Document:

Exhibit 10.1

CREDIT
AGREEMENT

among

GTSI
CORP., as the Borrower,

The
Persons party hereto as the Guarantors,

The financial institutions party hereto as the Lenders,

SUNTRUST
BANK, as the Issuing Bank,

SUNTRUST BANK and BANK OF AMERICA, N.A., 

as Co-Collateral Agents,

BANK OF AMERICA, N.A., 

as Syndication Agent,

and

SUNTRUST
BANK, as the Administrative Agent

SUNTRUST CAPITAL
MARKETS, INC. and 

BANC OF AMERICA SECURITIES LLC, as

Co-Lead Arrangers and Co-Book Runners

June 2,
2006

INDEX

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1.

  	
   

  	
  DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER
  INTERPRETIVE MATTERS

  	
   

  	
  1

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Accounting Principles

  	
   

  	
  27

  
	
  Section 1.3

  	
   

  	
  Other Interpretive Matters

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2.

  	
   

  	
  THE LOANS AND THE LETTERS OF CREDIT

  	
   

  	
  28

  
	
  Section 2.1

  	
   

  	
  Extension of Credit

  	
   

  	
  28

  
	
  Section 2.2

  	
   

  	
  Manner of Borrowing and Disbursement of Loans

  	
   

  	
  31

  
	
  Section 2.3

  	
   

  	
  Interest

  	
   

  	
  35

  
	
  Section 2.4

  	
   

  	
  Fees

  	
   

  	
  37

  
	
  Section 2.5

  	
   

  	
  Prepayment/Reduction of Commitment

  	
   

  	
  39

  
	
  Section 2.6

  	
   

  	
  Repayment

  	
   

  	
  40

  
	
  Section 2.7

  	
   

  	
  Notes; Loan Accounts

  	
   

  	
  41

  
	
  Section 2.8

  	
   

  	
  Manner of Payment

  	
   

  	
  42

  
	
  Section 2.9

  	
   

  	
  Reimbursement

  	
   

  	
  45

  
	
  Section 2.10

  	
   

  	
  Pro Rata Treatment

  	
   

  	
  45

  
	
  Section 2.11

  	
   

  	
  Application of Payments

  	
   

  	
  46

  
	
  Section 2.12

  	
   

  	
  Use of Proceeds

  	
   

  	
  47

  
	
  Section 2.13

  	
   

  	
  All Obligations to Constitute One Obligation

  	
   

  	
  47

  
	
  Section 2.14

  	
   

  	
  Maximum Rate of Interest

  	
   

  	
  47

  
	
  Section 2.15

  	
   

  	
  Letters of Credit

  	
   

  	
  48

  
	
  Section 2.16

  	
   

  	
  Bank Products

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3.

  	
   

  	
  GUARANTY

  	
   

  	
  53

  
	
  Section 3.1

  	
   

  	
  Guaranty

  	
   

  	
  53

  
	
  Section 3.2

  	
   

  	
  Special Provisions Applicable to Subsidiary
  Guarantors

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4.

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  57

  
	
  Section 4.1

  	
   

  	
  Conditions Precedent to Initial Advance

  	
   

  	
  57

  
	
  Section 4.2

  	
   

  	
  Conditions Precedent to Each Advance

  	
   

  	
  61

  

 

 

	
  Section 4.3

  	
   

  	
  Conditions Precedent to Each Letter of Credit

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  63

  
	
  Section 5.1

  	
   

  	
  General Representations and Warranties

  	
   

  	
  63

  
	
  Section 5.2

  	
   

  	
  Representations and Warranties Relating to Accounts

  	
   

  	
  74

  
	
  Section 5.3

  	
   

  	
  Representations and Warranties Relating to Inventory

  	
   

  	
  74

  
	
  Section 5.4

  	
   

  	
  Survival of Representations and Warranties, etc

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6.

  	
   

  	
  GENERAL COVENANTS

  	
   

  	
  74

  
	
  Section 6.1

  	
   

  	
  Preservation of Existence and Similar Matters

  	
   

  	
  75

  
	
  Section 6.2

  	
   

  	
  Compliance with Applicable Law

  	
   

  	
  75

  
	
  Section 6.3

  	
   

  	
  Maintenance of Properties

  	
   

  	
  75

  
	
  Section 6.4

  	
   

  	
  Accounting Methods and Financial Records

  	
   

  	
  75

  
	
  Section 6.5

  	
   

  	
  Insurance

  	
   

  	
  75

  
	
  Section 6.6

  	
   

  	
  Payment of Taxes and Claims

  	
   

  	
  76

  
	
  Section 6.7

  	
   

  	
  Visits and Inspections

  	
   

  	
  76

  
	
  Section 6.8

  	
   

  	
  Conduct of Business

  	
   

  	
  77

  
	
  Section 6.9

  	
   

  	
  ERISA

  	
   

  	
  77

  
	
  Section 6.10

  	
   

  	
  Lien Perfection

  	
   

  	
  77

  
	
  Section 6.11

  	
   

  	
  Location of Collateral

  	
   

  	
  77

  
	
  Section 6.12

  	
   

  	
  Protection of Collateral

  	
   

  	
  78

  
	
  Section 6.13

  	
   

  	
  Assignments and Records of Accounts

  	
   

  	
  78

  
	
  Section 6.14

  	
   

  	
  Administration of Accounts

  	
   

  	
  78

  
	
  Section 6.15

  	
   

  	
  The Blocked Account

  	
   

  	
  79

  
	
  Section 6.16

  	
   

  	
  Further Assurances

  	
   

  	
  80

  
	
  Section 6.17

  	
   

  	
  Broker’s Claims

  	
   

  	
  81

  
	
  Section 6.18

  	
   

  	
  Indemnity

  	
   

  	
  81

  
	
  Section 6.19

  	
   

  	
  Environmental Matters

  	
   

  	
  82

  
	
  Section 6.20

  	
   

  	
  Assignment of Claims Act

  	
   

  	
  83

  
	
  Section 6.21

  	
   

  	
  Formation of Subsidiaries

  	
   

  	
  83

  
	
  Section 6.22

  	
   

  	
  Notifications Relating to Contracts with the Federal
  Government

  	
   

  	
  83

  

 2
 

 

 

	
  ARTICLE 7.

  	
   

  	
  INFORMATION COVENANTS

  	
   

  	
  84

  
	
  Section 7.1

  	
   

  	
  Monthly and Quarterly Financial Statements and
  Information

  	
   

  	
  84

  
	
  Section 7.2

  	
   

  	
  Annual Financial Statements and Information;
  Certificate of No Default

  	
   

  	
  85

  
	
  Section 7.3

  	
   

  	
  Compliance Certificates

  	
   

  	
  85

  
	
  Section 7.4

  	
   

  	
  Access to Accountants

  	
   

  	
  86

  
	
  Section 7.5

  	
   

  	
  Additional Reports

  	
   

  	
  86

  
	
  Section 7.6

  	
   

  	
  Notice of Litigation and Other Matters

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8.

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  	
  89

  
	
  Section 8.1

  	
   

  	
  Funded Debt

  	
   

  	
  89

  
	
  Section 8.2

  	
   

  	
  Guaranties

  	
   

  	
  90

  
	
  Section 8.3

  	
   

  	
  Liens

  	
   

  	
  90

  
	
  Section 8.4

  	
   

  	
  Restricted Payments and Purchases

  	
   

  	
  90

  
	
  Section 8.5

  	
   

  	
  Investments

  	
   

  	
  90

  
	
  Section 8.6

  	
   

  	
  Affiliate Transactions

  	
   

  	
  91

  
	
  Section 8.7

  	
   

  	
  Liquidation; Change in Ownership, Name, or Year;
  Disposition or Acquisition of Assets; Etc

  	
   

  	
  91

  
	
  Section 8.8

  	
   

  	
  Minimum Availability

  	
   

  	
  92

  
	
  Section 8.9

  	
   

  	
  Minimum EBITDA

  	
   

  	
  93

  
	
  Section 8.10

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  	
  93

  
	
  Section 8.11

  	
   

  	
  Capital Expenditures

  	
   

  	
  93

  
	
  Section 8.12

  	
   

  	
  Limitation on Leases

  	
   

  	
  94

  
	
  Section 8.13

  	
   

  	
  Sales and Leasebacks

  	
   

  	
  94

  
	
  Section 8.14

  	
   

  	
  Amendment and Waiver

  	
   

  	
  94

  
	
  Section 8.15

  	
   

  	
  ERISA Liability

  	
   

  	
  94

  
	
  Section 8.16

  	
   

  	
  Prepayments

  	
   

  	
  95

  
	
  Section 8.17

  	
   

  	
  Negative Pledge

  	
   

  	
  95

  
	
  Section 8.18

  	
   

  	
  Inconsistent Agreements

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9.

  	
   

  	
  DEFAULT

  	
   

  	
  95

  
	
  Section 9.1

  	
   

  	
  Events of Default

  	
   

  	
  95

  

 3
 

 

 

	
  Section 9.2

  	
   

  	
  Remedies

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10.

  	
   

  	
  THE ADMINISTRATIVE AGENT

  	
   

  	
  99

  
	
  Section 10.1

  	
   

  	
  Appointment and Authorization

  	
   

  	
  99

  
	
  Section 10.2

  	
   

  	
  Interest Holders

  	
   

  	
  100

  
	
  Section 10.3

  	
   

  	
  Consultation with Counsel

  	
   

  	
  100

  
	
  Section 10.4

  	
   

  	
  Documents

  	
   

  	
  100

  
	
  Section 10.5

  	
   

  	
  Administrative Agent and Affiliates

  	
   

  	
  100

  
	
  Section 10.6

  	
   

  	
  Responsibility of the Administrative Agent

  	
   

  	
  101

  
	
  Section 10.7

  	
   

  	
  Action by Administrative Agent

  	
   

  	
  101

  
	
  Section 10.8

  	
   

  	
  Notice of Default

  	
   

  	
  101

  
	
  Section 10.9

  	
   

  	
  Responsibility Disclaimed

  	
   

  	
  102

  
	
  Section 10.10

  	
   

  	
  Indemnification

  	
   

  	
  102

  
	
  Section 10.11

  	
   

  	
  Credit Decision

  	
   

  	
  103

  
	
  Section 10.12

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  103

  
	
  Section 10.13

  	
   

  	
  Administrative Agent May File Proofs of Claim

  	
   

  	
  104

  
	
  Section 10.14

  	
   

  	
  Collateral

  	
   

  	
  104

  
	
  Section 10.15

  	
   

  	
  Release of Collateral

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  105

  
	
  Section 11.1

  	
   

  	
  Notices

  	
   

  	
  105

  
	
  Section 11.2

  	
   

  	
  Expenses

  	
   

  	
  107

  
	
  Section 11.3

  	
   

  	
  Waivers

  	
   

  	
  107

  
	
  Section 11.4

  	
   

  	
  Set-Off

  	
   

  	
  108

  
	
  Section 11.5

  	
   

  	
  Assignment

  	
   

  	
  108

  
	
  Section 11.6

  	
   

  	
  Counterparts

  	
   

  	
  111

  
	
  Section 11.7

  	
   

  	
  Under Seal; Governing Law

  	
   

  	
  111

  
	
  Section 11.8

  	
   

  	
  Severability

  	
   

  	
  111

  
	
  Section 11.9

  	
   

  	
  Headings

  	
   

  	
  111

  
	
  Section 11.10

  	
   

  	
  Source of Funds

  	
   

  	
  111

  
	
  Section 11.11

  	
   

  	
  Entire Agreement

  	
   

  	
  111

  
	
  Section 11.12

  	
   

  	
  Amendments and Waivers

  	
   

  	
  112

  
	
  Section 11.13

  	
   

  	
  Other Relationships

  	
   

  	
  113

  

 4
 

 

 

	
  Section 11.14

  	
   

  	
  Pronouns

  	
   

  	
  113

  
	
  Section 11.15

  	
   

  	
  Disclosure

  	
   

  	
  113

  
	
  Section 11.16

  	
   

  	
  Replacement of Lender

  	
   

  	
  113

  
	
  Section 11.17

  	
   

  	
  Confidentiality

  	
   

  	
  114

  
	
  Section 11.18

  	
   

  	
  Revival and Reinstatement of Obligations

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12.

  	
   

  	
  YIELD PROTECTION

  	
   

  	
  115

  
	
  Section 12.1

  	
   

  	
  Eurodollar Rate Basis Determination

  	
   

  	
  115

  
	
  Section 12.2

  	
   

  	
  Illegality

  	
   

  	
  115

  
	
  Section 12.3

  	
   

  	
  Increased Costs

  	
   

  	
  116

  
	
  Section 12.4

  	
   

  	
  Effect On Other Advances

  	
   

  	
  117

  
	
  Section 12.5

  	
   

  	
  Capital Adequacy

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13.

  	
   

  	
  JURISDICTION, VENUE AND WAIVER OF JURY TRIAL

  	
   

  	
  118

  
	
  Section 13.1

  	
   

  	
  Jurisdiction and Service of Process

  	
   

  	
  118

  
	
  Section 13.2

  	
   

  	
  Consent to Venue

  	
   

  	
  119

  
	
  Section 13.3

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  119

  

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Form of Administrative Questionnaire

  
	
  Exhibit B

  	
  —

  	
  Form of Assignment and Acceptance

  
	
  Exhibit C

  	
  —

  	
  Form of Blocked Account Agreement

  
	
  Exhibit D

  	
  —

  	
  Form of Borrowing Base Certificate

  
	
  Exhibit E-1

  	
  —

  	
  Form of Collateral Access Agreement — Landlord

  
	
  Exhibit E-2

  	
  —

  	
  Form of Collateral Access Agreement — Bailee

  
	
  Exhibit F

  	
  —

  	
  Form of Compliance Certificate

  
	
  Exhibit G

  	
  —

  	
  Form of Notice of Conversion/Continuation

  
	
  Exhibit H

  	
  —

  	
  Form of Request for Advance

  
	
  Exhibit I

  	
  —

  	
  Form of Request for Issuance of Letter of Credit

  
	
  Exhibit J

  	
  —

  	
  Form of Revolving Loan Note

  
	
  Exhibit K

  	
  —

  	
  Form of Guaranty Supplement

  
	
   

  	
   

  	
   

  

 5
 

 

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1(a)

  	
  —

  	
  Commitment Ratios

  
	
  Schedule 1(b)

  	
  —

  	
  Liens

  
	
  Schedule 1.1(c)

  	
  —

  	
  Permitted Investments

  
	
  Schedule 1.1(d)

  	
  —

  	
  Corporate Qualifications

  
	
  Schedule 5.1(c)-1

  	
  —

  	
  Subsidiaries

  
	
  Schedule 5.1(c)-2

  	
  —

  	
  Partnerships/Joint Ventures

  
	
  Schedule 5.1(d)

  	
  —

  	
  Outstanding Capital Stock Ownership

  
	
  Schedule 5.1(h)

  	
  —

  	
  Material Contracts

  
	
  Schedule 5.1(i)

  	
  —

  	
  Labor Matters

  
	
  Schedule 5.1(j)

  	
  —

  	
  Taxes

  
	
  Schedule 5.1(m)

  	
  —

  	
  Investments/Guaranties as of the Agreement Date

  
	
  Schedule 5.1(n)

  	
  —

  	
  Litigation

  
	
  Schedule 5.1(o)

  	
  —

  	
  ERISA

  
	
  Schedule 5.1(p)

  	
  —

  	
  Intellectual Property; Licenses and Certifications

  
	
  Schedule 5.1(v)

  	
  —

  	
  Insurance

  
	
  Schedule 5.1(w)

  	
  —

  	
  Brokers’ Fees

  
	
  Schedule 5.1(x) – 1

  	
  —

  	
  Leased Real Property

  
	
  Schedule 5.1(x) – 2

  	
  —

  	
  Owned Real Property

  
	
  Schedule 5.1(y) – 1

  	
  —

  	
  Environmental Matters — Hazardous Materials

  
	
  Schedule 5.1(y) – 2

  	
  —

  	
  Environmental Matters — Compliance

  
	
  Schedule 5.1(y) – 3

  	
  —

  	
  Environmental Matters — Notices

  
	
  Schedule 5.1(y) – 4

  	
  —

  	
  Environmental Matters — Handling of Hazardous
  Materials

  
	
  Schedule 5.1(y) – 5

  	
  —

  	
  Environmental Matters — Actions and Orders

  
	
  Schedule 5.1(y) – 6

  	
  —

  	
  Environmental Matters — Releases

  
	
  Schedule 6.11

  	
  —

  	
  Location of Collateral

  
	
  Schedule 6.15

  	
  —

  	
  Bank and Investment Accounts

  
	
  Schedule 8.6

  	
  —

  	
  Affiliate Transactions

  

 

 6

CREDIT AGREEMENT

THIS CREDIT
AGREEMENT dated as of June 2, 2006, is by and among GTSI CORP., a Delaware
corporation (the “Borrower”), the Persons party hereto from time to time
as Guarantors, the financial institutions party hereto from time to time as Lenders,
SUNTRUST BANK, as the Issuing Bank, and SUNTRUST BANK, as the Administrative
Agent, and SUNTRUST BANK and BANK OF AMERICA, N.A., as Co-Collateral Agents.

W I T N E S S E T
H:

WHEREAS, the Borrower has
requested that the Administrative Agent, the Issuing Bank and the Lenders make
available to it the Commitments, on the terms and conditions set forth herein,
to, among other things, refinance existing Funded Debt and to fund transaction
costs and working capital needs of the Borrower; and

WHEREAS, the Administrative
Agent, the Issuing Bank and the Lenders are willing to make the Commitments
available to the Borrower upon the terms and conditions set forth herein;

NOW, THEREFORE, in
consideration of the premises and the covenants and agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS,
ACCOUNTING PRINCIPLES AND

OTHER INTERPRETIVE MATTERS

Section 1.1             Definitions. For the
purposes of this Agreement:

“Account Debtor”
shall mean any Person who is obligated to make payments in respect of an
Account.

“Accounts” shall
mean all “accounts,” as such term is defined in the UCC, of each Borrower Party
whether now existing or hereafter created or arising, including, without
limitation, (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by
chattel paper (as defined in the UCC) or instruments (as defined in the UCC))
(including any such obligations that may be characterized as an account or
contract right under the UCC), (b) all of each Borrower Party’s rights in,
to and under all purchase orders or receipts for goods or services, (c) all
of each Borrower Party’s rights to any goods represented by any of the
foregoing 

 

(including unpaid
sellers’ rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all
rights to payment due to a Borrower Party for property sold, leased, licensed,
assigned or otherwise disposed of, for a policy of insurance issued or to be
issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Borrower Party or in connection
with any other transaction (whether or not yet earned by performance on the
part of such Borrower Party), (e) all health care insurance receivables
and (f) all collateral security of any kind, given by any Account Debtor
or any other Person with respect to any of the foregoing.

“ACH Transactions”
shall mean any cash management or related services including the automated
clearinghouse transfer of funds by the Co-Collateral Agents (or any Affiliate
of a Co-Collateral Agent) for the account of the Borrower Parties pursuant to
agreement or overdrafts.

“additional
amounts” shall have the meaning specified in Section 2.8(b)(i).

“Additional Commitment
Amount” shall have the meaning specified in Section 2.5(c).

“Additional Lender”
shall have the meaning specified in Section 2.5(c).

“Administrative Agent”
shall mean SunTrust Bank, acting as administrative agent for the Lender Group,
and any successor Administrative Agent appointed pursuant to Section 10.12.

 “Administrative Agent’s Office” shall
mean the office of the Administrative Agent located at 303 Peachtree Street,
Second Floor, Atlanta, Georgia 30308, Attention: Lauren Carrigan, or such other
office as may be designated by the Administrative Agent pursuant to the
provisions of Section 11.1.

“Administrative
Questionnaire” shall mean a questionnaire substantially in the form of Exhibit A.

“Advance” or “Advances”
shall mean amounts of the Loans advanced by the Lenders to, or on behalf of,
the Borrower pursuant to Section 2.2 on the occasion of any borrowing and
shall include, without limitation, all Agent Advances and Swing Loans.

“Affiliate” shall
mean, with respect to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or that is a director, officer, manager or partner of such Person.
For purposes of this definition, “control”, when used with respect to any
Person, includes, without limitation, the direct or indirect beneficial
ownership of ten percent (10%) or more of the 

 2
 

 

outstanding Equity
Interests of such Person or the power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

“Agent Advances”
shall have the meaning specified in Section 2.1(f).

“Aggregate Commitment
Ratio” shall mean, with respect to any Lender, the ratio, expressed as a
percentage, of (a) the unutilized Commitments plus Loans (other than Swing
Loans and Agent Advances) outstanding plus participation interests in Letter of
Credit Obligations, Swing Loans and Agent Advances outstanding of such Lender,
divided by (b) the sum of the aggregate unutilized Commitments plus Loans
(other than Swing Loans and Agent Advances) outstanding plus participation
interests in Letter of Credit Obligations, Swing Loans and Agent Advances of
all Lenders, which, as of the Agreement Date, are set forth (together with
Dollar amounts thereof) on Schedule 1(a).

“Aggregate Revolving
Credit Obligations” shall mean, as of any particular time, the sum of (a) the
aggregate principal amount of all Revolving Loans then outstanding, plus (b) the
aggregate principal amount of all Swing Loans then outstanding, plus (c) the
aggregate principal amount of all Agent Advances then outstanding, plus (d) the
aggregate amount of all Letter of Credit Obligations then outstanding.

“Agreement” shall
mean this Credit Agreement, together with all Exhibits and Schedules hereto.

“Agreement Date”
shall mean the date as of which this Agreement is dated.

“Anti-Terrorism
Laws” shall mean any Applicable Laws relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.

“Applicable Law”
shall mean, in respect of any Person, all provisions of constitutions,
statutes, rules, regulations, and orders of governmental bodies or regulatory
agencies applicable, whether by law or by virtue of contract, to such Person,
and all orders and decrees of all courts and arbitrators in proceedings or
actions to which the Person in question is a party or by which it is bound.

“Applicable Margin”
shall have the meaning specified in Section 2.3(c).

“Approved Fund”
shall mean any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity that administers or manages a
Lender.

“Assignment and
Acceptance” shall mean that certain form of Assignment and Acceptance
attached hereto as Exhibit B, pursuant to which each Lender may, as
further provided in Section 11.5, sell a portion of its Loans or
Commitments.

“Authorized Signatory”
shall mean, with respect to any Borrower Party, such senior personnel of such
Borrower Party as may be duly authorized and designated in 

 3
 

 

writing to the
Administrative Agent by such Borrower Party to execute documents, agreements,
and instruments on behalf of such Borrower Party.

“Average Availability”
shall mean for any monthly period, an amount equal to the sum of the actual
amount of Availability on each day or week, as applicable, during such month,
as determined by the Administrative Agent, divided by the number of days or
weeks, as applicable, in such month.

“Availability”
shall mean, as of any particular time, (a) the lesser of (i) the
Revolving Loan Commitment, and (ii) the Borrowing Base, minus (b) the
Aggregate Revolving Credit Obligations.

“Availability Block”
shall mean $10,000,000.

“Available Letter of
Credit Amount” shall mean, as of any particular time, an amount equal to
the lesser of (a) the Letter of Credit Commitment at such time less the
aggregate amount of all Letter of Credit Obligations then outstanding and (b) Availability
at such time.

“Bank Product Reserves”
shall mean all reserves that the Administrative Agent, from time to time,
establishes in its reasonable discretion for any Bank Products then provided or
outstanding.

“Bank Products”
shall mean any one or more of the following types of services or facilities
extended to the Borrower Parties by the Co-Collateral Agents (or any Affiliate
of a Co-Collateral Agent):  (a) credit
cards; (b) ACH Transactions; (c) cash management, including
controlled disbursement services; and (d) Co-Collateral Agent Hedge
Agreements.

“Bank Products Documents”
shall mean all agreements entered into from time to time by the Borrower
Parties in connection with any of the Bank Products and shall include the
Co-Collateral Agent Hedge Agreements.

“Bankruptcy Code”
shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et
seq.), as now or hereafter amended, and any successor statute.

“Base Rate” shall
mean, at any time, a fluctuating and floating rate per annum equal to the rate
of interest announced publicly by the Administrative Agent from time to time,
as its “prime rate” for the determination of interest rate loans of varying
maturities in Dollars to US residents of varying degrees of credit worthiness. Such
“prime rate” is not necessarily the lowest rate of interest charged to
borrowers of the Administrative Agent, and the Administrative Agent may make
commercial loans or other loans at rates of interest at, above, or below such “prime
rate”. Each change in the prime rate announced by the Administrative Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change.

 4
 

 

“Base Rate Advance”
shall mean an Advance which the Borrower requests to be made as a Base Rate
Advance or which is converted to a Base Rate Advance, in accordance with the
provisions of Section 2.2.

“Blocked Account”
shall have the meaning specified in Section 6.15.

“Blocked Account
Agreement” shall mean any agreement executed by a depository bank and the
Administrative Agent, for the benefit of the Lender Group, and acknowledged and
agreed to by the applicable Borrower Party, in the form of Exhibit C
or such other form acceptable to the Administrative Agent in its sole
discretion.

“Blocked Person”
shall have the meaning specified in Section 5.1(cc)(ii).

“Borrower” shall
have the meaning specified in the preamble.

“Borrower Parties”
shall mean, collectively, the Borrower and the Guarantors; and “Borrower
Party” shall mean any one of the foregoing Borrower Parties.

“Borrower
Payments” shall have the meaning specified in Section 2.8(b)(i).

“Borrowing Base”
shall mean, at any particular time, the lesser of:

(a)           sum of:

(i)            up to 90% times the
result of (A) the amount Federal Government Eligible Accounts, minus (B) the
amount of the applicable Dilution Reserve; plus

(ii)           up to 85% times the
result of (A) the amount of Other Eligible Accounts, minus (B) the
amount of the applicable Dilution Reserve; plus

(iii)          during the Inventory Eligibility
Period, the lesser of (A) $10,000,000 and (B) the lesser of (1) up
to 35% of the cost of Eligible Inventory and (2) up to 80% of the NOLV of
Eligible Inventory; minus

(iv)          the Availability
Block; minus

(v)           the Reserves;
and

(b)           the Term Loan Borrowing Base minus
the aggregate outstanding principal amount of the Subordinated Debt.

 5
 

 

“Borrowing Base Certificate”
shall mean a certificate of an Authorized Signatory of the Borrower
substantially in the form of Exhibit D.

“Business Day”
shall mean any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of Georgia or is a day on which banking
institutions located in such state are closed; provided, however,
that when used with reference to a Eurodollar Advance (including the making,
continuing, prepaying or repaying of any Eurodollar Advance), the term “Business
Day” shall also exclude any day in which banks are not open for dealings in
deposits of Dollars on the London interbank market.

“Capital Expenditures”
shall mean, for any period, on a consolidated basis for the Borrower Parties,
the aggregate of all expenditures made by the Borrower Parties during such
period that, in conformity with GAAP, are required to be included in or
reflected on the consolidated balance sheet as a capital asset of the Borrower
Parties, including, without limitation, Capitalized Lease Obligations of the
Borrower Parties.

“Capitalized Lease
Obligation” shall mean that portion of any obligation of a Person as lessee
under a lease which at the time would be required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.

“Cash Equivalents”
shall mean, collectively, (a) marketable, direct obligations of the US and
its agencies maturing within three hundred sixty-five (365) days of the date of
purchase, (b) commercial paper issued by corporations, each of which shall
(i) have a consolidated net worth of at least $250,000,000, and (ii) conduct
substantially all of its business in the US, which commercial paper will mature
within one hundred eighty (180) days from the date of the original issue
thereof and is rated “P-1” or better by Moody’s or “A-1” or better
by S&P, (c) certificates of deposit, Eurodollar time deposits,
overnight bank deposits and bankers’ acceptances, in each case  maturing within three hundred sixty-five
(365) days of the date of purchase and issued by a US national or state bank
having deposits totaling more than $250,000,000, and whose short-term debt is
rated “P-1” or better by Moody’s or “A-1” or better by S&P, and
(d) shares of any money market or similar fund that has net assets whose
dollar equivalent exceeds $250,000,000 and any other investment that is, in
each case, either (i) described on Schedule 1.1(c) or (ii) approved
in writing by the Co-Collateral Agents (such approval not to be unreasonably
withheld).

“Change in Control”
shall mean the occurrence of one or more of the following events:  (a) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the SEA) of thirty-five percent (35%) or more of
the outstanding shares of the voting Equity Interest of the Borrower; (b) as
of any date a majority of the board of directors of the Borrower consists
(other than vacant seats) of individuals who were not either (i) directors
of the Borrower as of the Agreement Date, (ii) selected or nominated to
become directors by the board of directors of the Borrower of which a majority
consisted of individuals described in clause 

 6
 

 

(i), or (iii) selected
or nominated to become directors by the board of directors of the Borrower of
which a majority consisted of individuals described in clause (i) and
individuals described in clause (ii), or (c) except as specifically
permitted hereunder, the Borrower ceases to directly or indirectly own and
control one hundred percent (100%) of the outstanding Equity Interests of all
of its Subsidiaries.

“Co-Collateral
Agent Hedge Agreement” shall mean any and all Hedge Agreements now existing
or hereafter entered into between or among any Borrower Party, on the one hand,
and either of the Co-Collateral Agents (or an Affiliate of a Co-Collateral
Agent), on the other hand.

 “Co-Collateral Agents” shall mean
SunTrust Bank and Bank of America, N.A.

“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time.

 “Collateral” shall mean all property pledged
as collateral security for the Obligations pursuant to the Security Documents
or otherwise, and all other property of any Borrower Party that is now or
hereafter in the possession or control of any member of the Lender Group, or on
which any member of the Lender Group has been granted a Lien.

“Collateral Access
Agreement” shall mean any agreement of any lessor, warehouseman, processor,
consignee or other Person in possession of, having a Lien upon or having rights
or interests in, any of the Collateral in favor of the Administrative Agent,
for the benefit of the Lender Group, substantially in the form of Exhibit E-1
or Exhibit E-2 or otherwise in form and substance
satisfactory to the Administrative Agent, waiving Liens or certain other rights
or interests such Person may hold in regard to the property of any of the
Borrower Parties and providing the Administrative Agent access to its
Collateral.

“Commercial Letter of
Credit” shall mean a documentary Letter of Credit issued by the Issuing
Bank in respect of the purchase of goods or services by the Borrower in the
ordinary course of its business.

“Commitment” shall
mean collectively the Revolving Loan Commitments and the Letter of Credit
Commitments.

“Compliance
Certificate” shall mean a certificate executed by an Authorized Signatory
of the Borrower substantially in the form of Exhibit F.

“Confidential
Information” shall have the meaning specified in Section 11.17.

 “Consulting Agreement” shall mean,
individually and collectively, (i) that certain Engagement Contract, dated
March 13, 2006, by and between FTI Consulting, Inc. and 

 7
 

 

the Borrower (as
may be amended from time to time with the consent of the Co-Collateral Agents),
and (ii) any other agreement with respect to which the Borrower has
engaged a third-party advisor which is mutually and reasonably acceptable to
the Borrower and the Co-Collateral Agents with respect to identity and term and
scope of engagement.

“Controlled
Disbursement Account” shall have the meaning specified in Section 2.2(e).

“Copyright Security
Agreements” shall mean, collectively, the Copyright Security Agreements
made in favor of the Administrative Agent, on behalf of the Lender Group, from
time to time.

“Corporate
Qualification Reserve” shall mean a reserve in the amount of $5,000,000 (or
such lesser amount as shall be acceptable to Co-Collateral Agents) to be
imposed until such time as Borrower has delivered to Administrative Agent a
certificate of good standing from the Secretary of State of each of the
jurisdictions listed on Schedule 1.1(d), in each case evidencing that Borrower
is qualified and in good standing as a foreign corporation in such
jurisdictions under the name “GTSI Corp.” (other than the State of California
or such other state as the Co-Collateral Agents may approve) and, with respect
to the State of California or such other state, the Borrower shall take such
steps to qualify and be in good standing as a foreign corporation as may be
reasonably acceptable to the Co-Collateral Agents.

“Customer Dispute”
shall mean all instances in which (a) a customer of the Borrower has
rejected or returned the goods and such return or rejection has not been
accepted by the Borrower as a valid return or rejection, or (b) a customer
of the Borrower has otherwise affirmatively asserted grounds for nonpayment of
an Account, including, without limitation, any repossession of goods by the
Borrower, or any claim by an Account Debtor of total or partial failure of
delivery, set-off, counterclaim, or breach of warranty.

“Date of Issue”
shall mean the date on which the Issuing Bank issues a Letter of Credit
pursuant to Section 2.15.

“Default” shall
mean any Event of Default, and any of the events specified in Section 9.1
regardless of whether there shall have occurred any passage of time or giving
of notice (or both) that would be necessary in order to constitute such event
an Event of Default.

“Default Rate”
shall mean a simple per annum interest rate equal to, with respect to all
outstanding Obligations, the sum of (a) the applicable Interest Rate
Basis, plus (b) the highest Applicable Margin, plus (c) two percent
(2.00%); provided, however, that (y) as to any Eurodollar
Advance outstanding on the date that the Default Rate becomes applicable, the
Default Rate shall be based on the then applicable Eurodollar Basis until 

 8
 

 

the end of the
current Eurodollar Advance Period and thereafter the Default Rate shall be
based on the Base Rate as in effect from time to time and (z) as to any
Base Rate Advance outstanding on the date that the Default Rate becomes
applicable, the Default Rate shall be based on the Base Rate as in effect from
time to time.

“Dilution” means,
as of any date of determination, a percentage, based upon the experience of the
immediately prior twelve month period, that is the result of dividing the
Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to the Borrower’s
Accounts during such period, by (b) the Borrower’s billings with respect
to Accounts during such period.

“Dilution Reserve”
means, as of any date of determination, an amount sufficient to reduce (a) the
advance rate against Federal Government Eligible Accounts by 1 percentage point
for each percentage point by which Dilution is in excess of zero (0.0%) and (b) the
advance rate against Other Eligible Accounts by 1 percentage point for each
percentage point by which Dilution is in excess of five percent (5.0%).

“Disbursement Account”
shall mean account number 202969908 maintained at SunTrust Bank, or as
otherwise designated to the Administrative Agent by the Borrower.

“Dividends” shall
mean any direct or indirect distribution, dividend, or payment to any Person on
account of any Equity Interests of any Borrower Party.

“Dollars” or “$”
shall mean the lawful currency of the United States of America.

“Domestic Subsidiary”
shall mean any Subsidiary of the Borrower that is organized and existing under
the laws of the US or any state or commonwealth thereof or under the laws of
the District of Columbia.

“EBITDA” shall
mean, with respect to the Borrower on a consolidated basis with its
Subsidiaries for any period, the net income for such period determined in
accordance with GAAP, plus, without duplication and to the extent
reflected as charges in the statement of net income for such period, the sum of
(i) income taxes, (ii) Interest Expense, and (iii) depreciation
and amortization expense; provided, however, that if any such
calculation includes any period in which an acquisition or sale of a Person or
all or substantially all of the assets of a Person occurred, then such
calculation shall be made on a Pro Forma Basis; provided, further,
the net income (or loss) of the Borrower and its Subsidiaries for any such
period shall exclude therefrom (to the extent otherwise included therein) (a) any
extraordinary gains, (b) any non-cash extraordinary losses, (c) with
respect to any such amount that was deducted under clause (b) of this
definition as an expense in a prior period, any cash payments of accrued
expenses that were not included in the calculation of EBITDA when the
applicable accrual was made, (d) any gains attributable to write-ups of
assets or gains due to the forgiveness of debt or trade liabilities, (e) any
equity interest of the Borrower or any Subsidiary of the Borrower in the
unremitted earnings of any Person that is not a Subsidiary, (f) any income
(or loss) of 

 9
 

 

any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated
with the Borrower or any Subsidiary on the date that such Person’s assets are
acquired by the Borrower or any Subsidiary and (g) any non-cash gains,
income, loss, expense, or charge to earnings due to change in GAAP accounting
rules.

“E-Fax”
means any system used to receive or transmit faxes electronically.

“Electronic
Transmission” means each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made
or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.

 “Eligible Accounts” shall mean, at any
particular date, all Accounts of the Borrower that the Administrative Agent, in
the exercise of its Permitted Discretion and after consultation with the
Co-Collateral Agents, determines to be Eligible Accounts; provided, however,
the Administrative Agent shall be permitted to make determinations regarding
Eligible Accounts without consultation with one or more of the Co-Collateral
Agents if it has made reasonable efforts to allow such consultation prior to
making any such determination; provided, further, that, without
limiting the right of the Administrative Agent to establish other criteria of
ineligibility, Eligible Accounts shall not include any of the following
Accounts:

(a)           (i) Accounts with respect to which
more than one hundred twenty  (120) days
have elapsed since the original invoice therefor or 90 days since the due date
of the original invoice if the Federal Government is the Account Debtor for
such Account or (ii) Accounts with respect to which more than ninety (90)
days have elapsed since the original invoice therefor or 60 days since the due
date of the original invoice if any Person other than the Federal Government is
the Account Debtor for such Account;

(b)           Accounts with respect to which any of
the representations, warranties, covenants and agreements contained in Section 5.2
are not or have ceased to be complete and correct or have been breached;

(c)           Accounts (or any other Account due
from the same Account Debtor), with respect to which, in whole or in part, a
check, promissory note, draft, trade acceptance or other instrument for the
payment of money has been received, presented for payment and returned
uncollected for any reason;

(d)           Accounts as to which the Borrower has
not performed, as of the applicable date of calculation, all of its obligations
then required to have been performed, including, without limitation, the
delivery of merchandise or rendition of services applicable to such Accounts;

(e)           Accounts as to which any one or more
of the following events has occurred with respect to the Account Debtor on such
Accounts:  death or judicial 

 10
 

 

declaration of
incompetency of such Account Debtor who is an individual; the filing by or
against such Account Debtor of a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws
of the US, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by such Account
Debtor for the benefit of creditors; the appointment of a receiver or trustee
for such Account Debtor or for any of the assets of such Account Debtor,
including, without limitation, the appointment of or taking possession by a “custodian,”
as defined in Bankruptcy Code; the institution by or against such Account
Debtor of any other type of insolvency proceeding (under the bankruptcy laws of
the US or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, such Account Debtor; the sale, assignment, or transfer of all or
substantially all of the assets of such Account Debtor unless the obligations
of such Account Debtor in respect of the Accounts are assumed by and assigned
to such purchaser or transferee; the nonpayment generally by such Account
Debtor of its debts as they become due; or the cessation of the business of
such Account Debtor as a going concern;

(f)            those Accounts of an Account Debtor
for whom fifty percent (50%) or more of the aggregate Dollar amount of such
Account Debtor’s outstanding Accounts are classified as ineligible under the
criteria (other than this clause (f)) set forth herein;

(g)           Accounts which represent the
remaining obligations for partially paid Accounts (excluding Accounts with
respect to which the applicable purchase order has been modified or adjusted
and acknowledged by the applicable Account Debtor, it being expressly understood
that such modification or adjustment shall not modify the original invoice date
with respect to any such Account);

(h)           Accounts owed by an Account Debtor
which: (i) does not maintain its chief executive office in the US or
Canada; or (ii) is not organized under the laws of the US or any state or
territory thereof; or (iii) is the government of any foreign country or
sovereign state, or of any state, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Accounts are secured or
payable by a letter of credit or acceptance, or insured under foreign credit
insurance in each case, on terms and conditions satisfactory to the
Co-Collateral Agents in their Permitted Discretion;

(i)            Accounts owed by an Account Debtor
which is an Affiliate or employee of the Borrower, except for Accounts owed by
EYAK with respect to which not more than 30 days have elapsed since the
original invoice therefor; provided, however, the aggregate
amount of all accounts owed by EYAK included in Eligible Accounts shall not
exceed $500,000;

 11
 

 

(j)            Accounts which are owed by an
Account Debtor to which the Borrower is indebted in any way, or which are
subject to any right of setoff by the Account Debtor, unless (i) the
Account Debtor has entered into an agreement acceptable to the Co-Collateral
Agents to waive setoff rights or (ii) the Account Debtor is the Federal
Government or a Governmental Authority and such setoff rights exist as a result
of claims unrelated to any Account;

(k)           Accounts which are subject to any
Customer Dispute, but only to the extent of the amount in dispute;

(l)            Accounts which are owed by the
Federal Government, unless funds with respect to such Accounts have been
appropriated and allocated by the Federal Government;

(m)          Accounts which are owed by any state,
municipality, territory or other political subdivision of the US, or any
department, agency, public corporation, or other instrumentality thereof and as
to which the Co-Collateral Agents determine in their Permitted Discretion that
the Administrative Agent’s security interest therein is not or cannot be
perfected;

(n)           Accounts which represent third-party
leasing transactions;

(o)           Accounts which represent sales on a
guaranteed sale, sale and return, sale on approval, consignment or other
repurchase or return basis

(p)           Accounts which represent sales on a
bill-and-hold arrangement, unless the Account Debtor has an absolute obligation
to pay such Account pursuant to a written agreement in form and substance
satisfactory to the Co-Collateral Agents and the Inventory associated such
Account is physically segregated from all other Inventory and appropriately
reflected in the books and records of the Borrower; provided, however,
the aggregate amount of all accounts which represent sales on a bill-and-hold
arrangement included in Eligible Accounts shall not exceed $7,500,000 or such
greater amount as may be agreed to by Co-Collateral Agents in their Permitted
Discretion;

(q)           Accounts which represent any
contractual obligation, based on a percentage of sales or otherwise, that must
be collected from the Account Debtor and paid by the Borrower to a third party
as a “pass-through” item, but only to the extent of the amount of such
pass-through;

(r)            Accounts which are evidenced by a
promissory note or other instrument or by chattel paper;

(s)           Accounts as to which the applicable
Account Debtor has not been sent an invoice or for which are partially billed
(excluding Accounts with respect to which the applicable purchase order has
been modified or adjusted and acknowledged by 

 12
 

 

the applicable Account
Debtor, it being expressly understood that such modification or adjustment
shall not modify the original invoice date with respect to any such Account);

(t)            Accounts with respect to which the
Account Debtor thereunder is located in any state requiring the filing of a
Notice of Business Activities Report or similar report in order to permit the
Borrower to seek judicial enforcement in such state of payment of such Account,
unless if, at the time the Accounts were created and at all times thereafter, (i) the
Borrower has filed and has maintained effective a current Notice of Business
Activities Report with the appropriate office or agency of such state, or (ii) the
Borrower was and has continued to be exempt from the filing of such Report and
has provided the Co-Collateral Agents with satisfactory evidence thereof;

(u)           Accounts which are not a bona fide,
valid and, to the best of the Borrower’s knowledge, enforceable obligation of
the Account Debtor thereunder;

(v)           Accounts which represent “demo”
equipment which has been sent to an Account Debtor except for any Account
related to a true sale of such demo equipment to such Account Debtor;

(w)          Accounts which are owed by an Account
Debtor with whom the Borrower has any agreement or understanding for deductions
from the Accounts, except for discounts or allowances which are made in the
ordinary course of business for prompt payment or volume purchases and which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Accounts, or Accounts with respect to which a
debit or chargeback has been issued or generated;

(x)            Accounts which are not subject to a
valid and continuing first priority Lien in favor of the Administrative Agent,
for the benefit of the Lender Group, pursuant to the Security Documents as to
which all action necessary or desirable to perfect such security interest shall
have been taken, and to which the Borrower has good and marketable title, free
and clear of any Liens (other than Liens in favor of the Administrative Agent,
for the benefit of the Lender Group, and Subordinated Debt Agent);

(y)           Accounts which are owed by an Account
Debtor other than the Federal Government to the extent that such Account,
together with all other Accounts owing by the same Account Debtor and its
Affiliates, exceed 20% of all Eligible Accounts from Account Debtor other than
the Federal Government;

(z)            Accounts which represent rebates,
refunds or other similar transactions, but only to the extent of the amount of
such rebate, refund or similar transaction;

(aa)         Accounts as to which a security
agreement, financing statement, equivalent security or Lien instrument or continuation statement is on file or of
record in 

 13
 

 

any
public office, except as may have been filed in favor of the Administrative
Agent, for the benefit of the Lender Group, pursuant to the Security Documents;

(bb)         Accounts which include past due credits,
but only to the extent of such past due credits;

(cc)         Accounts which include credits for
freight and returned merchandise, but only to the extent of such credits; or

(dd)         Accounts for which payment terms have been extended beyond normal and
customary payment terms.

“Eligible Assignee”
shall mean (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; or (d) any other Person approved by (i) the
Administrative Agent, (ii) with respect to any proposed assignee of the
Revolving Loan Commitment, the Issuing Bank and, (iii) unless (A) such
Person is taking delivery of an assignment in connection with physical
settlement of a credit derivatives transaction or (B) a Default exists,
the Borrower, such approvals not to be unreasonably withheld or delayed; provided,
however, that if the consent of the Borrower 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 Section 11.5(b)),
the Borrower shall be deemed to have given its consent seven (7) Business
Days after the date notice thereof has been delivered by the assigning Lender
(through the Administrative Agent) unless such consent is expressly refused by
the Borrower prior to such seventh (7th) Business Day.

“Eligible Inventory”
shall mean, as of any particular date, the portion of the Inventory of the
Borrower and its Subsidiary Guarantors that the Administrative Agent, in the
exercise of its Permitted Discretion and after consultation with the
Co-Collateral Agents, determines to be Eligible Inventory; provided, however,
the Administrative Agent shall be permitted to make determinations regarding
Eligible Inventory without consultation with one or more of the Co-Collateral
Agents if it has made reasonable efforts to allow such consultation prior to
making any such determination; provided, further, that without
limiting the right of the Administrative Agent to establish other criteria of
ineligibility, Eligible Inventory shall not include any of the following
Inventory:

(a)           Inventory that is not owned solely by
the Borrower;

(b)           Inventory that does not conform to
all of the warranties and representations regarding the same which are set
forth in this Agreement or any of the other Loan Documents;

(c)           Inventory that is not located in the
continental US either (i) on real property owned by the Borrower, or (ii) on
leased premises in regard to which the 

 14
 

 

landlord thereof,
and any bailee, warehouseman or similar party that will be in possession of
such Inventory, shall have executed and delivered to the Administrative Agent a
Collateral Access Agreement;

(d)           Inventory that is subject to any
claim of reclamation, Lien (other than the Liens in favor of Administrative
Agent and the Subordinated Debt Agent), adverse claim, interest or right of any
other Person;

(e)           Inventory that is not in good
condition or does not meet all standards imposed by any Person having
regulatory authority over such goods or their use and/or sale, or Inventory
that is not currently saleable in the normal course of the Borrower’s business;

 (f)           Inventory
scheduled for return to vendors, Inventory which is obsolete or slow-moving
(for purposes of this subsection, what constitutes “obsolete or slow-moving”
Inventory shall be determined by the Co-Collateral Agent in their Permitted
Discretion including, without limitation, Inventory on-hand more than 90 days),
Inventory which is not finished goods or which constitutes work-in-process, raw
materials, subassemblies, packaging and shipping material, manufacturing
supplies, samples, prototypes, displays or display items, bill-and-hold goods,
goods that are returned or marked for return, repossessed goods, defective or
damaged goods or goods held on consignment;

(g)           Inventory that is not personal
property in which the Borrower has granted a valid and continuing first Lien in
favor of the Administrative Agent, for the benefit of the Lender Group,
pursuant to the Security Documents, or as to which all action necessary to
perfect such security interest has not been taken; or

(h)           Inventory consisting of software or
services related goods.

“Environmental Laws”
shall mean, collectively, any and all applicable federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority regulating, relating to
or imposing liability or standards of conduct concerning environmental
protection matters, including without limitation, Hazardous Materials or human
health, as now or may at any time during the term of this Agreement be in
effect.

“Equity
Interests” shall mean, as applied to any Person, any capital stock,
membership interests, partnership interests or other equity interests of such
Person, regardless of class or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto.

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as in effect on
the Agreement Date and as such Act may be amended thereafter from time to time.

 15

 

“ERISA Affiliate”
shall mean, with respect to any Borrower Party, any trade or business (whether
or not incorporated) that together with such Borrower Party, are treated as a
single employer under Section 414 of the Code.

“ERISA Event”
shall mean, with respect to any Borrower Party or any ERISA Affiliate, (a) any
“reportable event” within the meaning of Section 4043 of ERISA with
respect to a Title IV Plan for which the thirty (30) day notice period has not
been waived; (b) the withdrawal of any Borrower Party or ERISA Affiliate
from a Title IV Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Borrower Party or any
ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution or
threatened institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (f) the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; (g) the
failure by any Borrower Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within thirty (30) days; (h) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069
or 4212(c) of ERISA, or (i) the revocation or threatened revocation
of a Plan’s tax-qualified status under Code Section 401(a).

“E-System” means any electronic system,
including Intralinks® and any other internet or
extranet-based site, whether
such electronic system is owned, operated or hosted by the Administrative
Agent, any of its Affiliates or any other Person, providing for access to data protected
by passcodes or other security system.

“Eurodollar
Advance” shall mean an Advance which the Borrower requests to be made as a
Eurodollar Advance or which is continued as or converted to a Eurodollar
Advance, in accordance with the provisions of Section 2.2.

“Eurodollar
Advance Period” shall mean, for each Eurodollar Advance, each one (1), two
(2), three (3), or six (6) month period, as selected by the Borrower
pursuant to Section 2.2, during which the applicable Eurodollar Rate (but
not the Applicable Margin) shall remain unchanged. Notwithstanding the
foregoing, however: (a) any applicable Eurodollar Advance Period which
would otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day, unless such Business Day falls in another
calendar month, in which case such Eurodollar Advance Period shall end on the
next preceding Business Day; (b) any applicable Eurodollar Advance Period
which begins on a day for which there is no numerically corresponding day in the
calendar month during which such Eurodollar Advance Period is to end shall
(subject to clause (a) above) end on the last day of such calendar month;
and (c) no Eurodollar Advance Period 

 16
 

 

shall extend
beyond the Maturity Date or such earlier date as would interfere with the
repayment obligations of the Borrower under Section 2.6.

“Eurodollar
Basis” shall mean, with respect to each Eurodollar Advance Period, a simple
per annum interest rate equal to the quotient of (a) the Eurodollar Rate
divided by (b) one minus the Eurodollar Reserve Percentage, stated as a
decimal. The Eurodollar Basis shall remain unchanged during the applicable
Eurodollar Advance Period, except for changes to reflect adjustments in the
Eurodollar Reserve Percentage.

“Eurodollar
Rate” shall mean, for any applicable Eurodollar Advance Period, the rate
per annum quoted at or about 11:00 a.m. (London, England time) two (2) Business
Days prior to the first day of the Eurodollar Advance Period on that page of
the Reuters reporting service (as then being used by the Administrative Agent
to obtain such interest rate quotes) that displays British Banker’s Association
Interest Settlement Rates for deposits in Dollars for a period equal to such
Eurodollar Advance Period or if such page or such service shall cease to
be available, such other page or service (as the case may be) for the
purpose of displaying British Banker’s Association Interest Settlement Rates as
reasonably determined by the Administrative Agent upon advising the Borrower as
to the use of any such other service; provided, that if the
Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Eurodollar Advance Period, the Eurodollar Rate
shall mean the rate of interest determined by the Administrative Agent to be
the average (rounded upward, if necessary, to the nearest one one-hundredth of
one percent (1/100th of 1%)) of the rates per annum at which deposits in
Dollars are offered to the Administrative Agent two (2) Business Days
preceding the first day of such Eurodollar Advance Period by leading banks in
the London interbank market as of 10:00 a.m. for delivery on the first day
of such Eurodollar Advance Period, for the number of days comprised therein and
in an amount comparable to the amount of the applicable Eurodollar Advance; provided,
further, that if no such offered rates appear on such page and any
Co-Collateral Agent Hedge Agreement is in effect on such date, the Eurodollar
Rate for such Eurodollar Advance Period will be the applicable floating rate
payable by the Administrative Agent with respect to the applicable
Co-Collateral Agent Hedge Agreement (without regard to any applicable margins
added thereto under the terms of such Co-Collateral Agent Hedge Agreement).

“Eurodollar
Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next one one-hundredth of one percent (1/100th of 1%)) in effect on any day
to which the Administrative Agent is subject with respect to the Eurodollar
Basis pursuant to regulations issued by the Board of Governors of the Federal
Reserve System (or any Governmental Authority succeeding to any of its
principal functions) (“Regulation D”) with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D). Eurodollar Advances shall be deemed
to constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, 

 17
 

 

exemptions or
offsets that may be available from time to time to the Administrative Agent
under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage. The Eurodollar Basis for any Eurodollar Advance shall be adjusted
as of the effective date of any changes in the Eurodollar Reserve Percentage.

“Event
of Default” shall mean any of the events specified in Section 9.1, provided
that any requirement for notice or lapse of time, or both, has been satisfied.

“Executive
Order No. 13224” shall mean Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been,
or shall hereafter be, renewed, extended, amended or replaced.

“EYAK”
shall mean Eyak Technology, LLC, a Delaware limited liability company.

“Federal
Funds Rate” shall mean, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, “H.15(519)”) on the preceding Business Day opposite the caption “Federal
Funds (Effective)”; or, if for any relevant day such rate is not so published
on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 12:00 noon
(Atlanta, Georgia time) on that day by each of three (3) leading brokers
of Federal funds transactions in New York, New York selected by the
Administrative Agent.

“Federal
Government” shall mean the US or any agency, department or instrumentality
thereof.

“Federal
Government Eligible Accounts” shall mean Eligible Accounts for which the
Federal Government is the Account Debtor.

 “Fee Letter” shall mean that certain
fee letter, dated as of May 25, 2006, executed by the Borrower, SunTrust
Bank, SunTrust Capital Markets, Inc., Bank of America, N.A. and Banc of
America Securities LLC, the rights and obligations of which shall survive the
execution of this Agreement.

“Financial
Covenants” shall mean the financial covenants applicable to the Borrower
Parties from time to time pursuant to Sections 8.8, 8.9, 8.10 and 8.11.

“Fixed
Charge Coverage Ratio” shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, calculated on a Pro Forma
Basis during such period, the ratio of (a) the greater of (i) (x) EBITDA
for such period minus (y) the sum of (A) Capital Expenditures made
during such period and (B) cash tax payments made during such period, or (ii) zero,
to (b) the sum of (i) scheduled payments 

 18
 

 

of principal made
with respect to Funded Debt during such period, (ii) Interest Expense
during such period other than non-cash amortization of loan fees and (iii) Restricted
Purchases and Restricted Payments paid during such period.

“Foreign
Lender” shall have the meaning specified in Section 2.8(b).

“Fund”
shall mean any 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.

“Funded Debt”
shall mean, with respect to the Borrower and its Subsidiaries on a consolidated
basis and without duplication, as of any calculation date, (a) any
obligation of such Person for borrowed money, including, without limitation,
all of the Obligations; (b) any obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) any obligation
of such Person to pay the deferred purchase price of property or for services
(other than in the ordinary course of business); (d) any Capitalized Lease
Obligation; (e) any obligation or liability of others secured by a Lien on
property owned by such Person, whether or not such obligation or liability is
assumed; (f) any debt, liability or obligation of such Person arising from
or in connection with any Hedge Agreements and, without double counting, any
other debt, liability or obligation arising from or in connection with any Bank
Products; (g) any reimbursement obligations (contingent or otherwise) of
such Person with respect to letters of credit, bankers acceptances and similar
instruments issued for the account of such Person; (h) any Guaranty
(except items of shareholders’ equity or Equity Interests or surplus or general
contingency or deferred tax reserves); (i) any financial obligation of
such Person under purchase money mortgages; (j) any financial obligation
of such Person under asset securitization vehicles; (k) any obligations of
such Person under conditional sales contracts and similar title retention
instruments with respect to property acquired; (l) the outstanding balance
of the Subordinated Debt; and (m) any financial obligation of such Person
as issuer of Equity Interests redeemable in whole or in part at the option of a
Person other than such issuer, at a fixed and determinable date or upon the
occurrence of an event not solely within the control of such issuer; provided,
however, that notwithstanding anything in GAAP to the contrary, the
amount of all obligations shall be the full face amount of such obligations.

“Funding
Losses” shall mean expenses incurred by any Lender or any participant of
such Lender permitted hereunder in connection with the re-employment of funds
prepaid, repaid, not borrowed, or paid, as the case may be, and any lost profit
of such Lender or any participant of such Lender over the remainder of the
Eurodollar Advance Period for such prepaid Advance. For purposes of calculating
amounts payable to a Lender hereunder with respect to Funding Losses, each
Lender shall be deemed to have actually funded its relevant Eurodollar Advance
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of that Eurodollar Advance and having a maturity and
repricing characteristics comparable to the relevant 

 19
 

 

Eurodollar Advance
Period; provided, however, that each Lender may fund each of its
Eurodollar Advances in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable hereunder.

“GAAP”
shall mean generally accepted accounting principles and practices set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
US accounting profession).

“Governmental
Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any
government.

“Guarantors”
shall mean, collectively, the Subsidiary Guarantors and any other Person that
has executed a Guaranty Supplement or other document guaranteeing the
Obligations; and “Guarantor” shall mean any one of the foregoing Guarantors.

“Guaranty”
or “guaranteed,” as applied to an obligation (each a “primary obligation”),
shall mean and include (a) any guaranty, direct or indirect, in any
manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit, and any
obligation of any Person, whether or not contingent, (i) to purchase any
such primary obligation or any property or asset constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for
the purchase or payment of such primary obligation or (B) to maintain
working capital, equity capital or the net worth, cash flow, solvency or other
balance sheet or income statement condition of any other Person, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner or holder of any primary obligation of the ability of the
primary obligor with respect to such primary obligation to make payment thereof
or (iv) otherwise to assure or hold harmless the owner or holder of such
primary obligation against loss in respect thereof. All references in this
Agreement to “this Guaranty” shall be to the Guaranty provided for pursuant to
the terms of Article 3.

“Guaranty
Supplement” shall have the meaning specified in Section 6.21.

“Hazardous
Materials” shall mean any hazardous materials, hazardous wastes, hazardous
constituents, hazardous or toxic substances, petroleum products (including
crude oil or any fraction thereof), friable asbestos containing materials
defined or regulated as such in or under any Environmental Law.

 20
 

 

“Hedge
Agreement” shall mean any and all transactions, agreements or documents now
existing or hereafter entered into between or among any Borrower Party, on the
one hand, and a third party, on the other hand, which provides for an interest
rate, credit or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging such Borrower Party’s exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations.

“Indemnified
Person” shall have the meaning specified in Section 10.10.

“Intercreditor
Agreements” shall mean, individually or collectively, the Subordinated Debt
Intercreditor Agreement and the Vendor Intercreditor Agreements.

“Interest
Expense” shall mean, for any period, interest expense and loan fees of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, and including capitalized and non-capitalized interest and the
interest component of Capitalized Lease Obligations.

“Interest
Rate Basis” shall mean the Base Rate or the Eurodollar Basis, as
applicable.

“Inventory”
shall mean all “inventory,” as such term is defined in the UCC, of each
Borrower Party, whether now existing or hereafter acquired, wherever located,
and in any event including inventory, merchandise, goods and other personal
property that are held by or on behalf of a Borrower Party for sale or lease or
are furnished or are to be furnished under a contract of service, goods that
are leased by a Borrower Party as lessor, or that constitute raw materials,
samples, work-in-process, finished goods, returned goods, promotional materials
or materials or supplies of any kind, nature or description used or consumed or
to be used or consumed in such Borrower Party’s business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.

 “Inventory Eligibility Period” shall
mean the period commencing on August 1 and ending on November 30 of
each year during the term of this Agreement.

“Investment”
shall mean, with respect to any Person, any loan, advance or extension of
credit by such Person to, or any Guaranty with respect to the Equity Interests,
Funded Debt or other obligations of, or any contributions to the capital of,
any other Person, or any ownership, purchase or other acquisition by such
Person of any Equity Interests of any other Person, other than any acquisition
of all or substantially all of the Equity Interests of a Person or all or
substantially all of the assets, property or business of a Person.

 21
 

 

“Issuing
Bank” shall mean SunTrust Bank, or any other Person who hereafter may be
designated as the Issuing Bank pursuant to an Assignment and Acceptance or
otherwise.

“Lender
Group” shall mean, collectively, the Administrative Agent, the Issuing Bank
and the Lenders. In addition, if SunTrust Bank ceases to be the Administrative
Agent, then for any Co-Collateral Agent Hedge Agreement entered into by any
Borrower Party with SunTrust Bank while it was the Administrative Agent,
SunTrust Bank shall be a deemed to be a member of the Lender Group for purposes
of determining the secured parties under any Security Documents.

“Lenders”
shall mean those lenders whose names are set forth on the signature pages to
this Agreement under the heading “Lenders” and any assignees of the Lenders who
hereafter become parties hereto pursuant to and in accordance with Section 11.5;
and “Lender” shall mean any one of the foregoing Lenders.

“Letter
of Credit Commitment” shall mean the obligation of the Issuing Bank to
issue Letters of Credit in an aggregate face amount from time to time not to
exceed $25,000,000 pursuant to the terms of this Agreement.

“Letter
of Credit Obligations” shall mean, at any time, the sum of (a) an
amount equal to one hundred percent (100%) of the aggregate undrawn and
unexpired stated amount (including the amount to which any such Letter of
Credit can be reinstated pursuant to its terms) of the then outstanding Letters
of Credit, plus (b) an amount equal to one hundred percent (100%) of the
aggregate drawn, but unreimbursed drawings of any Letters of Credit.

“Letter
of Credit Reserve Account” shall mean any account maintained by the
Administrative Agent the proceeds of which shall be applied as provided in Section 9.2(d).

“Letters
of Credit” shall mean either Standby Letters of Credit or Commercial
Letters of Credit issued by the Issuing Bank on behalf of the Borrower from
time to time in accordance with Section 2.15.

“Lien”
shall mean, with respect to any property, any mortgage, lien, pledge, negative
pledge agreement, assignment, charge, option, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment, any
documents, notice, instruments or other filings under the Federal Assignment of
Claims Act of 1940 or other encumbrance of any kind in respect of such
property, whether or not choate, vested, or perfected.

“Loan
Account” shall have the meaning specified in Section 2.7.

 22
 

 

“Loan
Documents” shall mean this Agreement, any Revolving Loan Notes, the
Security Documents, the Blocked Account Agreements, the Fee Letter, the
Guaranty Supplements, the Intercreditor Agreements, all
reimbursement agreements relating to Letters of Credit issued hereunder, all
Collateral Access Agreements, all Compliance Certificates, all Requests for
Advance, all Requests for Issuance of Letters of Credit, all Notices of
Conversion/Continuation, all Borrowing Base Certificates, all documents
executed in connection with the Federal Assignment of Claims Act of 1940 (if
any), and all other documents, lockbox agreements, instruments, certificates,
and agreements executed or delivered in connection with or contemplated by this
Agreement, including, without limitation, any security agreements or guaranty
agreements from the Borrower’s Subsidiaries to the Lender Group, or any of
them; provided, however, that, notwithstanding the foregoing,
none of the Bank Product Documents shall constitute Loan Documents.

“Loans”
shall mean, collectively, the Revolving Loans, the Swing Loans and the Agent
Advances.

“Majority
Lenders” shall mean, as of any date of calculation, Lenders the sum of
whose unutilized Commitments plus Loans (other than Swing Loans and Agent
Advances) outstanding plus participation interests in Letter of Credit
Obligations, Swing Loans and Agent Advances outstanding on such date of
calculation equals or exceeds sixty-six and two-thirds of one percent (66 2/3%)
of the sum of the aggregate unutilized Commitments plus Loans (other than Swing
Loans and Agent Advances) outstanding plus participation interests in Letter of
Credit Obligations, Swing Loans and Agent Advances outstanding of all of the
Lenders as of such date of calculation.

“Margin
Stock” shall have the meaning specified in Section 5.1(t).

“Material
Contracts” shall mean, collectively, (a) those contracts with the
Federal Government listed on Schedule 5.1(h) and (b) all other
contracts, leases, instruments, guaranties, licenses or other arrangements
(other than the Loan Documents) to which any Borrower Party or any Subsidiary a
of Borrower Party is or becomes a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could have a Materially
Adverse Effect.

“Materially
Adverse Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding), a
material adverse change in, or a material adverse effect on: (a) the
business, operations, prospects, properties, condition (financial or
otherwise), assets or income of the Borrower and its Subsidiaries, taken as a
whole; (b) the ability of the Borrower and its Subsidiaries, taken as a
whole, to perform any material obligations under any Loan Document; or (c) (i) the
validity, binding effect or enforceability of any Loan Document, (ii) the
rights, remedies or benefits available to the Administrative Agent, the Issuing
Bank or any Lender under any Loan Document or (iii) the attachment,
perfection or priority of any Lien of the Administrative Agent under 

 23
 

 

the Security
Documents on a material portion of the Collateral. In determining whether any
individual event, act, condition or occurrence of the foregoing types would
result in a Material Adverse Effect, notwithstanding that a particular event,
act, condition or occurrence does not itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of
such event, act, condition or occurrence and all other events, acts, conditions
or occurrences of the foregoing types which have occurred would result in a
Material Adverse Effect

“Maturity
Date” shall mean June 2, 2010, or such earlier date as payment of the
Loans in full at such time shall be due (whether by acceleration or otherwise).

“Maximum
Guaranteed Amount” shall have the meaning specified in Section 3.1(g).

“Moody’s”
shall mean Moody’s Investor Service, Inc., or any successor thereto.

“Mortgage”
shall mean, collectively, any mortgage, deed of trust or deed to secure debt
entered into by a Borrower Party in favor of the Administrative Agent, for the
benefit of the Lender Group.

“Multiemployer
Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA, and to which any Borrower Party or ERISA Affiliate is making, is
obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.

“Necessary
Authorizations” shall mean all material authorizations, consents, permits,
approvals, licenses, and exemptions from, and all filings and registrations
with, and all reports to, any Governmental Authority whether federal, state,
local, and all agencies thereof, which are required for the transactions
contemplated by the Loan Documents and the conduct of the businesses and the
ownership (or lease) of the properties and assets of the Borrower Parties.

“Net
Cash Proceeds” shall mean, with respect to any sale, lease, transfer,
casualty loss or other disposition or loss of assets by any Borrower Party or
any issuance by any Borrower Party of any Equity Interests or the incurrence by
any Borrower Party of any Funded Debt (other than the Obligations), the
aggregate amount of cash received for such assets or Equity Interests, or as a
result of such Funded Debt, net of reasonable and customary transaction costs
properly attributable to such transaction and payable by such Borrower Party to
a non-Affiliate in connection with such sale, lease, transfer or other
disposition of assets or the issuance of any Equity Interests or the incurrence
of any Funded Debt, including, without limitation, sales commissions and
underwriting discounts.

“NOLV”
shall mean, as to any particular asset, the value that is estimated to be
recoverable in an orderly liquidation thereof, as determined from time to time
by a 

 24
 

 

qualified appraiser
selected by the Co-Collateral Agents, net of all liquidation costs and
expenses.

“Non-Depository
Account” shall have the meaning specified in Section 6.15(f).

“Notice
of Conversion/Continuation” shall mean a notice in substantially the form
of Exhibit G.

“Obligations”
shall mean (a) all payment and performance obligations as existing from
time to time of the Borrower Parties to the Lender Group, or any of them, under
this Agreement and the other Loan Documents (including all Letter of Credit
Obligations and including any interest, fees and expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), or as a result of
making the Loans or issuing the Letters of Credit, (b) the obligation to
pay an amount equal to the amount of any and all damages which the Lender
Group, or any of them, may suffer by reason of a breach by any Borrower Party
of any obligation, covenant, or undertaking with respect to this Agreement or
any other Loan Document, and (c) any debts, liabilities and obligations as
existing from time to time of any Borrower Party to a Co-Collateral Agent (or
an Affiliate of a Co-Collateral Agent) arising from or in connection with any
Bank Products and, if either SunTrust Bank or Bank of America, N.A. ceases to
be a Co-Collateral Agent, any debts, liabilities and obligations as existing
from time to time of any Borrower Party to SunTrust Bank or Bank of America, N.A.
(or an Affiliate of SunTrust Bank or Bank of America, N.A.) arising from or in
connection with any Bank Products Documents entered into at a time when
SunTrust Bank or Bank of America, N.A., as the case may be, was a Co-Collateral
Agent.

“OFAC”
shall mean the Office of Foreign Assets Control of the United States Department
of the Treasury.

“Other
Eligible Accounts” shall mean Eligible Accounts for which the Federal
Government is not the Account Debtor.

 “Other Taxes” shall have the meaning
specified in Section 2.8(b)(ii).

“Overadvance”
shall have the meaning specified in Section 2.1(e).

“Participant”
shall have the meaning specified in Section 11.5.

“Payment
Date” shall mean the last day of each Eurodollar Advance Period for a
Eurodollar Advance.

“PBGC”
shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.

 25
 

 

“Perfection
Certificates” shall mean, collectively, the perfection certificates
delivered by each of the Borrower Parties to the Administrative Agent.

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

“Permitted
Inventory Financing” shall mean an inventory financing facility with terms
and conditions, including, without limitation, an intercreditor agreement
between such inventory financing lender and the Administrative Agent, that are
in form and substance acceptable to all Lenders in their Permitted Discretion.

“Permitted
Liens” shall mean, as applied to any Person:

(a)           Any Lien in favor of the
Administrative Agent or any other member of the Lender Group given to secure
the Obligations;

(b)           (i) Liens on real estate for
real estate taxes not yet delinquent and (ii) Liens for taxes,
assessments, judgments, governmental charges or levies, or claims not yet
delinquent or the non-payment of which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves have been set
aside on such Person’s books;

(c)           Liens of carriers, warehousemen,
mechanics, laborers, suppliers, workers and materialmen incurred in the
ordinary course of business for sums not yet due or being diligently contested
in good faith, if such reserve or appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;

(d)           Liens incurred in the ordinary course
of business in connection with worker’s compensation and unemployment insurance
or other types of social security benefits;

(e)           Easements, rights-of-way,
restrictions (including zoning or deed restrictions), and other similar
encumbrances on the use of real property which in the reasonable opinion of the
Administrative Agent do not interfere with the ordinary conduct of the business
of such Person;

(f)            Purchase money security interests
and Liens securing Capitalized Lease Obligations provided that such Lien
attaches only to the asset (which asset shall not constitute Inventory) so
purchased or leased by such Person and secures only Funded Debt incurred by
such Person in order to purchase or lease such asset, but only to the extent
permitted by Section 8.1(d);

 26
 

 

(g)           Deposits to secure the performance of
bids, trade contracts, tenders, sales, leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;

(h)           Liens in favor of vendors and
suppliers incurred in the ordinary course of business that (i) secure
indebtedness in a principal amount that is less than $500,000 in the aggregate
for all such Liens permitted under this clause (i) or (ii) are
subject to a Vendor Intercreditor Agreement;

(i)            Liens on assets of the Borrower
existing as of the Agreement Date which are set forth on Schedule 1(b);

(j)            With respect to Collateral
consisting of real property, Liens that are exceptions to the commitments for
title insurance issued in connection with the Mortgage, as accepted by the
Administrative Agent in its sole and absolute discretion;

(k)           Liens securing the Subordinated Debt
or Refinancing Debt so long as any such Lien is subject to the Subordinated
Debt Intercreditor Agreement or other intercreditor agreement in form and
substance satisfactory to the Lenders in their Permitted Discretion; and

(l)            Liens securing any Permitted
Inventory Financing so long as any such Liens is subject to an intercreditor
agreement in form and substance satisfactory to the Lenders in their Permitted
Discretion.

“Person”
shall mean an individual, corporation, partnership, trust, joint stock company,
limited liability company, unincorporated organization, other legal entity or
joint venture or a government or any agency or political subdivision thereof.

“Plan” shall mean
an employee benefit plan within the meaning of Section 3(3) of ERISA
that any Borrower Party or ERISA Affiliate maintains, contributes to or has an
obligation to contribute to or has maintained, contributed to or had an
obligation to contribute to at any time within the past six (6) years on
behalf of participants who were employed by any Borrower Party or ERISA
Affiliate.

