**Exhibit4.1**

 

**AMENDEDAND RESTATED CREDIT AGREEMENT**

** **

**byand between**

** **

**METAGROUP, INC.**

** **

**AND**

** **

**THEBANK OF NEW YORK**

** **

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** **

**$20,000,000**

 

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**Dated as of November 5, 2001**

 

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**TABLE OF CONTENTS**

 
| 1.     | DEFINITIONS  AND PRINCIPLES OF CONSTRUCTION |
|--------|---------------------------------------------|
|   |                                        |
|   | 1.1.                                        | Definitions |
|   | 1.2.                                        | Principles of Construction |
|   | 1.3.                                        | Matters  Regarding the Prior Credit Agreement |
|   | 1.4.                                        | Continuation of Collateral. |
|   |                                        |   |
| 2.     | AMOUNT  AND TERMS OF LOANS                  |
|   |                                        |
|   | 2.1.                                        | Revolving Credit Loans |
|   | 2.2.                                        | Revolving Credit Note. |
|   | 2.3.                                        | Term Loan. |
|   | 2.4.                                        | Term Note. |
|   | 2.5.                                        | Procedure for Borrowing. |
|   | 2.6.                                        | Termination  of Commitment; Reduction of Commitment Amount |
|   | 2.7.                                        | Prepayments  of the Loans; Payment on Maturity |
|   | 2.8.                                        | Payments |
|   | 2.9.                                        | Use of  Proceeds |
|   | 2.10.                                       | Letter of Credit  Sub-facility |
|   | 2.11.                                       | Absolute  Obligation with respect to Letter of Credit Payments |
|   |                                        |   |
| 3.     | INTEREST, FEES, YIELD PROTECTIONS,  ETC.    |
|   |                                        |
|   | 3.1.                                        | Interest Rate and  Payment Dates |
|   | 3.2.                                        | Fees |
|   | 3.3.                                        | Conversions |
|   | 3.4.                                        | Indemnification for Loss |
|   | 3.5.                                        | Capital  Adequacy |
|   | 3.6.                                        | Reimbursement for  Increased Costs |
|   | 3.7.                                        | Illegality of Funding |
|   | 3.8.                                        | Substituted Interest Rate |
|   | 3.9.                                        | Taxes |
|   | 3.10.                                       | Option  to Fund |
|   |                                        |   |
| 4.     | REPRESENTATIONS AND  WARRANTIES             |
|   |                                        |
|   | 4.1.                                        | Subsidiaries;  Capitalization |
|   | 4.2.                                        | Existence  and Power |
|   | 4.3.                                        | Authority and Execution |
|   | 4.4.                                        | Binding  Agreement |
|   | 4.5.                                        | Litigation |
|   | 4.6.                                        | Required  Consents |
|   | 4.7.                                        | Absence  of Defaults; No Conflicting Agreements |
|   | 4.8.                                        | Compliance with  Applicable Laws |

 

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|   | 4.9.                       | Taxes                                                   |
|--------|----------------------------|---------------------------------------------------------|
|   | 4.10.                      | Governmental Regulations                                |
|   | 4.11.                      | Federal  Reserve Regulations; Use of Loan Proceeds      |
|   | 4.12.                      | Plans                                                   |
|   | 4.13.                      | Financial Statements                                    |
|   | 4.14.                      | Property                                                |
|   | 4.15.                      | Intellectual Property;  Licenses                        |
|   | 4.16.                      | Environmental Matters                                   |
|   | 4.17.                      | Solvency                                                |
|   | 4.18.                      | Security  Interests                                     |
|   | 4.19.                      | Absence of Certain  Restrictions                        |
|   | 4.20.                      | No Misrepresentation                                    |
|   |                       |                                                    |
| 5.     | CONDITIONS  TO FIRST LOANS |
|   |                       |
|   | 5.1.                       | Evidence  of Action                                     |
|   | 5.2.                       | This  Agreement                                         |
|   | 5.3.                       | Note                                                    |
|   | 5.4.                       | Security  Agreement                                     |
|   | 5.5.                       | Subsidiary Guaranty                                     |
|   | 5.6.                       | Officer’s Certificate                              |
|   | 5.7.                       | Compliance Certificate                                  |
|   | 5.8.                       | Opinion of Counsel  to the Borrower                     |
|   | 5.9.                       | Search Reports and  Related Documents                   |
|   | 5.10.                      | Approval of Special Counsel                             |
|   | 5.11.                      | Fees                                                    |
|   | 5.12.                      | Fees and Expenses  of Special Counsel                   |
|   | 5.13.                      | Other  Documents                                        |
|   |                       |                                                    |
| 6.     | CONDITIONS  OF LENDING     |
|   |                       |
|   | 6.1.                       | Compliance                                              |
|   | 6.2.                       | Borrowing  Request / Letter of Credit Agreement         |
|   | 6.3.                       | Loan  Closings                                          |
|   | 6.4.                       | Other Documents                                         |
|   |                       |                                                    |
| 7.     | AFFIRMATIVE  COVENANTS     |
|   |                       |
|   | 7.1.                       | Financial  Statements and Information                   |
|   | 7.2.                       | Certificates; Other  Information                        |
|   | 7.3.                       | Legal  Existence                                        |
|   | 7.4.                       | Taxes                                                   |
|   | 7.5.                       | Insurance                                               |
|   | 7.6.                       | Performance of Obligations                              |
|   | 7.7.                       | Condition of Property                                   |
|   | 7.8.                       | Observance of Legal  Requirements                       |
|   | 7.9.                       | Inspection  of Property; Books and Records; Discussions |
|   | 7.10.                      | Authorizations                                          |
|   | 7.11.                      | Financial Covenants                                     |

 

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| 8.     | NEGATIVE  COVENANTS |
|--------|---------------------|
|   |                |
|   | 8.1.                | Indebtedness |
|   | 8.2.                | Liens |
|   | 8.3.                | Merger; Consolidations |
|   | 8.4.                | Dispositions |
|   | 8.5.                | Acquisitions, Investments, Loans, Etc. |
|   | 8.6.                | Restricted Payments |
|   | 8.7.                | Business and Name Changes |
|   | 8.8.                | Subsidiaries |
|   | 8.9.                | Sale and Leaseback  Transactions |
|   | 8.10.               | Amendments,  Etc. of Certain Agreements |
|   | 8.11.               | Transactions with  Affiliates |
|   | 8.12.               | Limitation on  Dividend Restrictions |
|   | 8.13.               | Limitation on Negative  Pledges |
|   |                |   |
| 9.     | DEFAULT             |
|   |                |
|   | 9.1.                | Events  of Default |
|   | 9.2.                | Remedies |
|   |                |   |
| 10.    | OTHER  PROVISIONS   |
|   |                |
|   | 10.1.               | Amendments and Waivers |
|   | 10.2.               | Notices |
|   | 10.3.               | No Waiver;  Cumulative Remedies |
|   | 10.4.               | Survival  of Representations and Warranties and Certain Obligations |
|   | 10.5.               | Expenses |
|   | 10.6.               | Successors and Assigns |
|   | 10.7.               | Counterparts |
|   | 10.8.               | Set-off |
|   | 10.9.               | Construction |
|   | 10.10.              | Governing  Law |
|   | 10.11.              | Headings Descriptive |
|   | 10.12.              | Severability |
|   | 10.13.              | Integration |
|   | 10.14.              | Consent to Jurisdiction |
|   | 10.15.              | Service  of Process |
|   | 10.16.              | No Limitation on  Service or Suit |
|   | 10.17.              | WAIVER OF TRIAL BY JURY |

 

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Exhibits

 
| Exhibit A-1 |   | Form of Revolving Credit Note      |
|-------------|--------|------------------------------------|
| Exhibit A-2 |   | Form of Term Note                  |
| Exhibit B   |   | Form of Borrowing Request          |
| Exhibit C   |   | Form of Notice of Conversion       |
| Exhibit D   |   | Form of Security Agreement         |
| Exhibit E   |   | Form of Subsidiary Guarantee       |
| Exhibit F   |   | Form of Compliance Certificate     |
| Exhibit G   |   | Form of Borrowing Base Certificate |

 

Schedules

 
| Schedule 4.1  |   | List of  Subsidiaries; Capitalization                  |
|---------------|--------|--------------------------------------------------------|
| Schedule 4.12 |   | List of Plans                                          |
| Schedule 4.15 |   | List of Licenses  and Intellectual Property Agreements |
| Schedule 8.2  |   | List of Existing  Liens                                |
| Schedule 8.5  |   | List of Existing  Investments                          |

 

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AMENDED AND RESTATEDCREDIT AGREEMENT (this “Agreement”) dated as of November 5, 2001 by andbetween META GROUP, INC., a Delaware corporation (the “Borrower”) andTHE BANK OF NEW YORK (the “Bank”).

 

RECITALS:

 

A.            The Bank and the Borrower have previously entered intothat certain Credit Agreement, dated as of September 18, 2000 (as amended, the“Prior Credit Agreement”).

 

B.            It is the intention of the partieshereto that this Agreement amend and restate the terms of the Prior CreditAgreement in its entirety, and that, on the Effective Date, the Loans under andas defined in the Prior Credit Agreement be Loans under this Agreement,evidenced and secured by the applicable Loan Documents (hereinafter defined).

 

C.            Subject to and upon the terms and conditionsherein set forth, the Bank is willing to renew, extend, and amend the PriorCredit Agreement pursuant to the terms of this Agreement.

 

NOW, THEREFORE, INCONSIDERATION OF THE PREMISES AND AGREEMENTS CONTAINED HEREIN, THE PARTIESHERETO AGREE AS FOLLOWS:

 

1.             DEFINITIONSAND PRINCIPLES OF CONSTRUCTION

 

1.1.          Definitions

 

As used in this Agreement, terms defined in therecitals have the meanings therein indicated, and the following terms have thefollowing meanings:

 

“ABR Advances”: the Revolving Credit Loans orthe Term Loan, as the case may be, (or any portions thereof) at such time asthey (or such portions) are made and/or being maintained at a rate of interestbased upon the Alternate Base Rate.

 

“Accountants”: Deloitte & Touche, or suchother independent certified public accountants of nationally recognizedstanding chosen by the Borrower and acceptable to the Bank in its reasonablejudgment.

 

“Accounts”: *“accounts”* as defined in the UniformCommercial Code as in effect in the State of New York.

 

“Accumulated Funding Deficiency”: as defined inSection 302 of ERISA.

 

“Acquisition”: with respect to any Person, thepurchase or other acquisition by such Person, by any means whatsoever(including through a merger, dividend or otherwise and whether in a singletransaction or in a series of related transactions), of (i) any Capital Stockof, or other equity securities of, any other Person if, immediately thereafter,such other Person would be either a Subsidiary of such Person or otherwiseunder the control of such Person, (ii)

 

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any Operating Entity, or(iii) any property of (A) any other Person or (B) any Operating Entity, ineither case other than in the ordinary course of business, provided, however,that no acquisition of all or substantially all of the assets of such otherPerson or Operating Entity shall be deemed to be in the ordinary course ofbusiness.

 

“Advance”: an ABR Advance or a LIBOR Advance,as the case may be.

 

“Affiliate”: as to any Person, any other Personwhich, directly or indirectly, controls, is controlled by, or is under commoncontrol with, such Person.

 

“Agreement”: this Credit Agreement, as the samemay be amended, supplemented or otherwise modified from time to time.

 

“Alternate Base Rate”: on any date, a rate ofinterest per annum equal to the higher of (i) the Federal Funds Rate in effecton such date plus 0.50% or (ii) the Prime Rate in effect on such date.

 

“Applicable Margin”: with respect to the unpaidprincipal balance of Revolving Credit Loans or the Term Loan, as the case maybe (i) consisting of LIBOR Advances, 2.50%, and (ii) consisting of ABRAdvances, 0.00%.

 

“Authorized Signatory”: as to (i) any Personwhich is a corporation, the chairman of the board, the president, any vicepresident, the chief financial officer or any other officer (acceptable to theBank) of such Person, and (ii) any Person which is not a corporation, a generalpartner, Managing Person or other appropriate appointed officer (acceptable tothe Bank) thereof.

 

“Available Revolving Credit Commitment”: at anydate of determination, an amount equal to the excess, if any, of (a) the amountof the Revolving Credit Commitment over (b) the sum of (i) the aggregate unpaidprincipal amount at such time of all Revolving Credit Loans plus (ii)the Letter of Credit Exposure.

 

“Bond Collateral”:  the portion of the Collateral consisting of FHA bonds and theproceeds thereof, as such Collateral may be substituted from time to time withother Liquid Investments.

 

“Borrowing Date”: any Business Day on which theBank makes a Loan or issues a Letter of Credit.

 

“Borrowing Base”: at any date of determination,an amount equal to 80% of Eligible Accounts Receivable at such date.  The Borrowing Base shall be determined fromtime to time by the Bank by reference to the Borrowing Base Certificate mostrecently delivered to it.

 

“Borrowing Base Certificate”: a certificatesubstantially in the form of Exhibit G.

 

“Borrowing Request”: a request for one or moreAdvances, substantially in the form of Exhibit B.

 

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“Business Day”: any day other than a Saturday,a Sunday or a day on which commercial banks located in New York City areauthorized or required by law or other governmental action to close and, withrespect to all notices and determinations in connection with, and payments ofprincipal and interest on, LIBOR Advances, which is also a day on whicheurodollar funding between banks may be carried on in London, England.

 

“Capital Expenditures”: for any period, theaggregate of all expenditures incurred by the Borrower and its Subsidiariesduring such period which, in accordance with GAAP, are required to be shown asadditions to property, plant, equipment**or similar fixed asset accounts reflectedon the consolidated balance sheet of the Borrower and its Subsidiaries,provided, however, that “Capital Expenditures” shall not include (i)capitalized leases, or (ii) expenditures of proceeds of insurance settlementsin respect of lost, destroyed or damaged assets, equipment or other property tothe extent such expenditures are made to replace or repair such lost, destroyedor damaged assets, equipment or other property within six months of the receiptof such proceeds.

 

“Capital Lease Obligations”: with respect toany Person, obligations of such Person with respect to leases which arerequired to be capitalized for financial reporting purposes in accordance withGAAP.

 

“Capital Stock”: as to any Person, all shares,interests, partnership interests, limited liability company interests,participations, rights in or other equivalents (however designated) of suchPerson’s equity (however designated) and any rights, warrants or optionsexchangeable for or convertible into such shares, interests, participations,rights or other equity.

 

“Change of Control”: the acquisition ofownership, directly or indirectly, beneficially or of record, by any Person orgroup (within the meaning of the Securities Exchange Act of 1934 and the rulesof the Securities and Exchange Commission thereunder as in effect on the datehereof), of shares representing 50% or more of the aggregate ordinary votingpower or economic interests represented by the issued and outstanding equitysecurities of the Borrower on a fully diluted basis.

 

“Code”: the Internal Revenue Code of 1986, asthe same may be amended from time to time, or any successor thereto, and therules and regulations issued thereunder, as from time to time in effect.

 

“Collateral”: the property in which a securityinterest is granted under the Collateral Documents.

 

“Collateral Documents”: the Security Agreementand all documents executed or delivered in connection therewith.

 

“Commitment Fee”: as defined in Section 3.2(a).

 

“Commitment”: the Revolving Credit Commitment,the Term Loan Commitment or the Letter of Credit Commitment, as the case maybe.

 

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“Compliance Certificate”: a certificatesubstantially in the form of Exhibit F.

 

“Contingent Obligation”: as to any Person (a “secondaryobligor”), any obligation of such secondary obligor (i) guaranteeing or ineffect guaranteeing any return on any investment made by another Person, or(ii) guaranteeing or in effect guaranteeing any Indebtedness, lease, dividendor other obligation (a “primary obligation”) of any other Person (a “primaryobligor”) in any manner, whether directly or indirectly, including, withoutlimitation, any obligation of such secondary obligor, whether contingent, (A)to purchase any primary obligation or any property constituting direct or indirectsecurity therefor, (B) to advance or supply funds (x) for the purchase orpayment of any primary obligation or (y) to maintain working capital or equitycapital of the primary obligor or otherwise to maintain the net worth orsolvency of a primary obligor, (C) to purchase property, securities or servicesprimarily for the purpose of assuring the beneficiary of any primary obligationof the ability of a primary obligor to make payment of a primary obligation,(D) otherwise to assure or hold harmless the beneficiary of a primaryobligation against loss in respect thereof, and (E) in respect of theliabilities of any partnership in which a secondary obligor is a generalpartner, except to the extent that such liabilities of such partnership arenonrecourse to such secondary obligor and its separate property, provided,however, that the term “Contingent Obligation” shall not include theindorsement of instruments for deposit or collection in the ordinary course ofbusiness.  The amount of any ContingentObligation of a Person shall be deemed to be an amount equal to the stated ordeterminable amount of a primary obligation in respect of which such ContingentObligation is made or, if not stated or determinable, the maximum reasonablyanticipated liability in respect thereof as determined by such Person in goodfaith.

 

“Conversion Date”: the date on which: (i) aLIBOR Advance is converted to an ABR Advance, (ii) a LIBOR Advance is continuedas a new LIBOR Advance, or (iii) an ABR Advance is converted to a LIBORAdvance.

 

“Credit Agreement”: this Amended and RestatedCredit Agreement, as the same may be amended from time to time.

 

“Credit Party”: the Borrower and each otherparty (other than the Bank) to a Loan Document.

 

“Debt Service”: for any period, with respect tothe Borrower and its Subsidiaries for each of the following, the sum of (i)Interest Expense for such period, plus (ii) all scheduled payments ofprincipal during such period on Indebtedness which had, on the date of creationof such Indebtedness, a final maturity which was more than twelve months aftersuch date.

