Document:

Exhibit
10.1

 

 

$100,000,000

 

THIRD AMENDED AND
RESTATED

CREDIT AGREEMENT

 

dated as of

 

December 21, 2007

 

among

 

BENCHMARK ELECTRONICS,
INC.,

 

The Borrowing
Subsidiaries

 

The Lenders Party Hereto,

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent,

Collateral Agent and Issuing Lender

 

and

 

BANK OF AMERICA, N.A.,

WELLS FARGO BANK, N.A.

and

COMERICA BANK

as Co-Documentation Agent

 

J.P. MORGAN SECURITIES
INC.,

as Lead Arranger

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions

  	
   

  	
  1

  
	
  Section 1.01

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  Section 1.02

  	
   

  	
  Terms Generally

  	
   

  	
  25

  
	
  Section 1.03

  	
   

  	
  Accounting Terms; GAAP

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II The Credits

  	
   

  	
  25

  
	
  Section 2.01

  	
   

  	
  Commitments

  	
   

  	
  25

  
	
  Section 2.02

  	
   

  	
  Loans and Borrowings

  	
   

  	
  25

  
	
  Section 2.03

  	
   

  	
  Requests for Borrowings

  	
   

  	
  26

  
	
  Section 2.04

  	
   

  	
  Letters of Credit

  	
   

  	
  27

  
	
  Section 2.05

  	
   

  	
  Funding of Borrowings

  	
   

  	
  31

  
	
  Section 2.06

  	
   

  	
  Interest Elections

  	
   

  	
  31

  
	
  Section 2.07

  	
   

  	
  Termination and Reduction of
  Commitments

  	
   

  	
  32

  
	
  Section 2.08

  	
   

  	
  Repayment of Loans; Evidence of
  Debt

  	
   

  	
  33

  
	
  Section 2.09

  	
   

  	
  Prepayment of Loans

  	
   

  	
  33

  
	
  Section 2.10

  	
   

  	
  Fees

  	
   

  	
  34

  
	
  Section 2.11

  	
   

  	
  Interest

  	
   

  	
  35

  
	
  Section 2.12

  	
   

  	
  Alternate Rate of Interest

  	
   

  	
  36

  
	
  Section 2.13

  	
   

  	
  Increased Costs

  	
   

  	
  36

  
	
  Section 2.14

  	
   

  	
  Break Funding Payments

  	
   

  	
  37

  
	
  Section 2.15

  	
   

  	
  Taxes

  	
   

  	
  38

  
	
  Section 2.16

  	
   

  	
  Payments Generally; Pro Rata
  Treatment; Sharing of Set-offs

  	
   

  	
  39

  
	
  Section 2.17

  	
   

  	
  Mitigation Obligations; Replacement
  of Lenders

  	
   

  	
  40

  
	
  Section 2.18

  	
   

  	
  Increase of Commitments

  	
   

  	
  41

  
	
  Section 2.19

  	
   

  	
  Borrowing Subsidiaries

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III Representations and
  Warranties

  	
   

  	
  43

  
	
  Section 3.01

  	
   

  	
  Organization

  	
   

  	
  43

  
	
  Section 3.02

  	
   

  	
  Authorization; Enforceability

  	
   

  	
  43

  
	
  Section 3.03

  	
   

  	
  Governmental Approvals; No
  Conflicts

  	
   

  	
  43

  
	
  Section 3.04

  	
   

  	
  Financial Statements; No Material
  Adverse Change

  	
   

  	
  44

  
	
  Section 3.05

  	
   

  	
  Properties

  	
   

  	
  44

  
	
  Section 3.06

  	
   

  	
  Litigation and Environmental Matters

  	
   

  	
  44

  
	
  Section 3.07

  	
   

  	
  Compliance with Laws and Agreements

  	
   

  	
  45

  
	
  Section 3.08

  	
   

  	
  Intellectual Property

  	
   

  	
  45

  
	
  Section 3.09

  	
   

  	
  Investment Company Status

  	
   

  	
  45

  
	
  Section 3.10

  	
   

  	
  Taxes

  	
   

  	
  45

  
	
  Section 3.11

  	
   

  	
  ERISA

  	
   

  	
  46

  
	
  Section 3.12

  	
   

  	
  Labor Matters

  	
   

  	
  46

  
	
  Section 3.13

  	
   

  	
  Insurance

  	
   

  	
  46

  
	
  Section 3.14

  	
   

  	
  Solvency

  	
   

  	
  46

  
	
  Section 3.15

  	
   

  	
  Subsidiaries

  	
   

  	
  47

  

 

i

 

	
  Section 3.16

  	
   

  	
  Disclosure

  	
   

  	
  47

  
	
  Section 3.17

  	
   

  	
  Margin Stock

  	
   

  	
  47

  
	
  Section 3.18

  	
   

  	
  Use of Proceeds

  	
   

  	
  47

  
	
  Section 3.19

  	
   

  	
  No Undisclosed Liabilities

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV Conditions

  	
   

  	
  48

  
	
  Section 4.01

  	
   

  	
  Effective Date

  	
   

  	
  48

  
	
  Section 4.02

  	
   

  	
  Each Credit Event

  	
   

  	
  49

  
	
  Section 4.03

  	
   

