Credit Agreement

 Exhibit 10.1
  CREDIT AGREEMENT
  DATED AS OF
FEBRUARY 14, 2003
  AMONG
  KORN/FERRY INTERNATIONAL,
  as Borrower,
  THE LENDERS FROM TIME TO TIME PARTY HERETO,
 as Lenders,
  WELLS
FARGO BANK, NATIONAL ASSOCIATION,
 as Administrative Agent,
  and
  WELLS FARGO BANK, NATIONAL
ASSOCIATION,
 as Arranger

	  
 	   
 	  Credit Agreement
 

   
 
  





  
 TABLE OF CONTENTS

	   
 	   
 	  Page No.
 
	   
 	   
 	 
 
	  Section 1.
 	  
DEFINITIONS
 	  1
 
	  
 	  
 	  
 
	  
 	  1.1
 	  
Certain Defined Terms
 	  1
 
	  
 	  
 	  
 	  
 
	  
 	 1.2
 	 
Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement
 	  24
 
	  
 	  
 	  
 	  
 
	  
 	  1.3
 	  
Other Definitional Provisions and Rules of Construction
 	  24
 
	  
 	  
 	  
 
	  Section 2.
 	  
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
 	  25
 
	  
 	  
 	  
 
	  
 	 2.1
 	  
Commitments; Making of Loans; the Register; Optional Notes
 	  25
 
	  
 	  
 	  
 	  
 
	  
 	  2.2
 	  
Interest on the Loans
 	  28
 
	  
 	  
 	  
 	  
 
	  
 	  2.3
 	  
Fees
 	  31
 
	  
 	  
 	  
 
	  
 	 2.4
 	  
Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions Regarding Payments; Application of Proceeds of Collateral and Payments Under Subsidiary Guaranty
 	  31
 
	 	  
 	  
 	  
 
	 	  2.5
 	  
Use of Proceeds
 	  35
 
	 	  
 	  
 	  
 
	 	  2.6
 	  
Special Provisions Governing Eurodollar Rate Loans
 	  35
 
	 	  
 	  
 	  
 
	 	 2.7
 	  
Increased Costs; Taxes; Capital Adequacy
 	  38
 
	 	  
 	  
 	  
 
	 	  2.8
 	  
Statement of Lenders; Obligation of Lenders and Issuing Lender to Mitigate
 	  42
 
	 	  
 	  
 	  
 
	 	  2.9
 	  
Replacement of a Lender
 	  42
 
	  
 	  
 	  
 
	 Section 3.
 	  
LETTERS OF CREDIT
 	  43
 
	  
 	  
 	  
 
	 	  3.1
 	  
Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein
 	  43
 
	 	  
 	  
 	  
 
	 	  3.2
 	  
Letter of Credit Fees
 	  45
 
	 	  
 	  
 	  
 
	 	 3.3
 	  
Drawings and Reimbursement of Amounts Paid Under Letters of Credit
 	  45
 
	 	  
 	  
 	  
 
	 	  3.4
 	  
Obligations Absolute
 	  48
 
	 	  
 	  
 	  
 
	 	  3.5
 	  
Nature of Issuing Lender’s Duties
 	  49
 
	  
 	  
 	  
 
	 Section 4.
 	  
CONDITIONS TO LOANS AND LETTERS OF CREDIT
 	  50
 
	  
 	  
 	  
 
	  
 	  4.1
 	  
Conditions to Initial Revolving Loans
 	  50
 
	  
 	  
 	  
 	  
 
	  
 	  4.2
 	  
Conditions to All Loans
 	  53
 
	  
 	  
 	  
 	  
 
	  
 	 4.3
 	  
Conditions to Letters of Credit
 	  54
 
	  
 	  
 	  
 
	  Section 5.
 	  
COMPANY’S REPRESENTATIONS AND WARRANTIES
 	  55
 
	  
 	  
 	  
 
	  
 	  5.1
 	  
Organization, Powers, Qualification, Good Standing, Business and Subsidiaries
 	  55
 
	  
 	  
 	  
 	  
 
	  
 	 5.2
 	  
Authorization of Borrowing, etc
 	  56
 

  1
   
   
   




  
 TABLE OF CONTENTS
 (Continued)

	   
 	   
 	  Page No.
 
	   
 	   
 	 
 
	  
 	  5.3
 	  
Financial Condition
 	  56
 
	  
 	  
 	  
 	  
 
	  
 	 5.4
 	  
No Material Adverse Change; No Restricted Junior Payments
 	  57
 
	  
 	  
 	  
 	  
 
	  
 	  5.5
 	  
Title to Properties; Liens; Real Property; Intellectual Property
 	  57
 
	  
 	  
 	  
 	  
 
	  
 	  5.6
 	  
Litigation; Adverse Facts
 	  58
 
	  
 	  
 	  
 	  
 
	  
 	 5.7
 	  
Payment of Taxes
 	  58
 
	  
 	  
 	  
 	  
 
	  
 	  5.8
 	  
Performance of Agreements
 	  59
 
	  
 	  
 	  
 	  
 
	  
 	  5.9
 	  
Governmental Regulation
 	  59
 
	  
 	  
 	  
 	  
 
	  
 	 5.10
 	  
Securities Activities
 	  59
 
	  
 	  
 	  
 	  
 
	  
 	  5.11
 	  
Employee Benefit Plans
 	  59
 
	  
 	  
 	  
 	  
 
	  
 	  5.12
 	  
Certain Fees
 	  60
 
	  
 	  
 	  
 	  
 
	  
 	 5.13
 	  
Environmental Protection
 	  60
 
	  
 	  
 	  
 	  
 
	  
 	  5.14
 	  
Employee Matters
 	  61
 
	  
 	  
 	  
 	  
 
	  
 	  5.15
 	  
Solvency
 	  61
 
	  
 	  
 	  
 	  
 
	  
 	 5.16
 	  
Matters Relating to Collateral
 	  61
 
	  
 	  
 	  
 	  
 
	  
 	  5.17
 	  
Disclosure
 	  62
 
	  
 	  
 	  
 	  
 
	  
 	  5.18
 	  
Subordinated Indebtedness
 	  62
 
	  
 	  
 	  
 	  
 
	 Section 6.
 	  
COMPANY’S AFFIRMATIVE COVENANTS
 	  63
 
	  
 	  
 	  
 
	 	  6.1
 	  
Financial Statements and Other Reports
 	  63
 
	 	  
 	  
 	  
 
	 	  6.2
 	  
Existence, etc.
 	  68
 
	 	  
 	  
 	  
 
	 	 6.3
 	  
Payment of Taxes and Claims; Tax
 	  68
 
	 	  
 	  
 	  
 
	 	  6.4
 	  
Maintenance of Properties; Insurance; Application of Net Business Interruption Insurance Proceeds
 	  68
 
	 	  
 	  
 	  
 
	 	  6.5
 	  
Inspection Rights; Lender Meeting
 	  69
 
	 	  
 	  
 	  
 
	 	 6.6
 	  
Compliance with Laws, etc.
 	  69
 
	 	  
 	  
 	  
 
	 	  6.7
 	  
Environmental Matters
 	  70
 
	 	  
 	  
 	  
 
	  
 	  6.8
 	  
Execution of Subsidiary Guaranty and Personal Property Collateral Documents After the Closing Date
 	  71
 
	  
 	  
 	  
 	  
 
	 Section 7.
 	  
COMPANY’S NEGATIVE COVENANTS
 	  73
 
	  
 	  
 	  
 
	 	  7.1
 	  
Indebtedness
 	  73
 
	 	  
 	  
 	  
 
	 	  7.2
 	  
Liens and Related Matters
 	  74
 
	 	  
 	  
 	  
 
	 	 7.3
 	  
Investments; Acquisitions
 	  75
 
						

  
 2 



  
  TABLE OF CONTENTS
 (Continued)

	   	   	  Page No.
 
	   
 	   
 	 
 
	 	  7.4
 	  
Contingent Obligations
 	  76
 
	 	  
 	  
 	  
 
	 	 7.5
 	  
Restricted Junior Payments
 	  76
 
	 	  
 	  
 	  
 
	 	  7.6
 	  
Financial Covenants
 	  76
 
	 	  
 	  
 	  
 
	 	  7.7
 	  
Restriction on Fundamental Changes; Asset Sales
 	  77
 
	 	  
 	  
 	  
 
	 	 7.8
 	  
Consolidated Capital Expenditures
 	  78
 
	 	  
 	  
 	  
 
	 	  7.9
 	  
Transactions with Shareholders and Affiliates
 	  78
 
	 	  
 	  
 	  
 
	 	  7.10
 	  
Sales and Lease-Backs
 	  79
 
	 	  
 	  
 	  
 
	 	 7.11
 	  
Sale or Discount of Receivables
 	  79
 
	 	  
 	  
 	  
 
	 	  7.12
 	  
Conduct of Business
 	  79
 
	 	  
 	  
 	  
 
	 	  7.13
 	  
Amendments of Documents Relating to Subordinated Indebtedness
 	  79
 
	 	  
 	  
 	  
 
	 	 7.14
 	  
Fiscal Year
 	  79
 
	 	 	 	  
 
	  Section 8.
 	  
EVENTS OF DEFAULT
 	  80
 
	  
 	  
 	  
 
	 	  8.1
 	  
Failure to Make Payments When Due
 	  80
 
	 	  
 	  
 	  
 
	 	 8.2
 	  
Default in Other Agreements
 	  80
 
	 	  
 	  
 	  
 
	 	  8.3
 	  
Breach of Certain Covenants
 	  80
 
	 	  
 	  
 	  
 
	 	  8.4
 	  
Breach of Warranty
 	  80
 
	 	  
 	  
 	  
 
	 	 8.5
 	  
Other Defaults Under Loan Documents
 	  81
 
	 	 	 	  
 
	 	  8.6
 	  
Involuntary Bankruptcy; Appointment of Receiver, etc.
 	  81
 
	 	  
 	  
 	  
 
	 	  8.7
 	  
Voluntary Bankruptcy; Appointment of Receiver, etc.
 	  81
 
	 	  
 	  
 	  
 
	 	 8.8
 	  
Judgments and Attachments
 	  82
 
	 	  
 	  
 	  
 
	 	  8.9
 	  
Dissolution
 	  82
 
	 	  
 	  
 	  
 
	 	  8.10
 	  
Employee Benefit Plans
 	  82
 
	 	  
 	  
 	  
 
	 	 8.11
 	  
Material Adverse Effect
 	  82
 
	 	  
 	  
 	  
 
	 	  8.12
 	  
Change in Control
 	  82
 
	 	  
 	  
 	  
 
	 	  8.13
 	  
Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations
 	  82
 
	 	  
 	  
 	  
 
	 Section 9.
 	  
ADMINISTRATIVE AGENT
 	  83
 
	  
 	  
 	  
 
	 	  9.1
 	  
Appointment
 	  83
 
	 	  
 	  
 	  
 
	 	  9.2
 	  
Powers and Duties; General Immunity
 	  84
 
	 	  
 	  
 	  
 
	 	 9.3
 	  
Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness
 	  86
 
					

  3




   TABLE OF CONTENTS
 (Continued)

	  
 	  
 	  Page No.
 
	  
 	  
 	 
 
	 
 	  9.4
 	  
Right to Indemnity
 	  86
 
	 
 	 
 	 
 	  
 
	 
 	 9.5
 	  
Successor Administrative Agent
 	  87
 
	 
 	 
 	 
 	  
 
	 
 	  9.6
 	  
Collateral Documents and Subsidiary Guaranty
 	  87
 
	 
 	 
 	 
 	  
 
	 
 	  9.7
 	  
Administrative Agent May File Proofs of Claim
 	  88
 
	 
 	 
 	 
 	  
 
	 Section 10.
 	  
MISCELLANEOUS
 	  89
 
	 
 	 
 	  
 
	 
 	  10.1
 	  
Successors and Assigns; Assignments and Participations in Loans and Letters of Credit
 	  89
 
	 
 	 
 	 
 	  
 
	 
 	  10.2
 	  
Expenses
 	  92
 
	 
 	 
 	 
 	  
 
	 
 	 10.3
 	  
Indemnity
 	  93
 
	 
 	 
 	 
 	  
 
	 
 	  10.4
 	  
Set-Off
 	  94
 
	 
 	  
 	 
 	  
 
	 
 	  10.5
 	  
Ratable Sharing
 	  94
 
	 
 	 
 	 
 	  
 
	 
 	 10.6
 	  
Amendments and Waivers
 	  95
 
	 
 	 
 	 
 	  
 
	 
 	  10.7
 	  
Independence of Covenants
 	  96
 
	 
 	 
 	 
 	  
 
	 
 	  10.8
 	  
Notices; Effectiveness of Signatures
 	  96
 
	 
 	 
 	 
 	  
 
	 
 	 10.9
 	  
Survival of Representations, Warranties and Agreements
 	  97
 
	 
 	 
 	 
 	  
 
	 
 	  10.10
 	  
Failure or Indulgence Not Waiver; Remedies Cumulative
 	  97
 
	 
 	 
 	 
 	  
 
	 
 	  10.11
 	  
Marshalling; Payments Set Aside
 	  97
 
	 
 	 
 	 
 	  
 
	 
 	 10.12
 	  
Severability
 	  97
 
	 
 	 
 	 
 	  
 
	 
 	  10.13
 	  
Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver
 	  98
 
	 
 	 
 	 
 	  
 
	 
 	  10.14
 	  
Release of Security Interest or Guaranty
 	  98
 
	 
 	 
 	 
 	  
 
	 
 	 10.15
 	  
Applicable Law
 	  98
 
	 
 	 
 	 
 	  
 
	 
 	  10.16
 	  
Construction of Agreement; Nature of Relationship
 	  99
 
	 
 	 
 	 
 	  
 
	 
 	  10.17
 	  
Consent to Jurisdiction and Service of Process
 	  99
 
	 
 	 
 	 
 	  
 
	 
 	 10.18
 	  
Waiver of Jury Trial
 	  100
 
	 
 	 
 	 
 	  
 
	 
 	  10.19
 	  
Confidentiality
 	  100
 
	 
 	 
 	 
 	  
 
	 
 	  10.20
 	  
Counterparts; Effectiveness
 	  101
 
	 
 	 
 	  
 
	 Signature pages
 	   
 	 S-1
 
	 
 	 
 	  
 
	   
 	 
 	  
 
							

  4
   




   
 TABLE OF CONTENTS
 (Continued)

	   
 	   
 	  Page No.
 
	  EXHIBITS 
 	   
 	 
 
	  
 	 I
 	  FORM OF NOTICE OF BORROWING
 	  
 
	  
 	  II
 	  FORM OF NOTICE OF CONVERSION/CONTINUATION
 	  
 
	  
 	  III
 	  FORM OF REQUEST FOR ISSUANCE
 	  
 
	  
 	  IV
 	  FORM OF REVOLVING NOTE
 	  
 
	  
 	  V
 	  FORM OF COMPLIANCE CERTIFICATE
 	  
 
	  
 	  VI
 	  FORM OF OPINION OF COMPANY COUNSEL
 	  
 
	  
 	 VII
 	  FORM OF OPINION OF O’MELVENY & MYERS LLP
 	  
 
	  
 	  VIII
 	  FORM OF ASSIGNMENT AGREEMENT
 	  
 
	  
 	  IX
 	  FORM OF SUBSIDIARY GUARANTY
 	  
 
	  
 	  X
 	  FORM OF SECURITY AGREEMENT
 	  
 
	  
 	  XI
 	  FORM OF BORROWING BASE CERTIFICATE
 	  
 
	  
 	  
 	  
 	  
 
	 SCHEDULES
 	  
 	  
 
	  
 	  
 	  
 
	  
 	  1
 	  APPROVED CASH EQUIVALENT INVESTMENTS
 	  
 
	  
 	  2.1
 	  LENDERS’ COMMITMENTS AND PRO RATA SHARES
 	  
 
	  
 	  4.1C
 	  CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
 	  
 
	  
 	  5.1
 	  SUBSIDIARIES OF COMPANY
 	  
 
	  
 	 5.5B
 	  REAL PROPERTY
 	  
 
	  
 	  5.5C
 	  INTELLECTUAL PROPERTY
 	  
 
	  
 	  5.6
 	  LITIGATION
 	  
 
	  
 	  5.11
 	  CERTAIN EMPLOYEE BENEFIT PLANS
 	  
 
	  
 	  7.1
 	  CERTAIN EXISTING INDEBTEDNESS
 	  
 
	  
 	  7.2
 	  CERTAIN EXISTING LIENS
 	  
 
	  
 	 7.3
 	 CERTAIN EXISTING INVESTMENTS
 	  
 
	  
 	 7.4
 	 CONTINGENT OBLIGATIONS
 	  
 
					

 5





 
   
 KORN/FERRY INTERNATIONAL
  CREDIT AGREEMENT
                      This CREDIT AGREEMENT is
dated as of February 14, 2003 and entered into by and among KORN/FERRY INTERNATIONAL, a Delaware corporation (“Company”), THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO (each individually referred to herein as a
“Lender” and collectively as “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as administrative agent for Lenders (in such capacity, “Administrative
Agent”).
  R E C I T A L S
                      WHEREAS, Lenders, at the request of Company, have agreed to extend certain credit facilities to
Company, the proceeds of which will be used to provide financing for working capital and other general corporate purposes of Company and its Subsidiaries;
                      WHEREAS, Company desires to secure all of the Obligations hereunder and under the other Loan
Documents by granting to Administrative Agent, on behalf of Lenders, a first priority Lien on substantially all of its real, personal and mixed property, including a pledge of certain capital stock of its Domestic Significant Subsidiaries and 66% of
the capital stock of its Foreign Significant Subsidiaries; and
                     WHEREAS,
all of the Domestic Significant Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Administrative Agent, on behalf of Lenders, a first
priority Lien on substantially all of their real, personal and mixed property, including a pledge of certain capital stock of their Domestic Significant Subsidiaries and 66% of the capital stock of their Foreign Significant Subsidiaries:

                     NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Company, Lenders and Administrative Agent agree as follows:
 
 Section 1.              DEFINITIONS
                      
1.1     Certain Defined Terms.
                      The following terms used in this Agreement shall have the following meanings:
                      “Account” means, with respect to any Person, all present and future rights of such Person
to payment for goods sold or leased or for services rendered (except those evidenced by instruments or chattel paper), whether now existing or hereafter arising and wherever arising, and whether or not they have been earned by performance. 


	  
 	   
 	 Credit Agreement
 






                      “Administrative Agent” has the meaning
assigned to that term in the introduction to this Agreement and also means and includes any successor Administrative Agent appointed pursuant to subsection 9.5A.
                      “Affected Lender” has the meaning assigned to that term in subsection 2.6C.

                     “Affected Loans” has the meaning assigned to that term in subsection
2.6C.
                      “Affiliate”, as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership
of voting securities or by contract or otherwise.
                     “Agreement”
means this Credit Agreement dated as of February 14, 2003, as it may be amended, supplemented or otherwise modified from time to time.
                      “Amortization Adjustment” means, as of the last day of any Fiscal Quarter, an amount
equal to 20.00% of the average Revolving Loan Commitment for the consecutive four Fiscal Quarters ending on such day (or, to the extent that the Closing Date occurs during such period, for the period since the Closing Date).  
 
                    “Approved Fund” means a Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.
                      “Asset Sale” means the sale by Company or any of its Subsidiaries to any Person other
than Company or any of its wholly-owned Subsidiaries of (i) any of the stock of any of Company’s Subsidiaries, (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Company or any of its Subsidiaries (other than (a) inventory sold in the ordinary course of business, (b) sales, assignments, transfers or dispositions of accounts in the ordinary
course of business for purposes of collection and (c) any such other assets to the extent that the aggregate value of such assets sold in any single transaction or related series of transactions is equal to $1,000,000 or less).
                     “Assignment Agreement” means an Assignment Agreement in substantially the form of
Exhibit VIII annexed hereto.
                      “Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.
                      “Base Rate” means, at any time, the higher of (i) the Prime Rate or (ii) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.  Any change in the Base Rate due to a 

	  
 	  2
 	  Credit Agreement
 






  change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change.
                      “Base Rate Loans” means Loans bearing interest at rates determined by reference to the
Base Rate as provided in subsection 2.2A.
                     “Borrowing
Availability” means, as of any date of determination, an amount equal to (i) the lesser of (a) the Revolving Loan Commitments then in effect and (b) the Borrowing Base then in effect minus (ii) the Total
Utilization of Revolving Loan Commitments as of such date.
                      “Borrowing
Base” means, as of any date of determination, an aggregate amount equal to 80% of Eligible Accounts Receivable; provided that Administrative Agent may, in its reasonable credit judgment based on its analysis of material changes
arising after the date hereof in the value of Eligible Accounts Receivable, and on at least two Business Days’ prior notice to Company, revise from time to time the percentage of the value of any individual item of Eligible Accounts Receivable
that shall be used in determining the Borrowing Base; provided, however, that Administrative Agent shall not increase the percentage of value of any individual item of Eligible Accounts Receivable to an amount in excess of that in
effect on the Closing Date without the prior consent of the Requisite Lenders.
                      “Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit XI annexed hereto.
                      “Business Day” means
(i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to close, and (ii) with respect to all notices, determinations, fundings and payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, any day that is a
Business Day described in clause (i) above and that is also a day for trading by and between banks in Dollar deposits in the London interbank market.
                     “Capital Lease”, as applied to any Person, means any lease of any property (whether real,
personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.
                      “Capital Stock” means the capital stock or other equity interests of a Person.

                     “Cash” means money, currency or a credit balance in a Deposit
Account.
                      “Cash Equivalents” means, as at any date of
determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the
full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the 

	  
 	  3
 	  Credit Agreement
 






 highest rating obtainable from either Standard & Poor’s (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”); (iii)
commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or
bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is
at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual
fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has the highest rating obtainable from either S&P
or Moody’s; and (vi) other investments set forth on Schedule 1 annexed hereto. 
                      “Change in Control” means any of the following: (i) any Person or group of Persons (other
than Richard Ferry, either individually or as a trustee of any trust for which he has sole power to direct and control investments), shall have acquired beneficial ownership, directly or indirectly, of Securities of Company (or other Securities
convertible into such Securities) representing 30% or more of the combined voting power of all Securities of Company entitled to vote in the election of members of the Governing Body of Company, other than Securities having such power only by reason
of the happening of a contingency, (ii) either of the individuals serving, as of the Closing Date, as chairman of the board or chief executive officer of Company no longer hold these positions and their successors are not approved by a majority of
the board of directors of Company, (iii) the occurrence of a change in the composition of the Governing Body of Company such that a majority of the members of any such Governing Body are not Continuing Members, (iv) the occurrence of any
“Change of Control Event” as defined in either the Convertible Subordinated Notes or the Convertible Series A Preferred Stock, and (v) the occurrence of a “change of control” as defined in any document governing Indebtedness of
Company or any of its Subsidiaries in excess of $3,000,000 which gives the holders of such Indebtedness the right to accelerate or otherwise require payment of such Indebtedness prior to the maturity date thereof.  As used herein, the term
“beneficially own” or “beneficial ownership” shall have the meaning set forth in the Exchange Act and the rules and regulations promulgated thereunder.
                     “Closing Date” means the date on which the initial Loans are made.
                      “Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.
                      “Collateral Account” has the meaning assigned to that term in the Security
Agreement.
                      “Collateral Documents” means the Security
Agreement, the Foreign Pledge Agreements and all other instruments or documents delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant to Administrative Agent, on behalf of 

	  
 	  4
 	  Credit Agreement
 






  Lenders, a Lien on any real, personal or mixed property of that Loan Party as security for the Obligations.
                     “Commitments” means the commitments of Lenders to make Loans as set forth in
subsection 2.1A and subsection 3.3.
                      “Company” has the
meaning assigned to that term in the introduction to this Agreement.
                      “Compliance Certificate” means a certificate substantially in the form of
Exhibit V annexed hereto.
                      “Consolidated Capital
Expenditures” means, for any period, the sum of the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated
balance sheet of Company and its Subsidiaries) by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries.  For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may
be.  
                     “Consolidated Cash Interest Expense” means, for any
period, Consolidated Interest Expense for such period excluding, however, any interest expense not payable in Cash (including amortization of discount and amortization of debt issuance costs).
                      “Consolidated Current Assets” means, as at any date of determination, the sum of (i)
current Cash and Cash Equivalents, plus (ii) trade Accounts, in each case of Company and its Subsidiaries on a consolidated basis.  
                      “Consolidated Current Liabilities” means, as at any date of determination, the total
liabilities of Company and its Subsidiaries on a consolidated basis which may properly be classified as current liabilities in conformity with GAAP, including the aggregate principal amount of all outstanding Revolving Loans.  
 