 

“Default”: any event or condition whichconstitutes an Event of Default or which, with the giving of notice, the lapseof time, or any other condition, would, unless cured or waived, become an Eventof Default.

 

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“Defaulted Account”: any Account of theBorrower which has been or should have been charged off as not collectible inconformity with the accounting policies of the Borrower in effect at the timeof determination.

 

“Disposition”: with respect to any Person, anysale, assignment, transfer or other disposition by such Person, by any means,of (i) the Capital Stock of, or other equity interests of, any other Person,(ii) any Operating Entity, or (iii) any other property of such Person otherthan in the ordinary course of business, provided, however, that no such sale,assignment, transfer or other disposition of property shall be deemed to be inthe ordinary course of business (a) if the fair market value thereof is inexcess of $250,000, or (b) to the extent that the fair market value thereof,when aggregated with all other sales, assignments, transfers and otherdispositions made by such Person within the same fiscal year, exceeds $500,000,and then only to the extent of such excess, if any, or (c) if it is the sale,assignment, transfer or disposition of (1) all or substantially all of theproperty of such Person or (2) any Operating Entity.

 

“Dollars” and “$”: lawful currency of theUnited States.

 

“Domestic Subsidiary”: any Subsidiary which isorganized and existing under the laws of a jurisdiction of, and conducts itsbusiness primarily in, the United States of America.

 

“EBITDA”: for any period, net income of theBorrower and its Subsidiaries for such period, determined on a consolidatedbasis in accordance with GAAP plus the sum of, without duplication, (i)Interest Expense, (ii) Income Tax Expense and (iii) depreciation, amortizationand other non-cash charges of the Borrower and its Subsidiaries (includingamortization or other expense recognitions of any costs associated with assetwrite-ups), each to the extent deducted in determining such net income for suchperiod; provided, however, that for purposes of this calculation,net income shall exclude extraordinary gains and losses from sales, exchangesand other dispositions of property not in the ordinary course of business andother non-recurring items.

 

“Effective Date”: November 5, 2001.

 

“Eligible Accounts Receivable”: An amount equalto the aggregate outstanding balance of all Accounts of the Borrower and itsDomestic Subsidiaries payable in the United States of America in Dollars, asset forth in the consolidated aging reports of billed Accounts for the Borrowerand its Domestic Subsidiaries as of such time, providedthat,unless otherwise approved in writing by the Bank, no amount owing in respect ofany Account shall be deemed to be included in any calculation of EligibleAccounts Receivable if:

 

(a)           (i) such Account is not a bona fide,valid and legally enforceable obligation of the Obligor thereon arising fromthe actual sale and delivery of goods to or rendition to and acceptance ofservices by such Obligor, or (ii) such Account otherwise does not represent afinal sale or transfer of title to such Obligor,

 

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(b)           (i) the Obligor thereon is anyAffiliate of the Borrower or any Subsidiary, or any employee, officer, salesrepresentative, agent (other than any such sales representative or agent whichhas an independent contractor relationship with the Borrower or anySubsidiary), director or stockholder holding 10% or more of the of theBorrower, any Subsidiary or any of their Affiliates, or (ii) the sale givingrise to such Account is to an Obligor in any jurisdiction outside the UnitedStates;

 

(c)           such Account was, at the date of theoriginal issuance of the respective invoice therefor, payable more than 31 daysafter such date;

 

(d)           such Account remains unpaid for morethan 60 days after the date set forth for payment in the invoice originallyissued therefor;

 

(f)            such Account is a Defaulted Account;

 

(g)           a proceeding under bankruptcy orsimilar laws has occurred and is continuing with respect to the Obligorthereon;

 

(h)           it is an Account which, pursuant toany agreement between the Borrower or any of its Subsidiaries and the Obligorthereon, may be set off or charged against any trade payable, rebate obligationor other similar liability owing to such Obligor;

 

(i)            such Account is the result of achargeback, debit memo or a reinvoice of a disputed Account or DefaultedAccount;

 

(j)            the Obligor thereon has disputed itsliability in writing on, or the Obligor thereon has made any written claim ordefense with respect to, such Account or any other Account due from suchObligor to the Borrower or any Subsidiary, which has not been resolved (butonly the amount of such Account that is disputed or subject to claim or defenseor is unresolved shall be excluded from the calculation of Eligible AccountsReceivable);

 

(k)           such Account is not owned solely bythe Borrower or any Subsidiary free and clear of all Liens or other rights orclaims of any other Person (except in favor of the Bank);

 

(l)            such Account is subject to anymaterial contractual restrictions on the transfer, assignability or salethereof, enforceable against the assignee, except pursuant to any Loan Documentor any other agreement or instrument governing any Indebtedness of the Borrowerand its Subsidiaries which is permitted to be incurred by the Borrower and itsSubsidiaries pursuant to this Agreement; or

 

(m)          the Bank does not have a valid andperfected first priority security interest in such Account or such Account doesnot conform in all material respects to the

 

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representations and warranties contained in thisAgreement or any of the Collateral Documents.

 

For purposes ofdetermining Eligible Accounts Receivable, the aggregate amount owing in respectof Accounts meeting the foregoing criteria for inclusion in the determinationof Eligible Accounts Receivable shall be reduced by (i) an amount equal to thenet credit balances owed to any customers, (ii) an amount equal to the amountof any reserve for the value of an accrual for the estimated current liabilityfor rebates and return and credit memos with respect to such Accounts,determined in conformity with the accounting policies of the Borrower and itsSubsidiaries as in effect from time to time and (iii) an amount equal to theportion of any Account representing delivery or freight which has been orshould have been charged-off as not collectable in conformity with theaccounting policies of the Borrower and its Subsidiaries as in effect from timeto time.

 

“Employee Benefit Plan”: an employee benefitplan within the meaning of Section 3(3) of ERISA maintained, sponsored orcontributed to by the Borrower, any of its Subsidiaries or any ERISA Affiliate.

 

“Employee Stock Options”: options or otherrights to purchase common shares of the Borrower issued exclusively todirectors, officers and employees of the Borrower and its Subsidiaries pursuantto a plan or arrangement adopted by the board of directors of the Borrower.

 

“Environmental Laws”: any and all federal, stateand local laws relating to the environment, the use, storage, transporting,manufacturing, handling, discharge, disposal or recycling of hazardoussubstances, materials or pollutants or industrial hygiene, and including,without limitation, (i) the Comprehensive Environmental Response, Compensationand Liability Act, as amended, 42 USCA §9601 etseq.; (ii) theResource Conservation and Recovery Act of 1976, as amended, 42 USCA §6901 etseq.; (iii) the Toxic Substance Control Act, as amended, 15 USCA §2601 etseq.; (iv) the Water Pollution Control Act, as amended, 33 USCA §1251 etseq.; (v) the Clean Air Act, as amended, 42 USCA §7401 et seq.;(vi) the Hazardous Materials Transportation Authorization Act of 1994, asamended, 49 USCA §5101 etseq. and (vii) all rules, regulations,judgments, decrees, injunctions and restrictions thereunder and any analogousstate law.

 

“ERISA”: the Employee Retirement IncomeSecurity Act of 1974, as amended from time to time, and the rules andregulations issued thereunder, as from time to time in effect.

 

“ERISA Affiliate”: when used with respect to anEmployee Benefit Plan, ERISA, the PBGC or a provision of the Code pertaining toemployee benefit plans, any Person which is a member of any group oforganizations within the meaning of Sections 414(b) or (c) of the Code (or,solely for purposes of potential liability under Section 302(c)(11) of ERISAand Section 412(c)(11) of the Code and the lien created under Section 302(f) ofERISA and Section 412(n) of the Code, Sections 414(m) or (o) of the Code) ofwhich the Borrower or any of its Subsidiaries is a member.

 

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“Event of Default”: as defined in Section 9.1.

 

“Existing L/Cs”: all letters of credit issued(or deemed issued) pursuant to the Prior Credit Agreement.

 

“Facility Fee”: as defined in Section 3.2(b).

 

“Federal Funds Rate”: for any day, a rate perannum (expressed as a decimal, rounded upwards, if necessary, to the nexthigher 1/100 of 1%) equal to the weighted average of the rates on overnightfederal funds transactions with members of the Federal Reserve System arrangedby federal funds brokers on such day, as published by the Federal Reserve Bankof New York on the Business Day next succeeding such day, provided that(i) if the day for which such rate is to be determined is not a Business Day,the Federal Funds Rate for such day shall be such rate on such transactions onthe next preceding Business Day as so published on the next succeeding BusinessDay, and (ii) if such rate is not so published for any day, the Federal FundsRate for such day shall be the average of the quotations for such day on suchtransactions received by the Bank.

 

“Financial Officer”: as to any Person, thechief financial officer of such Person or such other officer as shall bereasonably satisfactory to the Bank.

 

“Fixed Charge Coverage Ratio”: at any date ofdetermination, the ratio of (a) EBITDA minus Capital Expenditures to (b)the sum of Debt Service plus Income Tax Expense, in each case for thefour fiscal quarter period ending on such date.

 

“Fixed Rate Funding Loss” means all liquidateddamages, break funding losses and other losses, claims, damages or otheramounts payable by the Borrower to the Bank under any Interest Rate ProtectionProduct, including, without limitation, any amounts payable by reason of anearly termination of any Interest Rate Protection Product.

 

“Foreign Subsidiary”: any Subsidiary which doesnot qualify under the definition of *Domestic Subsidiary*.

 

“Funded Debt”: on any date (x) during theRevolving Credit Commitment Period, the sum of (i) the aggregate principalamount of Revolving Credit Loans outstanding on such date plus (ii) theprincipal amount of all senior indebtedness for borrowed money of the Borrowerand its Subsidiaries outstanding on such date which has a final maturity ofmore than twelve months from such date, and (y) after the Revolving CreditCommitment Period, the sum of (i) the outstanding principal balance of the TermLoan on such date plus (ii) the principal amount of all seniorindebtedness for borrowed money of the Borrower and its Subsidiaries (otherthan the Term Loan) outstanding on such date which has a final maturity of morethan twelve months from such date.

 

“GAAP”: generally accepted accountingprinciples in effect in the United States of America as of the date ofdetermination, consistently applied.

 

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“Governmental Authority”: any foreign, federal,state, municipal or other government, or any department, commission, board,bureau, agency, public authority or instrumentality thereof, or any court orarbitrator.

 

“Hazardous Substance”: any hazardous or toxicsubstance, material or waste, including, but not limited to, (i) thosesubstances, materials, and wastes listed in the United States Department ofTransportation Hazardous Materials Table (49 CFR 172.101) or by theEnvironmental Protection Agency as hazardous substances (40 CFR Part 302) andamendments thereto and replacements thereof and (ii) any substance, pollutantor material defined as, or designated in, any Environmental Law as a “hazardoussubstance,” “toxic substance,” “hazardous material,” “hazardous waste,”“restricted hazardous waste,” “pollutant,” “toxic pollutant” or words of similarimport.

 

“Income Tax Expense”: for any period, thegreater of (i) accrued income tax expense calculated in accordance with GAAP,or (ii) income taxes paid in cash, in each case for such period of the Borrowerand its Subsidiaries determined on a consolidated basis.

 

“Indebtedness”: as to any Person, at aparticular time, all items which constitute, without duplication, (i)indebtedness for borrowed money, (ii) indebtedness in respect of the deferredpurchase price of property (other than trade payables incurred in the ordinarycourse of business), (iii) indebtedness evidenced by notes, bonds, debenturesor similar instruments, (iv) obligations with respect to any conditional saleor title retention agreement, (v) indebtedness arising under acceptance facilitiesand the amount available to be drawn under all letters of credit issued for theaccount of such Person and, without duplication, all drafts drawn thereunder tothe extent such Person shall not have reimbursed the issuer in respect of theissuer’s payment thereof, (vi) all liabilities secured by any Lien on anyproperty owned by such Person even though such Person has not assumed orotherwise become liable for the payment thereof (other than carriers’,warehousemen’s, mechanics’, repairmen’s or other like non-consensual statutoryLiens arising in the ordinary course of business), (vii) Capital LeaseObligations, (viii) obligations under interest rate or foreign currency hedgingarrangements at market value, (ix) all obligations of such Person in respect ofCapital Stock subject to mandatory redemption or redemption at the option ofthe holder thereof, in whole or in part, and (x) all Contingent Obligations ofsuch Person in respect of any of the foregoing.

 

“Intellectual Property”: as defined in Section4.15.

 

“Intercompany Indebtedness”: loans which aremade (i) by the Borrower to any Subsidiary Guarantor, or (ii) by a direct orindirect wholly-owned Subsidiary of the Borrower to the Borrower or to aSubsidiary Guarantor.

 

“Interest Expense”: for any period, the sum of,without duplication, all interest (adjusted to give effect to all interest rateswap, cap or other interest rate hedging arrangements and fees and expensespaid in connection therewith) paid in cash in respect of all Indebtedness duringsuch period of the Borrower and its Subsidiaries as determined on aconsolidated basis.

 

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“Interest Payment Date”: (i) during theRevolving Credit Commitment Period (x) as to any ABR Advance, the first day ofeach month commencing on the first of such days to occur after such ABR Advanceis made or any LIBOR Advance is converted to an ABR Advance, (y) as to anyLIBOR Advance as to which the Borrower has selected an Interest Period of one,two or three months, the last day of such Interest Period, and (z) as to anyLIBOR Advance as to which the Borrower has selected an Interest Period of sixmonths, the date which occurs three months from the first day of such InterestPeriod and the last day of such Interest Period; (ii) after the RevolvingCredit Commitment Period, with respect to all Advances, the first day of eachmonth; and (iii) the Maturity Date.

 

“Interest Period”: with respect to any LIBORAdvance, the period commencing on, as the case may be, the Borrowing Date orConversion Date with respect to such LIBOR Advance and ending one, two, threeor six months thereafter as selected by the Borrower and agreed to by the Bank,provided, however, that:

 

(a)           if any Interest Period would otherwiseend on a day which is not a Business Day, such Interest Period shall beextended to the next succeeding Business Day unless the result of suchextension would be to carry such Interest Period into another calendar month,in which event such Interest Period shall end on the immediately precedingBusiness Day;

 

(b)           any Interest Period which begins onthe last Business Day of a calendar month (or on a day for which there is nonumerically corresponding day in the calendar month at the end of such InterestPeriod) shall end on the last Business Day of the calendar month at the end ofthe Interest Period;

 

(c)           no Interest Period selected inrespect of the conversion of any LIBOR Advance shall end after (i) theRevolving Credit Termination Date, for the period prior to the Revolving CreditTermination Date, and (ii) the Maturity Date, for the period after the TermLoan Conversion Date;

 

(d)           the Borrower shall select InterestPeriods such that, on each date that a mandatory scheduled principal payment isrequired to be made with respect to the Term Loan, (i) the aggregate principalbalance of all ABR Advances comprising the Term Loan outstanding on such date,plus (ii) the aggregate principal balance of each LIBOR Advance comprising theTerm Loan, the applicable Interest Period of which shall end on or before suchdate, shall equal or exceed the aggregate principal balance of the Term Loanrequired to be paid on such date;

 

(e)           the Borrower shall select InterestPeriods so that not more than ten (10) different Interest Periods shall beoutstanding at any one time under the Loans; and

 

(f)            if the Borrower shall enter into anyInterest Rate Protection Product with respect to the Term Loan, each InterestPeriod with respect to the amount of

 

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the Term Loan equal to the notional amount in such Interest RateProtection Product shall be one month.

 

“Interest Rate Protection Product”****meansany interest rate swap, cap, collar or floor agreement, hedge device or otheragreement or arrangement entered into by the Borrower with the Bank at any timewith respect to a notional amount equal to the all or any portion of theoutstanding principal balance of the Term Loan, the purpose of which is toprovide a fixed rate of interest payable by the Borrower with respect to suchportion of the Term Loan.

 

“Investments”: as defined in Section 8.5.

 

“Letter of Credit Agreement”: each Applicationand Agreement for Standby Letter of Credit, in the form provided by the Bankfrom time to time.

 

“Letter of Credit Commitment”: the commitmentof the Bank to issue Letters of Credit under and in accordance with the termsof this Agreement.

 

“Letter of Credit Commitment Amount”:$5,000,000, as reduced from time to time pursuant to Section 2.6.

 

“Letter of Credit Commitment Period”: theperiod from the date hereof until the Business Day immediately preceding theMaturity Date.

 

“Letter of Credit Exposure”: at any date, thesum, without duplication, of (i) the aggregate amount which may be drawn underall unexpired Letters of Credit outstanding on such date (whether or not theconditions for drawing thereunder have or may be satisfied), and (ii) theaggregate unpaid reimbursement obligations in respect of the Letters of Crediton such date.

 

“Letter of Credit”: as defined in Section 2.10.

 

“Leverage Ratio”: at any date of determination,the ratio of (x) Funded Debt on such date to (y) EBITDA for the period of fourfiscal quarters ending on such date.

 

“LIBOR Advances”: collectively, the RevolvingCredit Loans or the Term Loan, as the case may be, (or any portions thereof),at such time as they (or such portions) are made and/or being maintained at arate of interest based upon LIBOR.

 

“LIBOR”: with respect to the Interest Periodapplicable to any LIBOR Advance, a rate of interest per annum, as determined bythe Bank, (rounded, if necessary, to the nearest one hundred-thousandth of apercentage point) equal to the rate for deposits in U.S. Dollars for a periodcomparable to such Interest Period which appears on the Telerate Page 3750 asof 11:00 a.m., London time, on the day that is two London Banking Days prior tothe first day of such Interest Period. If such rate does not appear on the Telerate Page 3750, LIBOR shallmean, for such Interest Period, the rate per annum (rounded, if necessary, tothe nearest one hundred-thousandth of a percentage point) at which deposits inU.S. Dollars are offered by four major banks in the London interbank market atapproximately 11:00 a.m., London time, on the day that

 

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is two London BankingDays prior to the first day of such Interest Period to prime banks in theLondon interbank market for a period comparable to such Interest Period and inan amount comparable to the outstanding principal amount of such LIBOR Advance.The Bank will request the principal London office of each such bank to providea quotation of its rate.  If at leasttwo such quotations are provided as requested, the rate for that InterestPeriod will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as requested, the ratefor that Interest Period will be the arithmetic mean of the rates quoted bymajor banks in New York City, selected by the Bank, at approximately 11:00a.m., New York City time, on the date that is two Business Days prior to thefirst day of such Interest Period for loans in U.S. Dollars to leading Europeanbanks for a period comparable to such Interest Period and in an amountcomparable to the outstanding principal amount of such LIBOR Advance.