“Pledge
Agreement” shall mean that certain Pledge Agreement dated as of the
Agreement Date among the Borrower Parties and the Administrative Agent, on
behalf of, and for the benefit of, the Lender Group.

“Pro
Forma Basis” shall mean for purposes of determining compliance with the
Financial Covenants and the defined terms relating thereto, giving pro forma
effect to any acquisition or sale of a Person, all or substantially all of the
business or assets of a Person, and any related incurrence, repayment or
refinancing of Funded Debt, Capital Expenditures or other related transactions
which would otherwise be accounted for as an adjustment permitted by Regulation
S-X under the Securities Act or on a pro forma basis 

 27
 

 

under GAAP, in
each case, as if such acquisition or sale and related transactions were
realized on the first day of the relevant period.

“Prompt
Payment Act” shall mean the United States Prompt Payment Act (31 U.S.C.
3901 et seq.), as now or hereafter amended, and any successor statute.

“Property”
shall mean any real property or personal property, plant, building, facility,
structure, underground storage tank or unit, equipment, Inventory or other
asset owned, leased or operated by the Borrower Parties, their Subsidiaries or
any of them (including, without limitation, any surface water thereon or
adjacent thereto, and soil and groundwater thereunder).

“Qualified
Cash” shall mean, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries
that is in deposit accounts or in investment accounts, or any combination
thereof, and which such deposit account or investment account is the subject of
a Blocked Account Agreement or control agreement in favor of the Administrative
Agent.

“Refinancing
Debt” shall mean Funded Debt that refinances the Subordinated Debt provided
that the following conditions are satisfied before and after giving effect to
the incurrence of such Refinancing Debt: (a) the Refinancing Debt is in an
aggregate principal amount that does not exceed the lesser of (i) $10,000,000
or (ii) the aggregate outstanding principal amount of the Subordinated
Debt being refinanced, (b) the Refinancing Debt has a later final maturity
date than the Subordinated Debt, (c) the Refinancing Debt does not bear a
rate of interest that exceeds a market rate (as determined in good faith by the
Co-Collateral Agents) as of the date of such refinancing, (d) the
covenants contained in any instrument or agreement relating to the Refinancing
Debt are not less favorable to Borrower and/or Lenders than those contained in
the Subordinated Debt Documents, (e) the Refinancing Debt shall be
subordinated to the Obligations to the same extent as the Subordinated Debt, (f) at
the time of and after giving effect to such refinancing, no Default or Event of
Default shall exist and (g) the proceeds for any such Refinancing Debt
shall be used to repay in full the outstanding obligations under the
Subordinated Debt and any Liens securing the Subordinated Debt shall be
immediately released.

“Register”
shall have the meaning specified in Section 11.5(c).

“Reimbursement
Obligations” shall mean the payment obligations of the Borrower under Section 2.15(d).

“Replacement
Event” shall have the meaning specified in Section 11.16.

“Replacement
Lender” shall have the meaning specified in Section 11.16.

 28
 

 

“Request
for Advance” shall mean any certificate signed by an Authorized Signatory
of the Borrower requesting a new Advance hereunder, which certificate shall be
denominated a “Request for Advance,” and shall be in substantially the
form of Exhibit H. Each Request for Advance shall, among other
things, specify the date of the Advance, which shall be a Business Day, the
amount of the Advance, and the type of Advance.

“Request
for Issuance of Letter of Credit” shall mean any certificate signed by an
Authorized Signatory of the Borrower requesting that the Issuing Bank issue a
Letter of Credit hereunder, which certificate shall be in substantially the
form of Exhibit I, and shall, among other things, (a) specify
that the requested Letter of Credit is either a Commercial Letter of Credit or
a Standby Letter of Credit, (b) the stated amount of the Letter of Credit
(which shall be in Dollars), (c) the effective date (which shall be a
Business Day) for the issuance of such Letter of Credit, (d) the date on
which such Letter of Credit is to expire (which shall be a Business Day and
which shall be subject to Section 2.15(a)), (e) the Person for whose
benefit such Letter of Credit is to be issued, (f) other relevant terms of
such Letter of Credit, and (g) the Available Letter of Credit Amount as of
the scheduled date of issuance of such Letter of Credit.

“Reserves”
shall mean reserves that the Co-Collateral Agents may establish from time to
time in their Permitted Discretion for such purposes as the Co-Collateral
Agents shall deem necessary. Without limiting the generality of the foregoing,
the following reserves shall be deemed an exercise of the Co-Collateral Agents’
Permitted Discretion:  (a) reserves
for price adjustments and damages, (b) reserves for accrued but unpaid ad
valorem, excise and personal property tax liability; (c) receivable
reserves; (d) Bank Product Reserves; (e) reserves for accrued, unpaid
interest on the Obligations; (f) reserves for Federal Government claims or
offsets; (g) reserves for any other matter that has a negative impact on
the value of the Collateral; (h) rent reserves; (i) reserves for any
changes in the terms of the Borrower’s trade credit including, without
limitation, credit limits and repayment terms; (j) reserves for consignor
payables; and (k) the Corporate Qualification Reserve.

“Restricted
Payment” shall mean (a) Dividends, (b) loans by any Borrower Party
to any holder of Equity Interests in the Borrower, (c) any payment of
management, consulting or similar fees payable by any Borrower Party or any
Subsidiary of a Borrower Party to any Affiliate, or (d) any redemption,
purchase, retirement, defeasance, sinking fund or similar payment or any claim
of rescission with respect to the capital stock of a Borrower Party.

“Restricted
Purchase” shall mean any payment on account of the purchase, redemption, or
other acquisition or retirement of any shares of Equity Interests of any
Borrower Party.

“Retiree Welfare Plan”
shall mean a Plan that is an “employee welfare benefit plan” within the meaning
of Section 3(1) of ERISA that provides for continuing coverage 

 29
 

 

or benefits for
any participant or any beneficiary of a participant after such participant’s
termination of employment, other than continuation coverage provided pursuant
to Code Section 4980B (or applicable state law mandating health insurance
continuation coverage for employees) and at the sole expense of the participant
or the beneficiary.

“Revolving
Commitment Ratio” shall mean, with respect to any Lender, the ratio,
expressed as a percentage, of (a) the Revolving Loan Commitment of such
Lender, divided by (b) the Revolving Loan Commitment of all Lenders, which,
as of the Agreement Date, are set forth (together with Dollar amounts thereof)
on Schedule 1(a).

“Revolving
Loan Commitment” shall mean the several obligations of the Lenders to
advance to the Borrower on or after the Agreement Date, in accordance with
their respective Revolving Commitment Ratios, pursuant to the terms of this
Agreement, the aggregate amount of up to $125,000,000, as such amount may be
increased or reduced from time to time pursuant to the terms of this Agreement.

 “Revolving Loan Notes” shall mean those
certain promissory notes issued by the Borrower to each of the Lenders that
requests a promissory note, in accordance with each such Lender’s Revolving
Commitment Ratio of the Revolving Loan Commitment, in substantially in the form
of Exhibit J.

“Revolving
Loans” shall mean, collectively, the amounts (other than Agent Advances and
Swing Loans) advanced from time to time by the Lenders to the Borrower under
the Revolving Loan Commitment, not to exceed the amount of the Revolving Loan
Commitment.

“S&P”
shall mean Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc.,
or any successor thereto.

“SEA”
shall mean the Securities Exchange Act of 1934 and the rules promulgated
thereunder by the Securities and Exchange Commission, as amended from time to
time or any similar Federal law then in force.

“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar
Federal law then in force.

“Security
Agreement” shall mean that certain Security Agreement dated as of the
Agreement Date among the Borrower Parties and the Administrative Agent, on
behalf of, and for the benefit of, the Lender Group.

“Security
Documents” shall mean, collectively, the Copyright Security Agreements, the
Mortgages, the Security Agreement, the Trademark Security Agreements, the
Pledge Agreement, the Perfection Certificates, all UCC-1 financing
statements and any other document, instrument or agreement granting Collateral
for the Obligations, as the same may be amended or modified from time to time.

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“Standby
Letter of Credit” shall mean a Letter of Credit issued to support
obligations of the Borrower incurred in the ordinary course of its business,
and which is not a Commercial Letter of Credit.

“Subordinated
Debt” shall mean the Funded Debt in the aggregate principal amount not to
exceed $10,000,000 incurred by the Borrower pursuant to the Subordinated Debt
Documents.

“Subordinated
Debt Agent” shall mean Crystal Capital Fund, L.P., as administrative agent
under the Subordinated Debt Documents, and any successor administrative agent
thereunder.

“Subordinated
Debt Agreement” shall mean that certain Credit Agreement among the
Borrower, the Subsidiary Guarantors, the financial institutions party thereto
as lenders, and Subordinated Debt Agent, dated as of the date hereof, in form
and substance satisfactory to the Co-Collateral Agents.

“Subordinated
Debt Borrowing Base Certificate” shall mean the “Borrowing Base Certificate”,
as such term is defined in the Subordinated Debt Agreement.

“Subordinated
Debt Documents” shall mean the Subordinated Debt Agreement and the Loan
Documents (as defined in the Subordinated Debt Agreement), in form and
substance satisfactory to the Co-Collateral Agents.

“Subordinated
Debt Intercreditor Agreement” shall mean that certain Intercreditor
Agreement, dated as of the date hereof, by and among the Administrative Agent,
the Subordinated Debt Agent, and the Borrower with respect to the Subordinated
Debt Documents.

“Subordinated
Debt Lenders” shall mean the “Lenders” as such term is defined in the
Subordinated Debt Agreement.

“Subsidiary”
shall mean, as applied to any Person, (a) any corporation of which more
than fifty percent (50%) of the outstanding stock (other than directors’
qualifying shares) having ordinary voting power to elect a majority of its
board of directors, regardless of the existence at the time of a right of the
holders of any class or classes of securities of such corporation to exercise
such voting power by reason of the happening of any contingency, or any partnership
or limited liability company of which more than fifty percent (50%) of the
outstanding partnership interests or membership interests, as the case may be,
is at the time owned by such Person, or by one or more Subsidiaries of such
Person, or by such Person and one or more Subsidiaries of such Person, and (b) any
other entity which is controlled or capable of being controlled by such Person,
or by one or more Subsidiaries of such Person, or by such Person and one or
more Subsidiaries of such Person.

 31
 

 

“Subsidiary
Guarantors” shall mean all Subsidiaries of the Borrower signatory to this
Agreement as a “Guarantor” and all Subsidiaries of the Borrower that have
executed and delivered a Guaranty Supplement.

“Swing
Bank” shall mean SunTrust Bank, or any other Lender who shall agree with
the Administrative Agent to act as Swing Bank.

“Swing
Loans” shall mean, collectively, the amounts advanced from time to time by
the Swing Bank to the Borrower under the Revolving Loan Commitment in
accordance with Section 2.2(g).

“Taxes”
shall have the meaning specified in Section 2.8(b)(i).

“Term
Loan Borrowing Base” means the “Term Loan Borrowing Base” as defined in the
Subordinated Debt Agreement, as in effect on the date hereof.

“Title IV Plan”
shall mean a Plan that is an “employee pension benefit plan,” within the
meaning of Section 3(2) of ERISA, that is covered by Title IV of
ERISA.

“Trademark Security
Agreements” shall mean, collectively, the Trademark Security Agreements
made in favor of the Administrative Agent, on behalf of the Lender Group, from
time to time.

“UCC”
shall mean the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Georgia; provided, that to the
extent that the UCC is used to define any term herein and such term is defined
differently in different Articles or Divisions of the UCC, the definition of
such term contained in Article or Division 9 shall govern; provided
further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, the Administrative Agent’s Lien on any Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of Georgia, the term “UCC” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.

“Unused
Line Fee” shall have the meaning specified in Section 2.4(b).

“USA
Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as the
same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Unfunded Pension
Liability” shall mean at any time, the aggregate amount, if any, of the sum
of (a) the amount by which the present value of all accrued benefits under

 32
 

 

each Title IV Plan
exceeds the fair market value of all assets of such Title IV Plan allocable to
such benefits in accordance with Title IV of ERISA, all determined as of the
most recent valuation date for each such Title IV Plan using the actuarial
assumptions for funding purposes in effect under such Title IV Plan, and (b) for
a period of five (5) years following a transaction which might reasonably
be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by any Borrower Party or any
ERISA Affiliate as a result of such transaction.

“Uniform
Customs” shall mean the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.

“US”
or “United States” shall mean the United States of America.

“Vendor
Intercreditor Agreements” shall mean one or more intercreditor agreements
or subordination agreements executed by the Borrower, the applicable vendor or
other supplier, and the Administrative Agent, in each case in form and
substance satisfactory to the Co-Collateral Agents.

“Voidable
Transfer” shall have the meaning specified in Section 11.18.

Section 1.2             Accounting Principles. The
classification, character and amount of all assets, liabilities, capital
accounts and reserves and of all items of income and expense to be determined,
and any consolidation or other accounting computation to be made, and the
interpretation of any definition containing any financial term, pursuant to
this Agreement shall be determined and made in accordance with GAAP
consistently applied, unless such principles are inconsistent with the express
requirements of this Agreement; provided that if because of a change in
GAAP after the date of this Agreement the Borrower or any of its Subsidiaries
would be required to alter a previously utilized accounting principle, method
or policy in order to remain in compliance with GAAP, such determination shall continue
to be made in accordance with the Borrower’s or such Subsidiary’s previous
accounting principles, methods and policies. All accounting terms used herein
without definition shall be used as defined under GAAP. All financial
calculations hereunder shall, unless otherwise stated, be determined for the
Borrower on a consolidated basis with its Subsidiaries.

Section 1.3             Other Interpretive Matters. Each
definition of an agreement in this Article 1 shall include such instrument
or agreement as amended, restated, supplemented or otherwise modified from time
to time with, if required, the prior written consent of the Majority Lenders,
except as provided in Section 11.12 and otherwise to the extent permitted
under this Agreement and the other Loan Documents. Except where the context
otherwise requires, definitions imparting the singular shall include the plural
and vice versa. Except where otherwise specifically provided herein, each
reference to a “Section”, “Article”, “Exhibit” or “Schedule” shall be to a Section or
Article of this Agreement or an Exhibit or Schedule attached to this
Agreement. Except where 

 33
 

 

otherwise specifically
restricted, reference to a party to a Loan Document includes that party and its
successors and assigns. An Event of Default, if one occurs, shall “exist”, “continue”
or be “continuing” until such Event of Default has been waived in writing in
accordance with Section 11.12. All terms used herein which are defined in Article 9
of the UCC and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.

ARTICLE 2.

THE LOANS AND THE LETTERS OF CREDIT

Section 2.1             Extension of Credit. Subject
to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, the Lenders
agree, severally in accordance with their respective Revolving Commitment
Ratios, and not jointly, to extend credit to the Borrower in an aggregate
principal amount not to exceed $125,000,000.

(a)           The Revolving Loans. Each
Lender agrees, severally in accordance with its Revolving Commitment Ratio and
not jointly with the other Lenders, upon the terms and subject to the
conditions of this Agreement, to lend and relend to the Borrower, from time to
time on any Business Day prior to the Maturity Date, amounts which do not
exceed such Lender’s ratable share (based upon such Lender’s Revolving
Commitment Ratio) of Availability as of such Business Day. Subject to the terms
and conditions hereof and prior to the Maturity Date, Advances under the
Revolving Loan Commitment may be repaid and reborrowed from time to time on a
revolving basis.

(b)           Intentionally Omitted.

(c)           The Letters of Credit. Subject
to the terms and conditions of this Agreement, the Issuing Bank agrees to issue
Letters of Credit for the account of the Borrower, from time to time on any
Business Day prior to the date thirty (30) days prior to the Maturity Date,
pursuant to Section 2.15 in an outstanding face amount not to exceed, with
respect to the issuance of any individual Letter of Credit as of any Business
Day, the Available Letter of Credit Amount as of such Business Day.

(d)           The Swing Loans. Subject to
the terms and conditions of this Agreement, the Swing Bank, in its sole
discretion, may from time to time on any Business Day after the Agreement Date
but prior to the Maturity Date, make Swing Loans to the Borrower (i) in an
amount not to exceed Availability as of such Business Day and (ii) in an
aggregate amount (including all Swing Loans outstanding as of such Business
Day) not to exceed the lesser of (A) the excess of (1) the Swing Bank’s
ratable share (in accordance with its Revolving Commitment Ratio) of the
Revolving Loan Commitment less (2) the sum of the aggregate outstanding
principal amount of Swing Loans and Revolving Loans made by it and the Swing
Bank’s ratable share (in

 34
 

 

accordance with its
Revolving Commitment Ratio) of the outstanding Letter of Credit Obligations and
Agent Advances, and (B) $10,000,000.

(e)           Overadvances; Optional
Overadvances. If at any time the amount of the Aggregate Revolving Credit
Obligations exceeds the Revolving Loan Commitment, the Borrowing Base or any
other applicable limitation set forth in this Agreement (including, without
limitation, the limitations on Swing Loans, Agent Advances and Letters of
Credit) such excess (an “Overadvance”) shall nevertheless constitute a
portion of the Obligations that are secured by the Collateral and are entitled
to all benefits thereof. In no event, however, shall the Borrower have any right
whatsoever to (i) receive any Revolving Loan, (ii) receive any Swing
Loan, or (iii) request the issuance of any Letter of Credit if, before or
after giving effect thereto, there shall exist a Default. In the event that (1) the
Lenders shall make any Revolving Loans, (2) the Swing Bank shall make any
Swing Loan, (3) the Administrative Agent shall make any Agent Advances or (4) the
Issuing Bank shall agree to the issuance of any Letter of Credit, which in any
such case gives rise to an Overadvance, the Borrower shall make, on demand, a
payment on the Obligations to be applied to the Revolving Loans, the Swing
Loans, the Agent Advances and the Letter of Credit Reserve Account, as
appropriate, in an aggregate principal amount equal to such Overadvance. Notwithstanding
the foregoing or any other contrary provision of this Agreement, the Lenders
hereby authorize the Swing Bank at the direction of the Administrative Agent in
the Administrative Agent’s Permitted Discretion, and Swing Bank shall, at the
direction of the Administrative Agent, knowingly and intentionally, continue to
make Swing Loans to the Borrower notwithstanding that an Overadvance exists or
thereby would be created, so long as (i) after giving effect to such Swing
Loans, the outstanding Aggregate Revolving Credit Obligations do not exceed the
Borrowing Base by more than $5,000,000, (ii) after giving effect to such
Swing Loans, the outstanding Aggregate Revolving Credit Obligations does not
exceed the Revolving Loan Commitment, (iii) at the time of the making of
any such Swing Loans, the Administrative Agent does not believe, in good faith,
that the Overadvance created by such Swing Loans will be outstanding for more
than ninety (90) days and (iv) the aggregate amount of all Agent Advances
and Overadvances after given effect to such Swing Loans shall not exceed (A) $5,000,000,
or (B) after consultation by the Administrative Agent with the
Co-Collateral Agents (or a good faith attempt, under the circumstances, to
consult with the Co-Collateral Agents) $10,000,000. The foregoing sentence is
for the exclusive benefit of the Administrative Agent, the Swing Bank, and the
Lenders and is not intended to benefit the Borrower in any way. The Majority
Lenders may at any time revoke the Administrative Agent’s authority to direct
the Swing Bank to make Overadvances pursuant to the preceding sentence of this Section 2.1(e).
Any such revocation must be in writing and shall become effective prospectively
upon the Administrative Agent’s receipt thereof.

(f)            Agent Advances.

 35
 

 

(i)            Subject to the limitations set forth
below and notwithstanding anything else in this Agreement to the contrary, the
Administrative Agent is authorized by the Borrower and the Lenders, from time
to time in the Administrative Agent’s sole discretion, (A) at any time
that a Default exists, or (B) at any time that any of the other conditions
precedent set forth in Article 4 have not been satisfied, to make Base
Rate Advances to the Borrower on behalf of the Lenders in an aggregate amount
outstanding (together with all optional Overadvances outstanding under clause (e) above)
at any time not to exceed (together with all other Aggregate Revolving Credit
Obligations) the lesser of (y) the Revolving Loan Commitment and (z) $5,000,000
(or after consultation by the Administrative Agent with the Co-Collateral
Agents (or a good faith attempt, under the circumstances, to consult with the
Co-Collateral Agents) $10,000,000, which the Administrative Agent, in its
reasonable business judgment, deems necessary or desirable (1) to preserve
or protect the Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations, (3) to pay the amount of any “carve-out” for professional
fees and expenses in conjunction with a Default described in Section 9.1(g) or
9.1(h), or (4) to pay any other amount chargeable to the Borrower pursuant
to the terms of this Agreement, including costs, fees and expenses as provided
under this Agreement (any of such advances are herein referred to as “Agent
Advances”); provided, that (i) such amount shall not be
outstanding more than 30 days and (ii) the Majority Lenders may at any
time revoke the Administrative Agent’s authorization to make Agent Advances. Any
such revocation must be in writing and shall become effective prospectively
upon the Administrative Agent’s receipt thereof. The Administrative Agent shall
promptly provide to the Borrower written notice of any Agent Advance.

(ii)           The Agent Advances shall be secured
by the Collateral and shall constitute Obligations hereunder. Each Agent
Advance shall bear interest as a Base Rate Advance. Each Agent Advance shall be
subject to all terms and conditions of this Agreement and the other Loan
Documents applicable to Revolving Loans, except that all payments thereon shall
be made to the Administrative Agent solely for its own account and the making
of any Agent Advance shall not require the consent of the Borrower. The
Administrative Agent shall have no duty or obligation to make any Agent Advance
hereunder.

(iii)          The Administrative Agent shall notify
each Lender no less frequently than weekly, as determined by the Administrative
Agent, of the principal amount of Agent Advances outstanding as of 12:00 noon
(Atlanta, Georgia time) as of such date, and each Lender’s pro rata share
thereof. Each Lender shall before 2:00 p.m. (Atlanta, Georgia time) on
such Business Day make available to the Administrative Agent, in immediately
available funds, the amount of its pro rata share of such principal amount of
Agent Advances outstanding. Upon such payment by a Lender, such Lender shall be
deemed to have made a 

 36
 

 

Revolving Loan to the
Borrower, notwithstanding any failure of the Borrower to satisfy the conditions
in Section 4.2. The Administrative Agent shall use such funds to repay the
principal amount of Agent Advances. Additionally, if at any time any Agent
Advances are outstanding, any of the events described in clauses (g) or (h) of
Section 9.1 shall have occurred, then each Lender shall automatically,
upon the occurrence of such event, and without any action on the part of the
Administrative Agent, the Borrower or the Lenders, be deemed to have purchased
an undivided participation in the principal and interest of all Agent Advances
then outstanding in an amount equal to such Lender’s Revolving Commitment Ratio
and each Lender shall, notwithstanding such Event of Default, immediately pay
to the Administrative Agent in immediately available funds, the amount of such
Lender’s participation (and upon receipt thereof, the Administrative Agent
shall deliver to such Lender, a loan participation certificate dated the date
of receipt of such funds in such amount). The disbursement of funds in
connection with the settlement of Agent Advances hereunder shall be subject to
the terms and conditions of Section 2.2(f).

(g)           Maximum Account Balance. Agent
and Lenders shall have no obligation to make Advances hereunder if and to the
extent the aggregate cash balance in the Borrower Parties’ bank accounts
exceeds $15,000,000.

Section 2.2             Manner
of Borrowing and Disbursement of Loans.

(a)           Choice of Interest Rate, etc. Any
Advance shall, at the option of the Borrower, be made either as a Base Rate
Advance or as a Eurodollar Advance (except for the first three (3) Business
Days after the Agreement Date, during which period the Loans shall bear
interest as a Base Rate Advance); provided, however, that (i) if
the Borrower fails to give the Administrative Agent written notice specifying
whether a Eurodollar Advance is to be repaid, continued or converted on a
Payment Date, such Advance shall be converted to a Base Rate Advance on the
Payment Date in accordance with Section 2.3(a)(iii), (ii) the
Borrower may not select a Eurodollar Advance (A) with respect to Swing
Loans, (B) with respect to an Advance, the proceeds of which are to
reimburse the Issuing Bank pursuant to Section 2.15, or (C) if, at
the time of such Advance or at the time of the continuation of, or conversion
to, a Eurodollar Advance pursuant to Section 2.2(c), a Default exists and (iii) all
Agent Advances shall be made as Base Rate Advances. Any notice given to the
Administrative Agent in connection with a requested Advance hereunder shall be
given to the Administrative Agent prior to 11:30 a.m. (Atlanta, Georgia
time) in order for such Business Day to count toward the minimum number of
Business Days required.

(b)           Base Rate Advances.

(i)            Initial and Subsequent Advances.
The Borrower shall give the Administrative Agent in the case of Base Rate
Advances irrevocable notice by telephone not later than 11:30 a.m.
(Atlanta, Georgia time) one Business Day

 37
 

 

prior to the date of such
Base Rate Advance and shall immediately confirm any such telephone notice with
a written Request for Advance; provided, however, that the
failure by the Borrower to confirm any notice by telephone with a written
Request for Advance shall not invalidate any notice so given. Each Base Rate
Advance shall be in a principal amount of no less than $1,000,000 and in an
integral multiple of $100,000 in excess thereof.

(ii)           Repayments and Conversions. The
Borrower may (A) subject to Section 2.5, at any time without prior
notice repay a Base Rate Advance, or (B) upon at least three (3) Business
Days’ irrevocable prior written notice to the Administrative Agent in the form
of a Notice of Conversion/Continuation, convert all or a portion of the
principal thereof to one or more Eurodollar Advances. Upon the date indicated
by the Borrower, such Base Rate Advance shall be so repaid or converted.

(c)           Eurodollar Advances.

(i)            Initial and Subsequent Advances.
The Borrower shall give the Administrative Agent in the case of Eurodollar
Advances irrevocable notice by telephone not later than 11:30 a.m.
(Atlanta, Georgia time) three (3) days prior to the date of such
Eurodollar Advance and shall immediately confirm any such telephone notice with
a written Request for Advance; provided, however, that the
failure by the Borrower to confirm any notice by telephone with a written
Request for Advance shall not invalidate any notice so given.

(ii)           Repayments, Continuations and
Conversions. At least three (3) Business Days prior to each Payment
Date for a Eurodollar Advance, the Borrower shall give the Administrative Agent
written notice in the form of a Notice of Conversion/Continuation specifying
whether all or a portion of such Eurodollar Advance outstanding on such Payment
Date is to be continued in whole or in part as one or more new Eurodollar
Advances and also specifying the new Eurodollar Advance Period applicable to
each such new Eurodollar Advance (and subject to the provisions of this
Agreement, upon such Payment Date, such Eurodollar Advance shall be so
continued). Upon such Payment Date, any Eurodollar Advance (or portion thereof)
not so continued shall be converted to a Base Rate Advance or, subject to Section 2.5,
be repaid.

(iii)          Miscellaneous. Notwithstanding
any term or provision of this Agreement which may be construed to the contrary,
each Eurodollar Advance shall be in a principal amount of no less than
$1,000,000 and in an integral multiple of $100,000 in excess thereof, and at no
time shall the aggregate number of all Eurodollar Advances then outstanding
exceed five (5). In addition to any other fee payable hereunder, Borrower shall
pay the Administrative Agent, for its sole benefit, a Eurodollar Advance fee in
the amount of $500 for each Eurodollar Advance hereunder.

 38
 

 

(d)           Notification of Lenders. Upon
receipt of a (i) Request for Advance or a telephone or telecopy request
for Advance, (ii) notification from the Issuing Bank that a draw has been
made under any Letter of Credit (unless the Issuing Bank will be reimbursed
through the funding of a Swing Loan), or (iii) notice from the Borrower
with respect to the prepayment of any outstanding Eurodollar Advance prior to
the Payment Date for such Advance, the Administrative Agent shall promptly
notify each Lender by telephone or telecopy of the contents thereof and the
amount of each Lender’s portion of any such Advance. Each Lender shall, not
later than 1:00 p.m. (Atlanta, Georgia time) on the date specified for
such Advance (under clause (i) or (ii) above) in such notice, make
available to the Administrative Agent at the Administrative Agent’s Office, or
at such account as the Administrative Agent shall designate, the amount of such
Lender’s portion of the Advance in immediately available funds.

(e)           Disbursement. Prior to 3:00 p.m.
(Atlanta, Georgia time) on the date of an Advance hereunder, the Administrative
Agent shall, subject to the satisfaction of the conditions set forth in Article 4,
disburse the amounts made available to the Administrative Agent by the Lenders
in like funds by (i) transferring the amounts so made available by wire
transfer to the Borrower’s Disbursement Account or (ii) in the case of an
Advance the proceeds of which are to reimburse the Issuing Bank pursuant to Section 2.15,
transferring such amounts to such Issuing Bank. Unless the Administrative Agent
shall have received notice from a Lender prior to 12:00 Noon (Atlanta, Georgia
time) on the date of any Advance that such Lender will not make available to
the Administrative Agent such Lender’s ratable portion of such Advance, the
Administrative Agent may assume that such Lender has made or will make such
portion available to the Administrative Agent on the date of such Advance and
the Administrative Agent may, in its sole discretion and in reliance upon such
assumption, make available to the Borrower or the Issuing Bank, as applicable,
on such date a corresponding amount. If and to the extent such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower or the Issuing Bank, as
applicable, until the date such amount is repaid to the Administrative Agent, (x) for
the first two (2) Business Days, at the Federal Funds Rate for such
Business Days, and (y) thereafter, at the Base Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender’s portion of the applicable Advance for
purposes of this Agreement and if both such Lender and the Borrower shall pay
and repay such corresponding amount, the Administrative Agent shall promptly
relend to the Borrower such corresponding amount. If such Lender does not repay
such corresponding amount immediately upon the Administrative Agent’s demand
therefor, the Administrative Agent shall notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
failure of any Lender to fund its portion of any Advance shall not relieve any
other Lender of its obligation, if any, hereunder to fund its respective
portion of the Advance on the date of such borrowing, but no Lender shall be
responsible for any such failure of any other 

 39
 

 

Lender. In the event that
a Lender for any reason fails or refuses to fund its portion of an Advance in
violation of this Agreement, then, until such time as such Lender has funded
its portion of such Advance, or all other Lenders have received payment in full
(whether by repayment or prepayment) of the principal and interest due in
respect of such Advance, such non-funding Lender shall not (i) have the
right to vote regarding any issue on which voting is required or advisable
under this Agreement or any other Loan Document and, with respect to any such
Lender, the amount of the Commitments or Loans, as applicable, held by such
Lender shall not be counted as outstanding for purposes of determining “Majority
Lenders” hereunder, and (ii) be entitled to receive any payments of
principal, interest or fees from the Borrower or the Administrative Agent (or
the other Lenders) in respect of its Loans.

(f)            Deemed Requests for Advance.  Unless payment is otherwise timely made by the
Borrower, the becoming due of any amount required to be paid under this
Agreement or any of the other Loan Documents as principal, interest,
reimbursement obligations in connection with Letters of Credit, premiums, fees,
reimbursable expenses or other sums payable hereunder shall be deemed
irrevocably to be a Request for Advance on the due date of, and in an aggregate
amount required to pay, such principal, interest, reimbursement obligations in
connection with Letters of Credit, premiums, fees, reimbursable expenses or
other sums payable hereunder, and the proceeds of a Revolving Loan made
pursuant thereto may be disbursed by way of direct payment of the relevant
Obligation and shall bear interest as a Base Rate Advance. The Lenders shall
have no obligation to the Borrower to honor any deemed Request for Advance
under this Section 2.2(f) unless all the conditions set forth in Section 4.2
have been satisfied, but, with the consent of the Lenders required under the
last sentence of Section 4.2, may do so in their sole discretion and
without regard to the existence of, and without being deemed to have waived,
any Default and without regard to the existence or creation of an Overadvance
or the failure by the Borrower to satisfy any of the conditions set forth in Section 4.2.
No further authorization, direction or approval by the Borrower shall be
required to be given by the Borrower for any deemed Request for Advance under
this Section 2.2(f). The Administrative Agent shall promptly provide to
the Borrower written notice of any Advance pursuant to this Section 2.2(f).
The Borrower has established with the Administrative Agent a master
disbursement account into which the Administrative Agent wires proceeds of
Advances from time to time (the “Controlled Disbursement Account”). Until
such time as the Administrative Agent in its sole discretion delivers written
notice to the contrary, the presentation for payment by the Administrative
Agent of any check or other item of payment drawn on the Controlled
Disbursement Account at a time when there are insufficient funds in such
account to cover such check or other item of payment shall be deemed
irrevocably to be a request (without any requirement for the submission of a
Request for Advance) for an Advance on the date of such presentation and in an
amount equal to the aggregate amount of the items presented for payment, and
the proceeds of such Advances may be disbursed to the Controlled Disbursement
Account and shall bear interest as a Base Rate Advance.

 40
 

 

(g)           Special Provisions Pertaining to
Swing Loans.

(i)            The Borrower shall give the Swing
Bank written notice in the form of a Request for Advance, or notice by
telephone no later than 12:00 noon. (Atlanta, Georgia time) on the date on
which the Borrower wishes to receive an Advance of any Swing Loan followed
immediately by a written Request for Advance, with a copy to the Administrative
Agent; provided, however, that the failure by the Borrower to
confirm any notice by telephone with a written Request for Advance shall not
invalidate any notice so given; provided  further, however,
that any request by the Borrower for a Base Rate Advance under the Revolving
Loan Commitment shall be deemed to be a request for a Swing Loan unless the
Borrower specifically requests otherwise. Each Swing Loan shall bear interest
at the rate equal to the sum of (A) the Base Rate, and (B) the
Applicable Margin with respect to Base Rate Advances. If the Swing Bank, in its
sole discretion, elects to make the requested Swing Loan, the Swing Loan shall
be made on the date specified in the notice or the Request for Advance and such
notice or Request for Advance shall specify (i) the amount of the
requested Swing Loan which shall be in a principal amount of no less than
$100,000 and in an integral multiple of $100,000 in excess thereof, and (ii) instructions
for the disbursement of the proceeds of the requested Swing Loan. Each Swing
Loan shall be subject to all the terms and conditions applicable to Revolving
Loans, except that all payments thereon shall be payable to the Swing Bank
solely for its own account. The Swing Bank shall have no duty or obligation to
make any Swing Loans hereunder. The Swing Bank shall not make any Swing Loans
if the Swing Bank has received written notice from any Lender (or the Swing
Bank has actual knowledge) that one or more applicable conditions precedent set
forth in Section 4.2 will not be satisfied (or waived pursuant to the last
sentence of Section 4.2) on the requested Advance date. In the event the
Swing Bank in its sole and absolute discretion elects to make any requested
Swing Loan, the Swing Bank shall make the proceeds of such Swing Loan available
to the Borrower by deposit of Dollars in same day funds by wire transfer to the
Disbursement Account. In the event that the Swing Bank informs the
Administrative Agent that it will not make the requested Advance as a Swing
Loan, then such request will be deemed a request for a Base Rate Advance under
the Revolving Loan Commitment.

(ii)           The Swing Bank shall notify the
Administrative Agent and each Lender no less frequently than weekly, as
determined by the Administrative Agent, of the principal amount of Swing Loans
outstanding as of 3:00 p.m. (Atlanta, Georgia time) as of such date and
each Lender’s pro rata share (based on its Revolving Commitment Ratio) thereof.
Each Lender shall before 12:00 Noon (Atlanta, Georgia time) on the next Business
Day make available to the Administrative Agent, in immediately available funds,
the amount of its pro rata share (based on its Revolving Commitment Ratio) of
such principal amount of

 41
 

 

Swing Loans outstanding. Upon
such payment by a Lender, such Lender shall be deemed to have made a Revolving
Loan to the Borrower, notwithstanding any failure of the Borrower to satisfy
the conditions in Section 4.2. The Administrative Agent shall use such
funds to repay the principal amount of Swing Loans to the Swing Bank. Additionally,
if at any time any Swing Loans are outstanding, any of the events described in
clauses (g) or (h) of Section 9.1 shall have occurred, then each
Lender shall automatically upon the occurrence of such event and without any
action on the part of the Swing Bank, the Borrower, the Administrative Agent or
the Lenders be deemed to have purchased an undivided participation in the
principal and interest of all Swing Loans then outstanding in an amount equal
to such Lender’s Revolving Commitment Ratio of the principal and interest of
all Swing Loans then outstanding and each Lender shall, notwithstanding such
Event of Default, immediately pay to the Administrative Agent for the account
of the Swing Bank in immediately available funds, the amount of such Lender’s
participation (and upon receipt thereof, the Swing Bank shall deliver to such
Lender a loan participation certificate dated the date of receipt of such funds
in such amount). The disbursement of funds in connection with the settlement of
Swing Loans hereunder shall be subject to the terms and conditions of Section 2.2(e).

Section 2.3             Interest.

(a)           On Loans. Interest on the
Loans, subject to Sections 2.3(b) and (c), shall be payable as follows:

(i)            On Base Rate Advances. Interest
on each Base Rate Advance shall be computed for the actual number of days
elapsed on the basis of a hypothetical year of three hundred sixty (360) days
and shall be payable monthly in arrears on the first day of each calendar month
for the prior calendar month, commencing on June 1, 2006. Interest on Base
Rate Advances then outstanding shall also be due and payable on the Maturity
Date (or the date of any earlier prepayment in full of the Obligations).
Interest shall accrue and be payable on each Base Rate Advance at the simple
per annum interest rate equal to the sum of (A) the Base Rate, and (B) the
Applicable Margin with respect to Base Rate Advances.

(ii)           On Eurodollar Advances. Interest
on each Eurodollar Advance shall be computed for the actual number of days
elapsed on the basis of a hypothetical year of three hundred sixty (360) days
and shall be payable in arrears on (x) the Payment Date for such Advance,
and (y) if the Eurodollar Advance Period for such Advance is greater than
one (1) month, on the first day of each calendar month and on the last day
of the applicable Eurodollar Advance Period for such Advance. Interest on
Eurodollar Advances then outstanding shall also be due and payable on the
Maturity Date (or the date of any earlier

 42
 

 

prepayment in full of the
Obligations). Interest shall accrue and be payable on each Eurodollar Advance
at a rate per annum equal to the sum of (A) the Eurodollar Basis
applicable to such Eurodollar Advance, and (B) the Applicable Margin for
Eurodollar Advances.

(iii)          If No Notice of Selection of
Interest Rate. If the Borrower fails to give the Administrative Agent
timely notice of its selection of a Eurodollar Basis, or if for any reason a
determination of a Eurodollar Basis for any Advance is not timely concluded,
the Base Rate shall apply to such Advance. If the Borrower fails to elect to
continue any Eurodollar Advance then outstanding prior to the last Payment Date
applicable thereto in accordance with the provisions of Section 2.2, as
applicable, the Base Rate shall apply to such Advance commencing on and after
such Payment Date.

(b)           Upon Default. Immediately upon
the occurrence and during the continuance of an Event of Default, interest on
the outstanding Obligations shall accrue at the Default Rate. Interest accruing
at the Default Rate shall be payable on demand and in any event on the Maturity
Date (or the date of any earlier prepayment in full of the Obligations) and
shall accrue until the earliest to occur of (i) waiver of the applicable
Event of Default in accordance with Section 11.12, (ii) agreement by
the Majority Lenders to rescind the charging of interest at the Default Rate,
or (iii) payment in full of the Obligations. The Lenders shall not be
required to (A) accelerate the maturity of the Loans, (B) terminate
the Commitments, or (C) exercise any other rights or remedies under the
Loan Documents in order to charge interest hereunder at the Default Rate.

(c)           Applicable Margin. The
interest rate margin and Unused Line Fee, as the case may be (the “Applicable
Margin”), shall be that per annum interest rate margin or Unused Line Fee
determined as follows:  with respect to
each Advance or Unused Line Fee, the Applicable Margin shall be (x) from
the Agreement Date until the first day of the month immediately following the
month in which the Borrowing Base Certificate referred to in Section 7.5(b) with
respect to the month ending June 30, 2006 is delivered by the Borrower to
the Administrative Agent, 2.25% with respect to Eurodollar Advances,  0.25% with respect to Base Rate Advances and
0.25% with respect to Unused Line Fees, and (y) until the first day of the
month immediately following the month in which the Borrowing Base Certificate
referred to in Section 7.5(b) with respect to the month ending June 30,
2006 is delivered by the Borrower to the Administrative Agent and thereafter,
the interest rate margin and Unused Line Fee determined by the Administrative
Agent based upon the Average Availability as of the last day of the most
recently ended month ending after June 30, 2006 (with respect to which the
monthly Borrowing Base Certificate referred to in Section 7.5(b) has
been delivered), effective as of the first day of the month immediately
following the month in which the such monthly Borrowing Base Certificate has
been delivered by the Borrower to the Administrative Agent for the month most
recently ended, expressed as a per annum rate of interest as follows:

 43
 

 

 

	
  Average Availability

  	
   

  	
  Applicable Margin

  with respect to

  Eurodollar Advances

  	
   

  	
  Applicable Margin

  with respect to

  Base Rate Advances

  	
   

  	
  Applicable Margin

  with respect to

  Unused Line Fees

  	
   

  
	
  Greater than or
  equal to $65,000,000

  	
   

  	
  1.50%

  	
   

  	
  0.00%

  	
   

  	
  0.20%

  	
   

  
	
  Greater than or
  equal to $45,000,000 but less than $65,000,000  

  	
   

  	
  1.75%

  	
   

  	
  0.00%

  	
   

  	
  0.20%

  	
   

  
	
  Greater than or
  equal to $25,000,000 but less than $45,000,000  

  	
   

  	
  2.00%

  	
   

  	
  0.125%

  	
   

  	
  0.25%

  	
   

  
	
  Less than $25,000,000

  	
   

  	
  2.25%

  	
   

  	
  0.25%

  	
   

  	
  0.25%

  	
   

  

 

In the event that the
Borrower fails to timely provide the monthly Borrowing Base Certificate
referred to above in accordance with the terms of Sections 7.5(b), and without
prejudice to any additional rights under Section 9.2, as of the second
Business Day after delivery of such certificate was due until the first day of
the month immediately following the month in which such certificate is
delivered, the Applicable Margin shall be 2.25% with respect to Eurodollar
Advances, 0.25% with respect to Base Rate Advances and 0.25% with respect to
Unused Line Fees.

(d)           Computation of Interest. In
computing interest on any Advance, the date of making the Advance shall be included
and the date of payment shall be excluded; provided, however,
that if an Advance is repaid on the date that it is made, one (1) day’s
interest shall be due with respect to such Advance.

Section 2.4             Fees.

(a)           Fee Letter. The Borrower
agrees to pay to the Administrative Agent such fees as are set forth in the Fee
Letter.

(b)           Unused Line Fee. The Borrower
agrees to pay to the Administrative Agent, for the account of the Lenders in
accordance with their respective Revolving Commitment Ratios, an unused line
fee (“Unused Line Fee”) on the aggregate amount by which the Revolving
Loan Commitment exceeded the sum of the average daily amount of Aggregate
Revolving Credit Obligations (other than with respect to any Swing Loans and
Agent Advances) for each day from the Agreement Date through the Maturity Date
(or the date of any earlier prepayment in full of the Obligations), at the per
annum rate set forth in Section 2.3(c). Such Unused Line Fee shall be
computed on the basis of a hypothetical year of three hundred sixty (360) days
for the actual number of

 44
 

 

days elapsed, shall be
payable in arrears on June 1, 2006, for the immediately preceding calendar
month and thereafter shall be payable monthly in arrears on the first day of
each calendar month during the term of this Agreement for the immediately
preceding calendar month, and if then unpaid, on the Maturity Date (or the date
of any earlier prepayment in full of the Obligations), and shall be fully
earned when due and non-refundable when paid.

(c)           Letter of Credit
Fees.

(i)            The Borrower shall pay to the
Administrative Agent for the account of the Lenders, in accordance with their
respective Revolving Commitment Ratios, a fee on the stated amount of any
outstanding Letters of Credit for each day from the Date of Issue through the
Maturity Date (or the date of any earlier prepayment in full of the
Obligations) at a rate per annum on the amount of the Letter of Credit
Obligations equal to the Applicable Margin in effect from time to time with
respect to Eurodollar Advances. Such Letter of Credit fee shall be computed on
the basis of a hypothetical year of three hundred sixty (360) days for the
actual number of days elapsed, shall be payable monthly in arrears for each
calendar month on the first day of the immediately succeeding calendar month,
commencing on June 1, 2006, and if then unpaid, on the Maturity Date (or
the date of any earlier prepayment in full of the Obligations), and shall be
fully earned when due and non-refundable when paid.

(ii)           The Borrower shall also pay to the
Administrative Agent, for the account of the Issuing Bank, (A) a fee on
the stated amount of each Letter of Credit for each day from the Date of Issue
through the expiration date of each such Letter of Credit (or any earlier
prepayment in full of the Obligations) at a rate of one-eighth of one percent
(0.125%) per annum which fee shall be computed on the basis of a hypothetical
year of three hundred sixty (360) days for the actual number of days elapsed,
shall be payable monthly in arrears on the first day of each calendar month for
the immediately preceding calendar month, commencing on June 1, 2006, and,
if unpaid on the Maturity Date (or any earlier prepayment in full of the
Obligations) and (B) any reasonable and customary fees charged by the
Issuing Bank for issuance and administration of such Letters of Credit. The
foregoing fees shall be fully earned when due, and non-refundable when paid.

(d)           Computation of Fees. In
computing any fees payable under this Section 2.4, the first day of the
applicable period shall be included and the date of the payment shall be
excluded.

Section 2.5             Prepayment/Reduction/Increase of
Commitment. 

(a)           The principal amount of any
Base Rate Advance may be repaid in full or in part at any time, without penalty
or prior notice; and the principal amount of any

 45
 

 

Eurodollar Advance may be
prepaid prior to the applicable Payment Date, upon thirty (30) days’ prior
written notice to the Administrative Agent, provided that the Borrower
shall reimburse the Lenders and the Administrative Agent, on the earlier of
demand or the Maturity Date, for any Funding Loss or reasonable out-of-pocket
expense incurred by the Lenders or the Administrative Agent in connection with
such prepayment, as set forth in Section 2.9. Each notice of prepayment of
any Eurodollar Advance shall be irrevocable, and each prepayment or repayment
made under this Section 2.5(a) shall include the accrued interest on
the amount so prepaid or repaid. Upon receipt of any notice of repayment or
prepayment, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender’s portion of the
repayment or prepayment. Notwithstanding the foregoing, the Borrower shall not
make any repayment or prepayment of the Revolving Loans unless and until the
balance of the Swing Loans and the Agent Advances then outstanding is zero. Other
than with respect to amounts required to be applied to the Loans pursuant to
the last sentence of Section 2.6(a) or Section 2.6(b) or
pursuant to Section 2.6(c) or Section 6.15, repayments or
prepayments of principal hereunder shall be in minimum amounts of 1,000,000 and
integral multiples of $100,000 in excess thereof. Except as provided in Section 2.5(b),
any repayment and prepayment of Advances outstanding under the Revolving Loan
Commitment shall not reduce the Revolving Loan Commitment. Any prepayment of
the Loans shall not affect the Borrower’s obligation to continue to make
payments under any swap agreement (as defined in 11 U.S.C. §101), including,
without limitation any such swap agreement that is a Co-Collateral Agent Hedge
Agreement, which shall remain in full force and effect notwithstanding such
prepayment, subject to the terms of the applicable swap agreement.

(b)           The Borrower shall have the right, at
any time and from time to time after the Agreement Date and prior to the
Maturity Date, upon at least thirty (30) days’ prior written notice to the
Administrative Agent, without premium or penalty, to cancel or reduce
permanently all or a portion of the Revolving Loan Commitment on a pro rata
basis among the Lenders in accordance with their respective Revolving
Commitment Ratios; provided, that (i) any such partial reduction
shall be made in an amount not less than $5,000,000 and in integral multiples
of $1,000,000 in excess thereof, (ii) the
Revolving Loan Commitment may not be reduced to an amount below the then
outstanding Letter of Credit Obligations and (iii) after giving effect to
any partial reduction in the Revolving Loan Commitment, at least $100,000,000
of the Revolving Loan Commitment shall remain in place. As of the date of
cancellation or reduction set forth in such notice, the Revolving Loan
Commitment shall be permanently canceled or reduced to the amount stated in the
Borrower’s notice for all purposes herein, and the Borrower shall pay to the
Administrative Agent for the account of the Lenders the amount necessary to
repay in full the principal amount of the Revolving Loans, Swing Loans and
Agent Advances or reduce the principal amount of the Revolving Loans, Swing
Loans and Agent Advances then outstanding to not more than the amount of the
Revolving Loan Commitment as so reduced, together with accrued interest on the
amount so prepaid and the Unused Line Fee set forth in Section 2.4(b) accrued
through the date

 46
 

 

of the reduction with
respect to the amount reduced, and shall reimburse the Administrative Agent and
the Lenders for any Funding Loss or out-of-pocket expense incurred by any of
them in connection with such payment as set forth in Section 2.9 and, in
the case of cancellation of the Revolving Loan Commitment, shall secure the
Letter of Credit Obligations through the delivery of cash collateral in an
amount equal to 105% of the Letters of Credit Obligations.

(c)           Increase in Commitments.

(i)            So long as no Event of Default has
occurred and is continuing or would result therefrom, from time to time after
the Agreement Date and on or before June 2, 2008, Borrower may, upon at
least 30 days’ written notice to the Administrative Agent (who shall promptly
provide a copy of such notice to each Lender), 
propose to increase the Revolving Loan Commitments by an amount not to
exceed $25,000,000 (the amount of any such increase, the “Additional
Commitment Amount”); provided, however, the Borrower shall not be permitted
to request an increase in the Revolving Loan Commitments more that three (3) time
during the term of this Agreement. Each Lender shall have the right for a
period of 15 days following receipt of such notice, to elect by written notice
to the Borrower and the Administrative Agent to increase its Revolving Loan
Commitment by a principal amount equal to the product of (i) its Revolving
Commitment Ratio, multiplied by (ii) the Additional Commitment Amount. No
Lender (or any successor thereto) shall have any obligation to increase its
Revolving Loan Commitment or its other obligations under this Agreement and the
other Loan Documents, and any decision by a Lender to increase its Revolving
Loan Commitment shall be made in its sole discretion independently from any
other Lender.

(ii)           If any Lender shall not elect to
increase its Revolving Loan Commitment pursuant to clause (i) above, the
Borrower may designate another bank or other financial institution (which may
be, but need not be, one or more of the existing Lenders) which at the time
agrees to, in the case of any such Person that is an existing Lender, increase
its Revolving Loan Commitment and in the case of any other such Person (an “Additional
Lender”), become a party to this Agreement; provided, however,
that any new bank or financial institution must be acceptable to the
Administrative Agent, which acceptance will not be unreasonably withheld or
delayed. The sum of the increases in the Revolving Loan Commitments of the
existing Lenders pursuant to this subsection (ii) plus the Revolving Loan
Commitments of the Additional Lenders shall not in the aggregate exceed the
unsubscribed amount of the Additional Commitment Amount.

(iii)          An increase in the aggregate amount of
the Revolving Loan Commitments pursuant to this Section 2.5(c) shall
become effective upon the

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receipt by the
Administrative Agent of an agreement in form and substance satisfactory to the
Administrative Agent signed by the Borrower, by each Additional Lender and by
each other Lender whose Revolving Loan Commitment is to be increased, setting
forth the new Revolving Loan Commitments of such Lenders and setting forth the
agreement of each Additional Lender to become a party to this Agreement and to
be bound by all the terms and provisions hereof, together with such evidence of
appropriate corporate authorization on the part of the Borrower with respect to
the increase in the Revolving Loan Commitments and such opinions of counsel for
the Borrower and such other documentation with respect to the increase in the
Revolving Loan Commitments as the Administrative Agent may reasonably request.

(iv)          Upon the acceptance of any such
agreement by the Administrative Agent, the Revolving Loan Commitments shall
automatically be increased by the amount of the Revolving Loan Commitments
added through such agreement.

(v)           Upon any increase in the aggregate
amount of the Revolving Loan Commitments pursuant to this Section 2.5(c) that
is not pro rata among all Lenders based on their respective Revolving
Commitment Ratios, within five Business Days, in the case of any Base Rate
Advances then outstanding, and at the end of the then current Eurodollar
Advance Period with respect thereto, in the case of any Eurodollar Advances then
outstanding, the Borrower shall prepay such Loans in their entirety and, to the
extent the Borrower elects to do so and subject to the conditions specified in Article IV,
the Borrower shall reborrow Loans from the Lenders in proportion to their
respective Commitments after giving effect to such increase, until such time as
all outstanding Loans are held by the Lenders in such proportion.

Section 2.6             Repayment.

(a)           The Revolving Loans. All
unpaid principal and accrued interest on the Revolving Loans shall be due and
payable in full on the Maturity Date. Notwithstanding the foregoing, however,
in the event that at any time and for any reason there shall exist an
Overadvance, the Borrower shall pay to the Administrative Agent, on demand, an
amount equal to the Overadvance, which payment shall constitute a mandatory
payment of the Revolving Loans, Agent Advances, Swing Loans and Letter of
Credit Reserve Account, as appropriate.

(b)           Intentionally Omitted.

(c)           Other Mandatory
Repayments.

(i)            In the event that after the
Agreement Date, any Borrower Party shall issue any Equity Interests or shall
incur any Funded Debt other than

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Funded Debt permitted
under Section 8.1, one hundred percent (100%) of the Net Cash Proceeds
received by such Borrower Party from such issuance or incurrence shall be paid
on the date of receipt of the proceeds thereof by such Borrower Party to the
Lenders as a mandatory payment of the Loans; provided, that Borrower may
use Net Cash Proceeds from an issuance of Equity Interests to make prepayments
of Subordinated Debt to the extent permitted by clause (iii) of Section 8.16(b).
Any payment due hereunder shall be applied first to repay outstanding Agent
Advances, second to outstanding Swing Loans and then to repay outstanding
Revolving Loans. So long as no Event of Default exists, all such other Net Cash
Proceeds shall be applied in the manner set forth in Section 2.11(a). Notwithstanding
the foregoing, if an Event of Default exists, all such Net Cash Proceeds shall
be applied in the manner set forth in Section 2.11(b). The Revolving Loan
Commitment shall not be permanently reduced by the amount of any payment of the
Agent Advances, Swing Loans or Revolving Loans due under this Section 2.6(c)(i).
Nothing in this Section shall authorize any Borrower Party to incur any
Funded Debt except as expressly permitted by this Agreement or to issue any
Equity Interests except to the extent not prohibited by this Agreement.

(ii)           All Net Cash Proceeds from the sale
(other the sale of Inventory in the ordinary course of business) or casualty or
condemnation loss of any Collateral or other assets of any Borrower Party shall
be paid on the date of receipt thereof by the Borrower Parties as a mandatory
payment of the Obligations. So long as no Event of Default exists, all such Net
Cash Proceeds (other than Net Cash Proceeds from the sale of Inventory in the
ordinary course of business or from the casualty loss of any Inventory) shall
be applied first to repay outstanding Agent Advances, second to outstanding
Swing Loans and then to repay outstanding Revolving Loans. So long as no Event
of Default exists, all such other Net Cash Proceeds shall be applied in the
manner set forth in Section 2.11(a). Notwithstanding the foregoing, if an
Event of Default exists, all such Net Cash Proceeds shall be applied in the
manner set forth in Section 2.11(b). The Revolving Loan Commitment shall
not be permanently reduced by the amount of any payment of the Agent Advances,
Swing Loans or Revolving Loans due under this Section 2.6(c)(ii).

(d)           The Other Obligations. In
addition to the foregoing, the Borrower hereby promises to pay all Obligations
(other than Obligations in respect of Bank Products, if any), including,
without limitation, the principal amount of the Loans, amounts drawn under
Letters of Credit and interest and fees on the foregoing, as the same become
due and payable hereunder and, in any event, on the Maturity Date. In addition
to the foregoing, the Borrower hereby promises to pay all Obligations in
respect of Bank Products, if any, as the same become due and payable under any
applicable Bank Products Documents.

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Section 2.7             Notes; Loan Accounts.

(a)           The Loans shall be repayable in
accordance with the terms and provisions set forth herein and, upon request by
any Lender, the Loans owed to such Lender shall be evidenced by Revolving Loan
Notes. A Revolving Loan Note shall be payable to the order of each Lender
requesting such a Note in accordance with the Revolving Commitment Ratio of
such Lender. Each such Note shall be issued by the Borrower to the applicable
Lender and shall be duly executed and delivered by an Authorized Signatory of
the Borrower.

(b)           The Administrative Agent shall open
and maintain on its books in the name of the Borrower a loan account with
respect to the Loans and interest thereon (the “Loan Account”). The
Administrative Agent shall debit such Loan Account for the principal amount of
each Advance made by it on behalf of the Lenders, accrued interest thereon, and
all other amounts which shall become due from the Borrower pursuant to this
Agreement and shall credit the Loan Account for each payment which the Borrower
shall make in respect to the Obligations. The records of the Administrative
Agent with respect to such Loan Account shall be conclusive evidence of the
Loans and accrued interest thereon, absent manifest error.

Section 2.8             Manner
of Payment.

(a)           When Payments
Due.

(i)            Each payment (including any
prepayment) by the Borrower on account of the principal of or interest on the
Loans, fees, and any other amount owed to any member of the Lender Group under
this Agreement or the other Loan Documents shall be made not later than 12:00
noon. (Atlanta, Georgia time) on the date specified for payment under this
Agreement or any other Loan Document to the Administrative Agent at the
Administrative Agent’s Office, for the account of the Lenders, the Issuing Bank
or the Administrative Agent, as the case may be, in Dollars in immediately
available funds. Any payment received by the Administrative Agent after 12:00
noon. (Atlanta, Georgia time) shall be deemed received on the next Business Day.
In the case of a payment for the account of a Lender, the Administrative Agent
will promptly thereafter distribute the amount so received in like funds to
such Lender. In the case of a payment for the account of the Issuing Bank, the
Administrative Agent will promptly thereafter distribute the amount so received
in like funds to the Issuing Bank. If the Administrative Agent shall not have
received any payment from the Borrower as and when due, the Administrative
Agent will promptly notify the Lenders accordingly.

(ii)           Except as provided in the definition
of Eurodollar Advance Period, if any payment under this Agreement or any other
Loan Document shall be specified to be made on a day which is not a Business
Day, it shall be made on the next succeeding day which is a Business Day, and
such extension of time shall in such case be included in computing interest and
fees, if any, in connection with such payment.

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(b)           No Deduction.

(i)            Any and all payments of principal
and interest, or of any fees or indemnity or expense reimbursements by the
Borrower hereunder or under any other Loan Documents (the “Borrower Payments”)
shall be made without setoff or counterclaim and free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings with respect to such Borrower Payments and all
interest, penalties or similar liabilities with respect thereto, excluding
taxes imposed on the net income of any member of the Lender Group by the
jurisdiction under the laws of which such member of the Lender Group is
organized or conducts business or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges or withholdings and
liabilities collectively or individually “Taxes”). If the Borrower shall
be required to deduct any Taxes from or in respect of any sum payable to any
member of the Lender Group hereunder or under any other Loan Document, (A) the
sum payable shall be increased by the amount (an “additional amount”)
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.8(b)(i), such
member of the Lender Group shall receive an amount equal to the sum it would
have received had no such deductions been made, (B) the Borrower shall
make such deductions, and (C) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with Applicable
Law.

(ii)           In addition, the Borrower shall pay
to the relevant Governmental Authority in accordance with Applicable Law any
current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (such taxes being “Other Taxes”).

(iii)          The Borrower shall indemnify the
members of the Lender Group for the full amount of Taxes and Other Taxes with
respect to Borrower Payments paid by such Person, and any liability (including
penalties, interest and expenses (including reasonable attorney’s fees and
expenses)) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant Governmental
Authority. A certificate setting forth and containing an explanation in
reasonable detail of the manner in which such amount shall have been determined
and the amount of such payment or liability prepared by a member of the Lender
Group or the Administrative Agent on its behalf, absent manifest error, shall
be final, conclusive and binding for all purposes. Such indemnification shall
be made within thirty (30) days after the date the Administrative Agent or such
member, as the case may be, makes written demand therefor. If any Taxes or
Other Taxes for which the Administrative Agent or any member of the Lender
Group has received indemnification from the

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Borrower hereunder shall
be finally determined to have been incorrectly or illegally asserted and are
refunded to the Administrative Agent or such member, the Administrative Agent
or such member, as the case may be, shall promptly forward to the Borrower any
such refunded amount (after deduction of any Tax or Other Tax paid or payable
by any member of the Lender Group as a result of such refund), not exceeding
the increased amount paid by the Borrower pursuant to this Section 2.8(b).

(iv)          As soon as practicable after the date
of any payment of Taxes or Other Taxes by the Borrower to the relevant
Governmental Authority for which the Administrative Agent or any member of the
Lender Group has received indemnification from the Borrower hereunder, the
Borrower will deliver to the Administrative Agent, at its address, the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.

(v)           On or prior to the Agreement Date
(or, in the case of any Lender that becomes a party to this Agreement pursuant
to an Assignment and Acceptance, on or prior to the effective date of such
Assignment and Acceptance), each Lender which is organized in a jurisdiction
other than the United States or a political subdivision thereof (a “Foreign
Lender”) shall provide each of the Administrative Agent and the Borrower
with either (A) two (2) properly executed originals of Form W-8ECI
or Form W-8BEN (or any successor forms) prescribed by the Internal
Revenue Service or other documents reasonably satisfactory to the Borrower and
the Administrative Agent, as the case may be, certifying (1) as to such
Foreign Lender’s status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to such
Foreign Lender hereunder and under any other Loan Documents or Bank Products
Documents, if any, or (2) that all payments to be made to such Foreign
Lender hereunder and under any other Loan Documents and Bank Products
Documents, if any, are subject to such taxes at a rate reduced to zero by an
applicable tax treaty, or (B)(1) a certificate executed by such Lender
certifying that such Lender is not a “bank” and that such Lender qualifies for
the portfolio interest exemption under Section 881(c) of the Code,
and (2) two (2) properly executed originals of Internal Revenue
Service Form W-8BEN (or any successor form), in each case,
certifying such Lender’s entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made hereunder or
under any other Loan Documents or Bank Products Documents, if any. Each such
Foreign Lender agrees to provide the Administrative Agent and the Borrower with
new forms prescribed by the Internal Revenue Service upon the expiration or obsolescence
of any previously delivered form, or after the occurrence of any event
requiring a change in the most recent forms delivered by it to the
Administrative Agent and the Borrower.

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(vi)          The Borrower shall not be required to
indemnify any Foreign Lender, or to pay any additional amounts to such Foreign
Lender pursuant to Section 2.8(b)(i) or (b)(iii) above to the
extent that (A) the obligation to withhold amounts with respect to United
States Federal, state or local withholding tax existed on the date such Foreign
Lender became a party to this Agreement (or, in the case of a transferee, on
the effective date of the Assignment and Acceptance pursuant to which such
transferee became a Lender) or, with respect to payments to a new lending
office, the date such Foreign Lender designated such new lending office; provided,
however, that this clause (A) shall not apply to any Foreign Lender
that became a Lender or new lending office that became a new lending office as
a result of an assignment or designation made at the request of the Borrower;
and provided  further, however, that this clause (A) shall
not apply to the extent the indemnity payment or additional amounts, if any,
that any member of the Lender Group through a new lending office would be
entitled to receive (without regard to this clause (A)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment
or transfer to such member of the Lender Group making the designation of such
new lending office would have been entitled to receive in the absence of such
assignment, transfer or designation or (B) the obligation to pay such
additional amounts or such indemnity payments would not have arisen but for a
failure by such member of the Lender Group to comply with the provisions of Section 2.8(b)(v) above.

(vii)         Nothing contained in this Section 2.8(b) shall
require any member of the Lender Group to make available to the Borrower any of
its tax returns (or any other information) that it deems confidential or
proprietary.

Section 2.9             Reimbursement. Whenever any
Lender shall sustain or incur any Funding Losses or out-of-pocket expenses in
connection with (a) failure by the Borrower to borrow or continue any
Eurodollar Advance, or convert any Advance to a Eurodollar Advance, in each
case, after having given notice of its intention to do so in accordance with Section 2.2
(whether by reason of the election of the Borrower not to proceed or the
non-fulfillment of any of the conditions set forth in this Agreement), or (b) prepayment
of any Eurodollar Advance in whole or in part for any reason or (c) failure
by the Borrower to prepay any Eurodollar Advance after giving notice of its
intention to prepay such Advance, the Borrower agrees to pay to such Lender,
promptly upon such Lender’s demand therefor, an amount sufficient to compensate
such Lender for all such Funding Losses and out-of-pocket expenses. Such Lender’s
good faith determination of the amount of such Funding Losses and out-of-pocket
expenses, absent manifest error, shall be binding and conclusive.

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Section 2.10           Pro
Rata Treatment.

(a)           Advances. Each Advance with
respect to the Revolving Loans from the Lenders under this Agreement shall be
made pro rata on the basis of their respective Revolving Commitment Ratios.

(b)           Payments. Each payment and
prepayment of the principal of the Revolving Loans and each payment of interest
on the Revolving Loans received from the Borrower shall be made by the
Administrative Agent to the Lenders pro rata on the basis of their respective
unpaid principal amounts thereof outstanding immediately prior to such payment
or prepayment (except in cases when a Lender’s right to receive payments is
restricted pursuant to Section 2.2(e)). If any Lender shall obtain any
payment (whether involuntary, through the exercise of any right of set-off or
otherwise) on account of the Loans in excess of its ratable share of Loans
under its Aggregate Commitment Ratio (or in violation of any restriction set
forth in Section 2.2(e)), such Lender shall forthwith purchase from the
other Lenders such participation in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and such Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery
without interest thereon unless the Lender obligated to repay such amount is
required to pay interest. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.10(b) may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.

Section 2.11           Application of Payments.

(a)           Payments Prior to Event of Default.
Prior to the occurrence and continuance of an Event of Default, all amounts
received by the Administrative Agent from the Borrower (other than payments
specifically earmarked for application to certain principal, interest, fees or
expenses hereunder or payments made pursuant to Section 2.6(c) (which
shall be applied as earmarked or, with respect to payments under Section 2.6(c),
as set forth in Section 2.6(c))), shall be distributed by the
Administrative Agent in the following order of priority:

FIRST, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Administrative Agent or the Co-Collateral Agents with
enforcing the rights of the Lenders under the Loan Documents, and any Agent
Advances made by the Administrative Agent under or pursuant to the terms of the
Loan Documents;

 54
 

 

SECOND, to payment of any
fees owed to the Administrative Agent, any Co-Collateral Agent, the Issuing
Bank or the Swing Bank hereunder or under any other Loan Document;

THIRD, to the payment of
all obligations consisting of accrued fees and interest payable to the Lenders
hereunder;

FOURTH, to the payment of
principal then due and payable on the Swing Loans;

FIFTH, to the payment of
principal then due and payable on the Revolving Loans;

SIXTH, to the payment of
the Obligations arising in respect of any Bank Products then due and payable;
and

SEVENTH, to the payment
of all other Obligations not otherwise referred to in this Section 2.11(a) then
due and payable.

(b)           Payments Subsequent to Event of
Default. Notwithstanding anything in this Agreement or any other Loan
Documents which may be construed to the contrary, subsequent to the occurrence
and during the continuance of an Event of Default, payments and prepayments
with respect to the Obligations made to the Lender Group, or any of them, or
otherwise received by any member of the Lender Group (from realization on
Collateral or otherwise) shall be distributed in the following order of
priority (subject, as applicable, to Section 2.10):

FIRST, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Administrative Agent or the Co-Collateral Agents with
enforcing the rights of the Lenders under the Loan Documents, and any Agent
Advances made by the Administrative Agent under or pursuant to the terms of the
Loan Documents (including, without limitation, any costs incurred in connection
with the sale or disposition of any Collateral);

SECOND, to payment of any
fees owed to the Administrative Agent, any Co-Collateral Agent, the Issuing
Bank or the Swing Bank hereunder or under any other Loan Document;

THIRD, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Lenders with enforcing the rights of its rights under
the Loan Documents;

FOURTH, to the payment of
all obligations consisting of accrued fees and interest payable to the Lenders
hereunder;

FIFTH, to the payment of
the principal of the Swing Loans then outstanding,

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SIXTH, pro rata, to (i) the
payment of principal on the Revolving Loans then outstanding, and (ii) the
Letter of Credit Reserve Account to the extent of one hundred five percent
(105%) of any Letter of Credit Obligations then outstanding,

SEVENTH, to the payment
of any Obligation arising in respect of any Bank Products;

EIGHTH, to any other
Obligations not otherwise referred to in this Section 2.11(b); and

NINTH, upon satisfaction
in full of all Obligations, to the Borrower or as otherwise required by law.

Section 2.12           Use of Proceeds. The proceeds
of the Loans shall be used by the Borrower as follows:

(a)           The proceeds of the initial Advance
of Revolving Loans hereunder shall be used on the Agreement Date to refinance
existing Funded Debt and to fund transaction costs.

(b)           The balance of the proceeds of the
Loans shall be used for the Borrower’s general operating needs to the extent
not inconsistent with the provisions of this Agreement.

Section 2.13           All Obligations to Constitute One
Obligation. All Obligations shall constitute one general obligation of the
Borrower and shall be secured by the Administrative Agent’s security interest
(on behalf of, and for the benefit of, the Lender Group) and Lien upon all of
the Collateral, and by all other security interests and Liens heretofore, now
or at any time hereafter granted by any Borrower Party to the Administrative
Agent or any other member of the Lender Group, to the extent provided in the
Security Documents under which such Liens arise.

Section 2.14           Maximum Rate of Interest. The
Borrower and the Lender Group hereby agree and stipulate that the only charges
imposed upon the Borrower for the use of money in connection with this
Agreement are and shall be the specific interest and fees described in this Article 2
and in any other Loan Document. Notwithstanding the foregoing, the Borrower and
the Lender Group further agree and stipulate that all closing fees, agency
fees, syndication fees, facility fees, underwriting fees, default charges, late
charges, funding or “breakage” charges, increased cost charges, attorneys’ fees
and reimbursement for costs and expenses paid by any member of the Lender Group
to third parties or for damages incurred by the Lender Group, or any of them,
are charges to compensate the Lender Group for underwriting and administrative
services and costs or losses performed or incurred, and to be performed and
incurred, by the Lender Group in connection with this Agreement and the other
Loan Documents and shall under no circumstances be deemed to be charges for the
use of money pursuant to Official Code of

 56
 

 

Georgia Annotated
Sections 7-4-2 and 7-4-18 or any other Applicable Law. In
no event shall the amount of interest and other charges for the use of money
payable under this Agreement exceed the maximum amounts permissible under any
law that a court of competent jurisdiction shall, in a final determination,
deem applicable. The Borrower and the Lender Group, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
other charges for the use of money and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary
notwithstanding, if the amount of such interest and other charges for the use
of money or manner of payment exceeds the maximum amount allowable under
Applicable Law, then, ipso  facto as of the Agreement Date, the
Borrower is and shall be liable only for the payment of such maximum as allowed
by law, and payment received from the Borrower in excess of such legal maximum,
whenever received, shall be applied to reduce the principal balance of the
Revolving Loans to the extent of such excess.

Section 2.15           Letters
of Credit.

(a)           Subject to the terms
and conditions of this Agreement, the Issuing Bank, on behalf of the Lenders,
and in reliance on the agreements of the Lenders set forth in Section 2.15(c) below,
hereby agrees to issue one or more Letters of Credit up to an aggregate face
amount equal to the Letter of Credit Commitment; provided, however,
that, except as described in the last sentence of Section 4.3, the Issuing
Bank shall not issue any Letter of Credit unless the conditions precedent to
the issuance thereof set forth in Section 4.3 have been satisfied. Each
Letter of Credit shall (i) be denominated in Dollars, and (ii) expire
no later than the earlier to occur of (A) the date thirty (30) days prior
to the Maturity Date, and (B) three hundred sixty (360) days after its
date of issuance (but may contain provisions for automatic renewal provided
that no Default exists on the renewal date or would be caused by such renewal
and provided no such renewal shall extend beyond the date thirty (30) days
prior to the Maturity Date). Each Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
State of Georgia. The Issuing Bank shall not at any time be obligated to issue,
or cause to be issued, any Letter of Credit if such issuance would conflict
with, or cause the Issuing Bank to exceed any limits imposed by, any Applicable
Law.