                    “Consolidated EBITDA” means, for any period, the sum, without duplication,
of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv) total depreciation expense, (v) total amortization expense, (vi) a one-time
restructuring charge not to exceed $16,300,000 taken in the Fiscal Quarter ended October 31, 2002, and (vii) equity in earnings of Korn/Ferry International S.A. de C.V., Korn/Ferry Internacional del Norte, S.A. de C.V., Postgraduados y Especialistas
S.A. de C.V. and Servicios Romac S.A. de C.V., except to the extent the amount of any dividends or other distributions actually paid to Company or any of its Subsidiaries by such Subsidiaries during such period have been included in the calculation
of Consolidated Net Income, but only, in the case of clauses (ii)-(vi), to the extent deducted in the calculation of Consolidated Net 

	  
 	 5
 	  Credit Agreement
 






  Income, all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP.
                      “Consolidated Fixed Charges” means, for any period, the sum of (i) Consolidated Cash
Interest Expense for such period, plus (ii) the Amortization Adjustment for such period, plus (iii) all principal payments (including, without limitation, all scheduled payments and any prepayments) on all Indebtedness of Company and its
Subsidiaries during such period (excluding prepayments of Revolving Loans except to the extent the Revolving Loan Commitments are permanently reduced in connection with such prepayments), all of the foregoing as determined on a consolidated basis
for Company and its Subsidiaries in conformity with GAAP.
                      “Consolidated Interest Expense” means, for any period, total interest expense (including
that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, net costs under Interest Rate Agreements and amounts referred to in subsection 2.3 payable to Administrative Agent
and Lenders that are considered interest expense in accordance with GAAP, but excluding, however, any such amounts referred to in subsection 2.3 payable on or before the Closing Date.
                     “Consolidated Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio
of (i) Consolidated Total Debt as at such day to (ii) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day.
                      “Consolidated Net Income” means, for any period, the net income (or loss) of Company and
its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person’s assets are acquired by Company or
any of its Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (iv) any after-tax gains or losses attributable to asset sales or returned surplus assets of any
Pension Plan, and (v) (to the extent not included in clauses (i) through (iv) above) any net extraordinary gains or net non-cash extraordinary losses.
                     “Consolidated Quick Ratio” means, as of the last day of any Fiscal Quarter, the ratio of
(i) Consolidated Current Assets to (ii) Consolidated Current Liabilities.

	  
 	  6
 	  Credit Agreement
 






                      “Consolidated Total Debt” means, as at
any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, but excluding the Convertible Series A Preferred Stock and the
Convertible Subordinated Notes.  
                      “Contingent
Obligation”,as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent
thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Hedge Agreements.  Contingent Obligations shall include (a) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the
case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence.  The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.
                     “Continuing Member” means, as of any date of determination any member of the Governing
Body of Company who (i) was a member of such Governing Body on the Closing Date or (ii) was nominated for election or elected to such Governing Body with the affirmative vote of a majority of the members who were either members of such Governing
Body on the Closing Date or whose nomination or election was previously so approved.
                      “Contractual Obligation”, as applied to any Person, means any provision of any Security
issued by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its
properties is subject.
                      “Convertible Series A Preferred Stock”
means, collectively, (i) 10,000 shares of Company’s Convertible Series A Preferred Stock, (ii) the Certificate of Designation pursuant to which such shares were issued, and (iii) any shares of additional securities of the same nature issued
as payment in kind of dividends in respect thereto.  

	  
 	  7
 	  Credit Agreement
 






                     “Convertible Subordinated Notes” means
the Company’s Convertible Subordinated Notes dated as of June 13, 2002, in an aggregate principal amount of $40,000,000 and any additional notes of the same nature issued as payment in kind of interest in respect thereto.
                      “Currency Agreement” means any foreign exchange contract, currency swap agreement,
futures contract, option contract, synthetic cap or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.
                      “Deposit Account” means a demand, time, savings, passbook or similar account maintained
with a Person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.
                      “Dollars” and the sign “$” mean the lawful money of the United States of
America.
                      “Domestic Significant Subsidiary” means any Domestic
Subsidiary that is a Significant Subsidiary.
                     “Domestic Subsidiary”
means any Subsidiary of Company that is incorporated or organized under the laws of the United States of America, any state thereof or in the District of Columbia.
                      “Eligible Accounts Receivable” means all Accounts of Company; provided that an
Account shall not be an Eligible Account Receivable if:

	  
 	       (a)     it arises out of a sale made by Company to (a) an Affiliate or (b) a natural person (other
than credit card sales not otherwise ineligible hereunder); or
 
	  
 	  
 	  
 
	  
 	       (b)     its payment terms are longer than 30 days from date of invoice; or
 
	  
 	  
 	  
 
	  
 	       (c)     it is unpaid more than 90 days after the original payment due date; or
 
	  
 	  
 	  
 
	  
 	      (d)     it is from the same account debtor or its Affiliate and 20% or more of all Accounts from that account
debtor (and its Affiliates) are ineligible under (c) above; or
 
	  
 	  
 	  
 
	  
 	       (e)     when aggregated with all other Accounts of an account debtor, such Account exceeds 5% in face value of
all Accounts of Company then outstanding, but only to the extent of such excess, unless such excess is supported by an irrevocable letter of credit satisfactory to Administrative Agent (as to form, substance and issuer) and assigned to and directly
drawable by Administrative Agent; or
 
	  
 	  
 	  
 
	  
 	       (f)     the account debtor for such Account is a creditor of Company or any other Loan Party, has or has
asserted a right of setoff against Company or any other Loan Party, or has disputed its liability or otherwise has made any claim
 
	  
 	  
 	  
 
	  
 	 8
 	  Credit Agreement
 
					







	  
 	  with respect to such Account or any other Account which has not been resolved, in each case to the extent of the amount owed by such Loan Party to such account debtor,
the amount of such actual or asserted right of setoff, or the amount of such dispute or claim, as the case may be; or
 
	  
 	  
 	  
 
	  
 	       (g)     the account debtor is (or its assets are) the subject of an Insolvency Event; or
 
	  
 	  
 	  
 
	  
 	      (h)     such Account is not payable in Dollars or the account debtor for such Account is located outside the
continental United States; or
 
	  
 	  
 	  
 
	  
 	       (i)     the account debtor is the United States of America or any department, agency or instrumentality thereof;
or
 
	  
 	  
 	  
 
	  
 	       (j)     such Account is subject to any adverse security deposit, progress payment or other similar advance made
by or for the benefit of the applicable account debtor; or
 
	  
 	  
 	  
 
	  
 	       (k)     it is not subject to a valid and perfected First Priority Lien in favor of Administrative Agent or does
not otherwise conform to the representations and warranties contained in the Loan Documents.
 

 In determining the amount to be so included, the face amount of such Accounts shall
be reduced by the amount of all returns, discounts, deductions, claims, credits, charges, or other allowances.
                      “Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Approved
Fund of any Lender; and (ii) (a) a commercial bank organized under the laws of the United States or any state thereof; (b) a savings and loan association or savings bank organized under the laws of the United States or any state thereof;
(c) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided that (1) such bank is acting through a branch or agency located in the United States or (2) such bank is organized
under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (d) any other entity that is an “accredited investor” (as defined in Regulation
D under the Securities Act) that extends credit or buys loans as one of its businesses including insurance companies, mutual funds and lease financing companies; provided that neither Company nor any Affiliate of Company shall be an Eligible
Assignee.
                      “Employee Benefit Plan” means any “employee
benefit plan” as defined in Section 3(3) of ERISA which is or was maintained or contributed to by Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
                      “Environmental Claim” means any investigation, notice, notice of violation, claim,
action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Government Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any
Environmental Law, (ii) in connection 

	  
 	 9
 	  Credit Agreement
 






  with any Hazardous Materials or any actual or alleged Hazardous Materials Activity, or (iii) in connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
                      “Environmental
Laws” means any and all current or future statutes, ordinances, orders, rules, regulations, guidance documents, judgments, Governmental Authorizations, or any other requirements of any Government Authority relating to (i) environmental
matters, including those relating to any Hazardous Materials Activity, (ii) the generation, use, storage, transportation or disposal of Hazardous Materials, or (iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any Facility.
                      “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any successor thereto.
                      “ERISA Affiliate”, as
applied to any Person, means (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or
not incorporated) that is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member.  Any former ERISA Affiliate of a Person
or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of such Person or such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of such Person or such Subsidiary and
with respect to liabilities arising after such period for which such Person or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
                     “ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Company, any of its Subsidiaries 

	  
 	  10
 	  Credit Agreement
 






 or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Company, any
of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to
be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of
the Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
                      “Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an
Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (i) (A) the rate per annum (rounded upward to the nearest 1/16 of one percent) that appears on the Moneyline Telerate, page 3750 (or such other
comparable page as may, in the opinion of Administrative Agent, replace such page for the purpose of displaying such rate) as the interbank offered rate for Dollar deposits with maturities comparable to such Interest Period as of approximately 11:00
a.m. (London time) on such Interest Rate Determination Date or (B) if such rate is not available at such time for any reason, the arithmetic average (rounded upward to the nearest 1/16 of one percent) of the offered quotations, if any, to first
class banks in the interbank Eurodollar market by Wells Fargo for Dollar deposits of amounts in same day funds comparable to the principal amount of the Eurodollar Rate Loan of Wells Fargo for which the Eurodollar Rate is then being determined with
maturities comparable to such Interest Period as of approximately 10:00 A.M. (California time) on such Interest Rate Determination Date by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve requirements
(including any marginal, emergency, supplemental, special or other reserves) applicable on such Interest Rate Determination Date to any member bank of the Federal Reserve System in respect of “Eurocurrency liabilities” as defined in
Regulation D (or any successor category of liabilities under Regulation D).
                     “Eurodollar Rate Loans” means Loans bearing interest at rates determined by reference to
the Eurodollar Rate as provided in subsection 2.2A.
                      “Event of
Default” means each of the events set forth in Section 8.
                      “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and any successor statute.

	  
 	  11
 	  Credit Agreement
 






                      “Exchange Rate” means, on any date when
an amount expressed in a currency other than Dollars is to be determined with respect to any Letter of Credit, the nominal rate of exchange of Administrative Agent in the New York foreign exchange market for the sale of such currency in exchange for
Dollars at 12:00 noon (New York time) one Business Day prior to such date, expressed as a number of units of such currency per one Dollar.
                     “Facilities” means any and all real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Company or any of its Subsidiaries or any of their respective predecessors or Affiliates.
                      “Federal Funds Effective Rate” means, for any period, a fluctuating interest rate equal
for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by Administrative Agent.
                      “Financial Plan” has the meaning assigned to that term in subsection 6.1(xii).

                     “First Priority” means, with respect to any Lien purported to be created
in any Collateral pursuant to any Collateral Document, that (i) such Lien is perfected and has priority over any other Lien on such Collateral and (ii) such Lien is the only Lien (other than Liens permitted pursuant to subsection 7.2) to which such
Collateral is subject.
                     “Fiscal Month” means a fiscal month of
any Fiscal Year.
                      “Fiscal Quarter” means a fiscal quarter of
any Fiscal Year.
                      “Fiscal Year” means the fiscal year of
Company and its Subsidiaries ending on April 30 of each calendar year.  For purposes of this Agreement, any particular Fiscal Year shall be designated by reference to the calendar year in which such Fiscal Year ends.
                      “Foreign Plan” means any employee benefit plan maintained by Company or any of its
Subsidiaries that is mandated or governed by any law, rule or regulation of any Government Authority other than the United States of America, any state thereof or any other political subdivision thereof.
                      “Foreign Pledge Agreement” means each pledge agreement or similar instrument governed by
the laws of a country other than the United States, executed from time to time in accordance with subsection 6.8 by Company or any Domestic Significant Subsidiary that owns Capital Stock of one or more Foreign Significant Subsidiaries organized in
such country, in form and substance satisfactory to Administrative Agent, as such Foreign Pledge Agreement may be amended, supplemented or otherwise modified from time to time.

	  
 	 12
 	  Credit Agreement
 






                      “Foreign Significant Subsidiary” means
any Foreign Subsidiary that is a Significant Subsidiary.
                      “Foreign
Subsidiary” means any Subsidiary of Company that is not a Domestic Subsidiary.
                      “Fund” means any Person (other than a natural Person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
                      “Funding and Payment Office” means (i) the office of Administrative Agent located at
Commercial Banking Loan Center, 201 3rd Street, 8th Floor, San Francisco, California 94105 or (ii) such other office of Administrative Agent as may from time to time hereafter be designated as such in a written notice delivered
by Administrative Agent to Company and each Lender.
                     “Funding Date”
means the date of the funding of a Loan.
                      “GAAP” means,
subject to the limitations on the application thereof set forth in subsection 1.2, generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination.
                      “Governing Body” means the board of directors or other body having the power to direct or
cause the direction of the management and policies of a Person that is a corporation, partnership, trust or limited liability company.
                      “Government Authority” means any political subdivision or department thereof, any other
governmental or regulatory body, commission, central bank, board, bureau, organ or instrumentality or any court, in each case whether federal, state, local or foreign.
                      “Governmental Authorization” means any permit, license, registration, authorization,
plan, directive, consent, order or consent decree of or from, or notice to, any Government Authority.
                     “Hazardous Materials” means (i) any chemical, material or substance at any time
defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive waste”,
“biohazardous waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”, “toxic substances”, or any other term or expression intended
to define, list or classify substances by reason of properties harmful to health, safety or the indoor or outdoor environment (including harmful properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any applicable Environmental Laws); (ii) any oil, petroleum, 

	  
 	  13
 	  Credit Agreement
 






  petroleum fraction or petroleum derived substance; (iii) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable substances or explosives; (v) any radioactive materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Government
Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.
                     “Hazardous Materials Activity” means any past, current, proposed or threatened activity,
event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.
                      “Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement designed to
hedge against fluctuations in interest rates or currency values, respectively.
                      “Indebtedness”, as applied to any Person, means (i) all indebtedness for borrowed
money, (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted representing extensions of credit whether
or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is (a) due
more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument, and (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person.  Obligations under Interest Rate Agreements and Currency Agreements constitute (1) in the case of
Hedge Agreements, Contingent Obligations, and (2) in all other cases, Investments, and in neither case constitute Indebtedness.  
                     “Indemnified Liabilities” has the meaning assigned to that term in subsection
10.3.
                      “Indemnitee” has the meaning assigned to that term in
subsection 10.3.
                      “Insolvency Event” means, with respect to
any Person, the occurrence of any of the events described in subsection 8.6 or 8.7; provided that, solely for purposes of this definition, any references to Company or any of its Subsidiaries in subsection 8.6 or 8.7 shall be deemed to be a
reference to such Person.
                      “Intellectual Property” means all
patents, trademarks, tradenames, copyrights, technology, software, know-how and processes used in or necessary for the conduct of the 

	  
 	  14
 	  Credit Agreement
 






  business of Company and its Subsidiaries as currently conducted that are material to the condition (financial or otherwise), business or operations of Company and its
Subsidiaries, taken as a whole.
                     “Interest Payment Date” means
(i) with respect to any Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Closing Date, and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of six months “Interest Payment Date” shall also include the date that is three months after the commencement of
such Interest Period.
                      “Interest Period” has the meaning
assigned to that term in subsection 2.2B.
                      “Interest Rate
Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.
                      “Interest Rate Determination Date”, with respect to any Interest Period, means the second
Business Day prior to the first day of such Interest Period.
                      “Internal
Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.
                     “Investment” means (i) any direct or indirect purchase or other acquisition by
Company or any of its Subsidiaries of, or of a beneficial interest in, any Securities of any other Person (including any Subsidiary of Company), (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person other than Company or any of its Subsidiaries, of any equity Securities of such Subsidiary, (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Company or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the ordinary course of business, or (iv) Interest Rate Agreements or Currency Agreements not constituting Hedge Agreements.  As used herein, the term
“Investment” does not include investments relating to the cash surrender value of insurance policies.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment (other than adjustments for the repayment of, or the refund of capital with respect to, the original principal amount of any
such Investment).
                      “IP Collateral” means, collectively, the
Intellectual Property that constitutes Collateral under the Security Agreement.
                     “Issuing Lender” means Wells Fargo, in its capacity as issuer of any Letter of Credit
hereunder.

	  
 	  15
 	  Credit Agreement
 






                      “Joint Venture” means a joint venture,
partnership or other similar arrangement, whether in corporate, partnership or other legal form.
                      “Lender” and “Lenders” means the Persons identified as
“Lenders” and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 10.1.
                      “Letter of Credit” or “Letters of Credit” means any standby letters of
credit or similar instruments issued by Issuing Lender for the account of Company pursuant to subsection 3.1 for the purpose of supporting (i) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue or development
bonds or financings, (ii) workers’ compensation liabilities of Company or any of its Subsidiaries, (iii) the obligations of third party insurers of Company or any of its Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, (iv) obligations with respect to Capital Leases or Operating Leases of Company or any of its Subsidiaries, and (v) performance, payment, deposit or surety obligations of Company or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in accordance with custom and practice in the industry.
                     “Letter of Credit Usage” means, as at any date of determination, the sum of (i) the
maximum aggregate amount which is or at any time thereafter may become available for drawing under all Letters of Credit then outstanding plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Lender and not
theretofore reimbursed out of the proceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed by Company.  For purposes of this definition, any amount described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the applicable Exchange Rate for such currency as of the applicable date of determination.
                      “Lien” means any lien, mortgage, pledge, assignment, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the
practical effect of any of the foregoing.
                      “Loan” or
“Loans” means one or more of the Revolving Loans.
                      “Loan Documents” means this Agreement, the Notes, the Letters of Credit (and any
applications for, or reimbursement agreements or other documents or certificates executed by Company in favor of Issuing Lender relating to, the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
                     “Loan Party” means each of Company and any of Company’s Significant Subsidiaries
from time to time executing a Loan Document, and “Loan Parties” means all such Persons, collectively.
                      “Margin Stock” has the meaning assigned to that term in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.

	  
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 	  Credit Agreement
 






                      “Material Adverse Effect” means
(i) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company and its Subsidiaries taken as a whole or (ii) the impairment of the ability of any Loan Party to
perform, or of Administrative Agent or Lenders to enforce, the Obligations.
                      “Maximum Consolidated Capital Expenditures Amount” has the meaning assigned to that term
in subsection 7.8.
                     “Multiemployer Plan” means any Employee
Benefit Plan that is a “multiemployer plan” as defined in Section 3(37) of ERISA.
                      “Net Business Interruption Insurance Proceeds” means any Cash payments or proceeds
received by Company or any of its Subsidiaries under any business interruption or similar insurance policy in respect of a covered loss thereunder, net of any actual and reasonable documented costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or such Subsidiary in respect thereof.
                      “Non-US Lender” means a Lender that is organized under the laws of any jurisdiction other
than the United States or any state or other political subdivision thereof.
                      “Notes” means one or more of the Revolving Notes.
                      “Notice of Borrowing” means a notice substantially in the form of Exhibit I
annexed hereto.
                      “Notice of Conversion/Continuation” means a
notice substantially in the form of Exhibit II annexed hereto.
                     “Obligations” means all obligations of every nature of each Loan Party from time to time
owed to Administrative Agent, Lenders or any of them under the Loan Documents, whether for principal, interest, reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification or otherwise.
                      “Officer” means the president, chief executive officer, a vice president, chief financial
officer, treasurer, general partner (if an individual), managing member (if an individual) or other individual appointed by the Governing Body or the Organizational Documents of a corporation, partnership, trust or limited liability company to serve
in a similar capacity as the foregoing.
                      “Officer’s
Certificate”, as applied to any Person that is a corporation, partnership, trust or limited liability company, means a certificate executed on behalf of such Person by one or more Officers of such Person or one or more Officers of a general
partner or a managing member if such general partner or managing member is a corporation, partnership, trust or limited liability company.

	  
 	  17
 	  Credit Agreement
 






                     “Operating Lease”, as applied to any
Person, means any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capital Lease other than any such lease under which that Person is the lessor.
 
                    “Organizational Documents” means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust or limited liability company is organized.
                      “Participant” means a purchaser of a participation in the rights and obligations under
this Agreement pursuant to subsection 10.1C.
                      “PBGC” means the
Pension Benefit Guaranty Corporation or any successor thereto.
                      “Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, that is
subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA, and, for purposes of subsection 8.10, any Foreign Plan.
                     “Permitted Encumbrances” means the following types of Liens (excluding any such Lien
imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA, any such Lien imposed by a Government Authority in connection with any Foreign Plan, any such Lien relating to or imposed in connection with any Environmental
Claim, and any such Lien expressly prohibited by any applicable terms of any of the Collateral Documents):

	  
 	       (i)     Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time,
required by subsection 6.3;
 
	  
 	  
 	  
 
	  
 	       (ii)     statutory Liens of landlords, Liens of collecting banks under the UCC on items in the course of
collection, statutory Liens and rights of set-off of banks, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business (a) for
amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 5 days) are being contested in good faith by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, and (2) in the case of a Lien with respect to any portion of the Collateral, such contest proceedings conclusively operate to stay the
sale of any portion of the Collateral on account of such Lien;
 
	  
 	  
 	  
 
	  
 	      (iii)     deposits made in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the performance of statutory obligations, bids, leases, government contracts, trade contracts, and other similar obligations (exclusive of obligations for the payment of
borrowed money), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof;
 
	  
 	  
 	  
 
	  
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 	  Credit Agreement
 
					







	  
 	       (iv)     any attachment or judgment Lien not constituting an Event of Default under subsection 8.8;


	  
 	  
 	  
 
	  
 	      (v)     licenses (with respect to Intellectual Property and other property), leases or subleases granted to third
parties in accordance with any applicable terms of the Collateral Documents and not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
 
	  
 	  
 	  
 
	  
 	       (vi)     easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries or result in a material diminution in the value of any Collateral as security for the
Obligations;
 
	  
 	  
 	  
 
	  
 	       (vii)     any (a) interest or title of a lessor or sublessor under any lease not prohibited by this
Agreement, (b) Lien or restriction that the interest or title of such lessor or sublessor may be subject to, or (c) subordination of the interest of the lessee or sublessee under such lease to any Lien or restriction referred to in the
preceding clause (b), so long as the holder of such Lien or restriction agrees to recognize the rights of such lessee or sublessee under such lease;
 
	  
 	  
 	  
 
	  
 	      (viii)     Liens arising from filing UCC financing statements relating solely to leases not prohibited by this
Agreement;
 
	  
 	  
 	  
 
	  
 	       (ix)     any zoning or similar law or right reserved to or vested in any governmental office or agency to
control or regulate the use of any real property;
 
	  
 	  
 	  
 
	  
 	       (x)     Liens granted pursuant to the Collateral Documents; and
 
	  
 	  
 	  
 
	  
 	       (xi)     Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under
operating, reciprocal easement or similar agreements entered into in the ordinary course of business of Company and its Subsidiaries.
 
	  
 	  
 	  
 

                     “Person” means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal
entities, and governments (whether federal, state or local, domestic or foreign, and including political subdivisions thereof) and agencies or other administrative or regulatory bodies thereof.
                      “Pledged Collateral” means, collectively, the “Pledged Collateral” as defined
in the Security Agreement and any Foreign Pledge Agreement.