 

“License”: as defined in Section 4.15.

 

“Lien”: any mortgage, pledge, hypothecation,assignment, deposit or preferential arrangement, encumbrance, lien (statutoryor other), or other security agreement or security interest of any kind ornature whatsoever, including, without limitation, any conditional sale or othertitle retention agreement and any capital or financing lease havingsubstantially the same economic effect as any of the foregoing.

 

“Liquid Investments”: (i)normal business banking accounts, (ii) dollar denominated time deposits,certificates of deposit and bankers acceptances maturing within 180 days fromthe date of acquisition thereof issued or guaranteed by or placed with, andmoney market deposit accounts issued or offered by, any domestic office of anycommercial bank whose (or whose parent company’s) unsecured non-creditsupported short-term commercial paper rating at the time of such acquisition isthe highest credit rating obtainable from Standard & Poor’s RatingsServices, a division of The McGraw-Hill Companies, Inc., or any successorthereto (“S&P”) and Moody’s Investors Service, Inc. or any successorthereto (“Moody’s”) or, if rated by only one such rating agency, thehighest credit rating obtainable from such rating agency, (iii) securitiesissued, or directly and fully guaranteed, or insured, by the United States ofAmerica or any agency or instrumentality thereof (provided that the full faithand credit of the United States of America is pledged in full support thereof)having maturities of not more than one year from the date of acquisition, (iv)commercial paper maturing within 270 days from the date of acquisition thereofand having, at such date of acquisition, the highest credit rating obtainable fromS&P or from Moody’s, (v) marketable direct obligations issued by any stateof the United States of America or any political subdivision of any such stateor any public instrumentality thereof maturing within one year from the date ofacquisition thereof and, at the time of acquisition, having one of the twohighest ratings obtainable from either S&P or Moody’s, and (vi) equitysecurities traded on any nationally recognized securities exchange in theUnited States of America.

 

“Loan Documents”: collectively, this Agreement,the Note, each Letter of Credit Agreement, the Collateral Documents and anydocumentation governing an Interest Rate Protection Product.

 

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“Loans”: the Revolving Credit Loans and/or theTerm Loan, as the case may be.  The term“Loans” shall also include all loans made under the Prior Credit Agreementwhich are outstanding on the Effective Date.

 

“London Banking Day”: any day on whichcommercial banks are open for general business (including dealings in foreignexchange and foreign currency deposits) in London, England.

 

“Margin Stock”: any *“margin stock”*, as definedin Regulation U of the Board of Governors of the Federal Reserve System, asamended, supplemented or otherwise modified from time to time.

 

“Material Adverse Change”: a material adversechange in (i) the financial condition, operations, business, prospects orproperty of (A) the Borrower or (B) the Borrower and its Subsidiaries taken asa whole, (ii) the ability of the Borrower or any of its Subsidiaries to performits obligations under the Loan Documents to which it is a party or (iii) theability of the Bank to enforce the Loan Documents.

 

“Material Adverse Effect”: a material adverseeffect on (i) the financial condition, operations, business, prospects orproperty of (A) the Borrower or (B) the Borrower and its Subsidiaries taken asa whole, (ii) the ability of the Borrower or any of its Subsidiaries to performits obligations under the Loan Documents to which it is a party or (iii) theability of the Bank to enforce the Loan Documents.

 

“Maturity Date”: November 4, 2004, or, withrespect to either Note, such earlier date on which such Note shall become dueand payable, whether by acceleration or otherwise.

 

“Multiemployer Plan”: a Pension Plan which is amultiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Note”: the Revolving Credit Note or the TermNote, as the context requires; and “Notes” means the Revolving Credit Note andTerm Note, collectively.

 

“Notice of Conversion”: a notice substantiallyin the form of Exhibit C.

 

“Obligor”: the purchaser of goods and servicesgiving rise to an Account or any other Person obligated to make payment inrespect to such Account.

 

“Operating Entity”: any Person or any businessor operating unit of a Person which is, or could be, operated separate andapart from (i) the other businesses and operations of such Person, or (ii) anyother line of business or business segment.

 

“Organizational Documents”: as to any Personwhich is (i) a corporation, the certificate or articles of incorporation and by–lawsof such Person, (ii) a limited liability company, the limited liability companyagreement or similar agreement of such Person, (iii) a

 

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partnership, thepartnership agreement or similar agreement of such Person, or (iv) any otherform of entity or organization, the organizational documents analogous to theforegoing.

 

“PBGC”: the Pension Benefit GuarantyCorporation established pursuant to Subtitle A of Title IV of ERISA, or anyGovernmental Authority succeeding to the functions thereof.

 

“Pension Plan”: at any date of determination,any Employee Benefit Plan (including a Multiemployer Plan), the fundingrequirements of which (under Section 302 of ERISA or Section 412 of the Code)are, or at any time within the six years immediately preceding such date, werein whole or in part, the responsibility of the Borrower, any of itsSubsidiaries or any ERISA Affiliate.

 

“Permitted Lien”: a Lien permitted to existunder Section 8.2.

 

“Person”: any individual, firm, partnership,limited liability company, joint venture, corporation, association, businessenterprise, joint stock company, unincorporated association, trust,Governmental Authority or any other entity, whether acting in an individual,fiduciary, or other capacity, and for the purpose of the definition of “ERISAAffiliate”, a trade or business.

 

“Prime Rate”: a rate of interest per annumequal to the rate of interest publicly announced in New York City by the Bankfrom time to time as its prime commercial lending rate (which rate is not thelowest rate at which the Bank may make extensions of credit), such rate to beadjusted automatically (without notice) on the effective date of any change insuch publicly announced rate.

 

“Prior Credit Agreement”: as defined in theRecitals hereto.

 

“Prohibited Transaction”: a transaction whichis prohibited under Section 4975 of the Code or Section 406 of ERISA and notexempt under Section 4975 of the Code or Section 408 of ERISA.

 

“Real Property”: all real property owned orleased by the Borrower or any of its Subsidiaries.

 

“Regulatory Change”: (i) the introduction orphasing in of any law, rule or regulation after the Effective Date, (ii) theissuance or promulgation after the Effective Date of any directive, guidelineor request from any central bank or United States or foreign GovernmentalAuthority (whether or not having the force of law), or (iii) any change afterthe Effective Date in the interpretation of any existing law, rule, regulation,directive, guideline or request by any central bank or United States or foreignGovernmental Authority charged with the administration thereof.

 

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“Reimbursement Obligations”: all of theobligations and liabilities of the Borrower (a) under each Letter of CreditAgreement, and (b) hereunder in respect of the Letters of Credit.

 

“Reportable Event”: with respect to any PensionPlan, (i) any event set forth in Sections 4043(c) (other than a ReportableEvent as to which the 30 day notice requirement is waived by the PBGC underapplicable regulations), 4062(c) or 4063(a) of ERISA or the regulationsthereunder, (ii) an event requiring the Borrower, any of its Subsidiaries orany ERISA Affiliate to provide security to a Pension Plan under Section401(a)(29) of the Code, or (iii) any failure to make any payment required bySection 412(m) of the Code.

 

“Restricted Payment”: as to any Person (i) anydividend or other distribution, direct or indirect, on account of any shares ofCapital Stock or other equity interest in such Person now or hereafteroutstanding (other than a dividend payable solely in shares of such CapitalStock to the holders of such shares), (ii) any redemption, retirement, sinkingfund or similar payment, purchase or other acquisition, direct or indirect, ofany shares of any class of Capital Stock or other equity interest in suchPerson now or hereafter outstanding, and (iii) any payment of principal orpremium with respect to Indebtedness of such Person to any Affiliate, whetherat maturity, upon acceleration, or otherwise.

 

“Revolving Credit Commitment”: the Bank’sundertaking during the Revolving Credit Commitment Period to make RevolvingCredit Loans, subject to the terms and conditions hereof, in an aggregateoutstanding principal amount not exceeding at any time the lesser of (i) theRevolving Credit Commitment Amount, or (ii) the Borrowing Base at such time

 

“Revolving Credit Commitment Amount”: $12,000,000,as reduced from time to time pursuant to Section 2.6.

 

“Revolving Credit Commitment Period”: theperiod from the date hereof until the Business Day immediately preceding theRevolving Credit Termination Date.

 

“Revolving Credit Loan” and “RevolvingCredit Loans”: as defined in Section 2.1.

 

“Revolving Credit Termination Date”: theearlier of the Business Day immediately preceding the Maturity Date or suchother date upon which the Revolving Credit Commitment shall have beenterminated in accordance with Section 2.6 or Section 9.2.

 

“Sale and Leaseback Transaction”: anytransaction or series of related transactions pursuant to which a Person sellsor transfers any property in connection with the leasing, or the resale againstinstallment payments, of such property to the seller or transferor.

 

“Security Agreement”: the Amended and RestatedSecurity Agreement, substantially in the form of Exhibit D, as the same may beamended, supplemented or otherwise modified from time to time.

 

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“Solvent”: as to any Person, (i) such Person’stotal assets exceed its total liabilities, and (ii) such Person is not *insolvent*,as such term is defined in Section 101(32) of the Bankruptcy Code (11 U.S.C. §101 *etseq.*).

 

“Special Counsel”: Emmet, Marvin & Martin,LLP, special counsel to the Bank.

 

“Subsidiary”: as to any Person, anycorporation, association, partnership, limited liability company, joint ventureor other business entity of which such Person or any Subsidiary of such Person,directly or indirectly, either (i) in respect of a corporation, owns orcontrols more than 50% of the outstanding Capital Stock having ordinary votingpower to elect a majority of the board of directors, irrespective of whether aclass or classes shall or might have voting power by reason of the happening ofany contingency, or (ii) in respect of an association, partnership, limitedliability company, joint venture or other business entity, is entitled to sharein more than 50% of the profits and losses, however determined.

 

“Subsidiary Guarantor”: collectively, MG(Bermuda) Ltd., META Group Australia Holdings PTY. Limited, Cenntinum PTE LTD.and 1422722 Ontario Inc. and each other each Subsidiary of the Borrower whichhas executed and delivered to the Bank a Subsidiary Guaranty or a supplementthereto.

 

“Subsidiary Guaranty”: the Amended and RestatedSubsidiary Guaranty, substantially in the form of Exhibit E, as amended,supplemented or otherwise modified from time to time.

 

“Taxes”: any and all present or future income,stamp, franchise or other taxes, levies, imposts, duties, fees, assessments,deductions, withholdings, or other charges of whatever nature, now or hereafterimposed, levied, collected, withheld, or assessed by any jurisdiction, or byany department, agency, state or other political subdivision thereof ortherein.

 

“Telerate Page 3750”: the display page sodesignated on Bridge’s Telerate Service (or such other page as may replace thatpage on that service), or such other service as may be nominated as theinformation vendor, for purposes of displaying rates or prices comparable toLIBOR.

 

“Term Loan”: as defined in Section 2.3.

 

“Term Loan Commitment Amount”: $8,000,000.

 

“Term Note”: as defined in Section 2.4.

 

“Termination Event”: with respect to anyPension Plan, (i) a Reportable Event, (ii) the termination of a Pension Plan,or the filing of a notice of intent to terminate a Pension Plan, or thetreatment of a Pension Plan amendment as a termination under Section 4041(c) ofERISA, (iii) the institution of proceedings to terminate a Pension Plan underSection 4042 of ERISA, or (iv) the appointment of a trustee to administer anyPension Plan under Section 4042 of ERISA.

 

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“Total Commitment Amount”:  at any time, the sum of the Revolving CreditCommitment Amount and the Term Loan Commitment Amount at such time.

 

1.2.                              Principles of Construction

 

### (a)           All terms defined inthis Agreement shall have the meanings given such terms herein when used in theother Loan Documents or any certificate, opinion or other document made ordelivered pursuant hereto or thereto, unless otherwise defined therein.

###  

### (b)           As used in the LoanDocuments and in any certificate, opinion or other document made or deliveredpursuant thereto, accounting terms not defined in Section 1.1, and accountingterms partly defined in Section 1.1, to the extent not defined, shall have therespective meanings given to them under GAAP. If at any time any change in GAAP would affect the computation of anyfinancial ratio or requirement set forth in this Agreement, the Bank and theBorrower shall negotiate in good faith to amend such ratio or requirement toreflect such change in GAAP, provided that, until so amended, (i) suchratio or requirement shall continue to be computed in accordance with GAAPprior to such change therein and (ii) the Borrower shall provide to the Bankfinancial statements and other documents required under this Agreement or asreasonably requested hereunder setting forth a reconciliation betweencalculations of such ratio or requirement made before and after giving effectto such change in GAAP.

###  

### (c)           The words “hereof”,“herein”, “hereto” and “hereunder” and similar words when used in a LoanDocument shall refer to such Loan Document as a whole and not to any particularprovision thereof, and Section, schedule and exhibit references containedtherein shall refer to Sections thereof or schedules or exhibits thereto unlessotherwise expressly provided therein.

###  

### (d)           Unless the contextotherwise requires, words in the singular number include the plural, and wordsin the plural include the singular.

###  

### (e)           Unless specificallyprovided in a Loan Document to the contrary, any reference to a time shallrefer to such time in New York City.

###  

### (f)            Unless specificallyprovided in a Loan Document to the contrary, in the computation of periods oftime from a specified date to a later specified date, the word “from” means“from and including” and the words “to” and “until” each means “to butexcluding”.

###  

### (g)           References in anyLoan Document to a fiscal period shall refer to that fiscal period of theBorrower.

 

1.3.                              Matters Regarding the Prior CreditAgreement

 

On the EffectiveDate, (i) if the aggregate amount of the Revolving Credit Loans and Letter ofCredit Exposure (as such terms are defined in the Prior Credit Agreement)exceeds the Total Commitment Amount, the Borrower shall pay to the Bank (as aprepayment under the Prior Credit Agreement) the amount of such excess plus allaccrued and unpaid interest thereon and any other sums payable in connectiontherewith pursuant to the Prior Credit Agreement, and (ii) loansoutstanding under the Prior Credit Agreement shall thereafter be convertedfirst to the

 

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TermLoan pursuant to Section 2.3, and to the extent of any such loans in excess ofthe Term Loan Commitment Amount, the balance of such loans shall be convertedto Revolving Credit Loans hereunder pursuant to Section 2.1.

 

1.4.                              Continuation of Collateral.

 

The partiesexpressly agree that all Collateral pledged as Collateral under the securitydocuments for the Prior Credit Agreement which continues to be collateral as ofthe date hereof under the security documents for the Prior Credit Agreementshall be deemed to be Collateral as of the date hereof for all purposes underthe Collateral Documents and this Agreement.

 

2.                                       AMOUNT AND TERMS OF LOANS

 

2.1.                              Revolving Credit Loans

 

Subject to the terms and conditions hereof, the Bankagrees to make revolving credit loans (each a “Revolving Credit Loan”and collectively with all other Revolving Credit Loans, the “RevolvingCredit Loans”) to the Borrower from time to time during the RevolvingCredit Commitment Period; provided that (a) the aggregate principalamount of the Revolving Credit Loans outstanding at any time shall not exceed(1) the Revolving Credit Commitment Amount minus (2) the Letter ofCredit Exposure, and (b) after giving effect to any requested Revolving CreditLoan, the sum of all Revolving Credit Loans plus the outstanding principalbalance of the Term Loan shall not exceed the Borrowing Base.  During the Revolving Credit CommitmentPeriod, the Borrower may borrow, prepay in whole or in part and reborrow underthe Revolving Credit Commitment, all in accordance with the terms andconditions of this Agreement.  Subjectto the provisions of Sections 2.5(a) and 3.3, at the option of the Borrower,Revolving Credit Loans may be made as (i) one or more ABR Advances, (ii) one ormore LIBOR Advances or (iii) any combination thereof.  Loans outstanding under the Prior Credit Agreement on theEffective Date in excess of the Term Loan Commitment Amount shall be deemed tobe Revolving Credit Loans under this Agreement.  Each LIBOR Advance and each ABR Advance with respect to suchloans shall continue as a LIBOR Advance or ABR Advance hereunder, as the casemay be.

 

2.2.                              Revolving Credit Note.

##  

The Revolving Credit Loans to the Borrower shall beevidenced by a promissory note (the “Revolving Credit Note”)substantially in the form of Exhibit A-1, with appropriate insertions therein,payable to the order of the Bank, dated the Effective Date, and in a principalamount equal to the Revolving Credit Commitment Amount.  The outstanding principal balance of theRevolving Credit Loans shall be due and payable on the Maturity Date.

 

2.3.                              Term Loan.

 

Subject to the terms and conditions hereof, on theEffective Date, a portion of the loans outstanding under the Prior CreditAgreement in an amount equal to the Term Loan

 

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Commitment Amount shallbe converted to a fully advanced, non-revolving term loan hereunder (the “TermLoan”).  Each LIBOR Advance and eachABR Advance with respect to such loans shall continue as a LIBOR Advance or ABRAdvance hereunder, as the case may be. From the Effective Date, and subject to the provisions of Sections2.5(a) and 3.3, at the option of the Borrower, the Term Loan may be comprisedof (i) one or more ABR Advances, (ii) one or more LIBOR Advances or (iii) anycombination thereof, provided that if the Borrower shall enter into anyInterest Rate Protection Product with respect to the Term Loan, the portion ofthe Term Loan equal to the notional amount in such Interest Rate ProtectionProduct shall be a LIBOR Advance through and including the date that suchInterest Rate Protection Product shall expire or be terminated.