  	
  Initial Credit Event for each
  Borrowing Subsidiary

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V Affirmative Covenants

  	
   

  	
  50

  
	
  Section 5.01

  	
   

  	
  Financial Statements and Other
  Information

  	
   

  	
  50

  
	
  Section 5.02

  	
   

  	
  Notices of Material Events

  	
   

  	
  52

  
	
  Section 5.03

  	
   

  	
  Information Regarding Collateral

  	
   

  	
  53

  
	
  Section 5.04

  	
   

  	
  Existence; Conduct of Business

  	
   

  	
  53

  
	
  Section 5.05

  	
   

  	
  Payment of Obligations

  	
   

  	
  53

  
	
  Section 5.06

  	
   

  	
  Maintenance of Properties;
  Insurance

  	
   

  	
  53

  
	
  Section 5.07

  	
   

  	
  Insurance

  	
   

  	
  53

  
	
  Section 5.08

  	
   

  	
  Books and Records; Inspection and
  Audit Rights

  	
   

  	
  54

  
	
  Section 5.09

  	
   

  	
  Compliance with Laws

  	
   

  	
  54

  
	
  Section 5.10

  	
   

  	
  Use of Proceeds and Letters of
  Credit

  	
   

  	
  54

  
	
  Section 5.11

  	
   

  	
  Additional Subsidiaries

  	
   

  	
  54

  
	
  Section 5.12

  	
   

  	
  Ownership of Subsidiaries

  	
   

  	
  54

  
	
  Section 5.13

  	
   

  	
  Further Assurances

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI Negative Covenants

  	
   

  	
  55

  
	
  Section 6.01

  	
   

  	
  Indebtedness

  	
   

  	
  55

  
	
  Section 6.02

  	
   

  	
  Liens

  	
   

  	
  56

  
	
  Section 6.03

  	
   

  	
  Fundamental Changes

  	
   

  	
  57

  
	
  Section 6.04

  	
   

  	
  Investments, Loans, Advances,
  Guarantees and Acquisitions

  	
   

  	
  58

  
	
  Section 6.05

  	
   

  	
  Asset Sales, etc

  	
   

  	
  59

  
	
  Section 6.06

  	
   

  	
  Sale and Leaseback Transactions

  	
   

  	
  60

  
	
  Section 6.07

  	
   

  	
  Swap Agreements

  	
   

  	
  60

  
	
  Section 6.08

  	
   

  	
  Restricted Payments; Certain
  Payments in Respect of Indebtedness

  	
   

  	
  60

  
	
  Section 6.09

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  60

  
	
  Section 6.10

  	
   

  	
  Restrictive Agreements

  	
   

  	
  61

  
	
  Section 6.11

  	
   

  	
  Change in Fiscal Year

  	
   

  	
  61

  
	
  Section 6.12

  	
   

  	
  Constitutive Documents

  	
   

  	
  61

  
	
  Section 6.13

  	
   

  	
  Sales and Assignments of Income,
  Revenues and Receivables

  	
   

  	
  61

  
	
  Section 6.14

  	
   

  	
  Amendment of Material Documents

  	
   

  	
  61

  
	
  Section 6.15

  	
   

  	
  Adjusted Leverage Ratio; Leverage
  Ratio

  	
   

  	
  62

  
	
  Section 6.16

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  	
  62

  
	
  Section 6.17

  	
   

  	
  Intentionally Deleted

  	
   

  	
  62

  
	
  Section 6.18

  	
   

  	
  Minimum Tangible Net Worth

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII Events of Default and
  Remedies

  	
   

  	
  62

  
	
  Section 7.01

  	
   

  	
  Events of Default

  	
   

  	
  62

  

 

ii

 

	
  Section 7.02

  	
   

  	
  Cash Collateral

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII The Administrative
  Agent

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX Miscellaneous

  	
   

  	
  67

  
	
  Section 9.01

  	
   

  	
  Notices

  	
   

  	
  67

  
	
  Section 9.02

  	
   

  	
  Waivers; Amendments

  	
   

  	
  69

  
	
  Section 9.03

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  70

  
	
  Section 9.04

  	
   

  	
  Successors and Assigns

  	
   

  	
  71

  
	
  Section 9.05

  	
   

  	
  Survival

  	
   

  	
  74

  
	
  Section 9.06

  	
   

  	
  Counterparts; Integration;
  Effectiveness

  	
   

  	
  75

  
	
  Section 9.07

  	
   

  	
  Severability

  	
   

  	
  75

  
	
  Section 9.08

  	
   

  	
  Right of Setoff

  	
   

  	
  75

  
	
  Section 9.09

  	
   

  	
  Governing Law; Consent to Service
  of Process

  	
   

  	
  75

  
	
  Section 9.10

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  76

  
	
  Section 9.11

  	
   

  	
  Headings

  	
   

  	
  77

  
	
  Section 9.12

  	
   

  	
  Confidentiality

  	
   

  	
  77

  
	
  Section 9.13

  	
   

  	
  Interest

  	
   

  	
  77

  
	
  Section 9.14

  	
   

  	
  Release of Liens and Guarantees

  	
   

  	
  78

  
	
  Section 9.15

  	
   

  	
  No Novation

  	
   

  	
  78

  
	
  Section 9.16

  	
   

  	
  USA Patriot Act

  	
   

  	
  79

  
	
  Section 9.17

  	
   

  	
  Release of Benchmark BV
  Holdings, Inc.