(b)           The Borrower may from time to time
request that the Issuing Bank issue a Letter of Credit. The Borrower shall
execute and deliver to the Administrative Agent and the Issuing Bank a Request
for Issuance of Letter of Credit for each Letter of Credit to be issued by the
Issuing Bank, not later than 11:00 a.m. (Atlanta, Georgia time) on the
third (3rd) Business Day preceding the date on which the requested Letter of
Credit is to be issued, or such shorter notice as may be acceptable to the
Issuing Bank and the Administrative Agent. Upon receipt of any such Request for
Issuance of Letter of Credit, subject to satisfaction of all conditions
precedent thereto as set forth in Section 4.3 or waiver of such conditions
pursuant to the last sentence of Section 4.3, the Issuing Bank shall
process such Request for Issuance of Letter of Credit and the certificates,
documents

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and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby. The Issuing Bank shall furnish a copy of such Letter of Credit to the
Borrower and the Administrative Agent following the issuance thereof. In
addition to the fees payable pursuant to Section 2.4(c)(ii), the Borrower
shall pay or reimburse the Issuing Bank for normal and customary costs and
expenses incurred by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering the Letters of Credit.

(c)           Immediately upon the issuance by the
Issuing Bank of a Letter of Credit and in accordance with the terms and
conditions of this Agreement, the Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Lender’s Revolving Commitment Ratio, in such Letter of Credit and the
obligations of the Borrower with respect thereto (including, without
limitation, all Letter of Credit Obligations with respect thereto). The Issuing
Bank shall promptly notify the Administrative Agent of any draw under a Letter
of Credit. At such time as the Administrative Agent shall be notified by the
Issuing Bank that the beneficiary under any Letter of Credit has drawn on the
same, the Administrative Agent shall promptly notify the Borrower and the Swing
Bank (or, at its option, all Lenders), by telephone or telecopy, of the amount
of the draw and, in the case of each Lender, such Lender’s portion of such draw
amount as calculated in accordance with its Revolving Commitment Ratio.

(d)           The Borrower hereby agrees to
immediately reimburse the Issuing Bank for amounts paid by the Issuing Bank in
respect of draws under each Letter of Credit. In order to facilitate such
repayment, the Borrower hereby irrevocably requests the Lenders, and the
Lenders hereby severally agree, on the terms and conditions of this Agreement
(other than as provided in Article 2 with respect to the amounts of, the
timing of requests for, and the repayment of Advances hereunder and in Article 4
with respect to conditions precedent to Advances hereunder), with respect to
any drawing under a Letter of Credit, to make a Base Rate Advance on each day
on which a draw is made under any Letter of Credit and in the amount of such
draw, and to pay the proceeds of such Advance directly to the Issuing Bank to
reimburse the Issuing Bank for the amount paid by it upon such draw. Each
Lender shall pay its share of such Base Rate Advance by paying its portion of
such Advance to the Administrative Agent in accordance with Section 2.2(e) and
its Revolving Commitment Ratio, without reduction for any set-off or
counterclaim of any nature whatsoever and regardless of whether any Default
exists or would be caused thereby. The disbursement of funds in connection with
a draw under a Letter of Credit pursuant to this Section hereunder shall
be subject to the terms and conditions of Section 2.2(e). The obligation
of each Lender to make payments to the Administrative Agent, for the account of
the Issuing Bank, in accordance with this Section 2.15 shall be absolute
and unconditional and no Lender shall be relieved of its obligations to make

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such payments by reason
of noncompliance by any other Person with the terms of the Letter of Credit or
for any other reason (other than the gross negligence or willful misconduct of
the Issuing Bank in paying such Letter of Credit, as determined by a final
non-appealable judgment of a court of competent jurisdiction). The
Administrative Agent shall promptly remit to the Issuing Bank the amounts so
received from the other Lenders. Any overdue amounts payable by the Lenders to
the Issuing Bank in respect of a draw under any Letter of Credit shall bear
interest, payable on demand, (x) for the first two (2) Business Days,
at the Federal Funds Rate, and (y) thereafter, at the Base Rate. Notwithstanding
the foregoing, at the request of the Administrative Agent, the Swing Bank may,
at its option and subject to the conditions set forth in Section 2.2(g) other
than the condition that the applicable conditions precedent set forth in Article 4
be satisfied, make Swing Loans to reimburse the Issuing Bank for amounts drawn
under Letters of Credit.

(e)           The Borrower agrees that each Advance
by the Lenders to reimburse the Issuing Bank for draws under any Letter of
Credit, shall, for all purposes hereunder, unless and until converted into a
Eurodollar Advance pursuant to Section 2.2(b)(ii), be deemed to be a Base
Rate Advance under the Revolving Loan Commitment and shall be payable and bear
interest in accordance with all other Base Rate Advances of Revolving Loans.

(f)            The Borrower agrees that any action
taken or omitted to be taken by the Issuing Bank in connection with any Letter
of Credit, except for such actions or omissions as shall constitute gross
negligence or willful misconduct on the part of such Issuing Bank as determined
by a final non-appealable judgment of a court of competent jurisdiction, shall
be binding on the Borrower as between the Borrower and the Issuing Bank, and
shall not result in any liability of the Issuing Bank to the Borrower. The
obligation of the Borrower to reimburse the Issuing Bank for a drawing under
any Letter of Credit or the Lenders for Advances made by them to the Issuing
Bank on account of draws made under the Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances whatsoever, including,
without limitation, the following circumstances:

(i)            Any lack of validity or
enforceability of any Loan Document;

(ii)           Any amendment or waiver of or consent
to any departure from any or all of the Loan Documents;

(iii)          Any improper use which may be made of
any Letter of Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith;

(iv)          The existence of any claim, set-off,
defense or any right which the Borrower may have at any time against any
beneficiary or any

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transferee of any Letter
of Credit (or Persons for whom any such beneficiary or any such transferee may
be acting), any Lender or any other Person, whether in connection with any
Letter of Credit, any transaction contemplated by any Letter of Credit, this
Agreement, or any other Loan Document, or any unrelated transaction;

(v)           Any statement or any other documents
presented under any Letter of Credit proving to be insufficient, forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;

(vi)          The insolvency of any Person issuing
any documents in connection with any Letter of Credit;

(vii)         Any breach of any agreement between the
Borrower and any beneficiary or transferee of any Letter of Credit;

(viii)        Any irregularity in the transaction with
respect to which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit;

(ix)           Any errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, wireless or otherwise, whether or not they are in code;

(x)            Any act, error, neglect or default,
omission, insolvency or failure of business of any of the correspondents of the
Issuing Bank;

(xi)           Any other circumstances arising from
causes beyond the control of the Issuing Bank;

(xii)          Payment by the Issuing Bank under any
Letter of Credit against presentation of a sight draft or a certificate which
does not comply with the terms of such Letter of Credit, provided that such
payment shall not have constituted gross negligence or willful misconduct of
the Issuing Bank as determined by a final non-appealable judgment of a court of
competent jurisdiction; and

(xiii)         Any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.

(g)           The Borrower will indemnify and hold
harmless each Indemnified Person from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including reasonable attorneys’ fees) which may be imposed on,

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incurred by or asserted
against such Indemnified Person in any way relating to or arising out of the
issuance of a Letter of Credit, except that the Borrower shall not be liable to
an Indemnified Person for any portion of such claims, liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of such
Indemnified Person as determined by a final non-appealable judgment of a court
of competent jurisdiction. This Section 2.15(g) shall survive
termination of this Agreement.

(h)           Each Lender shall be responsible (to
the extent the Issuing Bank is not reimbursed by the Borrower) for its pro rata
share (based on such Lender’s Revolving Commitment Ratio) of any and all
reasonable out-of-pocket costs, expenses (including reasonable legal fees) and
disbursements which may be incurred or made by the Issuing Bank in connection
with the collection of any amounts due under, the administration of, or the
presentation or enforcement of any rights conferred by any Letter of Credit,
the Borrower’s or any guarantor’s obligations to reimburse draws thereunder or
otherwise. In the event the Borrower shall fail to pay such expenses of the
Issuing Bank within fifteen (15) days of demand for payment by the Issuing
Bank, each Lender shall thereupon pay to the Issuing Bank its pro rata share
(based on such Lender’s Revolving Commitment Ratio) of such expenses within ten
(10) days from the date of the Issuing Bank’s notice to the Lenders of the
Borrower’s failure to pay; provided, however, that if the
Borrower shall thereafter pay such expenses, the Issuing Bank will promptly
repay to each Lender the amounts received from such Lender hereunder.

Section 2.16           Bank Products. Any Borrower
Party may request and either Co-Collateral Agent may, in its sole and absolute
discretion, arrange for such Borrower Party to obtain from such Co-Collateral
Agent or any Affiliate of such Co-Collateral Agent, as applicable, Bank
Products although no Borrower Party is required to do so. If any Bank Products
are provided by an Affiliate of a Co-Collateral Agent, the Borrower Parties
agree to indemnify and hold the Lender Group, or any of them, harmless from any
and all costs and obligations now or hereafter incurred by the Lender Group, or
any of them, which arise from any indemnity given by such Co-Collateral Agent
to any of its Affiliates, as applicable, related to such Bank Products; provided,
however, nothing contained herein is intended to limit the Borrower
Parties’ rights, with respect to such Co-Collateral Agent or any of its Affiliates,
as applicable, if any, which arise as a result of the execution of documents by
and between the Borrower Parties and such Person which relate to any Bank
Products. The agreement contained in this Section shall survive
termination of this Agreement. The Borrower Parties acknowledge and agree that
the obtaining of Bank Products from the Co-Collateral Agents or their
Affiliates (a) is in the sole and absolute discretion of the Co-Collateral
Agents or such Affiliates, and (b) is subject to all rules and regulations
of the Co-Collateral Agents or such Affiliates.

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ARTICLE 3.

GUARANTY

Section 3.1             Guaranty.

(a)           Each Guarantor hereby guarantees to
the Administrative Agent, for the benefit of the Lender Group, the full and
prompt payment of the Obligations, including, without limitation, any interest
therein (including, without limitation, interest as provided in this Agreement,
accruing after the filing of a petition initiating any insolvency proceedings,
whether or not such interest accrues or is recoverable against the Borrower
after the filing of such petition for purposes of the Bankruptcy Code or is an
allowed claim in such proceeding), plus reasonable attorneys’ fees and expenses
if the obligations represented by this Guaranty are collected by law, through
an attorney-at-law, or under advice therefrom.

(b)           Regardless of whether any proposed
guarantor or any other Person shall become in any other way responsible to the
Lender Group, or any of them, for or in respect of the Obligations or any part
thereof, and regardless of whether or not any Person now or hereafter
responsible to the Lender Group, or any of them, for the Obligations or any
part thereof, whether under this Guaranty or otherwise, shall cease to be so
liable, each Guarantor hereby declares and agrees that this Guaranty shall be a
joint and several obligation, shall be a continuing guaranty and shall be
operative and binding until the Obligations shall have been indefeasibly paid
in full in cash (or in the case of Letter of Credit Obligations, secured
through delivery of cash collateral in an amount equal to one hundred and five
percent (105%) of the Letter of Credit Obligations) and the Commitments shall
have been terminated.

(c)           Each Guarantor absolutely,
unconditionally and irrevocably waives any and all right to assert any defense
(other than the defense of payment in cash in full, to the extent of its
obligations hereunder, or a defense that such Guarantor’s liability is limited
as provided in Section 3.1(g)), set-off, counterclaim or cross-claim of
any nature whatsoever with respect to this Guaranty or the obligations of the
Guarantors under this Guaranty or the obligations of any other Person or party
(including, without limitation, the Borrower) relating to this Guaranty or the
obligations of any of the Guarantors under this Guaranty or otherwise with
respect to the Obligations in any action or proceeding brought by the
Administrative Agent or any other member of the Lender Group to collect the
Obligations or any portion thereof, or to enforce the obligations of any of the
Guarantors under this Guaranty.

(d)           The Lender Group, or any of them, may
from time to time, without exonerating or releasing any Guarantor in any way
under this Guaranty, (i) take such further or other security or securities
for the Obligations or any part thereof as they may deem proper, or (ii) release,
discharge, abandon or otherwise deal with or fail to deal with any Guarantor of
the Obligations or any security or securities therefor or any part thereof

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now or hereafter held by
the Lender Group, or any of them, or (iii) amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Loan Documents, all as they may consider expedient or appropriate in
their sole discretion. Without limiting the generality of the foregoing, or of Section 3.1(e),
it is understood that the Lender Group, or any of them, may, without
exonerating or releasing any Guarantor, give up, modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept
or make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, and with or without notice, all as such
Person may deem expedient.

(e)           Each Guarantor acknowledges and agrees
that no change in the nature or terms of the Obligations or any of the Loan
Documents, or other agreements, instruments or contracts evidencing, related to
or attendant with the Obligations (including any novation), shall discharge all
or any part of the liabilities and obligations of such Guarantor pursuant to
this Guaranty; it being the purpose and intent of the Guarantors and the Lender
Group that the covenants, agreements and all liabilities and obligations of
each Guarantor hereunder are absolute, unconditional and irrevocable under any
and all circumstances. Without limiting the generality of the foregoing, each
Guarantor agrees that until each and every one of the covenants and agreements
of this Guaranty is fully performed, and without possibility of recourse,
whether by operation of law or otherwise, such Guarantor’s undertakings
hereunder shall not be released, in whole or in part, by any action or thing
which might, but for this paragraph of this Guaranty, be deemed a legal or
equitable discharge of a surety or guarantor, or by reason of any waiver,
omission of the Lender Group, or any of them, or their failure to proceed
promptly or otherwise, or by reason of any action taken or omitted by the
Lender Group, or any of them, whether or not such action or failure to act
varies or increases the risk of, or affects the rights or remedies of, such
Guarantor or by reason of any further dealings between the Borrower, on the one
hand, and any member of the Lender Group, on the other hand, or any other guarantor
or surety, and such Guarantor hereby expressly waives and surrenders any
defense to its liability hereunder except as otherwise expressly set forth in
this Agreement, or any right of counterclaim or offset of any nature or
description which it may have or may exist based upon, and shall be deemed to
have consented to, any of the foregoing acts, omissions, things, agreements or
waivers.

(f)            The Lender Group, or any of them,
may, without demand or notice of any kind upon or to any Guarantor, at any time
or from time to time when any amount shall be due and payable hereunder by any
Guarantor, if the Borrower shall not have timely paid any of the Obligations
(or in the case of Letter of Credit Obligations, secured through delivery of
cash collateral in an amount equal to one hundred and five percent (105%) of
the Letter of Credit Obligations), set-off and appropriate and apply to any
portion of the Obligations hereby guaranteed, and in such order of application
as the Administrative Agent may from time to time elect in accordance with this
Agreement, any deposits, property, balances, credit accounts or moneys of any
Guarantor in the possession of any member of the Lender Group or under their
respective control for any

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purpose. If and to the
extent that any Guarantor makes any payment to the Administrative Agent or any
other Person pursuant to or in respect of this Guaranty, any claim which such
Guarantor may have against the Borrower by reason thereof shall be subject and
subordinate to the prior payment in full of the Obligations to the satisfaction
of the Lender Group.

(g)           The creation or existence from time
to time of Obligations in excess of the amount committed to or outstanding on
the date of this Guaranty is hereby authorized, without notice to any Guarantor,
and shall in no way impair or affect this Guaranty or the rights of the Lender
Group herein. It is the intention of each Guarantor and the Administrative
Agent that each Guarantor’s obligations hereunder shall be, but not in excess
of, the Maximum Guaranteed Amount (as herein defined). The “Maximum
Guaranteed Amount” with respect to any Guarantor, shall mean the maximum
amount which could be paid by such Guarantor without rendering this Guaranty
void or voidable as would otherwise be held or determined by a court of
competent jurisdiction in any action or proceeding involving any state or
Federal bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to the insolvency of debtors.

(h)           Upon the bankruptcy or winding up or
other distribution of assets of the Borrower, or of any surety or guarantor
(other than the applicable Guarantor) for any Obligations of the Borrower to
the Lender Group, or any of them, the rights of the Administrative Agent
against any Guarantor shall not be affected or impaired by the omission of any
member of the Lender Group to prove its claim, or to prove the full claim, as
appropriate, against the Borrower, or any such other guarantor or surety, and
the Administrative Agent may prove such claims as it sees fit and may refrain
from proving any claim and in its discretion may value as it sees fit or
refrain from valuing any security held by it without in any way releasing,
reducing or otherwise affecting the liability to the Lender Group of each
of  the Guarantors.

(i)            Each Guarantor hereby absolutely,
unconditionally and irrevocably expressly waives, except to the extent such
waiver would be expressly prohibited by Applicable Law, the following:  (i) notice of acceptance of this Guaranty,
(ii) notice of the existence or creation of all or any of the Obligations,
(iii) presentment, demand, notice of dishonor, protest and all other
notices whatsoever (other than notices expressly required hereunder or under
any other Loan Document to which any Guarantor is a party), (iv) all
diligence in collection or protection of or realization upon the Obligations or
any part thereof, any obligation hereunder, or any security for any of the
foregoing, (v) all rights to enforce any remedy which the Lender Group, or
any of them, may have against the Borrower, (vi) until the Obligations
shall have been paid in full in cash (or in the case of a Letter of Credit
Obligations, secured through delivery of cash collateral in an amount equal to
one hundred and five percent (105%) of the Letter of Credit Obligations), all
rights of subrogation, indemnification, contribution and reimbursement from the
Borrower for amounts paid hereunder and any benefit of, or right to participate

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in, any collateral or
security now or hereinafter held by the Lender Group, or any of them, in
respect of the Obligations, and (vii) any and all rights under Official
Code of Georgia Sections 10-7-23 and 10-7-24. If a
claim is ever made upon any member of the Lender Group for the repayment or
recovery of any amount or amounts received by such Person in payment of any of
the Obligations and such Person repays all or part of such amount by reason of (A) any
judgment, decree or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (B) any
settlement or compromise of any such claim effected by such Person with any
such claimant, including the Borrower, then in such event each Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or the
cancellation of any promissory note or other instrument evidencing any of the
Obligations, and such Guarantor shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.

(j)            This Guaranty is a continuing
guaranty of the Obligations and all liabilities to which it applies or may
apply under the terms hereof and shall be conclusively presumed to have been
created in reliance hereon. No failure or delay by any member of the Lender
Group in the exercise of any right, power, privilege or remedy shall operate as
a waiver thereof, and no single or partial exercise by the Administrative Agent
of any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy and no course of dealing between any
Guarantor and any member of the Lender Group shall operate as a waiver thereof.
No action by any member of the Lender Group permitted hereunder shall in any
way impair or affect this Guaranty. For the purpose of this Guaranty, the
Obligations shall include, without limitation, all Obligations of the Borrower
to the Lender Group, notwithstanding any right or power of any third party,
individually or in the name of the Borrower and the Lender Group, or any of
them, to assert any claim or defense as to the invalidity or unenforceability
of any such Obligation, and no such claim or defense shall impair or affect the
obligations of any Guarantor hereunder.

(k)           This is a guaranty of payment and not
of collection. In the event the Administrative Agent makes a demand upon any
Guarantor in accordance with the terms of this Guaranty, such Guarantor shall
be held and bound to the Administrative Agent directly as debtor in respect of
the payment of the amounts hereby guaranteed. All costs and expenses,
including, without limitation, reasonable attorneys’ fees and expenses,
incurred by the Administrative Agent in obtaining performance of or collecting
payments due under this Guaranty shall be deemed part of the Obligations
guaranteed hereby.

(l)            Each Subsidiary Guarantor is a
direct or indirect wholly owned Domestic Subsidiary of the Borrower. Each
Guarantor expressly represents and acknowledges that any financial
accommodations by the Lender Group to the Borrower,

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including, without
limitation, the extension of credit, are and will be of direct interest,
benefit and advantage to such Guarantor.

(m)          The payment obligation of a Guarantor
to any other Guarantor under any Applicable Law regarding contribution rights
among co-obligors or otherwise shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of such Guarantor under
the other provisions of this Guaranty, and such Guarantor shall not exercise
any right or remedy with respect to such rights until payment and satisfaction
in full of all such obligations.

Section 3.2             Special Provisions Applicable to
Subsidiary Guarantors.

(a)           Pursuant to Section 6.21 of this
Agreement, any new Domestic Subsidiary of the Borrower is required to enter
into this Agreement by executing and delivering to the Administrative Agent a
Guaranty Supplement. Upon the execution and delivery of a Guaranty Supplement
by such new Domestic Subsidiary, such Domestic Subsidiary shall become a
Guarantor and Borrower Party hereunder with the same force and effect as if
originally named as a Guarantor or Borrower Party herein. The execution and
delivery of any Guaranty Supplement (and any other supplement to any Loan
Document delivered in connection therewith) adding an additional Guarantor as a
party to this Agreement or any other applicable Loan Document shall not require
the consent of any other party hereto. The rights and obligations of each party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor hereunder.

ARTICLE 4.

CONDITIONS PRECEDENT

Section 4.1             Conditions Precedent to Initial
Advance. The obligations of the Lenders to undertake the Commitments and to
make the initial Advance hereunder, and the obligation of the Issuing Bank to
issue the initial Letter of Credit hereunder, are subject to the prior
fulfillment of each of the following conditions:

(a)           The Administrative Agent shall have
received each of the following, in form and substance satisfactory to the
Co-Collateral Agents:

(i)            This duly executed Agreement;

(ii)           A duly executed Revolving Loan Note
to the order of each Lender requesting a promissory note in the amount of such
Lender’s Revolving Commitment Ratio of the Revolving Loan Commitment;

(iii)          The Security Agreement duly executed
by the Borrower Parties, together with Uniform Commercial Code financing
statements related thereto;

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(iv)          A Copyright Security Agreement duly
executed by the Borrower;

(v)           A Trademark Security Agreement duly
executed by the Borrower;

(vi)          The Pledge Agreement duly executed by
the Borrower Parties, together with (A) original stock certificates
evidencing the issued and outstanding shares of capital stock pledged to the
Administrative Agent pursuant to the Pledge Agreement and (B) stock powers
or other appropriate instruments of transfer executed in blank;

(vii)         The duly executed Blocked Account
Agreements required by Section 6.15;

(viii)        The Fee Letter duly executed by the
Borrower;

(ix)           Valuations by the Administrative
Agent’s field examiners reflecting values of the Borrower Parties’ Accounts and
other personal property at levels acceptable to the Co-Collateral Agents;

(x)            The legal opinion of Arent Fox PLLC,
counsel to the Borrower, addressed to the Lender Group;

(xi)           The duly executed Request for Advance
for the initial Advance of the Loans;

(xii)          A duly executed Borrowing Base
Certificate dated as of the Agreement Date;

(xiii)         Duly executed Collateral Access
Agreements with respect to the Borrower’s leased premises or goods in the
possession of bailees;

(xiv)        A loan certificate signed by an
Authorized Signatory of each Borrower Party, including a certificate of
incumbency with respect to each Authorized Signatory of such Borrower Party,
together with appropriate attachments which shall include, without limitation,
the following: (A) a copy of the Certificate of Incorporation or Formation
of such Borrower Party certified to be true, complete and correct by the
Secretary of State of the State of Delaware, (B) a true, complete and
correct copy of the By-Laws of such Borrower Party, (C) a true, complete
and correct copy of the resolutions of such Person authorizing the execution,
delivery and performance by such Person of the Loan Documents and the Bank
Products Documents, if any, and authorizing the borrowings hereunder, (D) certificates
of good standing from each jurisdiction in the US in which such Borrower Party
does business, (E) copies of employment contracts for the

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following management
level employees of the Borrower: James Leto, and (F) copies
of all shareholders agreements currently in effect relating to the Equity
Interests of the Borrower or share purchase agreements for equity interests
that have not been issued (other than pursuant to a Plan) relating to the
Equity Interests of the Borrower;

(xv)         A Solvency Certificate executed by an
Authorized Signatory of the Borrower regarding the solvency and financial
condition of the Borrower Parties, together with a pro forma balance sheet
giving effect to the incurrence of the Subordinated Debt and the incurrence of
the initial Advance and the issuance of the initial Letter of Credit hereunder;

(xvi)        The duly executed Subordinated Debt
Intercreditor Agreement;

(xvii)       A true, correct and complete copy of the
executed Subordinated Debt Documents, together with all exhibits and schedules
thereto;

(xviii)      a Vendor Intercreditor Agreement duly
executed by Hewlett-Packard Company and the other parties thereto;

(xix)         Borrower’s (A) 2006 business plan
including its 12 month income statement, balance sheet, statement of cash flows
and availability forecast and (B) annual projections, including income
statement, balance sheet and statement of cash flows, through the Maturity
Date;

(xx)          Certificates of insurance and loss
payable endorsements with respect to the Borrower Parties and certified copies
of all insurance policies of the Borrower Parties, in each case, meeting the
requirements of Section 6.5;

(xxi)         Pay-off letters, termination
statements, canceled mortgages and the like required by the Administrative
Agent in connection with the removal of any Liens (other than Permitted Liens),
including, without limitation, all tax liens, against the assets of the
Borrower Parties;

(xxii)        Lien search results with respect to the
Borrower Parties from all appropriate jurisdictions and filing offices
(including the United States Patent and Trademark Office and the United States
Copyright Office);

(xxiii)       Evidence satisfactory to the
Administrative Agent that the Liens granted pursuant to the Security Documents
will be first priority perfected Liens on the Collateral (subject only to
Permitted Liens);

(xxiv)       Payment of all fees and expenses payable
to the Administrative Agent, the Affiliates of the Administrative Agent, and
the Lenders

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in connection with the
execution and delivery of this Agreement, including, without limitation,
reasonable fees and expenses of counsel to the Administrative Agent;

(xxv)        A flow of funds report and disbursement
letter duly executed by the Borrower which report shall include a statement of
all sources and uses of funds on the Agreement Date; and

(xxvi)       All such other documents as the
Administrative Agent may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.

(b)           The Lender Group shall have received
evidence satisfactory to them that no change in the business, assets,
management, operations, financial condition or prospects of the Borrower shall
have occurred since December 31, 2005, which change has had or would be
reasonably expected to have a Materially Adverse Effect, and the Lender Group
shall have received a certificate of an Authorized Signatory of the Borrower so
stating.

(c)           The Lender Group shall have received
evidence satisfactory to them that all conditions to the closing of the
transactions contemplated by the Subordinated Debt Documents have been
satisfied, and that the Borrower has received proceeds of at least $10,000,000
pursuant to the Subordinated Debt Documents, and the Lender Group shall have
received a certificate of an Authorized Signatory of the Borrower so stating.

(d)           The Lender Group shall have received
the financial statements described in Section 5.1(k), each in form and
substance to the members of the Lender Group.

(e)           The Lender Group shall have received
evidence satisfactory to them that all Necessary Authorizations are in full
force and effect and are not subject to any pending or threatened reversal or
cancellation, that no other consents or approvals are required, and that no
Default exists, after giving effect to the initial Advance hereunder, and the
Lender Group shall have received a certificate of an Authorized Signatory of
the Borrower so stating.

(f)            The Borrower shall have established
one or more Blocked Accounts pursuant to a lockbox arrangement acceptable to
the Administrative Agent with SunTrust Bank.

(g)           The Administrative Agent shall have
received confirmation that the original Uniform Commercial Code financing
statements signed by the respective Borrower Parties as debtor and naming the
Administrative Agent as secured party have

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been duly filed in all
appropriate jurisdictions, in such form as shall be satisfactory to the
Administrative Agent.

(h)           The Administrative Agent shall have
received a Borrowing Base Certificate, in form and substance satisfactory to
the Lender Group and rolled forward from the Borrowing Base Certificate
previously verified by the Co-Collateral Agents, reflecting that, among other
things, as of the Agreement Date, after giving effect to the borrowings
hereunder on the Agreement Date and the issuance of any Letters of Credit
hereunder on the Agreement Date, Availability shall not be less than
$15,000,000 (with trade payables being paid currently in the ordinary course of
Borrower’s business; expenses and liabilities being paid in the ordinary course
of business, without acceleration of sales and without deterioration in working
capital and without giving effect to the additional capital attributable to the
proceeds of the Subordinated Debt).

(i)            The Co-Collateral Agents shall have
completed to their satisfaction a pre-funding field audit of the Borrower
including, without limitation, a review of GEMS, and an examination of Borrower’s
reporting capabilities, assets, liabilities (including review of accounts/trade
payables evidencing payment of such amounts in accordance with their terms or
otherwise on terms consistent with past practices acceptable to the
Co-Collateral Agents), books and records.

(j)            The Co-Collateral Agents shall have
received (A) final reports issued by FTI Consulting pursuant to that
certain engagement letter between FTI Consulting and Paul, Hastings, Janofsky &
Walker LLP, on behalf of SunTrust Bank, dated February 27, 2006, with
respect to quality of earnings and field audit matters of the Borrower and (B) FTI’s
report of the Borrower’s 2006 monthly Availability forecast, to include balance
sheet, income statement, statement of cash flows and confirmation of minimum
opening Availability of $15,000,000 (without giving effect to the additional
capital attributable to the proceeds of the Subordinated Debt).

(k)           The Co-Collateral Agents shall have
received a copy of the duly executed Consulting Agreement.

(l)            The Co-Collateral Agents shall have
completed background checks with respect to certain key officers of the
Borrower Parties and such background checks shall be satisfactory to the
Co-Collateral Agents.

(m)          The Co-Collateral Agents shall have
received daily Borrowing Base Certificates for a period prior to the Agreement
Date as requested by the Co-Collateral Agents, each in form and substance
satisfactory to the Co-Collateral Agents.

(n)           The Co-Collateral Agents shall have
received evidence that the Borrower has entered into arrangements with its
current floor plan suppliers under commercially reasonable open market terms
that are satisfactory to the Co-Collateral Agents, including, without
limitation, acceptable credit limits and payment terms.

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(o)           The Co-Collateral Agents shall have
completed such other business and legal due diligence with respect to the
Borrower and the results thereof shall be acceptable to the Co-Collateral
Agents, in their sole discretion.

Section 4.2             Conditions Precedent to Each
Advance. The obligation of the Lenders to make each Advance, including the
initial Advance hereunder (but excluding Advances, the proceeds of which are to
reimburse (i) the Swing Bank for Swing Loans, (ii) the Administrative
Agent for Agent Advances or (iii) the Issuing Bank for amounts drawn under
a Letter of Credit), is subject to the fulfillment of each of the following
conditions immediately prior to or contemporaneously with such Advance:

(a)           All of the representations and
warranties of the Borrower Parties under this Agreement and the other Loan
Documents, which, pursuant to Section 5.3, are made at and as of the time
of such Advance other than those that are by their terms true only as of a date
certain other than the date of such Advance, shall be true and correct at such
time, both before and after giving effect to the application of the proceeds of
the Advance;

(b)           The incumbency of the Authorized
Signatories of each Borrower Party shall be as stated in the certificate of
incumbency contained in the certificate of the Borrower delivered pursuant to Section 4.1(a) or
as subsequently modified and reflected in a certificate of incumbency delivered
to the Administrative Agent and the Lenders;

(c)           The most recent Borrowing Base
Certificate which shall have been delivered to the Administrative Agent
pursuant to Section 7.5(a) shall demonstrate that, after giving
effect to the making of such Advance (together with any other Advance made
after the date of such Borrowing Base Certificate), no Overadvance shall exist;

(d)           Since the Agreement Date, there shall
not have been any adverse change in the arrangements with the Borrower’s
current floor plan suppliers, including, without limitation, acceptable credit
limits and payment terms;

(e)           Since December 31, 2005, there
shall have been no change that has had or would be reasonably expected to have
a Material Adverse Effect;

(f)            There shall not exist on the date of
such Advance and after giving effect thereto, a Default;

(g)           Such Advance shall be “Priority Bank
Debt” as defined in the Subordinated Intercreditor Agreement;

(h)           All trade payables of the Borrower
are being paid currently in the ordinary course of the Borrower’s business; and

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(i)            The Administrative Agent and the
Lenders shall have received all such other certificates, reports, statements,
opinions of counsel, or other documents as the Administrative Agent or Lenders
may reasonably request and all of the other conditions to the making of such
Advance which are set forth in this Agreement shall have been fulfilled.

The Borrower hereby agrees that the delivery of any Request for Advance
hereunder or any telephonic request for an Advance hereunder shall be deemed to
be the certification of the Authorized Signatory thereof that all of the
conditions set forth in this Section 4.2 have been satisfied. Notwithstanding
the foregoing, if the conditions, or any of them, set forth above are not
satisfied, such conditions may be waived by the requisite Lenders under Section 11.12,
and, in any event the Majority Lenders may waive the condition set forth in Section 4.2(c).

Section 4.3             Conditions Precedent to Each
Letter of Credit. The obligation of the Issuing Bank to issue each Letter
of Credit (including the initial Letter of Credit) hereunder is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with the issuance of such Letter of Credit:

(a)           All of the representations and
warranties of the Borrower Parties under this Agreement and the other Loan
Documents, which, pursuant to Section 5.4, are made at and as of the time
of the issuance of such Letter of Credit other than those that are by their
terms true only as of a date certain other than the date of such Advance, shall
be true and correct at such time, both before and after giving effect to the
issuance of such Letter of Credit;

(b)           The incumbency of the Authorized
Signatories of each Borrower Party shall be as stated in the certificate of
incumbency contained in the certificate of the Borrower delivered pursuant to Section 4.1(a) or
as subsequently modified and reflected in a certificate of incumbency delivered
to the Administrative Agent and the Lenders;

(c)           The most recent Borrowing Base
Certificate which shall have been delivered to the Administrative Agent
pursuant to Section 7.5(a) shall demonstrate that, after giving
effect to the making of such Letter of Credit, no Overadvance shall exist;

(d)           Since December 31, 2005, there
shall have been no change that has had or would be reasonably expected to have
a Material Adverse Effect;

(e)           There shall not exist on the date of
issuance of such Letter of Credit, and after giving effect thereto, a Default;

(f)            All trade payables of the Borrower
are being paid currently in the ordinary course of the Borrower’s business; and

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(g)           The Administrative Agent and the
Issuing Bank shall have received all such other certificates, reports,
statements, opinions of counsel, or other documents as the Administrative Agent
or the Issuing Bank may reasonably request and all other conditions to the
issuance of such Letter of Credit which are set forth in this Agreement shall
have been fulfilled.

The Borrower hereby
agrees that the delivery of any Request for Issuance of a Letter of Credit
hereunder shall be deemed to be the certification of the Authorized Signatory
thereof that all of the conditions set forth in this Section 4.3 have been
satisfied. Notwithstanding the foregoing, if the conditions, or any of them,
set forth above are not satisfied, such conditions may be waived by the
requisite Lenders under Section 11.12, and, in any event the Majority
Lenders may waive the condition set forth in Section 4.3(c).

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

Section 5.1             General Representations and
Warranties. In order to induce the Lender Group to enter into this
Agreement and to extend the Loans and issue the Letters of Credit to the
Borrower, each Borrower Party hereby represents, and warrants that:

(a)           Organization; Power; Qualification.
Each Borrower Party and each Subsidiary of a Borrower Party (i) is a
corporation, partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its state of incorporation or
formation, (ii) has the corporate or other company power and authority to
own or lease and operate its properties and to carry on its business as now
being and hereafter proposed to be conducted, and (iii) is duly qualified
and is in good standing as a foreign corporation or other company, and
authorized to do business, in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.

(b)           Authorization; Enforceability.
Each Borrower Party has the power and has taken all necessary action, corporate
or otherwise, to authorize it to execute, deliver, and perform this Agreement
and each of the other Loan Documents to which it is a party in accordance with
the terms thereof and to consummate the transactions contemplated hereby and
thereby. Each of this Agreement and each other Loan Document to which a
Borrower Party is a party has been duly executed and delivered by such Borrower
Party, and is a legal, valid and binding obligation of such Borrower Party,
enforceable in accordance with its terms.

(c)           Partnerships; Joint Ventures;
Subsidiaries. Except as disclosed on Schedule 5.1(c)-1, no
Borrower Party or any Subsidiary of a Borrower Party has any Subsidiaries,
which Subsidiaries are identified on such Schedule as Domestic Subsidiaries or
Foreign Subsidiaries. No Borrower Party or any Subsidiary of a

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Borrower Party is a
partner or joint venturer in any partnership or joint venture other than (i) the
Subsidiaries listed on Schedule 5.1(c)-1 and (ii) the
partnerships and joint ventures (that are not Subsidiaries) listed on Schedule
5.1(c)-2. Schedule 5.1(c)-1 and Schedule 5.1(c)-2
set forth, for each Person set forth thereon, a complete and accurate statement
of (i) the percentage ownership of each such Person by the applicable
Borrower Party or Subsidiary of a Borrower Party, (ii) the state or other
jurisdiction of incorporation or formation, as appropriate, of each such
Person, (iii) each state in which each such Person is qualified to do
business on the Agreement Date and (iv) all of each such Person’s trade
names, trade styles or doing business forms which such Person has used or under
which such Person has transacted business during the five (5) year period
immediately preceding the Agreement Date.

(d)           Capital Stock and Related Matters.
The authorized Equity Interests as of the Agreement Date of each Borrower Party
and each Subsidiary of a Borrower Party that is a corporation and the number of
shares of such Equity Interests that are issued and outstanding as of the
Agreement Date (or with respect to the Borrower, as of the date set forth on Schedule
5.1(d)) are as set forth on Schedule 5.1(d). All of the shares of
such Equity Interests that are issued and outstanding as of the Agreement Date
have been duly authorized and validly issued and are fully paid and
non-assessable. None of such Equity Interests have been issued in violation of
the Securities Act, or the securities, “Blue Sky” or other Applicable Laws of
any applicable jurisdiction. As of the Agreement Date, the Equity Interests of
each such Borrower Party (other than the Borrower) and each such Subsidiary of
a Borrower Party are owned by the parties listed on Schedule 5.1(d) in
the amounts set forth on such schedule and a description of the Equity
Interests of each such party is listed on Schedule 5.1(d). Except as
described on Schedule 5.1(d), no Borrower Party or any Subsidiary of a
Borrower Party has outstanding any stock or securities convertible into or
exchangeable for any shares of its Equity Interests, nor are there any
preemptive or similar rights to subscribe for or to purchase, or any other
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments, or claims of any character relating to, any Equity
Interests or any stock or securities convertible into or exchangeable for any
Equity Interests. Except as set forth on Schedule 5.1(d), no Borrower
Party or any Subsidiary of any Borrower Party is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its Equity Interests or to register any shares of its Equity
Interests, and there are no agreements restricting the transfer of any shares
of such Borrower Party or such Subsidiary’s Equity Interests or restricting the
ability of any Subsidiary of the Borrower from making distributions, dividends
or other Restricted Payments to the Borrower.

(e)           Compliance with Law, Loan
Documents, and Contemplated Transactions. The execution, delivery, and
performance of this Agreement and each of the other Loan Documents and the Bank
Products Documents, if any, in accordance with their respective terms and the
consummation of the transactions contemplated hereby and

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thereby do not and will
not (i) violate any Applicable Law, (ii) conflict with, result in a
breach of, or constitute a default under the certificate of incorporation or
formation or by-laws, partnership agreement or operating agreement of any
Borrower Party or under any indenture, agreement, or other instrument to which
any Borrower Party is a party or by which any Borrower Party or any of its
properties may be bound, or (iii) result in or require the creation or
imposition of any Lien upon or with any Borrower Party except Permitted Liens.

(f)            Necessary Authorizations. Each
Borrower Party and each Subsidiary of a Borrower Party has obtained all
Necessary Authorizations, and all such Necessary Authorizations are in full
force and effect. None of such Necessary Authorizations is the subject of any
pending or, to the best of each Borrower Party’s knowledge, threatened attack
or revocation, by the grantor of the Necessary Authorization. No Borrower Party
or any Subsidiary of a Borrower Party is required to obtain any additional Necessary
Authorizations in connection with the execution, delivery, and performance of
this Agreement, any other Loan Document or any Bank Products Document, if any,
in accordance with their respective terms, or the consummation of the
transactions contemplated hereby or thereby.

(g)           Title to Properties. Each
Borrower Party has good, marketable, and legal title to, or a valid leasehold
interest in, all of its properties and assets, and none of such properties or
assets is subject to any Liens, other than Permitted Liens.

(h)           Material Contracts. Schedule 5.1(h)
contains a complete list, as of the Agreement Date, of each Material Contract,
true, correct and complete copies of which have been delivered to the
Administrative Agent. Schedule 5.1(h) further identifies, as of the
Agreement Date, each Material Contract that requires consent to the granting of
a Lien in favor of the Administrative Agent on the rights of any Borrower Party
thereunder. No Borrower Party or any Subsidiary of a Borrower Party is in
default under or with respect to any Material Contract, and any other contract
with the Federal Government, to which it is a party or by which it or any of
its properties are bound.

(i)            Labor Matters. Except as
disclosed on Schedule 5.1(i):  (i) no
labor contract to which any Borrower Party or any Subsidiary of a Borrower
Party is a party or is otherwise subject is scheduled to expire prior to the
Maturity Date; (ii) no Borrower Party or any Subsidiary of a Borrower
Party has, within the two-year period preceding the date of this Agreement,
taken any action which would have constituted or resulted in a “plant closing”
or “mass layoff” within the meaning of the Federal Worker Adjustment and
Retraining Notification Act of 1988 or any similar applicable federal, state or
local law, and no Borrower Party has any reasonable expectation that any such
action is or will be required at any time prior to the Maturity Date; and (iii) on
the Agreement Date (A) no Borrower Party or any Subsidiary of a Borrower
Party is a party to any labor dispute (other than any immaterial disputes with
such Borrower Party’s or Subsidiary’s employees as individuals and not
affecting such Borrower Party’s or

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Subsidiary’s relations
with any labor group or its workforce as a whole) and (B) there are no
pending or, to each Borrower Party’s knowledge, threatened strikes or walkouts
relating to any labor contracts to which any Borrower Party or any Subsidiary
of a Borrower Party is a party or is otherwise subject. Except as set forth on Schedule
5.1(i), none of the employees of any Borrower Party or a Subsidiary of a
Borrower Party is a party to any collective bargaining agreement with any
Borrower Party or a Subsidiary of a Borrower Party, as applicable.

(j)            Taxes. Except as set forth on
Schedule 5.1(j), all federal, state and other tax returns of each
Borrower Party and each Subsidiary of a Borrower Party required by law to be
filed have been duly filed, all such tax returns are true, complete and correct
in all material respects, and all federal, state, and other taxes (including
without limitation, all real estate and personal property, income, franchise,
transfer and gains taxes), all general or special assessments, and other
governmental charges or levies upon each Borrower Party and each Subsidiary of
a Borrower Party and any of their respective properties, income, profits, and
assets, which are due and payable, have been paid, except any payment of any of
the foregoing which such Borrower Party or such Subsidiary, as applicable, is
currently contesting in good faith by appropriate proceedings and with respect
to which reserves in conformity with GAAP have been provided on the books of
such Borrower Party or such Subsidiary, as the case may be. No adjustment
relating to any tax returns has been proposed formally or informally by any
Governmental Authority and, to the knowledge of each Borrower Party no basis
exists for any such adjustment. The charges, accruals, and reserves on the
books of the Borrower Parties and their Subsidiaries in respect of taxes are,
in the reasonable judgment of the Borrower Parties, adequate. No Borrower Party
or any Subsidiary of a Borrower Party has been audited, or has knowledge of any
pending audit, by the Internal Revenue Service or any other taxing authority. Except
as described in Schedule 5.1(j), no Borrower Party has executed or filed
with the Internal Revenue Service or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any taxes. None of the Borrower Parties
and their respective predecessors are liable for any taxes:  (i) under any agreement (including any
tax sharing agreements) or (ii) to each Borrower Party’s knowledge, as a
transferee. As of the Agreement Date, no Borrower Party has agreed, or been
requested, to make any adjustment under Code Section 481(a), by reason of
a change in accounting method or otherwise, which would have a Materially
Adverse Effect.

(k)           Financial Statements. The
Borrower has furnished, or caused to be furnished, to the Lenders (i) the
audited financial statements of the Borrower which are complete and correct in
all material respects and present fairly in accordance with GAAP the respective
financial positions of the Borrower as at December 31, 2005, and the
results of operations for the fiscal year then ended and (ii) the
unaudited financial statements of the Borrower which are complete and correct
in all material respects and present fairly in accordance with GAAP, subject to
normal year end adjustments, the

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respective financial
positions of the Borrower as at March 31, 2006, and the results of
operations for the fiscal quarter then ended. In addition, the Borrower shall
furnish to the Lenders the balance sheet of the Borrower dated as of the
Agreement Date giving pro forma effect to the borrowings hereunder and under
the Subordinated Debt Documents as of the Agreement Date. Except as disclosed
in such financial statements, the Borrower does not have any material
liabilities, contingent or otherwise, and there are no material unrealized or
anticipated losses of the Borrower which have not heretofore been disclosed in
writing to the Lenders.

(l)            Intentionally Omitted.

(m)          Investments and Guaranties. As
of the Agreement Date, no Borrower Party or any Subsidiary of a Borrower Party
owns any Equity Interests of any Person except as disclosed on Schedules 5.1(c)-1
and 5.1(c)-2, or has outstanding loans or advances to, or guaranties of
the obligations of, any Person, except as reflected in the financial statements
referred to in Section 5.1(k) or disclosed on Schedule 5.1(m).

(n)           Liabilities, Litigation, etc. As
of the Agreement Date, except for liabilities incurred in the normal course of
business, no Borrower Party or any Subsidiary of any Borrower Party has any
material (individually or in the aggregate) liabilities, direct or contingent,
except as disclosed or referred to in the financial statements referred to in Section 5.1(k) or
with respect to the Obligations or the Subordinated Debt. As of the Agreement
Date, except as described on Schedules 5.1(n) and 5.1(y)(1) through
(6), there is no litigation, legal or administrative proceeding,
investigation, or other action of any nature pending or, to the knowledge of
the Borrower Parties, threatened against or affecting any Borrower Party, any
Subsidiary of any Borrower Party or any of their respective properties which
could reasonably be expected to result in any judgment against or liability of
such Borrower Party or Subsidiary in excess of $500,000 in the aggregate with
respect to all Borrower Parties and their Subsidiaries, or the loss of any
certification or license material to the operation of such Borrower Party’s or
Subsidiary’s business. None of such litigation disclosed on Schedules 5.1(n)
and 5.1(y)(1) through (6), individually or collectively, could
reasonably be expected to have a Materially Adverse Effect.

(o)           ERISA. Schedule 5.1(o) lists
(i) all ERISA Affiliates and (ii) all Plans and separately identifies
all Title IV Plans, Multiemployer Plans, and Retiree Welfare Plans. Copies of
all such listed Plans, together with a copy of the latest IRS/DOL 5500-series
form for each such Plan, have been delivered to the Administrative Agent. Except
with respect to Multiemployer Plans, each Plan intended to be qualified under
Code Section 401 has been determined by the Internal Revenue Service to
qualify under Section 401 of the Code, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Sections 501 of the
Code, and nothing has occurred that would cause the loss of such qualification
or tax-exempt status. Each Borrower Party and each ERISA Affiliate and each of
their respective Plans are in

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compliance with ERISA and
the Code and no Borrower Party nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. No Borrower Party or, to each Borrower Party’s knowledge,
any of its ERISA Affiliates has made any promises of retirement or other
benefits to employees, except as set forth in the Plans. No Borrower Party or
ERISA Affiliate has incurred any liability to the PBGC in connection with any
such Plan (other than the payment of premiums that are not past due). No Title
IV Plan has any Unfunded Pension Liability. No ERISA Event or event described
in Section 4062(e) of ERISA has occurred and is continuing with
respect to any such Plan. There are no pending, or to the knowledge of any
Borrower Party, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any
Plan or any Person as fiduciary (as defined in Section 3(21) of ERISA) or
sponsor of any Plan. No such Plan or trust created thereunder, or party in
interest (as defined in Section 3(14) of ERISA, or any fiduciary (as
defined in Section 3(21) of ERISA), has engaged in a “prohibited
transaction” (as such term is defined in Section 406 of ERISA or Section 4975
of the Code) which would subject such Plan or any other Plan of any Borrower
Party or any of its ERISA Affiliates, any trust created thereunder, or any such
party in interest or fiduciary, or any party dealing with any such Plan or any
such trust to any material penalty or tax on “prohibited transactions” imposed
by Section 502 of ERISA or Section 4975 of the Code.

(p)           Intellectual Property; Licenses;
Certifications. Except as set forth on Schedule 5.1(p), no Borrower
Party or any Subsidiary of a Borrower Party owns any registered patents, trademarks,
service marks or copyrights, and has no pending registration applications with
respect to any of the foregoing. No other patents, trademarks, service marks or
copyrights are necessary for the operation of the business of the Borrower
Parties and their Subsidiaries. Except as set forth on Schedule 5.1(p),
no material licenses or certifications are necessary for the operation of the
Borrower Parties’ and their Subsidiaries’ business.

(q)           Compliance with Law; Absence of
Default. Each Borrower Party and each Subsidiary of a Borrower Party is in
material compliance with all Applicable Laws, including, without limitation,
the Prompt Payment Act, and with all of the provisions of its certificate of
incorporation or formation and by-laws or other governing documents, and no
event has occurred or has failed to occur which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes (i) a
Default, (ii) a default by such Borrower Party under the Subordinated Debt
Documents, or (iii) except with respect to Funded Debt in an aggregate
principal amount equal to or less than $100,000, a default under any other
indenture, agreement, or other instrument, or any judgment, decree, or order to
which such Borrower Party or such Subsidiary is a party or by which such
Borrower Party or such Subsidiary or any of their respective properties may be
bound.

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(r)            Casualties; Taking of Properties,
etc. Since December 31, 2005, neither the business nor the properties
of the Borrower Parties and their Subsidiaries has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or concessions
by any domestic or foreign government or any agency thereof, riot, activities
of armed forces, or acts of God or of any public enemy.

(s)           Accuracy and Completeness of
Information. All written information, reports, other papers and data
relating to the Borrower Parties and their Subsidiaries furnished by or at the
direction of the Borrower Parties to the Lender Group were, at the time
furnished, complete and correct in all material respects. With respect to
projections, estimates and forecasts given to the Lender Group, such
projections, estimates and forecasts are based on the Borrower Parties’ good
faith assessment of the future of the business at the time made. The Borrower
Parties had a reasonable basis for such assessment at the time made.

(t)            Compliance with Regulations T, U,
and X. No Borrower Party or any Subsidiary of a Borrower Party is engaged
principally in or has as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying, and no Borrower
Party or any Subsidiary of a Borrower Party owns or presently intends to
acquire, any “margin security” or “margin stock” as defined in Regulations T, U
and X of the Board of Governors of the Federal Reserve System (herein called “Margin
Stock”). None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock or for
the purpose of reducing or retiring any Funded Debt which was originally
incurred to purchase or carry Margin Stock or for any other purpose which might
constitute this transaction a “purpose credit” within the meaning of said
Regulations T, U and X. None of any Borrower Party, any Subsidiary of a
Borrower Party or any bank acting on its behalf has taken or will take any action
which might cause this Agreement or any other Loan Documents to violate
Regulation T, U or X or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the SEA, in each case as now in effect or
as the same may hereafter be in effect. If so requested by the Administrative
Agent, the Borrower Parties and their Subsidiaries will furnish the
Administrative Agent with (i) a statement or statements in conformity with
the requirements of Federal Reserve Form U-1 referred to in
Regulation U of said Board of Governors and (ii) other documents
evidencing its compliance with the margin regulations, including without
limitation an opinion of counsel in form and substance satisfactory to the
Administrative Agent. Neither the making of the Loans nor the use of proceeds
thereof will violate, or be inconsistent with, the provisions of Regulation T,
U or X of said Board of Governors.

(u)           Solvency. As of the Agreement
Date and after giving effect to the transactions contemplated by the Subordinated
Debt Documents and the Loan Documents (i) the property of each Borrower
Party, at a fair valuation on a going concern basis, will

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exceed its debt; (ii) the
capital of each Borrower Party will not be unreasonably small to conduct its
business; and (iii) no Borrower Party will have incurred debts, or have
intended to incur debts, beyond its ability to pay such debts as they mature. For
purposes of this Section, “debt” shall mean any liability on a claim, and “claim”
shall mean (A) the right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (B) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.

(v)           Insurance. The Borrower
Parties and their Subsidiaries have insurance meeting the requirements of Section 6.5,
and such insurance policies are in full force and effect. As of the Agreement
Date, all insurance maintained by the Borrower Parties and their Subsidiaries
is fully described on Schedule 5.1(v).

(w)          Broker’s or Finder’s Commissions.
Except as set forth on Schedule 5.1(w), no broker’s or finder’s fee or
commission will be payable with respect to the execution and delivery of this
Agreement and the other Loan Documents, and no other similar fees or
commissions will be payable by the Borrower Parties for any other services
rendered to the Borrower Parties ancillary to the credit transactions
contemplated herein.

(x)            Real Property. All real
property leased by each Borrower Party and each Subsidiary of a Borrower Party
as of the Agreement Date, and the name of the lessor of such real property, is
set forth in Schedule 5.1(x)-1. The leases of each Borrower Party
and each Subsidiary of a Borrower Party are valid, enforceable and in full
force and effect, and have not been modified or amended, except as otherwise
set forth in Schedule 5.1(x)-1. The Borrower Parties and their
Subsidiaries are the sole holders of the lessee’s interests under such leases,
and have the right to pledge, mortgage, assign and sublet the same except as
set forth in Schedule 5.1(x)-1. No Borrower Party or any
Subsidiary of a Borrower Party has made any pledge, mortgage, assignment or
sublease of any of it rights under such leases except pursuant to the Loan
Documents and as set forth in Schedule 5.1(x)-1 and, there is no
default or condition which, with the passage of time or the giving of notice,
or both, would constitute a material default on the part of a Borrower Party or
any Subsidiary of a Borrower Party under such leases and the Borrower Parties
and their Subsidiaries have paid all rents and other charges due and payable
under such leases. All real property owned by each Borrower Party or a
Subsidiary of a Borrower Party as of the Agreement Date is set forth in Schedule
5.1(x)-2. As of the Agreement Date, no Borrower Party or any Subsidiary
of a Borrower Party owns, leases or uses any real property other than as set
forth on Schedule 5.1(x)-1 or 2. Each Borrower Party and
each Subsidiary of a Borrower Party owns good and marketable fee simple title
to all of its owned real property, and none of its respective owned real
property is subject to any Liens, except Permitted Liens. No Borrower Party or
any

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Subsidiary of a Borrower
Party owns or holds, or is obligated under or a party to, any option, right of first
refusal or any other contractual right to purchase, acquire, sell, assign or
dispose of any real property owned or leased by it.

(y)           Environmental Matters.

(i)            Except as is described on Schedule
5.1(y) - 1, none of the Properties contains, in, on or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials in violation of Environmental Laws or in amounts that could
give rise to any material liability under Environmental Laws.

(ii)           Except as is described on Schedule
5.1(y) - 2, each Borrower Party and each Subsidiary of a Borrower
Party is in compliance with all applicable Environmental Laws and there is no
violation of any Environmental Law or contamination which could materially
interfere with the continued operation of any of the Properties or impair the
financial condition of any Borrower Party or any Subsidiary of a Borrower
Party.

(iii)          Except as is described on Schedule
5.1(y) - 3, no Borrower Party or any Subsidiary of a Borrower Party
has received from any Governmental Authority any complaint, or notice of
violation, alleged violation, investigation or advisory action or notice of
potential liability regarding matters of environmental protection or permit
compliance under applicable Environmental Laws with regard to the Properties,
nor is any Borrower Party aware that any such notice is pending.

(iv)          Except as is described on Schedule
5.1(y) - 4, Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Property in violation of any
Environmental Laws or in a manner that could give rise to any liability under
Environmental Laws nor have any Hazardous Materials been transported or
disposed of from any of the Properties to any other location in violation of
any Environmental Laws or in a manner that could give rise to liability under
Environmental Laws. Except as disclosed on Schedule 5.1(y)-4, no
Borrower Party or any Subsidiary of a Borrower Party has permitted or will
permit any tenant or occupant of the Properties to engage in any activity that
could impose material liability under the Environmental Laws on such tenant or
occupant, any Borrower Party or any Subsidiary of a Borrower Party or any other
owner of any of the Properties.

(v)           Except as is described on Schedule
5.1(y) - 5, no Borrower Party or any Subsidiary of a Borrower Party is
a party to any governmental administrative actions or judicial proceedings
pending under any Environmental Law with respect to any of the Properties, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other

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administrative or
judicial requirements outstanding under any Environmental Law with respect to
any of the Properties.

(vi)          Except as is described on Schedule
5.1(y) - 6, there has been no release or threat of release of
Hazardous Materials into the environment at or from any of the Properties, or
arising from or relating to the operations of the Borrower Parties or their
Subsidiaries, in material violation of Environmental Laws or in amounts that
could give rise to any material liability under Environmental Laws.

(vii)         None of the matters disclosed on Schedules
5.1 (y) - 1 through 6 is reasonably likely to result in
liability to the Borrower Parties and their Subsidiaries in excess of $100,000
in the aggregate.

(z)            OSHA. All of the Borrower
Parties’ and their Subsidiaries’ operations are conducted in compliance, in all
material respects, with all applicable rules and regulations promulgated
by the Occupational Safety and Health Administration of the United States
Department of Labor.

(aa)         Name of Borrower Party. No
Borrower Party or any Subsidiary of any Borrower Party has changed its name
within the preceding five (5) years from the Agreement Date, nor has any
Borrower Party or any Subsidiary of a Borrower Party transacted business under
any other name or trade name.

(bb)         Investment Company Act; Public
Utility Holding Company Act. No Borrower Party or any Subsidiary of a
Borrower Party is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance
by the Borrower Parties of this Agreement nor the issuance of any Revolving
Loan Notes violates any provision of such Act or requires any consent, approval,
or authorization of, or registration with, any governmental or public body or
authority pursuant to any of the provisions of such Act. No Borrower Party or
any Subsidiary of a Borrower Party is a “holding company” or a “subsidiary
company” of a “holding company”, or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company”, as such terms are defined in the
Public Utility Holding Company Act of 2005, as amended.

(cc)         Anti-Terrorism Laws.

(i)            Anti-Terrorism Laws. No
Borrower Party nor any Affiliate of any Borrower Party is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

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(ii)           Executive Order No. 13224.
No Borrower Party nor any Affiliate of any Borrower Party is any of the
following (each a “Blocked Person”):

(A)          a Person that is listed in the annex
to, or is otherwise subject to the provisions of, Executive Order No. 13224;

(B)           a Person owned or controlled by, or
acting for or on behalf of, any Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224;

(C)           a Person or entity with which any
bank or other financial institution is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(D)          a Person or entity that commits,
threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224;

(E)           a Person or entity that is named as a
“specially designated national” on the most current list published by OFAC at
its official website or any replacement website or other replacement official
publication of such list; or

(F)           a Person or entity who is affiliated
with a Person or entity listed above.

No Borrower Party nor any
Affiliate of any Borrower Party (x) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person or (y) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224.

(iii)          OFAC. No Borrower Party nor any
Affiliate of any Borrower Party is in violation of any rules or
regulations promulgated by OFAC or of any economic or trade sanctions or
engages in administered and enforced by OFAC or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any rules or
regulations promulgated by OFAC.

(dd)         Debarment and Suspension. No
event has occurred and, to the best knowledge of principal officers of the
Borrower, no condition exists that may result in the debarment or suspension of
the Borrower or any of its Subsidiaries from any contracting with the Federal
Government, and neither the Borrower nor any Affiliate of the Borrower has been
subject to any such debarment or suspension prior to the date of this Agreement.

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No investigation or inquiry
involving fraud, deception or willful misconduct has been commenced in
connection with any contract between the Federal Government and the Borrower or
a Subsidiary of the Borrower or any activities of the Borrower or any
Subsidiary of the Borrower.

Section 5.2             Representations and Warranties
Relating to Accounts. With respect to all Accounts of each Borrower Party,
such Borrower Party hereby warrants and represents to the Lender Group that
such Accounts are bona fide existing payment obligations of Account Debtors
created by the sale and delivery of Inventory or the rendition of services to
such Account Debtors in the ordinary course of such Borrower Party’s business
and all documents relating to such Accounts are legally sufficient under
Applicable Law and are legally enforceable in accordance with their terms as
necessary to provide the practical realization of the rights and benefits
contained therein. As to each Account that is identified by such Borrower Party
as an Eligible Account in the most recent Borrowing Base Certificate submitted
to the Administrative Agent by the Borrower, such Account is not ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Accounts.

Section 5.3             Representations and Warranties
Relating to Inventory. With respect to all Eligible Inventory, the
Administrative Agent may rely upon all statements, warranties, or
representations made in any Borrowing Base Certificate in determining the
classification of such Inventory and in determining which items of Inventory
listed in such Borrowing Base Certificate meet the requirements of eligibility.

Section 5.4             Survival of Representations and
Warranties, etc. All representations and warranties made under this
Agreement and the other Loan Documents shall be deemed to be made, and shall be
true and correct, at and as of the Agreement Date and the date of each Advance
or issuance of a Letter of Credit hereunder, except to the extent previously
fulfilled in accordance with the terms of this Agreement or the other Loan
Documents and to the extent subsequently inapplicable or that are by their
terms true only as of a date certain other than the Agreement Date. All
representations and warranties made under this Agreement and the other Loan
Documents shall survive, and not be waived by, the execution hereof by the
Lender Group, or any of them, any investigation or inquiry by any member of the
Lender Group, or the making of any Advance or the issuance of any Letter of
Credit under this Agreement.

ARTICLE 6.

GENERAL COVENANTS

Until the later of the
date the Obligations are repaid in full or the date the Borrower no longer has
the right to borrow, or have Letters of Credit issued, hereunder (whether or
not the conditions to borrowing have been or can be fulfilled), and unless the
Majority Lenders shall otherwise give their prior consent in writing:

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Section 6.1             Preservation of Existence and
Similar Matters. Each Borrower Party will, and will cause each of its
Subsidiaries to (i) except as expressly permitted by Section 8.7,
preserve and maintain its existence, rights, franchises, licenses, and
privileges in its jurisdiction of incorporation or organization including,
without limitation, all Necessary Authorizations, and (ii) qualify and
remain qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization.

Section 6.2             Compliance with Applicable Law.
Each Borrower Party will, and will cause each of its Subsidiaries to, comply
with the requirements of all Applicable Law, except where the failure to so
comply would not have a Material Adverse Effect.

Section 6.3             Maintenance of Properties. Each
Borrower Party will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in the ordinary course of business in good repair,
working order and condition, normal wear and tear and disposal of obsolete
equipment excepted, all properties used or useful in its business (whether
owned or held under lease), and from time to time make or cause to be made all
needed and appropriate repairs, renewals, replacements, additions, betterments,
and improvements thereto.

Section 6.4             Accounting Methods and Financial
Records. Each Borrower Party will, and will cause each of its Subsidiaries
to, maintain a system of accounting established and administered in accordance
with GAAP and with any system mandated by an Account Debtor, such as the
federal government cost and accounting standards, and will, and will cause each
of its Subsidiaries to, keep adequate records and books of account in which
complete entries will be made in accordance with such accounting principles
consistently applied and reflecting all transactions required to be reflected
by such accounting principles.

Section 6.5             Insurance. Each Borrower
Party will, and will cause each of its Subsidiaries to, maintain insurance
including, but not limited to, public liability, property insurance,
comprehensive general liability, business interruption, product liability and
fidelity coverage insurance, in such amounts and against such risks as would be
customary for companies in the same industry and of comparable size as the
Borrower Parties and their Subsidiaries from financially sound and reputable
insurance companies having and maintaining an A.M. Best rating of “A+” or
better and being in a size category of VI or larger or otherwise acceptable to
the Administrative Agent. In addition to the foregoing, each Borrower Party
further agrees to maintain and pay for insurance upon all goods constituting
Collateral wherever located, in storage or in transit in vehicles, vessels or
aircraft, including goods evidenced by documents, covering casualty, hazard,
public liability and such other risks and in such amounts as would be customary
for companies in the same industry and of comparable size as the Borrower
Parties, from financially sound and reputable insurance companies having and
maintaining an A.M. Best rating of “A+” or better and being in a size
category of VI or larger or otherwise

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acceptable to the
Administrative Agent to insure the Lender Group’s interest in such Collateral. All
such property insurance policies shall name the Administrative Agent as loss
payee and all liability insurance policies shall name the Administrative Agent
as additional insured. Each Borrower Party shall deliver the original
certificates of insurance evidencing that the required insurance is in force
together with satisfactory lender’s loss payable and additional insured, as
applicable, endorsements. Each policy of insurance or endorsement shall contain
a clause requiring the insurer to give not less than thirty (30) days’ prior
written notice to the Administrative Agent in the event of cancellation or
modification of the policy for any reason whatsoever and a clause that the
interest of the Administrative Agent shall not be impaired or invalidated by
any act or neglect of any Borrower Party or owner of the Collateral nor by the
occupation of the premises for purposes more hazardous than are permitted by
said policy. If any Borrower Party fails to provide and pay for such insurance,
the Administrative Agent may, at the Borrower’s expense, procure the same, but
shall not be required to do so. Upon the occurrence and during the continuance
of an Event of Default, each Borrower Party agrees to deliver to the
Administrative Agent, promptly as rendered, true copies of all reports made in
any reporting forms to insurance companies.

Section 6.6             Payment of Taxes and Claims.
Each Borrower Party will, and will cause each of its Subsidiaries to, pay and
discharge all taxes, assessments, and governmental charges or levies imposed
upon it or its income or profit or upon any properties belonging to it prior to
the date on which penalties attach thereto, and all lawful claims for labor,
materials and supplies which have become due and payable and which by law have
or may become a Lien upon any of its Property; except that, no such tax,
assessment, charge, levy, or claim need be paid which is being contested in
good faith by appropriate proceedings and for which adequate reserves shall
have been set aside on the appropriate books, but only so long as such tax,
assessment, charge, levy, or claim does not become a Lien or charge other than
a Permitted Lien and no foreclosure, distraint, sale, or similar proceedings
shall have been commenced and remain unstayed for a period thirty (30) days
after such commencement. Each Borrower Party shall, and shall cause each of its
Subsidiaries to, timely file all information returns required by federal,
state, or local tax authorities.

Section 6.7             Visits and Inspections. Each
Borrower Party will, and will permit each of its Subsidiaries to, permit
representatives of the Co-Collateral Agents to (a) visit and inspect the properties
of the Borrower Parties and their Subsidiaries during normal business hours
upon reasonable prior notice to the Borrower (unless an Event of Default shall
have occurred and be continuing), (b) inspect and make extracts from and
copies of the Borrower Parties’ and their Subsidiaries’ books and records,
subject to the confidentiality requirements of this Agreement, and (c) discuss
with the Borrower Parties’ and their Subsidiaries’ respective principal
officers the Borrower Parties’ or such Subsidiaries’ businesses, assets,
liabilities, financial positions, results of operations, and business prospects
relating to the Borrower Parties or such Subsidiaries. Any other member of the
Lender Group may, at its expense, accompany the Co-Collateral Agent(s)

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on any regularly
scheduled visit (or at any time that an Event of Default exists any visit
regardless of whether it is regularly scheduled) to the Borrower Parties and
their Subsidiaries’ properties.

Section 6.8             Conduct of Business. Each
Borrower Party shall, and shall cause each of its Subsidiaries to, continue to
engage in business of the same general type as conducted by it as of the
Agreement Date.

Section 6.9             ERISA. Each Borrower Party
shall at all times make, or cause to be made, prompt payment of contributions
required to meet the minimum funding standards set forth in ERISA with respect
to each Borrower Party’s and its ERISA Affiliates’ Plans; furnish to the
Administrative Agent, promptly upon the Administrative Agent’s request
therefor, copies of any annual report required to be filed pursuant to ERISA in
connection with each such Plan of each Borrower Party and its ERISA Affiliates;
notify the Administrative Agent as soon as practicable of any ERISA Event; and
furnish to the Administrative Agent, promptly upon the Administrative Agent’s
request therefor, such additional information concerning any such Plan as may
be reasonably requested by the Administrative Agent.

Section 6.10           Lien Perfection. Each Borrower
Party agrees to take such action as may be requested by the Administrative
Agent to perfect or continue the perfection of the Administrative Agent’s (on
behalf of, and for the benefit of, the Lender Group) security interest in the
Collateral. Each Borrower Party hereby authorizes the Administrative Agent to
file any such financing statement on such Borrower Party’s behalf describing
the Collateral as “all assets of the debtor” or “all personal property of the
debtor.”

Section 6.11           Location of Collateral. All
Collateral, other than Inventory in transit and Inventory sold in the ordinary
course of business, will at all times be kept by the Borrower Parties at one or
more of the business locations of the Borrower Parties set forth in Schedule
6.11 or any other location if (i) the Borrower gives the Administrative
Agent written notice of the new location at least thirty (30) days prior to
storing Collateral (other than Inventory) at such location, (ii) the
Lender Group’s security interest in such Collateral is and continues to be a
duly perfected, first priority Lien thereon, (iii) neither any Borrower
Party’s nor the Administrative Agent’s right of entry upon the premises where
such Collateral is stored or its right to remove the Collateral therefrom, is
in any way restricted, and (iv) the owner of such premises shall have
executed and delivered to the Administrative Agent a Collateral Access
Agreement. The Inventory shall not, without the prior written approval of the
Administrative Agent, be moved from the locations set forth on Schedule 6.11
except as permitted in the immediately preceding sentence and prior to an Event
of Default, (a) sales or other dispositions of assets permitted pursuant
to Section 8.7 and (b) the storage of Inventory at locations within
the continental US other than those specified in the first sentence of this Section 6.11
if (i) the Borrower gives the Administrative Agent written notice of the
new storage location at least thirty (30) days prior to storing Inventory at
such location, (ii) the Lender Group’s

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security interest in such
Inventory is and continues to be a duly perfected, first priority Lien thereon,
(iii) neither any Borrower Party’s nor the Administrative Agent’s right of
entry upon the premises where such Inventory is stored or its right to remove
the Inventory therefrom, is in any way restricted, (iv) the owner of such
premises, and any bailee, warehouseman or similar party that will be in
possession of such Inventory, shall have executed and delivered to the
Administrative Agent a Collateral Access Agreement, and (v) all negotiable
documents and receipts in respect of any Collateral maintained at such premises
are promptly delivered to the Administrative Agent and any non-negotiable
documents and receipts in respect of any Collateral maintained at such premises
are issued to the Administrative Agent and promptly delivered to the
Administrative Agent.

Section 6.12           Protection of Collateral. All
insurance expenses and expenses of protecting, storing, warehousing, insuring,
handling, maintaining and shipping the Collateral (including, without
limitation, all rent payable by any Borrower Party to any landlord of any
premises where any of the Collateral may be located), and any and all excise,
property, sales, and use taxes imposed by any state, federal, or local authority
on any of the Collateral or in respect of the sale thereof, shall be borne and
paid by the Borrower Parties. If the Borrower Parties fail to promptly pay any
portion thereof when due, the Lenders may, at their option, but shall not be
required to, make a Base Rate Advance for such purpose and pay the same
directly to the appropriate Person. The Borrower agrees to reimburse the
Lenders promptly therefor with interest accruing thereon daily at the Default
Rate provided in this Agreement. All sums so paid or incurred by the Lenders
for any of the foregoing and all reasonable costs and expenses (including
attorneys’ fees, legal expenses, and court costs) which the Lenders may incur
in enforcing or protecting the Lien on or rights and interest in the Collateral
or any of their rights or remedies under this or any other agreement between
the parties hereto or in respect of any of the transactions to be had hereunder
until paid by the Borrower to the Lenders with interest at the Default Rate,
shall be considered Obligations owing by the Borrower to the Lenders hereunder.
Such Obligations shall be secured by all Collateral and by any and all other
collateral, security, assets, reserves, or funds of the Borrower Parties in or
coming into the hands or inuring to the benefit of the Lenders. Neither the
Administrative Agent nor the Lenders shall be liable or responsible in any way
for the safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is in
the Lenders’ actual possession and loss or damage resulting from such Person’s
gross negligence or willful misconduct as determined by a final non-appealable
order of a court of competent jurisdiction) or for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency, or other person whomsoever, but the same shall be at the Borrower
Parties’ sole risk.