 

2.4.                              Term Note.

 

(a)           TheTerm Loan shall be evidenced by a promissory note (the “Term Note”) substantiallyin the form of Exhibit A-2, with appropriate insertions therein, payable to theorder of the Bank, dated the Effective Date, and in the principal amount of theTerm Loan.

###  

(b)           Theprincipal amount of the Term Loan shall be payable in 36 consecutive monthlyinstallments of $222,222.22 each, payable on the first day of each monthcommencing on the first such date following the Effective Date, and the balancethereof, plus all accrued and unpaid interest thereon, shall be payable on theMaturity Date.

 

2.5.                              Procedure for Borrowing.

 

(a)           TheBorrower may borrow under the Revolving Credit Commitment on any Business Dayduring the Revolving Credit Commitment Period, provided that theBorrower shall have delivered a Borrowing Request, together with a currentBorrowing Base Certificate**,**to the Bank, which shall be sent bytelecopy (confirmed promptly, and in any event within five Business Days, bythe delivery to the Bank of a manually signed counterpart), no later than:11:00 a.m. of the third Business Day prior to the requested Borrowing Date, inthe case of LIBOR Advances, and 11:00 a.m. on the requested Borrowing Date, inthe case of ABR Advances, specifying (A) the aggregate principal amount to beborrowed, (B) the requested Borrowing Date, (C) whether such borrowing is toconsist of one or more LIBOR Advances, an ABR Advance, or a combination thereofand (D) if the borrowing is to consist of one or more LIBOR Advances, thelength of the Interest Period for each such LIBOR Advance.  Each (i) LIBOR Advance made on eachBorrowing Date, when aggregated with all amounts to be converted to a LIBORAdvance on such date and having the same Interest Period as the LIBOR Advanceto be made, shall equal no less than $500,000 or a whole multiple of $100,000in excess thereof, and (ii) ABR Advance made on each Borrowing Date shall equalno less than $100,000 or an integral multiple thereof (or, if less, theAvailable Revolving Credit Commitment on such date).

 

(b)           Subjectto the satisfaction of the terms and conditions of this Agreement, asdetermined by the Bank, the requested Loans shall be made available by the Bankon the requested Borrowing Date to the Borrower at the office of the Bankspecified in Section 10.2 by

 

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crediting the account ofthe Borrower on the books of such office with the amount of such requestedLoans.

 

(c)           Ifthe Bank makes a new Loan on a Borrowing Date on which the Borrower is to repaya Loan, the Bank shall apply the proceeds of the new Loan to make suchrepayment, and only the excess of the proceeds of the new Loan over the Loanbeing repaid need be made available to the Borrower.

 

2.6.                              Termination of Commitment; Reductionof Commitment Amount

 

(a)           TheBorrower shall have the right, upon at least three Business Days’ prior writtennotice to the Bank, to terminate the Revolving Credit Commitment or from timeto time to permanently reduce the Revolving Credit Commitment Amount, providedthat (x) any such reduction shall be in the amount of $1,000,000 or a wholemultiple of $500,000 in excess thereof, and (y) the Revolving Credit CommitmentAmount may not be reduced to less than $1,000,000 without terminating theRevolving Credit Commitment. Simultaneously with each reduction of the RevolvingCredit Commitment Amount under this Section, the Borrower shall pay theCommitment Fee accrued on the amount by which the Revolving Credit CommitmentAmount has been reduced.

 

(b)           Reductionof the Letter of Credit Commitment Amount. The Letter of Credit Commitment Amount shall not be reduced until suchtime as the Revolving Credit Commitment Amount shall equal such Letter ofCredit Commitment Amount, and thereafter shall in each case be reduced,automatically, by a sum equal to the amount of each such reduction in theRevolving Credit Commitment Amount.

 

2.7.                              Prepayments of the Loans; Payment onMaturity

 

(a)           VoluntaryPrepayments. The Borrower may, at its option, prepay the Loans withoutpremium or penalty (but subject to Section 3.4), in full at any time or in partfrom time to time by notifying the Bank in writing no later than 12:00 noon onthe proposed prepayment date, in the case of Loans consisting of ABR Advances,and at least three Business Days prior to the proposed prepayment date, in thecase of Loans consisting of LIBOR Advances, specifying whether the Advances tobe prepaid are ABR Advances or LIBOR Advances or a combination thereof, theamount to be prepaid and the date of prepayment.  Each such notice shall be irrevocable and the amount specified ineach such notice, together with interest accrued on such amount to the date ofprepayment, shall be due and payable on the date specified.  Each partial prepayment pursuant to thissubsection shall be in an aggregate principal amount of $250,000 or a wholemultiple of $50,000 in excess thereof, or, if less, the outstanding principalbalance of the Revolving Credit Loans or Term Loan, as the case may be.  After giving effect to any partialprepayment with respect to LIBOR Advances which were made (whether as theresult of a borrowing or a conversion) on the same date and which had the sameInterest Period, the outstanding principal balance of such LIBOR Advances shallexceed (subject to Section 3.3) $500,000 or a whole multiple of $100,000 inexcess thereof.

###  

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(b)           MandatoryPrepayments Relating to Sales of Capital Stock. An amount equal to 100% ofthe net proceeds of any public secondary offering of Capital Stock of theBorrower shall be applied to prepay the Loans within one Business Day after thereceipt thereof by the Borrower.

###  

### (c)           MandatoryPrepayments Relating to Terminations of the Revolving Credit Commitment andReductions of the Revolving Credit Commitment Amount.  (i) Simultaneously with the termination ofthe Revolving Credit Commitment under Section 2.6, the Borrower shall prepaythe Revolving Credit Loans in full; and (ii) simultaneously with a reduction ofthe Revolving Credit Commitment Amount under Section 2.6, the Borrower shallprepay the Revolving Credit Loans by the aggregate amount, if any, by which thesum of the aggregate principal amount of the Revolving Credit Loans plusthe Letter of Credit Exposure exceeds the Revolving Credit Commitment Amount asso reduced.

###  

### (d)           Mandatory BorrowingBase Prepayment.  On any date thatthe aggregate amount of all Loans then outstanding exceeds the Borrowing Base,the Borrower shall prepay the Loans on such date in an amount equal to suchexcess.

###  

### (e)           PrepaymentsGenerally. With each prepayment of a Loan, the Borrower shall pay allinterest accrued on the principal amount prepaid to the date ofprepayment.  Each prepayment of the TermLoan shall be applied against the remaining installments of principal requiredto be paid pursuant to Section 2.4(b) in the inverse order of the maturitythereof.  Unless otherwise specified bythe Borrower, each prepayment of Loans shall first be applied to ABR Advances.

###  

### (f)            Maturity.  The outstanding principal balance of theLoans, all accrued and unpaid interest thereon and all fees and expensespayable hereunder shall be due and payable on the Maturity Date.

###  

2.8.          Payments

 

### (a)           Each payment ofprincipal and interest on the Loans and of all of the fees to be paid to theBank in connection with this Agreement shall be made by the Borrower prior to1:00 p.m. on the date such payment is due to the Bank at the Bank’s officespecified in Section 10.2, in each case in lawful money of the United States,in immediately available funds and without set-off or counterclaim.  The failure of the Borrower to make any suchpayment by such time shall not constitute a Default, provided that suchpayment is made on such due date, but any such payment made after 1:00 p.m. onsuch due date shall be deemed to have been made on the next Business Day forthe purpose of calculating interest on amounts outstanding on the Loans.

###  

### (b)           If any paymenthereunder or under the Notes shall be due and payable on a day which is not aBusiness Day, the due date thereof (except as otherwise provided in thedefinition of Interest Period) shall be extended to the next Business Day and(except with respect to payments in respect of the Fees) interest shall bepayable at the applicable rate specified herein

###  

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### during suchextension, provided, however that if such next Business Day is after theMaturity Date, any such payment shall be due on the immediately precedingBusiness Day.

###  

2.9.          Use ofProceeds

 

The Borrower agrees that the proceeds of the Loansshall be applied first to the refinancing of the loans outstanding under thePrior Credit Agreement in accordance with the provisions of Sections 2.1 and2.3.  Thereafter, Revolving Credit Loansshall be used solely, directly or indirectly, to (i) fund the Acquisition ofindependent sales representative offices of the Borrower and otherAcquisitions, in either case, subject to the provisions of Section 8.5(e), and(ii) provide working capital for the Borrower and its Subsidiaries and fortheir general corporate purposes not inconsistent with the provisionshereof.  No part of the proceeds of anyLoan nor any Letter of Credit will be used, directly or indirectly, for apurpose which violates any law, including, without limitation, the provisionsof Regulations T, U or X of the Board of Governors of the Federal ReserveSystem, as amended.

 

2.10.        Letterof Credit Sub-facility

 

### (a)           Subject to the termsand conditions of this Agreement, the Bank agrees to issue standby letters ofcredit (each, a “Letter of Credit”) during the Letter of CreditCommitment Period for the account of the Borrower, provided that immediatelyafter the issuance of each Letter of Credit (i) the Letter of Credit Exposureshall not exceed the Letter of Credit Commitment Amount, (ii) the sum of the aggregateprincipal amount of the Revolving Credit Loans plus the Letter of CreditExposure would not exceed the Revolving Credit Commitment Amount, and (iii) thesum of the aggregate principal amount of all Loans plus the Letter of CreditExposure would not exceed the Borrowing Base. Each of the Existing L/Cs shall be deemed to have been issued under theLetter of Credit Commitment and shall be a “Letter of Credit” under thisAgreement.

###  

### (b)           Each Letter ofCredit shall have an expiration date which shall not be later than the BusinessDay immediately preceding the Maturity Date, provided however, that theBank may agree, in its sole discretion, to issue Letters of Credit which havean expiration date later than the Revolving Credit Termination Date, at such timeor times prior to the Term Loan Election having occurred.  In the event that any Letters of Creditremain outstanding on the Maturity Date, whether the Maturity Date has occurredbecause of the Term Loan Election not having occurred or otherwise, the Borrowershall deposit with the Bank on the Maturity Date an amount equal to the Letterof Credit Exposure on the Maturity Date in a cash collateral account under theexclusive control of the Bank.

###  

### (c)           Each Letter ofCredit shall be issued for the account of the Borrower in support of anobligation of the Borrower in favor of a beneficiary who has requested theissuance of such Letter of Credit as a condition to a transaction entered intoin connection with the business of the Borrower.  The Borrower shall give the Bank a Letter of Credit Agreement forsuch Letter of Credit by 12:00 noon on the requested date of issuance of aLetter of Credit.  Each Letter of Creditshall be in form and substance reasonably satisfactory to the Bank, with such

###  

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### provisions withrespect to the conditions under which a drawing may be made thereunder and thedocumentation required in respect of such drawing as the Bank shall reasonablyrequire.

###  

### (d)           In determiningwhether to pay under any Letter of Credit, the Bank shall have no obligation tothe Borrower other than to confirm that any documents required to be deliveredunder such Letter of Credit have been delivered and that they appear to complyon their face with the requirements of such Letter of Credit.  Upon each payment by the Bank under a Letterof Credit, the Borrower shall reimburse the Bank for the amount thereof upondemand therefor by the Bank.  If all orany portion of any Reimbursement Obligation in respect of a Letter of Creditshall not be paid when due (whether upon demand, by acceleration or otherwise),such overdue  amount shall bearinterest, payable upon demand by the Bank, at a rate per annum equal to theAlternate Base Rate plus the Applicable Margin applicable to ABRAdvances plus 2%, from the date of such nonpayment until paid in full(whether before or after the entry of a judgment thereon).

###  

### (e)           Notwithstandinganything to the contrary contained in any Letter of Credit Agreement, to theextent that the terms of this Agreement shall be inconsistent with the terms ofsuch Letter of Credit Agreement, the terms of this Agreement shall govern.

###  

2.11.        Absolute Obligation with respect toLetter of Credit Payments

 

The Borrower’s obligation to reimburse the Bank foreach payment under or in respect of a Letter of Credit shall be absolute andunconditional under any and all circumstances and irrespective of any set–off,counterclaim or defense to payment which the Borrower may have or have hadagainst the beneficiary of such Letter of Credit, the Bank or any other Person,including any defense based on the failure of any drawing to conform to theterms of such Letter of Credit, any drawing document proving to be forged,fraudulent or invalid, or the illegality, invalidity, irregularity orunenforceability of such Letter of Credit, this Agreement or any other LoanDocument, provided that with respectto any Letter of Credit, the foregoing shall not relieve the Bank of anyliability it may have to the Borrower for any actual damages sustained by theBorrower arising from a wrongful pay­ment under such Letter of Credit made as aresult of the Bank’s gross negligence or will­ful misconduct.

 

3.             INTEREST,FEES, YIELD PROTECTIONS, ETC.

 

3.1.          InterestRate and Payment Dates

 

### (a)           Prior to Maturity.  Except as otherwise provided in Sections3.1(b) and 3.1(c), prior to maturity, the Loans shall bear interest on theoutstanding principal balance thereof at the applicable interest rate or ratesper annum set forth below:

###  

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| **Advances**       |   | **Interest  Rate**                                                   |
|--------------------|--------|----------------------------------------------------------------------|
|               |   |                                                                 |
| Each ABR Advance   |   | Alternate Base Rate                                                  |
|               |   |                                                                 |
| Each LIBOR Advance |   | LIBOR for the  applicable Interest Period plus the Applicable Margin |

 

### (b)           Late Charges.  If all or any portion of the principalbalance of or interest payable on any of the Loans or any other amount payableunder the Loan Documents shall not be paid when due (whether at the statedmaturity thereof, by acceleration or otherwise), such overdue amount shall bearinterest at a rate per annum (whether before or after the entry of a judgmentthereon) equal to 2% plus the rate which would otherwise be applicablepursuant to Section 3.1(a), from the date such amount was due to the date suchamount is paid in full.  For purposes ofthe preceding sentence, the rate applicable pursuant to Section 3.1(a) to anyoverdue principal, interest or other amount payable under the Loan Documentsshall be (i) in the case of an overdue principal balance of any LIBOR Advance,the applicable LIBOR plus the Applicable Margin until the last day ofthe applicable Interest Period (or the earlier termination thereof pursuant tothis Agreement) and thereafter at the Alternate Base Rate and (ii) in all othercases, the Alternate Base Rate.  Allsuch interest shall be payable on demand.

###  

### (c)           Computation.  Interest on (i) ABR Advances to the extentbased on the Prime Rate shall be calculated on the basis of a 365 or 366-dayyear (as the case may be), and (ii) ABR Advances (to the extent based on theFederal Funds Rate), and LIBOR Advances shall be calculated on the basis of a360-day year for the actual number of days elapsed.  Except as otherwise provided in Section 3.1(b), interest shall bepayable in arrears on each Interest Payment Date and upon each payment(including prepayment) of the Loans. Any change in the interest rate on the Loans resulting from a change inthe Alternate Base Rate or reserve requirements shall become effective as ofthe opening of business on the day on which such change shall becomeeffective.  Each determination of theAlternate Base Rate or a LIBOR by the Bank pursuant to this Agreement shall beconclusive and binding on all parties hereto absent manifest error.  At no time shall the interest rate payableon the Loans, together with the fees and all other amounts payable under theLoan Documents to the Bank, to the extent the same are construed to constituteinterest, exceed the maximum rate of interest permitted by applicable law.

###  

3.2.          Fees

 

### (a)           Commitment Fee.The Borrower agrees to pay to the Bank a fee on the amount of the average dailydifference between the outstanding Revolving Credit Loans and the RevolvingCredit Commitment Amount at the rate of 0.25% per annum (the “Commitment Fee”).The Commitment Fee shall be payable quarterly in arrears, calculated throughthe last day of each March, June, September and December of each year,commencing on the first such day following the Effective Date, and ending onthe Revolving Credit Termination Date. The Commitment Fee shall be calculatedon the basis of a 365 or 366 day year, as the case may be, for the actualnumber of days elapsed.  As soon aspossible on or after each quarter-end date, the

###  

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Bank shall notify the Borrower of the Commitment Fee due for thepreceding quarter, and the Borrower shall remit payment thereof to the Bankwithin ten (10) Business Days thereafter.

###  

### (b)           Facility Fee.  The Borrower agrees to pay to the Bank anon-refundable fee based upon the Total Commitment Amount (the “Facility Fee”)in the amount of $85,000.  The FacilityFee shall be payable to the Bank on the Effective Date in funds immediatelyavailable to the Bank

###  

### (c)           Letter of CreditFees.  The Borrower agrees to pay tothe Bank the Bank’s standard fees with respect to each Letter of Credit, plusan issuance fee equal to 1.50% of the face amount of such Letter of Credit.

###  

3.3.          Conversions

 

### (a)           Provided no Defaultor Event of Default shall exist, the Borrower may elect from time to time toconvert one or more LIBOR Advances to ABR Advances by submitting a dulyexecuted Notice of Conversion to the Bank at least one Business Day prior tosuch election, which notice shall be irrevocable, specifying the amount to beconverted, provided that any such conversion of LIBOR Advances shallonly be made on the last day of the Interest Period applicable thereto.  In addition, the Borrower may elect fromtime to time to (i) convert ABR Advances to LIBOR Advances and (ii) continueLIBOR Advances as new LIBOR Advances, in each case by giving the Bank at leastthree Business Days’ prior irrevocable notice of such election, specifying theamount to be so converted and the initial Interest Period relating thereto, providedthat any such conversion of ABR Advances to LIBOR Advances shall only bemade on a Business Day and any such conversion of LIBOR Advances to new LIBORAdvances shall only be made on the last day of the Interest Period applicableto the LIBOR Advances which are to be converted to such new LIBOR Advances.  Advances may be converted pursuant to thisSection in whole or in part, provided that the amount to be converted toa LIBOR Advance, when aggregated with any LIBOR Advance to be made on such datein accordance with Section 2.5(a) and having the same Interest Period, shall be$500,000 or a whole multiple of $100,000 in excess thereof.