  	
   

  	
  79

  
	
  Section 9.18

  	
   

  	
  Joint and Several Liability

  	
   

  	
  79

  
	
  Section 9.19

  	
   

  	
  FINAL AGREEMENT OF THE PARTIES

  	
   

  	
  79

  

 

 

 

SCHEDULES:

 

Schedule 1.01A –
Existing Letters of Credit

Schedule 1.01B –
Unrestricted Subsidiaries

Schedule 2.01 –
Commitments

Schedule 3.01 –
Organization

Schedule 3.06 –
Disclosed Matters

Schedule 3.13 –
Insurance

Schedule 3.15 –
Subsidiaries of Company

Schedule 3.19 –
Liabilities

Schedule 6.01 –
Existing Indebtedness

Schedule 6.02 –
Existing Liens

Schedule 6.04 –
Existing Investments

Schedule 6.10 –
Restrictive Agreements

 

iii

 

EXHIBITS:

 

Exhibit 1.01A –
Form of Assignment and Assumption

Exhibit 1.01B –
Form of Borrowing Request

Exhibit 1.01C –
Form of Borrowing Subsidiary Agreement

Exhibit 1.01D –
Form of Borrowing Subsidiary Termination

Exhibit 1.01E –
Form of Commitment Increase Agreement

Exhibit 1.01F –
Form of New Lender Agreement

 

iv

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”)
dated as of December 21, 2007 (the “Effective Date”), among
Benchmark Electronics, Inc., a Texas corporation (the “Company”),
the Borrowing Subsidiaries party hereto, the Lenders party hereto, JPMorgan
Chase Bank, N.A., as Administrative Agent, Collateral Agent and Issuing Lender,
Bank of America, N.A., Wells Fargo Bank, N.A., and Comerica Bank, as
Co-Documentation Agent.

 

PRELIMINARY STATEMENT:

 

WHEREAS, on August 24, 1999, the Company, the lenders
party thereto and the Administrative Agent entered into the Credit Agreement
(the “Original Credit Agreement”) whereby, upon the terms and conditions
therein stated, such lenders agreed to make term loans and revolving loans to
the Company up to the aggregate amount of $225,000,000, to be used by the
Company for the purposes set forth in Section 5.10 of the Original
Credit Agreement; and

 

WHEREAS, on June 23, 2000, the Company, the
lenders party thereto and the Agent amended the Original Credit Agreement and
entered into Amended and Restated Credit Agreement (as subsequently amended,
hereinafter called the “Amended and Restated Agreement”) whereby, upon
the terms and conditions therein stated, such lenders agreed to increase the
aggregate amount of the revolving loans to $175,000,000, increasing the
aggregate amount of the credit facility to $268,000,000, to be used by the
Company for the purposes set forth in Section 5.10 of the Amended
and Restated Agreement; and

 

WHEREAS, on January 20, 2005, the Company, the
Lenders party thereto and the Administrative Agent amended the Amended and
Restated Agreement and entered into a Second Amended and Restated Credit
Agreement (as subsequently amended, hereinafter called the “Second Amended
and Restated Agreement”) whereby, upon the  terms
and conditions therein stated, such Lenders agreed to reduce the amount of the
credit facility to $100,000,000, to be used by the Company for the purposes set
forth in Section 5.10 of the Second Amended and Restated Agreement;
and

 

WHEREAS, the Company, the Lenders and the Agent
mutually desire to amend and restate certain aspects of the Second Amended and
Restated Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants set forth herein, the Borrower, the Borrowing
Subsidiaries, the Administrative Agent and the Lenders agree to amend and
restate the Second Amended and Restated Agreement in its entirety as follows:

 

ARTICLE I

 

Definitions

 

Section 1.01  Defined Terms.  As
used in this Agreement, the following terms have the meanings specified below:

 

1

 

“ABR”, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Alternate Base
Rate.

 

“Acquisition” means any acquisition permitted
under Section 6.04(f).

 

“Act” has the meaning set forth in Section 9.16.

 

“Adjusted Leverage Ratio” means, on any date,
the ratio of (a) Total Indebtedness as of such date to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters of the Company and
its Restricted Subsidiaries ended on such date (or, if such date is not the
last day of a fiscal quarter, ended on the last day of the fiscal quarter of
the Company most recently ended prior to such date).

 

“Adjusted LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate.

 

“Administrative Agent” means JPMorgan Chase
Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

 

“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.

 

“Alternate Base Rate” means, for any day, a
rate per annum equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.