	  
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 	  Credit Agreement
 






                      “Potential Event of Default” means a
condition or event that, after notice or lapse of time or both, would constitute an Event of Default.
                     “Prime Rate” means the rate that Wells Fargo announces from time to time as its prime
lending rate, as in effect from time to time.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  Wells Fargo or any other Lender may make commercial loans or
other loans at rates of interest at, above or below the Prime Rate.
                      “Prior Letters of Credit” means, collectively, (i) that certain Letter of Credit No.
3020196 in the original face amount of approximately $470,400.00, issued by Bank of America, N.A. on or about November 2, 1999 for the account of Company and for the benefit of 444 Madison LLC, (ii) that certain Letter of Credit No. 3033942 in the
original face amount of approximately 3,257,059.50 British Pounds, issued by Bank of America, N.A. on or about January 9, 2001 for the account of Company and for the benefit of Bank of America London, and (iii) that certain Letter of Credit No.
3041996 in the original face amount of approximately 125,000.00 British Pounds, issued by Bank of America, N.A. on or about November 9, 2001 for the account of Company and for the benefit of Bank of America London.  
                      “Prior Reimbursement Obligations” means any and all reimbursement obligations in respect
of the Prior Letters of Credit issued by Bank of America, N.A.  
                      “Proceedings” means any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration.
                     “Pro Rata
Share” means, with respect to all payments, computations and other matters relating to the Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit issued or participations therein deemed purchased by any
Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1.  The initial Pro Rata Share of each Lender is set forth opposite the name of that Lender set forth on Schedule 2.1 annexed hereto.
                      “PTO” means the United States Patent and Trademark Office or any successor or substitute
office in which filings are necessary or, in the opinion of Administrative Agent, desirable in order to create or perfect Liens on any IP Collateral.
                      “Real Property Asset” means, at any time of determination, any interest then owned by any
Loan Party (other than any Foreign Subsidiary) in any real property.
                      “Regional Consolidated Financial Statements” means, with respect to the Foreign
Subsidiaries located in Europe, Latin America and Asia, financial statements prepared such that individual Subsidiaries within the above-mentioned geographic areas are consolidated together and presented as consolidated entities (e.g., presented as
“consolidated European Subsidiaries”, “consolidated Asian Subsidiaries”, etc.), each in form satisfactory to Administrative Agent.  

	  
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                      “Register” has the meaning assigned to
that term in subsection 2.1D.
                      “Regulation D” means
Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
                      “Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

                     “Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any Hazardous Materials through the air, soil, surface water or groundwater.
                     “Request for Issuance” means a request substantially in the form of
Exhibit III annexed hereto.
                      “Requisite Lenders”
means Revolving Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders.
                      “Restricted Junior Payment” means (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of Company now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company now or hereafter outstanding, (iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of Company now or hereafter outstanding, and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.
                      “Revolving Lender” means a Lender that has a Revolving Loan Commitment and/or that has an
outstanding Revolving Loan.
                     “Revolving Loan Commitment” means
the commitment of a Revolving Lender to make Revolving Loans to Company pursuant to subsection 2.1A, and “Revolving Loan Commitments” means such commitments of all Revolving Lenders in the aggregate.
                      “Revolving Loan Commitment Termination Date” means February 14, 2005.  

                     “Revolving Loan Exposure”, with respect to any Revolving Lender, means,
as of any date of determination (i) prior to the termination of the Revolving Loan Commitments, that Lender’s Revolving Loan Commitment, and (ii) after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender plus (b) in the event that Lender is Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (in each
case net of any 

	  
 	  21
 	  Credit Agreement
 






 participations purchased by other Lenders in such Letters of Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any unreimbursed drawings under any Letters of Credit.  
                      “Revolving Loans” means the Loans made by Revolving Lenders to Company pursuant to
subsection 2.1A.
                      “Revolving Notes” means any promissory notes
of Company issued pursuant to subsection 2.1E to evidence the Revolving Loans of any Revolving Lenders, substantially in the form of Exhibit IV annexed hereto, as they may be amended, supplemented or otherwise modified from time to
time.
                      “Securities” means any stock, shares, partnership
interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
                      “Securities Act” means the Securities Act of 1933, as amended from time to time, and any
successor statute.
                     “Security Agreement” means the Security
Agreement executed and delivered on the Closing Date, substantially in the form of Exhibit X annexed hereto, as such Security Agreement may thereafter be amended, supplemented or otherwise modified from time to time.
                      “Significant Subsidiary” means, collectively, (i) Korn/Ferry International
Futurestep, Inc., Korn/Ferry International GmbH, Korn/Ferry International, Limited, Nippon Korn/Ferry International, Korn/Ferry International (H.K.) Limited, and (ii), as of any date of determination, each additional Subsidiary of Company that had
on the last day of the Fiscal Quarter then most recently ended, any of the following:  (a) total assets (excluding intercompany Indebtedness owing from Company or any of the Significant Subsidiaries) with a book value equal to 5% or greater of
the total assets (excluding intercompany Indebtedness) of Company and its Subsidiaries, on a consolidated basis, or (b) total revenue (excluding intercompany revenue) equal to 5% or greater of the total revenue (excluding intercompany revenue)
of Company and its Subsidiaries, on a consolidated basis, in each case as determined in accordance with GAAP.  
                      “Solvent”, with respect to any Person, means that as of the date of determination both
(i)(a) the then fair saleable value of the property of such Person is (1) greater than the total amount of liabilities (including contingent liabilities) of such Person and (2) not less than the amount that will be required to pay the
probable liabilities on such Person’s then existing debts as they become absolute and due considering all financing alternatives and potential asset sales reasonably available to such Person; (b) such Person’s capital is not
unreasonably small in

	  
 	 22
 	  Credit Agreement
 






  relation to its business or any contemplated or undertaken transaction; and (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and (ii) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. 
For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
                      “Subordinated
Indebtedness” means (i) the Convertible Subordinated Notes and the Convertible Series A Preferred Stock, and (ii) any Indebtedness of Company incurred from time to time and subordinated in right of payment to the Obligations.
 
                    “Subordination Agreement” has the meaning assigned to that term in
subsection 4.1N.
                     “Subsidiary”, with respect to any Person,
means any corporation, partnership, trust, limited liability company, association, Joint Venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the members of the Governing Body is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
                      “Subsidiary Guarantor” means any Domestic
Significant Subsidiary of Company that executes and delivers a counterpart of the Subsidiary Guaranty on the Closing Date or from time to time thereafter pursuant to subsection 6.8.
                      “Subsidiary Guaranty” means the Subsidiary Guaranty executed and delivered by existing
Subsidiaries of Company on the Closing Date and to be executed and delivered by additional Subsidiaries of Company from time to time thereafter in accordance with subsection 6.8, substantially in the form of Exhibit IX annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or otherwise modified from time to time.
                      “Supplemental Collateral Agent” has the meaning assigned to that term in subsection
9.1B.
                     “Tax” or “Taxes” means any present or
future tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed, including interest, penalties, additions to tax and
any similar liabilities with respect thereto; except that, in the case of a Lender, there shall be excluded (i) taxes that are imposed on the overall net income or net profits (including franchise taxes imposed in lieu thereof) (a) by the
United States, (b) by any other Government Authority under the laws of which such Lender is organized or has its principal office or maintains its applicable lending office, or (c) by any jurisdiction solely as a result of a present or
former connection between such Lender and such jurisdiction (other than any such connection arising solely from such Lender having executed, delivered or performed its 

	  
 	  23
 	  Credit Agreement
 






  obligations or received a payment under, or enforced, any of the Loan Documents), (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Lender is located, and (iii) any tax, assessment or other governmental charge that would not have been imposed but for such Lender’s failure to comply with any certification, identification or other reporting
requirements concerning such Lender’s nationality, residence, identity or connection with the United States, if compliance is required as a precondition to exemption from or reduction of such tax, assessment or other governmental charge. 

                     “Total Utilization of Revolving Loan Commitments” means, as
at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans plus (ii) the Letter of Credit Usage.
                      “UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
                      “Wells Fargo” has the meaning assigned to that
term in the introduction to this Agreement.
                      “WF Letter of Credit”
means that certain Letter of Credit No. NZS472364 in the original face amount of approximately $470,400.00, issued by Wells Fargo on or about February 12, 2003 for the account of Company and for the benefit of 444 Madison LLC.
 
                    
1.2     Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.
                      Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information required to be delivered by Company to Lenders pursuant to clauses (ii), (iii), (iv) and (xii) of subsection 6.1 shall
be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in subsection 6.1(vi)).  Calculations in connection with the definitions, covenants and
other provisions of this Agreement shall utilize GAAP as in effect on the date of determination, applied in a manner consistent with that used in preparing the financial statements referred to in subsection 5.3. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in any Loan Document, and Company, Administrative Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and Company shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and Company shall provide to Administrative Agent and Lenders reconciliation statements provided for in subsection 6.1(vi).
                     
1.3     Other Definitional Provisions and Rules of Construction.
                      A.      Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the reference.

	  
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 	  Credit Agreement
 






                      B.      References
to “Sections” and “subsections” shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided.  Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
                      C.     The use in any of the Loan Documents of the word
“include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general statement, term or matter.
 
Section 2.             AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
               
2.1           Commitments; Making of Loans; the Register; Optional Notes.
                      A.      Commitments.  Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of Company herein set forth, each Lender severally agrees, subject to the limitations set forth below with respect to the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from time to time during the period from the Closing Date to but excluding the Revolving Loan Commitment Termination Date an aggregate amount not exceeding its Pro Rata Share of the aggregate amount
of the Revolving Loan Commitments to be used for the purposes identified in subsection 2.5A.  The original amount of each Revolving Lender’s Revolving Loan Commitment is set forth opposite its name set forth on Schedule 2.1
annexed hereto and the aggregate original amount of the Revolving Loan Commitments is $30,000,000; provided that the Revolving Loan Commitments of Revolving Lenders shall be adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B and shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4.  Each Revolving Lender’s Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Loan Commitments shall be paid in full no later than that date.  Amounts borrowed under this
subsection 2.1A may be repaid and reborrowed to but excluding the Revolving Loan Commitment Termination Date.  Anything contained in this Agreement to the contrary notwithstanding, the Revolving Loans and the Revolving Loan Commitments shall be
subject to the limitation that in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the lesser of the Revolving Loan Commitments then in effect or the Borrowing Base then in effect.
                     B.       Borrowing Mechanics.  Revolving Loans made
on any Funding Date (other than Revolving Loans made pursuant to subsection 3.3B) shall be in an aggregate minimum amount of $500,000 and multiples of $100,000 in excess of that amount; provided that Revolving Loans made on any Funding Date
as Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess of that 

	  
 	  25
 	  Credit Agreement
 






  amount.  Whenever Company desires that Lenders make Revolving Loans it shall deliver to Administrative Agent a duly executed Notice of Borrowing no later than 10:00 A.M.
(California time) at least three Business Days in advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or on the proposed Funding Date (in the case of a Base Rate Loan).  Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D.  In lieu of delivering a Notice of Borrowing, Company may give Administrative Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Borrowing to Administrative Agent on or before the applicable Funding Date.
                     Neither Administrative Agent nor any Lender shall incur any liability to Company in acting upon any
telephonic notice referred to above that Administrative Agent believes in good faith to have been given by an Officer or other person authorized to borrow on behalf of Company or for otherwise acting in good faith under this subsection 2.1B or under
subsection 2.2D, and upon funding of Loans by Lenders, and upon conversion or continuation of the applicable basis for determining the interest rate with respect to any Loans pursuant to subsection 2.2D, in each case in accordance with this
Agreement, pursuant to any such telephonic notice Company shall have effected Loans or a conversion or continuation, as the case may be, hereunder.
                      Company shall notify Administrative Agent prior to the funding of any Loans in the event that any of the
matters to which Company is required to certify in the applicable Notice of Borrowing is no longer true and correct as of the applicable Funding Date, and the acceptance by Company of the proceeds of any Loans shall constitute a re-certification by
Company, as of the applicable Funding Date, as to the matters to which Company is required to certify in the applicable Notice of Borrowing.
                      Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowing for, or a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to make a
borrowing or to effect a conversion or continuation in accordance therewith.
                     C.       Disbursement of Funds.  All Revolving Loans
shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that neither Administrative Agent nor any Lender shall be responsible for any default by any other Lender in that other
Lender’s obligation to make a Loan requested hereunder nor shall the Commitment of any Lender to make the particular type of Loan requested be increased or decreased as a result of a default by any other Lender in that other Lender’s
obligation to make a Loan requested hereunder.  Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent shall notify each Lender for that
type of Loan of the proposed borrowing.  Each such Lender shall make the amount of its Loan available to Administrative Agent not later than 10:00 A.M. (California time) on the applicable Funding Date in same day funds in Dollars at the


	  
 	  26
 	  Credit Agreement
 






  Funding and Payment Office.  Except as provided in subsection 3.3B with respect to Revolving Loans used to reimburse Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it, upon satisfaction or waiver of the conditions precedent specified in subsections 4.1 (in the case of Loans made on the Closing Date) and 4.2 (in the case of all Loans), Administrative Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to the account of Company at the
Funding and Payment Office.
                     Unless Administrative Agent shall have been
notified by any Lender prior to a Funding Date for any Loans that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Funding Date.  If
such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from
such Funding Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate.  If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the rate payable under this Agreement for Base Rate Loans.  Nothing in this subsection 2.1C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.
                      D.       The Register.
                     Administrative Agent, acting for these purposes solely as an agent of Company (it being acknowledged that
Administrative Agent, in such capacity, and its officers, directors, employees, agent and affiliates shall constitute Indemnitees under subsection 10.3), shall maintain (and make available for inspection by Company upon reasonable prior notice at
reasonable times) at its address referred to in subsection 10.8 a register for the recordation of, and shall record, the names and addresses of Lenders and the Revolving Loan Commitment and Revolving Loans of each Lender from time to time (the
“Register”).  Company and Administrative Agent shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof; all
amounts owed with respect to any Commitment or Loan shall be owed to the Lender listed in the Register as the owner thereof; and any request, authority or consent of any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.  Each Lender shall record on its internal records the amount of its Loans


	  
 	  27
 	  Credit Agreement
 

  




 and Commitments and each payment in respect hereof, and any such recordation shall be conclusive and binding on Company, absent manifest error, subject to the entries in the
Register, which shall, absent manifest error, govern in the event of any inconsistency with any Lender’s records.  Failure to make any recordation in the Register or in any Lender’s records, or any error in such recordation, shall not
affect any Loans or Commitments or any Obligations in respect of any Loans.
                      E.       Optional Notes.  If so requested by any Lender by
written notice to Company (with a copy to Administrative Agent) at least two Business Days prior to the Closing Date or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection 10.1) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after Company’s receipt of such notice) a promissory note or promissory
notes to evidence such Lender’s Revolving Loans, substantially in the form of Exhibit IV annexed hereto, with appropriate insertions.
                      
2.2       Interest on the Loans.
                      A.        Rate of Interest.  Subject to the provisions
of subsections 2.6 and 2.7, each Revolving Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate or the
Eurodollar Rate.  The applicable basis for determining the rate of interest with respect to any Revolving Loan shall be selected by Company initially at the time a Notice of Borrowing is given with respect to such Loan pursuant to subsection
2.1B, and the basis for determining the interest rate with respect to any Revolving Loan may be changed from time to time pursuant to subsection 2.2D.  If on any day a Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day that Loan shall bear interest determined by reference to the Base Rate. 
Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Revolving Loans shall bear interest through maturity as follows: (i) if a Base Rate Loan, then at the sum of the Base Rate plus 1.00% per annum or (ii)if a Eurodollar Rate Loan,
then at the sum of the Eurodollar Rate plus 2.50% per annum.
                     B.        Interest Periods.  In connection with
each Eurodollar Rate Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, select an interest period (each an “Interest Period”) to be applicable to such Loan, which
Interest Period shall be, at Company’s option, either a one, two, three or six month period; provided that:

	  
 	            (i)     the initial Interest Period for any Eurodollar Rate Loan shall commence on
the Funding Date in respect of such Loan, in the case of a Loan initially made as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate
Loan;
 
	  
 	  
 
	  
 	  28
 	  Credit Agreement
 
				







	  
 	           (ii)     in the case of immediately successive Interest Periods applicable to a Eurodollar Rate
Loan continued as such pursuant to a Notice of Conversion/Continuation, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;
 
	  
 	  
 
	  
 	            (iii)    if an Interest Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business Day;
 
	  
 	  
 
	  
 	            (iv)    any Interest Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.2B, end on the last Business Day of a calendar month;
 
	  
 	  
 
	  
 	           (v)     no Interest Period with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
 
	  
 	  
 
	  
 	            (vi)    there shall be no more than five Interest Periods outstanding at any time; and


	  
 	  
 
	  
 	            (vii)   in the event Company fails to specify an Interest Period for any Eurodollar Rate Loan in the
applicable Notice of Borrowing or Notice of Conversion/Continuation, Company shall be deemed to have selected an Interest Period of one month.
 
	  
 	  
 

                      C.        Interest Payments.  Subject to the
provisions of subsection 2.2E, interest on each Loan shall be payable in arrears on and to each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity
(including final maturity) provided that in the event any Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on such Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier, at final maturity).
                     D.        Conversion or Continuation.  Subject to the
provisions of subsection 2.6, Company shall have the option (i) to convert at any time all or any part of its outstanding Revolving Loans equal to $500,000 and multiples of $100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate determined by reference to an alternative basis or (ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
such Loan equal to $1,000,000 and multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar Rate Loan may only be converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto.
                      Company shall deliver a duly executed
Notice of Conversion/Continuation to Administrative Agent no later than 10:00 A.M. (California time) at least one Business Day in 

	  
 	  29
 	  Credit Agreement
 






  advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three Business Days in advance of the proposed conversion/continuation
date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan).  In lieu of delivering a Notice of Conversion/Continuation, Company may give Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date.  Upon receipt of written or telephonic notice of any proposed conversion/continuation under this subsection 2.2D, Administrative Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender of the Loan subject to the Notice of Conversion/Continuation.
                     E.        Default Rate.  Upon the occurrence and
during the continuation of any Event of Default, the outstanding principal amount of all Loans and, to the extent permitted by applicable law, any interest payments thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable upon demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Base Rate Loans.  Payment or acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.  
 
                    F.        Computation of Interest. 
Interest on the Loans shall be computed on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date of the making of such Loan or the
first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.
                     G.        Maximum Rate.  Notwithstanding the foregoing
provisions of this subsection 2.2, in no event shall the rate of interest payable by Company with respect to any Loan exceed the maximum rate of interest permitted to be charged under applicable law.

	  
 	  30
 	  Credit Agreement
 






                      

2.3    Fees.
                      A.     Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender’s Pro Rata Share, commitment fees for the period from and including the Closing Date to and excluding the Revolving Loan Commitment Termination Date equal to the average of the
daily excess of the Revolving Loan Commitments over the sum of (i) the aggregate principal amount of outstanding Revolving Loans plus (ii) the Letter of Credit Usage multiplied by 0.50% per annum, such commitment fees to be
calculated on the basis of a 360-day year and the actual number of days elapsed and to be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Closing
Date, and on the Revolving Loan Commitment Termination Date.  
                     B.     Other Fees. Company agrees to pay to Administrative Agent such fees
in the amounts and at the times separately agreed upon between Company and Administrative Agent.
                      
2.4     Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions Regarding Payments; Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty.
                      A.     Prepayments and
Reductions in Revolving Loan Commitments.

	  
 	            (i)     Voluntary Prepayments.  Company may, upon any Business Day
with prior written or telephonic notice, in the case of Base Rate Loans, and three Business Days’ prior written or telephonic notice, in the case of Eurodollar Rate Loans, in each case given to Administrative Agent by 10:00 A.M. (California
time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each Lender for
the Loans to be prepaid), at any time and from time to time prepay any Revolving Loans on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess of that amount with respect to Eurodollar
Rate Loans, and $500,000 and multiples of $100,000 in excess of that amount with respect to Base rate Loans.  Notice of prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein.  Any such voluntary prepayment shall be applied as specified in subsection 2.4A(iv).
 
	  
 	  
 
	   
 	           (ii)     Voluntary Reductions of Revolving Loan Commitments. 
Company may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Revolving Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitments in an amount up to the amount by which the Revolving Loan Commitments
exceed the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or
 
	   
 	  
 
	  
 	  31
 	  Credit Agreement
 
				







	  
 	  reduction; provided that any such partial reduction of the Revolving Loan Commitments shall be in an aggregate minimum amount of $1,000,000 and multiples of
$1,000,000 in excess of that amount.  Company’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on the date specified in Company’s notice and shall reduce the Revolving Loan Commitment of each Revolving Lender proportionately to its Pro Rata Share.  Any such voluntary
reduction of the Revolving Loan Commitments shall be applied as specified in subsection 2.4A(iv).
 
	  
 	  
 
	  
 	           (iii)     Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments.  The Loans shall be prepaid and/or the Revolving Loan Commitments shall be permanently reduced in the amounts and under the circumstances set forth below, all such prepayments and/or reductions to be applied as set forth below
or as more specifically provided in subsection 2.4A(iv):
 
	  
 	  
 
	  
 	  
 	             (a)     Prepayments and Reductions from Net Business Interruption Insurance
Proceeds.  No later than the first Business Day following the date of receipt by Administrative Agent or by Company or any of its Subsidiaries of any Net Business Interruption Insurance Proceeds that are required to be applied to prepay the
Loans and/or reduce the Revolving Loan Commitments pursuant to the provisions of subsection 6.4C, Company shall prepay the Loans and/or the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to the amount of such
Net Business Interruption Insurance Proceeds.
 
	  
 	  
 	  
 
	  
 	  
 	           (b)     Calculations of Net Business Interruption Insurance Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent Calculations.  Concurrently with any prepayment of the Loans and/or reduction of the Revolving Loan Commitments pursuant to subsection 2.4A(iii)(a), Company shall deliver to
Administrative Agent an Officer’s Certificate demonstrating the calculation of the amount of the applicable Net Business Interruption Insurance Proceeds that gave rise to such prepayment and/or reduction.  In the event that Company shall
subsequently determine that the actual amount was greater than the amount set forth in such Officer’s Certificate, Company shall promptly make an additional prepayment of the Loans (and/or, if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such excess, and Company shall concurrently therewith deliver to Administrative Agent an Officer’s Certificate demonstrating the derivation of the additional amount resulting in such
excess.
 
	  
 	  
 	  
 
	  
 	  
 	            (c)     Prepayments Due to Reductions or Restrictions of Revolving Loan
Commitments or Due to Insufficient Borrowing Base.  Company shall from time to time prepay the Revolving Loans to the extent necessary so that the Total Utilization of Revolving Loan Commitments shall not at any time exceed the


	  
 	  
 	  
 
	  
 	 32
 	  Credit Agreement
 
					







	  
 	  
 	  lesser of the Revolving Loan Commitments then in effect and the Borrowing Base then in effect.
 
	  
 	  
 
	  
 	            (iv)     Application of Prepayments.
 
	  
 	  
 
	  
 	  
 	            (a)     Application of Voluntary Prepayments by Type of Loans and Order of
Maturity.  Any voluntary prepayments pursuant to subsection 2.4A(i) shall be applied as specified by Company in the applicable notice of prepayment; provided that in the event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied to repay outstanding Revolving Loans to the full extent thereof.
 
	  
 	  
 	  
 
	  
 	  
 	           (b)     Application of Mandatory Prepayments by Type of Loans.  Except
as provided in subsection 2.4C, any amount required to be applied as a mandatory prepayment of the Loans and/or a reduction of the Revolving Loan Commitments pursuant to subsection 2.4A(iii)(a) shall be applied first, to prepay the Revolving
Loans to the full extent thereof and to further permanently reduce the Revolving Loan Commitments by the amount of such prepayment, and second, to the extent of any remaining portion of such amount, to further permanently reduce the Revolving
Loan Commitments to the full extent thereof.  Any mandatory reduction of Revolving Commitments pursuant to this subsection 2.4A shall be in proportion to each Revolving Lender’s Pro Rata Share.
 
	  
 	  
 	  
 
	  
 	  
 	            (c)     Application of Prepayments to Base Rate Loans and Eurodollar Rate
Loans.  Any prepayment shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.
 