###  

### (b)           Provided no Defaultor Event of Default shall exist, the Borrower may enter into an Interest RateProtection Product with respect to all or a portion of the outstanding balanceof the Term Loan, provided that on the effective date of such Interest RateProtection Product, such portion of the Term Loan to be made subject to suchInterest Rate Protection Product (the “Term Loan Notional Amount”) shallnot be a LIBOR Advance having an Interest Period longer than one month.  The Borrower shall give the Bank at leastthree Business Day’s prior notice thereof, specifying the amount to be madesubject to such Interest Rate Protection Product.

###  

### (c)           Upon the occurrenceand during the continuance of a Default or an Event of Default, all LIBORAdvances shall be automatically converted to ABR Advances on the last day ofthe applicable Interest Period.

###  

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### (d)           Each conversionshall be effected by the Bank by applying the proceeds of the new ABR Advanceor LIBOR Advance, as the case may be, to the Advances (or portion thereof)being converted. Any such conversion shall not constitute a borrowing forpurposes of Section 6.

###  

### (e)           If the Borrowershall have failed to elect to continue a LIBOR Advance as a new LIBOR Advanceprior to the expiration of its Interest Period, the amount of the Loanrepresented by such Advance shall be automatically converted to an ABR Advanceat the expiration of its Interest Period.

###  

3.4.          Indemnificationfor Loss

 

### (a)           Notwithstandinganything contained herein to the contrary, if the Borrower shall fail for anyreason to borrow or convert an Advance after it shall have given notice to doso in which it shall have requested a LIBOR Advance, or if a LIBOR Advanceshall be terminated for any reason prior to the last day of the Interest Periodapplicable thereto, or if any repayment or prepayment of the principal amountof a LIBOR Advance is made by the Borrower for any reason on a date which isprior to the last day of the Interest Period applicable thereto, the Borroweragrees to indemnify the Bank against, and to pay on demand directly to the Bankthe amount (calculated by the Bank using any method chosen by the Bank which iscustomarily used by the Bank for such purpose) equal to any loss orout-of-pocket expense suffered by the Bank as a result of such failure toborrow or convert, or such termination, repayment or prepayment, including anyloss, cost or expense suffered by the Bank in liquidating or employing depositsacquired to fund or maintain the funding of such LIBOR Advance, or redeployingfunds prepaid or repaid, in amounts which correspond to such LIBOR Advance, andany internal processing charge customarily charged by the Bank in connectiontherewith.

###  

### (b)           If (i) for anyreason after the Borrower has entered into an Interest Rate Protection Product,any Fixed Rate Funding Loss shall occur under or pursuant to such Interest RateProtection Product the Borrower shall pay the amount of such Fixed Rate FundingLoss to the Bank immediately upon demand.

###  

3.5.          CapitalAdequacy

 

If the amount of capital required or expected to bemaintained by the Bank or any Person directly or indirectly owning orcontrolling the Bank (each a “Control Person”), shall be affected by theoccurrence of a Regulatory Change and the Bank shall have determined that suchRegulatory Change shall have had or will thereafter have the effect of reducing(i) the rate of return on the Bank’s or such Control Person’s capital, or (ii)the asset value to the Bank or such Control Person of the Loans made ormaintained by the Bank or the Reimbursement Obligations, in any case to a levelbelow that which the Bank or such Control Person could have achieved or wouldthereafter be able to achieve but for such Regulatory Change (after taking intoaccount the Bank’s or such Control Person’s policies regarding capitaladequacy) by an amount deemed by the Bank to be material to the Bank or ControlPerson, then, within ten days after demand by the Bank, the Borrower shall payto the Bank or such Control Person such additional amount or

 

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amounts as shall besufficient to compensate the Bank or such Control Person, as the case may be,for such reduction.

 

3.6.          Reimbursement for Increased Costs

 

If the Bank shall determine that a Regulatory Change:

 

(a)           does or shall subject it to any Taxesof any kind whatsoever with respect to any LIBOR Advances or its obligations underthis Agreement to make LIBOR Advances, or change the basis of taxation ofpayments to it of principal, interest or any other amount payable hereunder inrespect of its LIBOR Advances, or impose on the Bank any other condition,including any Taxes required to be withheld from any amounts payable under theLoan Documents (except for imposition of, or change in the rate of, tax on theoverall net income of the Bank); or

 

(b)           does or shall impose, modify or makeapplicable any reserve, special deposit, compulsory loan, assessment, increasedcost or similar requirement against assets held by, or deposits of, or advancesor loans by, or other credit extended by, or any other acquisition of funds by,any office of the Bank in respect of its LIBOR Advances which is not otherwiseincluded in the determination of a LIBOR;

 

and the result ofany of the foregoing is to increase the cost to the Bank of making, renewing,converting or maintaining its LIBOR Advances or its commitment to make suchLIBOR Advances, or to reduce any amount receivable hereunder in respect of itsLIBOR Advances, then, in any such case, the Borrower shall pay the Bank withinten days after demand therefor, such additional amount as is sufficient tocompensate the Bank for such additional cost or reduction in such amountreceivable which the Bank deems to be material as determined by the Bank;provided, however, that nothing in this Section shall require the Borrower toindemnify the Bank with respect to withholding Taxes for which the Borrower hasno obligation under Section 3.9.  Nofailure by the Bank to demand, and no delay in demanding, compensation for anyincreased cost shall constitute a waiver of its right to demand suchcompensation at any time.  A statementsetting forth the calculations of any additional amounts payable pursuant tothis Section submitted by the Bank to the Borrower shall be conclusive absentmanifest error.

 

3.7.          Illegalityof Funding

 

Notwithstanding any other provision hereof, if theBank shall reasonably determine that any law, regulation, treaty or directive,or any change therein or in the interpretation or application thereof, shallmake it unlawful for the Bank to make or maintain any LIBOR Advance ascontemplated by this Agreement, the Bank shall promptly notify the Borrowerthereof, and (i) the commitment of the Bank to make such LIBOR Advances orconvert ABR Advances to LIBOR Advances shall forthwith be suspended, (ii) theBank shall fund each requested LIBOR Advance as an ABR Advance and (iii) theLoans then outstanding as such LIBOR Advances shall be converted automaticallyto ABR Advances on the last day of the then current Interest Period applicablethereto or at such earlier time as may be required by

 

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law.  If the commitment of the Bank with respectto LIBOR Advances is suspended pursuant to this Section and the Bank shall haveobtained actual knowledge that it is once again legal for the Bank to make ormaintain LIBOR Advances, the Bank shall promptly notify the Borrower thereofand, upon receipt of such notice by the Borrower, the Bank’s commitment to makeor maintain LIBOR Advances shall be reinstated.

 

3.8.          SubstitutedInterest Rate

 

In the event that (i) the Bank shall have determined(which determination shall be conclusive and binding upon the Borrower) that byreason of circumstances affecting the interbank eurodollar market eitheradequate and reasonable means do not exist for ascertaining LIBOR applicablepursuant to Section 3.1 or (ii) the Bank shall have determined (whichdetermination shall be conclusive and binding on the Borrower) that theapplicable LIBOR will not adequately and fairly reflect the cost to the Bank ofmaintaining or funding loans bearing interest based on such LIBOR, with respectto any portion of the Loans that the Borrower has requested be made as orconverted to LIBOR Advances (each, an “Affected Advance”), the Bankshall promptly notify the Borrower (by telephone or otherwise, to be promptlyconfirmed in writing) of such determination, on or, to the extent practicable,prior to the requested Borrowing Date or Conversion Date for such AffectedAdvances.  If the Bank shall give suchnotice, (a) any Affected Advances shall be made as ABR Advances, (b) theAdvances (or any portion thereof) that were to have been converted to AffectedAdvances shall be converted to ABR Advances and (c) any outstanding AffectedAdvances shall be converted, on the last day of the then current InterestPeriod with respect thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as the case may be, of thissection has been withdrawn by the Bank (by notice to the Borrower promptly uponeither (x) the Bank having determined that such circumstances affecting theinterbank eurodollar market no longer exist and that adequate and reasonablemeans do exist for determining LIBOR pursuant to Section 3.1 or (y) the Bankhaving determined that circumstances no longer render the Advances (or anyportion thereof) Affected Advances), no further LIBOR Advances shall berequired to be made by the Bank, nor shall the Borrower have the right toconvert all or any portion of the Loans to or as LIBOR Advances.

 

3.9.          Taxes

 

All payments made by each Credit Party under the LoanDocuments shall be made free and clear of, and without reduction for or onaccount of, any Taxes required by law to be withheld from any amounts payableunder the Loan Documents.  In the eventthat such Credit Party is prohibited by law from making payments hereunder freeof deductions or withholdings, then such Credit Party shall pay such additionalamounts to the Bank as may be necessary in order that the actual amountsreceived by the Bank in respect of interest and any other amounts payable underthe Loan Documents after deduction or withholding (and after payment of anyadditional Taxes or other charges due as a consequence of the payment of suchadditional amounts) shall equal the amount that would have been received ifsuch deduction or withholding were not required.

 

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3.10.        Option to Fund

 

The Bank has indicated that, if the Borrower requestsa LIBOR Advance, the Bank may wish to purchase one or more deposits in order tofund or maintain its funding of such LIBOR Advance during the Interest Periodwith respect thereto; it being understood that the provisions of this Agreementrelating to such funding are included only for the purpose of determining therate of interest to be paid in respect of such LIBOR Advance and any amountsowing under Sections 3.4 and 3.6.  TheBank shall be entitled to fund and maintain its funding of all or any part ofeach LIBOR Advance in any manner it sees fit, but all such determinationshereunder shall be made as if the Bank had actually funded and maintained eachLIBOR Advance during the applicable Interest Period through the purchase ofdeposits in an amount equal to such LIBOR Advance having a maturitycorresponding to such Interest Period. The Bank may fund each LIBOR Advance from or for the account of anybranch or office of the Bank as the Bank may choose from time to time.

 

4.             REPRESENTATIONS AND WARRANTIES

 

In order to induce the Bank to enter into thisAgreement and to make the Loans to the Borrower, the Borrower represents andwarrants that:

 

4.1.          Subsidiaries;Capitalization

 

As of the Effective Date, the only Subsidiaries of theBorrower are MG (Bermuda) Ltd., META Group Australia Holdings PTY. Limited,Cenntinum PTE LTD. and 1422722 Ontario Inc., and the authorized, issued andoutstanding Capital Stock of the Borrower and each such Subsidiary is as setforth on Schedule 4.1.  As of theEffective Date, except as set forth on Schedule 4.1, (i) the shares of, orpartnership or other interests in, each Subsidiary of the Borrower are ownedbeneficially and of record by the Borrower or another Subsidiary of theBorrower, are free and clear of all Liens, and are duly authorized, validlyissued, fully paid and nonassessable, (ii) neither the Borrower nor any of itsSubsidiaries has issued any securities convertible into, or options or warrantsfor, any common or preferred equity securities thereof, (iii) there are noagreements, voting trusts or understandings binding upon the Borrower or any ofits Subsidiaries with respect to the voting securities of the Borrower or anyof its Subsidiaries or affecting in any manner the sale, pledge, assignment orother disposition thereof, including any right of first refusal, option,redemption, call or other right with respect thereto, whether similar ordissimilar to any of the foregoing, and (iv) all of the outstanding CapitalStock of each Subsidiary of the Borrower is owned by the Borrower or anotherSubsidiary of the Borrower.

 

4.2.          Existenceand Power

 

The Borrower and each of its Subsidiaries is dulyorganized or formed and validly existing in good standing under the laws of thejurisdiction of its incorporation or formation, as the case may be, has allrequisite power and authority to own its property and to carry on its businessas now conducted, and is in good standing and authorized to do business in eachjurisdiction in which the nature of the business conducted therein or theproperty owned by it

 

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therein makes suchqualification necessary, except where the failure to be so qualified could havea Material Adverse Effect.

 

4.3.          Authorityand Execution

 

The Borrower and each of its Subsidiaries has fulllegal power and authority to enter into, execute, deliver and perform the termsof the Loan Documents to which it is a party, all of which have been dulyauthorized by all proper and necessary corporate, partnership or otherapplicable action and are in full compliance with its OrganizationalDocuments.  The Borrower and each of itsSubsidiaries has duly executed and delivered the Loan Documents to which it isa party.

 

4.4.          BindingAgreement

 

The Loan Documents (other than the Note) constitute,and the Note, when issued and delivered pursuant hereto for value received,will constitute, the valid and legally binding obligations of each CreditParty, in each case, to the extent it is a party thereto, enforceable inaccordance with their respective terms, except as such enforceability may belimited by applicable bankruptcy, insolvency, reorganization or other similarlaws affecting the enforcement of creditors’ rights generally.

 

4.5.          Litigation

 

There are no actions, suits or proceedings at law orin equity or by or before any Governmental Authority (whether purportedly onbehalf of the Borrower, any of its Subsidiaries or any other Credit Party)pending or, to the knowledge of the Borrower, threatened against the Borrower,any of its Subsidiaries or any other Credit Party or which may affect theproperty or rights of the Borrower, any of its Subsidiaries or any other CreditParty, which (i) could reasonably be expected to have a Material AdverseEffect, (ii) call into question the validity or enforceability of, or otherwiseseek to invalidate, any Loan Document, or (iii) might, individually or in theaggregate, materially and adversely affect any of the transactions contemplatedby the Loan Documents.

 

4.6.          RequiredConsents

 

Except for information filings required to be made inthe ordinary course of business which are not a condition to the performance bythe Borrower or any of its Subsidiaries under the Loan Documents to which it isa party, no consent, authorization or approval of, filing with, notice to, orexemption by, stockholders or holders of any other equity interest, anyGovernmental Authority or any other Person is required to authorize, or isrequired in connection with the execution, delivery and performance of the LoanDocuments to which the Borrower or any of its Subsidiaries or any other CreditParty is a party or is required as a condition to the validity orenforceability of the Loan Documents to which any of the same is a party.

 

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4.7.          Absence of Defaults; No ConflictingAgreements

 

### (a)           Neither theBorrower, nor any of its Subsidiaries or any other Credit Party is in defaultunder any mortgage, indenture, contract or agreement to which it is a party orby which it or any of its property is bound, the effect of which default couldreasonably be expected to have a Material Adverse Effect.  The execution, delivery or carrying out ofthe terms of the Loan Documents will not constitute a default under, or resultin the creation or imposition of, or obligation to create, any Lien upon anyproperty of the Borrower or any of its Subsidiaries or result in a breach of orrequire the mandatory repayment of or other acceleration of payment under orpursuant to the terms of any such mortgage, indenture, contract or agreement.

###  

### (b)           Neither theBorrower, any of its Subsidiaries nor any other Credit Party is in default withrespect to any judgment, order, writ, injunction, decree or decision of anyGovernmental Authority which default could reasonably be expected to have aMaterial Adverse Effect.

 

4.8.          Compliancewith Applicable Laws

 

The Borrower and each of its Subsidiaries is complyingin all material respects with all statutes, regulations, rules and orders ofall Governmental Authorities which are applicable to the Borrower or suchSubsidiary, a violation of which could reasonably be expected to have aMaterial Adverse Effect.

 

4.9.          Taxes

 

The Borrower and each of its Subsidiaries has filed orcaused to be filed all tax returns required to be filed and has paid, or hasmade adequate provision for the payment of, all taxes shown to be due andpayable on said returns or in any assessments made against it (other than thosebeing contested as required under Section 7.4) which would be material to theBorrower or any of its Subsidiaries, and no tax Liens have been filed withrespect thereto.  The charges, accrualsand reserves on the books of the Borrower and each of its Subsidiaries withrespect to all taxes are, to the best knowledge of the Borrower, adequate forthe payment of such taxes, and the Borrower knows of no unpaid assessment whichis due and payable against the Borrower or any of its Subsidiaries or anyclaims being asserted which could reasonably be expected to have a MaterialAdverse Effect, except such thereof as are being contested as required underSection 7.4, and for which adequate reserves have been set aside in accordancewith GAAP.

 

4.10.        GovernmentalRegulations

 

Neither the Borrower, any of its Subsidiaries nor anyPerson controlled by, controlling, or under common control with, the Borroweror any of its Subsidiaries, is subject to regulation under the InvestmentCompany Act of 1940, as amended, or is subject to any statute or regulationwhich prohibits or restricts the incurrence of Indebtedness.

 

31

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4.11.        Federal Reserve Regulations; Use ofLoan Proceeds

 

Neither the Borrower nor any of its Subsidiaries isengaged principally, or as one of its important activities, in the business ofextending credit for the purpose of purchasing or carrying any MarginStock.  After giving effect to themaking of each Loan, Margin Stock will constitute less than 25% of the assets(as determined by any reasonable method) of the Borrower and its Subsidiaries.