 

“Applicable Margin” means, for any day, with
respect to any ABR Loan or Eurodollar Loan, or with respect to the commitment
fees payable hereunder, as the case may be, the applicable rate per annum set
forth below under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment
Fee Rate”, as the case may be, based upon the Adjusted Leverage Ratio as of the
end of the most recent fiscal determination date:

 

	
  Adjusted Leverage Ratio

  	
   

  	
  ABR Spread

  	
   

  	
  Eurodollar Spread

  	
   

  	
  Commitment Fee Rate

  	
   

  
	
  Category 1 > 2.00 to 1.00

  	
   

  	
  .25

  	
  %

  	
  1.75

  	
  %

  	
  .35

  	
  %

  
	
  Category 2 > 1.50 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.50

  	
  %

  	
  .30

  	
  %

  
	
  Category 3 > 1.00 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.25

  	
  %

  	
  .25

  	
  %

  
	
  Category 4 > 0.50 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.00

  	
  %

  	
  .20

  	
  %

  
	
  Category 5 < 0.50 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  .75

  	
  %

  	
  .15

  	
  %

  

 

2

 

For purposes of the foregoing, (i) the Adjusted
Leverage Ratio shall be determined as of the end of each fiscal quarter of the
Company’s fiscal year based upon the Company’s consolidated financial
statements delivered pursuant to Section 5.01(a) or (b) and
(ii) each change in the Applicable Margin resulting from a change in the
Adjusted Leverage Ratio shall be effective during the period commencing on and
including the date of delivery to the Administrative Agent of such consolidated
financial statements indicating such change and ending on the date immediately
preceding the effective date of the next such change; provided that the
Adjusted Leverage Ratio shall be deemed to be in Category 1 under each of the
above tables at the option of the Administrative Agent or at the request of the
Required Lenders if the Company fails to deliver the consolidated financial
statements or the related compliance certificate required to be delivered by it
pursuant to Sections 5.01(a),  (b) or (c) during
the period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.  In the event that any financial statement or
certificate delivered pursuant to Section 5.01(a), Section 5.01(b) or
Section 5.01(c), as applicable, is shown to be inaccurate when
delivered (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered, but in any event not to exceed three
(3) years past the Maturity Date), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin for any period
(an “Applicable Period”) than the Applicable Margin applied for such
Applicable Period, and only in such case, then the Company shall immediately (i) deliver
to the Administrative Agent corrected financial statements for such Applicable
Period, (ii) determine the Applicable Margin for such Applicable Period
based upon the corrected financial statements, and (iii) immediately pay
to the Administrative Agent the accrued additional interest owing as a result
of such increased Applicable Margin for such Applicable Period.  This provision is in addition to rights of
the Administrative Agents and Lenders with respect to Section 2.11(c) and
their other respective rights under this Agreement.

 

“Applicable Percentage” means, with respect to
any Lender, the percentage of the total Commitments represented by such Lender’s
Commitment.  If the Commitments have
terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Approved Fund” has the meaning assigned to
such term in Section 9.04.

 

“Approved Jurisdiction” means any of the
Republic of Ireland, Scotland, the Kingdom of Sweden or the Republic of
Singapore.

 

“Assessment Rate” means, for any day, the
annual assessment rate in effect on such day that is payable by a member of the
Bank Insurance Fund classified as “well-capitalized” and within supervisory
subgroup “B” (or a comparable successor risk classification) within the meaning
of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit
Insurance Corporation for insurance by such Corporation of time deposits made
in dollars at the offices of such member in the United States; provided
that if, as a result of any change in any law, rule or regulation, it is
no longer possible to determine the Assessment Rate as aforesaid, 

 

3

 

then the Assessment Rate
shall be such annual rate as shall be determined by the Administrative Agent to
be representative of the cost of such insurance to the Lenders.

 

“Assignment and Assumption” means an assignment
and assumption entered into by a Lender and an assignee (with the consent of
any party whose consent is required by Section 9.04), and accepted
by the Administrative Agent, in the form of Exhibit 1.01A or any
other form approved by the Administrative Agent.

 

“Availability Period” means the period from and
including the Effective Date to but excluding the earlier of the Maturity Date
and the date of termination of the Commitments.

 

“Base CD Rate” means the sum of (a) the
Three-Month Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.

 

“Board” means the Board of Governors of the
Federal Reserve System of the United States of America.

 

“Board of Directors” means the Board of
Directors of the Company or any committee thereof duly authorized to act on
behalf of such Board.

 

“Borrower” means the Company or any Borrowing
Subsidiary.

 

“Borrowing” means Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect.

 

“Borrowing Request” means a request by the
Borrower for a Borrowing in accordance with Section 2.03,
substantially in the form of Exhibit 1.01B.

 

“Borrowing Subsidiary” means, at any time, each
Restricted Subsidiary incorporated or organized in a State of the United States
of America or an Approved Jurisdiction that has been designated as a Borrowing
Subsidiary by the Company pursuant to Section 2.19 and that has not
ceased to be a Borrowing Subsidiary as provided in such Section.

 

“Borrowing Subsidiary Agreement” means a
Borrowing Subsidiary Agreement substantially in the form of Exhibit 1.01C.

 

“Borrowing Subsidiary Termination” means a
Borrowing Subsidiary Termination substantially in the form of Exhibit 1.01D.

 

“Business Day” means any day that is not a
Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term “Business Day” shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.

 

“Capital Expenditures” means, for any period,
all expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period
that are capitalized on the consolidated balance sheet of the 

 

4

 

Company) by the Company
and its Restricted Subsidiaries during such period, that, in conformity with
GAAP, are included in “capital expenditures”, “additions to property, plant or
equipment” or comparable items in the consolidated financial statements of the
Company, but excluding expenditures for the restoration, repair or replacement
of any fixed or capital asset that was destroyed or damaged, in whole or in
part, in an amount equal to any insurance proceeds received in connection with
such destruction or damage.