	  
 	  
 	  
 
				

                     B.     General Provisions
Regarding Payments.

	  
 	            (i)     Manner and Time of Payment.  All payments by Company of
principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 10:00 A.M. (California
time) on the date due at the Funding and Payment Office for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day. 
Company hereby authorizes Administrative Agent to charge its accounts with Administrative Agent in order to cause timely payment to be made to Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
 
	  
 
	  
 	            (ii)     Application of Payments to Principal and Interest.  Except as
provided in subsection 2.2C, all payments in respect of the principal amount of any Loan shall
 
	  
 	  
 	  
 
	  
 	 33
 	  Credit Agreement
 
					







	  
 	  include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a
date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest before application to principal.
 
	  
 	  
 
	  
 	            (iii)     Apportionment of Payments.  Aggregate principal and interest
payments in respect of Revolving Loans shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to Lenders’ respective Pro Rata Shares.  Administrative Agent shall promptly distribute to
each Lender, at its primary address set forth below its name on the appropriate signature page hereof or at such other address as such Lender may request, its Pro Rata Share of all such payments received by Administrative Agent and the commitment
fees of such Lender, if any, when received by Administrative Agent pursuant to subsection 2.3.  Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
 
	  
 	  
 
	  
 	           (iv)     Payments on Business Days.  Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
 
	  
 	  
 
	  
 	            (v)     Notation of Payment.  Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting participations therein), that Lender will make a notation thereon of all Loans evidenced by that Note and all principal payments previously made thereon and of the date to which
interest thereon has been paid; provided that the failure to make (or any error in the making of) a notation of any Loan made under such Note shall not limit or otherwise affect the obligations of Company hereunder or under such Note
with respect to any Loan or any payments of principal or interest on such Note.
 
	  
 	  
 	  
 

                     C.     Application of Proceeds of Collateral and Payments after Event of
Default.

	                      Upon termination of the Revolving Loan
Commitments or upon the occurrence and during the continuation of an Event of Default, if requested by Requisite Lenders (a) all payments received on account of the Obligations, whether from Company, from any Guarantor or otherwise, shall be applied
by Administrative Agent against the Obligations and (b) all proceeds received by Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as Collateral for, and/or (then or at any time thereafter) applied in full or in part by Administrative Agent against, the
 
	  
 
	  
 	  34
 	  Credit Agreement
 







	  applicable Secured Obligations (as defined in such Collateral Document), in each case in the following order of priority:
 
	  
 	  
 
	  
 	           (i)     to the payment of all costs and expenses of such sale, collection or other realization,
all other expenses, liabilities and advances made or incurred by Administrative Agent in connection therewith, and all amounts for which Administrative Agent is entitled to compensation (including the fees described in subsection 2.3), reimbursement
and indemnification under any Loan Document and all advances made by Administrative Agent thereunder for the account of the applicable Loan Party, and to the payment of all costs and expenses paid or incurred by Administrative Agent in connection
with the Loan Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this Agreement and the Loan Documents;
 
	  
 	  
 
	  
 	            (ii)     thereafter, to the payment of all other Obligations for the ratable benefit of the
holders thereof (subject to the provisions of subsection 2.4B(ii) hereof); and
 
	  
 	  
 
	  
 	            (iii)     thereafter, to the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
 
	  
 	  
 

                     
2.5     Use of Proceeds.
                      A.     Revolving Loans.  The proceeds of any Revolving Loans shall be
applied by Company for working capital and other general corporate purposes, which may include the making of intercompany loans to any of Company’s Subsidiaries, to the extent permitted pursuant to subsection 7.1, for their own general
corporate purposes.
                      B.     Margin
Regulations.  No portion of the proceeds of any borrowing under this Agreement shall be used by Company or any of its Subsidiaries in any manner that might cause the borrowing or the application of such proceeds to violate Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of such Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of
proceeds.
                      
2.6     Special Provisions Governing Eurodollar Rate Loans.
                      Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall
govern with respect to Eurodollar Rate Loans as to the matters covered:
                     A.     Determination of Applicable Interest Rate.  As soon as
practicable after 10:00 A.M. (California time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent manifest error, be conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each Lender.


	  
 	  35
 	  Credit Agreement
 






                      B.     Inability to Determine
Applicable Interest Rate.  In the event that Administrative Agent shall have determined (which determination shall be conclusive and binding upon all parties hereto), on any Interest Rate Determination Date that by reason of circumstances
affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Company and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies
Company and Lenders that the circumstances giving rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by Company with respect to the Loans in respect of which such determination was
made shall be deemed to be for a Base Rate Loan.
                     C.     Illegality or Impracticability of Eurodollar Rate Loans.  In
the event that on any date any Lender shall have determined (which determination shall be conclusive and binding upon all parties hereto but shall be made only after consultation with Company and Administrative Agent) that the making, maintaining or
continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause such Lender material hardship, as a result of
contingencies occurring after the date of this Agreement which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected
Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Company and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other
Lender).  Thereafter (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as (or convert such Loan to, as
the case may be) a Base Rate Loan, (c) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by law, and (d) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination.  Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date
on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender).  Except as provided in the immediately preceding

	  
 	 36
 	  Credit Agreement
 






  sentence, nothing in this subsection 2.6C shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.
                      D.     Compensation For Breakage or Non-Commencement of Interest
Periods.  Company shall compensate each Lender, upon written request by that Lender pursuant to subsection 2.8, for all reasonable losses, expenses and liabilities (including any interest paid by that Lender to lenders of funds borrowed by
it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by that Lender in connection with the liquidation or re-employment of such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Borrowing or a telephonic request therefor, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment or other principal payment or any conversion of any of its Eurodollar Rate Loans (including any prepayment or conversion
occasioned by the circumstances described in subsection 2.6C) occurs on a date prior to the last day of an Interest Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in
a notice of prepayment given by Company, or (iv) as a consequence of any other default by Company in the repayment of its Eurodollar Rate Loans when required by the terms of this Agreement.
                     E.     Booking of Eurodollar Rate Loans.  Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of that Lender.
                      F.     Assumptions Concerning Funding of Eurodollar Rate Loans. 
Calculation of all amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A shall be made as though that Lender had funded each of its Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the
rate obtained pursuant to clause (i) of the definition of Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period, whether or not its Eurodollar Rate Loans had
been funded in such manner.
                      G.     Eurodollar Rate
Loans After Default.  After the occurrence of and during the continuation of a Potential Event of Default or an Event of Default, (i) Company may not elect to have a Loan be made or maintained as, or converted to, a Eurodollar Rate
Loan after the expiration of any Interest Period then in effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed to be for a Base Rate Loan or, if the conditions to making a Loan set forth in subsection 4.2 cannot then be satisfied, to be rescinded by Company.

	  
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 	  Credit Agreement
 






                      
2.7     Increased Costs; Taxes; Capital Adequacy.
                      A.     Compensation for Increased Costs.  Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters covered thereby), in the event that any Lender (including Issuing Lender) shall determine (which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental
rule, regulation or order), or any determination of a court or other Government Authority, in each case that becomes effective after the date hereof, or compliance by such Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other Government Authority (whether or not having the force of law):

	  
 	           (i)     subjects such Lender to any additional Tax with respect to this Agreement or any of its
obligations hereunder (including with respect to issuing or maintaining any Letters of Credit or purchasing or maintaining any participations therein or maintaining any Commitment hereunder) or any payments to such Lender of principal, interest,
fees or any other amount payable hereunder;
 
	  
 	  
 
	  
 	            (ii)     imposes, modifies or holds applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other
than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Eurodollar Rate); or
 
	  
 	  
 
	  
 	            (iii)     imposes any other condition (other than with respect to Taxes) on or affecting such
Lender or its obligations hereunder or the London interbank market;
 
	  
 	  
 

 and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make,
making or maintaining its Loans or Commitments or agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to purchase, purchasing or maintaining any participation therein or to reduce any amount received or receivable by such
Lender with respect thereto; then, in any such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in subsection 2.8A, such additional amount or amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder.
 
                   B.     Taxes.

	  
 	             (i)     Payments to Be Free and Clear.  All sums payable by Company
under this Agreement and the other Loan Documents shall be paid free and clear of, and without any deduction or withholding on account of, any Tax imposed, levied, collected, withheld or assessed by or within the United States of America or any
political subdivision in or of
 
	  
 	  
 
	  
 	 38
 	  Credit Agreement
 
				







	  
 	  the United States of America or any other jurisdiction from which a payment is made by or on behalf of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of payment.
 
	  
 	  
 
	  
 	            (ii)     Grossing-up of Payments.  If Company or any other Person is
required by law to make any deduction or withholding on account of any such Tax from any sum paid or payable by Company to Administrative Agent or any Lender under any of the Loan Documents:
 
	  
 	  
 
	  
 	  
 	            (a)     Company shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Company becomes aware of it;
 
	  
 	  
 	  
 
	  
 	  
 	           (b)     Company shall pay any such Tax when such Tax is due, such payment to be made (if the
liability to pay is imposed on Company) for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender;
 
	  
 	  
 	  
 
	  
 	  
 	            (c)     the sum payable by Company in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or payment been required or made; and
 
	  
 	  
 	  
 
	  
 	  
 	            (d)     within 30 days after paying any sum from which it is required by law to make any
deduction or withholding, and within 30 days after the due date of payment of any Tax which it is required by clause (b) above to pay, Company shall deliver to Administrative Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority;
 
	  
 	  
 	  
 

 provided that no such additional amount shall be required to be paid to any Lender under clause
(c) above except to the extent that any change after the date on which such Lender became a Lender in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect on the date on which such Lender became a Lender, in respect of payments to such Lender.

	  
 	            (iii)     Evidence of Exemption from U.S. Withholding Tax.
 
	  
 	  
 
	  
 	  
 	            (a)     Each Non-US Lender shall deliver to Administrative Agent and to Company,
on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at


	  
 	  
 	  
 
	  
 	 39
 	  Credit Agreement
 
					







	  
 	  
 	  such other times as may be necessary in the determination of Company or Administrative Agent (each in the reasonable exercise of its discretion), two original copies
of Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms) properly completed and duly executed by such Lender, or, in the case of a Non-US Lender claiming exemption from United States federal withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code with respect to payments of “portfolio interest”, a form W-8BEN, and, in the case of a Lender that has certified in writing to Administrative Agent that it is not a “bank” (as defined in
Section 881(c)(3)(A) of the Internal Revenue Code), a certificate of such Lender certifying that such Lender is not (i) a “bank” for purposes of Section 881(c) of the Internal Revenue Code, (ii) a ten-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of Company or (iii) a controlled foreign corporation related to Company (within the meaning of Section 864(d)(4) of the Internal Revenue Code) in each case together with any other
certificate or statement of exemption required under the Internal Revenue Code or the regulations issued thereunder to establish that such Lender is not subject to United States withholding tax with respect to any payments to such Lender of interest
payable under any of the Loan Documents.
 
	  
 	  
 	  
 
	  
 	  
 	           (b)     Each Non-US Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to Administrative Agent and to Company, on or
prior to the Closing Date (in the case of each Lender listed on the signature pages hereof), on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), or on such later date when
such Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of Company or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of the forms or statements required to be provided by such Lender under subsection 2.7B(iii)(a), properly completed and duly executed by such Lender, to establish the portion of any such sums paid or payable with
respect to which such Lender acts for its own account that is not subject to United States withholding tax, and (2) two original copies of Internal Revenue Service Form W-8IMY (or any successor forms) properly completed and duly executed by such
Lender, together with any information, if any, such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Internal Revenue Code or the regulations issued thereunder, to establish that such
Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender.
 
	  
 	  
 	  
 
	  
 	  
 	           (c)     Each Non-US Lender hereby agrees, from time to time after the initial
delivery by such Lender of such forms, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered
 
	  
 	  
 	  
 
	  
 	  40
 	  Credit Agreement
 
					

   






	  
 	  
 	  obsolete or inaccurate in any material respect, that such Lender shall promptly (1) deliver to Administrative Agent and to Company two original copies of renewals, amendments
or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required in order to confirm or establish that such Lender is not subject to United States
withholding tax with respect to payments to such Lender under the Loan Documents and, if applicable, that such Lender does not act for its own account with respect to any portion of such payment, or (2) notify Administrative Agent and Company
of its inability to deliver any such forms, certificates or other evidence.
 
	  
 	  
 	  
 
	  
 	  
 	           (d)     Company shall not be required to pay any additional amount to any Non-US Lender under
clause (c) of subsection 2.7B(ii), (1) with respect to any Tax required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender chooses to transmit with an Internal Revenue Service Form W-8IMY
pursuant to subsection 2.7B(iii)(b)(2) or (2) if such Lender shall have failed to satisfy the requirements of clause (a), (b) or (c)(1) of this subsection 2.7B(iii); provided that if such Lender shall have satisfied the requirements of subsection
2.7B(iii)(a) on the date such Lender became a Lender, nothing in this subsection 2.7B(iii)(d) shall relieve Company of its obligation to pay any amounts pursuant to subsection 2.7B(ii)(c) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender is not subject to withholding as described in subsection 2.7B(iii)(a).
 
	  
 	  
 	  
 

                     C.     Capital Adequacy Adjustment.  If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date hereof of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any
Government Authority charged with the interpretation or administration thereof, or compliance by any Lender with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Government
Authority, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Commitments or Letters of Credit
or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five Business Days after receipt by Company from such Lender
of the statement referred to in subsection 2.8A, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction.

	  
 	 41
 	  Credit Agreement
 






                      
2.8     Statement of Lenders; Obligation of Lenders and Issuing Lender to Mitigate.
                      A.     Statements.  Each Lender claiming compensation or
reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent manifest error.
                      B.     Mitigation.  Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender responsible for administering the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender or Issuing Lender to receive payments under subsection 2.7, use reasonable effort to make, issue, fund or maintain the
Commitments of such Lender or the Affected Loans or Letters of Credit of such Lender or Issuing Lender through another lending or letter of credit office of such Lender or Issuing Lender, if (i) as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7 would be materially reduced and (ii) as determined by
such Lender or Issuing Lender in its sole discretion, such action would not otherwise be disadvantageous to such Lender or Issuing Lender; provided that such Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8B unless Company agrees to pay all incremental expenses incurred by such Lender or Issuing Lender as a result of utilizing such other lending or letter of credit office as described
above.
                     
2.9     Replacement of a Lender.
                      If Company receives a statement of amounts due pursuant to subsection 2.8A from a Lender, a Revolving
Lender defaults in its obligations to fund a Revolving Loan pursuant to this Agreement, or a Lender becomes an Affected Lender (any such Lender, a “Subject Lender”), so long as (i) no Potential Event of Default or Event of Default
shall have occurred and be continuing and Company has obtained a commitment from another Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the Subject Lender’s Commitments and all other obligations of
the Subject Lender hereunder, (ii) such Lender is not Issuing Lender with respect to any Letters of Credit outstanding (unless all such Letters of Credit are terminated or arrangements acceptable to Issuing Lender (such as a “back-to-back”
letter of credit) are made) and (iii), if applicable, the Subject Lender is unwilling to withdraw the notice delivered to Company pursuant to subsection 2.8 and/or is unwilling to remedy its default upon 10 days prior written notice to the Subject
Lender and Administrative Agent, Company may require the Subject Lender to assign all of its Loans and Commitments to such other Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection 10.1B; provided
that, prior to or concurrently with such replacement, (1) the Subject Lender shall have received payment in full of all principal, interest, fees and other amounts (including all amounts under subsections 2.6D, 2.7 and/or 2.8B (if applicable))
through such date of replacement and a

	  
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 	  Credit Agreement
 






   release from its obligations under the Loan Documents, (2) the processing fee required to be paid by subsection 10.1B(i) shall have been paid to Administrative Agent, and
(3) all of the requirements for such assignment contained in subsection 10.1B, including, without limitation, the consent of Administrative Agent (if required) and the receipt by Administrative Agent of an executed Assignment Agreement and other
supporting documents, have been fulfilled.

	 
Section 3.     LETTERS OF CREDIT
 
	  
 
	  
 	 
3.1     Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.
 
	  
 	  
 
	               A.      Letters of Credit.  In addition to
Company requesting that Lenders make Revolving Loans pursuant to subsection 2.1A, Company may request, in accordance with the provisions of this subsection 3.1, from time to time during the period from the Closing Date to but excluding the 30th day
prior to the Revolving Loan Commitment Termination Date, that Issuing Lender issue Letters of Credit payable on a sight basis for the account of Company for the purposes specified in the definition of Letters of Credit.  Subject to the terms
and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, Issuing Lender shall issue such Letters of Credit in accordance with the provisions of this subsection 3.1; provided that
Company shall not request that Issuing Lender issue (and Issuing Lender shall not issue):
 
	  
 	  
 
	  
 	  
 	           (i)     any Letter of Credit if, after giving effect to such issuance, the Total
Utilization of Revolving Loan Commitments would exceed the lesser of the Revolving Loan Commitments then in effect or the Borrowing Base then in effect;
 
	  
 	  
 
	  
 	  
 	            (ii)     any Letter of Credit if, after giving effect to such issuance, the Letter
of Credit Usage would exceed $8,000,000;
 
	  
 
	  
 	  
 	            (iii)     any Letter of Credit having an expiration date later than the earlier of
(a) ten days prior to the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such Letter of Credit; provided that the immediately preceding clause (b) shall not prevent Issuing
Lender from agreeing that a Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless Issuing Lender elects not to extend for any such additional period; and provided, further
that Issuing Lender shall elect not to extend such Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 10.6) at the time Issuing Lender must elect
whether or not to allow such extension;
 
	  
 
	  
 	  
 	           (iv)     any Letter of Credit issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting “antecedent debt” (as that term is used in Section 547 of the Bankruptcy Code); or
 
	  
 	  
 
	  
 	  
 	            (v)     any Letter of Credit denominated in a currency other than Dollars or
Pounds.
 
	  
 	  
 
	  
 	  43
 	  Credit Agreement
 
						






  On and after the date of this Agreement, the WF Letter of Credit shall be deemed for all purposes, including for purposes of the fees to be collected pursuant to
subsection 3.2, and reimbursement of costs and expenses to the extent provided herein, to be a Letter of Credit outstanding under this Agreement and entitled to the benefits of this Agreement and the other Loan Documents, and shall be governed
by the applications and agreements pertaining thereto and by this Agreement; provided, however, that, notwithstanding any other provision of this Agreement, no fees with respect to the issuance of the WF Letter of Credit shall be due
hereunder.
                     B.     Mechanics of
Issuance.

	  
 	            (i)     Request for Issuance.  Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent a Request for Issuance no later than 10:00 A.M. (California time) at least three Business Days, or such shorter period as may be agreed to by Issuing Lender in any particular instance,
in advance of the proposed date of issuance.  Issuing Lender, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any documents described in or attached to the Request for Issuance.  In
furtherance of the provisions of subsection 10.8, and not in limitation thereof, Company may submit Requests for Issuance by telefacsimile and Administrative Agent and Issuing Lender may rely and act upon any such Request for Issuance without
receiving an original signed copy thereof.  No Letter of Credit shall require payment against a conforming demand for payment to be made thereunder on the same business day (under the laws of the jurisdiction in which the office of Issuing
Lender to which such demand for payment is required to be presented is located) that such demand for payment is presented if such presentation is made after 10:00 A.M. (in the time zone of such office of Issuing Lender) on such business
day.
 
	  
 	  
 
	  
 	           Company shall notify Issuing Lender prior to the issuance of any Letter of Credit in the event that any of
the matters to which Company is required to certify in the applicable Request for Issuance is no longer true and correct as of the proposed date of issuance of such Letter of Credit, and upon the issuance of any Letter of Credit Company shall be
deemed to have re-certified, as of the date of such issuance, as to the matters to which Company is required to certify in the applicable Request for Issuance.
 
	  
 	  
 
	  
 	            (ii)     Issuance of Letter of Credit.  Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in subsection 4.3, Issuing Lender shall issue the requested Letter of Credit in accordance with Issuing Lender’s standard operating procedures.
 
	  
 	  
 
	  
 	            (iii)     Notification to Revolving Lenders.  Upon the issuance of or
amendment to any Letter of Credit Issuing Lender shall promptly notify Administrative Agent and Company of such issuance or amendment in writing and such notice shall be accompanied by a copy of such Letter of Credit or amendment.  Upon receipt
of such notice (or, if Administrative Agent is Issuing Lender, together with such notice), Administrative Agent shall notify each Revolving Lender in writing of such issuance or
 
	  
 	  
 
	  
 	 44
 	  Credit Agreement
 
				







	  
 	  amendment and the amount of such Revolving Lender’s respective participation in such Letter of Credit or amendment, and, if so requested by a Revolving Lender, Administrative
Agent shall provide such Lender with a copy of such Letter of Credit or amendment.
 
	  
 	  
 

                      C.     Revolving Lenders’ Purchase of Participations in Letters of
Credit.  Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from Issuing Lender a participation in such Letter of Credit and any drawings
honored thereunder in an amount equal to such Revolving Lender’s Pro Rata Share of the maximum amount that is or at any time may become available to be drawn thereunder.
                     
3.2     Letter of Credit Fees.
                      Company agrees to pay, with respect to Letters of Credit issued hereunder, (i) a fronting fee,
payable directly to Issuing Lender for its own account, equal to the greater of (a) $500 and (b) 0.25% per annum of the daily amount available to be drawn under such Letter of Credit and (ii) a letter of credit fee, payable to Administrative
Agent for the account of Revolving Lenders, equal to 2.50% per annum of the daily amount available to be drawn under such Letter of Credit, each such fronting fee or letter of credit fee to be payable in arrears on and to (but excluding) each
March 31, June 30, September 30 and December 31 of each year and computed on the basis of a 360-day year for the actual number of days elapsed, and (ii) with respect to the issuance, amendment or transfer of each Letter of Credit
and each payment of a drawing made thereunder (without duplication of the fees payable under clauses (i) above), documentary and processing charges payable directly to Issuing Lender for its own account in accordance with Issuing Lender’s
standard schedule for such charges in effect at the time of such issuance, amendment, transfer or payment, as the case may be.  For purposes of calculating any fees payable under this subsection 3.2, (1) the daily amount available to be
drawn under any Letter of Credit shall be determined as of the close of business on any date of determination and (2) any amount described in such clauses which is denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of determination.  Promptly upon receipt by Administrative Agent of any amount described in clause (i)(b) of this subsection 3.2, Administrative Agent shall distribute to each
Revolving Lender its Pro Rata Share of such amount.
                     
3.3     Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
                      A.     Responsibility of Issuing Lender With Respect to Drawings.  In
determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, Issuing Lender shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether
they appear on their face to be in accordance with the terms and conditions of such Letter of Credit.
                      B.     Reimbursement by Company of Amounts Paid Under Letters of
Credit.  In the event Issuing Lender has determined to honor a drawing under a Letter of Credit issued by it,

	  
 	  45
 	  Credit Agreement
 






  Issuing Lender shall immediately notify Company and Administrative Agent, and Company shall reimburse Issuing Lender on or before the Business Day immediately following the date
on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars (which amount, in the case of a payment under a Letter of Credit which is denominated in a currency other than Dollars, shall be calculated by
reference to the applicable Exchange Rate) and in same day funds equal to the amount of such payment; provided that, anything contained in this Agreement to the contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and Issuing Lender prior to 10:00 A.M. (California time) on the date such drawing is honored that Company intends to reimburse Issuing Lender for the amount of such payment with funds other than the proceeds of Revolving Loans, Company shall
be deemed to have given a timely Notice of Borrowing to Administrative Agent requesting Revolving Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in the case of a payment
under a Letter of Credit which is denominated in a currency other than Dollars, shall be calculated by reference to the applicable Exchange Rate) equal to the amount of such payment and (ii) subject to satisfaction or waiver of the conditions
specified in subsection 4.2C, Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such payment, the proceeds of which shall be applied directly by Administrative Agent to reimburse
Issuing Lender for the amount of such payment; and provided, further that if for any reason proceeds of Revolving Loans are not received by Issuing Lender on the Reimbursement Date in an amount equal to the amount of such payment,
Company shall reimburse Issuing Lender, on demand, in an amount in same day funds equal to the excess of the amount of such payment over the aggregate amount of such Revolving Loans, if any, which are so received.  Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to make Revolving Loans on the terms and conditions set forth in this Agreement, and Company shall retain any and all rights it may have against any Revolving Lender resulting
from the failure of such Revolving Lender to make such Revolving Loans under this subsection 3.3B.
                     C.     Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.

