for handling confidential of
the same nature. Notwithstanding the foregoing, Administrative Agent and each
Lender may disclose Confidential Information to: (a) their Affiliates, or any
of their or their Affiliates’ directors, officers, employees, advisors, or
representatives (collectively, the “Representatives”) whom it determines
need to know such information for the purposes set forth in this Section (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Confidential Information and
instructed to keep such Confidential Information confidential; (b) any bank or
financial institution or other entity to which such Lender has assigned or
desires to assign an interest or participation in the Loan Documents or the
Obligations, provided that any such foregoing recipient of such Confidential
Information agrees to keep such Confidential Information confidential as
specified herein; (c) any governmental agency or regulatory body having or
claiming to have authority to regulate or oversee any aspect of Administrative
Agent’s or such Lender’s business or that of their Representatives in
connection with the exercise of such


 


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authority or
claimed authority; (d) the extent necessary or appropriate to effect or
preserve Administrative Agent or such Lender’s or any of their Affiliates’
security (if any) for any Obligation or to enforce any right or remedy or in
connection with any claims asserted by or against Administrative Agent or such
Lender or any of its Representatives; and (e) pursuant to any subpoena or any
similar legal process so long as Borrower is, or has been, given notice of such
legal process and the opportunity to seek a protective order. For purposes
hereof, the term “Confidential
Information” shall
not include information that (x) is in Administrative Agent’s or such Lender’s
possession prior to its being provided by or on behalf of Borrower and its
Subsidiaries, provided that such information is not known by Administrative
Agent or such Lender to be subject to another confidentiality agreement with,
or other legal or contractual obligation of confidentiality to, Borrower, (y)
is or becomes publicly available (other than through a breach hereof by
Administrative Agent or such Lender), or (z) becomes available to
Administrative Agent or such Lender on a nonconfidential basis, provided that
the source of such information was not known by Administrative Agent or such
Lender to be bound by a confidentiality agreement or other legal or contractual
obligation of confidentiality with respect to such information. Administrative
Agent and each Lender acknowledges that (i) the Confidential Information may include
material non-public information concerning the Borrower or a Subsidiary, as the
case may be, (ii) it has developed compliance procedures regarding the use of
material, non-public information and (iii) it will handle material non-public
information concerning the Borrower or a Subsidiary in accordance with all
Laws, including federal and state securities Laws applicable to Administrative
Agent or such Lender, as applicable, provided that neither Administrative Agent
nor any Lender shall in any way be responsible for compliance with such Laws by
Borrower or any of its Subsidiaries and provided, further, that nothing in this
sentence shall limit the right of Administrative Agent or any Lender to
disclose Confidential Information as otherwise permitted in this Section 10.18.


 


10.19  Further Assurances. Borrower
and its Subsidiaries shall, at their expense and without expense to
Administrative Agent or Lenders, do, execute and deliver such further acts and
documents as any Lender or Administrative Agent from time to time reasonably
requires for the assuring and confirming unto Lender of the rights hereby
created or intended now or hereafter so to be, or for carrying out the
intention or facilitating the performance of the terms of any Loan Document.


 


10.20  Headings. Section
headings in this Agreement and the other Loan Documents are included for
convenience of reference only and are not part of this Agreement or the other
Loan Documents for any other purpose.


 


10.21  Time of the Essence.
Time is of the essence of the Loan Documents.


 


10.22  Foreign Lenders. Each
Lender that is a “foreign corporation, partnership or trust” within the meaning
of the Code (a “Foreign
Lender”) shall
deliver to Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either Form W-8BEN or any
successor thereto (relating to such Person and entitling it to a complete
exemption from withholding on all payments to be made to such Person by
Borrower pursuant to this Agreement) or Form W-8ECI or any successor thereto
(relating to all payments to be made to such Person by Borrower pursuant to
this Agreement) of the United States Internal Revenue Service or such


 