 

“Cash Interest Expense” means, for any period,
the sum of all cash payments of interest and prepayment charges, if any,
including, without limitation, all net amounts payable (or receivable) under
interest rate protection agreements and all imputed interest in respect of
Capital Lease Obligations paid by the Company and its Restricted Subsidiaries
on all consolidated basis during such period.

 

“Capital Lease Obligations” of any Person means
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP and any obligations of such Person under any
synthetic lease financing whether or not such obligation is classified as a
capital lease under GAAP.

 

“Change in Control” means (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in
effect on the Effective Date), of Equity Interests representing more than 50%
of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in the Company; (b) occupation
of a majority of the seats (other than vacant seats) on the Board of Directors
by Persons who were neither (i) nominated by the current Board of
Directors nor (ii) appointed by directors so nominated; or (c) a
Change of Control or similar event, however denominated, under any Subordinated
Indebtedness or any other Material Indebtedness.

 

“Change in Law” means (a) the adoption of
any law, rule or regulation after the Effective Date, (b) any change
in any law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the Effective Date or (c) compliance
by any Lender or the Issuing Lender (or, for purposes of Section 2.13,
by any lending office of such Lender or by such Lender’s or the Issuing Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Effective Date.

 

“Co-Documentation Agent” means Bank of America,
N.A., Wells Fargo Bank, N.A. and Comerica Bank, each in their capacity as
Co-Documentation Agent.

 

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

 

“Collateral” means any and all “Collateral”, as
defined in any applicable Security Document.

 

5

 

“Collateral Agent” means JPMorgan Chase Bank,
N.A. in its capacity as collateral agent for the Lenders hereunder.

 

“Collateral and Guarantee Requirement” means,
at any time, that the following requirements shall be satisfied (to the extent
such requirements are stated to be applicable at the time under clause (a) or
(b) below):

 

(a)                                  at all times on and after the Effective
Date:

 

(i)                                     the Guarantee Agreement (or a supplement
thereto) shall have been executed by the Company and each Domestic Subsidiary
existing at such time, shall have been delivered to the Collateral Agent and
shall be in full force and effect;

 

(ii)                                  one or more Pledge Agreements (or
supplements thereto) shall have been duly executed and delivered by the Company
and each Domestic Subsidiary existing at such time and directly owning any
outstanding Equity Interests or any Indebtedness, and there shall have been
duly and validly pledged to the Collateral Agent thereunder, for the ratable
benefit of the Secured Parties (A) all the outstanding Equity Interests
(other than Equity Interests in any Foreign Subsidiary) owned directly by the
Company or any Domestic Subsidiary, (B) 65% of the outstanding voting
Equity Interests, and 100% of the outstanding non-voting Equity Interests (or,
in each case, such lesser percentages as shall be owned by the Company and the
Domestic Subsidiaries) in each Foreign Subsidiary owned in whole or in part
directly by the Company or any Domestic Subsidiary and (C) all
Indebtedness that is owed to the Company or any Domestic Subsidiary; and any
certificates, promissory notes or other instruments representing the Equity
Interests or Indebtedness pledged or subjected to a charge under the Pledge
Agreements, accompanied by stock powers or other instruments of transfer
endorsed in blank, shall be in the actual possession of the Collateral Agent
and all other steps required under applicable law or requested by the
Collateral Agent to ensure that the Pledge Agreements create valid, first
priority, perfected Liens (subject to Permitted Encumbrances) on all the
Collateral subject thereto shall have been taken;

 

(iii)                               one or more Security Agreements (or supplements
thereto) shall have been duly executed and delivered by the Company and each
Domestic Subsidiary existing at such time and there shall have been subjected
to security interests thereunder securing the Obligations all the assets of
each such Person in which a security interest can be created under the UCC, and
all documents and instruments, including UCC financing statements, required by
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded to create the security interests intended to be created by the
Security Agreements and perfect such Liens to the extent required by, and with
the priority required by, the 

 

6

 

Security Agreements, shall have been filed, registered or recorded (or
arrangements satisfactory to the Collateral Agent for such filing, registration
or recording shall have been made);

 

(iv)                              the Indemnity, Subrogation and
Contribution Agreement (or a supplement thereto) shall have been executed by
the Company and each Domestic Subsidiary party to the Guarantee Agreement, any
Pledge Agreement or any Security Agreement, shall have been delivered to the
Collateral Agent and shall be in full force and effect; and

 

(v)                                 each Loan Party shall have obtained all
consents and approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a party, the
performance of its obligations thereunder and the granting by it of the Liens
thereunder; and

 

(b)                                 at all times when there shall be one or
more Foreign Subsidiaries that are Foreign Borrowers under this Agreement:

 

(i)                                     the Guarantee Agreement (or a supplement
thereto) shall have been executed by each Foreign Subsidiary that is a direct
or indirect parent of any such Foreign Borrower (a “Foreign Parent”) (it
being understood that each Foreign Parent will guarantee only the Obligations
of Foreign Borrowers that are its subsidiaries), shall have been delivered to
the Collateral Agent and shall be in full force and effect;

 