Section 6.13           Assignments and Records of
Accounts. If so requested by the Administrative Agent following an Event of
Default, each Borrower Party shall execute and deliver to the Administrative
Agent, for the benefit of the Lender Group, formal

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written assignments of
all of the Accounts daily, which shall include all Accounts that have been
created since the date of the last assignment, together with copies of invoices
or invoice registers related thereto. Each Borrower Party shall keep accurate
and complete records of the Accounts and all payments and collections thereon.

Section 6.14           Administration of Accounts.

(a)           The Administrative Agent retains the
right after the occurrence and during the continuance of an Event of Default to
notify the Account Debtors that the Accounts have been assigned to the
Administrative Agent, for the benefit of the Lender Group, and to collect the
Accounts directly in its own name and to charge the collection costs and
expenses, including attorneys’ fees, to the Borrower. The Administrative Agent
has no duty to protect, insure, collect or realize upon the Accounts or preserve
rights in them. Each Borrower Party irrevocably makes, constitutes and appoints
the Administrative Agent as such Borrower Party’s true and lawful attorney and
agent-in-fact to endorse such Borrower Party’s name on any checks, notes,
drafts or other payments relating to, the Accounts which come into the
Administrative Agent’s possession or under the Administrative Agent’s control
as a result of its taking any of the foregoing actions. Additionally, the
Administrative Agent, for the benefit of the Lender Group, shall have the right
to collect and settle or adjust all disputes and claims directly with the
Account Debtor and to compromise the amount or extend the time for payment of
the Accounts upon such terms and conditions as the Administrative Agent may
deem advisable, and to charge the deficiencies, reasonable costs and expenses
thereof, including attorney’s fees, to the Borrower.

(b)           If an Account includes a charge for
any tax payable to any governmental taxing authority, the Administrative Agent
on behalf of the Lenders is authorized, in its sole discretion, to pay the
amount thereof to the proper taxing authority for the account of the applicable
Borrower Party and to make a Base Rate Advance to the Borrower to pay therefor.
The Borrower Parties shall notify the Administrative Agent if any Account
includes any tax due to any governmental taxing authority and, in the absence
of such notice, the Administrative Agent shall have the right to retain the
full proceeds of the Account and shall not be liable for any taxes to any
governmental taxing authority that may be due by any Borrower Party by reason
of the sale and delivery creating the Account.

(c)           Whether or not a Default has
occurred, any of the Administrative Agent’s officers, employees or agents shall
have the right, at any time or times hereafter, in the name of the Lenders, or
any designee of the Lenders or the Borrower Parties, to verify the validity,
amount or other matter relating to any Accounts by mail, telephone, telegraph
or otherwise. The Borrower Parties shall cooperate fully with the
Administrative Agent and the Lenders in an effort to facilitate and promptly
conclude any such verification process.

Section 6.15           The Blocked Account.

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(a)           The Borrower Parties shall establish
and maintain one or more blocked accounts (each a “Blocked Account”)
pursuant to a lockbox arrangement acceptable to the Administrative Agent with
SunTrust Bank or any Affiliate thereof. The Borrower Parties shall issue to
each such bank an irrevocable letter of instruction directing such bank to
deposit all payments or other remittances received in the lockbox to the
Blocked Account maintained at such Bank. All amounts which shall be deposited
into any Blocked Account shall immediately become the property of and be under
the sole dominion and exclusive control of the Administrative Agent, on behalf
of the Lender Group, and no Borrower Party shall have any right to withdraw
such amounts from the Blocked Account.

(b)           The Borrower Parties shall take all
steps to ensure that all of their Account Debtors and all of their credit card
processors forward all items of payment to lockboxes established with the
Blocked Account banks. The Borrower Parties shall cause each of their credit
card processors to enter into an agreement, in form and substance satisfactory
to the Administrative Agent, with the Administrative Agent and the applicable
Borrower Party pursuant to which the applicable Borrower Party shall
irrevocably instruct such credit card processor to forward all items of payment
owing to the Borrower Parties directly to a Blocked Account.

(c)           In the event that any Borrower Party
shall at any time receive any remittances of any of the foregoing directly or
shall receive any other funds representing proceeds of the Collateral, such
Borrower Party shall hold the same as trustee for the Administrative Agent,
shall segregate such remittances from its other assets, and shall promptly
deposit the same into a Blocked Account. All cash, cash equivalents, checks,
notes, drafts or similar items of payment (including, without limitation, from
the sale of any assets under Section 8.7(b) or otherwise or
constituting insurance or condemnation proceeds) received by any Borrower Party
shall be deposited into a Blocked Account promptly upon receipt thereof by such
Borrower Party.

(d)           If the Administrative Agent or any
Affiliate of the Administrative Agent is a Blocked Account bank, on each
Business Day the Administrative Agent shall, without further consent of any
Borrower Party, withdraw all immediately available funds in such Blocked
Account, deposit the same in the Loan Account, and apply the same against the
Obligations in the manner provided for in Section 2.11 or, if applicable, Section 2.6(c);
provided, however, if on any such date there are no outstanding
Obligations or the amount of any such deposit in the Loan Account is in excess
of the outstanding Obligations, then at the written request of the Borrower
such excess amount shall be directed to any other deposit or investment account
maintained by the Borrower so long as such account is subject to a Blocked
Account Agreement or other control agreement acceptable to the Co-Collateral
Agents. With respect to the calculation of interest, the application of such
funds to the Obligations shall be deemed made one (1) day after receipt of
such funds.

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(e)           As of the Agreement Date, all bank
accounts and investment accounts of the Borrower Parties are listed on Schedule
6.15 and such Schedule designates which such accounts are deposit accounts.
No Borrower Party shall open any other deposit account unless the depository
bank for such account shall have entered into an agreement with the
Administrative Agent substantially in the form of the Blocked Account
Agreement.

Section 6.16           Further Assurances. Upon the
written request of the Administrative Agent, each Borrower Party will promptly
cure, or cause to be cured, defects in the creation and issuance of any
Revolving Loan Notes and the execution and delivery of the Loan Documents
(including this Agreement) and any Bank Products Agreements, resulting from any
act or failure to act by any Borrower Party or any employee or officer thereof.
Each Borrower Party at its expense will promptly execute and deliver to the
Administrative Agent and the Lenders, or cause to be executed and delivered to
the Administrative Agent and the Lenders, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower Parties in the Loan Documents
(including this Agreement) and the Bank Products Documents, if any, or to
correct any omissions in the Loan Documents or any Bank Products Documents, or
more fully to state the obligations set out herein or in any of the Loan
Documents or the Bank Products Documents, or to obtain any consents, all as may
be necessary or appropriate in connection therewith as may be reasonably
requested provided that such further documents, agreements and instruments do
not increase the obligations or diminish the rights of any Borrower under the
Loan Documents from the existing covenants and agreements contained in the Loan
Documents (including this Agreement) and the Bank Products Documents, if any.

Section 6.17           Broker’s Claims. Each Borrower
Party hereby indemnifies and agrees to hold each member of the Lender Group
harmless from and against any and all losses, liabilities, damages, costs and
expenses which may be suffered or incurred by such member of the Lender Group
in respect of any claim, suit, action or cause of action now or hereafter
asserted by a broker or any Person acting in a similar capacity arising from or
in connection with the execution and delivery of this Agreement or any other
Loan Document or Bank Products Document or the consummation of the transactions
contemplated herein or therein. This Section 6.17 shall survive
termination of this Agreement.

Section 6.18           Indemnity. Each Borrower Party
will indemnify and hold harmless each Indemnified Person from and against any
and all claims, liabilities, investigations, losses, damages, actions, demands,
penalties, judgments, suits, investigations and costs, expenses (including fees
and expenses of experts, agents, consultants and reasonable fees and expenses
of counsel) and disbursements, in each case, of any kind or nature (whether or
not the Indemnified Person is a party to any such action, suit or
investigation) whatsoever which may be imposed on, incurred by, or asserted
against an Indemnified Person resulting from any breach or alleged breach by
the Borrower Parties of any

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representation or
warranty made hereunder, or otherwise in any way relating to or arising out of
the Commitments, this Agreement, the other Loan Documents, the Bank Products
Documents, if any, or any other document contemplated by this Agreement, the
making, administration or enforcement of the Loan Documents and the Loans or
any Bank Products Documents, any transaction contemplated hereby or any related
matters unless, with respect to any of the above, such Indemnified Person is
determined by a final non-appealable judgment of a court of competent
jurisdiction to have acted or failed to act with gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OR SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED
UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT. This Section 6.18 shall
survive termination of this Agreement.

Section 6.19           Environmental Matters.

(a)           Each Borrower Party shall, and shall
cause its Subsidiaries to, comply in all material respects with the
Environmental Laws and shall notify the Administrative Agent within thirty (30)
days in the event of any discharge or discovery of any Hazardous Materials at,
upon, under or within the Properties in amounts that require remediation. Each
Borrower Party shall forward to the Administrative Agent copies of all
documents alleging a violation of Environmental Laws, all responses thereto and
all documents submitted to environmental agencies relative to remediation of
Hazardous Materials on the Properties, in each case, within thirty (30) days of
receipt, delivery or submission (as the case may be) of the same.

(b)           The Borrower Parties will not use or
permit any other party to use any Hazardous Materials at any of their places of
business except such materials as are used in the Borrower Parties’ normal
course of business, maintenance and repairs, and then only in material
compliance with all applicable Environmental Laws. The Borrower Parties shall
not install or permit to be installed in the Property friable asbestos or any
substance containing asbestos and deemed hazardous by an Applicable Law
respecting such material, or any other building material deemed to be harmful,
hazardous or injurious by relevant Applicable Law and with respect to any such
material currently present in any Property shall promptly either (i) remove
any material which such Applicable Law deem harmful, hazardous or injurious and
require to be removed or (ii) otherwise comply with such Applicable Law,
at the Borrower Parties’ expense.

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(c)           Promptly upon the written request of
the Administrative Agent from time to time, the Borrower Parties shall provide
the Administrative Agent with an environmental site assessment or environmental
audit report prepared by an environmental engineering firm acceptable to the
Administrative Agent, to assess with a reasonable degree of certainty the
presence or absence of any Hazardous Materials and the potential costs in connection
with abatement, cleanup or removal of any Hazardous Materials found on, under,
at or within the Properties. Such assessment or report shall be at Borrower
Parties’ expense if, in the judgment of the Administrative Agent, there is
reason to believe that a violation of Environmental Laws has occurred.

(d)           Each Borrower Party shall at all
times indemnify and hold harmless the Lender Group against and from any and all
claims, suits, actions, debts, damages, costs, losses, obligations, judgments,
charges, and expenses, or any nature whatsoever under or on account of the
Environmental Laws including the assertion of any lien thereunder, with respect
to:

(i)            any discharge of Hazardous
Materials, the threat of a discharge of any Hazardous Materials or the presence
of any Hazardous Materials affecting the Properties whether or not the same
originates or emanates from the Properties or any contiguous real estate
including any loss of value of the Properties as a result of any of the
foregoing;

(ii)           any costs of removal or remedial
action incurred by the US government or any costs incurred by any other person
or damages from injury to, destruction of, or loss of natural resources,
including reasonable costs of assessing such injury, destruction or loss
incurred pursuant to any Environmental Laws;

(iii)          liability for personal injury or
property damage arising under any statutory or common law tort theory
(including without limitation damages assessed) for the maintenance of a public
or private nuisance or for the carrying on of an abnormally dangerous activity
at or caused by any Borrower Party or Subsidiary of a Borrower Party near the
Properties; and/or

(iv)          any other environmental matter
affecting the Properties within the jurisdiction of the Environmental
Protection Agency, any other federal agency, or any state or local
environmental agency.

(e)           In the event of any discharge or
discovery of any Hazardous Materials at, upon, under or within the Properties
in amounts that require remediation, if the applicable Borrower Party or
Subsidiary fails to begin the remediation within thirty (30) days after notice
to the Administrative Agent, the Administrative Agent may at its election, but
without the obligation to do so, give such notices and/or cause such work to be
performed at the Properties and/or take any and all other actions as the
Administrative Agent shall deem necessary or advisable in order to abate the
discharge of such

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Hazardous Material,
remove such Hazardous Material or cure such Borrower Party’s or Subsidiary’s
noncompliance.

(f)            All of the representations,
warranties, covenants and indemnities of this Section 6.19 and Section 5.1(y) shall
survive the termination of this Agreement, the repayment of the Obligations
and/or the release of the liens of the Mortgage from the Properties that are
subject to the Mortgage and shall survive the transfer of any or all right,
title and interest in and to the Properties by the Borrower Parties or any
Subsidiary to any party, whether or not affiliated with the Borrower Parties.

Section 6.20           Assignment of Claims Act. If
so requested by the Administrative Agent (after consultation with the Borrower)
upon (a) the occurrence and during the continuance of an Event of Default
or (b) the occurrence of any event, act or condition resulting in a
Material Adverse Effect, each Borrower Party shall execute and deliver to the
Administrative Agent, for the benefit of the Lender Group, all documents,
instruments, filings, or take any other required actions, necessary to complete
the required procedures under the Federal Assignment of Claims Act of 1940 for
the effective collateral assignment (to the extent available under Applicable
Law) of all Accounts which are owed by the Federal Government to the extent the
amount of such Accounts, either individually or in the aggregate together with
all other Accounts under a single contract, exceeds $1,000,000; provided,
however, such Borrower Party shall only be required to use commercially
reasonable efforts with respect to actions required by the applicable Account
Debtor or any other Person.

Section 6.21           Formation of Subsidiaries. At
the time of the formation of any direct or indirect Subsidiary of the Borrower
after the Agreement Date or the acquisition of any direct or indirect
Subsidiary of the Borrower after the Agreement Date, the Borrower Parties, as
appropriate, shall (a) cause such new Domestic Subsidiary to provide to
the Administrative Agent, for the benefit of the Lender Group, a joinder and
supplement to this Agreement substantially in the form of Exhibit K
(each, a “Guaranty Supplement”), pursuant to which such new Domestic
Subsidiary shall agree to join as a Guarantor of the Obligations under Article 3
and as a Borrower Party under this Agreement, a supplement to the Security
Agreement, and such other security documents (including, without limitation,
Mortgages with respect to any real estate owned by such Subsidiary), together
with appropriate Uniform Commercial Code financing statements, all in form and
substance reasonably satisfactory to the Administrative Agent, (b) provide
to the Administrative Agent, for the benefit of the Lender Group, a pledge
agreement and appropriate certificates and powers or Uniform Commercial Code
financing statements, pledging all direct or beneficial ownership interest in
such new Subsidiary (regardless of whether owned by a Borrower Party or a
Subsidiary of a Borrower Party or a minority shareholder), in form and
substance reasonably satisfactory to the Administrative Agent, and (c) provide
to the Administrative Agent, for the benefit of the Lender Group, all other
documentation, including one or more opinions of counsel satisfactory to the
Administrative Agent, which in its reasonable opinion is appropriate with
respect to such

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formation and the
execution and delivery of the applicable documentation referred to above. Nothing
in this Section 6.21 shall authorize any Borrower Party or any Subsidiary
of a Borrower Party to form or acquire any Subsidiary absent express
authorization to so form or acquire such Subsidiary pursuant to Article 8.
Any document, agreement or instrument executed or issued pursuant to this Section 6.21
shall be a “Loan Document” for purposes of this Agreement

Section 6.22           Notifications Relating to
Contracts with the Federal Government. Each Borrower Party will promptly
(and in any event within three (3) Business Days of), deliver to the
Administrative Agent: (a) any written notification from the Federal
Government indicating that it intends to take a setoff with respect to any
Account as to which the Federal Government is the Account Debtor; (b) any
written notification from any subcontractor indicating any Borrower Parties
failure to make prompt payments with respect to any contract entered into in
connection with any Account as to which the Federal Government is the Account
Debtor; (c) any written notification from the Federal Government in
connection with any Account as to which the Federal Government is the Account
Debtor indicating that the Federal Government intends to cancel an order for
goods or services or to change or limit the scope of an order for goods or
services, if such cancellation, change or limitation could, individually, have
a negative impact of $5,000,000 or more on the revenue of the Borrower; and (d) any
written notification from the Federal Government indicating that the Federal
Government intends to terminate for convenience any contract entered into in
connection with any Account as to which the Federal Government is the Account
Debtor if such termination could, individually, have a negative impact of
$5,000,000 or more on the revenue of the Borrower.

Section 6.23           Inventory Appraisals. Absent
the occurrence of an Event of Default, the Co-Collateral Agents shall, at the
Borrower’s expense, conduct  appraisals
of the Borrower’s Inventory not more than twice during any 12 month period (one
of which shall be within 30 days prior to the Inventory Eligibility Period). At
any time an Event of Default has occurred and is continuing, the Co-Collateral
Agents shall have the right to conduct further field exams, appraisals, audits
and valuations of the Inventory and other Collateral in their Permitted
Discretion at the Borrower’s expense. All amounts chargeable to the Borrower
under this Section shall constitute Obligations that are secured by all of
the Collateral and shall be payable to the applicable Co-Collateral Agent
within 10 days of written demand.

Section 6.24           Post Closing Conditions. The
Borrower shall perform or cause to be performed the following, each of which
shall be in form and substance satisfactory to the Administrative Agent:

(a)           Within
30 days after the Agreement Date (as may be extended by the Co-Collateral
Agents in their sole discretion),
Borrower shall have delivered to Administrative Agent a certificate of good
standing from the Secretary of State of each of the jurisdictions listed on
Schedule 1.1(d), in each case evidencing that Borrower is

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qualified and in good standing as a
foreign corporation in such jurisdictions under the name “GTSI Corp.” (other
than the State of California or such other state as the Co-Collateral Agents
may approve) and, with respect to the State of California or such other state,
the Borrower shall take such steps to qualify and be in good standing as a
foreign corporation as may be reasonably acceptable to the Co-Collateral
Agents.

(b)           Within 30 days after the Agreement
Date (as may be extended by the Co-Collateral Agents in their sole discretion,
the Borrower shall, or shall cause its Subsidiaries to, close its German bank
account.

(c)           Within 60 days after the Agreement
Date (as may by extended by the Co-Collateral Agents in their sole discretion),
deliver to Administrative Agent evidence that (i) Technology Logistics, Inc.,
as incorporated in Virginia (which for the avoidance of doubt differs from
Technology Logistics, Inc. incorporated in Delaware and which is a
Guarantor hereunder), has been either dissolved or merged into Technology
Logistics, Inc., as incorporated in Delaware, and (ii) Technology
Logistics, Inc., as incorporated in Delaware, has filed for qualification
as a foreign corporation in Virginia. The Borrower Parties hereby represent and
covenant that until such time as the requirements in clauses (i) and (ii) of
this subsection (c) have been completed, Technology Logistics, Inc.
shall not have any material assets or liabilities other than the Obligations
and the obligations under the Subordinated Debt Documents.

(d)           Within 15 days after the Agreement
Date (as may by extended by the Co-Collateral Agents in their sole discretion),
deliver to Administrative Agent a fully executed Collateral Access Agreement,
in form and substance satisfactory to Co-Collateral Agents, with respect to
Borrower’s leased location at 3900 Stonecroft Boulevard, Chantilly, Virginia
20151.

(e)           Within 30 days of the Agreement Date
(as may by extended by the Co-Collateral Agents in their sole discretion), the
Borrower shall take all actions required or reasonably requested by the
Administrative Agent to provide the Administrative Agent with a first priority
security perfected Lien on the judgment in favor of the Borrower against
Ichiban, Inc.

ARTICLE 7.

INFORMATION COVENANTS

Until the earlier of the
date the Obligations are repaid in full or the date the Borrower no longer has
a right to borrow, or have Letters of Credit issued, hereunder (whether or not
the conditions to borrowing have been or can be fulfilled) and unless the
Majority Lenders shall otherwise give their prior consent in writing, the
Borrower Parties will furnish or cause to be furnished to each member of the
Lender Group:

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Section 7.1             Monthly and Quarterly Financial
Statements and Information. (a)  Within thirty (30) days after the
last day of each fiscal month in each fiscal year of the Borrower, the balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal month,
and the related statement of income and retained earnings and related statement
of cash flows for such fiscal month and for the fiscal year to date period
(starting with the Agreement Date) ended with the last day of such fiscal
month, which financial statements shall set forth in comparative form such
figures (i) as at the end of such month during the previous fiscal year
and for such month during the previous fiscal year and (ii) as contained
in the Borrower’s projections most recently delivered to the Administrative
Agent for such periods, all of which shall be on a consolidated and
consolidating basis with the other Borrower Parties and shall be certified by
an Authorized Signatory of the Borrower to be, in his or her opinion, complete
and correct in all material respects and to present fairly in accordance with
GAAP the financial position of the Borrower Parties, as at the end of such
period and the results of operations for such period, and for the elapsed
portion of the year (starting with the Agreement Date) ended with the last day
of such period, subject only to normal year-end adjustments and lack of
footnotes, provided, that Borrower may deliver the financial statements
required under this subsection (a) up to five (5) Business Days late
and on up to two (2) occurrences in any twelve (12) month period before
causing a default under Section 9.1(c) with respect to this
subsection (a).

(b)           Within forty-five (45) days after the
last day of each fiscal quarter in each fiscal year of the Borrower, the
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related statement of income and retained earnings and related
statement of cash flows for such fiscal quarter which financial statements
shall set forth in comparative form (i) such figures as at the end of such
quarter during the previous fiscal year and for such quarter during the
previous fiscal year and (ii) as contained in the Borrower’s projections
most recently delivered to the Administrative Agent for such periods, all of
which shall be on a consolidated and consolidating basis with the other
Borrower Parties and shall be certified by an Authorized Signatory of the
Borrower to be, in his or her opinion, complete and correct in all material
respects and to present fairly in accordance with GAAP the financial position
of the Borrower Parties, as at the end of such period and the results of
operations for such period, subject only to normal year-end adjustments and
lack of footnotes.

Section 7.2             Annual Financial Statements and
Information; Certificate of No Default. Within ninety (90) days after the
end of each fiscal year of the Borrower, the audited balance sheet of the
Borrower and its Subsidiaries as at the end of such year and the related
audited statements of income and retained earnings and related audited
statements of cash flows for such year, all of which shall be on a consolidated
and consolidating basis with the other Borrower Parties, which financial
statements shall set forth in comparative form (i) such figures as at the
end of and for the previous year and (ii) as contained in the Borrower’s
projections most recently delivered to the Administrative Agent for such
periods, and shall be accompanied by an opinion of

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independent certified
public accountants of recognized standing satisfactory to the Administrative
Agent, stating that such financial statements are unqualified and prepared in
all material respects in accordance with GAAP, without any explanatory
paragraphs.

Section 7.3             Compliance Certificates.

(a)           Compliance Certificates. At
the time the financial statements are furnished pursuant to Section 7.1
and Section 7.2, a Compliance Certificate:

(b)           Setting forth as at the end of such
period, the arithmetical calculations required to establish whether or not the
Borrower Parties were in compliance with the requirements of the Financial
Covenants;

(c)           Stating whether any change in GAAP or
the application thereof has occurred since the date of the Borrower’s audited
financial statements delivered on the Agreement Date, and, if any change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate; and

(d)           Stating that, to the best of his or
her knowledge, no Default has occurred as at the end of such period, or, if a
Default has occurred, disclosing each such Default and its nature, when it
occurred and whether it is continuing.

Section 7.4             Access to Accountants. Each
Borrower Party hereby authorizes the Administrative Agent to communicate
directly with the Borrower Parties’ and their Subsidiaries’ independent public
accountants and authorizes these accountants to disclose to the Administrative
Agent any and all financial statements and other supporting financial data,
including matters relating to the annual audit and copies of any management
letter with respect to its business, financial condition and other affairs. On
or before the Agreement Date, the Borrower Parties shall deliver to their
independent public accountants a letter authorizing them to comply with the
provisions of this Section 7.4.

Section 7.5             Additional
Reports.

(a)           (i) Prior to 2:00 p.m.
(Atlanta, Georgia time) on each Business Day, the Borrower shall deliver to the
Administrative Agent, (A) a Borrowing Base Certificate as of the close of
business on the immediately preceding Business Day, which shall be in such form
as shall be reasonably satisfactory to the Administrative Agent, including
(without limitation) a roll-forward of all origination and collection activity
for Eligible Accounts and Eligible Inventory, (B) a summary of key vendor
terms (including credit limits and payment terms) or a certification that such
key vendor terms have not changed from the key vendor terms previously reported,
provided, that Borrower may deliver a Borrowing Base Certificate
required under this clause (i) up to one (1) Business Day late and on
up to ten (10) non-consecutive occurrences in any twelve (12) month period
before causing a default under Section 9.1(c) with respect to this
clause (i), (ii) on

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the 1st and 15th day of
each calendar month, a Borrowing Base Certificate as of the close of business
on the immediately preceding 1st day of such month or the 15th day of the prior
calendar month, whichever is most recent, setting forth (A) a categorical
breakdown of all Accounts of the Borrower, (B) a calculation of Eligible
Accounts and Eligible Inventory as of such date, (C) an aging of all
Accounts that are not Eligible Accounts and summary of all Inventory that is
not Eligible Inventory as of such date, in each case with the supporting
documentation and schedules in reasonable detail to confirm such calculations
and (iii) simultaneously with the delivery of the same to the Subordinated
Debt Agent, which times shall be not less frequent than the times set forth in
the Subordinated Debt Agreement as in effect on the date hereof, a copy of the
relevant Subordinated Debt Borrowing Base Certificate and all supporting
information delivered in connection therewith.

(b)           Within 15 days after the end of each
fiscal month, or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and the Lenders,
a Borrowing Base Certificate as of the last day of the preceding fiscal month
or such other date reasonably required by the Administrative Agent, which shall
be in such form as shall be satisfactory to the Administrative Agent, setting
forth a categorical breakdown of all Accounts of the Borrower, a calculation of
Eligible Accounts and Eligible Inventory as of such last day of the preceding
fiscal month and a calculation of Average Availability for the preceding fiscal
month, provided, that Borrower may deliver the items required under this
subsection (b) up to five (5) Business Days late and on up to two (2) occurrences
in any twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (b).

(c)           Within 15 days after the end of each
fiscal month or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and to any Lender
requesting the same, in form acceptable to the Administrative Agent, lockbox,
bank and investment account statements, a report of sales and collections,
debit and credit adjustments, a detailed aged trial balance of all Accounts of
the Borrower existing as of the last day of the preceding fiscal month or such
other date reasonably required by the Administrative Agent, specifying the names,
and face value for each Account Debtor obligated on an Account of the Borrower
so listed and all other information necessary to calculate Eligible Accounts as
of such last day of the preceding month or such other date reasonably required
by the Administrative Agent and, upon the Administrative Agent’s request
therefor, copies of proof of delivery and the original copy of all documents,
including, without limitation, repayment histories and present status reports
relating to the Accounts of the Borrower so scheduled and such other matters
and information relating to the status of then existing Accounts of the
Borrower as the Administrative Agent shall reasonably request, provided,
that Borrower may deliver the items required under this subsection (c) up
to five (5) Business Days late and on up to two (2) occurrences in
any twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (c).

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(d)           On Friday of each week, the Borrower
shall deliver to the Administrative Agent a 13-week cashflow,
Availability and “Term Loan Availability” (as defined in the Subordinated Debt
Agreement as in effect on the date hereof) forecast for the 13-week
period commencing on the Monday immediately following such Friday, such
forecast to be in form and substance satisfactory to the Administrative Agent, provided,
that Borrower may deliver the items required under this subsection (d) up
to one (1) Business Day late and on up to five (5) occurrences in any
twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (d).

(e)           Promptly upon receipt thereof, the
Borrower Parties shall deliver to the Lender Group copies of all final reports,
if any, submitted to any Borrower Party or any Subsidiary of a Borrower Party
by the Borrower Parties’ and their Subsidiaries’ independent public accountants
in connection with any annual or interim audit of the Borrower Parties and
their Subsidiaries, including, without limitation, any final management report
prepared in connection with the annual audit referred to in Section 7.2.

(f)            Within 15 days after the end of each
fiscal month, or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and the Lenders,
an Inventory report as of the last day of the preceding fiscal month or such
other date reasonably required by the Administrative Agent, which shall be in
such form as shall be reasonably satisfactory to the Administrative Agent,
setting forth a categorical breakdown of all Inventory of the Borrower,
including, without limitation, Inventory that secures trade or vendor debt, and
Inventory that is free and clear of any Lien (other than the Liens in favor of
the Administrative Agent), provided, that Borrower may deliver the items
required under this subsection (d) up to one (1) Business Day late
and on up to five (5) occurrences in any twelve (12) month period before
causing a default under Section 9.1(c) with respect to this
subsection (d).

(g)           On or before the date thirty (30)
days prior to the commencement of each fiscal year, the Borrower Parties shall
deliver to the Lender Group the annual budget for the Borrower Parties and
their Subsidiaries approved by the board of directors of the Borrower or a
committee thereof, including forecasts of the income statement, the balance
sheet and a cash flow statement for the immediately succeeding year on a month
by month basis and each succeeding year thereafter through the Maturity Date on
an annual basis.

(h)           To the extent not covered elsewhere
in this Article 7, promptly after the sending thereof, the Borrower
Parties shall, and shall cause their Subsidiaries to, deliver to the Administrative
Agent and the Lenders copies of all financial statements, reports and other
information which any Borrower Party or any such Subsidiary sends to any holder
of its Funded Debt (including the Subordinated Debt) or its securities or which

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any Borrower Party or any
such Subsidiary files with the Securities and Exchange Commission or any
national securities exchange.

(i)            If there is a material change in
GAAP after December 31, 2005, that affects the presentation of the
financial statements referred to in Section 7.1 and 7.2, then, in addition
to delivery of such financial statements, and on the date such financial
statements are required to be delivered, the Borrower Parties shall furnish the
adjustments and reconciliations necessary to enable the Borrower and each
Lender to determine compliance with each of the Financial Covenants, all of
which shall be determined in accordance with GAAP consistently applied.

(j)            Promptly upon the filing thereof,
copies of all 10-K, 10-Q, and all other material financial reports
filed by the Borrower Parties with the SEC.

(k)           To the extent not otherwise delivered
to the Administrative Agent hereunder, the Borrower Parties will provide, or
will cause to be provided to, the Administrative Agent and the Lenders all
reports and information as may be delivered pursuant to the terms of the
Subordinated Debt Documents (including, without limitation, information and
reports relating to collateral audits and appraisals of the Borrower Parties),
simultaneously with the delivery of the same to the Subordinated Debt Agent or
the Subordinated Debt Lenders;

(l)            To the extent not otherwise
delivered to the Administrative Agent hereunder, the Borrower Parties shall
deliver to the Administrative Agent and the Lenders (i) a copy of each notice
or other written communication outside of the ordinary course of business
delivered by it or on its behalf in connection with the Subordinated Debt
Documents, such delivery to be made at the same time and by the same means as
such notice or other communication is delivered to the Subordinated Debt Agent
or the Subordinated Debt Lenders, and (ii) a copy of each notice or other
written communication outside of the ordinary course of business received by
the Borrower Parties in connection with the Subordinated Debt Documents, such
delivery to be made promptly after such notice or other communication is
received by the Borrower Parties; and

(m)          From time to time and promptly upon
(and in any event within ten (10) Business Days of) each written request
from the Administrative Agent, the Borrower Parties shall, and shall cause
their Subsidiaries to, deliver to the Administrative Agent on behalf of the
Lender Group such data, certificates, reports, statements, opinions of counsel,
documents, or further information regarding the business, assets, liabilities,
financial position, projections, results of operations, or business prospects
of the Borrower Parties, such Subsidiaries, or any of them, as the
Administrative Agent may reasonably request.

Section 7.6             Notice of Litigation and Other
Matters.

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(a)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s obtaining knowledge
of the institution of, or a written threat of, any action, suit, governmental
investigation or arbitration proceeding against any Borrower Party, any
Subsidiary of a Borrower Party or any Property, which action, suit,
governmental investigation or arbitration proceeding, if adversely determined,
would expose, in such Borrower Party’s reasonable judgment, any Borrower Party
or any Subsidiary of a Borrower Party to liability in an aggregate amount in
excess of $500,000, such Borrower Party shall notify the Lender Group of the
occurrence thereof, and the Borrower Parties shall provide such additional
information with respect to such matters as the Lender Group, or any of them,
may reasonably request.

(b)           Immediately following the occurrence
of any default (whether or not any Borrower Party has received notice thereof
from any other Person) (i) on Funded Debt of any Borrower Party or any
Subsidiary of a Borrower Party which singly, or in the aggregate, exceeds
$500,000, or (ii) under the Subordinated Debt Documents, such Borrower
Party shall notify the Lender Group of the occurrence thereof;

(c)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s receipt of notice
of the pendency of any proceeding for the condemnation or other taking of any
Property of any Borrower Party or any Subsidiary of a Borrower Party, such
Borrower Party shall notify the Lender Group of the occurrence thereof;

(d)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s receipt of notice
of any event that could reasonably be likely to result in a Materially Adverse
Effect, such Borrower Party shall notify the Lender Group of the occurrence
thereof;

(e)           Promptly (and in any event within
five (5) Business Days) following any material amendment or change
approved by the board of directors of the Borrower to the budget submitted to
the Lender Group pursuant to Section 7.5(d), the Borrower Parties shall
notify the Lender Group of the occurrence thereof;

(f)            Promptly (but in any event within
two (2) Business Days) following any (i) Default under any Loan
Document, or default by any Borrower Party under the Subordinated Debt
Documents, or (ii) default under any other agreement (other than those
referenced in clause (i) of this Section 7.6(f) above or in Section 7.6(b))
to which any Borrower Party or any Subsidiary of a Borrower Party is a party or
by which any Borrower Party’s or any such Subsidiary’s properties is bound
which could reasonably be expected to have a Materially Adverse Effect, then
the Borrower Parties shall notify the Lender Group of the occurrence thereof
giving in each case the details thereof and specifying the action proposed to
be taken with respect thereto;

(g)           Promptly (but in any event within
five (5) Business Days) following the occurrence of any ERISA Event or a “prohibited
transaction” (as such term

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is defined in Section 406
of ERISA or Section 4975 of the Code) with respect to any Plan of any
Borrower Party or any of its ERISA Affiliates or the commencement or threatened
commencement of any litigation regarding any such Plan or naming it or the
trustee of any such Plan with respect to such Plan (other than claims for
benefits in the ordinary course of business), the Borrower Parties shall notify
the Administrative Agent and the Lenders of the occurrence thereof.

(h)           The Borrower Parties shall deliver
updates or supplements to the following schedules (i) within forty-five
days after the end of the end of each fiscal year, as of the last day of such
fiscal year:  Schedule 5.1(c)-1,
Schedule 5.1(c)-2, Schedule 5.1(d), Schedule 5.1(h),
Schedule 5.1(m), Schedule 5.1(p), Schedule 5.1(x)-1,
Schedule 5.1(x)-2, Schedule 5.1(y)-1, Schedule
5.1(y)-2, Schedule 5.1(y)-3, Schedule 5.1(y)-4,
Schedule 5.1(y)-5 and Schedule 5.1(y)-6, and (ii) within
forty-five days after the end of the end of each of the first and third fiscal
quarters of each fiscal year, as of the last day of such fiscal quarter: Schedule
6.11 and Schedule 6.15, in each case, as may be required to render
correct the representations and warranties contained in the applicable sections
to which such schedules relate as of the last day of such fiscal quarter
without giving effect to any references therein to the “Agreement Date” in each
case, appropriately marked to show the changes made therein; provided
that no such supplement to any such Schedules or representation shall be deemed
a waiver of any Default resulting from the matters disclosed therein, except as
consented to by the Majority Lenders in writing.

ARTICLE 8.

NEGATIVE COVENANTS

Until the earlier
of the date the Obligations are repaid in full or the date the Borrower no
longer has a right to borrow, or have Letters of Credit issued, hereunder
(whether or not the conditions to borrowing have been or can be fulfilled) and
unless the Majority Lenders shall otherwise give their prior consent in
writing:

Section 8.1             Funded Debt. No Borrower
Party will, or will permit any of its Subsidiaries to, create, assume, incur,
or otherwise become or remain obligated in respect of, or permit to be
outstanding, any Funded Debt except:

(a)           Funded Debt under this Agreement and
the other Loan Documents and the Bank Products Documents;

(b)           the Subordinated Debt or Refinancing
Debt in an aggregate principal amount not to exceed $10,000,000;

(c)           Trade or accounts payable and/or
similar obligations, and accrued expenses, incurred in the ordinary course of
business, other than for borrowed money;

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(d)           Funded Debt of the Borrower or any
Subsidiary of the Borrower that is unsecured or secured by Permitted Liens
described in clause (f) of the definition of Permitted Liens set forth in Article 1
(including without limitation Capitalized Lease Obligations), collectively, not
to exceed the aggregate principal amount of $1,000,000 at any time;

(e)           Guaranties permitted by Section 8.2;

(f)            Unsecured Funded Debt of any
Borrower Party owed to another Borrower Party; and

(g)           Obligations under Hedge Agreements
not entered into for speculative purposes approved by the Administrative Agent.

Section 8.2             Guaranties. No Borrower
Party will, or will permit any Subsidiary of a Borrower Party to, at any time
guarantee or enter into or assume any Guaranty, or be obligated with respect
to, or permit to be outstanding, any Guaranty, other than (a) guaranties
of the Obligations and the obligations under the Subordinated Debt Agreement, (b) guaranties
by any Borrower Party of obligations under agreements of any other Borrower
Party entered into in connection with the acquisition of services, supplies,
and equipment in the ordinary course of business of such Borrower Party, (c) endorsements
of instruments in the ordinary course of business, and (d) guaranties by
any Borrower Party of any obligation of any other Borrower Party.

Section 8.3             Liens. No Borrower Party
will, or will permit any Subsidiary of a Borrower Party to, create, assume,
incur, or permit to exist or to be created, assumed, or permitted to exist,
directly or indirectly, any Lien on any of its property, real or personal, now
owned or hereafter acquired, except for Permitted Liens.

Section 8.4             Restricted Payments and
Purchases. No Borrower Party shall, or shall permit any Subsidiary of a
Borrower Party to, directly or indirectly declare or make any Restricted
Payment or Restricted Purchase, or set aside any funds for any such purpose,
other than (a) Dividends on common stock which accrue (but are not paid in
cash) or are paid in kind or Dividends on preferred stock which accrue (but are
not paid in cash) or are paid in kind; provided, however, that
the Borrower’s Subsidiaries may make Restricted Payments to the Borrower or a
wholly owned Domestic Subsidiary of the Borrower that is a Borrower Party, (b) Restricted
Purchases or Restricted Payments for the sole purposes of repurchasing the
Borrower’s Stock from employees of the Borrower and its Subsidiaries upon
termination of employment of any such employee so long as (i) no Default
or Event of Default shall have occurred and be continuing or result therefrom
and (ii) the aggregate amount of all such Restricted Payments and
Restricted Purchases shall not exceed $500,000 during any twelve-month period
and (c) Restricted Payments and Restricted Purchases provided that the
Borrower shall have delivered evidence satisfactory to the Co-Collateral Agents
that the following conditions have been satisfied before and after giving
effect to any such Restricted Payment or Restricted

 104
 

 

Purchase: (i) no
Default or Event of Default shall have occurred and be continuing or result
from such Restricted Payment or Restricted Purchase, (ii) any such
Restricted Payment or Restricted Purchase shall have occurred on or after the
date that is one year immediately following the Agreement Date, (iii) Availability
shall not be less than $15,000,000, (iv) the Borrower shall have a Fixed
Charge Coverage Ratio of not less than 1.25 to 1.00 at the time of such
Restricted Payment or Restricted Purchase and shall have delivered to the
Co-Collateral Agents pro forma calculations evidencing a projected Fixed Charge
Coverage Ratio of not less than 1.25 to 1.00 for the twelve-month period
immediately following such Restricted Payment or Restricted Purchase, and (v) the
aggregate amount of all such Restricted Payments and Restricted Purchases shall
not exceed $500,000 during any twelve-month period.

Section 8.5             Investments. No Borrower
Party will, or will permit any Subsidiary of a Borrower Party to, make Investments,
except that (a) the Borrower may purchase or otherwise acquire and own and
may permit any of its Subsidiaries to purchase or otherwise acquire and own
Cash Equivalents provided that any such Investments in Cash Equivalents shall
be subject to a Blocked Account Agreement or other control agreement in form
and substance satisfactory to the Administrative Agent; (b) the Borrower
may hold the Investments in existence on the Agreement Date and described on Schedule
5.1(c)-2; (c) so long as no Default exists, the Borrower may
convert any of its Accounts that are in excess of ninety (90) days past due
into notes or Equity Interests from the applicable Account Debtor so long as
the Administrative Agent, for the benefit of the Lender Group, is granted a first
priority security interest in such Equity Interests or notes which Lien is
perfected contemporaneously with the conversion of such Account to Equity
Interests or notes; (d) the Borrower Parties and their Subsidiaries may
hold the Equity Interests of their respective Subsidiaries in existence as of
the Agreement Date and their Subsidiaries created after the Agreement Date in
accordance with Sections 6.21, 8.7(d) and 8.7(i); (e) without
limiting Section 8.2, any Borrower Party may make Investments in any other
Borrower Party; and (f) the Borrower Parties may hold Investments arising
out of Hedge Agreements not entered into for speculative purposes and approved
by the Administrative Agent, which such approval shall not be unreasonably
withheld in the Administrative Agent’s Permitted Discretion.

Section 8.6             Affiliate Transactions. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to,
enter into or be a party to any agreement or transaction with any Affiliate
except (a) as described on Schedule 8.6, (b) in the ordinary
course of and pursuant to the reasonable requirements of the applicable
Borrower Party’s or Subsidiary’s business and upon fair and reasonable terms
that are no less favorable to such Borrower Party or such Subsidiary than it
would obtain in a comparable arms length transaction with a Person not an
Affiliate of such Borrower Party or such Subsidiary, and otherwise on terms
consistent with the business relationship of such Borrower Party or such
Subsidiary and such Affiliate prior to the Agreement Date, if any, and fully
disclosed to the Administrative Agent or (c) as permitted by Sections 8.1,
8.4 and 8.5.

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Section 8.7             Liquidation; Change in
Ownership, Name, or Year; Disposition or Acquisition of Assets; Etc. No
Borrower Party shall, or shall permit any Subsidiary to, at any time:

(a)           Liquidate or dissolve itself (or
suffer any liquidation or dissolution) or otherwise wind up its business,
except that any Subsidiary of the Borrower may liquidate or dissolve itself in
accordance with Applicable Law;

(b)           Sell, lease, abandon, transfer or
otherwise dispose of, in a single transaction or a series of related
transactions, any assets, property or business, except for (i) the sale of
Inventory in the ordinary course of business at the fair market value thereof
and for cash or cash equivalents, (ii) the sale of leases (and related
assets) for which the Borrower is the lessor and which were entered into in the
ordinary course of business, any such sale to be at fair market value and for
cash or cash equivalents, (iii) physical assets used or consumed in the
ordinary course of business, and (iv) the sale or other disposal of
obsolete equipment with a sale value not greater than $100,000 in the aggregate
for all such assets that may be sold during any year if the purchase price
therefor is paid solely in cash;

(c)           Become a partner or joint venturer
with any third party after the Agreement Date;

(d)           Acquire (i) any Person, (ii) all
or any substantial part of the assets, property or business of a Person, or (iii) any
assets that constitute a division or operating unit of the business of any
Person; provided, however, that the Borrower Parties and their
Subsidiaries may acquire all or any substantial part of the assets, property or
business of a Person or any assets that constitute a division or operating unit
of the business of a Person  so long as (A) no
Default or Event of Default shall have occurred and be continuing or result
therefrom (including, without limitation, under Section 8.7(i)) and the
Borrower delivers to the Lender Group evidence satisfactory to the
Administrative Agent that the Borrower Parties will be in pro forma compliance
with this Agreement and the other Loan Documents after giving effect to such
acquisition, (B) the aggregate consideration (including, without
limitation, cash consideration, assumption of Funded Debt and seller financing)
for any such acquisition or series of related acquisitions does not exceed
$2,500,000 and that all such acquisitions during the term of this Agreement
does not exceed $7,500,000, (C) the Borrower Parties execute and deliver
to the Administrative Agent all documents required by Section 6.10 and
6.21 and any other Loan Documents and opinions reasonably requested by the
Administrative Agent regarding the creation and perfection of the security
interests of the Administrative Agent in the Collateral, (D) any such
acquisition shall not occur before the date that is one year immediately
following the Agreement Date, (E) Availability shall not be less than
$15,000,000, (F) the Borrower shall have a Fixed Charge Coverage Ratio of
not less than

 106
 

 

1.25 to 1.00 at the time
of such acquisition and shall have delivered to the Co-Collateral Agents pro
forma calculations evidencing a projected Fixed Charge Coverage Ratio of not
less than 1.25 to 1.00 for the twelve-month period immediately following such
acquisition, (G) the assets, property or business acquired shall have at
least $1 of positive EBITDA for the twelve-month period immediately preceding
the acquisition date and (H) any assets acquired in such acquisitions
shall not be included in the Borrowing Base until the Co-Collateral Agents have
conducted a field exam with results satisfactory to the Co-Collateral Agents in
their Permitted Discretion;

(e)           Merge or consolidate with any other
Person; provided, however, that (i) any Guarantor may merge
into the Borrower so long as the Borrower is the surviving entity after such
merger, and (ii) any Guarantor may merge into any other Guarantor so long
as a Guarantor is the surviving entity after such merger;

(f)            Change its corporate name without
giving the Administrative Agent thirty (30) days prior written notice of its
intention to do so and complying with all reasonable requirements of the
Lenders in regard thereto;

(g)           Change its year-end for accounting
purposes from the fiscal year ending December 31;

(h)           Acquire any real estate;

(i)            Create any Subsidiary; provided,
however, that the Borrower or any Subsidiary of the Borrower may create
wholly owned Domestic Subsidiaries so long as the Borrower and such
Subsidiaries comply with Sections 6.10 and 6.21; or

(j)             engage in any business other than
the type of business in which such Borrower Parties and their Subsidiaries are
engaged in on the Agreement Date and reasonable extensions thereof and
activities incidental thereto.

Section 8.8             Minimum Availability. Availability
plus, at any time that there are no outstanding Obligations, Qualified
Cash, shall not be less than $5,000,000 (assuming trade payables are not past
due, expenses and liabilities are being paid in the ordinary course of business
and without acceleration of sales, and without deterioration in working
capital).

Section 8.9             Minimum EBITDA. The Borrower
Parties shall not permit the EBITDA of the Borrower Parties be less than the
amounts set forth in the table below for the applicable periods set forth in
such table:

 107
 

 

 

	
  

  	
  Period

  	
   

  	
   

  	
   

  	
  Minimum EBITDA:

  	
   

  
	
  Twelve month
  period ending June 30, 2006

  	
   

  	
  $(12,200,000)

  
	
  Twelve month
  period ending July 31, 2006

  	
   

  	
  $(9,250,000)

  
	
  Twelve month
  period ending August 31, 2006

  	
   

  	
  $(7,070,000)

  
	
  Twelve month
  period ending September 30, 2006

  	
   

  	
  $(9,680,000)

  
	
  Twelve month
  period ending October 31, 2006

  	
   

  	
  $(7,580,000)

  
	
  Twelve month
  period ending November 30, 2006

  	
   

  	
  $(3,596,000)

  
	
  Twelve month
  period ending December 31, 2006

  	
   

  	
  $(789,000)

  
	
  Twelve month
  period ending January 31, 2007

  	
   

  	
  $(59,000)

  
	
  Twelve month
  period ending February 28, 2007

  	
   

  	
  $3,583,000

  
	
  Twelve month
  period ending March 31, 2007

  	
   

  	
  $3,813,000

  
	
  Twelve month period
  ending April 30, 2007

  	
   

  	
  $5,521,000

  
	
  Twelve month
  period ending May 31, 2007

  	
   

  	
  $5,922,000

  
	
  Twelve month
  period ending June 30, 2007

  	
   

  	
  $5,520,000

  
	
  Twelve month
  period ending July 31, 2007

  	
   

  	
  $6,721,000

  
	
  Twelve month
  period ending August 31, 2007

  	
   

  	
  $7,118,000

  
	
  Twelve month
  period ending September 30, 2007

  	
   

  	
  $7,929,000

  

 

Section 8.10           Fixed Charge Coverage Ratio. The
Borrower Parties shall not permit for the month ended October 31, 2007,
and for each month end thereafter, the Fixed Charge Coverage Ratio for the immediately
preceding twelve (12) month period to be less than 1.25 to 1.00.

Section 8.11           Capital Expenditures. The
Borrower Parties and their Subsidiaries shall not make or incur in the
aggregate any Capital Expenditures in excess of the amounts set forth in the
table below for the applicable periods set forth in such table:

 108
 

 

 

	
   

  	
  Period

  	
   

  	
   

  	
   

  	
  Capital Expenditures shall not exceed:

  	
   

  
	
  Fiscal Year
  ending December 31, 2006

  	
   

  	
  $4,000,000

  
	
  Fiscal year
  ending December 31, 2007

  	
   

  	
  $4,000,000

  

 

Section 8.12           Limitation on Leases. The
Borrower Parties shall not, and shall not permit their Subsidiaries to, create,
incur, assume or suffer to exist, any obligation for the payment of rent or
hire for property or assets of any kind whatsoever, whether real or personal,
under leases or lease agreements (other than Capitalized Lease Obligations)
which would cause the aggregate amount of all payments made by the Borrower
Parties and their Subsidiaries, pursuant to such lease or lease agreements to
exceed $4,000,000 during the fiscal year.

Section 8.13           Sales and Leasebacks. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to,
enter into any arrangement, directly or indirectly, with any third party
whereby such Borrower Party or such Subsidiary, as applicable, shall sell or
transfer any property, real or personal, whether now owned or hereafter
acquired, and whereby such Borrower Party or such Subsidiary, as applicable,
shall then or thereafter rent or lease as lessee such property or any part
thereof or other property which such Borrower Party or such Subsidiary intends
to use for substantially the same purpose or purposes as the property sold or
transferred.

Section 8.14           Amendment and Waiver. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to (a) enter
into any amendment of, or agree to or accept any waiver, which would adversely
affect the rights of such Borrower Party or such Subsidiary, applicable, or any
member of the Lender Group, of (i) its articles or certificate of
incorporation or formation and by-laws, partnership agreement or other
governing documents, or (ii) enter into any amendment to the Subordinated
Debt Documents which (A) increases the interest rate payable thereunder (other than application
of the default rate thereunder), (B) provides for amortization of
the term loan thereunder, (C) is otherwise adverse to any Borrower Party,
or (D) results in any Subordinated Debt Document becoming more restrictive
with respect to any Borrower Party than the Loan Documents, (b) permit any
Material Contract to be cancelled or terminated prior to its stated maturity if
such cancellation or termination could reasonably be likely to result in a
Materially Adverse Effect or (c) permit the Consulting Agreement to be
amended, cancelled or terminated (except in accordance with the terms and
conditions contained therein) without the prior written consent of the
Co-Collateral Agents.

Section 8.15           ERISA Liability. No Borrower
Party shall fail to meet all of the applicable minimum funding requirements of
ERISA and the Code, without regard to any waivers thereof, and, to the extent
that the assets of any of their Plans would be less than

 109
 

 

an amount sufficient to
provide all accrued benefits payable under such Plans, the Borrower Parties
shall make the maximum deductible contributions allowable under the Code (based
on the Borrower’s current actuarial assumptions). No Borrower Party shall, or
shall cause or permit any ERISA Affiliate to, (a) cause or permit to occur
any event that could result in the imposition of a Lien under Section 412
of the Code or Section 302 or 4068 of ERISA, or (b) cause or permit
to occur an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Materially Adverse Effect.

Section 8.16           Prepayments. No Borrower Party
shall, or shall permit any Subsidiary of a Borrower Party to, prepay, redeem,
defease or purchase in any manner, or deposit or set aside funds for the
purpose of any of the foregoing, make any payment in respect of principal of,
or make any payment in respect of interest on, (a) any Funded Debt (other
than the Subordinated Debt), except the Borrower may (i) make regularly
scheduled payments of principal or interest required in accordance with the
terms of the instruments governing any Funded Debt permitted hereunder, and (ii) make
payments, including prepayments permitted or required hereunder, with respect
to the Obligations or (b) the Subordinated Debt except (i) payments
of interest to the extent not prohibited by the Subordinated Debt Intercreditor
Agreement, (ii) payments permitted by the Subordinated Debt Intercreditor
Agreement, (iii) repayment of the Subordinated Debt with the proceeds of a
refinancing thereof as permitted under Section 8.1, (iv) repayment of
the Subordinated Debt with the proceeds of any issuance by Borrower of common
stock or preferred stock issued on terms and condition satisfactory to the
Co-Collateral Agents, and (v) other payments so long as (A)  any such
payment occurs not prior to eighteen (18) months after the Agreement Date, (B) the
Borrower shall have maintained Availability of not less than $15,000,000 (after
giving effect to the Availability Block and all Reserves) at all times for a
consecutive period of twelve (12) months immediately prior to any such payment
and (C) Borrower shall deliver pro-forma financial statements for the
twelve month period immediately following any such payment evidencing that it
shall have Availability of not less $15,000,000 (after giving effect to the
Availability Block and all Reserves) at all times during such twelve (12) month
period.

Section 8.17           Negative Pledge. No Borrower
Party shall, or shall permit any Subsidiary of any Borrower Party to, directly
or indirectly, enter into any agreement (other than the Loan Documents and the
Subordinated Debt Documents) with any Person that prohibits or restricts or
limits the ability of any Borrower Party or any such Subsidiary to create,
incur, pledge, or suffer to exist any Lien upon any of its respective assets,
or restricts the ability of any Subsidiary of the Borrower to pay Dividends to
the Borrower.

Section 8.18           Inconsistent Agreements. No
Borrower Party shall, or shall permit any Subsidiary of any Borrower Party to,
enter into any contract or agreement which would violate the terms hereof, any
other Loan Document or any Bank Products Document.

 110
 

 

ARTICLE 9.

DEFAULT

Section 9.1             Events of Default. Each of
the following shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any
order, rule, or regulation of any governmental or non-governmental body:

(a)           Any representation or warranty made
under this Agreement, any other Loan Document or any Bank Products Document
with respect to a Co-Collateral Agent Hedge Agreement shall prove incorrect or
misleading in any material respect when made or deemed to have been made
pursuant to Section 5.4;

(b)           Any payment of any principal or
interest hereunder, or any reimbursement obligations with respect to any Letter
of Credit, or any fees payable hereunder or under the other Loan Documents
shall not be received by the Administrative Agent on the date such payment is
due (and such failure shall continue for a period of three (3) Business
Days with respect to interest and fees);

(c)           Any Borrower Party shall default in
the performance or observance of any agreement or covenant contained in Section 2.12,
6.1, 6.5, 6.6, 6.7, 6.10, 6.12, 6.15, 6.19, 6.20, 6.21 or 6.24 or in Article 7
or Article 8 or in any Security Document;

(d)           Any Borrower Party shall default in
the performance or observance of any other agreement or covenant contained in
this Agreement not specifically referred to elsewhere in this Section 9.1,
and such default, if curable, shall not be cured to the Majority Lenders’
satisfaction within the earlier of (i) a period of thirty (30) days from
the date that such Borrower Party knew or should have known of the occurrence
of such default, or (ii) a period of thirty (30) days after written notice
of such default is given to such Borrower Party;

(e)           There shall occur any default in the
performance or observance of any agreement or covenant contained in any of the
other Loan Documents or in the Bank Products Documents, if any, with respect to
Co-Collateral Agent Hedge Agreements (other than this Agreement or the Security
Documents or as otherwise provided in this Section 9.1) which shall not be
cured to the Majority Lenders’ satisfaction within the applicable cure period,
if any, provided for in such Loan Document or any Bank Products Document;

(f)            There shall occur any Change in
Control;

(g)           (i) There shall be entered a
decree or order for relief in respect of any Borrower Party or any Subsidiary
of a Borrower Party under the Bankruptcy Code,

 111
 

 

or any other applicable
federal or state bankruptcy law or other similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or similar official of
any Borrower Party or of any Subsidiary of a Borrower Party or of any
substantial part of its properties, or ordering the winding-up or liquidation
of the affairs of any Borrower Party or any Subsidiary of a Borrower Party, or (ii) an
involuntary petition shall be filed against any Borrower Party or any
Subsidiary of a Borrower Party and a temporary stay entered and (A) such
petition and stay shall not be diligently contested, or (B) any such
petition and stay shall continue undismissed for a period of sixty (60)
consecutive days;

(h)           Any Borrower Party or any Subsidiary
of a Borrower Party shall commence an insolvency proceeding or any Borrower
Party or any Subsidiary of a Borrower Party shall consent to the institution of
an insolvency proceeding or to the appointment or taking of possession of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of such Borrower Party or any Subsidiary of a Borrower Party
or of any substantial part of its properties, or any Borrower Party or any
Subsidiary of a Borrower Party shall fail generally to pay its debts as they
become due, or any Borrower Party or any Subsidiary of a Borrower Party shall
take any action in furtherance of any such action;

(i)            A final judgment (other than a money
judgment or judgments fully covered (except for customary deductibles or
copayments not to exceed $100,000 in the aggregate) by insurance as to which
the insurance company has acknowledged coverage) shall be entered by any court
against any Borrower Party or any Subsidiary of any Borrower Party for the
payment of money which exceeds, together with all such other judgments of the
Borrower Parties and their Subsidiaries, $2,000,000 in the aggregate, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of any Borrower Party or any Subsidiary of a Borrower Party
pursuant to a final judgment which, together with all other such property of
the Borrower Parties and their Subsidiaries subject to other such process,
exceeds in value $2,000,000 in the aggregate, and if, within thirty (30) days
after the entry, issue, or levy thereof, such judgment, warrant, or process
shall not have been paid or discharged or stayed pending appeal, or if, after
the expiration of any such stay, such judgment, warrant, or process shall not
have been paid or discharged;

(j)            There shall be at any time any “accumulated
funding deficiency,” as defined in ERISA or in Section 412 of the Code,
with respect to any Plan maintained by any Borrower Party or any ERISA
Affiliate of a Borrower Party, or to which any Borrower Party or any of its
ERISA Affiliates has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
such Plan; or the PBGC shall institute proceedings to terminate any such Plan;
or any Borrower Party or any ERISA Affiliate of any Borrower Party shall incur
any liability to the PBGC in connection with the termination of any such Plan;
or any Plan or trust created under any Plan of any Borrower Party or any ERISA
Affiliate of any Borrower Party shall engage in a non-exempt “prohibited
transaction” (as such term is defined in

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Section 406 of ERISA
or Section 4975 of the Code) which would subject any such Plan, any trust
created thereunder, any trustee or administrator thereof, or any party dealing
with any such Plan or trust to any material tax or penalty on “prohibited
transactions” imposed by Section 502 of ERISA or Section 4975 of the
Code; or any Borrower Party or any ERISA Affiliate of any Borrower Party shall
enter into or become obligated to contribute to a Multiemployer Plan; or there
shall be at any time a Lien imposed against the assets of a Borrower Party or
ERISA Affiliate under Code Section 412, or ERISA Sections 302 or 4068; or
there shall occur at any time an ERISA Event to the extent such ERISA Event
could reasonably be expected to result in an aggregate liability greater than
$500,000 or otherwise have a Materially Adverse Effect.

(k)           (i) There shall occur any
default (after the expiration of any applicable cure period) under any
indenture, agreement, or instrument evidencing Funded Debt of any Borrower
Party or any Subsidiary of a Borrower Party in an aggregate principal amount
exceeding $500,000 (determined singly or in the aggregate with other Funded
Debt), including, without limitation, the
Subordinated Debt or (ii) there shall occur any default under any Hedge
Agreement (after the expiration of any applicable cure period set forth
therein);

(l)            All or any portion of any Loan Document
or any Bank Products Document shall at any time and for any reason be declared
to be null and void, or a proceeding shall be commenced by any Borrower Party,
any Subsidiary of a Borrower Party or any Affiliate thereof, or by any
governmental authority having jurisdiction over any Borrower Party, any
Subsidiary of a Borrower Party or any Affiliate thereof, seeking to establish
the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Borrower Party, any Subsidiary
of a Borrower Party or any Affiliate thereof shall deny that it has any
liability or obligation for the payment of any Obligation purported to be
created under any Loan Document or any Bank Products Document, or any
Co-Collateral Agent Hedge Agreement shall be terminated as a result of a
default or event of default thereunder by any Borrower Party or revoked; or

(m)          If the Borrower or any Subsidiary of
the Borrower shall be debarred, proposed for debarment, suspended or proposed
for suspension from any contracting with the Federal Government; or if a notice
of proposed debarment or notice of proposed suspension shall have been issued
to the Borrower or any Subsidiary of the Borrower by the Federal Government; or
if a notice of termination for default or the actual termination for default of
any Material Contract shall have been issued to or received by the Borrower or
any Subsidiary of the Borrower.

Section 9.2             Remedies. If an Event of
Default shall have occurred and shall be continuing, in addition to the rights
and remedies set forth elsewhere in this Agreement, the other Loan Documents
and any Bank Products Documents:

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(a)           With the exception of an Event of
Default specified in Section 9.1(g) or (h), the Administrative Agent
may in its discretion (unless otherwise instructed by the Majority Lenders) or
shall at the direction of the Majority Lenders, (i) terminate the
Commitments and the Letter of Credit Commitment, or (ii) declare the
principal of and interest on the Loans and all other Obligations (other than
any Obligations existing from time to time of any Borrower Party to a
Co-Collateral Agent (or an Affiliate of a Co-Collateral Agent) arising in
connection with any Bank Products Documents) to be forthwith due and payable
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding, or both.

(b)           Upon the occurrence and continuance
of an Event of Default specified in Sections 9.1(g) or (h), such
principal, interest, and other Obligations (other than any Obligations existing
from time to time of any Borrower Party to a Co-Collateral Agent (or an
Affiliate of a Co-Collateral Agent) arising in connection with any Bank
Products Documents) shall thereupon and concurrently therewith become due and
payable, and the Commitments and the Letter of Credit Commitment, shall
forthwith terminate, all without any action by the Lender Group, or any of them
and without presentment, demand, protest, or other notice of any kind, all of
which are expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding.

(c)           The Administrative Agent may in its
discretion (unless otherwise instructed by the Majority Lenders) or shall at
the direction of the Majority Lenders exercise all of the post-default rights
granted to the Lender Group, or any of them, under the Loan Documents or under
Applicable Law. The Administrative Agent, for the benefit of the Lender Group,
shall have the right to the appointment of a receiver for the Property of the
Borrower Parties, and the Borrower Parties hereby consent to such rights and
such appointment and hereby waive any objection the Borrower Parties may have thereto
or the right to have a bond or other security posted by the Lender Group, or
any of them, in connection therewith.

(d)           In regard to all Letters of Credit
with respect to which presentment for honor shall not have occurred at the time
of any acceleration of the Obligations pursuant to the provisions of this Section 9.2
or, upon the request of the Administrative Agent, after the occurrence of an
Event of Default and prior to acceleration, the Borrower shall promptly upon
demand by the Administrative Agent deposit in a Letter of Credit Reserve
Account opened by the Administrative Agent for the benefit of the Lender Group
an amount equal to one hundred and five percent (105%) of the aggregate then
undrawn and unexpired amount of such Letter of Credit Obligations. Amounts held
in such Letter of Credit Reserve Account shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay other Obligations in the
manner set forth in Section 2.11. Pending the

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application of such
deposit to the payment of the Reimbursement Obligations, the Administrative
Agent shall, to the extent reasonably practicable, invest such deposit in an
interest bearing open account or similar available savings deposit account and
all interest accrued thereon shall be held with such deposit as additional
security for the Obligations. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied, and all other Obligations shall have been paid in full, the balance,
if any, in such Letter of Credit Reserve Account shall be returned to the
Borrower. Except as expressly provided hereinabove, presentment, demand,
protest and all other notices of any kind are hereby expressly waived by the
Borrower.

(e)           If so requested by the Administrative
Agent (after consultation with the Borrower) each Borrower Party shall execute
and deliver to the Administrative Agent, for the benefit of the Lender Group,
all documents, instruments, filings, or take any other required actions,
necessary to complete the required procedures under the Federal Assignment of
Claims Act of 1940 for the effective collateral assignment (to the extent
available under Applicable Law) of all Accounts which are owed by the Federal
Government; provided, however, such Borrower Party shall only be required to
use commercially reasonable efforts with respect to actions required by the
applicable Account Debtor or any other Person.

(f)            The rights and remedies of the
Lender Group hereunder shall be cumulative, and not exclusive.

ARTICLE 10.

THE ADMINISTRATIVE AGENT

Section 10.1           Appointment and Authorization.
Each member of the Lender Group hereby irrevocably appoints and authorizes, and
hereby agrees that it will require any transferee of any of its interest in
this Agreement and the other Loan Documents and its Loans, Commitments and, if
applicable, Letter of Credit Commitment irrevocably to appoint and authorize,
the Administrative Agent and the Co-Collateral Agents, as the case may be, to
take such actions as its agent on its behalf and to exercise such powers
hereunder and under the other Loan Documents as are delegated by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Without limiting the foregoing, each member of the Lender Group hereby
authorizes the Administrative Agent to execute and deliver each Loan Document
to which the Administrative Agent is, or is required to be, a party. Neither
the Administrative Agent, the Co-Collateral Agents nor any of their directors,
officers, employees, or agents shall be liable for any action taken or omitted
to be taken by it hereunder or in connection herewith, except for its own gross
negligence or willful misconduct as determined by a final non-appealable order
of a court of competent jurisdiction.

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Section 10.2           Interest Holders. The
Administrative Agent may treat each Lender, or the Person designated in the
last notice filed with the Administrative Agent under this Section 10.2,
as the holder of all of the interests of such Lender in this Agreement and the
other Loan Documents and its Loans and Commitments until written notice of
transfer, signed by such Lender (or the Person designated in the last notice
filed with the Administrative Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the
Administrative Agent, shall have been filed with the Administrative Agent.

Section 10.3           Consultation with Counsel. The
Administrative Agent and the Co-Collateral Agents, as the case may be,  may consult with legal counsel selected by it
and shall not be liable to any Lender or the Issuing Bank for any action taken
or suffered by it in good faith in reliance on the advice of such counsel.

Section 10.4           Documents. The Administrative
Agent shall not be under any duty to examine, inquire into, or pass upon the
validity, effectiveness, or genuineness of this Agreement, any other Loan
Document, or any instrument, document, or communication furnished pursuant
hereto or in connection herewith, and the Administrative Agent shall be
entitled to assume that they are valid, effective, and genuine, have been
signed or sent by the proper parties, and are what they purport to be.

Section 10.5           Administrative Agent,
Co-Collateral Agents and Affiliates. With respect to the Revolving Loan
Commitment and Loans, the Administrative Agent and the Co-Collateral Agents
shall have the same rights and powers hereunder as any other Lender, and the
Administrative Agent, the Co-Collateral Agents and their Affiliates, as the
case may be,  may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower
Parties or any Affiliates of, or Persons doing business with, the Borrower
Parties, as if it were not the Administrative Agent, a Co-Collateral Agent or
affiliated with the Administrative Agent or a Co-Collateral Agent and without
any obligation to account therefor. The Lenders and the Issuing Bank
acknowledge that the Administrative Agent and its Affiliates have other lending
and investment relationships with the Borrower Parties and their Affiliates and
in the future may enter into additional such relationships.

Section 10.6           Responsibility of the
Administrative Agent and Co-Collateral Agents. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Administrative Agent and the Co-Collateral Agents shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Administrative Agent and/or the Co-Collateral Agents have or be
deemed to have any fiduciary relationship with any other member of the Lender
Group, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent and/or the
Co-Collateral Agents. Without limiting the generality of the foregoing
sentence, the use of the term “agent” in this Agreement

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with reference to the
Administrative Agent and the Co-Collateral Agents is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. The Administrative Agent
shall be entitled to assume that no Default exists unless it has actual
knowledge, or has been notified by any Borrower Party, of such fact, or has
been notified by a Lender that such Lender considers that a Default exists, and
such Lender shall specify in detail the nature thereof in writing. The
Administrative Agent shall provide each Lender with copies of such documents
received from any Borrower Party as such Lender may reasonably request.

Section 10.7           Action by Administrative Agent and
Co-Collateral Agents.

(a)           The Administrative Agent and the
Co-Collateral Agents, as the case may be, shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent or a Co-Collateral Agent,
as the case may be, shall have been instructed by the Majority Lenders to
exercise or refrain from exercising such rights or to take or refrain from
taking such action. The Administrative Agent and the Co-Collateral Agents shall
incur no liability under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of
its judgment or which may seem to it to be necessary or desirable in the
circumstances.

(b)           The Administrative Agent and the
Co-Collateral Agents, as the case may be, shall not be liable to the Lenders
and the Issuing Bank, or any of them, in acting or refraining from acting under
this Agreement or any other Loan Document in accordance with the instructions
of the Majority Lenders (or all Lenders if expressly required by Section 11.12),
and any action taken or failure to act pursuant to such instructions shall be
binding on all Lenders and the Issuing Bank.

Section 10.8           Notice of Default. In the
event that any member of the Lender Group shall acquire actual knowledge, or
shall have been notified in writing, of any Default, such member of the Lender
Group shall promptly notify the other members of the Lender Group, and the
Administrative Agent shall take such action and assert such rights under this
Agreement as the Majority Lenders shall request in writing, and the
Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Majority Lenders shall fail to
request the Administrative Agent to take action or to assert rights under this
Agreement in respect of any Default after their receipt of the notice of any
Default from a member of the Lender Group, or shall request inconsistent action
with respect to such Default, the Administrative Agent may, but shall not be
required to, take such action and assert such rights (other than rights under Article 9)
as it deems in its discretion to be advisable for the protection of the

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Lender Group, except
that, if the Majority Lenders have instructed the Administrative Agent not to
take such action or assert such right, in no event shall the Administrative
Agent act contrary to such instructions.

Section 10.9           Responsibility Disclaimed. The
Administrative Agent shall not be under any liability or responsibility
whatsoever as Administrative Agent:

(a)           To any Borrower Party or any other
Person or entity as a consequence of any failure or delay in performance by or
any breach by, any member of the Lender Group of any of its obligations under
this Agreement;

(b)           To any Lender Group, or any of them,
as a consequence of any failure or delay in performance by, or any breach by,
any Borrower Party or any other obligor of any of its obligations under this
Agreement or any other Loan Document; or

(c)           To any Lender Group, or any of them,
for any statements, representations, or warranties in this Agreement, or any
other document contemplated by this Agreement or any information provided
pursuant to this Agreement, any other Loan Document, or any other document
contemplated by this Agreement, or for the validity, effectiveness,
enforceability, or sufficiency of this Agreement, any other Loan Document, or
any other document contemplated by this Agreement.

Section 10.10         Indemnification. The Lenders
agree to indemnify (to the extent not reimbursed by the Borrower) and hold
harmless the Administrative Agent, Co-Collateral Agents and each of their
Affiliates, employees, representatives, officers and directors (each an “Indemnified
Person”) pro rata in accordance with their Aggregate Commitment Ratios from
and against any and all claims, liabilities, investigations, losses, damages,
actions, demands, penalties, judgments, suits, investigations, costs, expenses
(including fees and expenses of experts, agents, consultants and counsel) and
disbursements, in each case, of any kind or nature (whether or not an
Indemnified Person is a party to any such action, suit or investigation)
whatsoever which may be imposed on, incurred by, or asserted against an
Indemnified Person resulting from any breach or alleged breach by the Borrower
Parties of any representation or warranty made hereunder, or otherwise in any
way relating to or arising out of the Commitments, this Agreement, the other
Loan Documents or any other document contemplated by this Agreement or any
action taken or omitted by the Administrative Agent or the Co-Collateral Agents
under this Agreement, any other Loan Document, or any other document
contemplated by this Agreement (other than Bank Products Documents, if any),
the making, administration or enforcement of the Loan Documents and the Loans
or any transaction contemplated hereby or any related matters unless, with
respect to any of the above, such Indemnified Person is determined by a final
non-appealable judgment of a court of competent jurisdiction to have acted or
failed to act with gross negligence or willful misconduct. This Section 10.10
is for the benefit of each Indemnified Person and shall not in any way limit
the obligations of the Borrower Parties under Section 6.18. The provisions
of this Section 10.10 shall survive the termination of this Agreement.