74

















 


other evidence
satisfactory to Borrower and Administrative Agent that no withholding under the
federal income tax laws is required with respect to such Person. Thereafter and
from time to time, each such Person shall (a) promptly submit to Administrative
Agent such additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and Administrative Agent of any available exemption
from, United States withholding taxes in respect of all payments to be made to
such Person by Borrower pursuant to this Agreement, and (b) take such steps as
shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the re-designation
of its Lending Office) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to
such Person. If such Persons fail to deliver the above forms or other
documentation, then Administrative Agent may withhold from any interest payment
to such Person an amount equivalent to the applicable withholding tax imposed
by Sections 1441 and 1442 of the Code. If any Governmental Authority asserts
that Administrative Agent did not properly withhold any tax or other amount
from payments made in respect of such Person, such Person shall indemnify
Administrative Agent therefor, including all penalties and interest and costs
and expenses (including Attorney Costs) of Administrative Agent. The obligation
of Lenders under this Section shall survive the payment of all Obligations and
the resignation or replacement of Administrative Agent.


 


10.23  Governing Law.


 


(a)       THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE AGENT AND EACH LENDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.


 


(b)       ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY
LOAN DOCUMENT OR OTHER DOCUMENT RELATED HERETO. BORROWER, ADMINISTRATIVE AGENT
AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.


 


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10.24  Waiver of Right to
Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY,
AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.


 


10.25  Entire Agreement. This
Agreement and the other Loan Documents represent the final agreement between
the parties and may not be contradicted by evidence of prior, contemporaneous,
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.


 


[SIGNATURES
ON FOLLOWING PAGE.]


 


76

















 


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


 


	
  WIRELESS FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  	
  KEYBANK NATIONAL
  ASSOCIATION,

  as Administrative Agent,

  Issuing Lender and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Laura L. Siegal

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Laura L. Siegal

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President and Treasurer

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


Signature page to Credit
Agreement


 

















 


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


 


	
  WIRELESS FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  	
  KEYBANK NATIONAL
  ASSOCIATION,

  as Administrative Agent,

  Issuing Lender and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Robert W. Boswell

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  ROBERT W. BOSWELL

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  
											



 


 


Signature page to Credit
Agreement


 

















 


EXHIBIT A


 


FORM OF REQUEST FOR EXTENSION OF CREDIT


 


Date:                                   ,          


 


To:      KeyBank National Association


 


Ladies and
Gentlemen:


 


Reference is made to that certain Credit Agreement dated as of March
16, 2005, between Wireless Facilities, Inc., a Delaware corporation (“Borrower”) and, Lenders
from time to time party thereto, and KeyBank National Association, as
Administrative Agent, Lender and Issuing Lender with KeyBanc Capital Markets as
designated Sole Arranger and Sole Book Manager (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement”) the terms defined therein being used herein as therein
defined).


 


The undersigned hereby requests (select one):


 


	
  o A
  Borrowing of Loans

  	
   

  	
   ̈ A
  Conversion or Continuation of Loans

  



 


1.         On


 


2.         In the amount of $


 


3.         Comprised of [Offshore Rate or Base
Rate]


 


[type of Loan
requested]


 


4.         If applicable: with an Interest Period
of [1, 2, 3 or 6] months.


 


The foregoing request complies with the requirements of Section 2.1 of
the Agreement. Other than in connection with a Conversion or Continuation of
Loans, the undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the above date, before and after giving
effect to the Extension of Credit:


 


(a)       The representations and
warranties made by Borrower in the Agreement, or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection therewith, are and will be correct on and as of the date
of this Extension of Credit, except to the extent that such representations and
warranties specifically refer to any earlier date; and


 


1

















 


(b)       No Default or Event of
Default has occurred and is continuing on the date hereof or after giving
effect to this Extension of Credit.


 


	
   

  	
  WIRELESS
  FACILITIES, INC.,

  a Delaware corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


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