(ii)                                  one or more Pledge Agreements (or
supplements thereto) shall have been duly executed and delivered by each
Foreign Borrower and each Foreign Parent of such Foreign Borrower existing at
such time and directly owning any outstanding Equity Interests or any
Indebtedness, and there shall have been duly and validly pledged to the
Collateral Agent under the Pledge Agreement, for the ratable benefit of the
Secured Parties, (A) all the Equity Interests in such Foreign Borrower, each
Foreign Parent of such Foreign Borrower and each Subsidiary directly owned in
whole or in part by such Foreign Borrower or any such Foreign Parent, including
any such Equity Interests owned by the Company and the Domestic Subsidiaries
that are not pledged pursuant to clause (a)(ii) above and (B) all the
Indebtedness that is owed to such Foreign Borrower or a Foreign Parent (it
being understood that the Equity Interests and Indebtedness referred to in this
clause (ii) will secure only the Obligations of such Foreign Borrower);
and any certificates, promissory notes or other instruments representing such
Equity Interests or Indebtedness, accompanied by stock powers or other
instruments of transfer endorsed in blank, shall be in the actual possession of
the Collateral Agent and all other steps required under applicable law or
requested by the Collateral Agent to ensure that the Pledge Agreements create
valid, first priority, 

 

7

 

perfected Liens (subject to Permitted Encumbrances) on all the
Collateral subject thereto shall have been taken; and

 

(iii)                               one or more Security Agreements (or supplements
thereto) shall have been duly executed and delivered by each Foreign Borrower
or Foreign Parent of such Foreign Borrower existing at such time and there
shall have been subjected to security interests thereunder securing the
Obligations of such Foreign Borrower (but not any obligations of the Company or
any Domestic Subsidiary) all the personal property or fixtures (within the
meaning of the UCC) of such Person in which a security interest can be created
under the laws of each applicable jurisdiction, with such exceptions as the
Collateral Agent may approve in its sole discretion, and without liability to
any party hereto, taking into account the cost and difficulty involved in
creating or perfecting any such security interest and the benefits to the
Lenders that would result therefrom, and all documents and instruments required
by law or reasonably requested by the Collateral Agent to be filed, registered
or recorded to create the security interests intended to be created by the
Security Agreements and perfect such Liens to the extent required by, and with
the priority required by, the Security Agreements, shall have been filed,
registered or recorded (or arrangements satisfactory to the Collateral Agent
for such filing, registration or recording shall have been made).

 

Notwithstanding any of the foregoing provisions of
this definition, if the Company or any Subsidiary shall be using commercially
reasonable efforts to create or perfect any pledge of Equity Interests in or
Indebtedness of any Foreign Subsidiary, the failure to have created or
perfected such pledge shall not, in and of itself, prevent the Collateral and
Guarantee Requirement from being satisfied until (x) the later of (i) the
90th day after the Effective Date and (ii) the 90th day after the
acquisition of such Collateral by the Company or a Domestic Subsidiary or (y) if,
in the judgment of the Collateral Agent, the Company is endeavoring in good
faith to satisfy the Collateral and Guarantee Requirement, the 180th day after
the acquisition of such Collateral by the Company or a Domestic Subsidiary.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Exposure
hereunder, as such commitment may be (a) reduced or increased from time to
time pursuant to Section 2.07 or Section 2.18 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. 
The initial amount of each Lender’s Commitment is set forth on Schedule
2.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment, as applicable.  The initial aggregate amount of the Lenders’
Commitments is $100,000,000.

 

“Commitment Increase Agreement” means a
Commitment Increase Agreement substantially in the form of Exhibit 1.01E
among the Borrower, the Administrative Agent and a Lender.

 

8

 

“Commitment Increase Notice” has the meaning
assigned to such term in Section 2.18.

 

“Company” means Benchmark Electronics, Inc.,
a Texas corporation.

 

“Consolidated EBITDA” means, for any period,
the EBITDA of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis; provided that (i) solely for
purposes of calculating the Leverage Ratio and Adjusted Leverage Ratio, but not
for any other purpose, Consolidated EBITDA for any period of four fiscal
quarters during which an Acquisition shall have occurred shall be computed on a
pro forma consolidated basis to include the EBITDA of such Acquisition and (ii) solely
for purposes of calculating the Leverage Ratio but not for any other purpose,
all references to Restricted Subsidiaries in this definition and in the
definitions referred to herein shall be deemed references to Subsidiaries.

 

“Consolidated Net Income” means, for any Person
for any period, the net income (or loss) of such person and its subsidiaries
during such period, calculated and consolidated or combined in accordance with
GAAP; provided that there shall be excluded from such net income (to the
extent otherwise included therein) the following: (i) any non-cash,
non-recurring charges, (ii) gains or losses attributable to Property sales
not in the ordinary course of business, and (iii) the cumulative effect of
a change in accounting principles and any gains or losses attributable to
writeups or writedowns of assets.

 

“Consolidated Net Tangible Assets” means the
total assets of the Company and its Restricted Subsidiaries less, without
duplication, (i) intangible assets including, without limitation,
goodwill, research and development costs, trademarks, trade names, patents,
franchises, copyrights, licenses and like general intangibles, experimental or
organizational expense, unamortized debt discount and expense carried as an
asset, all reserves and any write-up in the book of value of assets made after
the Effective Date (other than write-ups of assets of a going concern business
made within 12 months after the acquisition of such business), net of accumulated
amortization and (ii) all reserves for depreciation and other asset
valuation reserves (but excluding reserves for federal, state and other income
taxes).