	  
 	             (i)     Payment by Revolving Lenders.  In the event that Company
shall fail for any reason to reimburse Issuing Lender as provided in subsection 3.3B in an amount (calculated, in the case of a payment under a Letter of Credit denominated in a currency other than Dollars, by reference to the applicable Exchange
Rate) equal to the amount of any payment by Issuing Lender under a Letter of Credit issued by it, Issuing Lender shall promptly notify each other Lender of the unreimbursed amount of such honored drawing and of such other Revolving Lender’s
respective participation therein based on such Revolving Lender’s Pro Rata Share.  Each Revolving Lender shall make available to Issuing Lender an amount equal to its respective participation, in Dollars and in same day funds, at the
office of Issuing Lender specified in such notice, not later than 10:00 A.M. (California time) on the first business day (under the laws of the jurisdiction in which such office of Issuing Lender is located) after the date notified by Issuing
Lender.  In the event that any Revolving Lender fails to make available to Issuing Lender on such business day the amount of such Revolving Lender’s participation in such Letter of
 
	  
 	  
 
	  
 	 46
 	  Credit Agreement
 
				







	  
 	  Credit as provided in this subsection 3.3C, Issuing Lender shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the rate
customarily used by Issuing Lender for the correction of errors among banks for three Business Days and thereafter at the Base Rate.  Nothing in this subsection 3.3C shall be deemed to prejudice the right of any Lender to recover from Issuing
Lender any amounts made available by such Revolving Lender to Issuing Lender pursuant to this subsection 3.3C in the event that it is determined by the final judgment of a court of competent jurisdiction that the payment with respect to a Letter of
Credit by Issuing Lender in respect of which payment was made by such Revolving Lender constituted gross negligence or willful misconduct on the part of Issuing Lender.
 
	  
 	  
 
	  
 	            (ii)     Distribution to Lenders of Reimbursements Received From Company.  In the
event Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion of any payment by Issuing Lender under a Letter of Credit issued by it, Issuing Lender shall distribute to each other
Revolving Lender that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such other Revolving Lender’s Pro Rata Share of all payments subsequently received by Issuing Lender from Company in reimbursement of
such payment under the Letter of Credit when such payments are received.  Any such distribution shall be made to a Revolving Lender at its primary address set forth below its name on the appropriate signature page hereof or at such other
address as such Revolving Lender may request.
 

                   D.     Interest on Amounts Paid Under Letters of Credit.

	  
 	            (i)     Payment of Interest by Company.  Company agrees to pay to
Issuing Lender, with respect to payments under any Letters of Credit issued by it, interest on the amount paid by Issuing Lender in respect of each such payment from the date a drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for the period from the date such drawing is honored to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Revolving Loans that are Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable under this Agreement with respect to Revolving Loans that are
Base Rate Loans.  Interest payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a 360-day year for the actual number of days elapsed in the period during which it accrues and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full.
 
	  
 	  
 
	  
 	            (ii)     Distribution of Interest Payments by Issuing Lender. 
Promptly upon receipt by Issuing Lender of any payment of interest pursuant to subsection 3.3D(i) with respect to a payment under a Letter of Credit issued by it, (a) Issuing Lender shall distribute to each other Revolving Lender, out of the
interest received by Issuing Lender in respect of the period from the date such drawing is honored to but excluding the date
 
	  
 	  
 
	  
 	 47
 	  Credit Agreement
 
				







	  
 	  on which Issuing Lender is reimbursed for the amount of such payment (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B), the
amount that such other Revolving Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period pursuant to subsection 3.2 if no drawing had been
honored under such Letter of Credit, and (b) in the event Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion of such payment, Issuing Lender shall distribute to each other
Revolving Lender that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such other Revolving Lender’s Pro Rata Share of any interest received by Issuing Lender in respect of that portion of such payment so
reimbursed by other Revolving Lenders for the period from the date on which Issuing Lender was so reimbursed by other Revolving Lenders to but excluding the date on which such portion of such payment is reimbursed by Company.  Any such
distribution shall be made to a Revolving Lender at its primary address set forth below its name on the appropriate signature page hereof or at such other address as such Revolving Lender may request.
 
	  
 	  
 

                     
3.4     Obligations Absolute.
                      The obligation of Company to reimburse Issuing Lender for payments under the Letters of Credit issued by
it and to repay any Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including any of the following circumstances:

	  
 	            (i)     any lack of validity or enforceability of any Letter of
Credit;
 
	  
 	  
 
	  
 	            (ii)     the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), Issuing Lender or other Revolving Lender or any other Person or, in the case of a
Revolving Lender, against Company, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured);
 
	  
 	  
 
	  
 	           (iii)     any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
 
	  
 	  
 
	  
 	            (iv)     payment by Issuing Lender under any Letter of Credit against
presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit;
 
	  
 	  
 
	  
 	  48
 	  Credit Agreement
 
				







	  
 	           (v)     any adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries;
 
	  
 	  
 
	  
 	            (vi)     any breach of this Agreement or any other Loan Document by any party
thereto;
 
	  
 	  
 
	  
 	            (vii)     any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or
 
	  
 	  
 
	  
 	            (viii)     the fact that an Event of Default or a Potential Event of Default shall have
occurred and be continuing;
 
	  
 	  
 

 provided, in each case, that payment by Issuing Lender under the applicable Letter of Credit
shall not have constituted gross negligence or willful misconduct of Issuing Lender under the circumstances in question (as determined by a final judgment of a court of competent jurisdiction).
                      
3.5     Nature of Issuing Lender’s Duties.
                                As between Company and Issuing Lender, Company
assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by Issuing Lender by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, Issuing Lender shall
not be responsible for:  (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required
in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of
any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Issuing Lender, including any act or omission by a Government Authority, and none of the above
shall affect or impair, or prevent the vesting of, any of Issuing Lender’s rights or powers hereunder.
                     In furtherance and extension and not in limitation of the specific provisions set forth in the first
paragraph of this subsection 3.5, any action taken or omitted by Issuing Lender under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put
Issuing Lender under any resulting liability to Company.

	  
 	  49
 	  Credit Agreement
 






                      Notwithstanding anything to the contrary contained in
this subsection 3.5, Company shall retain any and all rights it may have against Issuing Lender for any liability arising solely out of the gross negligence or willful misconduct of Issuing Lender, as determined by a final judgment of a court of
competent jurisdiction.

	  Section 4.     
CONDITIONS TO LOANS AND LETTERS OF CREDIT
 
	  
 
	      The obligations of Lenders to make Loans and the issuance of Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
 
	  
 	  
 
	       4.1     
Conditions to Initial Revolving Loans.
 
	  
 	  
 
	 
       The obligations of Lenders to make any Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent satisfaction of the following conditions:
 
	   
 	  
 
	       A.     Loan Party Documents.  On or before the Closing Date, Company shall, and shall cause each
other Loan Party to, deliver to Lenders (or to Administrative Agent with sufficient originally executed copies, where appropriate, for each Lender) the following with respect to Company or such Loan Party, as the case may be, each, unless otherwise
noted, dated the Closing Date:
 
	   
 	  
 
	   
 	           (i)     Copies of the Organizational Documents of such Person, certified by the
Secretary of State of its jurisdiction of organization or, if such document is of a type that may not be so certified, certified by the secretary or similar officer of the applicable Loan Party, together with a good standing certificate from the
Secretary of State of its jurisdiction of organization and each other state in which such Person is qualified to do business and, to the extent generally available, a certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such jurisdictions, each dated a recent date prior to the Closing Date;
 
	   
 	  
 
	   
 	            (ii)     Resolutions of the Governing Body of such Person approving and
authorizing the execution, delivery and performance of the Loan Documents to which it is a party, certified as of the Closing Date by the secretary or similar officer of such Person as being in full force and effect without modification or
amendment;
 
	   
 	  
 
	   
 	           (iii)     Signature and incumbency certificates of the officers of such Person
executing the Loan Documents to which it is a party;
 
	   
 	  
 
	   
 	            (iv)     Executed originals of the Loan Documents to which such Person is a
party; and
 
	   
 	  
 
	   
 	            (v)     Such other documents as Administrative Agent may reasonably
request.
 
	   
 	  
 
	  
 	  50
 	  Credit Agreement
 
				

  




                     B.     Fees.  Company
shall have paid to Administrative Agent, for distribution (as appropriate) to Administrative Agent and Lenders, the fees payable on the Closing Date referred to in subsection 2.3.
                      C.     Corporate and Capital Structure.

	  
 	                 (i)     Corporate Structure.  The corporate
organizational structure of Company and its Subsidiaries shall be as set forth on Schedule 4.1C annexed hereto.
 
	  
 	  
 
	  
 	                 (ii)     Capital Structure.  The capital
structure of Company shall be as set forth on Schedule 4.1C annexed hereto.
 
	  
 	  
 

                     D.     Representations and Warranties; Performance of Agreements. 
Company shall have delivered to Administrative Agent an Officer’s Certificate, in form and substance satisfactory to Administrative Agent, to the effect that the representations and warranties in Section 5 are true, correct and complete in all
material respects on and as of the Closing Date to the same extent as though made on and as of that date (or, to the extent such representations and warranties specifically relate to an earlier date, that such representations and warranties were
true, correct and complete in all material respects on and as of such earlier date) and that Company shall have performed in all material respects all agreements and satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to and agreed to in writing by Administrative Agent; provided that, if a representation and warranty, covenant or condition is qualified as to materiality, with
respect to such representation and warranty, covenant or condition the applicable materiality qualifier set forth above shall be disregarded for purposes of this condition.
                      E.     Opinions of Counsel to Loan Parties.  Lenders shall have
received originally executed copies of one or more favorable written opinions of Sullivan & Cromwell, counsel for Loan Parties, in form and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Closing Date
and setting forth substantially the matters in the opinions designated in Exhibit VI annexed hereto and as to such other matters as Administrative Agent acting on behalf of Lenders may reasonably request (this Credit Agreement
constituting a written request by Company to such counsel to deliver such opinions to Lenders).
                     F.     Opinion of Administrative Agent’s Counsel.  Lenders shall
have received originally executed copies of  a favorable written opinion of O’Melveny & Myers LLP, counsel to Administrative Agent, dated as of the Closing Date, substantially in the form of Exhibit VII annexed
hereto.
                      G.     Evidence of Insurance. 
Administrative Agent shall have received a certificate from Company’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to subsection 6.4 is in full force and effect and that
Administrative Agent on behalf of Lenders has been named as additional insured and/or loss payee thereunder to the extent required under subsection 6.4.

	  
 	  51
 	  Credit Agreement
 






                      H.     Necessary Governmental
Authorizations and Consents; Expiration of Waiting Periods, Etc.  Company shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents and the continued operation of the business conducted by Company and its Subsidiaries in substantially the same manner as conducted prior to the Closing Date.  Each such Governmental Authorization
and consent shall be in full force and effect, except in a case where the failure to obtain or maintain a Governmental Authorization or consent, either individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.  All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by
the Loan Documents or the financing thereof.  No action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable Government Authority
to take action to set aside its consent on its own motion shall have expired.  There shall not have occurred any material adverse change in governmental regulation or policy of any Governmental Authority that adversely affects any of the
Company, its Subsidiaries or the Lenders. 
                     I.     Security Interests in Personal and Mixed Property. 
Administrative Agent shall have received evidence satisfactory to it that Company and Subsidiary Guarantors shall have taken or caused to be taken all such actions, executed and delivered or caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such filings and recordings (other than the filing or recording of items described in clauses (ii), (iii) and (iv) below) that may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit of Lenders, a valid and (upon such filing and recording) perfected First Priority security interest in the entire personal and mixed property Collateral.  Such
actions shall include the following:

	  
 	            (i)     Stock Certificates and Instruments.  Delivery to
Administrative Agent of (a) certificates (which certificates shall be accompanied by irrevocable undated stock powers, duly endorsed in blank and otherwise satisfactory in form and substance to Administrative Agent) representing all Capital Stock
pledged pursuant to the Security Agreement and (b) all promissory notes or other instruments (duly endorsed, where appropriate, in a manner satisfactory to Administrative Agent) evidencing any Collateral;
 
	  
 	  
 
	  
 	           (ii)     Lien Searches and UCC Termination Statements.  Delivery to
Administrative Agent of (a) the results of a recent search, by a Person satisfactory to Administrative Agent, of all effective UCC financing statements and fixture filings and all judgment and tax lien filings which may have been made with respect
to any personal or mixed property of any Loan Party, together with copies of all such filings disclosed by such search, and (b) UCC termination statements duly executed by all applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements or fixture filings disclosed in such search (other than any such financing statements or fixture filings in respect of Liens permitted to remain outstanding pursuant to the terms of this
Agreement).
 
	  
 	  
 
	  
 	  52
 	  Credit Agreement
 
				







	  
 	            (iii)     UCC Financing Statements and Fixture Filings.  Delivery to
Administrative Agent of UCC financing statements and, where appropriate, fixture filings, duly executed by each applicable Loan Party (if required) with respect to all personal and mixed property Collateral of such Loan Party, for filing in all
jurisdictions as may be necessary or, in the opinion of Administrative Agent, desirable to perfect the security interests created in such Collateral pursuant to the Collateral Documents; and
 
	  
 	  
 
	  
 	           (iv)     PTO Cover Sheets, Etc.  Delivery to Administrative Agent of all cover
sheets or other documents or instruments required to be filed with the PTO in order to create or perfect Liens in respect of any IP Collateral.
 
	  
 	  
 

                      J.     Matters Relating to Existing Indebtedness of Company and its
Subsidiaries.  On the Closing Date, Company and its Subsidiaries shall have (a) repaid in full all Indebtedness in respect of the Prior Reimbursement Obligations, (b) delivered to Administrative Agent all documents or instruments necessary
to release all Liens securing Indebtedness or other obligations of Company and its Subsidiaries in connection therewith, and (d) made arrangements satisfactory to Administrative Agent with respect to the cancellation of the Prior Letters of
Credit.  
                      K.     Borrowing Base
Certificate.  On or before the Closing Date, Company shall have delivered to Administrative Agent and Lenders a Borrowing Base Certificate substantially in the form of Exhibit XI annexed hereto, prepared as of December 31,
2002.  
                     L.     Collateral Audits and
Appraisals.  Administrative Agent shall have received audits of the Accounts of Company and its Subsidiaries in form, scope and substance satisfactory to Administrative Agent.
                      M.     Completion of Proceedings.  All corporate and other
proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory
in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably
request.
                      N.     Subordination Agreement. 
Administrative Agent, Company and each of the holders of the Convertible Subordinated Notes and the Convertible Series A Preferred Stock shall have entered into a subordination agreement (the “Subordination Agreement”) in form and
substance satisfactory to Administrative Agent.  
                      
4.2     Conditions to All Loans.
                     The obligations of Lenders to make Loans on each Funding Date are subject to the following further
conditions precedent:

	  
 	  53
 	  Credit Agreement
 






                      A.     Administrative
Agent shall have received before that Funding Date, in accordance with the provisions of subsection 2.1B, an originally executed Notice of Borrowing, in each case signed by a duly authorized Officer of Company.
                      B.     Administrative Agent shall have received before that Funding Date,
the timely delivery of the most recent Borrowing Base Certificate (dated as contemplated in subsection 6.1(xvii)) required to be delivered hereunder.
                      C.     As of that Funding Date:

	  
 	           (i)     The representations and warranties contained herein and in the other Loan Documents
shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date; provided, that, if a representation and warranty is qualified as to materiality, with respect
to such representation and warranty the materiality qualifier set forth above shall be disregarded for purposes of this condition;
 
	  
 	  
 
	  
 	            (ii)     No event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by such Notice of Borrowing that would constitute an Event of Default or a Potential Event of Default;
 
	  
 	  
 
	  
 	            (iii)     Each Loan Party shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or satisfied by it on or before that Funding Date; and
 
	  
 	  
 
	  
 	           (iv)     No order, judgment or decree of any arbitrator or Government Authority shall
purport to enjoin or restrain any Lender from making the Loans to be made by it on that Funding Date.
 
	  
 	  
 

                      
4.3     Conditions to Letters of Credit.
                      The issuance of any Letter of Credit hereunder (whether or not Issuing Lender is obligated to issue such
Letter of Credit) is subject to the following conditions precedent:
                      A.     On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of subsection 3.1B(i), an originally executed Request for Issuance (or a facsimile copy thereof) in each case signed by a duly authorized Officer of Company, together with
all other information specified in subsection 3.1B(i) and such other documents or information as Issuing Lender may reasonably require in connection with the issuance of such Letter of Credit.

	  
 	 54
 	  Credit Agreement
 






                      B.     Administrative
Agent shall have received the timely delivery of the most recent Borrowing Base Certificate (dated as contemplated in subsection 6.1(xvii)) required to be delivered hereunder.
                      C.     On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as if the issuance of such Letter of Credit were the making of a Loan and the date of issuance of such Letter of Credit were a Funding Date.

	  Section 5.      
COMPANY’S REPRESENTATIONS AND WARRANTIES
 
	  
 
	               In order to induce Lenders to enter into this Agreement and to make the Loans, to
induce Issuing Lender to issue Letters of Credit and to induce Revolving Lenders to purchase participations therein, Company represents and warrants to each Lender:
 
	  
 	  
 
	           5.1     
Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.
 
	  
 	  
 
	            A.     Organization and Powers.  Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware.  Each of Company and its Subsidiaries has all requisite power and authority to enter into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.
 
	  
 	  
 
	            B.     Qualification and Good Standing.  Each of Company and its
Subsidiaries is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good
standing has not had and could not reasonably be expected to result in a Material Adverse Effect.
 
	  
 	  
 
	           C.     Conduct of Business.  Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection 7.12.
 
	  
 	  
 
	            D.     Subsidiaries.  All of the Subsidiaries of Company as of the
Closing Date and their jurisdictions of organization, and the identity of those Subsidiaries deemed to be Significant Subsidiaries in accordance with the terms hereof, are set forth on Schedule 5.1 annexed hereto, as said Schedule
5.1 may be supplemented from time to time pursuant to the provisions of subsection 6.1(xv).  The Capital Stock of each of the Subsidiaries of Company set forth on Schedule 5.1 annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such Capital Stock constitutes Margin Stock.  Each of the Subsidiaries of Company set forth on Schedule 5.1 annexed hereto (as so supplemented) is a corporation,
partnership, trust or limited liability company duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization set forth therein, has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be conducted, and is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good standing
 
	  
 	  
 
	  
 	 55
 	  Credit Agreement
 
				







	  or a lack of such power and authority has not had and could not reasonably be expected to result in a Material Adverse Effect.  Schedule 5.1 annexed hereto (as
so supplemented) correctly sets forth, as of the Closing Date, the ownership interest of Company and each of its Subsidiaries in each of the Subsidiaries of Company identified therein.
 

                      
5.2     Authorization of Borrowing, etc.
                      A.     Authorization of Borrowing.  The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto.
                      B.     No Conflict.  The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Organizational Documents of Company or any of its Subsidiaries or any order, judgment or decree of any court or other Government Authority binding on Company or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of Company or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date and disclosed in writing to Lenders.
                     C.     Governmental Consents.  The execution, delivery and
performance by Loan Parties of the Loan Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents do not and will not require any Governmental Authorization other than filings and recordings
pursuant to this Agreement and the Loan Documents relating to the Collateral.
                      D.     Binding Obligation.  Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
                      
5.3     Financial Condition.
                      Company has heretofore delivered to Lenders, at Lenders’ request, financial statements and
information for the Fiscal Year ended April 30, 2002 and interim statements for the Fiscal Quarters ended July 31, 2002 and October 31, 2002.  All such statements were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position (on a

	  
 	 56
 	  Credit Agreement
 

  




  consolidated and, where applicable, consolidating basis) of the entities described in such financial statements as at the respective dates thereof and the results of operations
and cash flows (on a consolidated and, where applicable, consolidating basis) of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and
normal year-end adjustments.  Neither Company nor any of its Subsidiaries has (and will not have following the funding of the initial Loans) any Contingent Obligation, contingent liability or liability for taxes, long-term lease or unusual
forward or long-term commitment that, as of the Closing Date, is not reflected in the foregoing financial statements or the notes thereto and, as of any Funding Date subsequent to the Closing Date, is not reflected in the most recent financial
statements delivered to Lenders pursuant to subsection 6.1 or the notes thereto and that, in any such case, is material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of
its Subsidiaries.
                      
5.4     No Material Adverse Change; No Restricted Junior Payments.
                     Since April 30, 2002, no event or change has occurred that has resulted in or evidences, either in any
case or in the aggregate, a Material Adverse Effect, and neither Company nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Junior Payment or agreed to do so,
except as permitted by subsection 7.5.
                      
5.5     Title to Properties; Liens; Real Property; Intellectual Property.
                      A.     Title to Properties; Liens.  Company and its Subsidiaries have
(i) good, sufficient and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the financial statements referred to in subsection 5.3 or in the most recent financial statements delivered pursuant to subsection 6.1, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business or as otherwise permitted under subsection 7.7, and except for such defects in title and interests that do not interfere with the ability of Company and its Subsidiaries
to conduct their business.  Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.
                     B.     Real Property.  As of the Closing Date, Schedule 5.5B
annexed hereto contains a true, accurate and complete list of (i) all fee interests in any Real Property Assets and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions
of any thereof) affecting each Real Property Asset, regardless of whether a Loan Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment.  Except as set forth on
Schedule 5.5B annexed hereto, each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect and Company does not have knowledge of any material default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding obligation of each applicable Loan Party, enforceable against such 

	  
 	  57
 	  Credit Agreement
 






  Loan Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles.
                      C.     Intellectual Property.  As of the Closing Date, Company and
its Subsidiaries own or have the right to use, all Intellectual Property used in the conduct of their business, except where the failure to own or have such right to use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect.  No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does Company know of any valid
basis for any such claim, except for such claims that in the aggregate could not reasonably be expected to result in a Material Adverse Effect.  The use of such Intellectual Property by Company and its Subsidiaries does not infringe on the
rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  All federal and state and all foreign registrations of and applications for
Intellectual Property that are owned or licensed by Company or any of its Subsidiaries on the Closing Date are set forth on Schedule 5.5C annexed hereto.
                     
5.6     Litigation; Adverse Facts.
                      Except as set forth in Schedule 5.6 annexed hereto, there are no Proceedings (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in equity, or before or by any court or other Government Authority (including any Environmental Claims) that are pending or, to the knowledge of Company, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  Neither Company nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Government Authority that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
 
                    
5.7     Payment of Taxes.
                      Except to the extent permitted by subsection 6.3, all material tax returns and reports of Company and its
Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable, expect where the failure to pay could not reasonably be expected to result in a Material Adverse Effect.  Company
knows of no material proposed tax assessment against Company or any of its Subsidiaries that is not being actively contested by Company or such Subsidiary in good faith and by appropriate 

	  
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  proceedings; provided that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided
therefor.
                      
5.8     Performance of Agreements.
                      Neither Company nor any of its Subsidiaries is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default, except where the consequences,
direct or indirect, of such default or defaults, if any, could not reasonably be expected to result in a Material Adverse Effect.
                      
5.9     Governmental Regulation.
                     Neither Company nor any of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render
all or any portion of the Obligations unenforceable.
                      
5.10     Securities Activities.
                      A.     Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.
                      B.     Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its Subsidiaries on a consolidated basis) subject to the provisions of subsection 7.2 or 7.7 or subject to any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness and within the scope of subsection 8.2, will be Margin Stock.
                      