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Section 10.11         Credit Decision. Each member of
the Lender Group represents and warrants to each other member of the Lender
Group that:

(a)           In making its decision to enter into
this Agreement and to make its Advances it has independently taken whatever
steps it considers necessary to evaluate the financial condition and affairs of
the Borrower Parties and that it has made an independent credit judgment, and
that it has not relied upon information provided by the Administrative Agent,
the Co-Collateral Agents or any of their respective Affiliates;

(b)           So long as any portion of the
Obligations remains outstanding, it will continue to make its own independent
evaluation of the financial condition and affairs of the Borrower Parties; and

(c)           Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent and the Co-Collateral Agents shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower Parties which
may come into the possession of any of the Administrative Agent or any
Affiliates of the Administrative Agent.

Section 10.12         Successor Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Administrative Agent (with the consent of the Borrower if no Event of Default
then exists); provided, however, upon any voluntary resignation
by SunTrust Bank as Administrative Agent hereunder, Bank of America, N.A. shall
be deemed appointed by the Majority Lenders as the successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent’s giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be any Lender or a Person organized
under the laws of the US, a State or any political subdivision thereof which
has combined capital and reserves in excess of $250,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties,
and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of Article 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Administrative Agent.

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Section 10.13         Administrative Agent May File
Proofs of Claim. The Administrative Agent may file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent,
its agents, financial advisors and counsel), the Lenders and the Issuing Bank
allowed in any judicial proceedings relative to any Borrower Party, or any of
their respective creditors or property, and shall be entitled and empowered to
collect, receive and distribute any monies, securities or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceedings is hereby authorized by each Lender and the Issuing Bank
to make such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount
due to the Administrative Agent for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent, its agents, financial
advisors and counsel, and any other amounts due the Administrative Agent under Section 11.2.
Nothing contained in the Loan Agreement or the Loan Documents shall be deemed
to authorize the Administrative Agent to authorize or consent to or accept or
adopt on behalf of any Lender or the Issuing Bank any plan of reorganization,
arrangement, adjustment or composition affecting this Agreement, any Revolving
Loan Notes, the Letters of Credit or the rights of any holder thereof, or to
authorize the Administrative Agent to vote in respect of the claim of any
Lender or the Issuing Bank in any such proceeding.

Section 10.14         Collateral. The Administrative
Agent is hereby authorized to hold all Collateral pledged pursuant to any Loan
Document and to act on behalf of the Lender Group, in its own capacity and
through other agents appointed by it, under the Security Documents; provided,
that the Administrative Agent shall not agree to the release of any Collateral
except in accordance with the terms of this Agreement. The Lender Group
acknowledges that the Loans, any Overadvances, all Obligations with respect to
any Bank Products Documents and all interest, fees and expenses hereunder
constitute one Funded Debt, secured by all of the Collateral. The
Administrative Agent hereby appoints each Lender and the Issuing Bank as its
agent (and each Lender and the Issuing Bank hereby accepts such appointment)
for the purpose of perfecting the Administrative Agent’s Liens in assets which,
in accordance with the UCC, can be perfected by possession. Should any Lender
or the Issuing Bank obtain possession of any such Collateral, subject to the
limitations set forth in the Blocked Account Agreements, promptly upon the Administrative
Agent’s request therefor shall deliver such Collateral to the Administrative
Agent or in accordance with the Administrative Agent’s instructions.

Section 10.15         Release of Collateral.

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(a)           Each Lender and the Issuing Bank
hereby directs, in accordance with the terms of this Agreement, the
Administrative Agent to release any Lien held by the Administrative Agent for
the benefit of the Lender Group:

(i)            against all of the Collateral, upon
final and indefeasible payment in full of the Obligations and termination of
the Commitments; or

(ii)           against any part of the Collateral
sold or disposed of by the Borrower Parties if such sale or disposition is
permitted by Section 8.7 or is otherwise consented to by the requisite
Lenders for such release as set forth in Section 11.12, as certified to
the Administrative Agent by the Borrower in a certificate of an Authorized
Signatory.

(b)           Each Lender and the Issuing Bank
hereby directs the Administrative Agent to execute and deliver or file or
authorize the filing of such termination and partial release statements and do
such other things as are necessary to release Liens to be released pursuant to
this Section 10.15 promptly upon the effectiveness of any such release. Upon
request by the Administrative Agent at any time, the Lenders and the Issuing
Bank will confirm in writing the Administrative Agent’s authority to release
particular types or items of Collateral pursuant to this Section 10.15.

ARTICLE 11.

MISCELLANEOUS

Section 11.1           Notices.

(a)           All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been given
five (5) days after deposit in the mail, designated as certified mail,
return receipt requested, postage-prepaid, or one (1) day after being
entrusted to a reputable commercial overnight delivery service, or when
delivered to the telegraph office or sent out (with receipt confirmed) by telex
or telecopy ,(or to the extent specifically permitted under Section 11.1(c) only,
when sent out by electronic means) addressed to the party to which such notice
is directed at its address determined as in this Section 11.1. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:

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(i)                                     If
to any Borrower Party, to such Borrower Party in care of the Borrower at:

                GTSI Corp. 
                3901 Stonecroft Blvd.
                Chantilly, Virginia 20151
                Attn: Legal Department
                Telecopy No.: 703-222-5217
                Email: Legal@GTSI.com

With a copy to:

Carter Strong, Esq.
                Arent Fox PLLC
                1050 Connecticut Avenue,
N.W.
                Washington, D.C. 20036
                Telecopy No. (202) 857-6395
                Strong.carter@arentfox.com

(ii)                                  If
to the Administrative Agent, to it at:

SunTrust Bank

303 Peachtree Street

Second Floor

Atlanta, Georgia 30308

Attn: Lauren P. Carrigan

Telecopy No.: (404) 588-7061

Email: lauren.carrigan@suntrust.com

with a copy to:

Chris D Molen, Esq.

Paul, Hastings, Janofsky & Walker LLP

600 Peachtree Street, N.E.

Suite 2400

Atlanta, Georgia 30308

Telecopy No.: (404) 815-2424

Email:  chrismolen@paulhastings.com

(iii)          If to the Lenders, to them at the
addresses set forth on the signature pages of this Agreement; and

(iv)          If to the Issuing Bank, at the address
set forth on the signature pages of this Agreement.

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(b)           Any party hereto may change the
address to which notices shall be directed under this Section 11.1 by
giving ten (10) days’ written notice of such change to the other parties.

(c)           The Borrower may make delivery of the
items required by Sections 7.1, 7.2 and 7.3 via Electronic Transmission to the
Lender Group.

Section 11.2           Expenses. The Borrower agrees
to promptly pay or promptly reimburse:

(a)           All out-of-pocket expenses of the
Administrative Agent, the Co-Collateral Agents and their respective Affiliates
in connection with the preparation, negotiation, execution, delivery and
syndication of this Agreement, the other Loan Documents and the Bank Products
Documents, if any, the transactions contemplated hereunder and thereunder, and
the making of the initial Advance hereunder, including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative Agent, the
Co-Collateral Agents and their Affiliates, and allocated costs for services of
internal counsel for the Co-Collateral Agents;

(b)           All out-of-pocket expenses of the
Co-Collateral Agents in connection with the administration of the transactions
contemplated in this Agreement, the other Loan Documents and any Bank Products
Documents, and the preparation, negotiation, execution, and delivery of any
waiver, amendment, or consent by the Lenders relating to this Agreement, the
other Loan Documents or any Bank Products Documents, including, but not limited
to, all out-of-pocket expenses of the Co-Collateral Agents in connection with
their periodic field audits, a fee of $1,000 per day (as may be increased from
time to time by such Co-Collateral Agent), per auditor, plus out-of-pocket
expenses for each field audit of a Loan Party performed by personnel employed
by either of the Co-Collateral Agents, the fees and disbursements of counsel
for the Administrative Agent and allocated costs for services of internal
counsel for the Administrative Agent;

(c)           All out-of-pocket costs and expenses
of the Administrative Agent, the Co-Collateral Agents, the Issuing Bank and any
Lender in connection with any restructuring, refinancing, or “work out” of the
transactions contemplated by this Agreement, and of obtaining performance under
this Agreement, the other Loan Documents and any Bank Products Documents, and
all out-of-pocket costs and expenses of collection if default is made in the
payment of the Obligations, which in each case shall include reasonable fees
and out-of-pocket expenses of counsel for the Administrative Agent, the Issuing
Bank and any Lender, and the fees and out-of-pocket expenses of any experts of
the Administrative Agent, or consultants of the Administrative Agent, including
in each case, but without in any way limiting the generality of the foregoing,
allocated costs for service of their internal counsel; and

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(d)           All taxes, assessments, general or
special, and other charges levied on, or assessed, placed or made against any
of the Collateral, any Revolving Loan Notes or the Obligations.

Section 11.3           Waivers. The rights and
remedies of the Lender Group under this Agreement, the other Loan Documents and
any Bank Products Documents shall be cumulative and not exclusive of any rights
or remedies which they would otherwise have. No failure or delay by the Lender
Group, or any of them, or the Majority Lenders in exercising any right shall
operate as a waiver of such right. The Lender Group expressly reserve the right
to require strict compliance with the terms of this Agreement in connection
with any funding of a request for an Advance. In the event the Lenders decide
to fund a request for an Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by the Lenders shall
not be deemed to constitute an undertaking by the Lenders to fund any further
requests for Advances or preclude the Lenders from exercising any rights
available to the Lenders under the Loan Documents or at law or equity. Any
waiver or indulgence granted by the Lenders or by the Majority Lenders shall
not constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by the
Lenders at variance with the terms of the Agreement such as to require further
notice by the Lenders of the Lenders’ intent to require strict adherence to the
terms of the Agreement in the future. Any such actions shall not in any way
affect the ability of the Lenders, in their discretion, to exercise any rights
available to them under this Agreement or under any other agreement, whether or
not the Lenders are party, relating to the Borrower.

Section 11.4           Set-Off. In addition to any
rights now or hereafter granted under Applicable Law and not by way of
limitation of any such rights, except to the extent limited by Applicable Law,
at any time that a Default exists, each member of the Lender Group and each
subsequent holder of the Obligations is hereby authorized by the Borrower
Parties at any time or from time to time, without notice to the Borrower
Parties or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and apply any and all deposits (general or
special, time or demand, including, but not limited to, Funded Debt evidenced
by certificates of deposit, in each case whether matured or unmatured, but not
including any amounts held by any member of the Lender Group or any of its
Affiliates in any escrow account) and any other Funded Debt at any time held or
owing by any member of the Lender Group or any such holder to or for the credit
or the account of any Borrower Party, against and on account of the obligations
and liabilities of the Borrower Parties, to any member of the Lender Group or
any such holder under this Agreement, any Revolving Loan Notes, any other Loan
Document and any Bank Products Documents, including, but not limited to, all
claims of any nature or description arising out of or connected with this
Agreement, any Revolving Loan Notes, any other Loan Document or any Bank
Products Document, irrespective of whether or not (a) the Lender Group
shall have made any demand hereunder or (b) the Lender Group shall have
declared the principal of and interest on the Loans and any Revolving Loan

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Notes and other amounts
due hereunder to be due and payable as permitted by Section 9.2 and
although said obligations and liabilities, or any of them, shall be contingent
or unmatured. Any sums obtained by any member of the Lender Group or by any
subsequent holder of the Obligations shall be subject to the application of
payments provisions of Article 2.

Section 11.5           Assignment.

(a)           The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower
Party may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Affiliates of the Administrative Agent) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b)           Any Lender (and any Lender that is an
Issuing Bank) may assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Revolving Loan Commitment and the Loans at the time owing to it and, if
applicable, all or a portion of its Letter of Credit Commitment and excluding
rights and obligations with respect to Bank Products Documents, if any);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Revolving Loan Commitment and the Loans at the
time owing to it or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund with respect to a Lender, the aggregate amount of
the Revolving Loan Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent), shall not
be less than $5,000,000, unless each of the Administrative Agent and, so long
as no Default exists, the Borrower otherwise consents (each such consent not to
be unreasonably withheld or delayed), and (ii) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to paragraph (c) of
this Section, from and after the effective date specified in each Assignment
and Acceptance, the Eligible Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the

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assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.8(b),
2.9, 6.18, 12.3 and 12.5. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph 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 paragraph (d) of
this Section.

(c)           The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amount of the Loans owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(d)           Any Lender may, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Revolving Loan Commitment and/or the Loans
owing to it); 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) the Borrower and the Lender Group 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 described in Section 11.12(a)(i) that affects such Participant.
Subject to paragraph (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.8(b), 2.9, 6.18,
6.19(c) and 12.3 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.4 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.8(b) as though it
were a Lender.

(e)           A Participant shall not be entitled
to receive any greater payment under Section 2.8(b) or Section 12.3
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the

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participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.8(b) unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.8(b) as though it
were a Lender.

(f)            Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation (i) any
pledge or assignment to secure obligations to a Federal Reserve Bank and (ii) in
the case of any Lender that is a Fund, any pledge or assignment of all or any
portion of such Lender’s rights under this Agreement to any holders of
obligations owed, or securities issued, by such Lender as security for such
obligations or securities, or to any trustee for, or any other representative
of, such holders, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

Section 11.6           Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but all such separate counterparts shall together constitute
but one and the same instrument. In proving this Agreement or any other Loan
Document in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission or by e-mail transmission of an adobe file format document (also
known as a PDF file) shall be deemed an original signature hereto.

Section 11.7           Under Seal; Governing Law. This
Agreement and the other Loan Documents are intended to take effect as sealed
instruments and shall be construed in accordance with and governed by the laws
of the State of Georgia, without regard to the conflict of laws principles
thereof, except to the extent otherwise provided in the Loan Documents.

Section 11.8           Severability. Any provision of
this Agreement which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.

Section 11.9           Headings. Headings used in this
Agreement are for convenience only and shall not be used in connection with the
interpretation of any provision hereof.

Section 11.10         Source of Funds. Notwithstanding
the use by the Lenders of the Base Rate and the Eurodollar Rate as reference
rates for the determination of interest on the Loans, the Lenders shall be
under no obligation to obtain funds from any particular

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source in order to charge
interest to the Borrower at interest rates tied to such reference rates.

Section 11.11         Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. Each Borrower Party represents and warrants to the Lender
Group that it has read the provisions of this Section 11.11 and discussed
the provisions of this Section 11.11 and the rest of this Loan Agreement
with counsel for such Borrower Party, and such Borrower Party acknowledges and
agrees that the Lender Group is expressly relying upon such representations and
warranties of such Borrower Party (as well as the other representations and
warranties of such Borrower Party set forth in this Agreement and the other
Loan Documents) in entering into this Agreement.

Section 11.12         Amendments and Waivers.

(a)           Neither this Agreement, any other
Loan Document nor any term hereof or thereof may be amended orally, nor may any
provision hereof be waived orally but only by an instrument in writing signed
by the Majority Lenders, or in the case of Loan Documents executed by the
Administrative Agent (and not the other members of the Lender Group), signed by
the Administrative Agent and approved by the Majority Lenders and, in the case
of an amendment, also by the Borrower, except that:  (i) the consent of each of the Lenders
shall be required for (A) any sale or release of, or the subordination of
the Administrative Agent’s security interest in, any material Collateral except
in conjunction with sales or transfers of Collateral permitted hereunder or any
release of any guarantor of the Obligations, (B) any extensions,
postponements or delays of the Maturity Date or the scheduled date of payment
of interest or principal or fees, or any reduction of principal (without a
corresponding payment with respect thereto), or reduction in the rate of
interest or fees due to the Lenders hereunder or under any other Loan
Documents, (C) any amendment of this Section 11.12 or of the
definition of “Majority Lenders” or any other provision of the Loan Documents
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder; (D) any amendment increasing the Commitments except pursuant
to Section 2.5 (it being understood and agreed that a waiver of any
Default or Event of Default or modification of any of the defined terms
contained herein (other than those defined terms specifically addressed in this
Section 11.12) shall not constitute a change in the terms of the
Commitments of any Lender); (E) any amendment increasing the amounts or
percentages set forth in the definition of “Borrowing Base” and the defined
terms used therein; (F) any amendment to the definition of “Availability”
and the defined terms used therein; and (G) any amendment to Section 2.11;
(ii) the consent of the Administrative Agent, the Majority Lenders and

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the Borrower shall be
required for any amendment to Section 2.1(f) or Article 10; (iii) the
consent of the Issuing Bank, the Majority Lenders and the Borrower shall be
required for any amendment to Section 2.1(c) or 2.15 or the
definition of “Letter of Credit Commitment”; (iv) the consent of the
Guarantors and the Majority Lenders shall be required for any amendment to Article 3;
(v) the consent of the Swing Bank, the Majority Lenders and the Borrower
shall be required for any amendment to Section 2.1(d) or Section 2.2(g);
(vi) the consent of the Administrative Agent only shall be required to
amend Schedule 1(a) to reflect assignments of the Commitments and
Loans in accordance with this Agreement. In addition to the required consents
set forth above, if SunTrust Bank or any Affiliate thereof has entered into a
Co-Collateral Agent Hedge Agreement with any Borrower Party and SunTrust Bank
is no longer the Administrative Agent or a Lender, the consent of SunTrust Bank
or such Affiliate shall be required for any amendment to Section 2.11 or
any amendment described in clause (i)(A) above. Any amendment,
modification, waiver, consent, termination or release of any Bank Products
Documents may be effected by the parties thereto without the consent of the
Lender Group.

(b)           Each Lender grants to the
Administrative Agent the right to purchase all (but not less than all) of such
Lender’s Revolving Loan Commitment, Letter of Credit Commitment, the Loans and
Letter of Credit Obligations owing to it and any Revolving Loan Notes held by
it and all of its rights and obligations hereunder and under the other Loan
Documents at a price equal to the outstanding principal amount of the Loans
payable to such Lender plus any accrued but unpaid interest on such Loans and
accrued but unpaid commitment fees and letter of credit fees owing to such
Lender plus the amount necessary to cash collateralize any Letters of Credit
issued by such Lender, which right may be exercised by the Administrative Agent
if such Lender refuses to execute any amendment, waiver or consent which
requires the written consent of all of the Lenders and to which the Majority
Lenders, the Administrative Agent and the Borrower have agreed. Each Lender
agrees that if the Administrative Agent exercises its option hereunder, it
shall promptly execute and deliver an Assignment and Acceptance and other
agreements and documentation necessary to effectuate such assignment. The
Administrative Agent may assign its purchase rights hereunder to any assignee
if such assignment complies with the requirements of Section 11.5(b).

(c)           If any fees are paid to the Lenders
as consideration for amendments, waivers or consents with respect to this
Agreement, at Administrative Agent’s election, such fees may be paid only to
those Lenders that agree to such amendments, waivers or consents within the
time specified for submission thereof.

Section 11.13         Other Relationships. No
relationship created hereunder or under any other Loan Document shall in any
way affect the ability of any member of the Lender Group to enter into or
maintain business relationships with the Borrower, or any of its Affiliates,
beyond the relationships specifically contemplated by this Agreement and the
other Loan Documents.

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Section 11.14         Pronouns. The pronouns used
herein shall include, when appropriate, either gender and both singular and
plural, and the grammatical construction of sentences shall conform thereto.

Section 11.15         Disclosure. The Borrower Parties
agree that the Administrative Agent shall have the right to issue press
releases regarding the making of the Loans and the issuance of the Commitments
to the Borrower pursuant to the terms of this Agreement.

Section 11.16         Replacement of Lender. In the
event that a Replacement Event occurs and is continuing with respect to any
Lender, the Borrower may designate another financial institution (such
financial institution being herein called a “Replacement Lender”)
acceptable to the Administrative Agent, and which is not the Borrower or an
Affiliate of the Borrower, to assume such Lender’s Revolving Loan Commitment
hereunder, to purchase the Loans and participations of such Lender and such
Lender’s rights hereunder and (if such Lender is the Issuing Bank) to issue
Letters of Credit in substitution for all outstanding Letters of Credit issued
by such Lender, without recourse to or representation or warranty by, or
expense to, such Lender for a purchase price equal to the outstanding principal
amount of the Loans payable to such Lender plus any accrued but unpaid interest
on such Loans and accrued but unpaid commitment fees and letter of credit fees
owing to such Lender plus amounts necessary to cash collateralize any Letters
of Credit issued by such Lender, and upon such assumption, purchase and
substitution, and subject to the execution and delivery to the Administrative
Agent by the Replacement Lender of documentation satisfactory to the
Administrative Agent (pursuant to which such Replacement Lender shall assume
the obligations of such original Lender under this Agreement), the Replacement
Lender shall succeed to the rights and obligations of such Lender hereunder and
such Lender shall no longer be a party hereto or have any rights hereunder
provided that the obligations of the Borrower to indemnify such Lender with
respect to any event occurring or obligations arising before such replacement
shall survive such replacement. “Replacement Event” shall mean, with
respect to any Lender, (a) the commencement of or the taking of possession
by, a receiver, custodian, conservator, trustee or liquidator of such Lender,
or the declaration by the appropriate regulatory authority that such Lender is
insolvent or (b) the making of any claim by any Lender under Section 2.8(b),
12.3 or 12.5, unless the changing of the lending office by such Lender would
obviate the need of such Lender to make future claims under such Sections.

Section 11.17         Confidentiality. No member of
the Lender Group shall disclose any non-public confidential information regarding
the Borrower Parties (“Confidential Information”) to any other Person
without the consent of the Borrower, other than (i) to such member of the
Lender Group’s Affiliates and their officers, directors, employees, agents and
advisors, to other members of the Lender Group and, as contemplated by Section 11.5,
to actual or prospective assignees and participants, and then only on a
confidential basis, (ii) as required by any law, rule or regulation
or judicial process, (iii)

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to any rating agency when
required by it, provided, that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Borrower Parties received by it from
such member of the Lender Group, (iv) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking,
and (v) in connection with the exercise of any remedy hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder.

Section 11.18         Revival and Reinstatement of
Obligations. If the incurrence or payment of the Obligations by the
Borrower or any Guarantor, or the transfer to the Lender Group of any property,
should for any reason subsequently be declared to be void or voidable under any
state or federal law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences or other
voidable or recoverable payments of money or transfers of property
(collectively, a “Voidable Transfer”), and if the Lender Group, or any
of them, is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its
counsel, then, as to any such Voidable Transfer, or the amount thereof that the
Lender Group, or any of them, is required or elects to repay or restore, and as
to all reasonable costs, expenses and attorneys fees of the Lender Group
related thereto, the liability of the Borrower or such Guarantor, as
applicable, automatically shall be revived, reinstated and restored and shall
exist as though such Voidable Transfer had never been made.

Section 11.19         Electronic Transmissions.
(a) Authorization. Subject to the provisions of this Section 11.19(a),
each of the Administrative Agent, the Borrower, the Lenders, the Issuing Bank
and each of their Affiliates is authorized (but not required) to transmit, post
or otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein.
Each of the Borrower and the other Borrower Parties hereby acknowledges and
agrees, and each of the Borrower and the other Borrower Parties shall cause
each of their Subsidiaries to acknowledge and agree, that the use of Electronic
Transmissions is not necessarily secure and that there are risks associated
with such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.

(b)           Separate Agreements. All uses
of an E-System shall be governed by and subject to, in addition to the terms
and conditions of this Agreement, separate terms and conditions posted or
referenced in such E-System and related Contractual Obligations executed by
Borrower Parties or the members of the Lender Group in connection with the use
of such E-System.

(c)           Limitation of Liability. All
E-Systems and Electronic Transmissions shall be provided “as is” and “as
available”. None of Administrative Agent or any of its Affiliates warrants the
accuracy, adequacy or completeness of any E-Systems or Electronic Transmission,
and each disclaims all liability for errors or omissions therein. No warranty
of any kind is made by the Administrative Agent or any of its Affiliates in
connection with any E-

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Systems or Electronic
Communication, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects. Each of
the Borrower and the other Borrower Parties agrees that the Administrative
Agent has no responsibility for maintaining or providing any equipment,
software, services or any testing required in connection with any Electronic
Transmission or otherwise required for any E-System.

ARTICLE 12.

YIELD PROTECTION

Section 12.1           Eurodollar Rate Basis
Determination. Notwithstanding anything contained herein which may be
construed to the contrary, if with respect to any proposed Eurodollar Advance
for any Eurodollar Advance Period, the Administrative Agent determines that
deposits in Dollars (in the applicable amount) are not being offered to leading
banks in the London interbank market for such Eurodollar Advance Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and
the Lenders, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such situation no longer exist, the
obligations of the Lenders to make Eurodollar Advances shall be suspended.

Section 12.2           Illegality. If any change in
Applicable Law, any change in the interpretation or administration of any
Applicable Law by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any change in
compliance with Applicable Law as a result of any request or directive (whether
or not having the force of law) of any such authority, central bank, or
comparable agency after the Agreement Date, shall make it unlawful or
impossible for any Lender to make, maintain, or fund its Eurodollar Advances,
such Lender shall so notify the Administrative Agent, and the Administrative
Agent shall forthwith give notice thereof to the other Lenders and the Borrower.
Before giving any notice to the Administrative Agent pursuant to this Section 12.2,
such Lender shall designate a different lending office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. Upon receipt of such
notice, notwithstanding anything contained in Article 2, the Borrower
shall repay in full the then outstanding principal amount of each affected
Eurodollar Advance of such Lender, together with accrued interest thereon,
either (a) on the last day of the then current Eurodollar Advance Period
applicable to such Eurodollar Advance if such Lender may lawfully continue to
maintain and fund such Eurodollar Advance to such day or (b) immediately
if such Lender may not lawfully continue to fund and maintain such Eurodollar
Advance to such day. Concurrently with repaying each affected Eurodollar
Advance of such Lender, notwithstanding anything contained in

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Article 2, the
Borrower shall borrow a Base Rate Advance from such Lender, and such Lender
shall make such Advance in an amount such that the outstanding principal amount
of the Revolving Loans held by such Lender shall equal the outstanding
principal amount of such Revolving Loans immediately prior to such repayment.

Section 12.3           Increased
Costs.

(a)           If any change in Applicable Law, any
change in the interpretation or administration of any Applicable Law by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof or any change in compliance with
Applicable Law as a result of any request or directive (whether or not having
the force of law) of such governmental authority, central bank, or comparable
agency after the Agreement Date:

(i)            Shall subject any Lender to any tax,
duty, or other charge with respect to its obligation to make Eurodollar
Advances, or its Eurodollar Advances, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on its Eurodollar
Advances or in respect of any other amounts due under this Agreement in respect
of its Eurodollar Advances or its obligation to make Eurodollar Advances
(except for changes in the rate of tax on the overall net income of such
Lender);

(ii)           Shall impose, modify, or deem
applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System, but excluding any included in an
applicable Eurodollar Reserve Percentage), special deposit, assessment, or
other requirement or condition against assets of, deposits (other than as
described in Section 12.5) with or for the account of, or commitments or
credit extended by any Lender, or shall impose on any Lender or the eurodollar
interbank borrowing market any other condition affecting its obligation to make
such Eurodollar Advances or its Eurodollar Advances; and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
any such Eurodollar Advances, or to reduce the amount of any sum received or
receivable by the Lender under this Agreement or under any Revolving Loan Notes
with respect thereto, and such increase is not given effect in the
determination of the Eurodollar Rate;

(iii)          Shall subject the Issuing Bank or any
Lender to any tax, duty or other charge with respect to the obligation to issue
Letters of Credit, maintain Letters of Credit or participate in Letters of
Credit, or shall change the basis of taxation of payments to the Issuing Bank
or any Lender in respect of amounts drawn under Letters of Credit or in respect
of any other amounts due under this Agreement in respect of Letters of Credit
or the obligation of the Issuing Bank to issue Letters of Credit or maintain
Letters of Credit or the obligation of the Lenders to participate in Letters of
Credit (except for changes in the rate of tax on the overall net income of the
Issuing Bank or any Lender); or

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(iv)          Shall impose, modify, or deem
applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System), special deposit, assessment, or
other requirement or condition against assets of, deposits (other than as
described in Section 12.5) with or for the account of, or commitments or
credit extended by the Issuing Bank, or shall impose on the Issuing Bank or any
Lender any other condition affecting the obligation to issue Letters of Credit,
maintain Letters of Credit or participate in Letters of Credit; and the result
of any of the foregoing is to increase the cost to the Issuing Bank or any
Lender of issuing, maintaining or participating in any such Letters of Credit
or to reduce the amount of any sum received or receivable by the Issuing Bank
or any Lender under this Agreement with respect thereto,

then promptly upon
demand by such Lender or Issuing Bank, the Borrower agrees to pay, without
duplication of amounts due under Section 2.8(b), to such Lender or Issuing
Bank such additional amount or amounts as will compensate such Lender or
Issuing Bank for such increased costs. Each Lender or Issuing Bank will
promptly notify the Borrower and the Administrative Agent of any event of which
it has knowledge, occurring after the date hereof, which will entitle such
Lender or the Issuing Bank to compensation pursuant to this Section 12.3
and will designate a different lending office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
sole judgment of such Lender or the Issuing Bank, be otherwise disadvantageous
to such Lender or the Issuing Bank.

(b)           A certificate of any Lender or the
Issuing Bank claiming compensation under this Section 12.3 and setting
forth the additional amount or amounts to be paid to it hereunder and
calculations therefor shall be conclusive in the absence of manifest error. In
determining such amount, such Lender or the Issuing Bank may use any reasonable
averaging and attribution methods. If any Lender demands compensation under
this Section 12.3, the Borrower may at any time, upon at least five (5) Business
Days’ prior notice to such Lender, prepay in full the then outstanding affected
Eurodollar Advances of such Lender, together with accrued interest thereon to
the date of prepayment, along with any reimbursement required under Section 2.9.
Concurrently with prepaying such Eurodollar Advances, the Borrower shall borrow
a Base Rate Advance, or a Eurodollar Advance not so affected, from such Lender,
and such Lender shall make such Advance in an amount such that the outstanding
principal amount of the Revolving Loans held by such Lender shall equal the
outstanding principal amount of such Revolving Loans immediately prior to such
prepayment.

Section 12.4           Effect On Other Advances. If
notice has been given pursuant to Section 12.1, 12.2 or 12.3 suspending
the obligation of any Lender to make any, or requiring Eurodollar Advances of
any Lender to be repaid or prepaid, then, unless and until such Lender (or, in
the case of Section 12.1, the Administrative Agent) notifies the Borrower
that the circumstances giving rise to such repayment no longer apply, all

 134
 

 

Advances which would
otherwise be made by such Lender as to the Eurodollar Advances affected shall,
at the option of the Borrower, be made instead as Base Rate Advances.

Section 12.5           Capital Adequacy. If after the
Agreement Date, any Lender or Issuing Bank (or any Affiliate of the foregoing)
shall have reasonably determined that the adoption of any applicable law,
governmental rule, regulation or order regarding the capital adequacy of banks
or bank holding companies, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender or Issuing Bank (or any Affiliate of the
foregoing) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such governmental authority, central bank
or comparable agency (but only if such adoption, change, request or directive
occurs after the Agreement Date), has or would have the effect of reducing the
rate of return on such Lender’s or Issuing Bank’s (or any Affiliate of the
foregoing) capital as a consequence of such Lender’s or Issuing Bank’s
Revolving Loan Commitment or obligations hereunder to a level below that which
it could have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or Issuing Bank’s (or any Affiliate of the
foregoing) policies with respect to capital adequacy immediately before such
adoption, change or compliance and assuming that such Lender’s or Issuing Bank’s
(or any Affiliate of the foregoing) capital was fully utilized prior to such
adoption, change or compliance), then, promptly upon demand by such Lender or
Issuing Bank, the Borrower shall immediately pay to such Lender or Issuing Bank
such additional amounts as shall be sufficient to compensate such Lender or
Issuing Bank for any such reduction actually suffered; provided, however,
that there shall be no duplication of amounts paid to a Lender pursuant to this
sentence and Section 12.3. A certificate of such Lender or Issuing Bank
setting forth the amount to be paid to such Lender or Issuing Bank by the
Borrower as a result of any event referred to in this paragraph shall, absent
manifest error, be conclusive.

ARTICLE 13.

JURISDICTION, VENUE AND WAIVER OF JURY TRIAL

Section 13.1           Jurisdiction and Service of
Process. FOR PURPOSES OF ANY LEGAL ACTION OR PROCEEDING BROUGHT BY ANY MEMBER
OF THE LENDER GROUP WITH RESPECT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
ANY BANK PRODUCTS DOCUMENT, EACH BORROWER PARTY HEREBY IRREVOCABLY SUBMITS TO
THE PERSONAL JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE STATE
OF GEORGIA AND HEREBY IRREVOCABLY DESIGNATES AND APPOINTS, AS ITS AUTHORIZED
AGENT FOR SERVICE OF PROCESS IN THE STATE OF GEORGIA, THE BORROWER, OR SUCH
OTHER PERSON AS SUCH BORROWER PARTY SHALL DESIGNATE HEREAFTER BY WRITTEN NOTICE
GIVEN TO THE ADMINISTRATIVE AGENT. THE CONSENT TO JURISDICTION HEREIN

 135
 

 

SHALL NOT BE EXCLUSIVE. THE
LENDER GROUP SHALL FOR ALL PURPOSES AUTOMATICALLY, AND WITHOUT ANY ACT ON THEIR
PART, BE ENTITLED TO TREAT SUCH DESIGNEE OF EACH BORROWER PARTY AS THE
AUTHORIZED AGENT TO RECEIVE FOR AND ON BEHALF OF SUCH BORROWER PARTY SERVICE OF
WRITS, OR SUMMONS OR OTHER LEGAL PROCESS IN THE STATE OF GEORGIA, WHICH SERVICE
SHALL BE DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH BORROWER PARTY SERVED WHEN
DELIVERED, WHETHER OR NOT SUCH AGENT GIVES NOTICE TO SUCH BORROWER PARTY; AND
DELIVERY OF SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO BE MADE
WHEN PERSONALLY DELIVERED OR THREE (3) BUSINESS DAYS AFTER MAILING BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH AUTHORIZED AGENT. EACH BORROWER
PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL TO
SUCH BORROWER PARTY AT THE ADDRESS SET FORTH ABOVE, SUCH SERVICE TO BECOME
EFFECTIVE THREE (3) BUSINESS DAYS AFTER SUCH MAILING. IN THE EVENT THAT,
FOR ANY REASON, SUCH AGENT OR ITS SUCCESSORS SHALL NO LONGER SERVE AS AGENT OF
EACH BORROWER PARTY TO RECEIVE SERVICE OF PROCESS IN THE STATE OF GEORGIA, EACH
BORROWER PARTY SHALL SERVE AND ADVISE THE ADMINISTRATIVE AGENT THEREOF SO THAT
AT ALL TIMES EACH BORROWER PARTY WILL MAINTAIN AN AGENT TO RECEIVE SERVICE OF
PROCESS IN THE STATE OF GEORGIA ON BEHALF OF SUCH BORROWER PARTY WITH RESPECT
TO THIS AGREEMENT, ALL OTHER LOAN DOCUMENTS AND ANY BANK PRODUCTS DOCUMENTS. IN
THE EVENT THAT, FOR ANY REASON, SERVICE OF LEGAL PROCESS CANNOT BE MADE IN THE
MANNER DESCRIBED ABOVE, SUCH SERVICE MAY BE MADE IN SUCH MANNER AS
PERMITTED BY LAW.

Section 13.2           Consent to Venue. EACH
BORROWER PARTY AND EACH MEMBER OF THE LENDER GROUP HEREBY IRREVOCABLY WAIVES
ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF ANY
SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT BROUGHT IN THE FEDERAL COURTS
OF THE UNITED STATES SITTING IN FULTON COUNTY, GEORGIA, AND HEREBY IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

Section 13.3           Waiver of Jury Trial. EACH
BORROWER PARTY AND EACH MEMBER OF THE LENDER GROUP TO THE EXTENT PERMITTED BY
APPLICABLE LAW WAIVES, AND OTHERWISE AGREES NOT TO REQUEST, A TRIAL BY JURY IN
ANY COURT AND IN ANY ACTION, PROCEEDING OR

 136
 

 

COUNTERCLAIM OF ANY TYPE
IN WHICH ANY BORROWER PARTY, ANY MEMBER OF THE LENDER GROUP OR ANY OF THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
ANY BANK PRODUCTS DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS
ARTICLE 13.

[remainder
of page intentionally left blank]

 137

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed under
seal by their duly authorized officers in Atlanta, Georgia, all as of the day
and year first above written.

	
  BORROWER:

  	
  GTSI CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
  GTSI FINANCIAL SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TECHNOLOGY LOGISTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

	
  AGENTS AND LENDERS:

  	
  SUNTRUST BANK, as the
  Administrative Agent, the Issuing Bank, a Lender, the Swing Bank and as a
  Co-Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as a
  Lender and as a Co-Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit 10.2

CREDIT AGREEMENT

 

among

 

GTSI CORP., as the Borrower,

 

The
Persons party hereto as the Guarantors,

 

The financial institutions party hereto as the Lenders,

 

and

CRYSTAL CAPITAL FUND, L.P., as the
Administrative Agent

 

 

June 2,
2006

INDEX

	
   

  	
   

  	
  

  	
   

  	
  Page

  	
   

  
	
  ARTICLE 1.

  	
   

  	
  DEFINITIONS, ACCOUNTING
  PRINCIPLES AND OTHER INTERPRETIVE MATTERS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.2

  	
   

  	
  Accounting Principles

  	
   

  	
  26

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.3

  	
   

  	
  Other Interpretive Matters

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2.

  	
   

  	
  THE TERM LOAN

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Extension of Credit

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.2

  	
   

  	
  Manner of Borrowing and
  Disbursement of the Term Loan

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.3

  	
   

  	
  Interest

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.4

  	
   

  	
  Fees

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.5

  	
   

  	
  Prepayment of the Term
  Loan

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.6

  	
   

  	
  Repayment

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.7

  	
   

  	
  Notes; Loan Accounts

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.8

  	
   

  	
  Manner of Payment

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.9

  	
   

  	
  Reserved

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.10

  	
   

  	
  Pro Rata Treatment

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.11

  	
   

  	
  Application of Payments

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.12

  	
   

  	
  Use of Proceeds

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.13

  	
   

  	
  All Obligations to
  Constitute One Obligation

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.14

  	
   

  	
  Maximum Rate of
  Interest

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3.

  	
   

  	
  GUARANTY

  	
   

  	
  39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Guaranty

  	
   

  	
  39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.2

  	
   

  	
  Special Provisions
  Applicable to Subsidiary Guarantors

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4.

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Conditions Precedent to
  Term Loan

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5.

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  General Representations
  and Warranties

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.2

  	
   

  	
  Representations and
  Warranties Relating to Accounts

  	
   

  	
  59

  	
   

  

 

 

 

	
  Section 5.3

  	
   

  	
  Representations and
  Warranties Relating to Inventory

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.4

  	
   

  	
  Survival of
  Representations and Warranties, etc

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6.

  	
   

  	
  GENERAL COVENANTS

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Preservation of
  Existence and Similar Matters

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.2

  	
   

  	
  Compliance with Applicable
  Law

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.3

  	
   

  	
  Maintenance of
  Properties

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.4

  	
   

  	
  Accounting Methods and
  Financial Records

  	
   

  	
  61

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.5

  	
   

  	
  Insurance

  	
   

  	
  61

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.6

  	
   

  	
  Payment of Taxes and
  Claims

  	
   

  	
  61

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.7

  	
   

  	
  Visits and Inspections

  	
   

  	
  62

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.8

  	
   

  	
  Conduct of Business

  	
   

  	
  62

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.9

  	
   

  	
  ERISA

  	
   

  	
  62

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.10

  	
   

  	
  Lien Perfection

  	
   

  	
  63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.11

  	
   

  	
  Location of Collateral

  	
   

  	
  63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.12

  	
   

  	
  Protection of
  Collateral

  	
   

  	
  63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.13

  	
   

  	
  Assignments and Records
  of Accounts

  	
   

  	
  64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.14

  	
   

  	
  Administration of
  Accounts

  	
   

  	
  64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.15

  	
   

  	
  The Blocked Account

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.16

  	
   

  	
  Further Assurances

  	
   

  	
  67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.17

  	
   

  	
  Broker’s Claims

  	
   

  	
  67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.18

  	
   

  	
  Indemnity

  	
   

  	
  67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.19

  	
   

  	
  Environmental Matters

  	
   

  	
  68

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.20

  	
   

  	
  Assignment of Claims
  Act

  	
   

  	
  70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.21

  	
   

  	
  Formation of
  Subsidiaries

  	
   

  	
  70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.22

  	
   

  	
  Notifications Relating
  to Contracts with the Federal Government

  	
   

  	
  71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.23

  	
   

  	
  Inventory Appraisals;
  Delivery of Appraisals under Senior Credit Facility Documents, Etc

  	
   

  	
  71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.24

  	
   

  	
  Post Closing Conditions

  	
   

  	
  71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7.

  	
   

  	
  INFORMATION COVENANTS

  	
   

  	
  72

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Monthly and Quarterly
  Financial Statements and Information

  	
   

  	
  72

  	
   

  

 

 2
 

 

 

	
  Section 7.2

  	
   

  	
  Annual Financial
  Statements and Information; Certificate of No Default

  	
   

  	
  73

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.3

  	
   

  	
  Compliance
  Certificates

  	
   

  	
  73

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.4

  	
   

  	
  Access to
  Accountants

  	
   

  	
  73

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.5

  	
   

  	
  Additional
  Reports

  	
   

  	
  74

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.6

  	
   

  	
  Notice of
  Litigation and Other Matters

  	
   

  	
  76

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  8.

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Funded Debt

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.2

  	
   

  	
  Guaranties

  	
   

  	
  79

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.3

  	
   

  	
  Liens

  	
   

  	
  79

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.4

  	
   

  	
  Restricted
  Payments and Purchases

  	
   

  	
  79

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.5

  	
   

  	
  Investments

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.6

  	
   

  	
  Affiliate
  Transactions

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.7

  	
   

  	
  Liquidation;
  Change in Ownership, Name, or Year; Disposition or Acquisition
  of Assets; Etc 
 	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.8

  	
   

  	
  Minimum Senior
  Credit Facility Availability

  	
   

  	
  82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.9

  	
   

  	
  Minimum EBITDA

  	
   

  	
  82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.10

  	
   

  	
  Fixed Charge
  Coverage Ratio

  	
   

  	
  83

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.11

  	
   

  	
  Capital
  Expenditures

  	
   

  	
  83

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.12

  	
   

  	
  Limitation on
  Leases

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.13

  	
   

  	
  Sales and
  Leasebacks

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.14

  	
   

  	
  Amendment and
  Waiver

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.15

  	
   

  	
  ERISA Liability

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.16

  	
   

  	
  Prepayments

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.17

  	
   

  	
  Negative Pledge

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.18

  	
   

  	
  Inconsistent
  Agreements

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.19

  	
   

  	
  Senior Credit
  Facility

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  9.

  	
   

  	
  DEFAULT

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Events of
  Default

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.2

  	
   

  	
  Remedies

  	
   

  	
  88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10.

  	
   

  	
  THE ADMINISTRATIVE
  AGENT

  	
   

  	
  89

  	
   

  

 

 3
 

 

 

	
  Section 10.1

  	
   

  	
  Appointment and
  Authorization

  	
   

  	
  89

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.2

  	
   

  	
  Interest Holders

  	
   

  	
  89

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.3

  	
   

  	
  Consultation
  with Counsel

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.4

  	
   

  	
  Documents

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.5

  	
   

  	
  Administrative
  Agent and Affiliates

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.6

  	
   

  	
  Responsibility
  of the Administrative Agent

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.7

  	
   

  	
  Action by
  Administrative Agent

  	
   

  	
  91

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.8

  	
   

  	
  Notice of
  Default

  	
   

  	
  91

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.9

  	
   

  	
  Responsibility
  Disclaimed

  	
   

  	
  91

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.10

  	
   

  	
  Indemnification

  	
   

  	
  92

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.11

  	
   

  	
  Credit Decision

  	
   

  	
  92

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.12

  	
   

  	
  Successor
  Administrative Agent

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.13

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.14

  	
   

  	
  Collateral

  	
   

  	
  94

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.15

  	
   

  	
  Release of
  Collateral

  	
   

  	
  94

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  11.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  95

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1

  	
   

  	
  Notices

  	
   

  	
  95

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.2

  	
   

  	
  Expenses

  	
   

  	
  96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.3

  	
   

  	
  Waivers

  	
   

  	
  97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.4

  	
   

  	
  Set-Off

  	
   

  	
  97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.5

  	
   

  	
  Assignment

  	
   

  	
  98

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.6

  	
   

  	
  Counterparts

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.7

  	
   

  	
  Governing Law

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.8

  	
   

  	
  Severability

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.9

  	
   

  	
  Headings

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.10

  	
   

  	
  Source of Funds

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.11

  	
   

  	
  Entire Agreement

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.12

  	
   

  	
  Amendments and
  Waivers

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.13

  	
   

  	
  Other
  Relationships

  	
   

  	
  102

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.14

  	
   

  	
  Pronouns

  	
   

  	
  102

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.15

  	
   

  	
  Disclosure

  	
   

  	
  102

  	
   

  

 

 4
 

 

 

	
  Section 11.16

  	
   

  	
  Replacement of
  Lender

  	
   

  	
  103

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.17

  	
   

  	
  Confidentiality

  	
   

  	
  103

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.18

  	
   

  	
  Revival and
  Reinstatement of Obligations

  	
   

  	
  103

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.19

  	
   

  	
  Electronic
  Transmissions

  	
   

  	
  104

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  12.

  	
   

  	
  YIELD PROTECTION

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1

  	
   

  	
  Reserved

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.2

  	
   

  	
  Reserved

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.3

  	
   

  	
  Reserved

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.4

  	
   

  	
  Reserved.

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.5

  	
   

  	
  Capital Adequacy

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  13.

  	
   

  	
  JURISDICTION,
  VENUE AND WAIVER OF JURY TRIAL

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1

  	
   

  	
  Jurisdiction and
  Service of Process

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.2

  	
   

  	
  Consent to Venue

  	
   

  	
  106

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.3

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  107

  	
   

  

 

 5
 

 

EXHIBITS

	
  Exhibit A

  	
  —

  	
  Form of Administrative Questionnaire

  
	
  Exhibit B

  	
  —

  	
  Form of Assignment and Acceptance

  
	
  Exhibit C

  	
  —

  	
  Form of Blocked Account Agreement

  
	
  Exhibit D

  	
  —

  	
  Form of Borrowing Base Certificate

  
	
  Exhibit E-1

  	
  —

  	
  Form of Collateral Access Agreement — Landlord

  
	
  Exhibit E-2

  	
  —

  	
  Form of Collateral Access Agreement — Bailee

  
	
  Exhibit F

  	
  —

  	
  Form of Compliance Certificate

  
	
  Exhibit G

  	
  —

  	
  Form of Request for Term Loan

  
	
  Exhibit H

  	
  —

  	
  Form of Term Loan Note

  
	
  Exhibit I

  	
  —

  	
  Form of Guaranty Supplement

  

 

SCHEDULES

	
  Schedule 1(a)

  	
  —

  	
  Term Loan Ratios

  
	
  Schedule 1(b)

  	
  —

  	
  Liens

  
	
  Schedule 1.1(c)

  	
  —

  	
  Permitted Investments

  
	
  Schedule 1.1(d)

  	
  —

  	
  Corporate Qualifications

  
	
  Schedule 5.1(c)-1

  	
  —

  	
  Subsidiaries

  
	
  Schedule 5.1(c)-2

  	
  —

  	
  Partnerships/Joint Ventures

  
	
  Schedule 5.1(d)

  	
  —

  	
  Outstanding Capital Stock Ownership

  
	
  Schedule 5.1(h)

  	
  —

  	
  Material Contracts

  
	
  Schedule 5.1(i)

  	
  —

  	
  Labor Matters

  
	
  Schedule 5.1(j)

  	
  —

  	
  Taxes

  
	
  Schedule 5.1(m)

  	
  —

  	
  Investments/Guaranties as of the Agreement Date

  
	
  Schedule 5.1(n)

  	
  —

  	
  Litigation

  
	
  Schedule 5.1(o)

  	
  —

  	
  ERISA

  
	
  Schedule 5.1(p)

  	
  —

  	
  Intellectual Property; Licenses and Certifications

  
	
  Schedule 5.1(v)

  	
  —

  	
  Insurance

  
	
  Schedule 5.1(w)

  	
  —

  	
  Brokers’ Fees

  
	
  Schedule 5.1(x)-1

  	
  —

  	
  Leased Real Property

  
	
  Schedule 5.1(x)-2

  	
  —

  	
  Owned Real Property

  
	
  Schedule 5.1(y)-1

  	
  —

  	
  Environmental Matters — Hazardous Materials

  
	
  Schedule 5.1(y)-2

  	
  —

  	
  Environmental Matters — Compliance

  
	
  Schedule 5.1(y)-3

  	
  —

  	
  Environmental Matters — Notices

  
	
  Schedule 5.1(y)-4

  	
  —

  	
  Environmental Matters — Handling of Hazardous
  Materials

  
	
  Schedule 5.1(y)-5

  	
  —

  	
  Environmental Matters — Actions and Orders

  
	
  Schedule 5.1(y)-6

  	
  —

  	
  Environmental Matters — Releases

  
	
  Schedule 6.11

  	
  —

  	
  Location of Collateral

  
	
  Schedule 6.15

  	
  —

  	
  Bank and Investment Accounts

  
	
  Schedule 8.6

  	
  —

  	
  Affiliate Transactions

  

 

 6

CREDIT
AGREEMENT

THIS
CREDIT AGREEMENT dated as of June 2, 2006, is by and among GTSI CORP., a Delaware corporation, as
borrower (the “Borrower”), the Persons party hereto from time to time as
Guarantors, the financial institutions party hereto from time to time as
Lenders and CRYSTAL CAPITAL FUND, L.P.,
as the Administrative Agent.

W I T N E S S E T
H:

WHEREAS, the Borrower has
requested that the Administrative Agent and the Lenders make available to it
the Term Loan, on the terms and conditions set forth herein, to, among other
things, refinance existing Funded Debt and to fund transaction costs and
working capital needs of the Borrower; and

WHEREAS, the
Administrative Agent and the Lenders are willing to make the Term Loan
available to the Borrower upon the terms and conditions set forth herein;

NOW, THEREFORE, in
consideration of the premises and the covenants and agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS,
ACCOUNTING PRINCIPLES AND

OTHER INTERPRETIVE MATTERS

Section 1.1             Definitions. For the
purposes of this Agreement:

“Account Debtor”
shall mean any Person who is obligated to make payments in respect of an
Account.

“Accounts” shall
mean all “accounts,” as such term is defined in the UCC, of each Borrower Party
whether now existing or hereafter created or arising, including, without
limitation, (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by
chattel paper (as defined in the UCC) or instruments (as defined in the UCC))
(including any such obligations that may be characterized as an account or
contract right under the UCC), (b) all of each Borrower Party’s rights in,
to and under all purchase orders or receipts for goods or services, (c) all
of each Borrower Party’s rights to any goods represented by any of the
foregoing (including unpaid sellers’ rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all rights to payment due to a Borrower Party for
property sold, leased, licensed, assigned or otherwise

 

disposed of, for a
policy of insurance issued or to be issued, for a secondary obligation incurred
or to be incurred, for energy provided or to be provided, for the use or hire
of a vessel under a charter or other contract, arising out of the use of a
credit card or charge card, or for services rendered or to be rendered by such
Borrower Party or in connection with any other transaction (whether or not yet
earned by performance on the part of such Borrower Party), (e) all health
care insurance receivables and (f) all collateral security of any kind, given
by any Account Debtor or any other Person with respect to any of the foregoing.

“additional
amounts” shall have the meaning specified in Section 2.8(b)(i).

“Administrative Agent”
shall mean Crystal Capital Fund, L.P. acting as administrative agent for the
Lender Group, and any successor Administrative Agent appointed pursuant to Section 10.12.

“Administrative Agent’s
Office” shall mean the office of the Administrative Agent located at 1
Federal Street, Ninth Floor, Boston, Massachusetts 02110, Attention: Michael
Pizette, or such other office as may be designated by the Administrative Agent
pursuant to the provisions of Section 11.1.

“Administrative
Questionnaire” shall mean a questionnaire substantially in the form of Exhibit A.

“Affiliate” shall
mean, with respect to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or that is a director, officer, manager or partner of such Person.
For purposes of this definition, “control”, when used with respect to any
Person, includes, without limitation, the direct or indirect beneficial
ownership of ten percent (10%) or more of the outstanding Equity Interests of
such Person or the power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

“Agreement” shall
mean this Credit Agreement, together with all Exhibits and Schedules hereto.

“Agreement Date”
shall mean the date as of which this Agreement is dated.

“Anti-Terrorism
Laws” shall mean any Applicable Laws relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.

“Applicable Law”
shall mean, in respect of any Person, all provisions of constitutions,
statutes, rules, regulations, and orders of governmental bodies or regulatory
agencies applicable, whether by law or by virtue of contract, to such Person,
and all orders and decrees of all courts and arbitrators in proceedings or
actions to which the Person in question is a party or by which it is bound.

 2
 

 

“Approved Fund”
shall mean any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity that administers or manages a
Lender.

“Assignment and
Acceptance” shall mean that certain form of Assignment and Acceptance
attached hereto as Exhibit B, pursuant to which each Lender may, as
further provided in Section 11.5, sell all or a portion of the Term Loan
held by it.

“Authorized Signatory”
shall mean, with respect to any Borrower Party, such senior personnel of such
Borrower Party as may be duly authorized and designated in writing to the
Administrative Agent by such Borrower Party to execute documents, agreements,
and instruments on behalf of such Borrower Party.

“Availability Block”
shall mean $10,000,000.

“Bank Product Reserves”
shall mean all reserves that the Senior Credit Facility Agent, from time to
time, establishes under the Senior Credit Facility Agreement in its reasonable
discretion for any “Bank Products” (as defined in the Senior Credit Facility
Agreement as in effect on the date hereof) then provided or outstanding; provided
that such Bank Product Reserves shall be maintained by the Senior Credit
Facility Agent in a manner consistent with its usual and customary underwriting
criteria and the methodology used by it on the Agreement Date with respect to
the Senior Credit Facility.

“Bankruptcy Code”
shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et
seq.), as now or hereafter amended, and any successor statute.

“Base Rate” shall
mean, at any time, the “prime rate” as published in the Wall Street Journal.

“Blocked Account”
shall have the meaning specified in Section 6.15.

“Blocked Account
Agreement” shall mean any agreement executed by a depository bank, the
Administrative Agent, for the benefit of the Lender Group, the other parties
thereto (if any) and acknowledged and agreed to by the applicable Borrower
Party, in the form of Exhibit C or such other form acceptable to
the Administrative Agent in its sole discretion.

“Blocked Person”
shall have the meaning specified in Section 5.1(cc)(ii).

“Borrower” shall
have the meaning specified in the preamble.

“Borrower Parties”
shall mean, collectively, the Borrower and the Guarantors; and “Borrower
Party” shall mean any one of the foregoing Borrower Parties.

“Borrower
Payments” shall have the meaning specified in Section 2.8(b)(i).

 3
 

 

“Borrowing Base
Certificate” shall mean a certificate of an Authorized Signatory of the
Borrower substantially in the form of Exhibit D.

“Business Day”
shall mean any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the Commonwealth of Massachusetts or is a day on
which banking institutions located in such state are closed.

“Capital Expenditures”
shall mean, for any period, on a consolidated basis for the Borrower Parties,
the aggregate of all expenditures made by the Borrower Parties during such
period that, in conformity with GAAP, are required to be included in or
reflected on the consolidated balance sheet as a capital asset of the Borrower
Parties, including, without limitation, Capitalized Lease Obligations of the
Borrower Parties.

“Capitalized Lease
Obligation” shall mean that portion of any obligation of a Person as lessee
under a lease which at the time would be required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.

“Cash Equivalents”
shall mean, collectively, (a) marketable, direct obligations of the US and
its agencies maturing within three hundred sixty-five (365) days of the date of
purchase, (b) commercial paper issued by corporations, each of which shall
(i) have a consolidated net worth of at least $250,000,000, and (ii) conduct
substantially all of its business in the US, which commercial paper will mature
within one hundred eighty (180) days from the date of the original issue
thereof and is rated “P-1” or better by Moody’s or “A-1” or better
by S&P, (c) certificates of deposit, Eurodollar time deposits,
overnight bank deposits and bankers’ acceptances, in each case  maturing within three hundred sixty-five
(365) days of the date of purchase and issued by a US national or state bank
having deposits totaling more than $250,000,000, and whose short-term debt is
rated “P-1” or better by Moody’s or “A-1” or better by S&P, and
(d) shares of any money market or similar fund that has net assets whose
dollar equivalent exceeds $250,000,000 and any other investment that is, in
each case, either (i) described on Schedule 1.1(c) or (ii) approved
in writing by the Administrative Agent (such approval not to be unreasonably
withheld).

“Change in Control”
shall mean the occurrence of one or more of the following events:  (a) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the SEA) of thirty-five percent (35%) or more of
the outstanding shares of the voting Equity Interest of the Borrower; (b) as
of any date a majority of the board of directors of the Borrower consists
(other than vacant seats) of individuals who were not either (i) directors
of the Borrower as of the Agreement Date, (ii) selected or nominated to
become directors by the board of directors of the Borrower of which a majority
consisted of individuals described in clause (i), or (iii) selected or
nominated to become directors by the board of directors of the Borrower of
which a majority consisted of individuals described in clause (i) and
individuals described in clause (ii), or (c) except as specifically
permitted hereunder, the

 4
 

 

Borrower ceases to
directly or indirectly own and control one hundred percent (100%) of the
outstanding Equity Interests of all of its Subsidiaries.

“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” shall
mean all property pledged as collateral security for the Obligations pursuant
to the Security Documents or otherwise, and all other property of any Borrower
Party that is now or hereafter in the possession or control of any member of
the Lender Group, or on which any member of the Lender Group has been granted a
Lien.

“Collateral Access
Agreement” shall mean any agreement of any lessor, warehouseman, processor,
consignee or other Person in possession of, having a Lien upon or having rights
or interests in, any of the Collateral in favor of the Administrative Agent,
for the benefit of the Lender Group, substantially in the form of Exhibit E-1
or Exhibit E-2 or otherwise in form and substance
satisfactory to the Administrative Agent, waiving Liens or certain other rights
or interests such Person may hold in regard to the property of any of the
Borrower Parties and providing the Administrative Agent access to its
Collateral.

“Compliance
Certificate” shall mean a certificate executed by an Authorized Signatory
of the Borrower substantially in the form of Exhibit F.

“Confidential
Information” shall have the meaning specified in Section 11.17.

“Consulting Agreement”
shall mean, individually and collectively, (i) that certain Engagement
Contract, dated March 13, 2006, by and between FTI Consulting, Inc.
and the Borrower (as may be amended from time to time with the consent of the
Administrative Agent), and (ii) any other agreement with respect to which
the Borrower has engaged a third-party advisor which is mutually and reasonably
acceptable to the Borrower and the Administrative Agent with respect to
identity and term and scope of engagement.

“Copyright Security
Agreements” shall mean, collectively, the Copyright Security Agreements
made by the Borrower Parties in favor of the Administrative Agent, on behalf of
the Lender Group, from time to time.

“Corporate
Qualification Reserve” shall mean a reserve in the amount of $5,000,000 (or
such lesser amount as shall be acceptable to the Administrative Agent) to be
imposed until such time as Borrower has delivered to Administrative Agent a
certificate of good standing from the Secretary of State of each of the
jurisdictions listed on Schedule 1.1(d), in each case evidencing that Borrower
is qualified and in good standing as a foreign corporation in such
jurisdictions under the name “GTSI Corp” (other than the State of California or
such other state as the Administrative Agent may

 5
 

 

approve) and, with
respect to the State of California or such other state, the Borrower shall take
such steps to qualify and be in good standing as a foreign corporation as may
be reasonably acceptable to the Administrative Agent.

“Crystal Capital”
shall mean Crystal Capital Fund, L.P.

“Customer Dispute”
shall mean all instances in which (a) a customer of the Borrower has
rejected or returned the goods and such return or rejection has not been
accepted by the Borrower as a valid return or rejection, or (b) a customer
of the Borrower has otherwise affirmatively asserted grounds for nonpayment of
an Account, including, without limitation, any repossession of goods by the
Borrower, or any claim by an Account Debtor of total or partial failure of
delivery, set-off, counterclaim, or breach of warranty.

“Default” shall
mean any Event of Default, and any of the events specified in Section 9.1
regardless of whether there shall have occurred any passage of time or giving
of notice (or both) that would be necessary in order to constitute such event
an Event of Default.

“Default Rate”
shall mean a simple per annum interest rate equal to, with respect to all
outstanding Obligations, the sum of (a) the rate of interest otherwise
applicable to the Term Loan, plus (b) two percent (2.00%).

“Dilution” means,
as of any date of determination, a percentage, based upon the experience of the
immediately prior twelve month period, that is the result of dividing the
Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to the Borrower’s
Accounts during such period, by (b) the Borrower’s billings with respect
to Accounts during such period.

“Dilution Reserve”
means, as of any date of determination, an amount sufficient to reduce (a) the
advance rate against Federal Government Eligible Accounts by 1 percentage point
for each percentage point by which Dilution is in excess of zero (0.0%) and (b) the
advance rate against Other Eligible Accounts by 1 percentage point for each
percentage point by which Dilution is in excess of five percent (5.0%).

“Disbursement Account”
shall mean account number 202969908 maintained at SunTrust Bank, or as
otherwise designated to the Administrative Agent by the Borrower.

“Dividends” shall
mean any direct or indirect distribution, dividend, or payment to any Person on
account of any Equity Interests of any Borrower Party.

“Dollars” or “$”
shall mean the lawful currency of the United States of America.

 6
 

 

“Domestic Subsidiary”
shall mean any Subsidiary of the Borrower that is organized and existing under
the laws of the US or any state or commonwealth thereof or under the laws of
the District of Columbia.

“EBITDA” shall
mean, with respect to the Borrower on a consolidated basis with its
Subsidiaries for any period, the net income for such period determined in
accordance with GAAP, plus, without duplication and to the extent
reflected as charges in the statement of net income for such period, the sum of
(i) income taxes, (ii) Interest Expense, and (iii) depreciation
and amortization expense; provided, however, that if any such
calculation includes any period in which an acquisition or sale of a Person or
all or substantially all of the assets of a Person occurred, then such
calculation shall be made on a Pro Forma Basis; provided, further,
the net income (or loss) of the Borrower and its Subsidiaries for any such period
shall exclude therefrom (to the extent otherwise included therein) (a) any
extraordinary gains, (b) any non-cash extraordinary losses, (c) with
respect to any such amount that was deducted under clause (b) of this
definition as an expense in a prior period, any cash payments of accrued
expenses that were not included in the calculation of EBITDA when the
applicable accrual was made, (d) any gains attributable to write-ups of
assets or gains due to the forgiveness of debt or trade liabilities, (e) any
equity interest of the Borrower or any Subsidiary of the Borrower in the
unremitted earnings of any Person that is not a Subsidiary, (f) any income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any Subsidiary on the date
that such Person’s assets are acquired by the Borrower or any Subsidiary and (g) any
non-cash gains, income, loss, expense, or charge to earnings due to change in
GAAP accounting rules.

“E-Fax”
means any system used to receive or transmit faxes electronically.

“Electronic
Transmission” means each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made
or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.

“Eligible Accounts”
shall mean, at any particular date, all Accounts of the Borrower that the
Administrative Agent, in the exercise of its Permitted Discretion (exercised in
a manner consistent with the Senior Credit Facility Agent’s Discretion),
determines to be Eligible Accounts; provided that, without limiting the
right of the Administrative Agent to establish other criteria of ineligibility,
Eligible Accounts shall not include any of the following Accounts:

(a)           (i) Accounts with respect to
which more than one hundred twenty  (120)
days have elapsed since the original invoice therefor or 90 days since the due
date of the original invoice if the Federal Government is the Account Debtor
for such Account or (ii) Accounts with respect to which more than ninety
(90) days have elapsed since the original invoice therefor or 60 days since the
due date of the original invoice if any Person other than the Federal
Government is the Account Debtor for such Account;

 7
 

 

(b)           Accounts with respect to which any of
the representations, warranties, covenants and agreements contained in Section 5.2
are not or have ceased to be complete and correct or have been breached;

(c)           Accounts (or any other Account due
from the same Account Debtor), with respect to which, in whole or in part, a
check, promissory note, draft, trade acceptance or other instrument for the
payment of money has been received, presented for payment and returned
uncollected for any reason;

(d)           Accounts as to which the Borrower has
not performed, as of the applicable date of calculation, all of its obligations
then required to have been performed, including, without limitation, the
delivery of merchandise or rendition of services applicable to such Accounts;

(e)           Accounts as to which any one or more
of the following events has occurred with respect to the Account Debtor on such
Accounts:  death or judicial declaration
of incompetency of such Account Debtor who is an individual; the filing by or
against such Account Debtor of a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws
of the US, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by such Account
Debtor for the benefit of creditors; the appointment of a receiver or trustee
for such Account Debtor or for any of the assets of such Account Debtor,
including, without limitation, the appointment of or taking possession by a “custodian,”
as defined in Bankruptcy Code; the institution by or against such Account
Debtor of any other type of insolvency proceeding (under the bankruptcy laws of
the US or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, such Account Debtor; the sale, assignment, or transfer of all or
substantially all of the assets of such Account Debtor unless the obligations
of such Account Debtor in respect of the Accounts are assumed by and assigned
to such purchaser or transferee; the nonpayment generally by such Account
Debtor of its debts as they become due; or the cessation of the business of
such Account Debtor as a going concern;

(f)            those Accounts of an Account Debtor
for whom fifty percent (50%) or more of the aggregate Dollar amount of such
Account Debtor’s outstanding Accounts are classified as ineligible under the
criteria (other than this clause (f)) set forth herein;

(g)           Accounts which represent the
remaining obligations for partially paid Accounts (excluding Accounts with
respect to which the applicable purchase order has been modified or adjusted
and acknowledged by the applicable Account Debtor, it being expressly
understood that such modification or adjustment shall not modify the original
invoice date with respect to any such Account);

 8
 

 

(h)           Accounts owed by an Account Debtor
which: (i) does not maintain its chief executive office in the US or
Canada; or (ii) is not organized under the laws of the US or any state or
territory thereof; or (iii) is the government of any foreign country or
sovereign state, or of any state, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Accounts are secured or
payable by a letter of credit or acceptance, or insured under foreign credit
insurance in each case, on terms and conditions satisfactory to the
Administrative Agent in its Permitted Discretion (exercised in a manner
consistent with the Senior Credit Facility Agent’s Discretion);

(i)            Accounts owed by an Account Debtor
which is an Affiliate or employee of the Borrower, except for Accounts owed by
EYAK with respect to which not more than 30 days have elapsed since the
original invoice therefor; provided, however, the aggregate
amount of all accounts owed by EYAK included in Eligible Accounts shall not
exceed $500,000;

(j)            Accounts which are owed by an
Account Debtor to which the Borrower is indebted in any way, or which are
subject to any right of setoff by the Account Debtor, unless (i) the
Account Debtor has entered into an agreement acceptable to the Administrative
Agent to waive setoff rights or (ii) the Account Debtor is the Federal
Government or a Governmental Authority and such setoff rights exist as a result
of claims unrelated to any Account;

(k)           Accounts which are subject to any
Customer Dispute, but only to the extent of the amount in dispute;

(l)            Accounts which are owed by the
Federal Government, unless funds with respect to such Accounts have been
appropriated and allocated by the Federal Government;

(m)          Accounts which are owed by any state,
municipality, territory or other political subdivision of the US, or any
department, agency, public corporation, or other instrumentality thereof and as
to which the Administrative Agent determines in its Permitted Discretion that
the Administrative Agent’s security interest therein is not or cannot be
perfected;

(n)           Accounts which represent third-party
leasing transactions;

(o)           Accounts which represent sales on a
guaranteed sale, sale and return, sale on approval, consignment or other
repurchase or return basis;

(p)           Accounts which represent sales on a
bill-and-hold arrangement, unless the Account Debtor has an absolute obligation
to pay such Account pursuant to a written agreement in form and substance
satisfactory to the Administrative Agent and the Inventory associated with such
Account is physically segregated from all other Inventory

 9
 

 

and appropriately
reflected in the books and records of the Borrower; provided, however,
the aggregate amount of all accounts which represent sales on a bill-and-hold
arrangement included in Eligible Accounts shall not exceed $7,500,000 or such
greater amount as may be agreed to by Administrative Agent in its Permitted
Discretion (exercised in a manner consistent with the Senior Credit Facility
Agent’s Discretion);

(q)           Accounts which represent any contractual
obligation, based on a percentage of sales or otherwise, that must be collected
from the Account Debtor and paid by the Borrower to a third party as a “pass-through”
item, but only to the extent of the amount of such pass-through;

(r)            Accounts which are evidenced by a
promissory note or other instrument or by chattel paper;

(s)           Accounts as to which the applicable
Account Debtor has not been sent an invoice or for which are partially billed
(excluding Accounts with respect to which the applicable purchase order has
been modified or adjusted and acknowledged by the applicable Account Debtor, it
being expressly understood that such modification or adjustment shall not
modify the original invoice date with respect to any such Account);

(t)            Accounts with respect to which the
Account Debtor thereunder is located in any state requiring the filing of a
Notice of Business Activities Report or similar report in order to permit the
Borrower to seek judicial enforcement in such state of payment of such Account,
unless if, at the time the Accounts were created and at all times thereafter, (i) the
Borrower has filed and has maintained effective a current Notice of Business
Activities Report with the appropriate office or agency of such state, or (ii) the
Borrower was and has continued to be exempt from the filing of such Report and
has provided the Administrative Agent with satisfactory evidence thereof;

(u)           Accounts which are not a bona fide,
valid and, to the best of the Borrower’s knowledge, enforceable obligation of
the Account Debtor thereunder;

(v)           Accounts which represent “demo”
equipment which has been sent to an Account Debtor except for any Account
related to a true sale of such demo equipment to such Account Debtor;

(w)          Accounts which are owed by an Account
Debtor with whom the Borrower has any agreement or understanding for deductions
from the Accounts, except for discounts or allowances which are made in the
ordinary course of business for prompt payment or volume purchases and which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Accounts, or Accounts with respect to which a
debit or chargeback has been issued or generated;

(x)            Accounts which are not subject to a
valid and continuing first priority Lien (subject to the SunTrust Intercreditor
Agreement) in favor of the

 10
 

 

Administrative Agent, for
the benefit of the Lender Group, pursuant to the Security Documents as to which
all action necessary or desirable to perfect such security interest shall have
been taken, and to which the Borrower has good and marketable title, free and
clear of any Liens (other than Liens in favor of the Administrative Agent, for
the benefit of the Lender Group and the Senior Credit Facility Agent);

(y)           Accounts which are owed by an Account
Debtor other than the Federal Government to the extent that such Account,
together with all other Accounts owing by the same Account Debtor and its
Affiliates, exceed 20% of all Eligible Accounts from Account Debtor other than
the Federal Government;

(z)            Accounts which represent rebates,
refunds or other similar transactions, but only to the extent of the amount of
such rebate, refund or similar transaction;

(aa)         Accounts as to which a security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement is on file or of record in any public office, except as
may have been filed in favor of the Administrative Agent, for the benefit of
the Lender Group, pursuant to the Security Documents;

(bb)         Accounts which include past due
credits, but only to the extent of such past due credits;

(cc)         Accounts which include credits for
freight and returned merchandise, but only to the extent of such credits; or

(dd)         Accounts for which payment terms have been extended beyond normal and
customary payment terms.