 

“Consolidated Tangible Net Worth” means, at any
time:

 

(A) the total assets of the Company and its
Restricted Subsidiaries which would be shown as assets on a consolidated
balance sheet of the Company and its Restricted Subsidiaries as of such time
prepared in accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries, minus

 

(B) the total liabilities of the Company and its
Restricted Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and its Restricted Subsidiaries as of such time
prepared in accordance with GAAP, minus

 

(C) the net book amount of all assets of the
Company and its Restricted Subsidiaries (after deducting any reserves
applicable thereto) 

 

9

 

that would be shown as intangible assets on a consolidated balance
sheet of the Company and its Restricted Subsidiaries as of such time prepared
in accordance with GAAP.

 

“Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise.  “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Debt Service” means, for any period, the sum
of (a) Cash Interest Expense for such period and(b) scheduled
principal payments on Total Indebtedness for such period.

 

“Default” means any event or condition that
constitutes an Event of Default or that upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.

 

“Disclosed Matters” means the actions, suits
and proceedings and the environmental matters disclosed in Schedule 3.06.

 

“dollars” or “$” refers to lawful money
of the United States of America.

 

“Domestic Subsidiaries” means all Subsidiaries
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.

 

“EBITDA” means, for any Person for any period,
without duplication, the Consolidated Net Income of such Person for such period
plus, to the extent deducted in determining such Consolidated Net
Income, Cash Interest Expense, depreciation, amortization, other non-cash,
non-recurring charges and income tax (including state franchise taxes based
upon income) expense.

 

“Effective Date” has the meaning in the
preamble of this Agreement.

 

“Environmental Laws” means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release
of any Hazardous Material or to health and safety matters.

 

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the Company or
any Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

10

 

 

“Equity Interests” means shares of capital
stock, partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in
a Person, and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any such equity interest.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business
(whether or not incorporated) that, together with the Company, is treated as a
single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of
the Code.

 

“ERISA Event” means (a) any “reportable
event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived); (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with respect
to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the Company or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Company or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

 

“Eurodollar”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to
such term in ARTICLE VII.

 

“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender, the Issuing Lender or any other recipient of
any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its
net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.17(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure

 

11

 

to comply with Section 2.15(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.15(a).

 

“Federal Funds Effective Rate” means, for any
day, the weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means the letter agreement dated November 6,
2007, between the Borrower and the Administrative Agent.

 

“Fiscal Quarter” means the fiscal quarter of
the Company, ending on the last day of each March, June, September and December of
each year.

 

“Financial Officer” means the chief financial
officer, principal accounting officer, treasurer or controller of the Borrower.

 

“Fixed Charge Coverage Ratio” means, for any
period, the ratio of (i) Consolidated EBITDA plus Lease Expense and less
cash taxes of the Company and its Restricted Subsidiaries for such period to (ii) the
Debt Service plus Capital Expenditures plus Lease Expense of the Company and
its Restricted Subsidiaries for such period.

 

“Foreign Borrower” means any Borrowing
Subsidiary that is a Foreign Subsidiary.

 

“Foreign Lender” means, with respect to any
Borrower, any Lender that is organized under the laws of a jurisdiction other
than that in which such Borrower is located. For purposed of the definition,
the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary” means any Subsidiary that
is organized under the laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting
principles in the United States of America.

 

“Governmental Approval” means (ii) any
authorization, consent, approval, license, waiver, ruling, permit, tariff,
rate, certification, exemption, filing, variance, claim, order, judgment,
decree, sanction or publication of, by or with; (iii)any notice to; (iv) any
declaration of or with; or (v) any registration by or with, or any other
action or deemed action by or on behalf of, any Governmental Authority.

 

12

 

“Governmental Authority” means the government
of the United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided,
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.

 

“Guarantee Agreement” means the Guarantee
Agreement dated as of August 24, 1999 and executed in connection with the
Original Credit Agreement among the Company, the Guarantors from time to time
party thereto and the Collateral Agent for the benefit of the Secured Parties,
as the same may be amended, modified or supplemented from time to time in
accordance with the provisions hereof.

 

“Guarantors” means all the Domestic
Subsidiaries and the Foreign Parent of each Foreign Borrower who is required to
execute a Guarantee Agreement pursuant to paragraph (b)(i) of the
definition of Collateral and Guarantee Requirement.

 

“Hazardous Materials” means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

 

“Highest Lawful Rate” means, as to any Lender
or the Issuing Lender, the maximum nonusurious rate of interest that, under
applicable law, may be contracted for, taken, reserved, charged or received by
such Lender on the Loans or under the Loan Documents at any time or from time
to time. If the maximum nonusurious rate of interest which, under applicable
law, any of such Lenders are permitted to charge the Borrower on the Loans
shall change after the date hereof, to the extent permitted by applicable law,
the Highest Lawful Rate shall be automatically increased or decreased, as the
case may be, as of the effective time of such change without notice to the
Borrower or any other Person.

 

13

 

“Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary
course of business), (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f) all
Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

“Indemnity, Subrogation and Contribution Agreement”
means the Indemnity, Subrogation and Contribution Agreement dated as of August 24,
1999 and executed in connection with the Original Credit Agreement among the
Company, the Domestic Subsidiaries from time to time party thereto and the
Collateral Agent for the benefit of the Secured Parties, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions hereof.