5.11     Employee Benefit Plans.
                     A.     Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan, except for any failure to comply that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Each Employee Benefit Plan that is intended to qualify under Section 401(a) of
the Internal Revenue Code is so qualified.  
                      B.     No ERISA Event has occurred or is reasonably expected to
occur.
                      C.     Except to the extent required
under Section 4980B of the Internal Revenue Code, or except as set forth in Schedule 5.11 annexed hereto, no Employee Benefit Plan provides

	  
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  health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates.
                      D.     As of the
most recent valuation date for any Pension Plan, the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), does not exceed $1,000,000.
                      E.     As of the most recent valuation date for each Multiemployer Plan
for which the actuarial report is available, the potential liability of Company, its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, based on information available pursuant to Section 4221(e) of ERISA, does not exceed $1,000,000.
                      F.     As of the date hereof, Company and its Subsidiaries have made full
payment when due of all material required contributions to any Foreign Plan.
                      
5.12     Certain Fees.
                     No broker’s or finder’s fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Company hereby indemnifies Lenders against, and agrees that it will hold Lenders harmless from, any claim, demand or liability for any such broker’s or finder’s fees alleged to have been
incurred in connection herewith or therewith and any expenses (including reasonable fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or liability.
                      
5.13     Environmental Protection.

	  
 	            (i)     to Company’s knowledge, neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to (a) any Environmental Law, (b) any Environmental Claim, or
(c) any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
 
	  
 	  
 
	  
 	            (ii)     to Company’s knowledge, neither Company nor any of its
Subsidiaries has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law;
 
	  
 	  
 
	  
 	           (iii)     to Company’s knowledge, there are and have been no conditions,
occurrences, or Hazardous Materials Activities that could be reasonably expected to form the basis of an Environmental Claim against Company or any of its Subsidiaries that,
 
	  
 	  
 
	  
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                      individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;

	  
 	             (iv)     to Company’s knowledge, neither Company nor any of its Subsidiaries nor
any predecessor of Company or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility, and none of Company’s or any of its Subsidiaries’
operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent; and
 
	  
 	  
 
	  
 	            (v)      to Company’s knowledge, compliance with all current or reasonably
foreseeable future requirements pursuant to or under Environmental Laws would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
 

                      5.14     
Employee Matters.
                      There is no strike or work
stoppage in existence or threatened involving Company or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.
                      5.15     
Solvency.
                      Each Loan Party is and, upon the
incurrence of any Obligations by such Loan Party on any date on which this representation is made, will be, Solvent.
                      5.16     
Matters Relating to Collateral.

	                     A.        Creation, Perfection and Priority of Liens. 
The execution and delivery of the Collateral Documents by Loan Parties, together with (i) the actions taken on or prior to the date hereof pursuant to subsections 4.1I and 6.8 and (ii) the delivery to Administrative Agent of any Pledged Collateral
not delivered to Administrative Agent at the time of execution and delivery of the applicable Collateral Document are effective to create in favor of Administrative Agent for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral), a valid First Priority Lien on all of the Collateral, and all filings and other actions necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and effect, other than the filing of any UCC financing statements delivered to Administrative Agent for filing (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of Administrative Agent.
 
	 
	                      B.        Governmental Authorizations.  No
authorization, approval or other action by, and no notice to or filing with, any Government Authority is required for either (i) the pledge or grant by any Loan Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by Administrative Agent of any rights or remedies in respect of any Collateral (whether specifically granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for 
 
	  
 
	  
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  filings or recordings contemplated by subsection 5.16A and except as may be required, in connection with the disposition of any Pledged Collateral, by laws generally affecting
the offering and sale of securities.
                      C.        Absence of Third-Party Filings.  Except such
as may have been filed in favor of Administrative Agent as contemplated by subsection 5.16A and to evidence permitted lease obligations and other Liens permitted pursuant to subsection 7.2, (i) no effective UCC financing statement, fixture filing or
other instrument similar in effect covering all or any part of the Collateral is on file in any filing or recording office and (ii) no effective filing covering all or any part of the IP Collateral is on file in the PTO.
                      D.        Margin Regulations.  The pledge of the
Pledged Collateral pursuant to the Collateral Documents does not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.
                      E.        Information Regarding Collateral.  All
information supplied to Administrative Agent by or on behalf of any Loan Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material
respects.
                     5.17     
Disclosure.
  No representation or warranty of Company or any of its Subsidiaries contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or any of its Subsidiaries for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made.  Any projections and pro forma
financial information contained in such materials are based upon good faith estimates and assumptions believed by Company to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.  There are no facts known (or which should upon the reasonable exercise of diligence be known) to
Company (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions contemplated hereby.
                      5.18     
Subordinated Indebtedness.
 The Obligations constitute senior indebtedness that is entitled to the benefits of the subordination provisions, if any, of all
Indebtedness of Company and its Subsidiaries, including, without limitation, any subordination provisions contained in the Subordination Agreement.

	  
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  Section 6.              
COMPANY’S AFFIRMATIVE COVENANTS
  Company covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until payment in full
of all of the Loans and other Obligations and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give prior written consent, Company shall perform, and shall cause each of its Subsidiaries to perform,
all covenants in this Section 6.
                      6.1     
Financial Statements and Other Reports.
                      Company will maintain, and cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP.  Company will deliver to Administrative Agent and Lenders:

	  
 	           (i)     Events of Default, etc.:  promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an Event of Default or Potential Event of Default, or becoming aware that any Lender has given any notice (other than to Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential Event of Default, (b) that any Person has given any notice to Company or any of its Subsidiaries or taken any other action with respect to a claimed default or event or condition of the type referred
to in subsection 8.2, or (c) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, an Officer’s Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or action taken by any such Person and the nature of such claimed Event of Default, Potential Event of Default, default, event or condition, and what action Company has taken, is taking
and proposes to take with respect thereto;
 
	  
 	  
 
	  
 	            (ii)    Monthly Financials:  as soon as available and in any event within
30 days after the end of each Fiscal Month, the consolidated and consolidating balance sheets of Company and its Subsidiaries as at the end of such Fiscal Month and the related consolidated and consolidating statements of income of Company and its
Subsidiaries for such Fiscal Month and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Month (provided that Company shall be permitted, unless otherwise requested by Administrative Agent, to provide
Regional Consolidating Financial Statements in lieu of consolidating statements) setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, to the extent prepared for such Fiscal Month, all in reasonable detail;
 
	  
 	  
 
	  
 	           (iii)     Quarterly Financials:  as soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, (a) the consolidated and consolidating balance sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated
and consolidating statements of
 
	  
 	  
 
	  
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 	  income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments, and (b) a narrative report describing the operations of Company and its Subsidiaries in the form prepared
for presentation to senior management for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter;
 
	  
 	  
 
	  
 	           (iv)     Year-End Financials:  as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated and consolidating balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and the related consolidated and consolidating statements of income,
stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial
Plan for the Fiscal Year covered by such financial statements, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, (b) a narrative report describing the operations of Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, and (c) in the case of such consolidated financial statements, a report thereon of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by
Company and satisfactory to Administrative Agent, which report shall be unqualified, shall express no doubts about the ability of Company and its Subsidiaries to continue as a going concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated financial position of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
 
	  
 	  
 
	  
 	           (v)      Compliance Certificates:  together with each delivery of
financial statements pursuant to subdivisions (iii) and (iv) above, (a) an Officer’s Certificate of Company stating that the signers have reviewed the terms of this Agreement and have made, or caused to be made under their supervision, a review
in reasonable detail of the transactions and condition of Company and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	  during or at the end of such accounting period, and that the signers do not have knowledge of the existence as at the date of such Officer’s Certificate, of any
condition or event that constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate demonstrating in reasonable detail compliance during and at the end of the applicable accounting periods with the restrictions contained in Section 7, in each case to the
extent compliance with such restrictions is required to be tested at the end of the applicable accounting period;
 
	  
 	  
 
	  
 	           (vi)     Reconciliation Statements:  if, as a result of any change in
accounting principles and policies from those used in the preparation of the audited financial statements referred to in subsection 5.3, the consolidated financial statements of Company and its Subsidiaries delivered pursuant to subdivision (ii),
(iii), (iv) or (xii) of this subsection 6.1 will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements pursuant to subdivision (ii), (iii), (iv) or (xii) of this subsection 6.1 following such change, consolidated financial statements of Company and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and (z) the two full Fiscal Years immediately preceding the Fiscal Year in which such change is made, in each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of financial statements pursuant to subdivision (ii), (iii), (iv) or (xii) of this subsection 6.1 following such change, if required pursuant to subsection 1.2, a written statement
of the chief accounting officer or chief financial officer of Company setting forth the differences (including any differences that would affect any calculations relating to the financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without giving effect to such change;
 
	  
 	  
 
	  
 	           (vii)     Accountants’ Reports:  promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all reports submitted to Company by independent certified public accountants in connection with each annual, interim or special audit of the financial statements of Company and its
Subsidiaries made by such accountants, including any comment letter submitted by such accountants to management in connection with their annual audit;
 
	  
 	  
 
	  
 	            (viii)    SEC Filings and Press Releases:  promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and proxy statements sent or made available generally by Company to its security holders or by any Subsidiary of Company to its security holders other than Company or another
Subsidiary of Company, (b) all regular and periodic reports and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Company or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private regulatory authority, and (c) all press releases and other
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	  statements made available generally by Company or any of its Subsidiaries to the public concerning material developments in the business of Company or any of its
Subsidiaries;
 
	  
 	  
 
	  
 	            (ix)    Litigation or Other Proceedings:  (a) promptly upon any Officer of
Company obtaining knowledge of (1) the institution of, or non-frivolous threat of, any Proceeding against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by
Company to Lenders or (2) any material development in any Proceeding that, in any case:
 
	  
 	  
 
	  
 	  
 	           (x)     if adversely determined, has a reasonable possibility of giving rise to a
Material Adverse Effect; or
 
	  
 	  
 	  
 
	  
 	  
 	            (y)     seeks to enjoin or otherwise prevent the consummation of, or to recover
any damages or obtain relief as a result of, the transactions contemplated hereby;
 
	  
 	  
 	  
 
	  
 	  written notice thereof together with such other information as may be reasonably available to Company to enable Lenders and their counsel to evaluate such matters; and
(b) within twenty days after the end of each Fiscal Quarter, a schedule of all Proceedings involving an alleged liability of, or claims against or affecting, Company or any of its Subsidiaries equal to or greater than $5,000,000, and promptly
after request by Administrative Agent such other information as may be reasonably requested by Administrative Agent to enable Administrative Agent and its counsel to evaluate any of such Proceedings;
 
	  
 	  
 
	  
 	           (x)     ERISA Events:  promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Company, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;
 
	  
 	  
 
	  
 	          (xi)     ERISA Notices:  with reasonable promptness, copies of (a) all notices
received by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (b) copies of such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
 
	  
 	  
 
	  
 	          (xii)     Financial Plans:  as soon as practicable and in any event no later than
30 days after the beginning of each Fiscal Year, a consolidated and consolidating plan and financial forecast for such Fiscal Year (the “Financial Plan” for such Fiscal Year), including (a) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of Company and its Subsidiaries for such Fiscal Year, together with a pro forma Compliance Certificate for such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, (b) forecasted
 
	  
 	  
 
	  
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 	  Credit Agreement
 
					







	  
 	  consolidated statements of income and cash flows of Company and its Subsidiaries for each Fiscal Quarter of such Fiscal Year, together with an explanation of the
assumptions on which such forecasts are based, and (c) such other information and projections as any Lender may reasonably request;
 
	  
 	  
 
	  
 	            (xiii)     Insurance:  as soon as practicable after any material
change in insurance coverage maintained by Company and its Subsidiaries notice thereof to Administrative Agent specifying the changes and reasons therefor;
 
	  
 	  
 
	  
 	           (xiv)     Governing Body:  with reasonable promptness, written notice
of any change in the Governing Body of Company;
 
	  
 	  
 
	  
 	            (xv)      New Subsidiaries:  promptly upon any Person becoming a
Subsidiary of Company or any Subsidiary becoming, or ceasing to be, a Significant Subsidiary, a written notice setting forth with respect to such Person or Subsidiary (a) the date on which such Person or Subsidiary (x) became a Subsidiary of Company
or (y) became, or ceased to be, a Significant Subsidiary, as the case may be, and (b) all of the data required to be set forth in Schedule 5.1 annexed hereto with respect to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed hereto for all purposes of this Agreement);
 
	  
 	  
 
	  
 	          (xvi)      Good Standing Certificates:  upon request by Administrative Agent,
good standing certificates as to each Loan Party from its jurisdiction of organization;
 
	  
 	  
 
	  
 	         (xvii)     Borrowing Base Certificates:  within ten Business Days after the last
day of each Fiscal Month ending after the Closing Date, a Borrowing Base Certificate dated as of the last Business Day of such Fiscal Month, together with any additional schedules and other information as Administrative Agent may reasonably
request.  In addition to such monthly Borrowing Base Certificates, Company may from time to time, deliver to Administrative Agent and Lenders on any Business Day after the last day of each Fiscal Month an updated Borrowing Base Certificate
dated as of such Business Day, together with any additional schedules and other information as Administrative Agent may reasonably request, and the most recent Borrowing Base Certificate described in this clause (xvii) that is delivered to
Administrative Agent shall be used in calculating the Borrowing Base as of any date of determination;
 
	  
 	  
 
	  
 	          (xviii)     Subordinated Indebtedness Notices:  with reasonable promptness, and in
any event within one Business Day of the receipt of any notice of acceleration of the Convertible Subordinated Notes, copies of all notices received by Company from holders of the Convertible Subordinated Notes or the Convertible Series A Preferred
Stock; and
 
	  
 	  
 
	  
 	         (xix)      Other Information:  with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by any Lender.
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				






                      6.2     
Existence, etc. 
                      Except as permitted under
subsection 7.7, Company will, and will cause each of its Significant Subsidiaries to, at all times preserve and keep in full force and effect its existence in the jurisdiction of organization set forth on Schedule 5.1 annexed hereto and all
rights and franchises material to its business; provided, however, that neither Company nor any of its Subsidiaries shall be required to preserve its existence or any such right or franchise if the Governing Body of Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of Company and its Subsidiaries taken as a whole and that the loss thereof is not disadvantageous in any material respect to Company and
its Subsidiaries taken as a whole or Lenders.
                     6.3     
Payment of Taxes and Claims; Tax.
                      A.     Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty accrues thereon, and all claims (including claims for labor,
services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto;
provided that no such tax, assessment, charge or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (i) such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made therefor (unless the amount is not material to Company’s financial condition) and (ii) in the case of a tax, assessment, charge or claim which has or may become a Lien
against any of the Collateral, such proceedings conclusively operate to stay the sale of any material portion of the Collateral to satisfy such charge or claim.
                      B.     Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any Person (other than Company or any of its Subsidiaries).
                     6.4     
Maintenance of Properties; Insurance; Application of Net Business Interruption Insurance Proceeds.
                      A.      Maintenance of Properties.  Company will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, except to the extent that any failure to maintain could not reasonably be expected to have a Material Adverse
Effect.
                      B.      Insurance.  Company
will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage 

	  
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 	  Credit Agreement
 






 insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Company and
its Subsidiaries as may customarily be carried or maintained under similar circumstances by corporations of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be customary for corporations similarly situated in the industry.  Each such policy of insurance shall (i) name Administrative Agent for the benefit of Lenders as an
additional insured thereunder as its interests may appear, and (ii) contain a loss payable clause or endorsement, satisfactory in form and substance to Administrative Agent, that names Administrative Agent for the benefit of Lenders as the loss
payee thereunder for any covered loss and provides for at least 30 days prior written notice to Administrative Agent of any modification or cancellation of such policy.  
                      C.     Application of Net Business Interruption Insurance Proceeds. 
Upon receipt by Company or any of its Subsidiaries of any Net Business Interruption Insurance Proceeds, (a) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing, Company or such Subsidiary may
retain and apply such Net Business Interruption Insurance Proceeds for working capital purposes, and (b) if an Event of Default or Potential Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net
Business Interruption Insurance Proceeds to prepay the Loans (and/or the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A;
                     6.5     
Inspection Rights; Lender Meeting.
                      A.      Inspection Rights.  Company shall, and shall cause each
of its Subsidiaries to, permit any authorized representatives designated by any Lender to visit and inspect any of the properties of Company or of any of its Subsidiaries, to inspect, copy and take extracts from its and their financial and
accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants (provided that Company may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested.
                      B.     Lender Meeting.  Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year to be held at Company’s principal offices (or at such other location as may be agreed to by Company and
Administrative Agent) at such time as may be agreed to by Company and Administrative Agent.
                      6.6     
Compliance with Laws, etc.
                     Company shall comply, and shall cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any Government Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to result in, individually or in the aggregate, a Material
Adverse Effect.

	  
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 	  Credit Agreement
 






                      6.7     
Environmental Matters.
                      A.      Environmental Disclosure.  Company will deliver to
Administrative Agent and Lenders:

	  
 	          (i)     Environmental Audits and Reports.  As soon as practicable following
receipt thereof, copies of all environmental audits, investigations, analyses and reports of any kind or character, whether prepared by personnel of Company or any of its Subsidiaries or by independent consultants, governmental authorities or any
other Persons, with respect to significant environmental matters at any Facility that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect or with respect to any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
 
	  
 	  
 
	  
 	         (ii)     Notice of Certain Releases, Remedial Actions, Etc.  Promptly upon the
occurrence thereof, written notice describing in reasonable detail (a) any Release required to be reported to any federal, state or local governmental or regulatory agency under any applicable Environmental Laws, (b) any remedial action taken
by Company or any other Person in response to (1) any Hazardous Materials Activities the existence of which could reasonably be expected to result in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse
Effect, or (2) any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, and (c) Company’s discovery of any occurrence or condition on any real property adjoining
or in the vicinity of any Facility that could cause such Facility or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws.
 
	  
 	  
 
	  
 	          (iii)     Written Communications Regarding Environmental Claims, Releases, Etc. 
As soon as practicable following the sending or receipt thereof by Company or any of its Subsidiaries, a copy of any and all written communications with respect to (a) any Environmental Claims that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect, (b) any Release required to be reported to any federal, state or local governmental or regulatory agency, and (c) any request for information from any governmental agency that suggests such
agency is investigating whether Company or any of its Subsidiaries may be potentially responsible for any Hazardous Materials Activity.
 
	  
 	  
 
	  
 	         (iv)     Notice of Certain Proposed Actions Having Environmental Impact.  Prompt
written notice describing in reasonable detail (a) any proposed acquisition of stock, assets, or property by Company or any of its Subsidiaries that could reasonably be expected to (1) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect or (2) affect the ability of Company or any of its Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for their respective operations and (b) any proposed action to be
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	  taken by Company or any of its Subsidiaries to commence manufacturing or other industrial operations or to modify current operations in a manner that could reasonably be expected
to subject Company or any of its Subsidiaries to any material additional obligations or requirements under any Environmental Laws that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.



                     B.     Company’s Actions Regarding
Hazardous Materials Activities, Environmental Claims and Violations of Environmental Laws.

	  
 	          (i)     Remedial Actions Relating to Hazardous Materials Activities.  Company shall, in
compliance with all applicable Environmental Laws, promptly undertake, and shall cause each of its Subsidiaries promptly to undertake, any and all investigations, studies, sampling, testing, abatement, cleanup, removal, remediation or other
response actions necessary to remove, remediate, clean up or abate any Hazardous Materials Activity on, under or about any Facility that is in violation of any Environmental Laws or that presents a material risk of giving rise to an Environmental
Claim, except where the failure could not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.
 
	  
 	  
 
	  
 	          (ii)    Actions with Respect to Environmental Claims and Violations of Environmental Laws.  Company
shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any material violation of applicable Environmental Laws by Company or its Subsidiaries that could reasonably be expected
to result in, individually or in the aggregate, a Material Adverse Effect and (ii) make an appropriate response to any Environmental Claim against Company or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder
where failure to do so could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.
 

                     6.8     
Execution of Subsidiary Guaranty and Personal Property Collateral Documents After the Closing Date.
                      A.      Execution of Subsidiary Guaranty and Personal Property Collateral
Documents.  In the event that any Person becomes a Domestic Significant Subsidiary of Company after the date hereof, Company will promptly notify Administrative Agent of that fact and cause such Domestic Significant Subsidiary to execute
and deliver to Administrative Agent a counterpart of the Subsidiary Guaranty and Security Agreement and to take all such further actions and execute all such further documents and instruments (including actions, documents and instruments comparable
to those described in subsection 4.1I) as may be necessary or, in the opinion of Administrative Agent, desirable to create in favor of Administrative Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on all of the personal
and mixed property assets of such Domestic Significant Subsidiary described in the applicable forms of Collateral Documents.  In addition, as provided in the Security Agreement, Company shall, or shall cause the Subsidiary that owns the Capital
Stock of such Person, to execute and deliver to Administrative Agent a supplement to the Security Agreement and to deliver to Administrative

	  
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 	  Credit Agreement
 






 Agent all certificates representing such Capital Stock of such Person (accompanied by irrevocable undated stock powers, duly endorsed in blank).
                      B.     Foreign Significant Subsidiaries.  If requested by
Administrative Agent, Company shall execute and deliver Foreign Pledge Agreements with respect to 66% of the Capital Stock owned by Company or a Domestic Subsidiary of some or all Foreign Significant Subsidiaries with respect to which Administrative
Agent deems a Foreign Pledge Agreement necessary or advisable to perfect or otherwise protect the First Priority Liens granted to Administrative Agent on behalf of Lenders in such Capital Stock, and take all such other actions under the laws of such
jurisdictions as Administrative Agent may deem necessary or advisable to perfect or otherwise protect such Liens.  In addition, in the event that any Person becomes a Foreign Significant Subsidiary of Company after the date hereof, Company will
promptly notify Administrative Agent of that fact and, if requested by Administrative Agent, if such Foreign Significant Subsidiary is directly owned by Company or a Domestic Subsidiary, cause such Foreign Significant Subsidiary to execute and
deliver to Administrative Agent such documents and instruments and take such further actions (including actions, documents and instruments comparable to those described above in this subsection 6.8B) as may be necessary, or in the reasonable opinion
of Administrative Agent, desirable to create in favor of Administrative Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on 66% of the capital stock of such Foreign Significant Subsidiary.
                     C.     Subsidiary Organizational Documents, Legal Opinions, Etc. 
Company shall deliver to Administrative Agent, together with such Loan Documents, (i) certified copies of such Significant Subsidiary’s Organizational Documents, together with, if such Significant Subsidiary is a Domestic Significant
Subsidiary, a good standing certificate from the Secretary of State of the jurisdiction of its organization and each other state in which such Person is qualified to do business and, to the extent generally available, a certificate or other evidence
of good standing as to payment of any applicable franchise or similar taxes from the appropriate taxing authority of each of such jurisdictions, each to be dated a recent date prior to their delivery to Administrative Agent, (ii) a certificate
executed by the secretary or similar officer of such Significant Subsidiary as to (a) the fact that the attached resolutions of the Governing Body of such Significant Subsidiary approving and authorizing the execution, delivery and performance
of such Loan Documents are in full force and effect and have not been modified or amended and (b) the incumbency and signatures of the officers of such Significant Subsidiary executing such Loan Documents, (iii) an executed supplement to
the Security Agreement evidencing the pledge of the Capital Stock of such Significant Subsidiary by Company or a Significant Subsidiary of Company that owns such Capital Stock, accompanied by certificate evidencing such Capital Stock, together with
an irrevocable undated stock powers duly endorsed in blank and satisfactory in form and substance to Administrative Agent, and (iv) a favorable opinion of counsel to such Significant Subsidiary, in form and substance satisfactory to
Administrative Agent and its counsel, as to (a) the due organization and good standing of such Significant Subsidiary, (b) the due authorization, execution and delivery by such Significant Subsidiary of such Loan Documents, (c) the
enforceability of such Loan Documents against such Significant Subsidiary and (d) such other matters (including matters relating to the creation and perfection of Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably 

	  
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 	  Credit Agreement
 






  request, all of the foregoing to be satisfactory in form and substance to Administrative Agent and its counsel.
  Section
7.             
COMPANY’S NEGATIVE COVENANTS
                      Company
covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 7.
                      7.1      
Indebtedness.
                      Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

	  
 	           (i)     Company may become and remain liable with respect to the
Obligations;
 
	  
 	  
 
	  
 	            (ii)    Company and its Subsidiaries may become and remain liable with respect to
Contingent Obligations permitted by subsection 7.4 and, upon any matured obligations actually arising pursuant thereto, the Indebtedness corresponding to the Contingent Obligations so extinguished;
 
	  
 	  
 
	  
 	            (iii)   Company and its Subsidiaries may become and remain liable with respect to
Indebtedness in respect of Capital Leases aggregating not in excess of $1,000,000 at any one time;
 
	  
 	  
 
	  
 	            (iv)   Company may become and remain liable with respect to Indebtedness to any Subsidiary
Guarantor, and any Subsidiary Guarantor may become and remain liable with respect to Indebtedness to Company or any other Subsidiary Guarantor; provided that (a) a Lien on all such intercompany Indebtedness to Company or any Subsidiary
Guarantor shall have been granted to Administrative Agent for the benefit of Lenders and (b) if such intercompany Indebtedness to Company or any Subsidiary Guarantor is evidenced by a promissory note or other instrument, such promissory note or
instrument shall have been pledged to Administrative Agent pursuant to the Security Agreement;
 
	  
 	  
 
	  
 	           (v)    Company may become and remain liable with respect to Indebtedness to any Foreign
Subsidiary, and any Foreign Subsidiary of Company may become and remain liable with respect to Indebtedness to Company or any Subsidiary Guarantor, in an aggregate principal amount not to exceed $5,000,000; provided that (a) a Lien on
all such intercompany Indebtedness to Company or any Subsidiary Guarantor shall have been granted to Administrative Agent for the benefit of Lenders and (b) if such intercompany Indebtedness to Company or any Subsidiary Guarantor is evidenced by a
promissory note or other instrument, such promissory note or instrument shall have been pledged to Administrative Agent pursuant to the Security Agreement;
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	            (vi)     Company and its Subsidiaries, as applicable, may remain liable with respect to
Indebtedness set forth on Schedule 7.1 annexed hereto, including any Indebtedness that refinances or replaces such Indebtedness;
 
	  
 	  
 
	  
 	           (vii)    Company may remain liable with respect to Indebtedness pursuant to the Convertible
Subordinated Notes and the Convertible Series A Preferred Stock;
 
	  
 	  
 
	  
 	            (viii)   Foreign Subsidiaries of Company may become and remain liable with respect to other Indebtedness
in an aggregate principal amount not to exceed $1,000,000 at any time outstanding;
 
	  
 	  
 
	  
 	            (ix)     Company and its Domestic Subsidiaries may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed $1,000,000 at any time outstanding;
 
	  
 	  
 
	  
 	            (x)      Foreign Subsidiaries may become and remain liable with respect to Indebtedness
to any other Foreign Subsidiaries, to the extent incurred in the ordinary course of business and consistent with past practices of such Subsidiaries;
 
	  
 	  
 
	  
 	           (xi)     Company may become and remain liable with respect to Indebtedness secured by the cash
surrender value of life insurance policies in an amount not to exceed, at any time, 95% of the aggregate cash surrender value of such policies; and
 
	  
 	  
 
	  
 	            (xii)    Company may become and remain liable with respect to Indebtedness subordinated to the
Obligations subject to terms, including, without limitation, subordination provisions, satisfactory in form and substance to Administrative Agent in an aggregate principal amount not to exceed $20,000,000 at any time outstanding.
 