 

4.12.        Plans

 

The only Pension Plans in effect as of the EffectiveDate are listed on Schedule 4.12. Each Employee Benefit Plan is in compliance with ERISA and the Code,where applicable, in all material respects. The Borrower and each of its Subsidiaries and ERISA Affiliates hascomplied with the requirements of Section 515 of ERISA with respect to eachPension Plan which is a Multiemployer Plan. As of the Effective Date, the Borrower and its Subsidiaries and ERISAAffiliates have no liability under Section 4201 or 4204 of ERISA (including theobligation to satisfy secondary liability as a result of purchaser default).  The Borrower and its Subsidiaries and ERISAAffiliates have, as of the Effective Date, made all contributions or paymentsto or under each such Pension Plan required by law or the terms of such PensionPlan or any contract or agreement with respect thereto.  No material liability to the PBGC has been,or is expected by the Borrower, any of its Subsidiaries or any ERISA Affiliateto be, incurred by the Borrower, any such Subsidiary or any ERISA Affiliate.Each Employee Benefit Plan which is a group health plan within the meaning ofSection 5000(b)(1) of the Code is in material compliance with the continuationof health care coverage requirements of Section 4980B of the Code.

 

4.13.        FinancialStatements

 

The Borrower has heretofore delivered to the Bankcopies of the audited consolidated balance sheets of the Borrower as ofDecember 31, 2000 and the related consolidated statements of operations,stockholder’s equity and cash flows for the fiscal years then ended (with therelated notes and schedules, the “Financial Statements”).  The Financial Statements fairly present theconsolidated financial condition and results of the operations of the Borrowerand its Subsidiaries as of the dates and for the periods indicated therein andhave been prepared in conformity with GAAP. Except as reflected in the Financial Statements or in the notes thereto,neither the Borrower nor any of its Subsidiaries has any obligation orliability of any kind (whether fixed, accrued, Contingent, unmatured orotherwise) which, in accordance with GAAP, should have been shown on theFinancial Statements and was not.  Sincethe date of the Financial Statements, the Borrower has conducted its businessonly in the ordinary course and there has been no Material Adverse Change.

 

4.14.        Property

 

The Borrower and each of its Subsidiaries has (i) goodand marketable title to all of its property, title to which is material to theBorrower or such Subsidiary and (ii) a valid

 

32

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leasehold interest in allproperty, a leasehold interest in which is material to the Borrower or suchSubsidiary, in each case subject to no Liens, except Permitted Liens.

 

4.15.        IntellectualProperty; Licenses

 

### (a)           The Borrower andeach of its Subsidiaries owns, or has the legal right to use, all United Statestrademarks, trademark applications, trade names, service marks, and copyrightsand all technology, know-how, and processes necessary for each of them toconduct its business as currently conducted (the “Intellectual Property”),except for those the failure to own or have the legal right to use would not bereasonably expected to have a Material Adverse Effect.  No claim has been asserted and is pending byany Person challenging or questioning the use of any such IntellectualProperty, nor does the Borrower know of any such claim, and to the knowledge ofthe Borrower the use of such Intellectual Property by the Borrower and itsSubsidiaries does not infringe on the rights of any Person, except for suchclaims and infringements that in the aggregate would not be reasonably expectedto have a Material Adverse Effect.  Noevent has occurred which permits or, to the best knowledge of the Borrower,after notice or the lapse of time or both, or any other condition, could reasonablybe expected to permit, the revocation or termination of any license or otherright to use Intellectual Property which revocation or termination couldreasonably be expected to have a Material Adverse Effect.

###  

### (b)           Schedule 4.15contains a list of each material license or other agreement in effect on theEffective Date under which the Borrower has the right to utilize and exploitany Intellectual Property owned or controlled by another Person (each, a “License”),including (i) the name of the licensor, (ii) a description of the IntellectualProperty covered by the License, (iii) the territory in which the License isexercisable, and (iv) the expiration date of the License.  Except as indicated on Schedule 4.15 or asupplement thereto delivered to the Bank, no material default has occurredunder any such License which is continuing or unremedied on the Effective Date.

###  

4.16.        EnvironmentalMatters

 

### (a)           No HazardousSubstances have been generated or manufactured on, transported to or from,treated at, stored at or discharged from any Real Property in materialviolation of any Environmental Laws; no Hazardous Substances have beendischarged into subsurface waters under any Real Property in material violationof any Environmental Laws; no Hazardous Substances have been discharged fromany Real Property on or into property or waters (including subsurface waters)adjacent to any Real Property in material violation of any Environmental Laws;and there are not now, nor ever have been, on any Real Property any undergroundor above ground storage tanks regulated under any Environmental Laws.

###  

### (b)           Neither the Borrowernor any of its Subsidiaries (i) has received notice (written or oral) orotherwise learned of any claim, demand, suit, action, proceeding, event,condition, report, directive, Lien, violation, non-compliance or investigationindicating or concerning any potential or actual liability (including, withoutlimitation, potential liability for enforcement, investigatory costs, cleanupcosts, government response costs, removal costs,

###  

33

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### remedial costs,natural resources damages, property damages, personal injuries or penalties)arising in connection with: (x) any non-compliance with or violation of therequirements of any applicable Environmental Laws, or (y) the presence of anyHazardous Substance on any Real Property (or any Real Property previously ownedby the Borrower or any of its Subsidiaries) or the release or threatenedrelease of any Hazardous Substance into the environment, (ii) has anythreatened or actual liability in connection with the presence of any HazardousSubstance on any Real Property (or any Real Property previously owned by theBorrower or any of its Subsidiaries) or the release or threatened release ofany Hazardous Substance into the environment, (iii) has received notice of anyfederal or state investigation evaluating whether any remedial action is neededto respond to the presence of any Hazardous Substance on any Real Property (orany Real Property previously owned by the Borrower or any of its Subsidiaries)or a release or threatened release of any Hazardous Substance into theenvironment for which the Borrower or any of its Subsidiaries is or may beliable, or (iv) has received notice that the Borrower or any of itsSubsidiaries is or may be liable to any Person under any Environmental Law.

###  

4.17.        Solvency

 

Immediately after giving effect to the transactionscontemplated by the Loan Documents, the Borrower and each of its Subsidiarieswill be Solvent.

 

4.18.        SecurityInterests

 

Subject to the continuing possession by the Bank ofthe Collateral, the security interests granted under the Collateral Documentswill constitute valid, binding and continuing duly perfected first priorityLiens in and to the Collateral.

 

4.19.        Absenceof Certain Restrictions

 

No indenture, certificate of designation for preferredstock, agreement or instrument to which the Borrower or any of its Subsidiariesis a party (other than this Agreement), prohibits or limits in any way,directly or indirectly the ability of any Subsidiary of the Borrower to makeRestricted Payments or repay any Indebtedness to the Borrower or to anotherSubsidiary of the Borrower.

 

4.20.        NoMisrepresentation

 

No representation or warranty contained in any LoanDocument and no certificate or report from time to time furnished by theBorrower or any of its Subsidiaries in connection with the transactionscontemplated hereby and thereby, contains or will contain a misstatement ofmaterial fact, or, to the best knowledge of the Borrower, omits or will omit tostate a material fact required to be stated in order to make the statementstherein contained not misleading in the light of the circumstances under whichmade, provided that any projections or pro-forma financial informationcontained therein are based upon good faith estimates and assumptions believedby the Borrower to be reasonable at the time made, it being recognized by theBank that

 

34

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such projections as tofuture events are not to be viewed as facts, and that actual results during theperiod or periods covered thereby may differ from the projected results.

 

5.             CONDITIONSTO FIRST LOANS

 

In addition to theconditions precedent set forth in Article 6, the obligation of the Bank to makeLoans on the first Borrowing Date shall be subject to the fulfillment of thefollowing conditions precedent:

 

5.1.          Evidenceof Action

 

The Bank shall have received a certificate, dated theEffective Date, of the Secretary or Assistant Secretary of each Credit Party(i) attaching a true and complete copy of the resolutions of its board ofdirectors or the equivalent and of all documents evidencing all necessarycorporate or similar action (in form and substance satisfactory to the Bank)taken by it to authorize the Loan Documents to which it is a party and thetransactions contemplated thereby, (ii) attaching a true and complete copy ofits Organizational Documents, (iii) setting forth the incumbency of its officerswho may sign the Loan****Documents, including therein a signaturespecimen of such officer or officers and (iv) attaching a certificate of goodstanding of the Secretary of State of the jurisdiction of its formation and ofeach other jurisdiction in which it is qualified to do business**.**

 

5.2.          ThisAgreement

 

The Bank shall have received counterparts of thisAgreement duly executed by an Authorized Signatory of the Borrower.

 

5.3.          Note

 

The Bank shall have received the Notes, dated theEffective Date and duly executed by an Authorized Signatory of the Borrower.

 

5.4.          SecurityAgreement

 

The Bank shall have received the Security Agreement,dated the Effective Date and duly executed by an Authorized Signatory of theBorrower, together with the following:

 

### (a)           one or more sharecertificates, representing (i) all of the issued and outstanding Capital Stockof each Domestic Subsidiary of the Borrower (provided that the Borrower shallhave 30 days from the date hereof to deliver such share certificates) and (ii)60% of the issued and outstanding Capital Stock of each Foreign Subsidiary ofthe Borrower which is not a Subsidiary Guarantor, in each case together withone undated stock power, executed in blank by an Authorized Signatory of theBorrower;

###  

### (b)           verification thatthe Bond Collateral continues to be held in a restricted safekeeping account#241033 maintained by the Bank; and

###  

35

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### (c)           such other documentsas the Bank may require in connection with the perfection of its securityinterests therein.

###  

5.5.          SubsidiaryGuaranty

 

The Bank shall have received the Subsidiary Guaranty,dated the Effective Date and duly executed by an Authorized Signatory of eachSubsidiary Guarantor.

 

5.6.          Officer’sCertificate

 

The Bank shall have received a certificate, in allrespects satisfactory to the Bank, of an officer of the Borrower, dated theEffective Date, certifying that:

 

### (a)           Absence ofLitigation.  There shall be noinjunction, writ, preliminary restraining order or other order of any natureissued by any Governmental Authority in any respect affecting the transactionsprovided for in the Loan Documents and no action or proceeding by or before anyGovernmental Authority shall have been commenced or be pending or, to the knowledgeof the Borrower, threatened, seeking to prevent or delay the transactionscontemplated by the Loan Documents or challenging any other terms andprovisions hereof or thereof or seeking any damages in connection therewith.

###  

### (b)           Approvals andConsents.  All approvals andconsents of all Persons required to be obtained in connection with theconsummation of the transactions contemplated by the Loan Documents shall havebeen obtained and shall be in full force and effect, and all required noticesshall have been given and all required waiting periods shall have expired.

###  

### (c)           Absence ofMaterial Adverse Change.  NoMaterial Adverse Change in the business, assets, liabilities, financialcondition or results of operations of the Borrower shall have occurred sincethe date of the Financial Statements.

###  

### (d)           No Liens otherthan Permitted Liens.  Upon themaking of Loans on the Effective Date, there will exist no Liens other thanPermitted Liens.

###  

5.7.          ComplianceCertificate

 

The Bank shall have received a Compliance Certificate,certified by a Financial Officer of the Borrower.

 

5.8.          Opinionof Counsel to the Borrower

 

The Bank shall have received an opinion, dated theEffective Date, of Wiggin & Dana, counsel to the Borrower, which shall beaddressed to the Bank and in form and substance satisfactory to the Bank andSpecial Counsel.  It is understood thatsuch opinion is being delivered to the Bank at the direction of the Borrowerand that the Bank may and will rely on such opinion.

 

36

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5.9.          Search Reports and Related Documents

 

The Bank shall have received UCC, tax and judgmentlien search reports with respect to each applicable public office where Liensare or may be filed, disclosing that there are no Liens of record in suchoffice showing the Borrower or any of its Subsidiaries as debtor thereunder(other than Permitted Liens).

 

5.10.        Approvalof Special Counsel

 

All legal matters incident to the making of the Loanson the Effective Date shall be reasonably satisfactory to Special Counsel.

 

5.11.        Fees

 

The Facility Fee, and all other fees payable to theBank on the Effective Date, shall have been paid.

 

5.12.        Feesand Expenses of Special Counsel

 

The fees and expenses of Special Counsel in connectionwith the preparation, negotiation and closing of the Loan Documents shall havebeen paid.

 

5.13.        OtherDocuments

 

The Bank shall have received such other documents,each in form and substance reasonably satisfactory to the Bank, as the Bankshall reasonably require in connection with the making of the first Loans.

 

6.             CONDITIONSOF LENDING

 

The obligation of theBank to make any Loan or issue any Letter of Credit on each Borrowing Date issubject to the satisfaction of the following conditions precedent as of suchBorrowing Date:

 

6.1.          Compliance

 

On each Borrowing Date and after giving effect to theLoans to be made thereon (i) there shall exist no Default or Event of Defaultand (ii) the representations and warranties contained in the Loan Documentsshall be true and correct with the same effect as though such representationsand warranties had been made on such Borrowing Date, except to the extent suchrepresentations and warranties specifically relate to an earlier date, in whichcase such representa­tions and warranties shall have been true and correct onand as of such earlier date.  Eachborrowing by the Borrower shall constitute a certification by the Borrower asof such Borrowing Date to the foregoing effect.

 

37

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6.2.          Borrowing Request / Letter of CreditAgreement

 

(i) With respect to each Loan, the Bank shall havereceived a Borrowing Request, and (ii) with respect to each Letter of Credit,the Bank shall have received a Letter of Credit Agreement, in each case dulyexecuted by an Authorized Signatory of the Borrower.

 

6.3.          Loan Closings

 

All documents required by the provisions of the LoanDocuments to be executed or delivered to the Bank on or before the applicableBorrowing Date shall have been executed and shall have been delivered at theoffice of the Bank set forth in Section 10.2 on or before such Borrowing Date.

 

6.4.          Other Documents

 

The Bank shall have received such other documents asthe Bank shall reasonably request.

 

7.             AFFIRMATIVECOVENANTS

 

The Borrower agrees that, so long as this Agreement isin effect, any Loan remains outstanding and unpaid, any Letter of Creditremains outstanding, or any other amount is owing under any Loan Document tothe Bank:

 

7.1.          Financial Statements and Information

 

The Borrower shall maintain, and cause each of itsSubsidiaries to maintain, a standard system of accounting in accordance withGAAP, and furnish or cause to be furnished to the Bank:

 

### (a)           As soon asavailable, but in any event within 90 days after the end of each fiscal year, acopy of an audited consolidated and consolidating balance sheet of the Borrowerand its Subsidiaries as at the end of such fiscal year, together with therelated consolidated and consolidating statements of operations, stockholder’sequity and cash flows as of and for such fiscal year, setting forth incomparative form the figures for the preceding fiscal year, together with anunqualified report thereon of the Accountants.

###  

### (b)           As soon asavailable, but in any event within 60 days after the end of each of the firstthree fiscal quarters of each fiscal year, a copy of an unaudited consolidatedand consolidating balance sheet of the Borrower and its Subsidiaries as at theend of each such quarterly period, together with the related consolidated andconsolidating statements of operations and cash flows for such period and forthe elapsed portion of the fiscal year through such date, setting forth incomparative form the figures for the corresponding periods of the precedingfiscal year, certified by a Financial Officer of the Borrower as being completeand

###  

38

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### correct in allmaterial respects and as presenting fairly the financial condition and theresults of operations of the Borrower and its Subsidiaries (subject to normalyear-end adjustments).

###  

### (c)           Concurrently withthe delivery of the financial statements specified in paragraphs (a) and (b) ofthis section, a Compliance Certificate, signed by a Financial Officer of theBorrower.

###  

### (d)           As soon asavailable, but in any event within 45 days after the end of each month, anaccounts receivable aging as of the end of such month, in form and substancereasonably satisfactory to the Bank.

###  

### (e)           Within 15 days afterthe end of each month, a Borrowing Base Certificate, signed by a FinancialOfficer of the Borrower.

###  

### (f)            Such otherinformation as the Bank may reasonably request from time to time.

###  

7.2.          Certificates;Other Information

 

The Borrower shall furnish to the Bank:

 

### (a)           Prompt writtennotice if there shall occur and be continuing a Default or an Event of Default;and

###  

### (b)           Prompt writtennotice of: (i) any citation, summons, subpoena, order to show cause or otherdocument naming the Borrower or any of its Subsidiaries a party to anyproceeding before any Governmental Authority which could reasonably be expectedto have a Material Adverse Effect or which calls into question the validity orenforceability of any of the Loan Documents, and include with such notice acopy of such citation, summons, subpoena, order to show cause or otherdocument, (ii) any lapse or other termination of any material license, permit,franchise or other authorization issued to the Borrower or any of itsSubsidiaries by any Person or Governmental Authority, and (iii) any refusal byany Person or Governmental Authority to renew or extend any such materiallicense, permit, franchise or other authorization, which lapse, termination,refusal or dispute could reasonably be expected to have a Material AdverseEffect.

###  

7.3.          Legal Existence

 

Except as may otherwise be permitted by Sections 8.3and 8.4, the Borrower shall maintain, and cause each of its Subsidiaries tomaintain, its corporate, partnership or analogous existence, as the case maybe, in good standing in the jurisdiction of its incorporation or formation andin each other jurisdiction in which the failure so to do could reasonably beexpected to have a Material Adverse Effect.

 

39

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7.4.          Taxes

 

The Borrower shall pay and discharge when due, andcause each of its Subsidiaries so to do, all Taxes upon or with respect to theBorrower or such Subsidiary and all Taxes upon the income, profits and propertyof the Borrower and its Subsidiaries, which if unpaid, could reasonably be expectedto have a Material Adverse Effect or become a Lien on property of the Borroweror such Subsidiary (other than a Lien described in clause (ii) ofSection 8.2), unless and to the extent only that such Taxes shall becontested in good faith and by appropriate proceedings diligently conducted bythe Borrower or such Subsidiary and provided that any such contested Tax, shallnot constitute, or create, a Lien on any property of the Borrower or suchSubsidiary senior to the Liens, if any, granted to the Bank by the CollateralDocuments on such property, and, provided further, that the Borrower shall givethe Bank prompt notice of such contest and that such reserve or otherappropriate provision as shall be required in accordance with GAAP shall havebeen made therefor.