“Eligible Inventory”
shall mean, as of any particular date, the portion of the Inventory of the
Borrower and its Subsidiary Guarantors that the Administrative Agent, in the
exercise of its Permitted Discretion, determines to be Eligible Inventory; provided
that without limiting the right of the Administrative Agent to establish other
criteria of ineligibility, Eligible Inventory shall not include any of the
following Inventory:

(a)           Inventory
that is not owned solely by the Borrower;

(b)           Inventory
that does not conform to all of the warranties and representations regarding
the same which are set forth in this Agreement or any of the other Loan
Documents;

(c)           Inventory
that is not located in the continental US either (i) on real property
owned by the Borrower, or (ii) on leased premises in regard to which the
landlord thereof, and any bailee, warehouseman or similar party that will be in
possession

 11
 

 

of such Inventory, shall
have executed and delivered to the Administrative Agent a Collateral Access
Agreement;

(d)           Inventory
that is subject to any claim of reclamation, Lien  (other than the Liens in favor of
Administrative Agent and the Senior Credit Facility Agent), adverse claim,
interest or right of any other Person;

(e)           Inventory
that is not in good condition or does not meet all standards imposed by any
Person having regulatory authority over such goods or their use and/or sale, or
Inventory that is not currently saleable in the normal course of the Borrower’s
business;

(f)            Inventory
scheduled for return to vendors, Inventory which is obsolete or slow-moving
(for purposes of this subsection, what constitutes “obsolete or slow-moving”
Inventory shall be determined by the Administrative Agent in its Permitted
Discretion including, without limitation, Inventory on-hand more than 90 days),
Inventory which is not finished goods or which constitutes work-in-process, raw
materials, subassemblies, packaging and shipping material, manufacturing
supplies, samples, prototypes, displays or display items, bill-and-hold goods,
goods that are returned or marked for return, repossessed goods, defective or
damaged goods or goods held on consignment;

(g)           Inventory
that is not personal property in which the Borrower has granted a valid and
continuing first Lien in favor of the Administrative Agent, for the benefit of
the Lender Group, pursuant to the Security Documents, or as to which all action
necessary to perfect such security interest has not been taken; or

(h)           Inventory
consisting of software or services related goods.

“Environmental Laws”
shall mean, collectively, any and all applicable federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority regulating, relating to
or imposing liability or standards of conduct concerning environmental
protection matters, including without limitation, Hazardous Materials or human
health, as now or may at any time during the term of this Agreement be in
effect.

“Equity
Interests” shall mean, as applied to any Person, any capital stock,
membership interests, partnership interests or other equity interests of such
Person, regardless of class or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto.

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as in effect on
the Agreement Date and as such Act may be amended thereafter from time to time.

 12
 

 

“ERISA Affiliate”
shall mean, with respect to any Borrower Party, any trade or business (whether
or not incorporated) that together with such Borrower Party, are treated as a
single employer under Section 414 of the Code.

“ERISA Event”
shall mean, with respect to any Borrower Party or any ERISA Affiliate, (a) any
“reportable event” within the meaning of Section 4043 of ERISA with
respect to a Title IV Plan for which the thirty (30) day notice period has not
been waived; (b) the withdrawal of any Borrower Party or ERISA Affiliate
from a Title IV Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Borrower Party or any
ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution or
threatened institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (f) the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; (g) the
failure by any Borrower Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within thirty (30) days; (h) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069
or 4212(c) of ERISA, or (i) the revocation or threatened revocation
of a Plan’s tax-qualified status under Code Section 401(a).

“E-System” means any electronic system,
including Intralinks® and any other internet or
extranet-based site, whether
such electronic system is owned, operated or hosted by the Administrative
Agent, any of its Affiliates or any other Person, providing for access to data
protected by passcodes or other security system.

“Event
of Default” shall mean any of the events specified in Section 9.1, provided
that any requirement for notice or lapse of time, or both, has been satisfied.

“Executive
Order No. 13224” shall mean Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been,
or shall hereafter be, renewed, extended, amended or replaced.

“EYAK”
shall mean Eyak Technology, LLC, a Delaware limited liability company.

“Federal
Funds Rate” shall mean, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, “H.15(519)”) on the preceding Business Day opposite the caption “Federal
Funds (Effective)”; or, if for any relevant day such rate is not so published
on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 12:00 noon

 13
 

 

(Boston,
Massachusetts time) on that day by each of three (3) leading brokers of
Federal funds transactions in New York, New York selected by the Administrative
Agent.

“Federal
Government” shall mean the US or any agency, department or instrumentality
thereof.

“Federal
Government Eligible Accounts” shall mean Eligible Accounts for which the
Federal Government is the Account Debtor.

“Fee
Letter” shall mean that certain fee letter, dated as of June 2, 2006,
executed by the Borrower and Crystal Capital, the rights and obligations of
which shall survive the execution of this Agreement.

“Financial
Covenants” shall mean the financial covenants applicable to the Borrower
Parties from time to time pursuant to Sections 8.8, 8.9, 8.10 and 8.11.

“Fixed
Charge Coverage Ratio” shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, calculated on a Pro Forma
Basis during such period, if applicable, the ratio of (a) the greater of (i) (x) EBITDA
for such period minus (y) the sum of (A) Capital Expenditures made
during such period and (B) cash tax payments made during such period, or (ii) zero,
to (b) the sum of (i) scheduled payments of principal made with respect
to Funded Debt during such period, (ii) Interest Expense during such
period other than non-cash amortization of loan fees and (iii) Restricted
Purchases and Restricted Payments paid during such period.

“Foreign
Lender” shall have the meaning specified in Section 2.8(b).

“Fund”
shall mean any 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.

“Funded Debt”
shall mean, with respect to the Borrower and its Subsidiaries on a consolidated
basis and without duplication, as of any calculation date, (a) any
obligation of such Person for borrowed money, including, without limitation,
all of the Obligations; (b) any obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) any obligation
of such Person to pay the deferred purchase price of property or for services
(other than in the ordinary course of business); (d) any Capitalized Lease
Obligation; (e) any obligation or liability of others secured by a Lien on
property owned by such Person, whether or not such obligation or liability is
assumed; (f) any debt, liability or obligation of such Person arising from
or in connection with any Hedge Agreements and, without double counting, any
other debt, liability or obligation arising from or in connection with any Bank
Products; (g) any reimbursement obligations (contingent or otherwise) of
such Person with respect to letters of credit, bankers acceptances and similar
instruments issued for the account of such Person; (h) any Guaranty
(except items of shareholders’ equity or Equity Interests or surplus or general

 14
 

 

contingency or
deferred tax reserves); (i) any financial obligation of such Person under
purchase money mortgages; (j) any financial obligation of such Person
under asset securitization vehicles; (k) any obligations of such Person
under conditional sales contracts and similar title retention instruments with
respect to property acquired; (l) the Senior Credit Facility Obligations;
and (m) any financial obligation of such Person as issuer of Equity
Interests redeemable in whole or in part at the option of a Person other than
such issuer, at a fixed and determinable date or upon the occurrence of an
event not solely within the control of such issuer; provided, however,
that notwithstanding anything in GAAP to the contrary, the amount of all
obligations shall be the full face amount of such obligations.

“GAAP”
shall mean generally accepted accounting principles and practices set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
US accounting profession).

“Governmental
Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any
government.

“Guarantors”
shall mean, collectively, the Subsidiary Guarantors and any other Person that
has executed a Guaranty Supplement or other document guaranteeing the
Obligations; and “Guarantor” shall mean any one of the foregoing Guarantors.

“Guaranty”
or “guaranteed,” as applied to an obligation (each a “primary obligation”),
shall mean and include (a) any guaranty, direct or indirect, in any
manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit, and any
obligation of any Person, whether or not contingent, (i) to purchase any
such primary obligation or any property or asset constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for
the purchase or payment of such primary obligation or (B) to maintain
working capital, equity capital or the net worth, cash flow, solvency or other
balance sheet or income statement condition of any other Person, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner or holder of any primary obligation of the ability of the
primary obligor with respect to such primary obligation to make payment thereof
or (iv) otherwise to assure or hold harmless the owner or holder of such
primary obligation against loss in respect thereof. All references in this
Agreement to “this Guaranty” shall be to the Guaranty provided for pursuant to
the terms of Article 3.

“Guaranty
Supplement” shall have the meaning specified in Section 6.21.

 15

 

“Hazardous
Materials” shall mean any hazardous materials, hazardous wastes, hazardous
constituents, hazardous or toxic substances, petroleum products (including
crude oil or any fraction thereof), friable asbestos containing materials
defined or regulated as such in or under any Environmental Law.

“Hedge
Agreement” shall mean any and all transactions, agreements or documents now
existing or hereafter entered into between or among any Borrower Party, on the
one hand, and a third party, on the other hand, which provides for an interest
rate, credit or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging such Borrower Party’s exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations.

“Indemnified
Person” shall have the meaning specified in Section 10.10.

“Intercreditor
Agreements” shall mean, individually or collectively, the SunTrust
Intercreditor Agreement and the Vendor Intercreditor Agreements.

“Interest
Expense” shall mean, for any period, interest expense and loan fees of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, and including capitalized and non-capitalized interest and the
interest component of Capitalized Lease Obligations.

“Inventory”
shall mean all “inventory,” as such term is defined in the UCC, of each
Borrower Party, whether now existing or hereafter acquired, wherever located,
and in any event including inventory, merchandise, goods and other personal
property that are held by or on behalf of a Borrower Party for sale or lease or
are furnished or are to be furnished under a contract of service, goods that
are leased by a Borrower Party as lessor, or that constitute raw materials,
samples, work-in-process, finished goods, returned goods, promotional materials
or materials or supplies of any kind, nature or description used or consumed or
to be used or consumed in such Borrower Party’s business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.

“Investment”
shall mean, with respect to any Person, any loan, advance or extension of
credit by such Person to, or any Guaranty with respect to the Equity Interests,
Funded Debt or other obligations of, or any contributions to the capital of,
any other Person, or any ownership, purchase or other acquisition by such
Person of any Equity Interests of any other Person, other than any acquisition
of all or substantially all of the Equity Interests of a Person or all or
substantially all of the assets, property or business of a Person.

“Lender
Group” shall mean, collectively, the Administrative Agent and the Lenders.

 16
 

 

“Lenders”
shall mean those lenders whose names are set forth on the signature pages to
this Agreement under the heading “Lenders” and any assignees of the Lenders who
hereafter become parties hereto pursuant to and in accordance with Section 11.5;
and “Lender” shall mean any one of the foregoing Lenders.

“Lien”
shall mean, with respect to any property, any mortgage, lien, pledge, negative
pledge agreement, assignment, charge, option, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment, any
documents, notice, instruments or other filings under the Federal Assignment of
Claims Act of 1940 or other encumbrance of any kind in respect of such property,
whether or not choate, vested, or perfected.

“Loan
Account” shall have the meaning specified in Section 2.7.

“Loan
Documents” shall mean this Agreement, any Term Loan Notes, the Security
Documents, the Blocked Account Agreements, the Fee Letter, the Guaranty
Supplements, the Intercreditor Agreements, all Collateral Access Agreements,
all Compliance Certificates, all Requests for Term Loan, all Borrowing Base
Certificates, all documents executed in connection with the Federal Assignment
of Claims Act of 1940 (if any), and all other documents, lockbox agreements,
instruments, certificates, and agreements executed or delivered in connection
with or contemplated by this Agreement, including, without limitation, any
security agreements or guaranty agreements from the Borrower’s Subsidiaries to
the Lender Group, or any of them.

“Majority
Lenders” shall mean, at
any date of determination thereof, the Lenders whose Term Loan Ratio of the
outstanding principal amount of the Term Loan represent at least 50.1% of the
aggregate outstanding principal amount of the Term Loan at such time.

“Margin
Stock” shall have the meaning specified in Section 5.1(t).

“Material
Contracts” shall mean, collectively, (a) those contracts with the
Federal Government listed on Schedule 5.1(h) and (b) all other
contracts, leases, instruments, guaranties, licenses or other arrangements
(other than the Loan Documents) to which any Borrower Party or any Subsidiary a
of Borrower Party is or becomes a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could have a Materially
Adverse Effect.

“Materially
Adverse Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding), a
material adverse change in, or a material adverse effect on: (a) the
business, operations, prospects, properties, condition (financial or
otherwise), assets or income of the Borrower and its Subsidiaries, taken as a
whole; (b) the ability of the Borrower and its Subsidiaries, taken as a
whole, to perform any material obligations under any Loan Document; or (c) (i) the
validity, binding effect

 17
 

 

or enforceability
of any Loan Document, (ii) the rights, remedies or benefits available to
the Administrative Agent or any Lender under any Loan Document or (iii) the
attachment, perfection or priority of any Lien of the Administrative Agent
under the Security Documents on a material portion of the Collateral. In
determining whether any individual event, act, condition or occurrence of the
foregoing types would result in a Material Adverse Effect, notwithstanding that
a particular event, act, condition or occurrence does not itself have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event, act, condition or occurrence and all other
events, acts, conditions or occurrences of the foregoing types which have
occurred would result in a Material Adverse Effect

“Maturity
Date” shall mean June 2,
2010, or such earlier date as payment of the Term Loan in full at such time
shall be due (whether by acceleration or otherwise).

“Maximum
Guaranteed Amount” shall have the meaning specified in Section 3.1(g).

“Moody’s”
shall mean Moody’s Investor Service, Inc., or any successor thereto.

“Mortgage”
shall mean, collectively, any mortgage, deed of trust or deed to secure debt
entered into by a Borrower Party in favor of the Administrative Agent, for the
benefit of the Lender Group.

“Multiemployer
Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA, and to which any Borrower Party or ERISA Affiliate is making, is
obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.

“Necessary
Authorizations” shall mean all material authorizations, consents, permits,
approvals, licenses, and exemptions from, and all filings and registrations
with, and all reports to, any Governmental Authority whether federal, state,
local, and all agencies thereof, which are required for the transactions
contemplated by the Loan Documents and the conduct of the businesses and the
ownership (or lease) of the properties and assets of the Borrower Parties.

“Net
Cash Proceeds” shall mean, with respect to any sale, lease, transfer,
casualty loss or other disposition or loss of assets by any Borrower Party or
any issuance by any Borrower Party of any Equity Interests or the incurrence by
any Borrower Party of any Funded Debt (other than the Obligations), the
aggregate amount of cash received for such assets or Equity Interests, or as a
result of such Funded Debt, net of reasonable and customary transaction costs
properly attributable to such transaction and payable by such Borrower Party to
a non-Affiliate in connection with such sale, lease, transfer or other
disposition of assets or the issuance of any Equity Interests or the incurrence
of any Funded Debt, including, without limitation, sales commissions and
underwriting discounts.

 18
 

 

“NOLV”
shall mean, as to any particular asset, the value that is estimated to be
recoverable in an orderly liquidation thereof, as determined from time to time
by a qualified appraiser selected by the Administrative Agent, net of all
liquidation costs and expenses.

“Non-Depository
Account” shall have the meaning specified in Section 6.15(f).

“Obligations”
shall mean (a) all payment and performance obligations as existing from
time to time of the Borrower Parties to the Lender Group, or any of them, under
this Agreement and the other Loan Documents (including any interest, fees and
expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), or as a result of making the Term Loan, and (b) the obligation to
pay an amount equal to the amount of any and all damages which the Lender
Group, or any of them, may suffer by reason of a breach by any Borrower Party
of any obligation, covenant, or undertaking with respect to this Agreement or
any other Loan Document.

“OFAC”
shall mean the Office of Foreign Assets Control of the United States Department
of the Treasury.

“Other
Eligible Accounts” shall mean Eligible Accounts for which the Federal
Government is not the Account Debtor.

“Other
Taxes” shall have the meaning specified in Section 2.8(b)(ii).

“Participant”
shall have the meaning specified in Section 11.5.

“PBGC”
shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.

“Perfection
Certificates” shall mean, collectively, the perfection certificates
delivered by each of the Borrower Parties to the Administrative Agent.

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

“Permitted
Inventory Financing” shall mean an inventory financing facility with terms
and conditions, including, without limitation, an intercreditor agreement
between such inventory financing lender and the Administrative Agent, that are
in form and substance acceptable to all Lenders in their Permitted Discretion.

“Permitted
Liens” shall mean, as applied to any Person:

(a)           Any Lien in favor of the
Administrative Agent or any other member of the Lender Group given to secure
the Obligations;

 19
 

 

(b)           (i) Liens on real estate for
real estate taxes not yet delinquent and (ii) Liens for taxes,
assessments, judgments, governmental charges or levies, or claims not yet
delinquent or the non-payment of which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves have been set
aside on such Person’s books;

(c)           Liens of carriers, warehousemen,
mechanics, laborers, suppliers, workers and materialmen incurred in the
ordinary course of business for sums not yet due or being diligently contested
in good faith, if such reserve or appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;

(d)           Liens incurred in the ordinary course
of business in connection with worker’s compensation and unemployment insurance
or other types of social security benefits;

(e)           Easements, rights-of-way,
restrictions (including zoning or deed restrictions), and other similar
encumbrances on the use of real property which in the reasonable opinion of the
Administrative Agent do not interfere with the ordinary conduct of the business
of such Person;

(f)            Purchase money security interests
and Liens securing Capitalized Lease Obligations provided that such Lien
attaches only to the asset (which asset shall not constitute Inventory) so
purchased or leased by such Person and secures only Funded Debt incurred by
such Person in order to purchase or lease such asset, but only to the extent
permitted by Section 8.1(d);

(g)           Deposits to secure the performance of
bids, trade contracts, tenders, sales, leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;

(h)           Liens in favor of vendors and
suppliers incurred in the ordinary course of business that (i) secure
indebtedness in a principal amount that is less than $500,000 in the aggregate
for all such Liens permitted under this clause (i) or (ii) are
subject to a Vendor Intercreditor Agreement;

(i)            Liens on assets of the Borrower
existing as of the Agreement Date which are set forth on Schedule 1(b);

(j)            With respect to Collateral
consisting of real property, Liens that are exceptions to the commitments for
title insurance issued in connection with the Mortgage, as accepted by the
Administrative Agent in its sole and absolute discretion;

(k)           Liens securing the Senior Credit
Facility Obligations or Refinancing Debt so long as any such Lien is subject to
the SunTrust Intercreditor Agreement or other

 20
 

 

intercreditor
agreement in form and substance satisfactory to the Administrative Agent and
the Lenders in their Permitted Discretion; and

(l) Liens
securing any Permitted Inventory Financing so long as any such Liens is subject
to an intercreditor agreement in form and substance satisfactory to the Lenders
in their Permitted Discretion.

“Person”
shall mean an individual, corporation, partnership, trust, joint stock company,
limited liability company, unincorporated organization, other legal entity or
joint venture or a government or any agency or political subdivision thereof.

“Plan” shall mean
an employee benefit plan within the meaning of Section 3(3) of ERISA
that any Borrower Party or ERISA Affiliate maintains, contributes to or has an
obligation to contribute to or has maintained, contributed to or had an
obligation to contribute to at any time within the past six (6) years on
behalf of participants who were employed by any Borrower Party or ERISA
Affiliate.

“Pledge
Agreement” shall mean that certain Pledge Agreement dated as of the
Agreement Date among the Borrower Parties and the Administrative Agent, on
behalf of, and for the benefit of, the Lender Group.

“Pro
Forma Basis” shall mean for purposes of determining compliance with the
Financial Covenants and the defined terms relating thereto, giving pro forma
effect to any acquisition or sale of a Person, all or substantially all of the
business or assets of a Person, and any related incurrence, repayment or
refinancing of Funded Debt, Capital Expenditures or other related transactions
which would otherwise be accounted for as an adjustment permitted by Regulation
S-X under the Securities Act or on a pro forma basis under GAAP, in each case,
as if such acquisition or sale and related transactions were realized on the
first day of the relevant period.

“Prompt
Payment Act” shall mean the United States Prompt Payment Act (31 U.S.C.
3901 et seq.), as now or hereafter amended, and any successor statute.

“Property”
shall mean any real property or personal property, plant, building, facility,
structure, underground storage tank or unit, equipment, Inventory or other
asset owned, leased or operated by the Borrower Parties, their Subsidiaries or
any of them (including, without limitation, any surface water thereon or adjacent
thereto, and soil and groundwater thereunder).

“Qualified
Cash” shall mean, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries
that is in deposit accounts or in investment accounts, or any combination
thereof, and which such deposit account or investment account is the subject of
a Blocked Account Agreement or control agreement in favor of the Administrative
Agent.

 21
 

 

“Refinancing
Debt” shall mean Funded Debt that refinances the Senior Credit Facility
Obligations provided that the following conditions are satisfied before and
after giving effect to the incurrence of such Refinancing Debt: (a) the
Refinancing Debt is in an aggregate principal amount that does not exceed the
lesser of (i) $150,000,000 or (ii) the aggregate outstanding
principal amount of the Senior Credit Facility Obligations being refinanced
(including unutilized commitments thereunder), (b) the Refinancing Debt
has a later final maturity date than the Senior Credit Facility, (c) the
Refinancing Debt does not bear a rate of interest that exceeds a market rate
(as determined in good faith by the Administrative Agent) as of the date of
such refinancing, (d) the covenants contained in any instrument or
agreement relating to the Refinancing Debt are not less favorable to Borrower
and/or Lenders than those contained in the Senior Credit Facility Documents, (e) the
Refinancing Debt shall be subject to the SunTrust Intercreditor Agreement in
all respects, (f) at the time of and after giving effect to such
refinancing, no Default or Event of Default shall exist and (g) the
proceeds for any such Refinancing Debt shall be used to repay in full the
outstanding obligations under the Senior Credit Facility Documents and any
Liens securing the Senior Credit Facility Obligations shall be immediately
released.

“Register”
shall have the meaning specified in Section 11.5(c).

“Reimbursement
Obligations” shall mean the payment obligations of the Borrower under Section 2.15(d).

“Replacement
Event” shall have the meaning specified in Section 11.16.

“Replacement
Lender” shall have the meaning specified in Section 11.16.

“Request
for Term Loan” shall mean any certificate signed by an Authorized Signatory
of the Borrower requesting the Term Loan, which certificate shall be
denominated a “Request for Term Loan,” and shall be in substantially the
form of Exhibit G.

“Reserves”
shall mean reserves that the Administrative Agent may establish from time to
time in its Permitted Discretion for such purposes as the Administrative Agent
shall deem necessary. Without limiting the generality of the foregoing, the
following reserves shall be deemed an exercise of the Administrative Agent’s
Permitted Discretion:  (a) reserves
for price adjustments and damages, (b) reserves for accrued but unpaid ad
valorem, excise and personal property tax liability; (c) receivable
reserves; (d) Bank Product Reserves; (e) reserves for accrued, unpaid
interest on the Obligations or the Senior Credit Facility Obligations; (f) reserves
for Federal Government claims or offsets; (g) reserves for any other
matter that has a negative impact on the value of the Collateral; (h) rent
reserves; (i) reserves for any changes in the terms of the Borrower’s
trade credit including, without limitation, credit limits and repayment terms; (j) reserves
for consignor payables and (k) the Corporate Qualification Reserve.

 22
 

 

“Restricted
Payment” shall mean (a) Dividends, (b) loans by any Borrower
Party to any holder of Equity Interests in the Borrower, (c) any payment
of management, consulting or similar fees payable by any Borrower Party or any
Subsidiary of a Borrower Party to any Affiliate, or (d) any redemption,
purchase, retirement, defeasance, sinking fund or similar payment or any claim
of rescission with respect to the capital stock of a Borrower Party.

“Restricted
Purchase” shall mean any payment on account of the purchase, redemption, or
other acquisition or retirement of any shares of Equity Interests of any
Borrower Party.

“Retiree Welfare Plan”
shall mean a Plan that is an “employee welfare benefit plan” within the meaning
of Section 3(1) of ERISA that provides for continuing coverage or
benefits for any participant or any beneficiary of a participant after such
participant’s termination of employment, other than continuation coverage
provided pursuant to Code Section 4980B (or applicable state law mandating
health insurance continuation coverage for employees) and at the sole expense
of the participant or the beneficiary.

“S&P”
shall mean Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc.,
or any successor thereto.

“SEA”
shall mean the Securities Exchange Act of 1934 and the rules promulgated
thereunder by the Securities and Exchange Commission, as amended from time to
time or any similar Federal law then in force.

“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar
Federal law then in force.

“Security
Agreement” shall mean that certain Security Agreement dated as of the
Agreement Date among the Borrower Parties and the Administrative Agent, on
behalf of, and for the benefit of, the Lender Group.

“Security
Documents” shall mean, collectively, the Copyright Security Agreements, the
Mortgages, the Security Agreement, the Trademark Security Agreements, the
Pledge Agreement, the Perfection Certificates, all UCC-1 financing
statements and any other document, instrument or agreement granting Collateral
for the Obligations, as the same may be amended or modified from time to time.

“Senior
Credit Facility” shall mean that certain revolving credit facility provided
to the Borrower pursuant to the Senior Credit Facility Documents.

“Senior
Credit Facility Agent” shall mean the “Administrative Agent” and/or the “Co-Collateral
Agents” (as each such term is defined in the Senior Credit Facility Agreement),
as the context may require.

 23
 

 

“Senior
Credit Facility Agent’s Discretion” shall mean the “Permitted Discretion”
(as such term is defined in the Senior Credit Facility Agreement as in effect
on the date hereof) of the Senior Credit Facility Agent under the Senior Credit
Facility Documents with respect to the referenced subject matter so long as, in
the good faith reasonable judgment of the Administrative Agent, the Senior
Credit Facility Agent has not deviated from the underwriting standards applied
in conjunction with the closing of the Senior Credit Facility Agreement or from
a good faith exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment with respect to such subject matter under
the Senior Credit Facility Documents.

“Senior
Credit Facility Agreement” shall mean the Credit Agreement dated as of June 2,
2006 by and among the Borrower, the Guarantors the Senior Credit Facility
Agent, the Senior Credit Facility Lenders and the other parties thereto, as
modified from time to time in accordance with the Intercreditor Agreement.

“Senior
Credit Facility Availability” shall mean “Availability” (as such term is
defined in the Senior Credit Facility Agreement as in effect on the date
hereof).

“Senior
Credit Facility Borrowing Base” shall mean “Borrowing Base” (as such term
is defined in the Senior Credit Facility Agreement as in effect on the date
hereof).

“Senior
Credit Facility Borrowing Base Certificate” shall mean “Borrowing Base
Certificate” (as such term is defined in the Senior Credit Facility Agreement
as in effect on the date hereof).

“Senior
Credit Facility Documents” shall mean the Senior Credit Facility Agreement
and the other “Loan Documents” (as such term is defined in the Senior Credit
Facility Agreement as in effect on the date hereof).

“Senior
Credit Facility Lenders” shall mean the “Lender Group” (as such term is
defined in the Senior Credit Facility Agreement as in effect on the date
hereof).

“Senior
Credit Facility Outstandings” shall mean the “Aggregate Revolving Credit
Obligations” (as such term is defined in the Senior Credit Facility Agreement
as in effect on the date hereof).

“Senior
Credit Facility Obligations” shall mean the “Obligations” (as such term is
defined in the Senior Credit Facility Agreement as in effect on the date
hereof).

“Subsidiary”
shall mean, as applied to any Person, (a) any corporation of which more
than fifty percent (50%) of the outstanding stock (other than directors’
qualifying shares) having ordinary voting power to elect a majority of its
board of directors, regardless of the existence at the time of a right of the
holders of any class or classes of securities of such corporation to exercise
such voting power by reason of the happening of any contingency, or any
partnership or limited liability company of which more than

 24
 

 

fifty percent
(50%) of the outstanding partnership interests or membership interests, as the
case may be, is at the time owned by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person, and (b) any other entity which is controlled or capable of
being controlled by such Person, or by one or more Subsidiaries of such Person,
or by such Person and one or more Subsidiaries of such Person.

“Subsidiary
Guarantors” shall mean all Subsidiaries of the Borrower signatory to this
Agreement as a “Guarantor” and all Subsidiaries of the Borrower that have
executed and delivered a Guaranty Supplement.

“SunTrust
Intercreditor Agreement” shall mean that certain Intercreditor Agreement,
dated as of the date hereof, by and among the Administrative Agent, the Senior
Credit Facility Agent, and the Borrower Parties with respect to the Senior
Credit Facility Documents.

“Taxes”
shall have the meaning specified in Section 2.8(b)(i).

“Term
Loan” shall mean the term loan advanced by the Lenders to the Borrower on
the Agreement Date in the aggregate principal amount of $10,000,000 pursuant to
and in accordance with Section 2.1.

“Term Loan Availability”
shall mean, as of any particular time, the result of (a) the Term Loan
Borrowing Base at such time, minus (b) the sum of (i) the
Senior Credit Facility Outstandings at such time and (ii) the outstanding
principal amount of the Term Loan at such time.

“Term Loan Borrowing
Base” shall mean, at any particular time, the sum of:

(a)                                  up
to 100% times the result of (i) the amount of Federal Government Eligible
Accounts, minus (ii) the amount of the applicable Dilution Reserve; plus

(b)                                 up
to 95% times the result of (i) the amount of Other Eligible Accounts,
minus (ii) the amount of the applicable Dilution Reserve; plus

(c)                                  an
amount equal to (i) during any calendar period from August 1 of any
year through December 15 of such year, the lesser of (A) up to 35% of
the cost of Eligible Inventory and (B) up to 80% of the NOLV of Eligible
Inventory and (ii) at all other times, the lesser of (A) up to 20% of
the cost of Eligible Inventory and (B) up to 55% of the NOLV of Eligible
Inventory; minus

(d)                                 the
Availability Block; minus

 25
 

 

(e)                                  the
Reserves.

“Term
Loan Ratio” shall mean, with respect to any Lender and on any date, the
ratio, expressed as a percentage, of (a) such Lender’s portion of the
outstanding principal amount of the Term Loan on such date, divided by (b) the
aggregate outstanding principal amount of the Term Loan of all Lenders on such
date. Each Lender’s Term Loan Ratio, as of the Agreement Date, is set forth
(together with Dollar amounts thereof) on Schedule 1(a).

“Term
Loan Notes” shall mean those certain promissory notes issued by the
Borrower to each of the Lenders that requests a promissory note, in accordance
with each such Lender’s Term Loan Ratio of the Term Loan, in substantially in
the form of Exhibit H.

“Title IV Plan”
shall mean a Plan that is an “employee pension benefit plan,” within the
meaning of Section 3(2) of ERISA, that is covered by Title IV of
ERISA.

“Trademark Security
Agreements” shall mean, collectively, the Trademark Security Agreements
made by the Borrower Parties in favor of the Administrative Agent, on behalf of
the Lender Group, from time to time.

“UCC”
shall mean the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the
extent that the UCC is used to define any term herein and such term is defined
differently in different Articles or Divisions of the UCC, the definition of
such term contained in Article or Division 9 shall govern; provided
further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, the Administrative Agent’s Lien on any Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.

“USA
Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as the
same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Unfunded Pension
Liability” shall mean at any time, the aggregate amount, if any, of the sum
of (a) the amount by which the present value of all accrued benefits under
each Title IV Plan exceeds the fair market value of all assets of such Title IV
Plan allocable to such benefits in accordance with Title IV of ERISA, all
determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five (5) years

 26
 

 

following a
transaction which might reasonably be expected to be covered by Section 4069
of ERISA, the liabilities (whether or not accrued) that could be avoided by any
Borrower Party or any ERISA Affiliate as a result of such transaction.

“US”
or “United States” shall mean the United States of America.

“Vendor
Intercreditor Agreements” shall mean one or more intercreditor agreements
or subordination agreements executed by the Borrower, the applicable vendor or
other supplier, the Administrative Agent and the Senior Credit Facility Agent,
in each case in form and substance satisfactory to the Administrative Agent and
the Senior Credit Facility Agent.

“Voidable
Transfer” shall have the meaning specified in Section 11.18.

Section 1.2             Accounting Principles. The
classification, character and amount of all assets, liabilities, capital accounts and reserves and
of all items of income and expense to be determined, and any consolidation or
other accounting computation to be made, and the interpretation of any
definition containing any financial term, pursuant to this Agreement shall be
determined and made in accordance with GAAP consistently applied, unless such
principles are inconsistent with the express requirements of this Agreement; provided
that if because of a change in GAAP after the date of this Agreement the
Borrower or any of its Subsidiaries would be required to alter a previously
utilized accounting principle, method or policy in order to remain in
compliance with GAAP, such determination shall continue to be made in
accordance with the Borrower’s or such Subsidiary’s previous accounting
principles, methods and policies. All accounting terms used herein without
definition shall be used as defined under GAAP. All financial calculations
hereunder shall, unless otherwise stated, be determined for the Borrower on a
consolidated basis with its Subsidiaries.

Section 1.3             Other Interpretive Matters. Each
definition of an agreement in this Article 1 shall include such instrument or agreement as
amended, restated, supplemented or otherwise modified from time to time with,
if required, the prior written consent of the Majority Lenders, except as
provided in Section 11.12 and otherwise to the extent permitted under this
Agreement and the other Loan Documents. Except where the context otherwise
requires, definitions imparting the singular shall include the plural and vice
versa. Except where otherwise specifically provided herein, each reference to a
“Section”, “Article”, “Exhibit” or “Schedule” shall be to a Section or Article of
this Agreement or an Exhibit or Schedule attached to this Agreement. Except
where otherwise specifically restricted, reference to a party to a Loan
Document includes that party and its successors and assigns. An Event of
Default, if one occurs, shall “exist”, “continue” or be “continuing” until such
Event of Default has been waived in writing in accordance with Section 11.12.
All terms used herein which are defined in Article 9 of the UCC and which
are not otherwise defined herein shall have the same meanings herein as set
forth therein.

 27
 

 

ARTICLE 2.

THE TERM LOAN

Section 2.1             Extension of Credit. Subject
to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, the Lenders
agree, severally in accordance with their respective Term Loan Ratios, and not
jointly, to extend credit to the Borrower in the form of a term loan in the aggregate
principal amount equal to $10,000,000.

(a)           The Term Loan. Each Lender
agrees, severally in accordance with its Term Loan Ratio and not jointly with
the other Lenders, upon the terms and subject to the conditions of this
Agreement, to lend to the Borrower, on the Agreement Date, an amount equal to
such Lender’s ratable share (based upon such Lender’s Term Loan Ratio) of the
aggregate principal amount of the Term Loan. The Borrower shall not be entitled
to reborrow any amounts repaid in respect of the Term Loan.

Section 2.2             Manner
of Borrowing and Disbursement of the Term Loan.

(a)           Disbursement. Each Lender
shall make the amount of such Lender’s ratable share (based upon such Lender’s
Term Loan Ratio) of the Term Loan to be made on the Agreement Date available to
the Administrative Agent in same day funds, to such account of the
Administrative Agent as the Administrative Agent may designate, not later than
2:00 p.m. (Boston, Massachusetts time) on the Agreement Date. After the
Administrative Agent’s receipt of the proceeds of such Term Loan, upon
satisfaction of the conditions precedent set forth in Article 4, the
Administrative Agent shall make the proceeds of such Term Loan available to the
Borrower on the Agreement Date by transferring same day funds equal to the
proceeds of such Term Loan received by the Administrative Agent to the
disbursement account specified in the disbursement letter referred to in Section 4.1(a)(xiv).

(b)           Unless the Administrative Agent shall
have received notice from a Lender prior to 12:00 Noon (Boston, Massachusetts
time) on the Agreement Date that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of the Term Loan, the
Administrative Agent may assume that such Lender has made or will make such
portion available to the Administrative Agent on the Agreement Date and the
Administrative Agent may, in its sole discretion and in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender agrees to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, (x) for the first two (2) Business Days, at the Federal Funds
Rate for such Business Days, and (y) thereafter, at the Base Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so

 28
 

 

repaid shall constitute
such Lender’s portion of the Term Loan for purposes of this Agreement and if
both such Lender and the Borrower shall pay and repay such corresponding
amount, the Administrative Agent shall promptly relend to the Borrower such
corresponding amount. If such Lender does not repay such corresponding amount
immediately upon the Administrative Agent’s demand therefor, the Administrative
Agent shall notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The failure of any Lender to
fund its portion of the Term Loan shall not relieve any other Lender of its
obligation, if any, hereunder to fund its respective portion of the Term Loan
on the Agreement Date, but no Lender shall be responsible for any such failure
of any other Lender. In the event that a Lender for any reason fails or refuses
to fund its portion of the Term Loan in violation of this Agreement, then,
until such time as such Lender has funded its portion of the Term Loan, or all
other Lenders have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of the Term Loan, such
non-funding Lender shall not (i) have the right to vote regarding any
issue on which voting is required or advisable under this Agreement or any
other Loan Document and, with respect to any such Lender, the amount of the
Term Loan held by such Lender shall not be counted as outstanding for purposes
of determining “Majority Lenders” hereunder, and (ii) be entitled to
receive any payments of principal, interest or fees from the Borrower or the
Administrative Agent (or the other Lenders) in respect of its ratable portion of
the Term Loan.

Section 2.3             Interest.

(a)           On the Term Loan. Interest on
the Term Loan, subject to Section 2.3(b), shall be determined and payable
as follows:

(i)            Payment of Interest; Rate of
Interest. Interest on the Term Loan shall be computed for the actual number
of days elapsed on the basis of a hypothetical year of three hundred sixty
(360) days and shall be payable monthly in arrears on the first day of each
calendar month for the prior calendar month, commencing on July 1, 2006. Interest
on the Term Loan then outstanding shall also be due and payable (x) on the
Maturity Date (or the date of any earlier prepayment in full of the
Obligations) and (y) in connection with any prepayment of the Term Loan. Except
as otherwise provided in Section 2.3(b), interest shall accrue and be
payable on the Term Loan (or any portion thereof) at the rate per annum equal
to the greater of (i) the Base Rate plus 5.00% or (ii) 13.00%,
such interest rate to be adjusted monthly on the first day of each calendar
month.

(b)           Upon Default. Immediately upon
the occurrence and during the continuance of an Event of Default, interest on
the outstanding Obligations shall accrue at the Default Rate. Interest accruing
at the Default Rate shall be payable on demand and in any event on the Maturity
Date (or the date of any earlier prepayment in full of the Obligations) and
shall accrue until the earliest to occur of (i) waiver of the applicable

 29
 

 

Event of Default in
accordance with Section 11.12, (ii) agreement by the Majority Lenders
to rescind the charging of interest at the Default Rate, or (iii) payment
in full of the Obligations. The Lenders shall not be required to (A) accelerate
the maturity of the Term Loan or (B) exercise any other rights or remedies
under the Loan Documents in order to charge interest hereunder at the Default
Rate.

(c)           Computation of Interest. In
computing interest on the Term Loan, the date of making the Term Loan shall be
included and the date of payment shall be excluded; provided, however,
that if the Term Loan (or any portion thereof) is repaid on the date that it is
made, one (1) day’s interest shall be due with respect to the Term Loan
(or such portion thereof).

Section 2.4             Fees.

(a)           Fee Letter. The Borrower
agrees to pay to the Administrative Agent such fees as are set forth in the Fee
Letter.

(b)           Early Termination
Fee. In the event of any repayment or prepayment of the Term Loan (or any
portion thereof) prior to the date which is twenty-four (24) months after the
Agreement Date for any reason, including, without limitation, (i) the
acceleration of the Obligations after the occurrence of an Event of Default, (ii) the
sale of, or casualty or condemnation of, any Collateral or the foreclosure and
sale of Collateral, (iii) sale of the Collateral in any bankruptcy or
insolvency proceeding, or (iv) the restructure, reorganization or
compromise of the Obligations by the confirmation of a plan of reorganization,
or any other plan of compromise, restructure, or arrangement in any bankruptcy
or insolvency proceeding, then, in view of the impracticability and extreme
difficulty of ascertaining the actual amount of damages to the Lenders or
profits lost by the Lenders as a result of such early termination, and by
mutual agreement of the parties as to a reasonable estimation and calculation
of the lost profits or damages of the Lenders, and as compensation for the cost
of making the Term Loan available to the Borrower, and not as a penalty, the
Borrower shall pay to the Administrative Agent, for the benefit of the Lenders,
an early termination fee (the “Early Termination Fee”) equal to the
greater of (A) the result (not less than $0) of (y) all interest on
the Term Loan that would be payable from the Agreement Date through the date
which is twelve (12) months after the Agreement Date, minus (z) amounts
actually paid by the Borrower in respect of all such interest through the date
of prepayment and (B) one percent (1.00%) of the amount repaid or prepaid.
The Early Termination Fee shall be allocated among the Lenders in accordance
with the amount of each Lender’s Term Loan Ratio of the principal amount of
$10,000,000.

(c)           Computation of Fees. In
computing any fees payable under this Section 2.4, the first day of the
applicable period shall be included and the date of the payment shall be
excluded.

Section 2.5             Prepayment of the Term Loan.

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(a)           The principal amount of the
Term Loan may be repaid in full or in part at any time upon thirty (30) days’
prior written notice to the Administrative Agent, provided that the
Borrower shall reimburse the Lenders and the Administrative Agent, on the earlier
of demand or the Maturity Date, for any reasonable out-of-pocket expense
incurred by the Lenders or the Administrative Agent in connection with such
prepayment, as set forth in Section 2.9. Each prepayment or repayment made
under this Section 2.5(a) shall include the accrued interest on the
amount so prepaid or repaid and any Early Termination Fee payable in accordance
with Section 2.4(b). Upon receipt of any notice of repayment or
prepayment, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender’s portion of the
repayment or prepayment. Other than with respect to amounts required to be
applied to the Term Loan pursuant to Section 2.6(a) or Section 2.6(c) or
Section 6.15, repayments or prepayments of principal hereunder shall be in
minimum amounts of 1,000,000 and integral multiples of $100,000 in excess
thereof. Amounts repaid or prepaid in respect of the Term Loan may not be
reborrowed.

Section 2.6             Repayment.

(a)           The Term Loan. All unpaid
principal and accrued interest on the Term Loan shall be due and payable in
full on the Maturity Date.

(b)           Intentionally Omitted.

(c)           Other Mandatory
Repayments.

(i)            In the event that after the
Agreement Date, any Borrower Party shall issue any Equity Interests or shall
incur any Funded Debt other than Funded Debt permitted under Section 8.1,
one hundred percent (100%) of the Net Cash Proceeds received by such Borrower
Party from such issuance or incurrence shall be paid on the date of receipt of
the proceeds thereof by such Borrower Party to the Lenders as a mandatory
payment of the Term Loan. So long as no Event of Default exists, all such other
Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(a).
Notwithstanding the foregoing, if an Event of Default exists, all such Net Cash
Proceeds shall be applied in the manner set forth in Section 2.11(b). Amounts
repaid in respect of the Term Loan may not be reborrowed. Nothing in this Section shall
authorize any Borrower Party to incur any Funded Debt except as expressly
permitted by this Agreement or to issue any Equity Interests except to the
extent not prohibited by this Agreement;

(ii)           All Net Cash Proceeds from the sale
(other the sale of Inventory in the ordinary course of business) or casualty or
condemnation loss of any Collateral or other assets of any Borrower Party shall
be paid on the date of receipt thereof by the Borrower Parties as a mandatory
payment of the Obligations. So long as no Event of Default exists, all Net Cash
Proceeds shall be applied in the manner set forth in Section 2.11(a). Notwithstanding
the foregoing,

 31
 

 

if an Event of Default
exists, all such Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(b).
Amounts repaid in respect of the Term Loan may not be reborrowed; and

(iii)          If at any time (i) the sum of (x) the
Senior Credit Facility Outstandings, plus (y) the outstanding principal
amount of the Term Loan exceeds (ii) the Term Loan Borrowing Base at such
time, then the Borrower shall prepay the Term Loan in an amount equal to such
excess;

provided, however, that the
Borrower shall not be obligated to prepay the Term Loan if (i) the
Borrower is required to apply such proceeds to the Senior Credit Facility
pursuant to the terms of the Senior Credit Facility Agreement and (ii) the
Borrower actually applies the payment that would otherwise (without giving
effect to this proviso) be required to be applied to the Term Loan pursuant to
this Section 2.6(c) to the Senior Credit Facility, and (iii) such
payment to the Senior Credit Facility is accompanied by, and the Senior Credit
Facility Agent implements and thereafter maintains, a corresponding permanent reserve against the Senior Credit Facility
Borrowing Base in an amount equal to at least sixty-five percent (65%) of the
amount by which such payments exceed the reduction in the Senior Credit
Facility Borrowing Base, if any, caused by the removal of the subject
Collateral from the Senior Credit Facility Borrowing Base. Nothing
contained in this Section 2.6(c) shall permit the disposition of any
Collateral or other assets of the Borrower not otherwise permitted under this
Agreement.

(d)           The Other Obligations. In
addition to the foregoing, the Borrower hereby promises to pay all Obligations,
including, without limitation, the principal amount of the Term Loan, and
interest and fees on the foregoing, as the same become due and payable
hereunder and, in any event, on the Maturity Date.

Section 2.7             Notes; Loan Accounts.

(a)           The Term Loan shall be repayable in
accordance with the terms and provisions set forth herein and, upon request by
any Lender, the Term Loan owed to such Lender shall be evidenced by Term Loan
Notes. A Term Loan Note shall be payable to the order of each Lender requesting
such a Note in accordance with the Term Loan Ratio of such Lender. Each such
Note shall be issued by the Borrower to the applicable Lender and shall be duly
executed and delivered by an Authorized Signatory of the Borrower.

(b)           The Administrative Agent shall open and
maintain on its books in the name of the Borrower a loan account with respect
to the Term Loan and interest thereon (the “Loan Account”). The
Administrative Agent shall debit such Loan Account for the principal amount of
the Term Loan made by it on behalf of the Lenders, accrued interest thereon,
and all other amounts which shall become due from the Borrower pursuant to this
Agreement and shall credit the Loan Account for each payment which the Borrower
shall make in respect to the Obligations. The records of the Administrative

 32
 

 

Agent with respect to
such Loan Account shall be conclusive evidence of the Term Loan and accrued
interest thereon, absent manifest error.

Section 2.8             Manner
of Payment.

(a)           When Payments
Due.

(i)            Each payment (including any prepayment)
by the Borrower on account of the principal of or interest on the Term Loan,
fees, and any other amount owed to any member of the Lender Group under this
Agreement or the other Loan Documents shall be made not later than 12:00 noon.
(Boston, Massachusetts time) on the date specified for payment under this
Agreement or any other Loan Document to the Administrative Agent at the
Administrative Agent’s Office, for the account of the Lenders or the
Administrative Agent, as the case may be, in Dollars in immediately available
funds. Any payment received by the Administrative Agent after 12:00 noon.
(Boston, Massachusetts time) shall be deemed received on the next Business Day.
In the case of a payment for the account of a Lender, the Administrative Agent
will promptly thereafter distribute the amount so received in like funds to
such Lender. If the Administrative Agent shall not have received any payment
from the Borrower as and when due, the Administrative Agent will promptly
notify the Lenders accordingly.

(ii)           If any payment under this Agreement
or any other Loan Document shall be specified to be made on a day which is not
a Business Day, it shall be made on the next succeeding day which is a Business
Day, and such extension of time shall in such case be included in computing
interest and fees, if any, in connection with such payment.

(b)           No Deduction.

(i)            Any and all payments of principal
and interest, or of any fees or indemnity or expense reimbursements by the
Borrower hereunder or under any other Loan Documents (the “Borrower Payments”)
shall be made without setoff or counterclaim and free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings with respect to such Borrower Payments and all
interest, penalties or similar liabilities with respect thereto, excluding
taxes imposed on the net income of any member of the Lender Group by the
jurisdiction under the laws of which such member of the Lender Group is
organized or conducts business or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges or withholdings and
liabilities collectively or individually “Taxes”). If the Borrower shall
be required to deduct any Taxes from or in respect of any sum payable to any
member of the Lender Group hereunder or under any other Loan Document, (A) the
sum payable shall be increased by the amount (an “additional amount”)
necessary so that after making all required deductions (including deductions

 33
 

 

applicable to additional
sums payable under this Section 2.8(b)(i), such member of the Lender Group
shall receive an amount equal to the sum it would have received had no such
deductions been made, (B) the Borrower shall make such deductions, and (C) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law.

(ii)           In addition, the Borrower shall pay
to the relevant Governmental Authority in accordance with Applicable Law any
current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (such taxes being “Other Taxes”).

(iii)          The Borrower shall indemnify the
members of the Lender Group for the full amount of Taxes and Other Taxes with
respect to Borrower Payments paid by such Person, and any liability (including
penalties, interest and expenses (including reasonable attorney’s fees and
expenses)) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant Governmental
Authority. A certificate setting forth and containing an explanation in
reasonable detail of the manner in which such amount shall have been determined
and the amount of such payment or liability prepared by a member of the Lender
Group or the Administrative Agent on its behalf, absent manifest error, shall be
final, conclusive and binding for all purposes. Such indemnification shall be
made within thirty (30) days after the date the Administrative Agent or such
member, as the case may be, makes written demand therefor. If any Taxes or
Other Taxes for which the Administrative Agent or any member of the Lender
Group has received indemnification from the Borrower hereunder shall be finally
determined to have been incorrectly or illegally asserted and are refunded to
the Administrative Agent or such member, the Administrative Agent or such
member, as the case may be, shall promptly forward to the Borrower any such
refunded amount (after deduction of any Tax or Other Tax paid or payable by any
member of the Lender Group as a result of such refund), not exceeding the increased
amount paid by the Borrower pursuant to this Section 2.8(b).

(iv)          As soon as practicable after the date
of any payment of Taxes or Other Taxes by the Borrower to the relevant
Governmental Authority for which the Administrative Agent or any member of the
Lender Group has received indemnification from the Borrower hereunder, the
Borrower will deliver to the Administrative Agent, at its address, the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.

(v)           On or prior to the Agreement Date
(or, in the case of any Lender that becomes a party to this Agreement pursuant
to an Assignment and

 34
 

 

Acceptance, on or prior
to the effective date of such Assignment and Acceptance), each Lender which is
organized in a jurisdiction other than the United States or a political
subdivision thereof (a “Foreign Lender”) shall provide each of the
Administrative Agent and the Borrower with either (A) two (2) properly
executed originals of Form W-8ECI or Form W-8BEN (or any
successor forms) prescribed by the Internal Revenue Service or other documents
reasonably satisfactory to the Borrower and the Administrative Agent, as the
case may be, certifying (1) as to such Foreign Lender’s status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Foreign Lender hereunder and under
any other Loan Documents or (2) that all payments to be made to such
Foreign Lender hereunder and under any other Loan Documents are subject to such
taxes at a rate reduced to zero by an applicable tax treaty, or (B)(1) a
certificate executed by such Lender certifying that such Lender is not a “bank”
and that such Lender qualifies for the portfolio interest exemption under Section 881(c) of
the Code, and (2) two (2) properly executed originals of Internal
Revenue Service Form W-8BEN (or any successor form), in each case,
certifying such Lender’s entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made hereunder or
under any other Loan Documents. Each such Foreign Lender agrees to provide the
Administrative Agent and the Borrower with new forms prescribed by the Internal
Revenue Service upon the expiration or obsolescence of any previously delivered
form, or after the occurrence of any event requiring a change in the most
recent forms delivered by it to the Administrative Agent and the Borrower.

(vi)          The Borrower shall not be required to
indemnify any Foreign Lender, or to pay any additional amounts to such Foreign
Lender pursuant to Section 2.8(b)(i) or (b)(iii) above to the
extent that (A) the obligation to withhold amounts with respect to United
States Federal, state or local withholding tax existed on the date such Foreign
Lender became a party to this Agreement (or, in the case of a transferee, on
the effective date of the Assignment and Acceptance pursuant to which such
transferee became a Lender) or, with respect to payments to a new lending
office, the date such Foreign Lender designated such new lending office; provided,
however, that this clause (A) shall not apply to any Foreign Lender
that became a Lender or new lending office that became a new lending office as
a result of an assignment or designation made at the request of the Borrower;
and provided  further, however, that this clause (A) shall
not apply to the extent the indemnity payment or additional amounts, if any,
that any member of the Lender Group through a new lending office would be
entitled to receive (without regard to this clause (A)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment
or transfer to such member of the Lender Group making the designation of such
new lending office would have been entitled to receive in the absence of such
assignment, transfer or designation or (B) the obligation to pay such
additional amounts or

 35
 

 

such indemnity payments
would not have arisen but for a failure by such member of the Lender Group to
comply with the provisions of Section 2.8(b)(v) above.

(vii)         Nothing contained in this Section 2.8(b) shall
require any member of the Lender Group to make available to the Borrower any of
its tax returns (or any other information) that it deems confidential or
proprietary.

Section 2.9             Intentionally Omitted.

Section 2.10           Pro
Rata Treatment.

(a)           The Term Loan. The Term Loan
from the Lenders under this Agreement shall be made pro rata on the basis of
their respective Term Loan Ratios.

(b)           Payments. Each payment and
prepayment of the principal of the Term Loan and each payment of interest on
the Term Loan received from the Borrower shall be made by the Administrative
Agent to the Lenders pro rata on the basis of their respective unpaid principal
amounts thereof outstanding immediately prior to such payment or prepayment
(except in cases when a Lender’s right to receive payments is restricted
pursuant to Section 2.2(e)). If any Lender shall obtain any payment
(whether involuntary, through the exercise of any right of set-off or
otherwise) on account of the Term Loan in excess of its ratable share of the
Term Loan under its Aggregate Term Loan Ratio (or in violation of any
restriction set forth in Section 2.2(e)), such Lender shall forthwith
purchase from the other Lenders such participation in the Term Loan made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery without interest thereon unless the Lender obligated to repay
such amount is required to pay interest. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.10(b) may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.

Section 2.11           Application of Payments.

(a)           Payments Prior to Event of Default.
Prior to the occurrence and continuance of an Event of Default, all amounts
received by the Administrative Agent from the Borrower (other than payments
specifically earmarked for application to certain principal, interest, fees or
expenses hereunder or payments made pursuant to Section 2.6(c) (which
shall be applied as earmarked or, with respect to payments under Section 2.6(c),
as set forth in Section 2.6(c))), shall be distributed by the
Administrative Agent in the following order of priority:

 36
 

 

FIRST, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Administrative Agent with enforcing the rights of the
Lenders under the Loan Documents;

SECOND, to payment of any
fees owed to the Administrative Agent hereunder or under any other Loan
Document;

THIRD, to the payment of
all obligations consisting of accrued fees and interest payable to the Lenders
hereunder;

FOURTH, to the payment of
principal then due and payable on the Term Loan; and

FIFTH, to the payment of
all other Obligations not otherwise referred to in this Section 2.11(a) then
due and payable.

(b)           Payments Subsequent to Event of
Default. Notwithstanding anything in this Agreement or any other Loan
Documents which may be construed to the contrary, subsequent to the occurrence
and during the continuance of an Event of Default, payments and prepayments
with respect to the Obligations made to the Lender Group, or any of them, or
otherwise received by any member of the Lender Group (from realization on
Collateral or otherwise) shall be distributed in the following order of
priority (subject, as applicable, to Section 2.10):

FIRST, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Administrative Agent with enforcing the rights of the
Lenders under the Loan Documents (including, without limitation, any costs
incurred in connection with the sale or disposition of any Collateral);

SECOND, to payment of any
fees owed to the Administrative Agent, hereunder or under any other Loan
Document;

THIRD, to the payment of
out-of-pocket costs and expenses (including without limitation reasonable
attorneys’ fees) of the Lenders with enforcing the rights of its rights under
the Loan Documents;

FOURTH, to the payment of
all obligations consisting of accrued fees and interest payable to the Lenders
hereunder;

FIFTH, to the payment of
the principal of the Term Loan then outstanding,

SIXTH, to any other
Obligations not otherwise referred to in this Section 2.11(b); and

 37
 

 

SEVENTH, upon
satisfaction in full of all Obligations, to the Borrower or as otherwise
required by law.

Section 2.12           Use of Proceeds. The proceeds
of the Term Loan shall be used by the Borrower as follows:

(a)           The proceeds of the Term Loan
hereunder shall be used on the Agreement Date to refinance existing Funded Debt
and to fund transaction costs.

(b)           The balance of the proceeds of the
Term Loan shall be used for the Borrower’s general operating needs to the
extent not inconsistent with the provisions of this Agreement.

Section 2.13           All Obligations to Constitute One
Obligation. All Obligations shall constitute one general obligation of the Borrower
and shall be secured by the Administrative Agent’s security interest (on behalf
of, and for the benefit of, the Lender Group) and Lien upon all of the
Collateral, and by all other security interests and Liens heretofore, now or at
any time hereafter granted by any Borrower Party to the Administrative Agent or
any other member of the Lender Group, to the extent provided in the Security
Documents under which such Liens arise.

Section 2.14           Maximum Rate of Interest. The
Borrower and the Lender Group hereby agree and stipulate that the only charges imposed
upon the Borrower for the use of money in connection with this Agreement are
and shall be the specific interest and fees described in this Article 2
and in any other Loan Document. Notwithstanding the foregoing, the Borrower and
the Lender Group further agree and stipulate that all closing fees, agency
fees, syndication fees, facility fees, underwriting fees, default charges, late
charges, funding or “breakage” charges, increased cost charges, attorneys’ fees
and reimbursement for costs and expenses paid by any member of the Lender Group
to third parties or for damages incurred by the Lender Group, or any of them,
are charges to compensate the Lender Group for underwriting and administrative
services and costs or losses performed or incurred, and to be performed and
incurred, by the Lender Group in connection with this Agreement and the other
Loan Documents and shall under no circumstances be deemed to be charges for the
use of money pursuant to any Applicable Law. In no event shall the amount of
interest and other charges for the use of money payable under this Agreement
exceed the maximum amounts permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable. The Borrower and
the Lender Group, in executing and delivering this Agreement, intend legally to
agree upon the rate or rates of interest and other charges for the use of money
and manner of payment stated within it; provided, however, that,
anything contained herein to the contrary notwithstanding, if the amount of
such interest and other charges for the use of money or manner of payment
exceeds the maximum amount allowable under Applicable Law, then, ipso  facto
as of the Agreement Date, the Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment

 38
 

 

received from the
Borrower in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Term Loan to the extent of such excess.

ARTICLE 3.

GUARANTY

Section 3.1             Guaranty.

(a)           Each Guarantor hereby guarantees to
the Administrative Agent, for the benefit of the Lender Group, the full and
prompt payment of the Obligations, including, without limitation, any interest
therein (including, without limitation, interest as provided in this Agreement,
accruing after the filing of a petition initiating any insolvency proceedings,
whether or not such interest accrues or is recoverable against the Borrower
after the filing of such petition for purposes of the Bankruptcy Code or is an
allowed claim in such proceeding), plus reasonable attorneys’ fees and expenses
if the obligations represented by this Guaranty are collected by law, through
an attorney-at-law, or under advice therefrom.

(b)           Regardless of whether any proposed
guarantor or any other Person shall become in any other way responsible to the
Lender Group, or any of them, for or in respect of the Obligations or any part
thereof, and regardless of whether or not any Person now or hereafter
responsible to the Lender Group, or any of them, for the Obligations or any
part thereof, whether under this Guaranty or otherwise, shall cease to be so
liable, each Guarantor hereby declares and agrees that this Guaranty shall be a
joint and several obligation, shall be a continuing guaranty and shall be
operative and binding until the Obligations shall have been indefeasibly paid
in full in cash.

(c)           Each Guarantor absolutely,
unconditionally and irrevocably waives any and all right to assert any defense
(other than the defense of payment in cash in full, to the extent of its
obligations hereunder, or a defense that such Guarantor’s liability is limited
as provided in Section 3.1(g)), set-off, counterclaim or cross-claim of
any nature whatsoever with respect to this Guaranty or the obligations of the
Guarantors under this Guaranty or the obligations of any other Person or party
(including, without limitation, the Borrower) relating to this Guaranty or the
obligations of any of the Guarantors under this Guaranty or otherwise with
respect to the Obligations in any action or proceeding brought by the
Administrative Agent or any other member of the Lender Group to collect the
Obligations or any portion thereof, or to enforce the obligations of any of the
Guarantors under this Guaranty.

(d)           The Lender Group, or any of them, may
from time to time, without exonerating or releasing any Guarantor in any way
under this Guaranty, (i) take such further or other security or securities
for the Obligations or any part thereof as they may deem proper, or (ii) release,
discharge, abandon or otherwise deal with or fail to deal with any Guarantor of
the Obligations or any security or securities therefor or any part thereof

 39
 

 

now or hereafter held by
the Lender Group, or any of them, or (iii) amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Loan Documents, all as they may consider expedient or appropriate in
their sole discretion. Without limiting the generality of the foregoing, or of Section 3.1(e),
it is understood that the Lender Group, or any of them, may, without
exonerating or releasing any Guarantor, give up, modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept
or make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, and with or without notice, all as such
Person may deem expedient.

(e)           Each Guarantor acknowledges and
agrees that no change in the nature or terms of the Obligations or any of the
Loan Documents, or other agreements, instruments or contracts evidencing,
related to or attendant with the Obligations (including any novation), shall
discharge all or any part of the liabilities and obligations of such Guarantor
pursuant to this Guaranty; it being the purpose and intent of the Guarantors
and the Lender Group that the covenants, agreements and all liabilities and obligations
of each Guarantor hereunder are absolute, unconditional and irrevocable under
any and all circumstances. Without limiting the generality of the foregoing,
each Guarantor agrees that until each and every one of the covenants and
agreements of this Guaranty is fully performed, and without possibility of
recourse, whether by operation of law or otherwise, such Guarantor’s
undertakings hereunder shall not be released, in whole or in part, by any
action or thing which might, but for this paragraph of this Guaranty, be deemed
a legal or equitable discharge of a surety or guarantor, or by reason of any
waiver, omission of the Lender Group, or any of them, or their failure to
proceed promptly or otherwise, or by reason of any action taken or omitted by
the Lender Group, or any of them, whether or not such action or failure to act
varies or increases the risk of, or affects the rights or remedies of, such
Guarantor or by reason of any further dealings between the Borrower, on the one
hand, and any member of the Lender Group, on the other hand, or any other
guarantor or surety, and such Guarantor hereby expressly waives and surrenders
any defense to its liability hereunder except as otherwise expressly set forth
in this Agreement, or any right of counterclaim or offset of any nature or
description which it may have or may exist based upon, and shall be deemed to
have consented to, any of the foregoing acts, omissions, things, agreements or
waivers.

(f)            The Lender Group, or any of them,
may, without demand or notice of any kind upon or to any Guarantor, at any time
or from time to time when any amount shall be due and payable hereunder by any
Guarantor, if the Borrower shall not have timely paid any of the Obligations,
set-off and appropriate and apply to any portion of the Obligations hereby
guaranteed, and in such order of application as the Administrative Agent may
from time to time elect in accordance with this Agreement, any deposits,
property, balances, credit accounts or moneys of any Guarantor in the possession
of any member of the Lender Group or under their respective control for any
purpose. If and to the extent that any Guarantor makes any payment to the
Administrative Agent or any other Person pursuant to or in respect of this
Guaranty, any claim which such Guarantor

 40
 

 

may have against the
Borrower by reason thereof shall be subject and subordinate to the prior
payment in full of the Obligations to the satisfaction of the Lender Group.

(g)           The creation or existence from time
to time of Obligations in excess of the amount committed to or outstanding on
the date of this Guaranty is hereby authorized, without notice to any
Guarantor, and shall in no way impair or affect this Guaranty or the rights of
the Lender Group herein. It is the intention of each Guarantor and the
Administrative Agent that each Guarantor’s obligations hereunder shall be, but
not in excess of, the Maximum Guaranteed Amount (as herein defined). The “Maximum
Guaranteed Amount” with respect to any Guarantor, shall mean the maximum
amount which could be paid by such Guarantor without rendering this Guaranty
void or voidable as would otherwise be held or determined by a court of
competent jurisdiction in any action or proceeding involving any state or
Federal bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to the insolvency of debtors.

(h)           Upon the bankruptcy or winding up or
other distribution of assets of the Borrower, or of any surety or guarantor
(other than the applicable Guarantor) for any Obligations of the Borrower to
the Lender Group, or any of them, the rights of the Administrative Agent
against any Guarantor shall not be affected or impaired by the omission of any
member of the Lender Group to prove its claim, or to prove the full claim, as
appropriate, against the Borrower, or any such other guarantor or surety, and
the Administrative Agent may prove such claims as it sees fit and may refrain
from proving any claim and in its discretion may value as it sees fit or
refrain from valuing any security held by it without in any way releasing,
reducing or otherwise affecting the liability to the Lender Group of each of
the Guarantors.

(i)            Each Guarantor hereby absolutely,
unconditionally and irrevocably expressly waives, except to the extent such
waiver would be expressly prohibited by Applicable Law, the following:  (i) notice of acceptance of this
Guaranty, (ii) notice of the existence or creation of all or any of the
Obligations, (iii) presentment, demand, notice of dishonor, protest and
all other notices whatsoever (other than notices expressly required hereunder
or under any other Loan Document to which any Guarantor is a party), (iv) all
diligence in collection or protection of or realization upon the Obligations or
any part thereof, any obligation hereunder, or any security for any of the
foregoing, (v) all rights to enforce any remedy which the Lender Group, or
any of them, may have against the Borrower, (vi) until the Obligations
shall have been paid in full in cash, all rights of subrogation,
indemnification, contribution and reimbursement from the Borrower for amounts
paid hereunder and any benefit of, or right to participate in, any collateral
or security now or hereinafter held by the Lender Group, or any of them, in
respect of the Obligations, and (vii) any and all rights under any
Applicable Law. If a claim is ever made upon any member of the Lender Group for
the repayment or recovery of any amount or amounts received by such Person in
payment of any of the Obligations and such Person repays all or part of such
amount by reason of (A) any judgment, decree

 41
 

 

or order of any court or
administrative body having jurisdiction over such Person or any of its
property, or (B) any settlement or compromise of any such claim effected
by such Person with any such claimant, including the Borrower, then in such
event each Guarantor agrees that any such judgment, decree, order, settlement
or compromise shall be binding upon such Guarantor, notwithstanding any
revocation hereof or the cancellation of any promissory note or other
instrument evidencing any of the Obligations, and such Guarantor shall be and
remain obligated to such Person hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by such
Person.

(j)            This Guaranty is a continuing
guaranty of the Obligations and all liabilities to which it applies or may
apply under the terms hereof and shall be conclusively presumed to have been
created in reliance hereon. No failure or delay by any member of the Lender
Group in the exercise of any right, power, privilege or remedy shall operate as
a waiver thereof, and no single or partial exercise by the Administrative Agent
of any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy and no course of dealing between any
Guarantor and any member of the Lender Group shall operate as a waiver thereof.
No action by any member of the Lender Group permitted hereunder shall in any
way impair or affect this Guaranty. For the purpose of this Guaranty, the
Obligations shall include, without limitation, all Obligations of the Borrower
to the Lender Group, notwithstanding any right or power of any third party,
individually or in the name of the Borrower and the Lender Group, or any of
them, to assert any claim or defense as to the invalidity or unenforceability
of any such Obligation, and no such claim or defense shall impair or affect the
obligations of any Guarantor hereunder.

(k)           This is a guaranty of payment and not
of collection. In the event the Administrative Agent makes a demand upon any
Guarantor in accordance with the terms of this Guaranty, such Guarantor shall
be held and bound to the Administrative Agent directly as debtor in respect of
the payment of the amounts hereby guaranteed. All costs and expenses,
including, without limitation, reasonable attorneys’ fees and expenses,
incurred by the Administrative Agent in obtaining performance of or collecting
payments due under this Guaranty shall be deemed part of the Obligations
guaranteed hereby.

(l)            Each Subsidiary Guarantor is a
direct or indirect wholly owned Domestic Subsidiary of the Borrower. Each
Guarantor expressly represents and acknowledges that any financial
accommodations by the Lender Group to the Borrower, including, without
limitation, the extension of credit, are and will be of direct interest,
benefit and advantage to such Guarantor.

(m)          The payment obligation of a Guarantor
to any other Guarantor under any Applicable Law regarding contribution rights
among co-obligors or otherwise shall be subordinate and subject in right of
payment to the prior payment in full of the

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obligations of such
Guarantor under the other provisions of this Guaranty, and such Guarantor shall
not exercise any right or remedy with respect to such rights until payment and
satisfaction in full of all such obligations.

Section 3.2             Special Provisions Applicable to
Subsidiary Guarantors.

(a)           Pursuant to Section 6.21 of this
Agreement, any new Domestic Subsidiary of the Borrower is required to enter
into this Agreement by executing and delivering to the Administrative Agent a
Guaranty Supplement. Upon the execution and delivery of a Guaranty Supplement
by such new Domestic Subsidiary, such Domestic Subsidiary shall become a
Guarantor and Borrower Party hereunder with the same force and effect as if
originally named as a Guarantor or Borrower Party herein. The execution and
delivery of any Guaranty Supplement (and any other supplement to any Loan
Document delivered in connection therewith) adding an additional Guarantor as a
party to this Agreement and the other applicable Loan Documents shall not
require the consent of any other party hereto. The rights and obligations of
each party hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor hereunder.

ARTICLE 4.

CONDITIONS PRECEDENT

Section 4.1             Conditions Precedent to Term
Loan. The obligations of the Lenders to make the Term Loan hereunder, are subject to
the prior fulfillment of each of the following conditions:

(a)           The Administrative Agent shall have
received each of the following, in form and substance satisfactory to the
Administrative Agent:

(i)            This duly executed Agreement;

(ii)           A duly executed Term Loan Note
payable to the order of each Lender requesting a promissory note in the amount
of such Lender’s Term Loan Ratio of the aggregate principal amount of the Term
Loan;

(iii)          The Security Agreement duly executed
by the Borrower Parties, together with Uniform Commercial Code financing
statements related thereto;

(iv)          A Copyright Security Agreement duly
executed by the Borrower Parties;

(v)           A Trademark Security Agreement duly
executed by the Borrower Parties;

 43
 

 

(vi)          The Pledge Agreement duly executed by
the Borrower Parties, together with (A) copies of the original stock
certificates (which original stock certificates on the Agreement Date are to be
delivered to and held by the Senior Credit Facility Agent subject to the
SunTrust Intercreditor Agreement) evidencing the issued and outstanding shares
of capital stock pledged to the Administrative Agent pursuant to the Pledge
Agreement and (B) original stock powers or other appropriate instruments
of transfer executed in blank;

(vii)         The duly executed Blocked Account
Agreements required by Section 6.15;

(viii)        The Fee Letter duly executed by the
Borrower;

(ix)           Valuations by the Administrative
Agent’s field examiners reflecting values of the Borrower Parties’ Accounts and
other personal property at levels acceptable to the Administrative Agent;

(x)            The legal opinion of Arent Fox PLLC,
counsel to the Borrower, addressed to the Lender Group;

(xi)           The duly executed Request for Term
Loan;

(xii)          A duly executed Borrowing Base
Certificate dated as of the Agreement Date;

(xiii)         Duly executed Collateral Access
Agreements with respect to the Borrower’s leased premises or goods in the
possession of bailees;

(xiv)        A loan certificate signed by an
Authorized Signatory of each Borrower Party, including a certificate of
incumbency with respect to each Authorized Signatory of such Borrower Party,
together with appropriate attachments which shall include, without limitation,
the following: (A) a copy of the Certificate of Incorporation of such
Borrower Party certified to be true, complete and correct by the Secretary of
State of the State of Delaware, (B) a true, complete and correct copy of
the By-Laws of such Borrower Party, (C) a true, complete and correct copy
of the resolutions of such Person authorizing the execution, delivery and
performance by such Person of the Loan Documents and the Senior Credit Facility
Documents and authorizing the borrowings hereunder and thereunder, (D) certificates
of good standing from each jurisdiction in the US in which such Borrower Party
does business, (E) copies of employment contracts for the following
management level employees of such Borrower Party: James Leto, and (F) copies of all shareholder agreements
currently in effect relating to the Equity Interests of such Borrower Party or
share purchase agreements for equity interests that have not been issued (other
than pursuant to a Plan) relating to the Equity Interests of such Borrower
Party;

 44
 

 

(xv)         A solvency certificate executed by an
Authorized Signatory of the Borrower regarding the solvency and financial condition
of the Borrower Parties, together with a pro forma balance sheet giving effect
to the incurrence of the Senior Credit Facility Obligations and the incurrence
of the Term Loan;

(xvi)        The duly executed SunTrust Intercreditor
Agreement;

(xvii)       A certificate signed by an Authorized
Signatory of the Borrower certifying as true, correct and complete (and
attaching thereto) a copy of the fully executed Senior Credit Facility
Agreement, together with all exhibits and schedules thereto, and certifying as
to the matters described in Section 4.1(c);

(xviii)      a Vendor Intercreditor Agreement duly
executed by each of the parties thereto;

(xix)         Borrower’s (A) 2006 business plan
including its 12 month income statement, balance sheet, statement of cash flows
and availability forecast and (B) annual projections, including income
statement, balance sheet and statement of cash flows, through the Maturity
Date;

(xx)          Certificates of insurance and loss
payable endorsements with respect to the Borrower Parties and certified copies
of all insurance policies of the Borrower Parties, in each case, meeting the
requirements of Section 6.5;

(xxi)         Pay-off letters, termination
statements, canceled mortgages and the like required by the Administrative
Agent in connection with the removal of any Liens (other than Permitted Liens),
including, without limitation, all tax liens, against the assets of the
Borrower Parties;

(xxii)        Lien search results with respect to the
Borrower Parties from all appropriate jurisdictions and filing offices (including
the United States Patent and Trademark Office and the United States Copyright
Office);

(xxiii)       Evidence satisfactory to the
Administrative Agent that the Liens granted pursuant to the Security Documents
will be first priority perfected Liens on the Collateral (subject only to
Permitted Liens (including the Permitted Liens in favor of the Senior Credit
Facility Agent securing the Senior Credit Facility Obligations, which Liens are
subject to the SunTrust Intercreditor Agreement));

(xxiv)       Payment of all fees and expenses payable
to the Administrative Agent, the Affiliates of the Administrative Agent, and
the Lenders in connection with the execution and delivery of this Agreement,
including, without limitation, reasonable fees and expenses of counsel to the
Administrative Agent;

 45
 

 

(xxv)        A flow of funds report and disbursement
letter, in each case, duly executed by the Borrower, which report shall include
a statement of all sources and uses of funds on the Agreement Date and which
disbursement letter shall be acceptable to the Administrative Agent in all
respects; and

(xxvi)       All such other documents as the
Administrative Agent may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.