                      7.2     
Liens and Related Matters.
                      A.      Prohibition on Liens.  Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of
Company or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect
to any such property, asset, income or profits under the UCC or under any similar recording or notice statute, except:

	  
 	 (i)     Permitted Encumbrances; and
 
	  
 	  
 
	  
 	  (ii)     Liens set forth on Schedule 7.2 annexed hereto.
 

                      B.     Equitable Lien in Favor of Lenders.  If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than Liens excepted by the provisions of subsection 7.2A, it shall make or cause 

	  
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 	  Credit Agreement
 






  to be made effective provision whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite Lenders to the creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
                     C.     No Further Negative
Pledges.  Neither Company nor any of its Subsidiaries shall enter into any agreement (other than an agreement prohibiting only the creation of Liens securing Subordinated Indebtedness) prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired, except with respect to specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to an Asset
Sale.
                      D.     No Restrictions on Subsidiary
Distributions to Company or Other Subsidiaries.  Company will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary’s Capital Stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or advances to Company or any other Subsidiary of Company, or (iv) transfer any of its property or assets to Company or any other Subsidiary of Company, except (a)
as provided in this Agreement and (b) as may be provided in an agreement with respect to an Asset Sale.
                      7.3     
Investments; Acquisitions.
                     Company
shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including any Joint Venture, or acquire, by purchase or otherwise, all or substantially all the business, property or fixed
assets of, or Capital Stock or other ownership interest of any Person, or any division or line of business of any Person except:

	  
 	            (i)     Company and its Subsidiaries may make and own Investments in Cash
Equivalents;
 
	  
 	  
 
	  
 	            (ii)    Company and its Subsidiaries may make intercompany loans to the extent
permitted under subsection 7.1;
 
	  
 	  
 
	  
 	            (iii)   Company and its Subsidiaries may make Consolidated Capital Expenditures permitted by
subsection 7.8;
 
	  
 	  
 
	  
 	           (iv)   Company and its Subsidiaries may continue to own the Investments owned by them and set
forth on Schedule 7.3 annexed hereto;
 
	  
 	  
 
	  
 	            (v)    Company and its Subsidiaries may make additional Investments in their respective
Foreign Subsidiaries; provided that the amount of all such Investments constituting equity Investments (other than the conversion to equity of the intercompany
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	 Indebtedness set forth on Schedule 7.1 annexed hereto) does not exceed $5,000,000 in the aggregate for all such Investments since the Closing Date; and
 
	  
 	  
 
	  
 	            (vi)    Company and its Subsidiaries may make and own other Investments in an aggregate amount not
to exceed at any time $2,500,000.
 

                      7.4     
Contingent Obligations
                      Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, create or become or remain liable with respect to any Contingent Obligation, except:

	  
 	            (i)     Subsidiaries of Company may become and remain liable with respect to Contingent
Obligations in respect of the Subsidiary Guaranty;
 
	  
 	  
 
	  
 	           (ii)   Company and its Subsidiaries, as applicable, may remain liable with respect to Contingent
Obligations set forth on Schedule 7.4 annexed hereto; and
 
	  
 	  
 
	  
 	            (iii)  Company and its Subsidiaries may become and remain liable with respect to other Contingent
Obligations; provided that the maximum aggregate liability, contingent or otherwise, of Company and its Subsidiaries in respect of all such Contingent Obligations shall at no time exceed $2,000,000.
 

                      7.5     
Restricted Junior Payments.
                      Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment; provided that Company may make mandatory payments in respect of the Convertible
Subordinated Notes and the Convertible Series A Preferred Stock in accordance with the terms of, and only to the extent required by, and subject to the subordination provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may be amended from time to time to the extent permitted under subsection 7.13, and the Subordination Agreement, as the case may be; provided, further, that Company
may make payments for acquisitions of shares of its common stock from its current or former employees provided that (i) the aggregate amount of any such payments does not exceed $1,500,000 in any Fiscal Year and (ii) no Event of Default shall have
occurred and be continuing or would result after giving effect to any such payment.
                     7.6     
Financial Covenants.
                      A.      Minimum Consolidated Fixed Charge Coverage Ratio. 
Company shall not permit the ratio of (i) the sum of (a) Consolidated EBITDA for any four Fiscal Quarter period ending on or after July 31, 2003, minus (b) Consolidated Capital Expenditures made during such period, minus (c) income taxes payable for
such period to (ii) Consolidated Fixed Charges for such period to be less than 1.40:1.00.  

	  
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                      B.      Maximum
Consolidated Leverage Ratio.  Company shall not permit the Consolidated Leverage Ratio, as of the last day of any Fiscal Quarter, to exceed 1.50:1.00.
                      C.     Minimum Consolidated EBITDA.  Company shall not permit
Consolidated EBITDA for (i) the three Fiscal Quarter period ended January 31, 2003 to be less than $12,000,000 and (ii) the four Fiscal Quarter period ended on any of the dates set forth below to be less than the correlative amount
indicated:

	 Period
 	   
 	  Minimum Consolidated EBITDA
 	   
 
	 
 	  
 	 
 	  
 
	  April 30, 2003
 	  
 	  $
 	  16,000,000
 	  
 
	  July 31, 2003
 	  
 	  $
 	  17,000,000
 	  
 
	  October 31, 2003
 	  
 	  $
 	  18,000,000
 	  
 
	 January 31, 2004
 	  
 	  $
 	  21,000,000
 	  
 
	  April 30, 2004
 	  
 	  $
 	  23,000,000
 	  
 
	  July 31, 2004 and thereafter
 	  
 	  $
 	  25,000,000
 	  
 

                      D.     Minimum Consolidated Quick Ratio.  Company shall not permit
the Consolidated Quick Ratio, as of the last day of any Fiscal Quarter, to be less than 1.25:1.00.  
                      7.7    
Restriction on Fundamental Changes; Asset Sales.
                     Company shall not, and shall not permit any of its Subsidiaries to, alter the corporate, capital or legal
structure of Company or any of its Subsidiaries, or enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, property or assets (including its notes or receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:

	  
 	            (i)     any Subsidiary of Company may be merged with or into Company or any
Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or
any Subsidiary Guarantor; provided that, in the case of such a merger, Company or such Subsidiary Guarantor shall be the continuing or surviving Person;
 
	  
 	  
 
	  
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 	  Credit Agreement
 
				







	  
 	           (ii)    Company and its Subsidiaries may sell or otherwise dispose of assets in transactions that do
not constitute Asset Sales; provided that the consideration received for such assets shall be in an amount at least equal to the fair market value thereof;
 
	  
 	  
 
	  
 	            (iii)   Company and its Subsidiaries may dispose of obsolete, worn out or surplus property in the
ordinary course of business;
 
	  
 	  
 
	  
 	            (iv)   Company and its Subsidiaries may make Asset Sales of assets having a fair market value not in
excess of $1,000,000; provided that (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof and (b) the sole consideration received shall be Cash or an Investment
permitted by subsection 7.3;
 
	  
 	  
 
	  
 	           (v)    in order to resolve disputes that occur in the ordinary course of business, Company and its
Subsidiaries may discount or otherwise compromise for less than the face value thereof, notes or accounts receivable; and
 
	  
 	  
 
	  
 	            (vi)   Company or a Subsidiary may sell or dispose of shares of Capital Stock of any of its Subsidiaries
in order to qualify members of the Governing Body of the Subsidiary if required by applicable law.
 

                      7.8     
Consolidated Capital Expenditures.
                      Company
shall not, and shall not permit its Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an aggregate amount in excess of the corresponding amount (the “Maximum Consolidated Capital
Expenditures Amount”) set forth below opposite such Fiscal Year:

	   
 	   
 	 Maximum Consolidated
 Capital Expenditures
 	   
 
	  Fiscal Year
 	  
 	  
 
	 
 	  
 	 
 	  
 
	  2003
 	  
 	  $
 	  2,000,000
 	  
 
	  2004 and thereafter
 	  
 	  $
 	  6,000,000
 	  
 

                     7.9     
Transactions with Shareholders and Affiliates.
                      Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of 5% or more of any class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as the case may be, than those that might be obtained at the time from Persons who are not such a holder or Affiliate; provided that the foregoing restriction shall
not apply to (i) any transaction between Company and any of its

	  
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  wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to members of the Governing Bodies of Company and its
Subsidiaries or (iii) subject to the terms of the Subordination Agreement, any transaction under or contemplated by the documents, instruments or agreements governing or evidencing the Subordinated Indebtedness.  
                     7.10     
Sales and Lease-Backs.
                      Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease, whether an Operating Lease or a Capital Lease, of any property (whether real,
personal or mixed), whether now owned or hereafter acquired, (i) that Company or any of its Subsidiaries has sold or transferred or is to sell or transfer to any other Person (other than Company or any of its Subsidiaries) or (ii) that
Company or any of its Subsidiaries intends to use for substantially the same purpose as any other property that has been or is to be sold or transferred by Company or any of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease.
                      7.11     
Sale or Discount of Receivables .
                      Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, sell
with recourse, or discount or otherwise sell for less than the face value thereof, any of its notes or Accounts, except in connection with bona fide efforts to collect Accounts which are past due 120 days or more.
                     7.12     
Conduct of Business.
                      From and after
the Closing Date, Company shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the businesses engaged in by Company and its Subsidiaries on the Closing Date and similar or related businesses. 

                      7.13     
Amendments of Documents Relating to Subordinated Indebtedness.
                      Company shall not, and shall not permit any of its Subsidiaries to, amend or otherwise change the
terms of any Subordinated Indebtedness, or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Subordinated Indebtedness, change (to earlier
dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period
related thereto), change the redemption, prepayment or defeasance provisions thereof, change the subordination provisions thereof (or of any guaranty thereof), or change any collateral therefor (other than to release such collateral). 

                     7.14     
Fiscal Year.
                      Company shall not change its
Fiscal Year-end from April 30.

	  
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  Section 8.             
EVENTS OF DEFAULT
                      If any of the
following conditions or events (“Events of Default”) shall occur:
                      8.1     
Failure to Make Payments When Due.
                      Failure
by Company to pay any installment of principal of any Loan when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; failure by Company to pay when due any amount payable to
Issuing Lender in reimbursement of any drawing under a Letter of Credit; or failure by Company to pay any interest on any Loan or any fee or any other amount due under this Agreement within five days after the date due; or
                     8.2     
Default in Other Agreements.

	  
 	            (i)     Failure of Company or any of its Subsidiaries to pay when due (a) any principal of or
interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in subsection 8.1) or Contingent Obligations in an individual principal amount of $1,000,000 or more or with an aggregate
principal amount of $1,000,000 or more, in each case beyond the end of any grace period provided therefor, or (b) any dividends on or any other amounts payable in respect of the Convertible Series A Preferred Stock; or
 
	  
 	  
 
	  
 	            (ii)    breach or default by Company or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations in the individual or aggregate principal amounts referred to in clause (i) above or (b) any loan agreement, mortgage, indenture or other agreement relating to such item(s)
of Indebtedness or Contingent Obligation(s), if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and payable prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
 

                     8.3     
Breach of Certain Covenants.
                      Failure of
Company to perform or comply with any term or condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
                      8.4     
Breach of Warranty.
                      Any
representation, warranty, certification or other statement made by Company or any of its Subsidiaries in any Loan Document or in any statement or certificate at any time given by Company or any of its Subsidiaries in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made; or

	  
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                      8.5     
Other Defaults Under Loan Documents.
                     Any Loan
Party shall default in the performance of or compliance with any term contained in this Agreement or any of the other Loan Documents, other than any such term referred to in any other subsection of this Section 8, and such default shall not
have been remedied or waived within 30 days after the earlier of (i) an Officer of Company or such Loan Party becoming aware of such default or (ii) receipt by Company and such Loan Party of notice from Administrative Agent or any Lender of such
default; or
                      8.6     
Involuntary Bankruptcy; Appointment of Receiver, etc..

	  
 	             (i)     A court having jurisdiction in the premises shall enter a decree or order for
relief in respect of Company or any of its Significant Subsidiaries in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or state law; or
 
	  
 	  
 
	  
 	             (ii)    an involuntary case shall be commenced against Company or any of its Significant
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over Company or any of its Subsidiaries, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of
an interim receiver, trustee or other custodian of Company or any of its Significant Subsidiaries for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial
part of the property of Company or any of its Significant Subsidiaries, and any such event described in this clause (ii) shall continue for 60 days unless dismissed, bonded or discharged; or
 

                     8.7     
Voluntary Bankruptcy; Appointment of Receiver, etc.

	  
 	             (i)     Company or any of its Significant Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its
property; or Company or any of its Significant Subsidiaries shall make any assignment for the benefit of creditors; or
 
	  
 	  
 
	  
 	             (ii)    Company or any of its Significant Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the Governing Body of Company or any of its Significant Subsidiaries (or any 
 
	  
 	  
 
	  
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 	  committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to in clause (i) above or this clause (ii); or



                      8.8     
Judgments and Attachments.
                      Any money
judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of $500,000 or (ii) in the aggregate at any time an amount in excess of $1,000,000 (in either case not adequately covered
by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Company or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five days prior to the date of any proposed sale thereunder); or
                     8.9     
Dissolution.
                      Any order, judgment or decree
shall be entered against Company or any of its Significant Subsidiaries decreeing the dissolution or split up of Company or that Significant Subsidiary and such order shall remain undischarged or unstayed for a period in excess of 30 days;
or
                      8.10    
Employee Benefit Plans.
                      There shall occur
one or more ERISA Events or similar events in respect of any Foreign Plans, that individually or in the aggregate results in or might reasonably be expected to result in liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $1,000,000 during the term of this Agreement; or there shall exist an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA) and unfunded liabilities in respect of Foreign Plans, individually or
in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities), which exceeds $1,000,000; or
                      8.11    
Material Adverse Effect.
                     Any event or change
shall occur that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect; or
                      8.12    
Change in Control.
                      A Change in Control shall
have occurred; or
                      8.13    
Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations.
                      At any time after the execution and delivery thereof, (i) any Loan Document or any material
provision thereof, for any reason other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void, (ii) Administrative Agent shall
not have or shall cease to have a 

	  
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 valid First Priority Lien in any material Collateral purported to be covered by the Collateral Documents, in each case for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, or (iii) any Loan Party shall contest the validity or enforceability of any Loan Document or any material provision thereof in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document or any provision thereof to which it is a party:
  THEN (i) upon the occurrence of any Event of Default
described in subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on the Loans, (b) an amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (whether
or not any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents or certificates required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right of any Lender to issue any Letter of Credit hereunder shall thereupon terminate, and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the written consent of Requisite Lenders, by written notice to Company, declare all or any portion of the amounts described in clauses (a) through (c) above to be, and the same
shall forthwith become, immediately due and payable, and the obligation of each Lender to make any Loan, the obligation of Administrative Agent to issue any Letter of Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the obligations of Revolving Lenders under subsection 3.3C(i).  
                     Any amounts described in clause (b) above, when received by Administrative Agent, shall be held by
Administrative Agent pursuant to the terms of the Security Agreement and shall be applied as therein provided.  
  Section
9.              
ADMINISTRATIVE AGENT
                      9.1     
Appointment.
                      A.     Appointment of Administrative Agent.Wells Fargo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents.  Each Lender hereby authorizes Administrative Agent to act as its agent in accordance with the terms of this Agreement and the other Loan Documents.  Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable.  The provisions of this Section 9 are solely for the benefit of Administrative Agent and Lenders and no Loan Party shall
have rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties under this Agreement, Administrative Agent (other than as provided in subsection 2.1D) shall act solely as an agent of Lenders
and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Company or any other Loan Party.

	  
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                      B.     Appointment of Supplemental Collateral Agents.  It is the
purpose of this Agreement and the other Loan Documents that there shall be no violation of any law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as agent or trustee in such
jurisdiction.  It is recognized that in case of litigation under this Agreement or any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan Documents, or in case Administrative Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or institution as a separate trustee, co-trustee, collateral agent or collateral co-agent (any such additional individual or institution being referred to herein
individually as a “Supplemental Collateral Agent” and collectively as “Supplemental Collateral Agents”).
                      In the event that Administrative Agent appoints a Supplemental Collateral Agent with respect to any
Collateral, (i) each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to Administrative Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the extent, and only to the extent, necessary to enable such Supplemental Collateral Agent to exercise such rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to Administrative Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to Administrative Agent and/or such Supplemental Collateral Agent, as the context may require.
                     Should any instrument in writing from Company or any other Loan Party be required by any Supplemental
Collateral Agent so appointed by Administrative Agent for more fully and certainly vesting in and confirming to him or it such rights, powers, privileges and duties, Company shall, or shall cause such Loan Party to, execute, acknowledge and deliver
any and all such instruments promptly upon request by Administrative Agent.  In case any Supplemental Collateral Agent, or a successor thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers, privileges and
duties of such Supplemental Collateral Agent, to the extent permitted by law, shall vest in and be exercised by Administrative Agent until the appointment of a new Supplemental Collateral Agent.
                      9.2     
Powers and Duties; General Immunity.
                      A.     Powers; Duties Specified.  Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Loan Documents as are specifically delegated or granted to Administrative Agent by the terms hereof
and thereof, together with such powers, rights and

	   
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  remedies as are reasonably incidental thereto.  Administrative Agent shall have only those duties and responsibilities that are expressly specified in this Agreement
and the other Loan Documents.  Administrative Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees.  Administrative Agent shall not have, by reason of this Agreement or any of
the other Loan Documents, a fiduciary relationship in respect of any Lender or Company; and nothing in this Agreement or any of the other Loan Documents, expressed or implied, is intended to or shall be so construed as to impose upon Administrative
Agent any obligations in respect of this Agreement or any of the other Loan Documents except as expressly set forth herein or therein.
                      B.     No Responsibility for Certain Matters.  Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by Administrative Agent to Lenders or by or on behalf of Company
to Administrative Agent or any Lender in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of Company or any other Person liable for the payment of any Obligations, nor
shall Administrative Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default.  Anything contained in this Agreement to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component amounts thereof.
                     C.     Exculpatory Provisions.  None of Administrative Agent or any
of its officers, directors, employees or agents shall be liable to Lenders for any action taken or omitted by Administrative Agent under or in connection with any of the Loan Documents except to the extent caused by Administrative Agent’s gross
negligence or willful misconduct.  Administrative Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection with this Agreement or any of the other Loan Documents or from
the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until Administrative Agent shall have received instructions in respect thereof from Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6) and, upon receipt of such instructions from Requisite Lenders (or such other Lenders, as the case may be), Administrative Agent shall be entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance with such instructions.  Without prejudice to the generality of the foregoing, (i) Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have 

	  
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  any right of action whatsoever against Administrative Agent as a result of Administrative Agent acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under subsection 10.6).
                      D.     Administrative Agent Entitled to Act as Lender.  The agency
hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, Administrative Agent in its individual capacity as a Lender hereunder.  With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder, and the term
“Lender” or “Lenders” or any similar term shall, unless the context clearly otherwise indicates, include Administrative Agent in its individual capacity.  Administrative Agent and its Affiliates may accept deposits from,
lend money to, acquire equity interests in and generally engage in any kind of commercial banking, investment banking, trust, financial advisory or other business with Company or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Company for services in connection with this Agreement and otherwise without having to account for the same to Lenders.
                     9.3     
Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.
                      Each Lender agrees that it has made its own independent investigation of the financial condition
and affairs of Company and its Subsidiaries in connection with the making of the Loans and the issuance of Letters of Credit hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Company and its
Subsidiaries.  Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and Administrative Agent shall have no responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
                      9.4     
Right to Indemnity.
                      Each Lender, in
proportion to its Pro Rata Share, severally agrees to indemnify Administrative Agent and its officers, directors, employees, agents, attorneys, professional advisors and Affiliates to the extent that any such Person shall not have been reimbursed by
Company, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements and fees and disbursements of any financial advisor engaged by
Administrative Agent) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Administrative Agent or and other such Persons in exercising the powers, rights and remedies of Administrative Agent or
performing duties of Administrative Agent hereunder or under the other Loan Documents or otherwise in its capacity as Administrative Agent in any way relating to or 

	  
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  arising out of this Agreement or the other Loan Documents; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of Administrative Agent resulting solely from Administrative Agent’s gross negligence or willful misconduct as determined by a final judgment of a court of competent
jurisdiction.  If any indemnity furnished to Administrative Agent or any other such Person for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired, Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished.
                      9.5     
Successor Administrative Agent.
                      Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to
Lenders and Company.  Upon any such notice of resignation, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Administrative Agent.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
                     9.6     
Collateral Documents and Subsidiary Guaranty.
                      Each Lender hereby further authorizes Administrative Agent, on behalf of and for the benefit of
Lenders, to enter into each Collateral Document as secured party and to be the agent for and representative of Lenders under the Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each Collateral Document and the Subsidiary
Guaranty; provided that Administrative Agent shall not (i) enter into or consent to any material amendment, modification, termination or waiver of any provision contained in any Collateral Document or the Subsidiary Guaranty or (ii) release
any Collateral (except as otherwise expressly permitted or required pursuant to the terms of this Agreement or the applicable Collateral Document), in each case without the prior consent of Requisite Lenders (or, if required pursuant to subsection
10.6, all Lenders); provided further, however, that, without further written consent or authorization from Lenders, Administrative Agent may execute any documents or instruments necessary to (a) release any Lien encumbering
any item of Collateral that is the subject of a sale or other disposition of assets permitted by this Agreement or to which Requisite Lenders have otherwise consented, (b) release any Subsidiary Guarantor from the Subsidiary Guaranty if all of
the Capital Stock of such Subsidiary Guarantor is sold to any Person (other than an Affiliate of Company) pursuant to a sale or other disposition permitted hereunder or to which Requisite Lenders have otherwise consented or (c) subordinate the
Liens of Administrative Agent, on behalf of Lenders, to any Liens permitted by subsection 7.2; provided that, in the case of a sale of such item of Collateral or stock referred to in subdivision (a) or (b), the requirements of 

	  
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  subsection 10.14 are satisfied.  Anything contained in any of the Loan Documents to the contrary notwithstanding, Company, Administrative Agent and each Lender hereby agree
that (1) no Lender shall have any right individually to realize upon any of the Collateral under any Collateral Document or to enforce the Subsidiary Guaranty, it being understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Administrative Agent for the benefit of Lenders in accordance with the terms thereof, and (2) in the event of a foreclosure by Administrative Agent on any of the Collateral pursuant to
a public or private sale, Administrative Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and Administrative Agent, as agent for and representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any
such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Administrative Agent at such sale.
                      9.7     
Administrative Agent May File Proofs of Claim.
                     In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to Company or any of the Subsidiaries of Company, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Company) shall be entitled and empowered, by intervention in such proceeding or otherwise

	  
 	             (i)     to file and prove a claim for the whole amount of principal and interest owing
and unpaid in respect of the Loans and any other Obligations that are owing and unpaid and to file such other papers or documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of Lenders and Administrative Agent and their agents and counsel and all other amounts due Lenders and Administrative Agent under subsections 2.3 and 10.2) allowed in such
judicial proceeding, and
  
 
	  
 	  
 
	  
 	             (ii)    to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;
 

 and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under subsections 2.3 and 10.2.