 

7.5.          Insurance

 

The Borrower shall maintain, and cause each of itsSubsidiaries to maintain, with financially sound and reputable insurancecompanies insurance in at least such amounts and against at least such risks(but including in any event public liability, product liability and businessinterruption coverage) as are usually insured against in the same general areaby companies engaged in the same or a similar business; and furnish to theBank, upon written request, full information as to the insurance carried.

 

7.6.          Performanceof Obligations

 

The Borrower shall pay and discharge when due, andcause each of its Subsidiaries so to do, all lawful Indebtedness, obligationsand claims for labor, materials and supplies or otherwise which, if unpaid,might (i) have a Material Adverse Effect, or (ii) become a Lien upon propertyof the Borrower or any of its Subsidiaries other than a Permitted Lien, unlessand to the extent only that the validity of such Indebtedness, obligation orclaim shall be contested in good faith and by appropriate proceedingsdiligently conducted and that any such contested Indebtedness, obligations orclaims shall not constitute, or create, a Lien on any property of the Borroweror any of its Subsidiaries senior to the Lien, if any, granted to the Bankunder the Collateral Documents on such property, and provided that the Borrowershall give the Bank prompt notice of any such contest and that such reserve orother appropriate provision as shall be required in accordance with GAAP shallhave been made therefor.

 

7.7.          Conditionof Property

 

The Borrower shall at all times, maintain, protect andkeep in good repair, working order and condition (ordinary wear and tearexcepted), and cause each of its Subsidiaries so to do, all property necessaryto the operation of the Borrower’s or such Subsidiary’s business.

 

40

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7.8.          Observanceof Legal Requirements

 

The Borrower shall observe and comply in all respects,and cause each of its Subsidiaries so to do, with all laws, ordinances, orders,judgments, rules, regulations, certifications, franchises, permits, licenses,directions and requirements of all Governmental Authorities, which now or atany time hereafter may be applicable to it, a violation of which couldreasonably be expected to have a Material Adverse Effect, except such thereofas shall be contested in good faith and by appropriate proceedings diligentlyconducted by it, provided that the Borrower shall give the Bank prompt noticeof such contest and that such reserve or other appropriate provision as shallbe required in accordance with GAAP shall have been made therefor.

 

7.9.          Inspection of Property; Books andRecords; Discussions

 

Upon reasonable prior notice, the Borrower shallpermit representatives of the Bank to visit the offices of the Borrower andeach of its Subsidiaries during normal business hours, to examine the books andrecords thereof and the reports of independent accountants relating thereto,and to make copies or extracts therefrom, to discuss the affairs of theBorrower and each such Subsidiary with the respective officers thereof, and toexamine and inspect the property of the Borrower and each such Subsidiary andto meet and discuss the affairs of the Borrower and each such Subsidiary withthe Accountants.

 

7.10.        Authorizations

 

The Borrower shall maintain, and cause each of itsSubsidiaries to maintain, in full force and effect, all material licenses,franchises, permits, licenses, authorizations and other rights as are necessaryfor the conduct of its business.

 

7.11.        FinancialCovenants

 

### (a)           Leverage Ratio.The Borrower shall maintain as of the last day of each fiscal quarter endingduring the periods set forth below, a Leverage Ratio of not more than the ratiosset forth below:

###  

41

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| **Period**                                                |   | **Ratio** |
|-----------------------------------------------------------|--------|-----------|
|                                                      |   |      |
| December 31,  2001                                        |   | 1.12:1.00 |
|                                                      |   |      |
| March 31, 2002                                            |   | 1.08:1.00 |
|                                                      |   |      |
| June 30, 2002                                             |   | 1.00:1.00 |
|                                                      |   |      |
| September 30,  2002                                       |   | 1.00:1.00 |
|                                                      |   |      |
| December 31,  2002 and each fiscal quarter end thereafter |   | 1.00:1.00 |

 

### (b)           Fixed ChargeCoverage Ratio. The Borrower shall maintain as of the last day of eachfiscal quarter ending during the periods set forth below, a Fixed ChargeCoverage Ratio of not less than the ratios set forth below:

###  

| **Period**                                                |   | **Ratio** |
|-----------------------------------------------------------|--------|-----------|
|                                                      |   |      |
| December 31,  2001                                        |   | 1.50:1.00 |
|                                                      |   |      |
| March 31, 2002                                            |   | 1.50:1.00 |
|                                                      |   |      |
| June 30, 2002                                             |   | 1.50:1.00 |
|                                                      |   |      |
| September 30,  2002                                       |   | 1.50:1.00 |
|                                                      |   |      |
| December 31,  2002 and each fiscal quarter end thereafter |   | 1.50:1.00 |

 

42

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### (c)           Minimum EBITDA.  EBITDA for each four fiscal quarter periodof the Borrower ending during the periods set forth below shall not be lessthan the amounts set forth below:

 
| **Period**                                                |   | **Amount** |
|-----------------------------------------------------------|--------|------------|
|                                                      |   |       |
| December 31,  2001                                        |   | $          | 6,500,000 |
|                                                      |   |       |
| March 31, 2002                                            |   | $          | 7,118,000 |
|                                                      |   |       |
| June 30, 2002                                             |   | $          | 8,065,000 |
|                                                      |   |       |
| September 30,  2002                                       |   | $          | 10,657,000 |
|                                                      |   |       |
| December 31,  2002 and each fiscal quarter end thereafter |   | $          | 15,000,000 |

 

8.             NEGATIVECOVENANTS

 

The Borrower agrees that,so long as this Agreement is in effect, any Loan remains outstanding andunpaid, any Letter of Credit remains outstanding, or any other amount is owingunder any Loan Document to the Bank, the Borrower shall not, directly orindirectly:

 

8.1.          Indebtedness

 

Create, incur, assume or suffer to exist any liabilityfor Indebtedness, or permit any of its Subsidiaries so to do, except (i)Indebtedness due under the Loan Documents, (ii) Indebtedness of the Borrower orany of its Subsidiaries existing on the Effective Date as set forth on Schedule8.1, (iii) Intercompany Indebtedness, and (iv) other Indebtedness not in excessof $450,000 in the aggregate.

 

8.2.          Liens

 

Create, incur, assume or suffer to exist any Lien uponany of its property (including, without limitation, Intellectual Property,Licenses and Real Property), whether now owned or hereafter acquired, or permitany of its Subsidiaries so to do, except (i) Liens in favor of the Bank underthe Loan Documents, (ii) Liens for Taxes in the ordinary course of businesswhich are not delinquent or which are being contested in accordance withSection 7.4, provided that enforcement of such Liens is stayed pendingsuch contest, (iii) Liens in connection with workers’ compensation,unemployment insurance or other social security obligations, (iv) deposits orpledges to secure bids, tenders, contracts (other than contracts for thepayment of money), leases, statutory obligations, surety and appeal bonds andother obligations of like nature arising in the ordinary course of business,(v) zoning ordinances, easements, rights of way, minor defects, irregularities,and other similar restrictions affecting real property which do not adverselyaffect the value of such real property or the financial condition of theBorrower or such Subsidiary or impair its use for the operation of the businessof the Borrower or such Subsidiary, (vi) Liens arising by operation of law suchas mechanics’, materialmen’s, carriers’, warehousemen’s liens incurred in theordinary course of business which are not delinquent or which are beingcontested in accordance with Section 7.6, provided that enforcement of such

 

43

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Liens is stayed pendingsuch contest, (vii) Liens arising out of judgments or decrees which are beingcontested in accordance with Section 7.6, provided that enforcement ofsuch Liens is stayed pending such contest, and (viii) Liens on property of theBorrower and its Subsidiaries existing on the Effective Date as set forth onSchedule 8.2 as renewed from time to time, but not any increases in the amountssecured thereby.

 

8.3.          Merger;Consolidations

 

Consolidate with, be acquired by, merge into or withany Person or enter into any binding agreement to do any of the foregoing whichis not contingent on obtaining the consent of the Bank, or permit any of itsSubsidiaries so to do, except, provided that (i) the Bank shall havereceived ten days prior written notice and (ii) immediately before and aftergiving effect thereto no Default or Event of Default shall exist, any direct orindirect wholly-owned Subsidiary of the Borrower may merge or consolidate withthe Borrower or any other direct or indirect wholly-owned Subsidiary of theBorrower, provided that in the event of a merger of the Borrower andsuch wholly-owned Subsidiary, the Borrower shall be the survivor and in theevent of a merger of a Subsidiary with a Subsidiary Guarantor, the SubsidiaryGuarantor shall be the survivor.

 

8.4.          Dispositions

 

Make any Disposition, or permit any of itsSubsidiaries so to do, except:

 

### (a)           Dispositions of anyInvestments permitted under Section 8.5;

###  

### (b)           Dispositions ofproperty which, in the reasonable opinion of the Borrower or such Subsidiary,is obsolete or no longer useful in the conduct of its business; and

###  

### (c)           Dispositions as towhich the following conditions have been satisfied:

###  

(i)            the Bank shall have consentedthereto,

 

(ii)           no Default or Event of Default shallexist immediately before or after giving effect thereto, and

 

(iii)          the total consideration received or tobe received therefor by the Borrower or any of its Subsidiaries shall bepayable in cash on or before the closing thereof and shall not be less than thefair market value thereof as reasonably determined by the board of directors ofthe Borrower or such Subsidiary.

 

8.5.          Acquisitions,Investments, Loans, Etc.

 

At any time, directly or indirectly purchase, hold,own or otherwise acquire or invest in any Capital Stock, evidence ofindebtedness or other obligation or security or any

 

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interest whatsoever inany other Person, or make or permit to exist any loans, advances or otherextensions of credit to, or any investment (whether in cash or other property)in, any other Person, or enter into any arrangement for the purpose ofproviding funds or credit to any other Person, or make any Acquisition, orbecome a partner or joint venturer in any partnership or joint venture, or makeany other investment, whether by way of capital contribution, time deposit orotherwise, in or with any Person, or make any commitment or otherwise to agreeto do any of the foregoing (all of which are sometimes referred to herein as “Investments”),or permit any of its Subsidiaries so to do, or except:

 

### (a)           Investments inLiquid Investments;

###  

### (b)           Investments existingon the Effective Date as set forth on Schedule 8.5;

###  

### (c)           Investments inSubsidiaries permitted by Section 8.8, provided that the Bank has given itsprior written consent thereto;

###  

### (d)           Investments by theBorrower or any Subsidiary in Intercompany Indebtedness, provided that the Bankhas given its prior written consent thereto; and

###  

### (e)           Acquisitions of theassets of (i) independent sales representative offices of the Borrower existingon the Effective Date, or (ii) other Persons engaged in the same line ofbusiness as the Borrower or its independent sales representative offices,provided that with respect to Acquisitions to be made after the Effective Date:

###  

#### (i)            At least 30 days prior to the datesuch Acquisition is to be consummated, the Borrower shall deliver to the Bank adetailed description of the proposed Acquisition;

####  

#### (ii)           At least 15****days prior to the date suchAcquisition is to be consummated, the Borrower shall deliver to the Bank thefollowing pro-forma information and projections: (1) a pro-forma consolidatedbalance sheet and income statement of the Borrower and its Subsidiariesdemonstrating to the satisfaction of the Bank that no Event of Default shalloccur after giving effect to such Acquisition and (2) financial projections ofthe Borrower and its consolidated Subsidiaries demonstrating to thesatisfaction of the Bank that immediately after giving effect so suchAcquisition, EBITDA of the Borrower and its Subsidiaries on a consolidatedbasis shall increase in an amount commensurate with the cost of suchAcquisition; and

####  

#### (iii)          The aggregate consideration paid forall such Acquisitions shall not exceed $7,500,000, and the actual cashconsideration paid in the aggregate for all such Acquisitions prior to theMaturity Date shall not exceed $2,000,000.

####  

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8.6.          RestrictedPayments

 

Make any Restricted Payments payable in cash orotherwise or apply any of its property thereto or set apart any sum therefor,or permit any of its Subsidiaries so to do, except that a wholly-ownedSubsidiary may make Restricted Payments to the Borrower.

 

8.7.          Businessand Name Changes

 

Materially change the nature of the business of theBorrower and its Subsidiaries from that conducted on the Effective Date, oralter or modify its name, structure or status, or change its fiscal year fromthat in effect on the Effective Date, or permit any Subsidiary so to do.

 

8.8.          Subsidiaries

 

Create or acquire any other Subsidiary, or permit anyof its Subsidiaries so to do unless prior to or simultaneously with theconsummation of the creation or acquisition of (a) (i) a Domestic Subsidiary or(ii) a Foreign Subsidiary which is not prevented, for tax reasons, fromguaranteeing the Borrower’s obligations hereunder, (x) such Subsidiary shallhave executed and delivered to the Bank a Subsidiary Guaranty or a supplementto the Subsidiary Guaranty in accordance with the terms thereof and become aSubsidiary Guarantor and (y) each Credit Party owning Capital Stock of suchSubsidiary shall deliver certificates evidencing 100% (in the case of aDomestic Subsidiary) or 60% (in the case of a Foreign Subsidiary) of suchCapital Stock to the Bank as additional Collateral, together with appropriatestock powers; or (b) a Foreign Subsidiary which is prevented, for tax reasons,from guaranteeing the Borrower’s obligations hereunder, each Credit Partyowning Capital Stock of such Foreign Subsidiary shall deliver certificatesevidencing 60% of such Capital Stock to the Bank as additional Collateral,together with appropriate stock powers; and in each case, the Bank shall havereceived such other documents as the Bank shall have reasonably requested.

 

8.9.          Saleand Leaseback Transactions

 

Enter into any Sale and Leaseback Transaction orpermit any of its Subsidiaries so to do.

 

8.10.        Amendments,Etc. of Certain Agreements

 

Enter into or agree to any amendment, modification orwaiver of any term or condition of its Organizational Documents in any waywhich would adversely affect the interests of the Bank under any of the LoanDocuments or permit any of its Subsidiaries so to do.

 

8.11.        Transactionswith Affiliates

 

Become a party to any transaction with an Affiliateunless the board of directors of the Borrower shall have determined that theterms and conditions relating thereto are as favorable to the Borrower as thosewhich would be obtainable at the time in a comparable

 

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arms-length transactionwith a Person other than an Affiliate, or permit any of its Subsidiaries so todo.

 

8.12.        Limitation on Dividend Restrictions

 

Permit or cause any of its Subsidiaries to enter intoor agree, or otherwise be or become subject, to any agreement, contract orother arrangement (other than this Agreement) with any Person pursuant to theterms of which such Subsidiary is or would be prohibited from declaring orpaying any cash dividends on any class of its Capital Stock owned directly orindirectly by the Borrower or any other Subsidiary or from making any otherdistribution on account of any class of any such Capital Stock.

 

8.13.        Limitationon Negative Pledges

 

Enter into any agreement, other than (i) thisAgreement and (ii) purchase money mortgages or capital leases permitted by thisAgreement (in which cases, any prohibition or limitation shall only beeffective against the assets financed thereby), or permit any of itsSubsidiaries so to do, which prohibits or limits the ability of the Borrower orsuch Subsidiary to create, incur, assume or suffer to exist any Lien upon anyof its property or revenues, whether now owned or hereafter acquired.

 

9.             DEFAULT

 

9.1.          Events ofDefault

 

The following shall each constitute an “Event ofDefault” hereunder:

 

### (a)           The failure of theBorrower to make any payment of principal on the Note, or in respect of anyReimbursement Obligation, when due and payable; or

###  

### (b)           The failure of theBorrower to make any payment of interest, fees, expenses or other amountspayable under any Loan Document or otherwise, to the Bank within five BusinessDays after the date when due and payable; or

###  

### (c)           The failure of theBorrower to observe or perform any covenant or agreement contained in Sections2.9, 7.3 or 7.11, or Article 8; or

###  

### (d)           The failure of anyCredit Party to observe or perform any other term, covenant, or agreementcontained in any Loan Document and such failure shall have continued unremediedfor a period of 30 days after such Credit Party shall have obtained knowledgethereof; or

###  

### (e)           Any representationor warranty made by any Credit Party (or by an officer thereof on its behalf)in any Loan Document or in any certificate, report, opinion (other than anopinion of counsel) or other document delivered or to be delivered pursuantthereto, shall

###  

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### prove to have beenincorrect or misleading (whether because of misstatement or omission) in anymaterial respect when made; or

###  

### (f)            Liabilities and/orother obligations of the Borrower (other than the obligations under the Noteand the Reimbursement Obligations), any of its Subsidiaries or any other CreditParty, whether as principal, guarantor, surety or other obligor, for thepayment of any Indebtedness or operating leases (i) shall become or shall bedeclared to be due and payable prior to the expressed maturity thereof, or (ii)shall not be paid when due or within any grace period for the payment thereof,(iii) any holder of any such obligation shall have the right to declare suchobligation due and payable prior to the expressed maturity thereof or (iv) as aconsequence of the occurrence or continuation of any event or condition, theBorrower, any of its Subsidiaries or such other Credit Party has becomeobligated to purchase or repay any Indebtedness before its regularly scheduledmaturity date; or

###  

### (g)           Any Change ofControl shall occur; or

###  

### (h)           The Borrower, any ofits Subsidiaries or any other Credit Party shall (i) suspend or discontinue itsbusiness, (ii) make an assignment for the benefit of creditors, (iii) generallynot be paying its debts as such debts become due, (iv) admit in writing itsinability to pay its debts as they become due, (v) file a voluntary petition inbankruptcy, (vi) become insolvent (however such insolvency shall be evidenced),(vii) file any petition or answer seeking for itself any reorganization,arrangement, composition, readjustment of debt, liquidation or dissolution orsimilar relief under any present or future statute, law or regulation of anyjurisdiction, (viii) petition or apply to any tribunal for any receiver,custodian or any trustee for any substantial part of its property, (ix) be thesubject of any such proceeding filed against it which remains undismissed for aperiod of 60 days, (x) file any answer admitting or not contesting the materialallegations of any such petition filed against it or any order, judgment ordecree approving such petition in any such proceeding, (xi) seek, approve,consent to, or acquiesce in any such proceeding, or in the appointment of anytrustee, receiver, sequestrator, custodian, liquidator, or fiscal agent for it,or any substantial part of its property, or an order is entered appointing anysuch trustee, receiver, custodian, liquidator or fiscal agent and such orderremains in effect for 60 days, or (xii) take any formal action for the purposeof effecting any of the foregoing or looking to the liquidation or dissolutionof the Borrower, such Subsidiary or such other Credit Party; or