(b)           The Lender Group shall have received
evidence satisfactory to them that no change in the business, assets,
management, operations, financial condition, income or prospects of the
Borrower shall have occurred since December 31, 2005, which change has had
or would be reasonably expected to have a Materially Adverse Effect, and the
Lender Group shall have received a certificate of an Authorized Signatory of
the Borrower so stating.

(c)           The Lender Group shall have received
evidence satisfactory to them that all conditions to the closing of the
transactions contemplated by the Senior Credit Facility Documents have been
satisfied and that the Senior Credit Facility is in full force and effect, and
the Lender Group shall have received a certificate of an Authorized Signatory
of the Borrower so stating.

(d)           The Lender Group shall have received
the financial statements described in Section 5.1(k), each in form and
substance to the members of the Lender Group.

(e)           The Lender Group shall have received
evidence satisfactory to them that all Necessary Authorizations are in full
force and effect and are not subject to any pending or threatened reversal or
cancellation, that no other consents or approvals are required, and that no
Default exists after the making of the Term Loan, and the Lender Group shall
have received a certificate of an Authorized Signatory of the Borrower so
stating.

(f)            The Borrower shall have established
one or more Blocked Accounts pursuant to a lockbox arrangement with SunTrust
Bank acceptable to the Administrative Agent.

(g)           The Administrative Agent shall have
received confirmation that (i) the original Uniform Commercial Code
financing statements signed (if required) by the respective Borrower Parties as
debtor and naming the Administrative Agent as secured party have been duly
filed in all appropriate jurisdictions, (ii) the Copyright Security
Agreements have been duly filed with the United States Copyright Office and (iii) the
Trademark Security Agreements have been duly filed with the United States
Patent and Trademark Office, in each case, in such form as shall be
satisfactory to the Administrative Agent.

 46

 

(h)           The Administrative Agent shall have
received a Borrowing Base Certificate and a Senior Credit Facility Borrowing
Base Certificate, in form and substance satisfactory to the Lender Group and
rolled forward from the Borrowing Base Certificate and Senior Credit Facility
Borrowing Base Certificate previously verified by the Administrative Agent,
reflecting that, among other things, as of the Agreement Date, after giving
effect to (i) the Senior Credit Facility and any borrowings or other
extensions of credit made thereunder and (ii) the making of the Term Loan
under this Agreement, Senior Credit Facility Availability shall not be less
than $25,000,000 (with trade payables being paid currently in the ordinary
course of Borrower’s business, expenses and liabilities being paid in the
ordinary course of business, without acceleration of sales and without
deterioration in working capital and without giving effect to the additional
capital attributable to the proceeds of the Term Loan).

(i)            The Administrative Agent shall have
completed to its satisfaction a pre-funding field audit of the Borrower
including, without limitation, a review of GEMS, and an examination of the
Borrower’s reporting capabilities, assets, liabilities (including review of
accounts/trade payables evidencing payment of such amounts in accordance with
their terms or otherwise on terms consistent with past practices acceptable to
the Administrative Agent), books and records.

(j)            The Administrative Agent shall have
received (A) final reports issued by FTI Consulting pursuant to that
certain engagement letter between FTI Consulting and Paul, Hastings, Janofsky &
Walker LLP, on behalf of SunTrust Bank, dated February 27, 2006, with
respect to quality of earnings and field audit matters of the Borrower and (B) FTI’s
report of the Borrower’s 2006 monthly Term Loan Availability and Senior Credit
Facility Availability forecast, to include balance sheet, income statement,
statement of cash flows and confirmation of minimum opening Senior Credit
Facility Availability of $25,000,000 under the Senior Credit Facility (without
giving effect to the additional capital attributable to the proceeds of the
Term Loan).

(k)           The Administrative Agent shall have
received a true and complete copy of the duly executed Consulting Agreement
certified by an Authorized Signatory of the Borrower and in full force and
effect.

(l)            The Administrative Agent shall have
completed background checks with respect to certain key officers of the
Borrower Parties and the results of such background checks shall be
satisfactory to the Administrative Agent.

(m)          The Administrative Agent shall have
received daily Senior Credit Facility Borrowing Base Certificates for a period
prior to the Agreement Date as requested by the Administrative Agent, each in
form and substance satisfactory to the Administrative Agent.

(n)           The Administrative Agent shall have
received evidence that the Borrower has entered into arrangements with its
current floor plan suppliers under

 47
 

 

commercially reasonable
open market terms that are satisfactory to the Administrative Agent, including,
without limitation, acceptable credit limits and payment terms.

(o)           The Administrative Agent shall have
completed such other business and legal due diligence with respect to the
Borrower Parties and the results thereof shall be acceptable to the
Administrative Agent, in its sole discretion.

(p)           All of the representations and
warranties of the Borrower Parties under this Agreement and the other Loan
Documents, which, pursuant to Section 5.3, are made at and as of the time
of the making of the Term Loan other than those that are by their terms true
only as of a date certain other than the date of the making of the Term Loan,
shall be true and correct at such time, both before and after giving effect to
the application of the proceeds of the Term Loan;

(q)           The incumbency of the Authorized
Signatories of the Borrower Parties shall be as stated in the certificate of
incumbency contained in the certificate of such Borrower Party delivered
pursuant to Section 4.1(a) or as subsequently modified and reflected
in a certificate of incumbency delivered to the Administrative Agent and the
Lenders;

(r)            Since December 31, 2005, there
shall have been no change that has had or would be reasonably expected to have a
Material Adverse Effect;

(s)           There shall not exist on the date of
the making of the Term Loan and after giving effect thereto, a Default; and

(t)            The Administrative Agent and the
Lenders shall have received all such other certificates, reports, statements,
opinions of counsel, or other documents as the Administrative Agent or Lenders
may reasonably request and all of the other conditions to the making of the
Term Loan which are set forth in this Agreement shall have been fulfilled.

The Borrower hereby agrees that the delivery of any Request for Term
Loan hereunder or any telephonic request for the making of the Term Loan
hereunder shall be deemed to be the certification of the Authorized Signatory
thereof that all of the conditions set forth in this Section 4.1 have been
satisfied. Notwithstanding the foregoing, if the conditions, or any of them,
set forth above are not satisfied, such conditions may be waived by the
requisite Lenders under Section 11.12.

 48
 

 

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

Section 5.1             General Representations and
Warranties. In order to induce the Lender Group to enter into this Agreement and to make the
Term Loan to the Borrower, each Borrower Party hereby represents, and warrants
that:

(a)           Organization; Power; Qualification.
Each Borrower Party and each Subsidiary of a Borrower Party (i) is a
corporation, partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its state of incorporation or
formation, (ii) has the corporate or other company power and authority to
own or lease and operate its properties and to carry on its business as now
being and hereafter proposed to be conducted, and (iii) is duly qualified
and is in good standing as a foreign corporation or other company, and
authorized to do business, in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.

(b)           Authorization; Enforceability.
Each Borrower Party has the power and has taken all necessary action, corporate
or otherwise, to authorize it to execute, deliver, and perform this Agreement
and each of the other Loan Documents to which it is a party in accordance with
the terms thereof and to consummate the transactions contemplated hereby and
thereby. Each of this Agreement and each other Loan Document to which a
Borrower Party is a party has been duly executed and delivered by such Borrower
Party, and is a legal, valid and binding obligation of such Borrower Party,
enforceable in accordance with its terms.

(c)           Partnerships; Joint Ventures;
Subsidiaries. Except as disclosed on Schedule 5.1(c)-1, no
Borrower Party or any Subsidiary of a Borrower Party has any Subsidiaries,
which Subsidiaries are identified on such Schedule as Domestic Subsidiaries or
Foreign Subsidiaries. No Borrower Party or any Subsidiary of a Borrower Party
is a partner or joint venturer in any partnership or joint venture other than (i) the
Subsidiaries listed on Schedule 5.1(c)-1 and (ii) the
partnerships and joint ventures (that are not Subsidiaries) listed on Schedule
5.1(c)-2. Schedule 5.1(c)-1 and Schedule 5.1(c)-2
set forth, for each Person set forth thereon, a complete and accurate statement
of (i) the percentage ownership of each such Person by the applicable
Borrower Party or Subsidiary of a Borrower Party, (ii) the state or other
jurisdiction of incorporation or formation, as appropriate, of each such
Person, (iii) each state in which each such Person is qualified to do
business on the Agreement Date and (iv) all of each such Person’s trade
names, trade styles or doing business forms which such Person has used or under
which such Person has transacted business during the five (5) year period
immediately preceding the Agreement Date.

(d)           Capital Stock and Related Matters.
The authorized Equity Interests as of the Agreement Date of each Borrower Party
and each Subsidiary of a

 49
 

 

Borrower Party that is a
corporation and the number of shares of such Equity Interests that are issued
and outstanding as of the Agreement Date (or with respect to the Borrower, as
of the date set forth on Schedule 5.1(d)) are as set forth on Schedule
5.1(d). All of the shares of such Equity Interests that are issued and
outstanding as of the Agreement Date have been duly authorized and validly issued
and are fully paid and non-assessable. None of such Equity Interests have been
issued in violation of the Securities Act, or the securities, “Blue Sky” or
other Applicable Laws of any applicable jurisdiction. As of the Agreement Date,
the Equity Interests of each such Borrower Party (other than the Borrower) and
each such Subsidiary of a Borrower Party are owned by the parties listed on Schedule
5.1(d) in the amounts set forth on such schedule and a description of the
Equity Interests of each such party is listed on Schedule 5.1(d). Except
as described on Schedule 5.1(d), no Borrower Party or any Subsidiary of
a Borrower Party has outstanding any stock or securities convertible into or
exchangeable for any shares of its Equity Interests, nor are there any
preemptive or similar rights to subscribe for or to purchase, or any other
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments, or claims of any character relating to, any Equity
Interests or any stock or securities convertible into or exchangeable for any
Equity Interests. Except as set forth on Schedule 5.1(d), no Borrower
Party or any Subsidiary of any Borrower Party is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its Equity Interests or to register any shares of its Equity
Interests, and there are no agreements restricting the transfer of any shares
of such Borrower Party or such Subsidiary’s Equity Interests or restricting the
ability of any Subsidiary of the Borrower from making distributions, dividends
or other Restricted Payments to the Borrower.

(e)           Compliance with Law, Loan
Documents, and Contemplated Transactions. The execution, delivery, and
performance of this Agreement and each of the other Loan Documents in
accordance with their respective terms and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any Applicable
Law, (ii) conflict with, result in a breach of, or constitute a default
under the certificate of incorporation or formation or by-laws, partnership
agreement or operating agreement of any Borrower Party or under any indenture,
agreement, or other instrument to which any Borrower Party is a party or by
which any Borrower Party or any of its properties may be bound, or (iii) result
in or require the creation or imposition of any Lien upon or with any Borrower
Party except Permitted Liens.

(f)            Necessary Authorizations. Each
Borrower Party and each Subsidiary of a Borrower Party has obtained all
Necessary Authorizations, and all such Necessary Authorizations are in full
force and effect. None of such Necessary Authorizations is the subject of any
pending or, to the best of each Borrower Party’s knowledge, threatened attack
or revocation, by the grantor of the Necessary Authorization. No Borrower Party
or any Subsidiary of a Borrower Party is required to

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obtain any additional
Necessary Authorizations in connection with the execution, delivery, and
performance of this Agreement or any other Loan Document in accordance with
their respective terms, or the consummation of the transactions contemplated
hereby or thereby.

(g)           Title to Properties. Each
Borrower Party has good, marketable, and legal title to, or a valid leasehold
interest in, all of its properties and assets, and none of such properties or
assets is subject to any Liens, other than Permitted Liens.

(h)           Material Contracts.  Schedule
5.1(h) contains a complete list, as of the Agreement Date, of each
Material Contract, true, correct and complete copies of which have been
delivered to the Administrative Agent. Schedule 5.1(h) further
identifies, as of the Agreement Date, each Material Contract that requires
consent to the granting of a Lien in favor of the Administrative Agent on the
rights of any Borrower Party thereunder. No Borrower Party or any Subsidiary of
a Borrower Party is in default under or with respect to any Material Contract,
and any other contract with the Federal Government, to which it is a party or
by which it or any of its properties are bound.

(i)            Labor Matters. Except as
disclosed on Schedule 5.1(i):  (i) no
labor contract to which any Borrower Party or any Subsidiary of a Borrower Party
is a party or is otherwise subject is scheduled to expire prior to the Maturity
Date; (ii) no Borrower Party or any Subsidiary of a Borrower Party has,
within the two-year period preceding the date of this Agreement, taken any
action which would have constituted or resulted in a “plant closing” or “mass
layoff” within the meaning of the Federal Worker Adjustment and Retraining
Notification Act of 1988 or any similar applicable federal, state or local law,
and no Borrower Party has any reasonable expectation that any such action is or
will be required at any time prior to the Maturity Date; and (iii) on the
Agreement Date (A) no Borrower Party or any Subsidiary of a Borrower Party
is a party to any labor dispute (other than any immaterial disputes with such
Borrower Party’s or Subsidiary’s employees as individuals and not affecting
such Borrower Party’s or Subsidiary’s relations with any labor group or its
workforce as a whole) and (B) there are no pending or, to each Borrower
Party’s knowledge, threatened strikes or walkouts relating to any labor
contracts to which any Borrower Party or any Subsidiary of a Borrower Party is
a party or is otherwise subject. Except as set forth on Schedule 5.1(i),
none of the employees of any Borrower Party or a Subsidiary of a Borrower Party
is a party to any collective bargaining agreement with any Borrower Party or a
Subsidiary of a Borrower Party, as applicable.

(j)            Taxes. Except as set forth on
Schedule 5.1(j), all federal, state and other tax returns of each
Borrower Party and each Subsidiary of a Borrower Party required by law to be
filed have been duly filed, all such tax returns are true, complete and correct
in all material respects, and all federal, state, and other taxes (including
without limitation, all real estate and personal property, income, franchise,
transfer and gains taxes), all general or special assessments, and other
governmental charges or levies

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upon each Borrower Party
and each Subsidiary of a Borrower Party and any of their respective properties,
income, profits, and assets, which are due and payable, have been paid, except
any payment of any of the foregoing which such Borrower Party or such
Subsidiary, as applicable, is currently contesting in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of such Borrower Party or such Subsidiary, as the
case may be. No adjustment relating to any tax returns has been proposed
formally or informally by any Governmental Authority and, to the knowledge of
each Borrower Party no basis exists for any such adjustment. The charges,
accruals, and reserves on the books of the Borrower Parties and their
Subsidiaries in respect of taxes are, in the reasonable judgment of the
Borrower Parties, adequate. No Borrower Party or any Subsidiary of a Borrower
Party has been audited, or has knowledge of any pending audit, by the Internal
Revenue Service or any other taxing authority. Except as described in Schedule
5.1(j), no Borrower Party has executed or filed with the Internal Revenue
Service or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any taxes. None of the Borrower Parties and their respective
predecessors are liable for any taxes:  (i) under
any agreement (including any tax sharing agreements) or (ii) to each
Borrower Party’s knowledge, as a transferee. As of the Agreement Date, no
Borrower Party has agreed, or been requested, to make any adjustment under Code
Section 481(a), by reason of a change in accounting method or otherwise,
which would have a Materially Adverse Effect.

(k)           Financial Statements. The
Borrower has furnished, or caused to be furnished, to the Lenders (i) the
audited financial statements of the Borrower which are complete and correct in
all material respects and present fairly in accordance with GAAP the respective
financial positions of the Borrower as at December 31, 2005, and the
results of operations for the fiscal year then ended and (ii) the
unaudited financial statements of the Borrower which are complete and correct
in all material respects and present fairly in accordance with GAAP, subject to
normal year end adjustments, the respective financial positions of the Borrower
as at March 31, 2006, and the results of operations for the fiscal quarter
then ended. In addition, the Borrower shall furnish to the Lenders the balance
sheet of the Borrower dated as of the Agreement Date giving pro forma effect to
the borrowings hereunder and under the Subordinated Debt Documents as of the
Agreement Date. Except as disclosed in such financial statements, the Borrower
does not have any material liabilities, contingent or otherwise, and there are
no material unrealized or anticipated losses of the Borrower which have not
heretofore been disclosed in writing to the Lenders.

(l)            Intentionally Omitted.

(m)          Investments and Guaranties. As
of the Agreement Date, no Borrower Party or any Subsidiary of a Borrower Party
owns any Equity Interests of any Person except as disclosed on Schedules
5.1(c)-1 and 5.1(c)-2, or has outstanding loans

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or advances to, or
guaranties of the obligations of, any Person, except as reflected in the
financial statements referred to in Section 5.1(k) or disclosed on Schedule
5.1(m).

(n)           Liabilities, Litigation, etc. As
of the Agreement Date, except for liabilities incurred in the normal course of
business, no Borrower Party or any Subsidiary of any Borrower Party has any
material (individually or in the aggregate) liabilities, direct or contingent,
except as disclosed or referred to in the financial statements referred to in Section 5.1(k) or
with respect to the Obligations or the Subordinated Debt. As of the Agreement
Date, except as described on Schedules 5.1(n) and 5.1(y)(1) through
(6), there is no litigation, legal or administrative proceeding,
investigation, or other action of any nature pending or, to the knowledge of
the Borrower Parties, threatened against or affecting any Borrower Party, any
Subsidiary of any Borrower Party or any of their respective properties which
could reasonably be expected to result in any judgment against or liability of
such Borrower Party or Subsidiary in excess of $500,000 in the aggregate with
respect to all Borrower Parties and their Subsidiaries, or the loss of any
certification or license material to the operation of such Borrower Party’s or
Subsidiary’s business. None of such litigation disclosed on Schedules 5.1(n) and
5.1(y)(1) through (6), individually or collectively, could
reasonably be expected to have a Materially Adverse Effect.

(o)           ERISA. Schedule 5.1(o) lists
(i) all ERISA Affiliates and (ii) all Plans and separately identifies
all Title IV Plans, Multiemployer Plans, and Retiree Welfare Plans. Copies of
all such listed Plans, together with a copy of the latest IRS/DOL 5500-series
form for each such Plan, have been delivered to the Administrative Agent. Except
with respect to Multiemployer Plans, each Plan intended to be qualified under
Code Section 401 has been determined by the Internal Revenue Service to
qualify under Section 401 of the Code, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Sections 501 of
the Code, and nothing has occurred that would cause the loss of such
qualification or tax-exempt status. Each Borrower Party and each ERISA
Affiliate and each of their respective Plans are in compliance with ERISA and
the Code and no Borrower Party nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. No Borrower Party or, to each Borrower Party’s knowledge,
any of its ERISA Affiliates, has made any promises of retirement or other
benefits to employees, except as set forth in the Plans. No Borrower Party or
ERISA Affiliate has incurred any liability to the PBGC in connection with any
such Plan (other than the payment of premiums that are not past due). No Title
IV Plan has any Unfunded Pension Liability. No ERISA Event or event described
in Section 4062(e) of ERISA has occurred and is continuing with
respect to any such Plan. There are no pending, or to the knowledge of any
Borrower Party, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any
Plan or any Person as fiduciary (as defined in Section 3(21) of

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ERISA) or sponsor of any
Plan. No such Plan or trust created thereunder, or party in interest (as
defined in Section 3(14) of ERISA, or any fiduciary (as defined in Section 3(21)
of ERISA), has engaged in a “prohibited transaction” (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) which would
subject such Plan or any other Plan of any Borrower Party or any of its ERISA
Affiliates, any trust created thereunder, or any such party in interest or
fiduciary, or any party dealing with any such Plan or any such trust to any
material penalty or tax on “prohibited transactions” imposed by Section 502
of ERISA or Section 4975 of the Code.

(p)           Intellectual Property; Licenses;
Certifications. Except as set forth on Schedule 5.1(p), no Borrower
Party or any Subsidiary of a Borrower Party owns any registered patents,
trademarks, service marks or copyrights, and has no pending registration
applications with respect to any of the foregoing. No other patents,
trademarks, service marks or copyrights are necessary for the operation of the
business of the Borrower Parties and their Subsidiaries. Except as set forth on
Schedule 5.1(p), no material licenses or certifications are necessary
for the operation of the Borrower Parties’ and their Subsidiaries’ business.

(q)           Compliance with Law; Absence of
Default. Each Borrower Party and each Subsidiary of a Borrower Party is in
material compliance with all Applicable Laws, including, without limitation,
the Prompt Payment Act, and with all of the provisions of its certificate of
incorporation or formation and by-laws or other governing documents, and no
event has occurred or has failed to occur which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes (i) a
Default, (ii) a default by such Borrower Party under the Senior Credit
Facility Documents, or (iii) except with respect to Funded Debt in an
aggregate principal amount equal to or less than $100,000, a default under any
other indenture, agreement, or other instrument, or any judgment, decree, or
order to which such Borrower Party or such Subsidiary is a party or by which
such Borrower Party or such Subsidiary or any of their respective properties
may be bound.

(r)            Casualties; Taking of Properties,
etc. Since December 31, 2005, neither the business nor the properties
of the Borrower Parties and their Subsidiaries has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces, or acts of God or of any public enemy.

(s)           Accuracy and Completeness of
Information. All written information, reports, other papers and data
relating to the Borrower Parties and their Subsidiaries furnished by or at the
direction of the Borrower Parties to the Lender Group were, at the time
furnished, complete and correct in all material respects. With respect to
projections, estimates and forecasts given to the Lender Group, such
projections, estimates and forecasts are based on the Borrower Parties’ good
faith assessment of the

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future of the business at
the time made. The Borrower Parties had a reasonable basis for such assessment
at the time made.

(t)            Compliance with Regulations T, U,
and X. No Borrower Party or any Subsidiary of a Borrower Party is engaged
principally in or has as one of its important activities the business of
extending credit for the purpose of purchasing or carrying, and no Borrower
Party or any Subsidiary of a Borrower Party owns or presently intends to
acquire, any “margin security” or “margin stock” as defined in Regulations T, U
and X of the Board of Governors of the Federal Reserve System (herein called “Margin
Stock”). None of the proceeds of the Term Loan will be used, directly or indirectly,
for the purpose of purchasing or carrying any Margin Stock or for the purpose
of reducing or retiring any Funded Debt which was originally incurred to
purchase or carry Margin Stock or for any other purpose which might constitute
this transaction a “purpose credit” within the meaning of said Regulations T, U
and X. None of any Borrower Party, any Subsidiary of a Borrower Party or any
bank acting on its behalf has taken or will take any action which might cause
this Agreement or any other Loan Documents to violate Regulation T, U or X or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the SEA, in each case as now in effect or as the same may hereafter
be in effect. If so requested by the Administrative Agent, the Borrower Parties
and their Subsidiaries will furnish the Administrative Agent with (i) a
statement or statements in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U of said Board of Governors and (ii) other documents
evidencing its compliance with the margin regulations, including without
limitation an opinion of counsel in form and substance satisfactory to the
Administrative Agent. Neither the making of the Term Loan nor the use of
proceeds thereof will violate, or be inconsistent with, the provisions of
Regulation T, U or X of said Board of Governors.

(u)           Solvency. As of the Agreement
Date and after giving effect to the transactions contemplated by the Senior
Credit Facility Documents and the Loan Documents (i) the property of each
Borrower Party, at a fair valuation on a going concern basis, will exceed its
debt; (ii) the capital of each Borrower Party will not be unreasonably
small to conduct its business; and (iii) no Borrower Party will have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature. For purposes of this Section, “debt” shall mean any
liability on a claim, and “claim” shall mean (A) the right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, undisputed, legal, equitable, secured or
unsecured, or (B) the right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, undisputed, secured or unsecured.

(v)           Insurance. The Borrower
Parties and their Subsidiaries have insurance meeting the requirements of Section 6.5,
and such insurance policies are in full

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force and effect. As of
the Agreement Date, all insurance maintained by the Borrower Parties and their
Subsidiaries is fully described on Schedule 5.1(v).

(w)          Broker’s or Finder’s Commissions.
Except as set forth on Schedule 5.1(w), no broker’s or finder’s fee or
commission will be payable with respect to the execution and delivery of this
Agreement and the other Loan Documents, and no other similar fees or
commissions will be payable by the Borrower Parties for any other services
rendered to the Borrower Parties ancillary to the credit transactions
contemplated herein.

(x)            Real Property. All real
property leased by each Borrower Party and each Subsidiary of a Borrower Party
as of the Agreement Date, and the name of the lessor of such real property, is
set forth in Schedule 5.1(x)-1. The leases of each Borrower Party
and each Subsidiary of a Borrower Party are valid, enforceable and in full
force and effect, and have not been modified or amended, except as otherwise
set forth in Schedule 5.1(x)-1. The Borrower Parties and their
Subsidiaries are the sole holders of the lessee’s interests under such leases,
and have the right to pledge, mortgage, assign and sublet the same except as
set forth in Schedule 5.1(x)-1. No Borrower Party or any
Subsidiary of a Borrower Party has made any pledge, mortgage, assignment or
sublease of any of it rights under such leases except pursuant to the Loan
Documents and as set forth in Schedule 5.1(x)-1 and, there is no
default or condition which, with the passage of time or the giving of notice,
or both, would constitute a material default on the part of a Borrower Party or
any Subsidiary of a Borrower Party under such leases and the Borrower Parties
and their Subsidiaries have paid all rents and other charges due and payable
under such leases. All real property owned by each Borrower Party or a
Subsidiary of a Borrower Party as of the Agreement Date is set forth in Schedule
5.1(x)-2. As of the Agreement Date, no Borrower Party or any
Subsidiary of a Borrower Party owns, leases or uses any real property other
than as set forth on Schedule 5.1(x)-1 or 2. Each Borrower
Party and each Subsidiary of a Borrower Party owns good and marketable fee
simple title to all of its owned real property, and none of its respective
owned real property is subject to any Liens, except Permitted Liens. No
Borrower Party or any Subsidiary of a Borrower Party owns or holds, or is
obligated under or a party to, any option, right of first refusal or any other
contractual right to purchase, acquire, sell, assign or dispose of any real
property owned or leased by it.

(y)           Environmental Matters.

(i)            Except as is described on Schedule
5.1(y)-1, none of the Properties contains, in, on or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials in violation of Environmental Laws or in amounts that could
give rise to any material liability under Environmental Laws.

(ii)           Except as is described on Schedule
5.1(y)-2, each Borrower Party and each Subsidiary of a Borrower Party
is in compliance with all

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applicable Environmental
Laws and there is no violation of any Environmental Law or contamination which
could materially interfere with the continued operation of any of the
Properties or impair the financial condition of any Borrower Party or any
Subsidiary of a Borrower Party.

(iii)          Except as is described on Schedule
5.1(y)-3, no Borrower Party or any Subsidiary of a Borrower Party has
received from any Governmental Authority any complaint, or notice of violation,
alleged violation, investigation or advisory action or notice of potential
liability regarding matters of environmental protection or permit compliance
under applicable Environmental Laws with regard to the Properties, nor is any
Borrower Party aware that any such notice is pending.

(iv)          Except as is described on Schedule
5.1(y)-4, Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Property in violation of any
Environmental Laws or in a manner that could give rise to any liability under
Environmental Laws nor have any Hazardous Materials been transported or
disposed of from any of the Properties to any other location in violation of
any Environmental Laws or in a manner that could give rise to liability under
Environmental Laws. Except as disclosed on Schedule 5.1(y)-4, no
Borrower Party or any Subsidiary of a Borrower Party has permitted or will
permit any tenant or occupant of the Properties to engage in any activity that
could impose material liability under the Environmental Laws on such tenant or
occupant, any Borrower Party or any Subsidiary of a Borrower Party or any other
owner of any of the Properties.

(v)           Except as is described on Schedule
5.1(y)-5, no Borrower Party or any Subsidiary of a Borrower Party is
a party to any governmental administrative actions or judicial proceedings
pending under any Environmental Law with respect to any of the Properties, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to any of the Properties.

(vi)          Except as is described on Schedule
5.1(y)-6, there has been no release or threat of release of Hazardous
Materials into the environment at or from any of the Properties, or arising
from or relating to the operations of the Borrower Parties or their
Subsidiaries, in material violation of Environmental Laws or in amounts that
could give rise to any material liability under Environmental Laws.

(vii)         None of the matters disclosed on Schedules
5.1(y)-1 through 6 is reasonably likely to result in liability
to the Borrower Parties and their Subsidiaries in excess of $100,000 in the
aggregate.

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(z)            OSHA. All of the Borrower
Parties’ and their Subsidiaries’ operations are conducted in compliance, in all
material respects, with all applicable rules and regulations promulgated
by the Occupational Safety and Health Administration of the United States
Department of Labor.

(aa)         Name of Borrower Party. No
Borrower Party or any Subsidiary of any Borrower Party has changed its name
within the preceding five (5) years from the Agreement Date, nor has any
Borrower Party or any Subsidiary of a Borrower Party transacted business under
any other name or trade name during such five (5) year period.

(bb)         Investment Company Act; Public
Utility Holding Company Act. No Borrower Party or any Subsidiary of a
Borrower Party is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance
by the Borrower Parties of this Agreement nor the issuance of any Term Loan
Notes violates any provision of such Act or requires any consent, approval, or
authorization of, or registration with, any governmental or public body or
authority pursuant to any of the provisions of such Act. No Borrower Party or
any Subsidiary of a Borrower Party is a “holding company” or a “subsidiary
company” of a “holding company”, or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company”, as such terms are defined in the
Public Utility Holding Company Act of 2005, as amended.

(cc)         Anti-Terrorism Laws.

(i)            Anti-Terrorism Laws. No
Borrower Party nor any Affiliate of any Borrower Party is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(ii)           Executive Order No. 13224.
No Borrower Party nor any Affiliate of any Borrower Party is any of the
following (each a “Blocked Person”):

(A)          a Person that is listed in the annex
to, or is otherwise subject to the provisions of, Executive Order No. 13224;

(B)           a Person owned or controlled by, or
acting for or on behalf of, any Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224;

(C)           a Person or entity with which any
bank or other financial institution is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

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(D)          a Person or entity that commits,
threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224;

(E)           a Person or entity that is named as a
“specially designated national” on the most current list published by OFAC at
its official website or any replacement website or other replacement official
publication of such list; or

(F)           a Person or entity who is affiliated
with a Person or entity listed above.

No Borrower Party nor any
Affiliate of any Borrower Party (x) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person or (y) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224.

(iii)          OFAC. No Borrower Party nor any
Affiliate of any Borrower Party is in violation of any rules or
regulations promulgated by OFAC or of any economic or trade sanctions or
engages in administered and enforced by OFAC or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any rules or
regulations promulgated by OFAC.

(dd)         Debarment and Suspension. No
event has occurred and, to the best knowledge of principal officers of the
Borrower, no condition exists that may result in the debarment or suspension of
the Borrower or any of its Subsidiaries from any contracting with the Federal
Government, and neither the Borrower nor any Affiliate of the Borrower has been
subject to any such debarment or suspension prior to the date of this Agreement.
No investigation or inquiry involving fraud, deception or willful misconduct
has been commenced in connection with any contract between the Federal
Government and the Borrower or a Subsidiary of the Borrower or any activities
of the Borrower or any Subsidiary of the Borrower.

Section 5.2             Representations and Warranties
Relating to Accounts. With respect to all Accounts of each Borrower Party, such
Borrower Party hereby warrants and represents to the Lender Group that such
Accounts are bona fide existing payment obligations of Account Debtors created
by the sale and delivery of Inventory or the rendition of services to such
Account Debtors in the ordinary course of such Borrower Party’s business and
all documents relating to such Accounts are legally sufficient under Applicable
Law and are legally enforceable in accordance with their terms as necessary to
provide the practical realization of the rights and benefits contained therein.
As to each Account that is identified by such Borrower Party as an Eligible
Account in the most recent Borrowing Base Certificate submitted to the
Administrative Agent by the 

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Borrower, such Account is
not ineligible by virtue of one or more of the excluding criteria set forth in
the definition of Eligible Accounts.

Section 5.3             Representations and Warranties
Relating to Inventory. With respect to all Eligible Inventory, the Administrative Agent may
rely upon all statements, warranties, or representations made in any Borrowing
Base Certificate in determining the classification of such Inventory and in determining
which items of Inventory listed in such Borrowing Base Certificate meet the
requirements of eligibility.

Section 5.4             Survival of Representations and
Warranties, etc. All representations and warranties made under this Agreement and the
other Loan Documents shall be deemed to be made, and shall be true and correct,
at and as of the Agreement Date, except to the extent previously fulfilled in
accordance with the terms of this Agreement or the other Loan Documents and to
the extent subsequently inapplicable or that are by their terms true only as of
a date certain other than the Agreement Date. All representations and
warranties made under this Agreement and the other Loan Documents shall
survive, and not be waived by, the execution hereof by the Lender Group, or any
of them, any investigation or inquiry by any member of the Lender Group, or the
making of the Term Loan under this Agreement.

ARTICLE 6.

GENERAL COVENANTS

Until the Obligations are
repaid in full in cash, unless the Majority Lenders shall otherwise give their
prior consent in writing:

Section 6.1             Preservation of Existence and
Similar Matters. Each Borrower Party will, and will cause each of its Subsidiaries to (i) except
as expressly permitted by Section 8.7, preserve and maintain its existence,
rights, franchises, licenses, and privileges in its jurisdiction of
incorporation or organization including, without limitation, all Necessary
Authorizations, and (ii) qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization.

Section 6.2             Compliance with Applicable Law.
Each Borrower Party will, and will cause each of its Subsidiaries to, comply
with the requirements of all Applicable Law, except where the failure to so
comply would not have a Material Adverse Effect.

Section 6.3             Maintenance of Properties. Each
Borrower Party will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in the ordinary course of business in good repair, working order and
condition, normal wear and tear and disposal of obsolete equipment excepted,
all properties used or useful in its business (whether owned or held under
lease), and from time to time make or cause to be made all 

 60
 

 

needed and appropriate
repairs, renewals, replacements, additions, betterments, and improvements
thereto.

Section 6.4             Accounting Methods and Financial
Records. Each Borrower Party will, and will cause each of its Subsidiaries to, maintain a
system of accounting established and administered in accordance with GAAP and
with any system mandated by an Account Debtor, such as the federal government
cost and accounting standards, and will, and will cause each of its
Subsidiaries to, keep adequate records and books of account in which complete
entries will be made in accordance with such accounting principles consistently
applied and reflecting all transactions required to be reflected by such
accounting principles.

Section 6.5             Insurance. Each Borrower
Party will, and will cause each of its Subsidiaries to, maintain insurance including, but not limited
to, public liability, property insurance, comprehensive general liability,
business interruption, product liability and fidelity coverage insurance, in
such amounts and against such risks as would be customary for companies in the
same industry and of comparable size as the Borrower Parties and their
Subsidiaries from financially sound and reputable insurance companies having
and maintaining an A.M. Best rating of “A+” or better and being in a size
category of VI or larger or otherwise acceptable to the Administrative Agent. In
addition to the foregoing, each Borrower Party further agrees to maintain and
pay for insurance upon all goods constituting Collateral wherever located, in
storage or in transit in vehicles, vessels or aircraft, including goods
evidenced by documents, covering casualty, hazard, public liability and such
other risks and in such amounts as would be customary for companies in the same
industry and of comparable size as the Borrower Parties, from financially sound
and reputable insurance companies having and maintaining an A.M. Best
rating of “A+” or better and being in a size category of VI or larger or
otherwise acceptable to the Administrative Agent to insure the Lender Group’s
interest in such Collateral. All such property insurance policies shall name
the Administrative Agent as loss payee and all liability insurance policies
shall name the Administrative Agent as additional insured. Each Borrower Party
shall deliver the original certificates of insurance evidencing that the
required insurance is in force together with satisfactory lender’s loss payable
and additional insured, as applicable, endorsements. Each policy of insurance
or endorsement shall contain a clause requiring the insurer to give not less
than thirty (30) days’ prior written notice to the Administrative Agent in the
event of cancellation or modification of the policy for any reason whatsoever
and a clause that the interest of the Administrative Agent shall not be
impaired or invalidated by any act or neglect of any Borrower Party or owner of
the Collateral nor by the occupation of the premises for purposes more
hazardous than are permitted by said policy. If any Borrower Party fails to
provide and pay for such insurance, the Administrative Agent may, at the
Borrower’s expense, procure the same, but shall not be required to do so. Upon
the occurrence and during the continuance of an Event of Default, each Borrower
Party agrees to deliver to the Administrative Agent, promptly as rendered, true
copies of all reports made in any reporting forms to insurance companies.

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Section 6.6             Payment of Taxes and Claims.
Each Borrower Party will, and will cause each of its Subsidiaries to, pay and discharge all
taxes, assessments, and governmental charges or levies imposed upon it or its
income or profit or upon any properties belonging to it prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials and
supplies which have become due and payable and which by law have or may become
a Lien upon any of its Property; except that, no such tax, assessment, charge,
levy, or claim need be paid which is being contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the appropriate books, but only so long as such tax, assessment,
charge, levy, or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale, or similar proceedings shall have
been commenced and remain unstayed for a period thirty (30) days after such
commencement. Each Borrower Party shall, and shall cause each of its
Subsidiaries to, timely file all information returns required by federal,
state, or local tax authorities.

Section 6.7             Visits and Inspections. Each
Borrower Party will, and will permit each of its Subsidiaries to, permit representatives of
the Administrative Agent to (a) visit and inspect the properties of the
Borrower Parties and their Subsidiaries during normal business hours upon
reasonable prior notice to the Borrower (unless an Event of Default shall have
occurred and be continuing), (b) inspect and make extracts from and copies
of the Borrower Parties’ and their Subsidiaries’ books and records, subject to
the confidentiality requirements of this Agreement, and (c) discuss with
the Borrower Parties’ and their Subsidiaries’ respective principal officers the
Borrower Parties’ or such Subsidiaries’ businesses, assets, liabilities,
financial positions, results of operations, and business prospects relating to
the Borrower Parties or such Subsidiaries. Any other member of the Lender Group
may, at its expense, accompany the Administrative Agent on any regularly
scheduled visit (or at any time that an Event of Default exists any visit
regardless of whether it is regularly scheduled) to the Borrower Parties and
their Subsidiaries’ properties.

Section 6.8             Conduct of Business. Each
Borrower Party shall, and shall cause each of its Subsidiaries to, continue to engage in
business of the same general type as conducted by it as of the Agreement Date.

Section 6.9             ERISA. Each Borrower Party
shall at all times make, or cause to be made, prompt payment of contributions required to
meet the minimum funding standards set forth in ERISA with respect to each
Borrower Party’s and its ERISA Affiliates’ Plans; furnish to the Administrative
Agent, promptly upon the Administrative Agent’s request therefor, copies of any
annual report required to be filed pursuant to ERISA in connection with each
such Plan of each Borrower Party and its ERISA Affiliates; notify the
Administrative Agent as soon as practicable of any ERISA Event; and furnish to
the Administrative Agent, promptly upon the Administrative Agent’s request
therefor, such additional information concerning any such Plan as may be
reasonably requested by the Administrative Agent.

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Section 6.10           Lien
Perfection. Each Borrower Party agrees to take such action as may be
requested by the Administrative
Agent to perfect or continue the perfection of the Administrative Agent’s (on
behalf of, and for the benefit of, the Lender Group) security interest in the
Collateral. Each Borrower Party hereby authorizes the Administrative Agent to
file any such financing statement on such Borrower Party’s behalf describing
the Collateral as “all assets of the debtor” or “all personal property of the
debtor.”

Section 6.11           Location of Collateral. All
Collateral, other than Inventory in transit and Inventory sold in the ordinary course of
business, will at all times be kept by the Borrower Parties at one or more of
the business locations of the Borrower Parties set forth in Schedule 6.11
or any other location if (i) the Borrower gives the Administrative Agent
written notice of the new location at least thirty (30) days prior to storing
Collateral (other than Inventory) at such location, (ii) the Lender Group’s
security interest in such Collateral is and continues to be a duly perfected,
first priority Lien thereon, (iii) neither any Borrower Party’s nor the
Administrative Agent’s right of entry upon the premises where such Collateral
is stored or its right to remove the Collateral therefrom, is in any way
restricted, and (iv) the owner of such premises shall have executed and
delivered to the Administrative Agent a Collateral Access Agreement. The
Inventory shall not, without the prior written approval of the Administrative
Agent, be moved from the locations set forth on Schedule 6.11 except as
permitted in the immediately preceding sentence and prior to an Event of
Default, (a) sales or other dispositions of assets permitted pursuant to Section 8.7
and (b) the storage of Inventory at locations within the continental US
other than those specified in the first sentence of this Section 6.11 if (i) the
Borrower gives the Administrative Agent written notice of the new storage
location at least thirty (30) days prior to storing Inventory at such location,
(ii) the Lender Group’s security interest in such Inventory is and
continues to be a duly perfected, first priority Lien thereon, (iii) neither
any Borrower Party’s nor the Administrative Agent’s right of entry upon the
premises where such Inventory is stored or its right to remove the Inventory
therefrom, is in any way restricted, (iv) the owner of such premises, and
any bailee, warehouseman or similar party that will be in possession of such
Inventory, shall have executed and delivered to the Administrative Agent a
Collateral Access Agreement, and (v) all negotiable documents and receipts
in respect of any Collateral maintained at such premises are promptly delivered
to the Administrative Agent and any non-negotiable documents and receipts in respect
of any Collateral maintained at such premises are issued to the Administrative
Agent and promptly delivered to the Administrative Agent.

Section 6.12           Protection of Collateral. All
insurance expenses and expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral (including, without limitation, all
rent payable by any Borrower Party to any landlord of any premises where any of
the Collateral may be located), and any and all excise, property, sales, and use
taxes imposed by any state, federal, or local authority on any of the
Collateral or in respect of the sale thereof, shall be borne and paid by the
Borrower Parties. If the Borrower Parties fail to promptly pay any portion
thereof when

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due, the Lenders may, at
their option, but shall not be required to, pay the same directly to the
appropriate Person and such amounts shall be borne and paid on demand by the
Borrower Parties. The Borrower agrees to reimburse the Lenders promptly
therefor with interest accruing thereon daily at the Default Rate provided in
this Agreement. All sums so paid or incurred by the Lenders for any of the
foregoing and all reasonable costs and expenses (including attorneys’ fees,
legal expenses, and court costs) which the Lenders may incur in enforcing or
protecting the Lien on or rights and interest in the Collateral or any of their
rights or remedies under this or any other agreement between the parties hereto
or in respect of any of the transactions to be had hereunder until paid by the
Borrower to the Lenders with interest at the Default Rate, shall be considered
Obligations owing by the Borrower to the Lenders hereunder. Such Obligations
shall be secured by all Collateral and by any and all other collateral,
security, assets, reserves, or funds of the Borrower Parties in or coming into
the hands or inuring to the benefit of the Lenders. Neither the Administrative
Agent nor the Lenders shall be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in the
Lenders’ actual possession and loss or damage resulting from such Person’s
gross negligence or willful misconduct as determined by a final non-appealable
order of a court of competent jurisdiction) or for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency, or other person whomsoever, but the same shall be at the Borrower
Parties’ sole risk.

Section 6.13           Assignments and Records of
Accounts. If so requested by the Administrative Agent following an Event of Default, each
Borrower Party shall execute and deliver to the Administrative Agent, for the
benefit of the Lender Group, formal written assignments of all of the Accounts
daily, which shall include all Accounts that have been created since the date
of the last assignment, together with copies of invoices or invoice registers
related thereto. Each Borrower Party shall keep accurate and complete records
of the Accounts and all payments and collections thereon.

Section 6.14           Administration of Accounts.

(a)           The Administrative Agent retains the
right after the occurrence and during the continuance of an Event of Default to
notify the Account Debtors that the Accounts have been assigned to the
Administrative Agent, for the benefit of the Lender Group, and to collect the
Accounts directly in its own name and to charge the collection costs and
expenses, including attorneys’ fees, to the Borrower. The Administrative Agent
has no duty to protect, insure, collect or realize upon the Accounts or
preserve rights in them. Each Borrower Party irrevocably makes, constitutes and
appoints the Administrative Agent as such Borrower Party’s true and lawful
attorney and agent-in-fact to endorse such Borrower Party’s name on any checks,
notes, drafts or other payments relating to, the Accounts which come into the
Administrative Agent’s possession or under the Administrative Agent’s control
as a result of its taking any of the foregoing actions. Additionally, the
Administrative Agent, for the benefit of the Lender Group,

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shall have the right to
collect and settle or adjust all disputes and claims directly with the Account
Debtor and to compromise the amount or extend the time for payment of the
Accounts upon such terms and conditions as the Administrative Agent may deem
advisable, and to charge the deficiencies, reasonable costs and expenses
thereof, including attorney’s fees, to the Borrower.

(b)           If an Account includes a charge for
any tax payable to any governmental taxing authority, the Administrative Agent
on behalf of the Lenders is authorized, in its sole discretion, to pay the
amount thereof to the proper taxing authority for the account of the applicable
Borrower Party. The Borrower agrees to reimburse the Lenders promptly therefor
with interest accruing thereon daily at the Default Rate provided in this
Agreement. The Borrower Parties shall notify the Administrative Agent if any
Account includes any tax due to any governmental taxing authority and, in the
absence of such notice, the Administrative Agent shall have the right to retain
the full proceeds of the Account and shall not be liable for any taxes to any
governmental taxing authority that may be due by any Borrower Party by reason
of the sale and delivery creating the Account.

(c)           Whether or not a Default has
occurred, any of the Administrative Agent’s officers, employees or agents shall
have the right, at any time or times hereafter, in the name of the Lenders, or
any designee of the Lenders or the Borrower Parties, to verify the validity,
amount or other matter relating to any Accounts by mail, telephone, telegraph
or otherwise. The Borrower Parties shall cooperate fully with the
Administrative Agent and the Lenders in an effort to facilitate and promptly
conclude any such verification process.

Section 6.15           The Blocked Account.

(a)           The Borrower Parties shall establish
and maintain one or more blocked accounts (each a “Blocked Account”)
pursuant to a lockbox arrangement acceptable to the Administrative Agent with
SunTrust Bank, any Affiliate thereof or a banking institution acceptable to the
Administrative Agent. The Borrower Parties shall issue to each such bank an
irrevocable letter of instruction directing such bank to deposit all payments
or other remittances received in the lockbox to the Blocked Account maintained
at such bank. All amounts which shall be deposited into any Blocked Account
shall immediately become the property of and, subject to the SunTrust Intercreditor
Agreement, be under the sole dominion and exclusive control of the
Administrative Agent, on behalf of the Lender Group, and no Borrower Party
shall have any right to withdraw such amounts from the Blocked Account. The Borrower Parties shall, at all times
prior to the payment in full of the Senior Credit Facility Obligations
(including letters of credit that are included therein being cash
collateralized) and the termination of the Senior Credit Facility, comply with
the blocked account provisions set forth in Section 6.15 of the Senior
Credit Facility Agreement (as in effect on the date hereof). After the payment
in full of the Senior Credit Facility Obligations (including

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letters
of credit that are included therein being cash collateralized) and termination
of the Senior Credit Facility, the Borrower Parties shall maintain cash
management arrangements satisfactory to the Administrative Agent in all
respects, including, without limitation, the blocked account arrangements
described in this Section 6.15. The Borrower Parties acknowledge
and agree that (i) the funds on deposit in each Blocked Account shall at
all times constitute collateral security for all of the Obligations and (ii) the
funds on deposit in each such Blocked Account shall be applied as provided the
Senior Credit Facility Agreement as in effect on the date hereof or, after the payment in full of the Senior Credit
Facility Obligations (including letters of credit that are included therein
being cash collateralized) and the termination of the Senior Credit Facility,
in a manner satisfactory in all respects to the Administrative Agent.

(b)           The Borrower Parties shall take all
steps to ensure that all of their Account Debtors and all of their credit card
processors forward all items of payment to lockboxes established with the
Blocked Account banks. The Borrower Parties shall cause each of their credit
card processors to enter into an agreement, in form and substance satisfactory
to the Administrative Agent, with the Administrative Agent and the applicable
Borrower Party pursuant to which the applicable Borrower Party shall
irrevocably instruct such credit card processor to forward all items of payment
owing to the Borrower Parties directly to a Blocked Account.

(c)           In the event that any Borrower Party
shall at any time receive any remittances of any of the foregoing directly or
shall receive any other funds representing proceeds of the Collateral, such
Borrower Party shall hold the same as trustee for the Administrative Agent,
shall segregate such remittances from its other assets, and shall promptly
deposit the same into a Blocked Account. All cash, cash equivalents, checks,
notes, drafts or similar items of payment (including, without limitation, from
the sale of any assets under Section 8.7(b) or otherwise or
constituting insurance or condemnation proceeds) received by any Borrower Party
shall be deposited into a Blocked Account promptly upon receipt thereof by such
Borrower Party.

(d)           If the Administrative Agent or any
Affiliate of the Administrative Agent is a Blocked Account bank, on each
Business Day the Administrative Agent shall, without further consent of any
Borrower Party but subject to the SunTrust Intercreditor Agreement, withdraw
all immediately available funds in such Blocked Account, deposit the same in
the Loan Account, and apply the same against the Obligations in the manner
provided for in Section 2.11 or, if applicable, Section 2.6(c); provided,
however, if on any such date there are no outstanding Obligations or the
amount of any such deposit in the Loan Account is in excess of the outstanding
Obligations, then at the written request of the Borrower such excess amount
shall be directed to any other deposit or investment account maintained by the
Borrower so long as such account is subject to a Blocked Account Agreement or
other control agreement acceptable to the Administrative Agent. With respect to
the calculation of interest, the application of such funds to the Obligations
shall be deemed made one (1) day after receipt of such funds.

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(e)           As of the Agreement Date, all bank
accounts and investment accounts of the Borrower Parties are listed on Schedule
6.15 and such Schedule designates which such accounts are deposit accounts.
No Borrower Party shall open any other deposit account unless the depository
bank for such account shall have entered into an agreement with the
Administrative Agent substantially in the form of the Blocked Account
Agreement.

Section 6.16           Further Assurances. Upon the
written request of the Administrative Agent, each Borrower Party will promptly cure, or
cause to be cured, defects in the creation and issuance of any Term Loan Notes
and the execution and delivery of the Loan Documents (including this
Agreement), resulting from any act or failure to act by any Borrower Party or
any employee or officer thereof. Each Borrower Party at its expense will
promptly execute and deliver to the Administrative Agent and the Lenders, or
cause to be executed and delivered to the Administrative Agent and the Lenders,
all such other and further documents, agreements, and instruments in compliance
with or accomplishment of the covenants and agreements of the Borrower Parties
in the Loan Documents (including this Agreement) or to correct any omissions in
the Loan Documents or more fully to state the obligations set out herein or in
any of the Loan Documents or to obtain any consents, all as may be necessary or
appropriate in connection therewith as may be reasonably requested provided
that such further documents, agreements and instruments do not increase the
obligations or diminish the rights of any Borrower under the Loan Documents
from the existing covenants and agreements contained in the Loan Documents
(including this Agreement).

Section 6.17           Broker’s Claims. Each Borrower
Party hereby indemnifies and agrees to hold each member of the Lender Group harmless from
and against any and all losses, liabilities, damages, costs and expenses which
may be suffered or incurred by such member of the Lender Group in respect of
any claim, suit, action or cause of action now or hereafter asserted by a
broker or any Person acting in a similar capacity arising from or in connection
with the execution and delivery of this Agreement or any other Loan Document or
the consummation of the transactions contemplated herein or therein. This Section 6.17
shall survive termination of this Agreement.

Section 6.18           Indemnity. Each Borrower Party
will indemnify and hold harmless each Indemnified Person from and against any and all
claims, liabilities, investigations, losses, damages, actions, demands,
penalties, judgments, suits, investigations and costs, expenses (including fees
and expenses of experts, agents, consultants and reasonable fees and expenses
of counsel) and disbursements, in each case, of any kind or nature (whether or
not the Indemnified Person is a party to any such action, suit or
investigation) whatsoever which may be imposed on, incurred by, or asserted
against an Indemnified Person resulting from any breach or alleged breach by
the Borrower Parties of any representation or warranty made hereunder, or
otherwise in any way relating to or arising out of the Term Loan, this
Agreement, the other Loan Documents or any other document contemplated by this
Agreement, the making, administration or enforcement of the Loan 

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Documents and the Term
Loan, any transaction contemplated hereby or any related matters unless, with
respect to any of the above, such Indemnified Person is determined by a final
non-appealable judgment of a court of competent jurisdiction to have acted or
failed to act with gross negligence or willful misconduct. NO INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN
DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT. This Section 6.18 shall survive termination
of this Agreement.

Section 6.19           Environmental Matters.

(a)           Each Borrower Party shall, and shall
cause its Subsidiaries to, comply in all material respects with the
Environmental Laws and shall notify the Administrative Agent within thirty (30)
days in the event of any discharge or discovery of any Hazardous Materials at,
upon, under or within the Properties in amounts that require remediation. Each
Borrower Party shall forward to the Administrative Agent copies of all
documents alleging a violation of Environmental Laws, all responses thereto and
all documents submitted to environmental agencies relative to remediation of
Hazardous Materials on the Properties, in each case, within thirty (30) days of
receipt, delivery or submission (as the case may be) of the same.

(b)           The Borrower Parties will not use or
permit any other party to use any Hazardous Materials at any of their places of
business except such materials as are used in the Borrower Parties’ normal
course of business, maintenance and repairs, and then only in material
compliance with all applicable Environmental Laws. The Borrower Parties shall
not install or permit to be installed in the Property friable asbestos or any
substance containing asbestos and deemed hazardous by an Applicable Law
respecting such material, or any other building material deemed to be harmful,
hazardous or injurious by relevant Applicable Law and with respect to any such
material currently present in any Property shall promptly either (i) remove
any material which such Applicable Law deem harmful, hazardous or injurious and
require to be removed or (ii) otherwise comply with such Applicable Law,
at the Borrower Parties’ expense.

(c)           Promptly upon the written request of
the Administrative Agent from time to time, the Borrower Parties shall provide
the Administrative Agent with an environmental site assessment or environmental
audit report prepared by an environmental engineering firm acceptable to the
Administrative Agent, to assess with a reasonable degree of certainty the
presence or absence of any Hazardous Materials and

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the potential costs in
connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or within the Properties. Such assessment or report shall be at
Borrower Parties’ expense if, in the judgment of the Administrative Agent,
there is reason to believe that a violation of Environmental Laws has occurred.

(d)           Each Borrower Party shall at all
times indemnify and hold harmless the Lender Group against and from any and all
claims, suits, actions, debts, damages, costs, losses, obligations, judgments,
charges, and expenses, or any nature whatsoever under or on account of the Environmental
Laws including the assertion of any lien thereunder, with respect to:

(i)            any discharge of Hazardous
Materials, the threat of a discharge of any Hazardous Materials or the presence
of any Hazardous Materials affecting the Properties whether or not the same
originates or emanates from the Properties or any contiguous real estate
including any loss of value of the Properties as a result of any of the
foregoing;

(ii)           any costs of removal or remedial
action incurred by the US government or any costs incurred by any other person
or damages from injury to, destruction of, or loss of natural resources,
including reasonable costs of assessing such injury, destruction or loss
incurred pursuant to any Environmental Laws;

(iii)          liability for personal injury or
property damage arising under any statutory or common law tort theory
(including without limitation damages assessed) for the maintenance of a public
or private nuisance or for the carrying on of an abnormally dangerous activity
at or caused by any Borrower Party or Subsidiary of a Borrower Party near the
Properties; and/or

(iv)          any other environmental matter
affecting the Properties within the jurisdiction of the Environmental
Protection Agency, any other federal agency, or any state or local environmental
agency.

(e)           In the event of any discharge or
discovery of any Hazardous Materials at, upon, under or within the Properties
in amounts that require remediation, if the applicable Borrower Party or
Subsidiary fails to begin the remediation within thirty (30) days after notice
to the Administrative Agent, the Administrative Agent may at its election, but
without the obligation to do so, give such notices and/or cause such work to be
performed at the Properties and/or take any and all other actions as the Administrative
Agent shall deem necessary or advisable in order to abate the discharge of such
Hazardous Material, remove such Hazardous Material or cure such Borrower Party’s
or Subsidiary’s noncompliance.

(f)            All of the representations,
warranties, covenants and indemnities of this Section 6.19 and Section 5.1(y) shall
survive the termination of this Agreement, the repayment of the Obligations
and/or the release of the liens of the Mortgage from the

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Properties that are
subject to the Mortgage and shall survive the transfer of any or all right,
title and interest in and to the Properties by the Borrower Parties or any
Subsidiary to any party, whether or not affiliated with the Borrower Parties.

Section 6.20           Assignment of Claims Act. If
so requested by the Administrative Agent (after consultation with the Borrower) upon (a) the
occurrence and during the continuance of an Event of Default or (b) the
occurrence of any event, act or condition resulting in a Material Adverse
Effect, each Borrower Party shall execute and deliver to the Administrative
Agent, for the benefit of the Lender Group, all documents, instruments,
filings, or take any other required actions, necessary to complete the required
procedures under the Federal Assignment of Claims Act of 1940 for the effective
collateral assignment (to the extent available under Applicable Law) of all
Accounts which are owed by the Federal Government to the extent the amount of
such Accounts, either individually or in the aggregate together with all other
Accounts under a single contract, exceeds $1,000,000; provided, however,
such Borrower Party shall only be required to use commercially reasonable
efforts with respect to actions required by the applicable Account Debtor or
any other Person.

Section 6.21           Formation of Subsidiaries. At
the time of the formation of any direct or indirect Subsidiary of the Borrower after the
Agreement Date or the acquisition of any direct or indirect Subsidiary of the
Borrower after the Agreement Date, the Borrower Parties, as appropriate, shall (a) cause
such new Domestic Subsidiary to provide to the Administrative Agent, for the
benefit of the Lender Group, a joinder and supplement to this Agreement
substantially in the form of Exhibit I (each, a “Guaranty
Supplement”), pursuant to which such new Domestic Subsidiary shall agree to
join as a Guarantor of the Obligations under Article 3 and as a Borrower
Party under this Agreement, a supplement to the Security Agreement, and such
other security documents (including, without limitation, Mortgages with respect
to any real estate owned by such Subsidiary), together with appropriate Uniform
Commercial Code financing statements, all in form and substance reasonably
satisfactory to the Administrative Agent, (b) provide to the
Administrative Agent, for the benefit of the Lender Group, a pledge agreement
and appropriate certificates and powers or Uniform Commercial Code financing
statements, pledging all direct or beneficial ownership interest in such new
Subsidiary (regardless of whether owned by a Borrower Party or a Subsidiary of
a Borrower Party or a minority shareholder), in form and substance reasonably
satisfactory to the Administrative Agent, and (c) provide to the
Administrative Agent, for the benefit of the Lender Group, all other documentation,
including one or more opinions of counsel satisfactory to the Administrative
Agent, which in its reasonable opinion is appropriate with respect to such
formation and the execution and delivery of the applicable documentation
referred to above. Nothing in this Section 6.21 shall authorize any
Borrower Party or any Subsidiary of a Borrower Party to form or acquire any
Subsidiary absent express authorization to so form or acquire such Subsidiary
pursuant to Article 8. Any document, agreement or instrument
executed or issued pursuant to this Section 6.21 shall be a “Loan Document”
for purposes of this Agreement

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Section 6.22           Notifications Relating to
Contracts with the Federal Government. Each Borrower Party will promptly (and in any event
within three (3) Business Days of), deliver to the Administrative Agent: (a) any
written notification from the Federal Government indicating that it intends to
take a setoff with respect to any Account as to which the Federal Government is
the Account Debtor; (b) any written notification from any subcontractor
indicating any Borrower Parties failure to make prompt payments with respect to
any contract entered into in connection with any Account as to which the
Federal Government is the Account Debtor; (c) any written notification
from the Federal Government in connection with any Account as to which the
Federal Government is the Account Debtor indicating that the Federal Government
intends to cancel an order for goods or services or to change or limit the
scope of an order for goods or services, if such cancellation, change or
limitation could, individually, have a negative impact of $5,000,000 or more on
the revenue of the Borrower; and (d) any written notification from the
Federal Government indicating that the Federal Government intends to terminate
for convenience any contract entered into in connection with any Account as to
which the Federal Government is the Account Debtor if such termination could,
individually, have a negative impact of $5,000,000 or more on the revenue of
the Borrower.

Section 6.23           Inventory Appraisals; Delivery of
Appraisals under Senior Credit Facility Documents, Etc.

(a)           Absent the occurrence of an Event of
Default, the Administrative Agent may, at the Borrower’s expense, (i) have
conducted appraisals of the Borrower’s Inventory not more than twice during any
12 month period and (ii) have conducted commercial finance examinations
not more than four times during any 12 month period. Prior to the occurrence of
an Event of Default, the Agent may have conducted appraisals of the Borrower’s
Inventory and commercial finance examinations (in addition to those appraisals
commercial finance examinations conducted at the Borrowers’ expense as set
forth in the preceding sentence) at its own expense at any time upon its
reasonable request. At any time an Event of Default has occurred and is
continuing, the Administrative Agent shall have the right to have conducted
further appraisals, commercial finance examinations, audits and valuations of
the Inventory and other Collateral in its Permitted Discretion at the Borrower’s
expense. The requirements of this Section 6.23(a) may be satisfied by
the receipt by the Administrative Agent from the Senior Credit Facility Agent
(in each case, in form and substance acceptable to the Administrative Agent in
its Permitted Discretion (exercised in a manner consistent with the Senior
Credit Facility Agent’s Discretion)) of appraisals, field audits, commercial
finance examinations, environmental reports and other evaluations (in each
case, promptly upon the Senior Credit Facility Agent’s receipt of the same)
performed by or for the benefit of the Senior Credit Facility Agent under the
Senior Credit Facility Agreement; provided that the failure by the
Senior Credit Facility Agent to deliver such items shall not constitute a
Default or Event of Default hereunder.

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(b)           All amounts chargeable to the
Borrower under this Section 6.23 shall constitute Obligations that are
secured by all of the Collateral and shall be payable to the Administrative
Agent within 10 days of written demand.

Section 6.24           Post
Closing Conditions. The Borrower shall perform or cause to be performed the
following, each of which
shall be in form and substance satisfactory to the Administrative Agent:

(a)           Within 30 days after the Agreement
Date (as may be extended by the Administrative Agent in its sole discretion),
Borrower shall have delivered to Administrative Agent a certificate of good
standing from the Secretary of State of each of the jurisdictions listed on Schedule
1.1(d), in each case evidencing that Borrower is qualified and in good standing
as a foreign corporation in such jurisdictions under the name “GTSI Corp”
(other than the State of California or such other state as the Administrative
Agent may approve) and, with respect to the State of California or such other
state, the Borrower shall take such steps to qualify and be in good standing as
a foreign corporation as may be reasonably acceptable to the Administrative
Agent.

(b)           Within 30 days of
the Agreement date (as may by extended by the Administrative Agent in its sole
discretion), the Borrower shall, or shall cause its Subsidiaries to, close its
German bank account.

(c)           Within 60 days after
the Agreement Date (as may by extended by the Administrative Agent in its sole
discretion), deliver to Administrative Agent evidence that (i) Technology
Logistics, Inc., as incorporated in Virginia (which for the avoidance of
doubt differs from Technology Logistics, Inc. incorporated in Delaware and
which is a Guarantor hereunder), has been either dissolved or merged into
Technology Logistics, Inc., as incorporated in Delaware, and (ii) Technology
Logistics, Inc., as incorporated in Delaware, has filed for qualification
as a foreign corporation in Virginia. The Borrower Parties hereby represent and
covenant that until such time as the requirements in clauses (i) and (ii) of
this subsection (c) have been completed, Technology Logistics, Inc.
shall not have any material assets or liabilities other than the Obligations and
the obligations under the Subordinated Debt Documents.

(d)           Within 15 days after the Agreement
Date (as may by extended by the Administrative Agent in its sole discretion),
deliver to Administrative Agent a fully executed Collateral Access Agreement,
in form and substance satisfactory to Co-Collateral Agents, with respect to
Borrower’s leased location at 3900 Stonecroft Boulevard, Chantilly, Virginia
20151.

(e)           Within 30 days of the Agreement date
(as may by extended by the Administrative Agent in its sole discretion), the
Borrower take all actions required or reasonably requested by the
Administrative Agent to provide the Administrative Agent with a first priority
security perfected Lien (subject to the Lien in favor of the Senior Credit
Facility Agent) on the judgment in favor of the Borrower against Ichiban, Inc.

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ARTICLE 7.

INFORMATION COVENANTS

Until the Obligations are
repaid in full in cash, unless the Majority Lenders shall otherwise give their
prior consent in writing, the Borrower Parties will furnish or cause to be
furnished to each member of the Lender Group:

Section 7.1             Monthly and Quarterly Financial
Statements and Information. (a)  Within thirty (30) days after the last day of each fiscal
month in each fiscal year of the Borrower, the balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal month, and the related
statement of income and retained earnings and related statement of cash flows
for such fiscal month and for the fiscal year to date period (starting with the
Agreement Date) ended with the last day of such fiscal month, which financial
statements shall set forth in comparative form such figures (i) as at the
end of such month during the previous fiscal year and for such month during the
previous fiscal year and (ii) as contained in the Borrower’s projections
most recently delivered to the Administrative Agent for such periods, all of
which shall be on a consolidated and consolidating basis with the other
Borrower Parties and shall be certified by an Authorized Signatory of the
Borrower to be, in his or her opinion, complete and correct in all material
respects and to present fairly in accordance with GAAP the financial position
of the Borrower Parties, as at the end of such period and the results of
operations for such period, and for the elapsed portion of the year (starting
with the Agreement Date) ended with the last day of such period, subject only
to normal year-end adjustments and lack of footnotes, provided, that
Borrower may deliver the financial statements required under this subsection (a) up
to five (5) Business Days late and on up to two (2) occurrences in
any twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (a).

(b)           Within forty-five (45) days after the
last day of each fiscal quarter in each fiscal year of the Borrower, the
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related statement of income and retained earnings and related
statement of cash flows for such fiscal quarter which financial statements
shall set forth in comparative form (i) such figures as at the end of such
quarter during the previous fiscal year and for such quarter during the
previous fiscal year and (ii) as contained in the Borrower’s projections
most recently delivered to the Administrative Agent for such periods, all of
which shall be on a consolidated and consolidating basis with the other
Borrower Parties and shall be certified by an Authorized Signatory of the
Borrower to be, in his or her opinion, complete and correct in all material
respects and to present fairly in accordance with GAAP the financial position
of the Borrower Parties, as at the end of such period and the results of
operations for such period, subject only to normal year-end adjustments and
lack of footnotes.

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Section 7.2             Annual Financial Statements and
Information; Certificate of No Default. Within ninety (90) days after the end of each
fiscal year of the Borrower, the audited balance sheet of the Borrower and its
Subsidiaries as at the end of such year and the related audited statements of
income and retained earnings and related audited statements of cash flows for
such year, all of which shall be on a consolidated and consolidating basis with
the other Borrower Parties, which financial statements shall set forth in
comparative form (i) such figures as at the end of and for the previous
year and (ii) as contained in the Borrower’s projections most recently
delivered to the Administrative Agent for such periods, and shall be
accompanied by an opinion of independent certified public accountants of
recognized standing satisfactory to the Administrative Agent, stating that such
financial statements are unqualified and prepared in all material respects in
accordance with GAAP, without any explanatory paragraphs.

Section 7.3             Compliance Certificates.

(a)           Compliance Certificates. At
the time the financial statements are furnished pursuant to Section 7.1
and Section 7.2, a Compliance Certificate:

(b)           Setting forth as at the end of such
period, the arithmetical calculations required to establish whether or not the
Borrower Parties were in compliance with the requirements of the Financial
Covenants;

(c)           Stating whether any change in GAAP or
the application thereof has occurred since the date of the Borrower’s audited
financial statements delivered on the Agreement Date, and, if any change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate; and

(d)           Stating that, to the best of his or
her knowledge, no Default has occurred as at the end of such period, or, if a
Default has occurred, disclosing each such Default and its nature, when it
occurred and whether it is continuing.

Section 7.4             Access to Accountants. Each
Borrower Party hereby authorizes the Administrative Agent to communicate directly with
the Borrower Parties’ and their Subsidiaries’ independent public accountants
and authorizes these accountants to disclose to the Administrative Agent any
and all financial statements and other supporting financial data, including
matters relating to the annual audit and copies of any management letter with
respect to its business, financial condition and other affairs. On or before
the Agreement Date, the Borrower Parties shall deliver to their independent
public accountants a letter authorizing them to comply with the provisions of
this Section 7.4.

Section 7.5             Additional
Reports.

(a)           (i) Prior to 2:00 p.m.
(Boston, Massachusetts time) on each Business Day, the Borrower shall deliver
to the Administrative Agent, (A) a Borrowing

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Base Certificate as of
the close of business on the immediately preceding Business Day, which shall be
in such form as shall be reasonably satisfactory to the Administrative Agent,
including (without limitation) a daily roll-forward from the prior Business Day
of all origination and collection activity for Eligible Accounts and Eligible
Inventory, (B) a summary of key vendor terms (including credit limits and
payment terms) or a certification that such key vendor terms have not changed
from the key vendor terms previously reported, provided, that Borrower
may deliver a Borrowing Base Certificate required under this clause (i) up
to one (1) Business Day late and on up to ten (10) non-consecutive
occurrences in any twelve (12) month period before causing a default under Section 9.1(c) with
respect to this clause (i), (ii) on the 1st and 15th day of each calendar
month, a Borrowing Base Certificate as of the close of business on the
immediately preceding 1st day of such month or the 15th day of the prior
calendar month, whichever is most recent, setting forth (A) a categorical
breakdown of all Accounts of the Borrower, (B) a calculation of Eligible
Accounts and Eligible Inventory as of such date, (C) an aging of all
Accounts that are not Eligible Accounts and summary of all Inventory that is
not Eligible Inventory as of such date, in each case with the supporting
documentation and schedules in reasonable detail to confirm such calculations
and (iii) simultaneously with the delivery of the same to the Senior
Credit Facility Agent or the Senior Credit Facility Lenders, which times shall
be not less frequent than the times set forth in the Senior Credit Facility
Agreement as in effect on the date hereof, a copy of the relevant Senior Credit
Facility Borrowing Base Certificate and all supporting information delivered in
connection therewith.