	  
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                      Nothing herein contained shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lenders or to authorize Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
  Section 10.              
MISCELLANEOUS
                      10.1     
Successors and Assigns; Assignments and Participations in Loans and Letters of Credit.
                     A.        General.  This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders (it being understood that Lenders’ rights of assignment are subject to
the further provisions of this subsection 10.1).  Neither Company’s rights or obligations hereunder nor any interest therein may be assigned or delegated by Company without the prior written consent of all Lenders (and any attempted
assignment or transfer by Company without such consent shall be null and void).  No sale, assignment or transfer or participation of any Letter of Credit or any participation therein may be made separately from a sale, assignment, transfer or
participation of a corresponding interest in the Revolving Loan Commitment and the Revolving Loans of the Revolving Lender effecting such sale, assignment, transfer or participation.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Affiliates of each of Administrative Agent and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
                      B.
        Assignments.

	  
 	               (i)     Amounts and Terms of Assignments.  Any
Lender may assign to one or more Eligible Assignees all or any portion of its rights and obligations under this Agreement; provided that (a), except (1) in the case of an assignment of the entire remaining amount of the assigning
Lender’s rights and obligations under this Agreement or (2) in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund of a Lender, the aggregate amount of the Revolving Loan Exposure of the assigning Lender
and the assignee subject to each such assignment shall not be less than $2,000,000 unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, Company otherwise consents, each such consent not to be
unreasonably withheld or delayed), (b) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment
assigned, (c) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment Agreement, together with a processing and recordation fee of $3,500 (unless the assignee is an Affiliate or an Approved Fund of the
assignor, in which case no fee shall be required), and the Eligible Assignee, if it shall not be a Lender, shall deliver to Administrative Agent information reasonably requested by Administrative Agent, including such forms,
 
	  
 	  
 
	  
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 	  certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to subsection 2.7B(iii) and (d), except in the case of an assignment to another Lender, an Affiliate of a Lender or an Approved Fund of a Lender,  Administrative Agent and, if no Event of
Default has occurred and is continuing, Company, shall have consented thereto (which consent shall not be unreasonably withheld).  Upon such execution, delivery and consent, from and after the effective date specified in such Assignment
Agreement, (y) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder
and (z) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive the termination of
this Agreement under subsection 10.9B) and be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto; provided that, anything contained in any of the Loan Documents to the contrary notwithstanding, if such Lender is Issuing Lender with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of Issuing Lender with respect to such Letters of Credit until the cancellation or expiration of such Letters of Credit and the reimbursement of any amounts drawn thereunder).  The
assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its Notes, if any, to Administrative Agent for cancellation, and thereupon new Notes shall, if so requested by the assignee and/or
the assigning Lender in accordance with subsection 2.1E, be issued to the assignee and/or to the assigning Lender, substantially in the form of Exhibit IV, with appropriate insertions, to reflect the new Commitments and/or outstanding
Revolving Loans of the assignee and/or the assigning Lender.  Other than as provided in subsection 10.5, any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 10.1B shall
be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection 10.1C.
 
	  
 	  
 
	  
 	              (ii)    Acceptance by Administrative Agent; Recordation in
Register.  Upon its receipt of an Assignment Agreement executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with the processing and recordation fee referred to in subsection 10.1B(i) and any
forms, certificates or other evidence with respect to United States federal income tax withholding matters that such assignee may be required to deliver to Administrative Agent pursuant to subsection 2.7B(iii), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced thereby (in each case to the extent such consent is required pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a counterpart thereof
as provided therein (which acceptance shall evidence any required consent of Administrative Agent to such assignment), (b) record the information contained therein in the Register, and (c) give prompt notice thereof to Company.


	  
 	  
 
	  
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 	 Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it as provided in this subsection 10.1B(ii).
 
	  
 	  
 
	  
 	       (iii)     Deemed Consent by Company.  If the consent of Company to an assignment or to an Eligible Assignee is
required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in subsection 10.1B(i)), Company shall be deemed to have given its consent five Business Days after the date notice thereof has
been delivered by the assigning Lender (through Administrative Agent) unless such consent is expressly refused by Company prior to such fifth Business Day.
 

                    C.     Participations.  Any Lender may, without the consent of, or notice to,
Company or Administrative Agent, sell participations to one or more Persons (other than a natural Person or Company or any of its Affiliates) in all or a portion of such Lender’s rights and/or obligations under this Agreement; provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Company, Administrative Agent and
Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to any amendment, modification or waiver directly affecting (i) the extension of the scheduled final maturity date of  any Loan allocated to such participation or (ii) a
reduction of the principal amount of or the rate of interest payable on any Loan allocated to such participation.  Subject to the further provisions of this subsection 10.1C, Company agrees that each Participant shall be entitled to the
benefits of subsections 2.6D and 2.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection 10.1B.  To the extent permitted by law, each Participant also shall be entitled to the benefits of
subsection 10.4 as though it were a Lender, provided such Participant agrees to be subject to subsection 10.5 as though it were a Lender.  A Participant shall not be entitled to receive any greater payment under subsections 2.6D and 2.7 than
the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with Company’s prior written consent.  A Participant that
would be a Non-US Lender if it were a Lender shall not be entitled to the benefits of subsection 2.7 unless Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Company, to comply with
subsection 2.7B(iii) as though it were a Lender.
                    D.     Pledges and Assignments.  Any Lender may at any time pledge or
assign a security interest in all or any portion of its Loans, and the other Obligations owed to such Lender, to secure obligations of such Lender, including, without limitation, any pledge or assignment to secure obligations to any Federal Reserve
Bank; provided that (i) no Lender shall be relieved of any of its obligations hereunder as a result of any such assignment or pledge and 

	  
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  (ii) in no event shall any assignee or pledgee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action
hereunder.
                      E.       Information.  Each Lender may furnish any
information concerning Company and its Subsidiaries in the possession of that Lender from time to time to assignees and participants (including prospective assignees and participants), subject to subsection 10.19.
                      F.       Agreements of Lenders.  Each Lender listed on the
signature pages hereof hereby agrees (i) that it is an Eligible Assignee described in clause (ii) of the definition thereof; (ii) that it has experience and expertise in the making of loans such as the Loans; and (iii) that it will make its Loans
for its own account in the ordinary course of its business and without a view to distribution of such Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the
provisions of this subsection 10.1, the disposition of such Loans or any interests therein shall at all times remain within its exclusive control).  Each Lender that becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree that the agreements of such Lender contained in Section 2(c) of such Assignment Agreement are incorporated herein by this reference.
                     
10.2     Expenses.
                      Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly
(i) all reasonable costs and expenses of negotiation, preparation and execution of the Loan Documents and any consents, amendments, waivers or other modifications thereto; (ii) all costs and expenses of furnishing all opinions by counsel
for Company (including any opinions requested by Administrative Agent or Lenders as to any legal matters arising hereunder) and of Company’s performance of and compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with respect to confirming compliance with environmental, insurance and solvency requirements; (iii) all reasonable fees, expenses and disbursements of counsel to
Administrative Agent (including allocated costs of internal counsel) in connection with the negotiation, preparation, execution and administration of the Loan Documents and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Company; (iv) all costs and expenses of creating and perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant to any Collateral Document, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, and reasonable fees, expenses and disbursements of counsel to Administrative Agent and of counsel providing any opinions that Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created pursuant thereto; (v) all costs and expenses incurred by Administrative Agent in connection with the custody or preservation of any of the Collateral; (vi) all
other costs and expenses incurred by Administrative Agent in connection with the syndication of the Commitments; (vii) all costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel) and fees, costs
and expenses of accountants, advisors and consultants, incurred by Administrative Agent and its counsel relating to efforts to (a) evaluate or assess any Loan Party, its business or financial condition and (b) protect, evaluate, assess or dispose of
any of the Collateral; and (viii) all costs

	  
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  and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel),  fees, costs and expenses of accountants, advisors and consultants
and costs of settlement, incurred by Administrative Agent and Lenders in enforcing any Obligations of or in collecting any payments due from any Loan Party hereunder or under the other Loan Documents (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the enforcement of the Loan Documents) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a
“work-out” or pursuant to any insolvency or bankruptcy proceedings.
                      

10.3     Indemnity.
                      In addition to the payment of expenses pursuant to subsection 10.2, whether or not the transactions
contemplated hereby shall be consummated, Company agrees to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless Administrative Agent and Lenders (including Issuing Lender), and the officers, directors,
employees, agents and Affiliates of Administrative Agent and Lenders (collectively called the “Indemnitees”), from and against any and all Indemnified Liabilities (as hereinafter defined); provided that Company shall not have
any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise solely from the gross negligence or willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.
                                As used herein, “Indemnified
Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, actions, judgments, suits, claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be
designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby (including Lenders’ agreement to make the Loans hereunder or the use or intended use of
the proceeds thereof or the issuance of Letters of Credit hereunder or the use or intended use of any thereof, the failure of Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Government Authority, or any enforcement of any of the Loan Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty)), (ii) the statements contained in the commitment letter delivered by any Lender to Company with respect thereto, or (iii) any Environmental Claim or

	  
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  any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
                      To the extent that the undertakings to defend, indemnify,
pay and hold harmless set forth in this subsection 10.3 may be unenforceable in whole or in part because they are violative of any law or public policy, Company shall contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.
                      
10.4     Set-Off.
                      In addition to any rights now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence of any Event of Default each Lender is hereby authorized by Company at any time or from time to time, without notice to Company or to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special, time or demand, provisional or final, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any
other Indebtedness at any time held or owing by that Lender or any Affiliate of that Lender to or for the credit or the account of Company and each other Loan Party against and on account of the Obligations of Company or any other Loan Party to that
Lender (or any Affiliate of that Lender) or to any other Lender (or any Affiliate of any other Lender) under this Agreement, the Letters of Credit and participations therein and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, the Letters of Credit and participations therein or any other Loan Document, irrespective of whether or not (i) that Lender shall have made any demand hereunder or (ii) the principal of or
the interest on the Loans or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have become due and payable pursuant to Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured.  
                    
10.5      Ratable Sharing.
                      Lenders hereby agree among themselves that if any of them shall, whether by voluntary payment (other than
a voluntary prepayment of Loans made and applied in accordance with the terms of this Agreement), by realization upon security, through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts
payable in respect of Letters of Credit, fees and other amounts then due and owing to that Lender hereunder or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to such Lender) that is greater than the
proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase assignments (which it shall be deemed to have purchased from each seller of an assignment simultaneously upon the receipt by such seller of its portion of such
payment)

	  
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 of the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due
to them; provided that if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such assignments shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest.  Company expressly consents to the foregoing arrangement and agrees that any
purchaser of an assignment so purchased may exercise any and all rights of a Lender as to such assignment as fully as if that Lender had complied with the provisions of subsection 10.1B with respect to such assignment.  In order to further
evidence such assignment (and without prejudice to the effectiveness of the assignment provisions set forth above), each purchasing Lender and each selling Lender agree to enter into an Assignment Agreement at the request of a selling Lender or a
purchasing Lender, as the case may be, in form and substance reasonably satisfactory to each such Lender.
                      
10.6      Amendments and Waivers.
                      No amendment, modification, termination or waiver of any provision of this Agreement or of the Notes, and
no consent to any departure by Company therefrom, shall in any event be effective without the written concurrence of Requisite Lenders; provided that no such amendment, modification, termination, waiver or consent shall, without the consent
of (a) each Lender, (1) reduce the principal amount of any Loan, (2) increase the maximum aggregate amount of Letters of Credit, (3) postpone the date or reduce the amount of any scheduled payment (but not prepayment) of principal of any Loan,
(4) postpone the date on which any interest or any fees are payable, (5) decrease the interest rate borne by any Loan (other than any waiver of any increase in the interest rate applicable to any of the Loans pursuant to subsection 2.2E) or the
amount of any fees payable hereunder, (6) reduce the amount or postpone the due date of any amount payable in respect of any Letter of Credit, (7) extend the expiration date of any Letter of Credit beyond the Revolving Loan Commitment Termination
Date or (8) change in any manner the obligations of Revolving Lenders relating to the purchase of participations in Letters of Credit; (b) each Lender, (1) change in any manner the definition of “Pro Rata Share” or the definition of
“Requisite Lenders” or the definition of “Requisite Lenders” (except for any changes resulting solely from an increase in Commitments approved by Requisite Lenders), (2) change in any manner any provision of this Agreement that,
by its terms, expressly requires the approval or concurrence of all Lenders, (3) increase the maximum duration of Interest Periods permitted hereunder, (4) release any Lien granted in favor of Administrative Agent with respect to all or
substantially all of the Collateral or more in aggregate fair market value of the Collateral or release all or substantially all of the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty, in each case other than in accordance
with the terms of the Loan Documents, or (5) change in any manner or waive the provisions contained in subsection 8.1 or this subsection 10.6.  In addition, (i) any amendment, modification, termination or waiver of any of the provisions
contained in Section 4 shall be effective only if evidenced by a writing signed by or on behalf of Administrative Agent and Requisite Lenders, (ii) no amendment, modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of that Note, (iii)  no amendment,

	  
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  modification, termination or waiver of any provision of Section 3 shall be effective without the written concurrence of  Administrative Agent and, with respect to the
purchase of participations in Letters of Credit, without the written concurrence of Issuing Lender that has issued an outstanding Letter of Credit or has not been reimbursed for a payment under a Letter of Credit, (iv) no amendment,
modification, termination or waiver of any provision of Section 9 or of any other provision of this Agreement which, by its terms, expressly requires the approval or concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent, and (v) no Commitment of a Lender shall be increased without the consent of such Lender.  Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on Company in any case shall
entitle Company to any other or further notice or demand in similar or other circumstances.  Any amendment, modification, termination, waiver or consent effected in accordance with this subsection 10.6 shall be binding upon each Lender at the
time outstanding, each future Lender and, if signed by Company, on Company.
                     

10.7     Independence of Covenants.
                      All covenants hereunder shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
                      
10.8      Notices; Effectiveness of Signatures.
                      Unless otherwise specifically provided herein, any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of
telefacsimile in complete and legible form, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided that notices to Administrative Agent and Issuing Lender shall not be
effective until received.  For the purposes hereof, the address of each party hereto shall be as set forth under such party’s name on the signature pages hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other parties hereto and (ii) as to each other party, such other address as shall be designated by such party in a written notice delivered to Administrative Agent. 

                     Loan Documents and notices under the Loan Documents may be transmitted and/or
signed by telefacsimile.  The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as an original copy with manual signatures and shall be binding on all Loan Parties,
Administrative Agent and Lenders.  Administrative Agent may also require that any such documents and signature be confirmed by a manually-signed copy

	  
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  thereof; provided, however, that the failure to request or deliver any such manually-signed copy shall not affect the effectiveness of any facsimile document or
signature.
                      
10.9     Survival of Representations, Warranties and Agreements.
                      A.      All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit hereunder.
                     B.       Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 10.2, 10.3, 10.4, 10.17 and 10.18 and the agreements of Lenders set forth in subsections 9.2C, 9.4, 10.5 and 10.18 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination of this Agreement.
                      
10.10    Failure or Indulgence Not Waiver; Remedies Cumulative.
                      No failure or delay on the part of Administrative Agent or any Lender in the exercise of any power, right
or privilege hereunder or under any other Loan Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or privilege.  All rights and remedies existing under this Agreement and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
                      
10.11    Marshalling; Payments Set Aside.
                     Neither Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor
of Company or any other party or against or in payment of any or all of the Obligations.  To the extent that Company makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent for the benefit of Lenders), or
Administrative Agent or any Lender enforces any security interests or exercises its rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
                      
10.12    Severability.
                      In case any provision in or obligation under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

	  
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10.13       Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.
                      The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or
Commitments of any other Lender hereunder.  Nothing contained herein or in any other Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or Lenders and Company, as a partnership, an
association, a Joint Venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.
  To the extent permitted by law, Company shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement
(including, without limitation, subsection 2.1C hereof), any other Loan Document, any transaction contemplated by the Loan Documents, any Loan or the use of proceeds thereof.
                     
10.14    Release of Security Interest or Guaranty.
                      Upon the proposed sale or other disposition of any Collateral that is permitted by this Agreement or to
which Requisite Lenders have otherwise consented, or the sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor to any Person (other than an Affiliate of Company) permitted by this Agreement or to which Requisite Lenders
have otherwise consented, for which a Loan Party desires to obtain a security interest release or a release of the Subsidiary Guaranty from Administrative Agent, such Loan Party shall deliver an Officer’s Certificate (i) stating that the
Collateral or the Capital Stock subject to such disposition is being sold or otherwise disposed of in compliance with the terms hereof and (ii) specifying the Collateral or Capital Stock being sold or otherwise disposed of in the proposed
transaction.  Upon the receipt of such Officer’s Certificate, Administrative Agent shall, at such Loan Party’s expense, so long as Administrative Agent has no reason to believe that the facts stated in such Officer’s Certificate
are not true and correct, execute and deliver such releases of its security interest in such Collateral or such Subsidiary Guaranty, as may be reasonably requested by such Loan Party.
                      10.15.   Applicable Law
                      THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING SECTION 1646.5 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF
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10.16    Construction of Agreement; Nature of Relationship.
                      Each of the parties hereto acknowledges that (i) it has been represented by counsel in the negotiation and
documentation of the terms of this Agreement, (ii) it has had full and fair opportunity to review and revise the terms of this Agreement, (iii) this Agreement has been drafted jointly by all of the parties hereto, and (iv) neither Administrative
Agent nor any Lender or other Agent has any fiduciary relationship with or duty to Company arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent and Lenders, on one
hand, and Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.  Accordingly, each of the parties hereto acknowledges and agrees that the terms of this Agreement shall not be construed against or
in favor of another party.
                      
10.17    Consent to Jurisdiction and Service of Process.
                     ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, COUNTY AND CITY OF LOS ANGELES.  BY EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

	  
 	       (I)     ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS;
 
	  
 	  
 	  
 
	  
 	       (II)     WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
 
	  
 	  
 	  
 
	  
 	       (III)     AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
 
	  
 
	  
 	  
 	  
 
	  
 	      (IV)     AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
 
	  
 	  
 	  
 
	  
 	       (V)     AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
 
	  
 	  
 	  
 
	  
 	       (VI)     AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND 
 

   

	  
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 	  ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 410.40 OR OTHERWISE.
 

                      
10.18.     Waiver of Jury Trial.
                      EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE HEREUNDER.  In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
                     
10.19.     Confidentiality.
                      Each Lender shall hold all non-public information obtained pursuant to the requirements of this Agreement
in accordance with such Lender’s customary procedures for handling confidential information of this nature, it being understood and agreed by Company that in any event a Lender may make disclosures (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed
to keep such information confidential), (b) to the extent requested by any Government Authority, (c) to the extent required by applicable laws or regulations or by any 

	  
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  subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this subsection 10.19, to (i) any Eligible Assignee of or participant in, or
any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of Company, (g) with the consent of Company, (h) to the extent such information (i) becomes publicly available other
than as a result of a breach of this subsection 10.19 or (ii) becomes available to Administrative Agent or any Lender on a nonconfidential basis from a source other than Company or (i) to the National Association of Insurance Commissioners
or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender’s or its Affiliates’ investment portfolio in connection with ratings issued with respect to such Lender or its
Affiliates and that no written or oral communications from counsel to Administrative Agent and no information that is or is designated as privileged or as attorney work product may be disclosed to any Person unless such Person is a Lender or a
participant hereunder; provided that, unless specifically prohibited by applicable law or court order, each Lender shall notify Company of any request by any Government Authority or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by such Government Authority) for disclosure of any such non-public information prior to disclosure of such information; and provided, further that in no event
shall any Lender be obligated or required to return any materials furnished by Company or any of its Subsidiaries.  In addition, Administrative Agent and Lenders may disclose the existence of this Agreement and information about this Agreement
to market data collectors, similar service providers to the lending industry, and service providers to Administrative Agent and Lenders.
                     
10.20.      Counterparts; Effectiveness.
                      This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may
be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto.
  [Remainder of page intentionally left blank]

	  
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                      IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

	 COMPANY:
 	  
 	  
 
	  
 	  KORN/FERRY INTERNATIONAL
 	  
 
	  
 	  
 	  
 
	  
 	  By:  
 	  /s/ GARY D. BURNISON

	  
 
	  
 	 
 	  
 
	  
 	  Title:  
 	 Chief Financial Officer and Executive Vice President
 	  
 
	  
 	  
 	 
 	  
 
	  
 	  
 	  
 	  
 
	  
 	 Notice Address:
 	  
 
	  
 	  	  
 
	  
 	 Korn/Ferry International
 1800 Century Park East, Suite 900
 Los Angeles, California 90067
 Attention: Gary D. Burnison
 	  
 
	  
 	  	  
 
	  
 	  	  
 
	  LENDERS:
 	  
 	  
 
	  
 	  WELLS FARGO
BANK, NATIONAL ASSOCIATION,
 	  
 
	  
 	 individually and as Administrative Agent
 	  
 
	  
 	  
 	  
 
	  
 	  
 	  
 
	  
 	  By:  
 	  /s/  HUGH DIDDY
 	  
 
	  
 	  
 	 
 	  
 
	  
 	  Title:
 	  Vice President
 	  
 
	  
 	  
 	 
 	  
 
	  
 	  
 	  
 	  
 
	  
 	 Notice Address:
 	  
 
	  
 	  
 	  
 
	  
 	  Wells Fargo Bank, National Association
 	  
 
	  
 	  555 Montgomery Street, 17th Floor
 	  
 
	  
 	  San Francisco, California 94111
 	  
 
	  
 	  Attention:  Hugh Diddy
 	  
 

   

	  
 	 S-1
 	  Credit Agreement