###  

### (i)            An order for reliefis entered under the United States bankruptcy laws or any other decree or orderis entered by a court having jurisdiction (i) adjudging the Borrower, any ofits Subsidiaries or any other Credit Party bankrupt or insolvent, (ii)approving as properly filed a petition seeking reorganization, liquidation,arrangement, adjustment or composition of or in respect of the Borrower, any ofits Subsidiaries or any other Credit Party under the United States bankruptcylaws or any other applicable Federal or state law, (iii) appointing a receiver,liquidator, assignee, trustee, custodian, sequestrator (or other similarofficial) of the Borrower, any of its Subsidiaries or any other Credit Party orof any substantial part of the property of any thereof, or (iv) ordering thewinding up or liquidation of the affairs of

###  

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### the Borrower, anyof its Subsidiaries or any other Credit Party, and any such decree or ordercontinues unstayed and in effect for a period of 60 days; or

###  

### (j)            Judgments ordecrees against the Borrower, any of its Subsidiaries or any other Credit Partyaggregating in excess of $100,000 shall remain unpaid, unstayed on appeal,undischarged, unbonded or undismissed for a period of 30 days; or

###  

### (k)           The occurrence of anEvent of Default (beyond any applicable notice or cure period) as defined inany Collateral Document; or

###  

### (l)            Any Loan Documentshall cease, for any reason, to be in full force and effect, or any CreditParty shall so assert in writing or shall disavow any of its obligationsthereunder; or

###  

### (m)          (i) any TerminationEvent shall occur; (ii) any Accumulated Funding Deficiency, whether waived,shall exist with respect to any Pension Plan; (iii) any Person shall engage inany Prohibited Transaction involving any Employee Benefit Plan; (iv) theBorrower, any of its Subsidiaries or any ERISA Affiliate shall fail to pay whendue an amount which is payable by it to the PBGC or to a Pension Plan underTitle IV of ERISA; (v) the imposition of any tax under Section 4980B(a) of theCode; (vi) the assessment of a civil penalty with respect to any EmployeeBenefit Plan under Section 502(c) of ERISA; or (vii) any other event orcondition shall occur or exist with respect to an Employee Benefit Plan whichin the case of clauses (i) through (vi) would, individually or in the aggregate,have a Material Adverse Effect.

###  

9.2.          Remedies

 

### (a)           Upon the occurrenceof an Event of Default or at any time thereafter during the continuancethereof, (i) if such event is an Event of Default specified in clause (h) or(i) above, the Commitments shall immediately and automatically terminate andthe Loans, all accrued and unpaid interest thereon, any ReimbursementObligations owing in respect of all outstanding Letters of Credit and all otheramounts owing under the Loan Documents shall immediately become due andpayable, the Borrower shall forthwith deposit with the Bank an amount equal tothe Letter of Credit Exposure in a cash collateral account under the exclusivecontrol of the Bank, and the Bank may exercise any and all remedies and otherrights provided in the Loan Documents, and (ii) if such event is any otherEvent of Default, any or all of the following actions may be taken: (A) theBank may, by notice to the Borrower, declare the Commitments terminatedforthwith, whereupon the Commitments shall immediately terminate, and (B) theBank may, by notice of default to the Borrower, declare the Loans, all accruedand unpaid interest thereon, any Reimbursement Obligations owing in respect ofall outstanding Letters of Credit and all other amounts owing under the LoanDocuments to be due and payable forthwith, whereupon the same shall immediatelybecome due and payable, the Borrower shall forthwith deposit with the Bank anamount equal to the Letter of Credit Exposure in a cash collateral account underthe exclusive control of the Bank, and the Bank may exercise any and allremedies and other rights provided in the Loan Documents.  Except as otherwise provided in thisSection, presentment, demand, protest and all other notices of any kind arehereby expressly

###  

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### waived. TheBorrower hereby further expressly waives and covenants not to assert anyappraisement, valuation, stay, extension, redemption or similar laws, now or atany time hereafter in force which might delay, prevent or otherwise impede theperformance or enforcement of any Loan Document.

###  

### (b)           In the event thatthe Commitments shall have been terminated or the Loans, all accrued and unpaidinterest thereon and all other amounts owing under the Loan Documents shallhave been declared due and payable pursuant to the provisions of this section,any funds received by the Bank from or on behalf of the Borrower shall beapplied by the Bank in liquidation of the Loans, the Reimbursement Obligationsand the other obligations of the Borrower under the Loan Documents in thefollowing manner and order: (i) to the payment of interest on the Loans; (ii)to the payment of the principal portion of any Loans in such order as the Bankmay determine in its absolute discretion; (iii) to the payment of theReimbursement Obligations; (iv) to the payment of any fees or expenses due theBank from the Borrower; (v) to reimburse the Bank for any expenses (to theextent not paid pursuant to clause (iv) above) due from the Borrower pursuantto the provisions of Section 10.5; and (vi) to the payment of any other amountsowed to the Bank under any Loan Document.

###  

10.           OTHERPROVISIONS

 

10.1.        Amendmentsand Waivers

 

No amendment or waiver of any provision of thisAgreement or any Loan Document shall in any event be effective unless the sameshall be in writing and signed by all parties, and such waiver or consent shallbe effective only in the spe­cific instance and for the specific purpose forwhich given.

 

10.2.        Notices

 

All notices, requests and demands to or upon therespective parties to the Loan Documents to be effective shall be in writingand, unless otherwise expressly provided therein, shall be deemed to have beenduly given, made and received (i) when delivered by hand, (ii) one Business Dayafter having been sent by overnight courier service, (iii) five days afterbeing deposited with the United States Postal Service as certified orregistered mail, with first–class postage and fees prepaid, or, (iv) whensent by facsimile transmission upon electronic confirmation of receipt,addressed as follows in the case of the Borrower or the Bank or addressed tosuch other addresses as to which the Bank may be hereafter notified by therespective parties thereto or any future holders of the Note:

 

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The Borrower:

 

Meta Group Inc.

208 Harbor Drive

Stamford,Connecticut   06912

Attention:     Bernard Denoyer

Telephone:    (203) 973-6813

Telecopy:      (203) 973-6921

 

with a copy to:

 

Valerie A. Seiling, Esq.

Wiggin & Dana

One City Place

185 Asylum Street

Hartford,Connecticut  06103-3402

 

The Bank:

 

The Bank of New York

10 Mason Street

Greenwich, Connecticut06830

Attention:     Mark Sicinski,

                            Vice President

Telephone:    (203) 863-2794

Telecopy:      (203) 863-2610

 

except that anynotice, request or demand by the Borrower to or upon the Bank pursuant toSections 2.5 or 3.3 and any notice by either party of a change of address shallnot be effective until received.  Anyparty to a Loan Document may rely on signatures of the parties thereto whichare transmitted by facsimile or other electronic means as fully as iforiginally signed.

 

10.3.        No Waiver;Cumulative Remedies

 

No failure to exercise and no delay in exercising, onthe part of the Bank, any right, remedy, power or privilege under any LoanDocument shall operate as a waiver thereof; nor shall any single or partialexercise of any right, remedy, power or privilege under any Loan Documentpreclude any other or further exercise thereof or the exercise of any otherright, remedy, power or privilege.  Therights, remedies, powers and privileges under the Loan Documents are cumulativeand not exclusive of any rights, remedies, powers and privileges provided bylaw.

 

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10.4.        Survival of Representations andWarranties and Certain Obligations

 

### (a)           All representationsand warranties made under the Loan Documents and in any document, certificateor statement delivered pursuant thereto or in connection therewith shallsurvive the execution and delivery of the Loan Documents.

###  

### (b)           The obligations ofthe Borrower under Sections 3.4, 3.5, 3.6 (to the extent that such obligationsunder Sections 3.5 and 3.6 arose prior to the termination of the RevolvingCredit Commitment and the payment of the Loans), 3.9 and 10.5 shall survive thetermination of the Revolving Credit Commitment and the payment of the Loans andall other amounts payable under the Loan Documents.

###  

10.5.        Expenses

 

The Borrower agrees, promptly upon presentation of astatement or invoice therefor, and whether or not any Loan is made or anyLetter of Credit is issued (i) to pay or reimburse the Bank for all itsout-of-pocket costs and expenses reasonably incurred in connection with thedevelopment, preparation and execution of, the Loan Documents and anyamendment, supplement or modification thereto (whether or not executed oreffective), any documents prepared in connection therewith and the consummationof the transactions contemplated thereby, including without limitation thereasonable fees and disbursements of Special Counsel, (ii) to pay or reimbursethe Bank for the cost of all audits undertaken from time to time with respectto any Collateral (provided that prior to the occurrence of an Event of Defaultthe Borrower shall not be obligated to pay for the cost of audits undertakenmore frequently than once per year), all costs incurred by the Bank to perfectits Lien in the Collateral, and any costs or expenses incurred by the Bank inprotecting its interest in the Collateral, (iii) to pay or reimburse the Bankfor all of its costs and expenses, including, without limitation, reasonablefees and disbursements of Special Counsel or any other counsel, incurred inconnection with (A) any Default or Event of Default and any enforcement orcollection proceedings resulting therefrom or in connection with thenegotiation of any restructuring or “work-out” (whether consummated or not) ofthe obligations of any Credit Party under any of the Loan Documents and (B) theenforcement of this section, and (iv) to pay, indemnify and hold the Bank andeach of its officers, directors and employees harmless from and against any andall other liabilities, obligations, claims, losses, damages, penalties,actions, judgments, suits, costs, expenses or disbursements of any kind ornature whatsoever (including, without limitation, reasonable counsel fees anddisbursements) with respect to the enforcement and performance of the LoanDocuments, the use of the proceeds of the Loans and the enforcement andperformance of the provisions of any subordination agreement involving the Bank(all the foregoing in this clause (iv), collectively, the “IndemnifiedLiabilities”) and, if and to the extent that the foregoing indemnity may beunenforceable for any reason, the Borrower agrees to make the maximum paymentnot prohibited under applicable law; provided, however, that theBorrower shall have no obligation to pay Indemnified Liabilities to the Bankarising from the finally adjudicated gross negligence or willful misconduct ofthe Bank or claims between one indemnified party and another indemnified party.

 

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10.6.        Successorsand Assigns

 

This Agreement, the Note and the other Loan Documentsto which any Credit Party is a party shall be binding upon and inure to thebenefit of such Credit Party and the Bank, all future holders of the Note andtheir respective successors and assigns, provided, however, that such CreditParty may neither delegate its liabilities and obligations, nor assign itsrights and benefits, under any Loan Document to any Person.  Notwithstanding anything to the contrarycontained in this Section, the Bank may at any time or from time to time assignall or any portion of its rights under the Loan Documents to a Federal ReserveBank, provided that any such assignment shall not release such assignorfrom its obligations thereunder.

 

10.7.        Counterparts

 

Each Loan Document (other than the Note) may beexecuted by one or more of the parties thereto on any number of separatecounterparts and all of said counterparts taken together shall be deemed toconstitute one and the same document. It shall not be necessary in making proof of any Loan Document toproduce or account for more than one counterpart signed by the party to becharged.  A counterpart of any LoanDocument and of any an amendment, modification, consent or waiver to or of anyLoan Document transmitted by facsimile shall be deemed to be an originallyexecuted counterpart.

 

10.8.        Set-off

 

In addition to any rights and remedies of the Bankprovided by law, upon the occurrence of an Event of Default and theacceleration of the obligations owing in connection with the Loan Documents, orat any time upon the occurrence and during the continuance of an Event ofDefault under Sections 9.1(a) or (b), the Bank shall have the right, withoutprior notice to the Borrower or any other Credit Party, any such notice beingexpressly waived by the Borrower and each other Credit Party to the extent notprohibited by applicable law, to set-off and apply against any indebtedness,whether matured or unmatured, of the Borrower or such other Credit Party, asthe case may be, to the Bank any amount owing from the Bank to the Borrower orsuch other Credit Party, as the case may be, at, or at any time after, thehappening of any of the above-mentioned events.  To the extent not prohibited by applicable law, the aforesaidright of set-off may be exercised by the Bank against the Borrower or suchother Credit Party, as the case may be, or against any trustee in bankruptcy,custodian, debtor in possession, assignee for the benefit of creditors,receiver, or execution, judgment or attachment creditor of the Borrower or suchother Credit Party, as the case may be, or against anyone else claiming throughor against the Borrower or such other Credit Party, as the case may be, or suchtrustee in bankruptcy, custodian, debtor in possession, assignee for thebenefit of creditors, receiver, or execution, judgment or attachment creditor,notwithstanding the fact that such right of set-off shall not have beenexercised by the Bank prior to the making, filing or issuance, or service uponthe Bank of, or of notice of, any such petition, assignment for the benefit ofcreditors, appointment or application for the appointment of a receiver, orissuance of execution, subpoena, order or warrant.  The Bank agrees promptly to notify the Borrower after any suchset-off and 

 

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application made by theBank, provided that the failure to give such notice shall not affect thevalidity of such set-off and application.

 

10.9.        Construction

 

Each party to a Loan Document represents that it hasbeen represented by counsel in connection with the Loan Documents and thetransactions contemplated thereby and that the principle that agreements are tobe construed against the party drafting the same shall be inapplicable.

 

10.10.      Governing Law

 

The Loan Documents and the rights and obligations ofthe parties thereunder shall be governed by, and construed and interpreted inaccordance with, the internal laws of the State of New York, without regard toprinciples of conflict of laws, but including Section 5-1401 of the GeneralObligations Law.

 

10.11.      HeadingsDescriptive

 

Section headings have been inserted in the LoanDocuments for convenience only and shall not be construed to be a part thereof.

 

10.12.      Severability

 

Every provision of the Loan Documents is intended tobe severable, and if any term or provision thereof shall be invalid, illegal orunenforceable for any reason, the validity, legality and enforceability of theremaining provisions thereof shall not be affected or impaired thereby.

 

10.13.      Integration

 

All exhibits to a Loan Document shall be deemed to bea part thereof.  Except for agreementsbetween the Bank and the Borrower with respect to certain fees, the LoanDocuments embody the entire agreement and understanding between the Borrowerand the Bank with respect to the subject matter thereof and supersede all prioragreements and understandings between the Borrower and the Bank with respect tothe subject matter thereof.

 

10.14.      Consentto Jurisdiction

 

Each Credit Party hereby irrevocably submits to thejurisdiction of any New York State or Federal court sitting in the City of NewYork over any suit, action or proceeding arising out of or relating to the LoanDocuments.  Each Credit Party herebyirrevocably waives, to the fullest extent permitted or not prohibited by law,any objection which it may now or hereafter have to the laying of the venue ofany such suit, action or proceeding brought in such a court and any claim thatany such suit, action or proceeding brought in such a court has been brought inan inconvenient forum.  Each CreditParty hereby agrees that a final judgment in any such suit,

 

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action or proceedingbrought in such a court, after all appropriate appeals, shall be conclusive andbinding upon it.

 

10.15.      Service ofProcess

 

Each party to a Loan Document hereby irrevocablyconsents to the service of process in any suit, action or proceeding by sendingthe same by first class mail, return receipt requested or by overnight courierservice, to the address of such party set forth in Section 10.2 or in theapplicable Loan Document executed by such party.  Each party to a Loan Document hereby agrees that any such service(i) shall be deemed in every respect effective service of process upon it inany such suit, action, or proceeding, and (ii) shall to the fullest extentenforceable by law, be taken and held to be valid personal service upon andpersonal delivery to it.

 

10.16.      NoLimitation on Service or Suit

 

Nothing in the Loan Documents or any modification,waiver, consent or amendment thereto shall affect the right of the Bank toserve process in any manner permitted by law or limit the right of the Bank tobring proceedings against any Credit Party in the courts of any jurisdiction orjurisdictions in which such Credit Party may be served.

 

10.17.      WAIVER OFTRIAL BY JURY

 

EACH OF THE BANK AND THE CREDIT PARTIES HEREBYKNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO ATRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTIONWITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN.  FURTHER, EACH CREDIT PARTY HEREBY CERTIFIESTHAT NO REPRESENTATIVE OR AGENT OF THE BANK, OR COUNSEL TO THE BANK, HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OFSUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIALPROVISION.  EACH CREDIT PARTYACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTERALIA, THE PROVISIONS OF THIS SECTION.

 

[THE REMAINDER OFTHIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Amended and Restated Credit Agreement to be duly executed and delivered bytheir proper and duly authorized officers as of the day and year first abovewritten.

 
|   |                  |                                               |
|--------|-----------------------|----------------------------------------------------|
|   | META GROUP, INC.      |
|   |                  |
|   |                  |                                               |
|   | By:                   | /s/ John A.  Piontkowski                           |   |
|   | Name:                 | John A.  Piontkowski                               |   |
|   | Title:                | Senior Vice  President and Chief Financial Officer |
|   |                  |                                               |
|   |                  |                                               |
|   | THE BANK OF NEW  YORK |
|   |                  |                                               |
|   |                  |                                               |
|   | By:                   | /s/ Mark J.  Sicinski                              |   |
|   |                  | Mark J. Sicinski,                                  |
|   |                  | Vice President                                     |
|        |                       |                                                    |  |  |  |

 

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