(b)           Within 15 days after the end of each
fiscal month, or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and the Lenders,
a Borrowing Base Certificate as of the last day of the preceding fiscal month
or such other date reasonably required by the Administrative Agent, which shall
be in such form as shall be satisfactory to the Administrative Agent, setting
forth a categorical breakdown of all Accounts of the Borrower, a calculation of
Eligible Accounts and Eligible Inventory as of such last day of the preceding
fiscal month and a calculation of “Average Availability” (as defined in the
Senior Credit Facility Agreement as in effect on the date hereof) for the
preceding fiscal month, provided, that Borrower may deliver the items
required under this subsection (b) up to five (5) Business Days late
and on up to two (2) occurrences in any twelve (12) month period before
causing a default under Section 9.1(c) with respect to this
subsection (b).

(c)           Within 15 days after the end of each
fiscal month or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and to any Lender
requesting the same, in form acceptable to the Administrative Agent, lockbox,
bank and investment account statements, a report of sales and collections,
debit and credit adjustments, a detailed aged trial balance of all Accounts of
the Borrower existing as of the last day of the preceding fiscal month or such
other date reasonably required by the Administrative Agent, specifying the
names, and

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face value for each
Account Debtor obligated on an Account of the Borrower so listed and all other
information necessary to calculate Eligible Accounts as of such last day of the
preceding month or such other date reasonably required by the Administrative
Agent and, upon the Administrative Agent’s request therefor, copies of proof of
delivery and the original copy of all documents, including, without limitation,
repayment histories and present status reports relating to the Accounts of the
Borrower so scheduled and such other matters and information relating to the
status of then existing Accounts of the Borrower as the Administrative Agent
shall reasonably request, provided, that Borrower may deliver the items
required under this subsection (c) up to five (5) Business Days late
and on up to two (2) occurrences in any twelve (12) month period before
causing a default under Section 9.1(c) with respect to this
subsection (c).

(d)           On Friday of each week, the Borrower
shall deliver to the Administrative Agent a 13-week cashflow, Term Loan
Availability and Senior Credit Facility Availability forecast for the 13-week
period commencing on the Monday immediately following such Friday, such
forecast to be in form and substance satisfactory to the Administrative Agent, provided,
that Borrower may deliver the items required under this subsection (d) up
to one (1) Business Day late and on up to five (5) occurrences in any
twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (d).

(e)           Promptly upon receipt thereof, the
Borrower Parties shall deliver to the Lender Group copies of all final reports,
if any, submitted to any Borrower Party or any Subsidiary of a Borrower Party
by the Borrower Parties’ and their Subsidiaries’ independent public accountants
in connection with any annual or interim audit of the Borrower Parties and
their Subsidiaries, including, without limitation, any final management report
prepared in connection with the annual audit referred to in Section 7.2.

(f)            Within 15 days after the end of each
fiscal month, or more frequently as reasonably required by the Administrative
Agent, the Borrower shall deliver to the Administrative Agent and the Lenders,
an Inventory report as of the last day of the preceding fiscal month or such
other date reasonably required by the Administrative Agent, which shall be in
such form as shall be reasonably satisfactory to the Administrative Agent,
setting forth a categorical breakdown of all Inventory of the Borrower,
including, without limitation, Inventory that secures trade or vendor debt, and
Inventory that is free and clear of any Lien (other than the Liens in favor of
the Administrative Agent and the Senior Credit Facility Agent), provided,
that Borrower may deliver the items required under this subsection (f) up
to one (1) Business Day late and on up to five (5) occurrences in any
twelve (12) month period before causing a default under Section 9.1(c) with
respect to this subsection (f).

(g)           On or before the date thirty (30)
days prior to the commencement of each fiscal year, the Borrower Parties shall
deliver to the Lender Group the annual

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budget for the Borrower
Parties and their Subsidiaries approved by the board of directors of the
Borrower or a committee thereof, including forecasts of the income statement,
the balance sheet and a cash flow statement for the immediately succeeding year
on a month by month basis and each succeeding year thereafter through the
Maturity Date on an annual basis.

(h)           To the extent not covered elsewhere
in this Article 7, promptly after the sending thereof, the Borrower
Parties shall, and shall cause their Subsidiaries to, deliver to the
Administrative Agent and the Lenders copies of all financial statements,
reports and other information which any Borrower Party or any such Subsidiary
sends to any holder of its Funded Debt (including the Senior Credit Facility
Obligations) or its securities or which any Borrower Party or any such
Subsidiary files with the Securities and Exchange Commission or any national
securities exchange.

(i)            If there is a material change in
GAAP after December 31, 2005, that affects the presentation of the
financial statements referred to in Section 7.1 and 7.2, then, in addition
to delivery of such financial statements, and on the date such financial
statements are required to be delivered, the Borrower Parties shall furnish the
adjustments and reconciliations necessary to enable the Borrower and each
Lender to determine compliance with each of the Financial Covenants, all of
which shall be determined in accordance with GAAP consistently applied.

(j)            Promptly upon the filing thereof,
copies of all 10-K, 10-Q, and all other material financial reports
filed by the Borrower parties with the SEC.

(k)           To the extent not otherwise delivered
to the Administrative Agent hereunder, the Borrower Parties will provide, or
will cause to be provided to, the Administrative Agent and the Lenders all
reports and information as may be delivered pursuant to the terms of the Senior
Credit Facility Documents (including, without limitation, information and
reports relating to collateral audits and appraisals of the Borrower Parties),
simultaneously with the delivery of the same to the Senior Credit Facility
Agent or the Senior Credit Facility Lenders.

(l)            To the extent not otherwise
delivered to the Administrative Agent hereunder, the Borrower Parties shall
deliver to the Administrative Agent and the Lenders (i) a copy of each
notice or other written communication outside of the ordinary course of
business delivered by it or on its behalf in connection with the Senior Credit
Facility, such delivery to be made at the same time and by the same means as
such notice or other communication is delivered to the Senior Credit Facility
Agent or the Senior Credit Facility Lenders, and (ii) a copy of each notice
or other written communication outside of the ordinary course of business
received by the Borrowers in connection with the Senior Credit Facility, such
delivery to be made promptly after such notice or other communication is
received by the Borrower Parties.

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(m)          From time to time and promptly upon
(and in any event within ten (10) Business Days of) each written request
from the Administrative Agent, the Borrower Parties shall, and shall cause
their Subsidiaries to, deliver to the Administrative Agent on behalf of the
Lender Group such data, certificates, reports, statements, opinions of counsel,
documents, or further information regarding the business, assets, liabilities,
financial position, projections, results of operations, or business prospects
of the Borrower Parties, such Subsidiaries, or any of them, as the
Administrative Agent may reasonably request.

Section 7.6             Notice of Litigation and Other
Matters.

(a)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s obtaining knowledge
of the institution of, or a written threat of, any action, suit, governmental
investigation or arbitration proceeding against any Borrower Party, any
Subsidiary of a Borrower Party or any Property, which action, suit,
governmental investigation or arbitration proceeding, if adversely determined,
would expose, in such Borrower Party’s reasonable judgment, any Borrower Party
or any Subsidiary of a Borrower Party to liability in an aggregate amount in
excess of $500,000, such Borrower Party shall notify the Lender Group of the
occurrence thereof, and the Borrower Parties shall provide such additional
information with respect to such matters as the Lender Group, or any of them,
may reasonably request.

(b)           Immediately following the occurrence
of any default (whether or not any Borrower Party has received notice thereof
from any other Person) (i) on Funded Debt of any Borrower Party or any
Subsidiary of a Borrower Party which singly, or in the aggregate, exceeds
$500,000 or (ii) under the Senior Credit Facility Documents, such Borrower
Party shall notify the Lender Group of the occurrence thereof;

(c)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s receipt of notice
of the pendency of any proceeding for the condemnation or other taking of any
Property of any Borrower Party or any Subsidiary of a Borrower Party, such
Borrower Party shall notify the Lender Group of the occurrence thereof;

(d)           Promptly upon (and in any event
within five (5) Business Days of) any Borrower Party’s receipt of notice
of any event that could reasonably be likely to result in a Materially Adverse
Effect, such Borrower Party shall notify the Lender Group of the occurrence
thereof;

(e)           Promptly (and in any event within
five (5) Business Days) following any material amendment or change
approved by the board of directors of the Borrower to the budget submitted to
the Lender Group pursuant to Section 7.5(d), the Borrower Parties shall
notify the Lender Group of the occurrence thereof;

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(f)            Promptly (but in any event within
two (2) Business Days) following any (i) Default under any Loan
Document, or default by any Borrower Party under the Senior Credit Facility
Documents, or (ii) default under any other agreement (other than those
referenced in clause (i) of this Section 7.6(f) above or in Section 7.6(b))
to which any Borrower Party or any Subsidiary of a Borrower Party is a party or
by which any Borrower Party’s or any such Subsidiary’s properties is bound
which could reasonably be expected to have a Materially Adverse Effect, then
the Borrower Parties shall notify the Lender Group of the occurrence thereof
giving in each case the details thereof and specifying the action proposed to
be taken with respect thereto;

(g)           Promptly (but in any event within
five (5) Business Days) following the occurrence of any ERISA Event or a “prohibited
transaction” (as such term is defined in Section 406 of ERISA or Section 4975
of the Code) with respect to any Plan of any Borrower Party or any of its ERISA
Affiliates or the commencement or threatened commencement of any litigation
regarding any such Plan or naming it or the trustee of any such Plan with
respect to such Plan (other than claims for benefits in the ordinary course of
business), the Borrower Parties shall notify the Administrative Agent and the
Lenders of the occurrence thereof.

(h)           The Borrower Parties shall deliver
updates or supplements to the following schedules (i) within forty-five
days after the end of the end of each fiscal year, as of the last day of such
fiscal year:  Schedule 5.1(c)-1,
Schedule 5.1(c)-2, Schedule 5.1(d), Schedule 5.1(h),
Schedule 5.1(m), Schedule 5.1(p), Schedule 5.1(x)-1,
Schedule 5.1(x)-2, Schedule 5.1(y)-1, Schedule
5.1(y)-2, Schedule 5.1(y)-3, Schedule 5.1(y)-4,
Schedule 5.1(y)-5 and Schedule 5.1(y)-6, and (ii) within
forty-five days after the end of the end of each of the first and third fiscal
quarters of each fiscal year, as of the last day of such fiscal quarter: Schedule
6.11 and Schedule 6.15, in each case, as may be required to render
correct the representations and warranties contained in the applicable sections
to which such schedules relate as of the last day of such fiscal quarter
without giving effect to any references therein to the “Agreement Date” in each
case, appropriately marked to show the changes made therein; provided
that no such supplement to any such Schedules or representation shall be deemed
a waiver of any Default resulting from the matters disclosed therein, except as
consented to by the Majority Lenders in writing.

ARTICLE 8.

NEGATIVE COVENANTS

Until the
Obligations are repaid in full in cash, unless the Majority Lenders shall
otherwise give their prior consent in writing:

Section 8.1             Funded Debt. No Borrower
Party will, or will permit any of its Subsidiaries to, create, assume, incur,
or otherwise become or remain obligated in respect of, or permit to be
outstanding, any Funded Debt except:

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(a)           Funded Debt under this Agreement and
the other Loan Documents;

(b)           Funded Debt under the Senior Credit Facility Documents (or Refinancing
Debt) and the “Bank Products Documents” (as defined in the Senior Credit
Facility Agreement as in effect on the date hereof); provided that the
aggregate amount of Senior Credit Facility Outstandings does not, at any time,
exceed the lesser of (i) $150,000,000 and (ii) the result of (A) the
Term Loan Borrowing Base at such time minus (B) the outstanding principal
amount of the Term Loan at such time;

(c)           Trade or accounts payable and/or
similar obligations, and accrued expenses, incurred in the ordinary course of
business, other than for borrowed money;

(d)           Funded Debt of the Borrower or any
Subsidiary of the Borrower that is unsecured or secured by Permitted Liens
described in clause (f) of the definition of Permitted Liens set forth in Article 1
(including without limitation Capitalized Lease Obligations), collectively, not
to exceed the aggregate principal amount of $1,000,000 at any time;

(e)           Guaranties permitted by Section 8.2;

(f)            Unsecured Funded Debt of any
Borrower Party owed to another Borrower Party; and

(g)           Obligations under Hedge Agreements
not entered into for speculative purposes approved by the Administrative Agent.

Section 8.2             Guaranties. No Borrower
Party will, or will permit any Subsidiary of a Borrower Party to, at any time guarantee or enter
into or assume any Guaranty, or be obligated with respect to, or permit to be
outstanding, any Guaranty, other than (a) guaranties of the Obligations
and the Senior Credit Facility Obligations, (b) guaranties by any Borrower
Party of obligations under agreements of any other Borrower Party entered into
in connection with the acquisition of services, supplies, and equipment in the
ordinary course of business of such Borrower Party, (c) endorsements of
instruments in the ordinary course of business, and (d) guaranties by any
Borrower Party of any obligation of any other Borrower Party.

Section 8.3             Liens. No Borrower Party
will, or will permit any Subsidiary of a Borrower Party to, create, assume, incur, or permit to
exist or to be created, assumed, or permitted to exist, directly or indirectly,
any Lien on any of its property, real or personal, now owned or hereafter
acquired, except for Permitted Liens.

Section 8.4             Restricted Payments and
Purchases. No Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to, directly
or indirectly declare or make any Restricted Payment or Restricted Purchase, or
set aside any funds for any such purpose, other than (a) Dividends on
common stock which accrue (but are not paid in

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cash) or are paid in kind
or Dividends on preferred stock which accrue (but are not paid in cash) or are
paid in kind; provided, however, that the Borrower’s Subsidiaries
may make Restricted Payments to the Borrower or a wholly owned Domestic
Subsidiary of the Borrower that is a Borrower Party, (b) Restricted
Purchases or Restricted Payments for the sole purposes of repurchasing the
Borrower’s Stock from employees of the Borrower and its Subsidiaries upon
termination of employment of any such employee so long as (i) no Default
or Event of Default shall have occurred and be continuing or result therefrom
and (ii) the aggregate amount of all such Restricted Payments and
Restricted Purchases shall not exceed $500,000 during any twelve-month period
and (c) Restricted Payments and Restricted Purchases provided that the
Borrower shall have delivered evidence satisfactory to the Administrative Agent
that the following conditions have been satisfied before and after giving
effect to any such Restricted Payment or Restricted Purchase: (i) no
Default or Event of Default shall have occurred and be continuing or result
from such Restricted Payment or Restricted Purchase, (ii) any such
Restricted Payment or Restricted Purchase shall have occurred on or after the
date that is one year immediately following the Agreement Date, (iii) each
of the Term Loan Availability and the Senior Credit Facility Availability
(after giving effect to such transaction) shall not be less than $15,000,000, (iv) the
Borrower shall have a Fixed Charge Coverage Ratio on a Pro Forma Basis after
giving effect to such transaction of not less than 1.25 to 1.00 at the time of
such Restricted Payment or Restricted Purchase and shall have delivered to the
Administrative Agent pro forma calculations evidencing a projected Fixed Charge
Coverage Ratio of not less than 1.25 to 1.00 for the twelve-month period
immediately following such Restricted Payment or Restricted Purchase, and (v) the
aggregate amount of all such Restricted Payments and Restricted Purchases shall
not exceed $500,000 during any twelve-month period.

Section 8.5             Investments. No Borrower
Party will, or will permit any Subsidiary of a Borrower Party to, make Investments, except that (a) the
Borrower may purchase or otherwise acquire and own and may permit any of its
Subsidiaries to purchase or otherwise acquire and own Cash Equivalents provided
that any such Investments in Cash Equivalents shall be subject to a Blocked
Account Agreement or other control agreement in form and substance satisfactory
to the Administrative Agent; (b) the Borrower may hold the Investments in
existence on the Agreement Date and described on Schedule 5.1(c)-2;
(c) so long as no Default exists, the Borrower may convert any of its
Accounts that are in excess of ninety (90) days past due into notes or Equity
Interests from the applicable Account Debtor so long as the Administrative
Agent, for the benefit of the Lender Group, is granted a first priority
security interest in such Equity Interests or notes (subject only to Liens securing
the Senior Credit Facility, which Liens are subject to the SunTrust
Intercreditor Agreement) which Lien is perfected contemporaneously with the
conversion of such Account to Equity Interests or notes; (d) the Borrower
Parties and their Subsidiaries may hold the Equity Interests of their
respective Subsidiaries in existence as of the Agreement Date and their
Subsidiaries created after the Agreement Date in accordance with Sections 6.21,
8.7(d) and 8.7(i); (e) without limiting Section 8.2, any Borrower
Party may make Investments in any other

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Borrower Party; and (f) the
Borrower Parties may hold Investments arising out of Hedge Agreements not
entered into for speculative purposes and approved by the Administrative Agent,
which such approval shall not be unreasonably withheld in the Administrative
Agent’s Permitted Discretion.

Section 8.6             Affiliate Transactions. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to, enter into or be
a party to any agreement or transaction with any Affiliate except (a) as
described on Schedule 8.6, (b) in the ordinary course of and
pursuant to the reasonable requirements of the applicable Borrower Party’s or
Subsidiary’s business and upon fair and reasonable terms that are no less
favorable to such Borrower Party or such Subsidiary than it would obtain in a
comparable arms length transaction with a Person not an Affiliate of such
Borrower Party or such Subsidiary, and otherwise on terms consistent with the
business relationship of such Borrower Party or such Subsidiary and such
Affiliate prior to the Agreement Date, if any, and fully disclosed to the
Administrative Agent or (c) as permitted by Sections 8.1, 8.4 and 8.5.

Section 8.7             Liquidation; Change in
Ownership, Name, or Year; Disposition or Acquisition of Assets; Etc. No Borrower Party shall, or
shall permit any Subsidiary to, at any time:

(a)           Liquidate or dissolve itself (or
suffer any liquidation or dissolution) or otherwise wind up its business,
except that any Subsidiary of the Borrower may liquidate or dissolve itself in
accordance with Applicable Law;

(b)           Sell, lease, abandon, transfer or
otherwise dispose of, in a single transaction or a series of related
transactions, any assets, property or business, except for (i) the sale of
Inventory in the ordinary course of business at the fair market value thereof
and for cash or cash equivalents, (ii) the sale of leases (and related
assets) for which the Borrower is the lessor and which were entered into in the
ordinary course of business, any such sale to be at fair market value and for
cash or cash equivalents, (iii) physical assets used or consumed in the
ordinary course of business, and (iv) the sale or other disposal of
obsolete equipment with a sale value not greater than $100,000 in the aggregate
for all such assets that may be sold during any year if the purchase price
therefor is paid solely in cash;

(c)           Become a partner or joint venturer
with any third party after the Agreement Date;

(d)           Acquire (i) any Person, (ii) all
or any substantial part of the assets, property or business of a Person, or (iii) any
assets that constitute a division or operating unit of the business of any
Person; provided, however, that the Borrower Parties and their
Subsidiaries may acquire all or any substantial part of the assets, property or
business of a Person or any assets that constitute a division or operating unit
of the business of a Person  so long as (A) no
Default or Event of Default shall have occurred and be continuing or result
therefrom (including, without limitation, under Section 8.7(i)) and the
Borrower

 82
 

 

delivers to the Lender
Group evidence satisfactory to the Administrative Agent that the Borrower
Parties will be in pro forma compliance with this Agreement and the other Loan
Documents after giving effect to such acquisition, (B) the aggregate
consideration (including, without limitation, cash consideration, assumption of
Funded Debt and seller financing) for any such acquisition or series of related
acquisitions does not exceed $2,500,000 and that all such acquisitions during
the term of this Agreement does not exceed $7,500,000, (C) the Borrower
Parties execute and deliver to the Administrative Agent all documents required
by Section 6.10 and 6.21 and any other Loan Documents and opinions
reasonably requested by the Administrative Agent regarding the creation and
perfection of the security interests of the Administrative Agent in the
Collateral, (D) any such acquisition shall not occur before the date that
is one year immediately following the Agreement Date, (E) each of the Term
Loan Availability and the Senior Credit Facility Availability (after giving
effect to such transaction) shall not be less than $15,000,000, (F) the
Borrower shall have a Fixed Charge Coverage Ratio on a Pro Forma Basis after giving
effect to such transaction of not less than 1.25 to 1.00 at the time of such
acquisition and shall have delivered to the Administrative Agent pro forma
calculations evidencing a projected Fixed Charge Coverage Ratio of not less
than 1.25 to 1.00 for the twelve-month period immediately following such
acquisition, (G) the assets, property or business acquired shall have at
least $1 of positive EBITDA for the twelve-month period immediately preceding
the acquisition date and (H) any assets acquired in such acquisitions
shall not be included in the Borrowing Base until the Administrative Agent has
conducted (or received from the Senior Credit Facility Agent in accordance with
Section 6.23(a)) a field exam with results satisfactory to the
Administrative Agent in its Permitted Discretion (exercised in a manner
consistent with the Senior Credit Facility Agent’s Discretion);

(e)           Merge or consolidate with any other
Person; provided, however, that (i) any Guarantor may merge
into the Borrower so long as the Borrower is the surviving entity after such
merger, and (ii) any Guarantor may merge into any other Guarantor so long
as a Guarantor is the surviving entity after such merger;

(f)            Change its corporate name without
giving the Administrative Agent thirty (30) days prior written notice of its
intention to do so and complying with all reasonable requirements of the
Lenders in regard thereto;

(g)           Change its year-end for accounting
purposes from the fiscal year ending December 31;

(h)           Acquire any real estate;

(i)            Create any Subsidiary; provided,
however, that the Borrower or any Subsidiary of the Borrower may create
wholly owned Domestic Subsidiaries so long as the Borrower and such
Subsidiaries comply with Sections 6.10 and 6.21; or

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(j)            Engage in any business other than
the type of business in which such Borrower Parties and their Subsidiaries are
engaged in on the Agreement Date and reasonable extensions thereof and
activities incidental thereto.

Section 8.8             Minimum Term Loan Availability.
The Borrower shall not permit Term Loan Availability plus, at any time that there are no
outstanding Senior Credit Facility Obligations, Qualified Cash, at any time to
be less than $5,000,000 (assuming trade payables are not past due, expenses and
liabilities are being paid in the ordinary course of business and without
acceleration of sales, and without deterioration in working capital).

Section 8.9             Minimum
EBITDA. The Borrower Parties shall not permit the EBITDA of the Borrower
Parties be less than the
amounts set forth in the table below for the applicable periods set forth in
such table:

	
  Period

  	
   

  	
  Minimum EBITDA:

  	
   

  
	
  Twelve month
  period ending June 30, 2006

  	
   

  	
  $

  	
  (12,200,000

  	
  )

  
	
  Twelve month
  period ending July 31, 2006

  	
   

  	
  $

  	
  (9,250,000

  	
  )

  
	
  Twelve month
  period ending August 31, 2006

  	
   

  	
  $

  	
  (7,070,000

  	
  )

  
	
  Twelve month
  period ending September 30, 2006

  	
   

  	
  $

  	
  (9,680,000

  	
  )

  
	
  Twelve month
  period ending October 31, 2006

  	
   

  	
  $

  	
  (7,580,000

  	
  )

  
	
  Twelve month
  period ending November 30, 2006

  	
   

  	
  $

  	
  (3,596,000

  	
  )

  
	
  Twelve month
  period ending December 31, 2006

  	
   

  	
  $

  	
  (789,000

  	
  )

  
	
  Twelve month
  period ending January 31, 2007

  	
   

  	
  $

  	
  (59,000

  	
  )

  
	
  Twelve month
  period ending February 28, 2007

  	
   

  	
  $

  	
  3,583,000

  	
   

  
	
  Twelve month
  period ending March 31, 2007

  	
   

  	
  $

  	
  3,813,000

  	
   

  
	
  Twelve month
  period ending April 30, 2007

  	
   

  	
  $

  	
  5,521,000

  	
   

  
	
  Twelve month
  period ending May 31, 2007

  	
   

  	
  $

  	
  5,922,000

  	
   

  
	
  Twelve month
  period ending June 30, 2007

  	
   

  	
  $

  	
  5,520,000

  	
   

  
	
  Twelve month
  period ending July 31, 2007

  	
   

  	
  $

  	
  6,721,000

  	
   

  
	
  Twelve month
  period ending August 31, 2007

  	
   

  	
  $

  	
  7,118,000

  	
   

  
	
  Twelve month period
  ending September 30, 2007

  	
   

  	
  $

  	
  7,929,000

  	
   

  

 

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Section 8.10           Fixed
Charge Coverage Ratio. The Borrower Parties shall not permit for the month
ended October 31,
2007, and for each month end thereafter, the Fixed Charge Coverage Ratio for
the immediately preceding twelve (12) month period to be less than 1.25 to 1.00.

Section 8.11           Capital
Expenditures. The Borrower Parties and their Subsidiaries shall not make or
incur in the aggregate
any Capital Expenditures in excess of the amounts set forth in the table below
for the applicable periods set forth in such table:

	
  Period

  	
   

  	
  Capital Expenditures shall not exceed:

  	
   

  
	
  Agreement Date
  through December 31, 2006

  	
   

  	
  $4,000,000

  	
   

  
	
  Fiscal year ending
  December 31, 2007

  	
   

  	
  $4,000,000

  	
   

  

 

Section 8.12           Limitation on Leases. The
Borrower Parties shall not, and shall not permit their Subsidiaries to, create, incur, assume or
suffer to exist, any obligation for the payment of rent or hire for property or
assets of any kind whatsoever, whether real or personal, under leases or lease
agreements (other than Capitalized Lease Obligations) which would cause the
aggregate amount of all payments made by the Borrower Parties and their
Subsidiaries, pursuant to such lease or lease agreements to exceed $4,000,000
during the fiscal year.

Section 8.13           Sales and Leasebacks. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to, enter into any
arrangement, directly or indirectly, with any third party whereby such Borrower
Party or such Subsidiary, as applicable, shall sell or transfer any property,
real or personal, whether now owned or hereafter acquired, and whereby such
Borrower Party or such Subsidiary, as applicable, shall then or thereafter rent
or lease as lessee such property or any part thereof or other property which
such Borrower Party or such Subsidiary intends to use for substantially the
same purpose or purposes as the property sold or transferred.

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Section 8.14           Amendment and Waiver. No
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to (a) enter
into any amendment of, or agree to or accept any waiver, which would adversely
affect the rights of such Borrower Party or such Subsidiary, applicable, or any
member of the Lender Group, of (i) its articles or certificate of
incorporation or formation and by-laws, partnership agreement or other
governing documents, or (ii) the Senior Credit Facility Document, except
amendments, waivers and modifications permitted by the SunTrust Intercreditor
Agreement, (b) permit any Material Contract to be cancelled or terminated
prior to its stated maturity if such cancellation or termination could
reasonably be likely to result in a Materially Adverse Effect or (c) permit
the Consulting Agreement to be amended, cancelled or terminated without the
prior written consent of the Administrative Agent.

Section 8.15           ERISA Liability. No Borrower
Party shall fail to meet all of the applicable minimum funding requirements of ERISA and
the Code, without regard to any waivers thereof, and, to the extent that the
assets of any of their Plans would be less than an amount sufficient to provide
all accrued benefits payable under such Plans, the Borrower Parties shall make
the maximum deductible contributions allowable under the Code (based on the
Borrower’s current actuarial assumptions). No Borrower Party shall, or shall
cause or permit any ERISA Affiliate to, (a) cause or permit to occur any
event that could result in the imposition of a Lien under Section 412 of
the Code or Section 302 or 4068 of ERISA, or (b) cause or permit to
occur an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Materially Adverse Effect.

Section 8.16           Prepayments. No Borrower Party
shall, or shall permit any Subsidiary of a Borrower Party to, prepay, redeem, defease or
purchase in any manner, or deposit or set aside funds for the purpose of any of
the foregoing, make any payment in respect of principal of, or make any payment
in respect of interest on, any Funded Debt (other than the Senior Credit
Facility Obligations), except the Borrower may (i) make regularly
scheduled payments of principal or interest required in accordance with the
terms of the instruments governing any Funded Debt permitted hereunder, and (ii) make
payments, including prepayments permitted or required hereunder, with respect
to the Obligations.

Section 8.17           Negative Pledge. No Borrower
Party shall, or shall permit any Subsidiary of any Borrower Party to, directly or indirectly,
enter into any agreement (other than the Loan Documents and the Senior Credit
Facility Documents) with any Person that prohibits or restricts or limits the
ability of any Borrower Party or any such Subsidiary to create, incur, pledge,
or suffer to exist any Lien upon any of its respective assets, or restricts the
ability of any Subsidiary of the Borrower to pay Dividends to the Borrower.

Section 8.18           Inconsistent Agreements. No
Borrower Party shall, or shall permit any Subsidiary of any Borrower Party to, enter
into any contract or agreement which would violate the terms hereof, any other
Loan Document.

 86
 

 

Section 8.19           Borrowings Under The Senior Credit
Facility. The Borrower shall not make any borrowings under the Senior Credit Facility
at any time the cash balances in the Borrower Parties’ bank accounts exceeds
$15,000,000.

ARTICLE 9.

DEFAULT

Section 9.1             Events of Default. Each of
the following shall constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule, or
regulation of any governmental or non-governmental body:

(a)           Any representation or warranty made
under this Agreement or any other Loan Document shall prove incorrect or
misleading in any material respect when made or deemed to have been made pursuant
to Section 5.3;

(b)           (i) Any payment of any principal
hereunder or under the other Loan Documents shall not be received by the
Administrative Agent on the date such payment is due or (ii) any payment
of any interest hereunder or any fees payable hereunder or under the other Loan
Documents shall not be received by the Administrative Agent on the date such
payment is due (and such failure shall continue for a period of three (3) Business
Days with respect to interest and fees);

(c)           Any Borrower Party shall default in
the performance or observance of any agreement or covenant contained in Section 2.6,
2.12, 6.1, 6.5, 6.6, 6.7, 6.10, 6.12, 6.15, 6.19, 6.20, 6.21 or 6.24 or in Article 7
or Article 8 or in any Security Document;

(d)           Any Borrower Party shall default in
the performance or observance of any other agreement or covenant contained in
this Agreement not specifically referred to elsewhere in this Section 9.1,
and such default, if curable, shall not be cured to the Majority Lenders’
satisfaction within the earlier of (i) a period of thirty (30) days from
the date that such Borrower Party knew or should have known of the occurrence
of such default, or (ii) a period of thirty (30) days after written notice
of such default is given to such Borrower Party;

(e)           There shall occur any default in the
performance or observance of any agreement or covenant contained in any of the
other Loan Documents (other than this Agreement or the Security Documents or as
otherwise provided in this Section 9.1) which shall not be cured to the
Majority Lenders’ satisfaction within the applicable cure period, if any,
provided for in such Loan Document;

(f)            There shall occur any Change in
Control;

 87
 

 

(g)           (i) There shall be entered a
decree or order for relief in respect of any Borrower Party or any Subsidiary
of a Borrower Party under the Bankruptcy Code, or any other applicable federal
or state bankruptcy law or other similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or similar official of any
Borrower Party or of any Subsidiary of a Borrower Party or of any substantial
part of its properties, or ordering the winding-up or liquidation of the
affairs of any Borrower Party or any Subsidiary of a Borrower Party, or (ii) an
involuntary petition shall be filed against any Borrower Party or any
Subsidiary of a Borrower Party and a temporary stay entered and (A) such
petition and stay shall not be diligently contested, or (B) any such
petition and stay shall continue undismissed for a period of sixty (60)
consecutive days;

(h)           Any Borrower Party or any Subsidiary
of a Borrower Party shall commence an insolvency proceeding or any Borrower
Party or any Subsidiary of a Borrower Party shall consent to the institution of
an insolvency proceeding or to the appointment or taking of possession of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of such Borrower Party or any Subsidiary of a Borrower Party
or of any substantial part of its properties, or any Borrower Party or any
Subsidiary of a Borrower Party shall fail generally to pay its debts as they
become due, or any Borrower Party or any Subsidiary of a Borrower Party shall
take any action in furtherance of any such action;

(i)            A final judgment (other than a money
judgment or judgments fully covered (except for customary deductibles or
copayments not to exceed $100,000 in the aggregate) by insurance as to which
the insurance company has acknowledged coverage) shall be entered by any court
against any Borrower Party or any Subsidiary of any Borrower Party for the
payment of money which exceeds, together with all such other judgments of the
Borrower Parties and their Subsidiaries, $2,000,000 in the aggregate, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of any Borrower Party or any Subsidiary of a Borrower Party
pursuant to a final judgment which, together with all other such property of
the Borrower Parties and their Subsidiaries subject to other such process,
exceeds in value $2,000,000 in the aggregate, and if, within thirty (30) days
after the entry, issue, or levy thereof, such judgment, warrant, or process
shall not have been paid or discharged or stayed pending appeal, or if, after
the expiration of any such stay, such judgment, warrant, or process shall not
have been paid or discharged;

(j)            There shall be at any time any “accumulated
funding deficiency,” as defined in ERISA or in Section 412 of the Code,
with respect to any Plan maintained by any Borrower Party or any ERISA
Affiliate of a Borrower Party, or to which any Borrower Party or any of its
ERISA Affiliates has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
such Plan; or the PBGC shall institute proceedings to terminate any such Plan;
or any Borrower Party or any ERISA Affiliate of any Borrower Party shall incur
any liability to the PBGC in connection with the termination of any such Plan;
or any Plan or trust

 88
 

 

created under any Plan of
any Borrower Party or any ERISA Affiliate of any Borrower Party shall engage in
a non-exempt “prohibited transaction” (as such term is defined in Section 406
of ERISA or Section 4975 of the Code) which would subject any such Plan,
any trust created thereunder, any trustee or administrator thereof, or any
party dealing with any such Plan or trust to any material tax or penalty on “prohibited
transactions” imposed by Section 502 of ERISA or Section 4975 of the
Code; or any Borrower Party or any ERISA Affiliate of any Borrower Party shall
enter into or become obligated to contribute to a Multiemployer Plan; or there
shall be at any time a Lien imposed against the assets of a Borrower Party or
ERISA Affiliate under Code Section 412, or ERISA Sections 302 or 4068; or
there shall occur at any time an ERISA Event to the extent such ERISA Event
could reasonably be expected to result in an aggregate liability greater than
$500,000 or otherwise have a Materially Adverse Effect.

(k)           (i) There shall occur any
default (after the expiration of any applicable cure period) under any
indenture, agreement, or instrument evidencing Funded Debt of any Borrower
Party or any Subsidiary of a Borrower Party in an aggregate principal amount
exceeding $500,000 (determined singly or in the aggregate with other Funded
Debt) but excluding the Senior Credit Facility Documents, (ii) there shall occur any default under any Hedge
Agreement (after the expiration of any applicable cure period set forth
therein) or (iii) there shall occur (A) an “Overadvance” (as defined
in the Senior Credit Facility Agreement as in effect on the date hereof) under
the Senior Credit Facility Agreement, (B) any default or event of default
under the Senior Credit Facility Agreement as in effect on the date hereof as a
result of non-compliance with Section 8.8 of the Senior Credit Facility
Agreement as in effect on the date hereof or (C) if the events described
in foregoing clauses (A) or (B) are waived (or any other action is
taken which has the effect of waiving such events), any default or event of
default under the Senior Credit Facility Agreement as a result of
non-compliance with any covenant or condition imposed as a condition of such
waiver, or, in any case, the Senior Credit Facility Agent or any Senior Credit
Facility Lender shall provide written notice to the Administrative Agent of the
occurrence or existence of any such default or event of default;

(l)            All or any portion of any Loan
Document shall at any time and for any reason be declared to be null and void,
or a proceeding shall be commenced by any Borrower Party, any Subsidiary of a
Borrower Party or any Affiliate thereof, or by any governmental authority
having jurisdiction over any Borrower Party, any Subsidiary of a Borrower Party
or any Affiliate thereof, seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Borrower Party, any Subsidiary of a Borrower Party
or any Affiliate thereof shall deny that it has any liability or obligation for
the payment of any Obligation purported to be created under any Loan Document;
or

(m)          If the Borrower or any Subsidiary of
the Borrower shall be debarred, proposed for debarment, suspended or proposed
for suspension from any contracting with the Federal Government; or if a notice
of proposed debarment or notice

 89
 

 

of proposed suspension
shall have been issued to the Borrower or any Subsidiary of the Borrower by the
Federal Government; or if a notice of termination for default or the actual
termination for default of any Material Contract shall have been issued to or
received by the Borrower or any Subsidiary of the Borrower.

Section 9.2             Remedies. If an Event of
Default shall have occurred and shall be continuing, in addition to the rights and remedies set
forth elsewhere in this Agreement and the other Loan Documents:

(a)           With the exception of an Event of
Default specified in Section 9.1(g) or (h), the Administrative Agent
may in its discretion (unless otherwise instructed by the Majority Lenders) or
shall at the direction of the Majority Lenders, declare the principal of and
interest on the Term Loan and all other Obligations to be forthwith due and
payable without presentment, demand, protest, or notice of any kind, all of
which are hereby expressly waived, anything in this Agreement or in any other
Loan Document to the contrary notwithstanding, or both.

(b)           Upon the occurrence and continuance
of an Event of Default specified in Sections 9.1(g) or (h), such principal,
interest, and other Obligations shall thereupon and concurrently therewith
become due and payable, all without any action by the Lender Group, or any of
them and without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding.

(c)           The Administrative Agent may in its
discretion (unless otherwise instructed by the Majority Lenders) or shall at
the direction of the Majority Lenders exercise all of the post-default rights
granted to the Lender Group, or any of them, under the Loan Documents or under
Applicable Law. The Administrative Agent, for the benefit of the Lender Group,
shall have the right to the appointment of a receiver for the Property of the
Borrower Parties, and the Borrower Parties hereby consent to such rights and
such appointment and hereby waive any objection the Borrower Parties may have
thereto or the right to have a bond or other security posted by the Lender Group,
or any of them, in connection therewith.

(d)           Intentionally Omitted.

(e)           If so requested by the Administrative
Agent (after consultation with the Borrower) each Borrower Party shall execute
and deliver to the Administrative Agent, for the benefit of the Lender Group,
all documents, instruments, filings, or take any other required actions,
necessary to complete the required procedures under the Federal Assignment of
Claims Act of 1940 for the effective collateral assignment (to the extent
available under Applicable Law) of all Accounts which are owed by the Federal
Government; provided, however, such Borrower Party shall only be required to
use commercially reasonable efforts with respect to actions required by the
applicable Account Debtor or any other Person.

 90

 

(f)            The rights and remedies of the
Lender Group hereunder shall be cumulative, and not exclusive.

ARTICLE 10.

THE ADMINISTRATIVE AGENT

Section 10.1           Appointment and Authorization.
Each member of the Lender Group hereby irrevocably appoints and authorizes, and hereby
agrees that it will require any transferee of any of its interest in this
Agreement and the other Loan Documents and its Term Loan irrevocably to appoint
and authorize, the Administrative Agent to take such actions as its agent on
its behalf and to exercise such powers hereunder and under the other Loan
Documents as are delegated by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Without limiting the foregoing,
each member of the Lender Group hereby authorizes the Administrative Agent to
execute and deliver each Loan Document to which the Administrative Agent is, or
is required to be, a party. Neither the Administrative Agent nor any of its
directors, officers, employees, or agents shall be liable for any action taken
or omitted to be taken by it hereunder or in connection herewith, except for
its own gross negligence or willful misconduct as determined by a final
non-appealable order of a court of competent jurisdiction.

Section 10.2           Interest Holders. The
Administrative Agent may treat each Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 10.2, as the holder of all of the
interests of such Lender in this Agreement and the other Loan Documents and the
Term Loan until written notice of transfer, signed by such Lender (or the
Person designated in the last notice filed with the Administrative Agent) and
by the Person designated in such written notice of transfer, in form and
substance satisfactory to the Administrative Agent, shall have been filed with
the Administrative Agent.

Section 10.3           Consultation with Counsel. The
Administrative Agent may consult with legal counsel selected by it and shall not be liable
to any Lender for any action taken or suffered by it in good faith in reliance
on the advice of such counsel.

Section 10.4           Documents. The Administrative
Agent shall not be under any duty to examine, inquire into, or pass upon the validity,
effectiveness, or genuineness of this Agreement, any other Loan Document, or
any instrument, document, or communication furnished pursuant hereto or in
connection herewith, and the Administrative Agent shall be entitled to assume
that they are valid, effective, and genuine, have been signed or sent by the
proper parties, and are what they purport to be.

Section 10.5           Administrative Agent and
Affiliates. With respect to the Term Loan, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower Parties or

 91
 

 

any Affiliates of, or
Persons doing business with, the Borrower Parties, as if it were not the
Administrative Agent or affiliated with the Administrative Agent and without
any obligation to account therefor. The Lenders acknowledge that the
Administrative Agent and its Affiliates have other lending and investment
relationships with the Borrower Parties and their Affiliates and in the future
may enter into additional such relationships.

Section 10.6           Responsibility of the
Administrative Agent. Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any other member of the Lender Group, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” in this Agreement with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship
between independent contracting parties. The Administrative Agent shall be
entitled to assume that no Default exists unless it has actual knowledge, or
has been notified by any Borrower Party, of such fact, or has been notified by
a Lender that such Lender considers that a Default exists, and such Lender
shall specify in detail the nature thereof in writing. The Administrative Agent
shall provide each Lender with copies of such documents received from any
Borrower Party as such Lender may reasonably request.

Section 10.7           Action by Administrative Agent.

(a)           The Administrative Agent shall be
entitled to use its discretion with respect to exercising or refraining from
exercising any rights which may be vested in it by, and with respect to taking
or refraining from taking any action or actions which it may be able to take
under or in respect of, this Agreement, unless the Administrative Agent shall
have been instructed by the Majority Lenders to exercise or refrain from
exercising such rights or to take or refrain from taking such action. The
Administrative Agent shall incur no liability under or in respect of this
Agreement with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment or which may seem to it to be necessary or
desirable in the circumstances.

(b)           The Administrative Agent shall not be
liable to the Lenders, or any of them, in acting or refraining from acting
under this Agreement or any other Loan Document in accordance with the
instructions of the Majority Lenders (or all Lenders if expressly required by Section 11.12),
and any action taken or failure to act pursuant to such instructions shall be
binding on all Lenders.

Section 10.8           Notice of Default. In the
event that any member of the Lender Group shall acquire actual knowledge, or shall have
been notified in writing, of any

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Default, such member of
the Lender Group shall promptly notify the other members of the Lender Group,
and the Administrative Agent shall take such action and assert such rights
under this Agreement as the Majority Lenders shall request in writing, and the
Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Majority Lenders shall fail to
request the Administrative Agent to take action or to assert rights under this
Agreement in respect of any Default after their receipt of the notice of any
Default from a member of the Lender Group, or shall request inconsistent action
with respect to such Default, the Administrative Agent may, but shall not be
required to, take such action and assert such rights (other than rights under Article 9)
as it deems in its discretion to be advisable for the protection of the Lender
Group, except that, if the Majority Lenders have instructed the Administrative
Agent not to take such action or assert such right, in no event shall the
Administrative Agent act contrary to such instructions.

Section 10.9           Responsibility Disclaimed. The
Administrative Agent shall not be under any liability or responsibility whatsoever
as Administrative Agent:

(a)           To any Borrower Party or any other
Person or entity as a consequence of any failure or delay in performance by or
any breach by, any member of the Lender Group of any of its obligations under
this Agreement;

(b)           To any Lender Group, or any of them,
as a consequence of any failure or delay in performance by, or any breach by,
any Borrower Party or any other obligor of any of its obligations under this
Agreement or any other Loan Document; or

(c)           To any Lender Group, or any of them,
for any statements, representations, or warranties in this Agreement, or any
other document contemplated by this Agreement or any information provided
pursuant to this Agreement, any other Loan Document, or any other document
contemplated by this Agreement, or for the validity, effectiveness,
enforceability, or sufficiency of this Agreement, any other Loan Document, or
any other document contemplated by this Agreement.

Section 10.10         Indemnification. The Lenders
agree to indemnify (to the extent not reimbursed by the Borrower) and hold harmless the
Administrative Agent and each of their Affiliates, employees, representatives,
officers and directors (each an “Indemnified Person”) pro rata in
accordance with their Term Loan Ratios from and against any and all claims,
liabilities, investigations, losses, damages, actions, demands, penalties,
judgments, suits, investigations, costs, expenses (including fees and expenses
of experts, agents, consultants and counsel) and disbursements, in each case,
of any kind or nature (whether or not an Indemnified Person is a party to any
such action, suit or investigation) whatsoever which may be imposed on,
incurred by, or asserted against an Indemnified Person resulting from any
breach or alleged breach by the Borrower Parties of any representation or
warranty made hereunder, or otherwise in any way relating to or arising out of
the Term Loan, this Agreement, the other Loan Documents or any other document
contemplated by this Agreement or any action taken or omitted by the
Administrative

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Agent under this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, the making, administration or enforcement of the Loan Documents and
the Term Loan or any transaction contemplated hereby or any related matters
unless, with respect to any of the above, such Indemnified Person is determined
by a final non-appealable judgment of a court of competent jurisdiction to have
acted or failed to act with gross negligence or willful misconduct. This Section 10.10
is for the benefit of each Indemnified Person and shall not in any way limit
the obligations of the Borrower Parties under Section 6.18. The provisions
of this Section 10.10 shall survive the termination of this Agreement.

Section 10.11         Credit Decision. Each member of
the Lender Group represents and warrants to each other member of the Lender Group that:

(a)           In making its decision to enter into
this Agreement and to make the Term Loan it has independently taken whatever
steps it considers necessary to evaluate the financial condition and affairs of
the Borrower Parties and that it has made an independent credit judgment, and
that it has not relied upon information provided by the Administrative Agent or
any of their respective Affiliates;

(b)           So long as any portion of the
Obligations remains outstanding, it will continue to make its own independent
evaluation of the financial condition and affairs of the Borrower Parties; and

(c)           Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower Parties which may come into the
possession of any of the Administrative Agent or any Affiliates of the
Administrative Agent.

Section 10.12         Successor Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Administrative Agent (with the consent of the Borrower if no Event of Default
then exists). If no successor Administrative Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent’s giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be any Lender or
a Person organized under the laws of the United States of America, a State or
any political subdivision thereof. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges, duties, and obligations of the

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retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of Article 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.

Section 10.13         Administrative Agent May File
Proofs of Claim. The Administrative Agent may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel) and the Lenders allowed in any judicial
proceedings relative to any Borrower Party, or any of their respective
creditors or property, and shall be entitled and empowered to collect, receive
and distribute any monies, securities or other property payable or deliverable
on any such claims and any custodian in any such judicial proceedings is hereby
authorized by each Lender to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any
amount due to the Administrative Agent for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel, and any other amounts due the Administrative
Agent under Section 11.2. Nothing contained in the Loan Agreement or the
Loan Documents shall be deemed to authorize the 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 this
Agreement, any Term Loan Notes, or to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

Section 10.14         Collateral. The Administrative
Agent is hereby authorized to hold all Collateral pledged pursuant to any Loan Document and to
act on behalf of the Lender Group, in its own capacity and through other agents
appointed by it, under the Security Documents; provided, that the
Administrative Agent shall not agree to the release of any Collateral except in
accordance with the terms of this Agreement. The Lender Group acknowledges that
the Term Loan and all interest, fees and expenses hereunder constitute one
Funded Debt, secured by all of the Collateral. The Administrative Agent hereby
appoints each Lender as its agent (and each Lender hereby accepts such
appointment) for the purpose of perfecting the Administrative Agent’s Liens in
assets which, in accordance with the UCC, can be perfected by possession. Should
any Lender obtain possession of any such Collateral, subject to the limitations
set forth in the Blocked Account Agreements, promptly upon the Administrative
Agent’s request therefor shall deliver such Collateral to the Administrative
Agent or in accordance with the Administrative Agent’s instructions.

Section 10.15         Release of Collateral.

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(a)           Each Lender hereby directs, in
accordance with the terms of this Agreement, the Administrative Agent to
release any Lien held by the Administrative Agent for the benefit of the Lender
Group:

(i)            against all of the Collateral, upon
final and indefeasible payment in full of the Obligations; or

(ii)           against any part of the Collateral
sold or disposed of by the Borrower Parties if such sale or disposition is
permitted by Section 8.7 or is otherwise consented to by the requisite
Lenders for such release as set forth in Section 11.12, as certified to
the Administrative Agent by the Borrower in a certificate of an Authorized
Signatory.

(b)           Each Lender hereby directs the
Administrative Agent to execute and deliver or file or authorize the filing of
such termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 10.15
promptly upon the effectiveness of any such release. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent’s authority to release particular types or items of
Collateral pursuant to this Section 10.15.

ARTICLE 11.

MISCELLANEOUS

Section 11.1           Notices.

(a)           All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been given
five (5) days after deposit in the mail, designated as certified mail,
return receipt requested, postage-prepaid, or one (1) day after being
entrusted to a reputable commercial overnight delivery service, or when
delivered to the telegraph office or sent out (with receipt confirmed) by telex
or telecopy ,(or to the extent specifically permitted under Section 11.1(c) only,
when sent out by electronic means) addressed to the party to which such notice
is directed at its address determined as in this Section 11.1. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:

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(i)            If
to any Borrower Party, to such Borrower Party in care of the Borrower at:

                GTSI Corp. 

3901 Stonecroft
Blvd.

Chantilly,
Virginia 20151

Attn: Legal
Department

Telecopy No.: 703-222-5217

Email:Legal@GTSI.com

With a copy to:

Carter
Strong, Esq.

Arent
Fox PLLC

1050
Connecticut Avenue, N.W.

Washington,
D.C. 20036

Telecopy
No. (202) 857-6395

Strong.carter@arentfox.com

(ii)                                  If
to the Administrative Agent, to it at:

Crystal Capital Fund, L.P.

1 Federal Street

Ninth Floor

Boston, Massachusetts 02110

Attn: Michael L. Pizette

Telecopy No.: 617-428-8701

Email: mpizette@crystalcapital.com

with a copy to:

Matthew Furlong, Esq.

Bingham McCutchen LLP

150 Federal Street

Boston, Massachusetts 02110

Telecopy No.: 617-951-8736

Email:  matthew.furlong@bingham.com

(iii)          If to the Lenders, to them at the
addresses set forth on the signature pages of this Agreement.

(b)           Any party hereto may change the
address to which notices shall be directed under this Section 11.1 by
giving ten (10) days’ written notice of such change to the other parties.

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(c)           The Borrower may make delivery of the
items required by Sections 7.1, 7.2 and 7.3 via Electronic Transmission to the
Lender Group.

Section 11.2           Expenses. The Borrower agrees
to promptly pay or promptly reimburse:

(a)           All out-of-pocket expenses of the
Administrative Agent and its respective Affiliates in connection with the
preparation, negotiation, execution, delivery and syndication of this Agreement
and the other Loan Documents, the transactions contemplated hereunder and
thereunder, and the making of the Term Loan, including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative Agent and
its Affiliates, and allocated costs for services of internal counsel for the
Administrative Agent;

(b)           All out-of-pocket expenses of the
Administrative Agent in connection with the administration of the transactions
contemplated in this Agreement and the other Loan Documents, and the
preparation, negotiation, execution, and delivery of any waiver, amendment, or
consent by the Lenders relating to this Agreement or the other Loan Documents,
including, but not limited to, all out-of-pocket expenses of the Administrative
Agent in connection with its periodic field audits, a fee of $1,000 per day (as
may be increased from time to time by the Administrative Agent), per auditor,
plus out-of-pocket expenses for each field audit of a Borrower Party performed
by personnel employed by the Administrative Agent, the fees and disbursements
of counsel for the Administrative Agent and allocated costs for services of
internal counsel for the Administrative Agent;

(c)           All out-of-pocket costs and expenses
of the Administrative Agent and any Lender in connection with any
restructuring, refinancing, or “work out” of the transactions contemplated by
this Agreement, and of obtaining performance under this Agreement and the other
Loan Documents, and all out-of-pocket costs and expenses of collection if
default is made in the payment of the Obligations, which in each case shall
include reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and any Lender, and the fees and out-of-pocket expenses of
any experts of the Administrative Agent, or consultants of the Administrative
Agent, including in each case, but without in any way limiting the generality
of the foregoing, allocated costs for service of their internal counsel; and

(d)           All taxes, assessments, general or
special, and other charges levied on, or assessed, placed or made against any
of the Collateral, any Term Loan Notes or the Obligations.

Section 11.3           Waivers. The rights and
remedies of the Lender Group under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Lender Group, or any of them, or the
Majority Lenders in exercising any right shall operate as a

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waiver of such right. The
Lender Group expressly reserve the right to require strict compliance with the
terms of this Agreement in connection with any funding of a request for the
Term Loan. In the event the Lenders decide to fund a request for the Term Loan
at a time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by the Lenders shall not preclude the Lenders from
exercising any rights available to the Lenders under the Loan Documents or at
law or equity. Any waiver or indulgence granted by the Lenders or by the
Majority Lenders shall not constitute a modification of this Agreement, except
to the extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Lenders at variance with the terms of the Agreement
such as to require further notice by the Lenders of the Lenders’ intent to
require strict adherence to the terms of the Agreement in the future. Any such
actions shall not in any way affect the ability of the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Lenders are party, relating to
the Borrower.

Section 11.4           Set-Off. In addition to any
rights now or hereafter granted under Applicable Law and not by way of limitation of any such
rights, except to the extent limited by Applicable Law, at any time that a
Default exists, each member of the Lender Group and each subsequent holder of
the Obligations is hereby authorized by the Borrower Parties at any time or
from time to time, without notice to the Borrower Parties or to any other
Person, any such notice being hereby expressly waived, to set-off and to
appropriate and apply any and all deposits (general or special, time or demand,
including, but not limited to, Funded Debt evidenced by certificates of
deposit, in each case whether matured or unmatured, but not including any amounts
held by any member of the Lender Group or any of its Affiliates in any escrow
account) and any other Funded Debt at any time held or owing by any member of
the Lender Group or any such holder to or for the credit or the account of any
Borrower Party, against and on account of the obligations and liabilities of
the Borrower Parties, to any member of the Lender Group or any such holder
under this Agreement, any Term Loan Notes and any other Loan Document,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, any Term Loan Notes or any other Loan
Document, irrespective of whether or not (a) the Lender Group shall have
made any demand hereunder or (b) the Lender Group shall have declared the
principal of and interest on the Term Loan and any Term Loan Notes and other
amounts due hereunder to be due and payable as permitted by Section 9.2
and although said obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by any member of the Lender Group or
by any subsequent holder of the Obligations shall be subject to the application
of payments provisions of Article 2.

Section 11.5           Assignment.

(a)           The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower
Party may assign or otherwise transfer any of its rights 

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or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Affiliates of the Administrative Agent) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b)           Any Lender may assign to one or more
Persons all or a portion of its rights and obligations under this Agreement
(including all or a portion of the Term Loan at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s portion of the Term Loan at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the aggregate amount of the Term
Loan of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent), shall not be less than $1,000,000,
unless the Administrative Agent otherwise consents, and (ii) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to paragraph (c) of
this Section, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.8(b), 2.9, 6.18, 12.3 and 12.5). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph 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 paragraph (d) of this Section.

(c)           The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders and principal amount of the Term Loan owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice 

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to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(d)           Any Lender may sell participations to
one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of the Term Loan owing to it); 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) the Borrower and
the Lender Group 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 described in Section 11.12(a)(i) that
affects such Participant. Subject to paragraph (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.8(b), 2.9, 6.18, 6.19(c) and 12.3 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 11.4 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.8(b) as
though it were a Lender.

(e)           A Participant shall not be entitled
to receive any greater payment under Section 2.8(b) or Section 12.3
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 the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.8(b) unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.8(b) as
though it were a Lender.

(f)            Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation (i) any
pledge or assignment to secure obligations to a Federal Reserve Bank and (ii) in
the case of any Lender that is a Fund, any pledge or assignment of all or any
portion of such Lender’s rights under this Agreement to any holders of
obligations owed, or securities issued, by such Lender as security for such
obligations or securities, or to any trustee for, or any other representative
of, such holders, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

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Section 11.6           Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument. In proving this Agreement or any other Loan Document
in any judicial proceedings, it shall not be necessary to produce or account
for more than one such counterpart signed by the party against whom such enforcement
is sought. Any signatures delivered by a party by facsimile transmission or by
e-mail transmission of an adobe file format document (also known as a PDF file)
shall be deemed an original signature hereto.

Section 11.7           Governing Law. This Agreement and
the other Loan Documents shall be construed in accordance with and governed by the
laws of the State of New York, excluding the laws applicable to conflicts or
choice of law (other than the New York General Obligations Law §5-1401),
except to the extent otherwise provided in the Loan Documents.

Section 11.8           Severability. Any provision of
this Agreement which is prohibited or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.

Section 11.9           Headings. Headings used in
this Agreement are for convenience only and shall not be used in connection with the
interpretation of any provision hereof.

Section 11.10         Source of Funds. Notwithstanding
the use by the Lenders of the Base Rate as a reference rate for the determination of
interest on the Term Loan, the Lenders shall be under no obligation to obtain
funds from any particular source in order to charge interest to the Borrower at
interest rates tied to such reference rates.

Section 11.11         Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Each
Borrower Party represents and warrants to the Lender Group that it has read the
provisions of this Section 11.11 and discussed the provisions of this Section 11.11
and the rest of this Loan Agreement with counsel for such Borrower Party, and
such Borrower Party acknowledges and agrees that the Lender Group is expressly
relying upon such representations and warranties of such Borrower Party (as
well as the other representations and warranties of such Borrower Party set
forth in this Agreement and the other Loan Documents) in entering into this
Agreement.

Section 11.12         Amendments and Waivers.

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(a)           Neither this Agreement, any other
Loan Document nor any term hereof or thereof may be amended orally, nor may any
provision hereof be waived orally but only by an instrument in writing signed
by the Majority Lenders, or in the case of Loan Documents executed by the
Administrative Agent (and not the other members of the Lender Group), signed by
the Administrative Agent and approved by the Majority Lenders and, in the case
of an amendment, also by the Borrower, except that:  (i) the consent of each of the Lenders
shall be required for (A) any sale or release of, or the subordination of
the Administrative Agent’s security interest in, any material Collateral except
in conjunction with sales or transfers of Collateral permitted hereunder or any
release of any guarantor of the Obligations, (B) any extensions,
postponements or delays of the Maturity Date or the scheduled date of payment
of interest or principal or fees, or any reduction of principal (without a
corresponding payment with respect thereto), or reduction in the rate of
interest or fees due to the Lenders hereunder or under any other Loan
Documents, (C) any amendment of this Section 11.12 or of the
definition of “Majority Lenders” or any other provision of the Loan Documents
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder; (D) any amendment increasing the principal amount of the Term
Loan (it being understood and agreed that a waiver of any Default or Event of
Default or modification of any of the defined terms contained herein (other
than those defined terms specifically addressed in this Section 11.12)
shall not constitute a change in the terms of the Term Loan); (E) any
amendment increasing the amounts or percentages set forth in the definition of “Borrowing
Base” and the defined terms used therein; and (F) any amendment to Section 2.11;
(ii) the consent of the Administrative Agent, the Majority Lenders and the
Borrower shall be required for any amendment to Article 10; (iii) the
consent of the Guarantors and the Majority Lenders shall be required for any
amendment to Article 3; (iv) the consent of the Administrative Agent
only shall be required to amend Schedule 1(a) to reflect assignments
of the Term Loan in accordance with this Agreement.

(b)           Each Lender grants to the
Administrative Agent the right to purchase all (but not less than all) of such
Lender’s portion of the Term Loan owing to it and any Term Loan Notes held by
it and all of its rights and obligations hereunder and under the other Loan
Documents at a price equal to the outstanding principal amount of the Term Loan
payable to such Lender plus any accrued but unpaid interest on the Term Loan
and accrued but unpaid fees owing to such Lender, which right may be exercised
by the Administrative Agent if such Lender refuses to execute any amendment,
waiver or consent which requires the written consent of all of the Lenders and
to which the Majority Lenders, the Administrative Agent and the Borrower have
agreed. Each Lender agrees that if the Administrative Agent exercises its
option hereunder, it shall promptly execute and deliver an Assignment and
Acceptance and other agreements and documentation necessary to effectuate such
assignment. The Administrative Agent may assign its purchase rights hereunder
to any assignee if such assignment complies with the requirements of Section 11.5(b).

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(c)           If any fees are paid to the Lenders
as consideration for amendments, waivers or consents with respect to this
Agreement, at Administrative Agent’s election, such fees may be paid only to
those Lenders that agree to such amendments, waivers or consents within the
time specified for submission thereof.

Section 11.13         Other Relationships. No relationship
created hereunder or under any other Loan Document shall in any way affect the ability
of any member of the Lender Group to enter into or maintain business
relationships with the Borrower, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.

Section 11.14         Pronouns. The pronouns used
herein shall include, when appropriate, either gender and both singular and plural, and
the grammatical construction of sentences shall conform thereto.

Section 11.15         Disclosure. The Borrower Parties
agree that the Administrative Agent shall have the right to issue press releases regarding
the making of the Term Loan to the Borrower pursuant to the terms of this
Agreement.

Section 11.16         Replacement of Lender. In the
event that a Replacement Event occurs and is continuing with respect to any Lender, the
Borrower may designate another financial institution (such financial
institution being herein called a “Replacement Lender”) acceptable to
the Administrative Agent, and which is not the Borrower or an Affiliate of the
Borrower, to purchase the Term Loan owing to such Lender and participations of
such Lender and such Lender’s rights hereunder, without recourse to or
representation or warranty by, or expense to, such Lender for a purchase price
equal to the outstanding principal amount of the Term Loan payable to such
Lender plus any accrued but unpaid interest on such Term Loan and accrued but
unpaid fees owing to such Lender, and upon such purchase and substitution, and
subject to the execution and delivery to the Administrative Agent by the
Replacement Lender of documentation satisfactory to the Administrative Agent
(pursuant to which such Replacement Lender shall assume the obligations of such
original Lender under this Agreement), the Replacement Lender shall succeed to
the rights and obligations of such Lender hereunder and such Lender shall no
longer be a party hereto or have any rights hereunder provided that the
obligations of the Borrower to indemnify such Lender with respect to any event
occurring or obligations arising before such replacement shall survive such
replacement. “Replacement Event” shall mean, with respect to any Lender,
(a) the commencement of or the taking of possession by, a receiver,
custodian, conservator, trustee or liquidator of such Lender, or the
declaration by the appropriate regulatory authority that such Lender is
insolvent or (b) the making of any claim by any Lender under Section 2.8(b),
12.3 or 12.5, unless the changing of the lending office by such Lender would
obviate the need of such Lender to make future claims under such Sections.

Section 11.17         Confidentiality. No member of
the Lender Group shall disclose any non-public confidential information regarding the
Borrower Parties (“Confidential

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Information”)
to any other Person without the consent of the Borrower, other than (i) to
such member of the Lender Group’s Affiliates and their officers, directors,
employees, agents and advisors, to other members of the Lender Group and, as
contemplated by Section 11.5, to actual or prospective assignees and
participants, and then only on a confidential basis, (ii) as required by
any law, rule or regulation or judicial process, (iii) to any rating
agency when required by it, provided, that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Borrower Parties received by it
from such member of the Lender Group, (iv) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking,
and (v) in connection with the exercise of any remedy hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder.

Section 11.18         Revival and Reinstatement of
Obligations. If the incurrence or payment of the Obligations by the Borrower or any Guarantor,
or the transfer to the Lender Group of any property, should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences or other voidable or
recoverable payments of money or transfers of property (collectively, a “Voidable
Transfer”), and if the Lender Group, or any of them, is required to repay
or restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group, or any of them, is
required or elects to repay or restore, and as to all reasonable costs,
expenses and attorneys fees of the Lender Group related thereto, the liability
of the Borrower or such Guarantor, as applicable, automatically shall be
revived, reinstated and restored and shall exist as though such Voidable
Transfer had never been made.

Section 11.19         Electronic Transmissions.
(a) Authorization. Subject to the provisions of this Section 11.19(a),
each of the
Administrative Agent, the Borrower, the Lenders, the Issuing Bank and each of
their Affiliates is authorized (but not required) to transmit, post or
otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein.
Each of the Borrower and the other Borrower Parties hereby acknowledges and
agrees, and each of the Borrower and the other Borrower Parties shall cause
each of their Subsidiaries to acknowledge and agree, that the use of Electronic
Transmissions is not necessarily secure and that there are risks associated
with such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.

(b)           Separate Agreements. All uses
of an E-System shall be governed by and subject to, in addition to the terms
and conditions of this Agreement, separate terms and conditions posted or
referenced in such E-System and related Contractual

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Obligations executed by
Borrower Parties or the members of the Lender Group in connection with the use
of such E-System.

(c)           Limitation of Liability. All
E-Systems and Electronic Transmissions shall be provided “as is” and “as
available”. None of Administrative Agent or any of its Affiliates warrants the
accuracy, adequacy or completeness of any E-Systems or Electronic Transmission,
and each disclaims all liability for errors or omissions therein. No warranty
of any kind is made by the Administrative Agent or any of its Affiliates in
connection with any E-Systems or Electronic Communication, including any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third-party rights or freedom from viruses or other code defects. Each of the Borrower and the other Borrower
Parties agrees that the Administrative Agent has no responsibility for
maintaining or providing any equipment, software, services or any testing
required in connection with any Electronic Transmission or otherwise required
for any E-System.

ARTICLE 12.

YIELD PROTECTION

Section 12.1           Intentionally Omitted.

Section 12.2           Intentionally Omitted.

Section 12.3           Intentionally
Omitted.

Section 12.4           Intentionally Omitted.

Section 12.5           Capital Adequacy. If after the
Agreement Date, any Lender (or any Affiliate thereof) shall have reasonably determined that
the adoption of any applicable law, governmental rule, regulation or order
regarding the capital adequacy of banks or bank holding companies, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by such Lender (or
any Affiliate thereof) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency (but only if such adoption, change, request
or directive occurs after the Agreement Date), has or would have the effect of
reducing the rate of return on such Lender’s (or any Affiliate thereof) capital
as a consequence of such Lender’s obligations hereunder to a level below that
which it could have achieved but for such adoption, change or compliance
(taking into consideration such Lender’s (or any Affiliate thereof) policies
with respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender’s (or any Affiliate thereof) capital
was fully utilized prior to such adoption, change or compliance), then,
promptly upon demand by such Lender, the Borrower shall

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immediately pay to such
Lender such additional amounts as shall be sufficient to compensate such Lender
for any such reduction actually suffered; provided, however, that
there shall be no duplication of amounts paid to a Lender pursuant to this
sentence and Section 12.3. A certificate of such Lender setting forth the
amount to be paid to such Lender by the Borrower as a result of any event
referred to in this paragraph shall, absent manifest error, be conclusive.

ARTICLE 13.

JURISDICTION, VENUE AND WAIVER OF JURY TRIAL

Section 13.1           Jurisdiction and Service of
Process. FOR PURPOSES OF ANY LEGAL ACTION OR PROCEEDING BROUGHT BY ANY
MEMBER OF THE LENDER GROUP WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, EACH BORROWER PARTY HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL
JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE STATE OF NEW YORK
AND HEREBY IRREVOCABLY DESIGNATES AND APPOINTS, AS ITS AUTHORIZED AGENT FOR
SERVICE OF PROCESS IN THE STATE OF NEW YORK, THE BORROWER, OR SUCH OTHER PERSON
AS SUCH BORROWER PARTY SHALL DESIGNATE HEREAFTER BY WRITTEN NOTICE GIVEN TO THE
ADMINISTRATIVE AGENT. THE CONSENT TO JURISDICTION HEREIN SHALL NOT BE EXCLUSIVE.
THE LENDER GROUP SHALL FOR ALL PURPOSES AUTOMATICALLY, AND WITHOUT ANY ACT ON
THEIR PART, BE ENTITLED TO TREAT SUCH DESIGNEE OF EACH BORROWER PARTY AS THE
AUTHORIZED AGENT TO RECEIVE FOR AND ON BEHALF OF SUCH BORROWER PARTY SERVICE OF
WRITS, OR SUMMONS OR OTHER LEGAL PROCESS IN THE STATE OF NEW YORK, WHICH
SERVICE SHALL BE DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH BORROWER PARTY
SERVED WHEN DELIVERED, WHETHER OR NOT SUCH AGENT GIVES NOTICE TO SUCH BORROWER
PARTY; AND DELIVERY OF SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO
BE MADE WHEN PERSONALLY DELIVERED OR THREE (3) BUSINESS DAYS AFTER MAILING
BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH AUTHORIZED AGENT. EACH
BORROWER PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL TO SUCH BORROWER PARTY AT THE ADDRESS SET FORTH ABOVE, SUCH
SERVICE TO BECOME EFFECTIVE THREE (3) BUSINESS DAYS AFTER SUCH MAILING. IN
THE EVENT THAT, FOR ANY REASON, SUCH AGENT OR ITS SUCCESSORS SHALL NO LONGER
SERVE AS AGENT OF EACH BORROWER PARTY TO RECEIVE SERVICE OF PROCESS IN THE
STATE OF NEW YORK, EACH BORROWER PARTY SHALL SERVE AND ADVISE THE
ADMINISTRATIVE AGENT THEREOF SO THAT AT ALL TIMES EACH BORROWER PARTY WILL
MAINTAIN AN AGENT TO 

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RECEIVE SERVICE OF
PROCESS IN THE STATE OF NEW YORK ON BEHALF OF SUCH BORROWER PARTY WITH RESPECT
TO THIS AGREEMENT, ALL OTHER LOAN DOCUMENTS. IN THE EVENT THAT, FOR ANY REASON,
SERVICE OF LEGAL PROCESS CANNOT BE MADE IN THE MANNER DESCRIBED ABOVE, SUCH
SERVICE MAY BE MADE IN SUCH MANNER AS PERMITTED BY LAW.

Section 13.2           Consent to Venue. EACH
BORROWER PARTY AND EACH MEMBER OF THE LENDER GROUP HEREBY IRREVOCABLY
WAIVES ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF
ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT BROUGHT IN THE FEDERAL COURTS OF THE UNITED STATES
SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, STATE OF NEW YORK, AND
HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Section 13.3           Waiver of Jury Trial. EACH
BORROWER PARTY AND EACH MEMBER OF THE LENDER GROUP TO THE EXTENT
PERMITTED BY APPLICABLE LAW WAIVES, AND OTHERWISE AGREES NOT TO REQUEST, A
TRIAL BY JURY IN ANY COURT AND IN ANY ACTION, PROCEEDING OR COUNTERCLAIM OF ANY
TYPE IN WHICH ANY BORROWER PARTY, ANY MEMBER OF THE LENDER GROUP OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS ARTICLE 13.

[remainder
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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed as of the
day and year first above written.

	
  BORROWER:

  	
  GTSI CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Thomas A. Mutryn

  
	
   

  	
  Title:

  	
   

  	
  Senior Vice President, Finance & CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
  GTSI FINANCIAL SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Charles DeLeon

  
	
   

  	
  Title:

  	
   

  	
  Corporate Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TECHNOLOGY LOGISTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Charles DeLeon

  
	
   

  	
  Title:

  	
   

  	
  Corporate Secretary

  

 

 Credit Agreement Signature Page
 

 

 

	
  AGENT AND LENDER:

  	
  CRYSTAL CAPITAL FUND, L.P., as the

  Administrative Agent, and a Lender

  
	
   

  	
   

  
	
   

  	
  By: Crystal Capital GP, LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Michael L. Pizette

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Managing Director

  

 

 Credit Agreement Signature Page

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