 

“Intercompany Indebtedness” means any
indebtedness of the Company or any Subsidiary owed to and held by the Company
or any Wholly Owned Subsidiary; provided that any subsequent issuance or
transfer of any Equity Interest which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent transfer
of such indebtedness (other than to the Company or another Wholly Owned Subsidiary)
shall be deemed, in each case, to constitute a new incurrence of Indebtedness
other than Intercompany Indebtedness by the issuer thereof.

 

“Interest Election Request” means a request by
the Borrower to convert or continue a Borrowing in accordance with Section 2.06.

 

“Interest Payment Date” means (a) with
respect to any ABR Loan, the last day of each March, June, September and
December, and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such
Interest Period.

 

“Interest Period” means with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in

 

14

 

the calendar month that
is one, two, three or six months thereafter, as the Borrower may elect;
provided, that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

 

“Issuing Lender” means JPMorgan Chase Bank,
N.A. in its capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.04. The
Issuing Lender may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Lender, in which case the term
“Issuing Lender” shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.

 

“Joinder to, Ratification and Amendment of
Guarantee Agreement” means that certain Joinder to, Ratification and
Amendment of Guarantee Agreement dated of even date herewith by and among the
Company, all Domestic Subsidiaries of the Company as of the Effective Date, all
Foreign Parents of all Foreign Borrowers and Administrative Agent.

 

“Joinder to, Ratification and Amendment of
Indemnity, Subrogation and Contribution Agreement” means that certain
Joinder to, Ratification and Amendment of Indemnity, Subrogation and
Contribution Agreement dated of even date herewith by and among the Company,
all Domestic Subsidiaries of the Company as of the Effective Date and
Administrative Agent.

 

“Joinder to, Ratification and Amendment of Pledge
Agreement” means that certain Joinder to, Ratification and Amendment of
Pledge Agreement dated of even date herewith by and among the Company, all
Domestic Subsidiaries of the Company as of the Effective Date, all Foreign
Parents of all Foreign Borrowers as of the Effective Date, all Foreign
Borrowers as of the Effective Date and Administrative Agent.

 

“Joinder to, Ratification and Amendment of Security
Agreement” means that certain Joinder to, Ratification and Amendment of
Security Agreement dated of even date herewith by and among the Company, all
Domestic Subsidiaries of the Company as of the Effective Date, all Foreign
Parents of all Foreign Borrowers as of the Effective Date, all Foreign
Borrowers as of the Effective Date and Administrative Agent.

 

“Law” means all laws, statutes, treaties,
ordinances, codes, acts, rules, regulations, Government Approvals and Orders of
all Governmental Authorities, whether now or hereafter in effect.

 

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

 

15

 

“LC Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.

 

“Lease Expense” for any period shall mean gross
operating lease obligations of the Company and its Restricted Subsidiaries for
any relevant period for which such calculation is being utilized.

 

“Lenders” means the Persons listed on Schedule
2.01 and any other Person that shall have become a Lender hereto pursuant
to an Assignment and Assumption, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption.

 

“Letter of Credit” means any letter of credit
issued pursuant to this Agreement including, without limitation, the existing
letters of credit listed on Schedule 1.01A attached hereto.

 

“Leverage Ratio” means, on any date, the ratio
of (a) Total Indebtedness as of such date to (b) Consolidated EBITDA
for the period of four consecutive fiscal quarters of the Company ended on such
date (or, if such date is not the last day of a fiscal quarter, ended on the
last day of the fiscal quarter of the Company most recently ended prior to such
date); provided, that for purposes of determining the Leverage Ratio, all
references in the definitions of Total Indebtedness and Consolidated EBITDA
(and in the definitions used therein) to Restricted Subsidiaries shall be
deemed references to Subsidiaries.

 

“LIBO Rate” means, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on the Reuters Screen
LIBOR01 page (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the “LIBO
Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office
of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or
a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities. For the purposes of this

 

16

 

Agreement and the other
Loan Documents, the Company or any Subsidiary of the Company shall be deemed to
be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes.

 

“Loan Documents” means this Agreement, each
Borrowing Subsidiary Agreement, each Borrowing Subsidiary Termination, the
Indemnity Subrogation and Contribution Agreement, the Letters of Credit (and
any applications therefor and reimbursement agreements relating thereto), the
Security Documents, any promissory note issued pursuant to Section 2.08.

 

“Loan Parties” means each Borrower and each Subsidiary
that is party to any Loan Document.

 

“Loans” means the loans made by the Lenders to
the Borrower pursuant to this Agreement.

 

 “Material
Adverse Effect” means any event, development or circumstance that has had
or could reasonably be expected to have a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of the
Borrower and the Subsidiaries taken as a whole, or (b) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders.

 

“Material Indebtedness” means Indebtedness
(other than the Loans and Letters of Credit), or obligations in respect of one
or more Swap Agreements, of any one or more of the Borrower and its
Subsidiaries in an aggregate principal amount exceeding $25,000,000. For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Borrower or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.

 

“Maturity Date” means December 21, 2012.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.

 

 “Net
Proceeds” means, with respect to any event, (a) the proceeds received
in respect of such event net of all brokerage commissions, reasonable fees and
out-of-pocket expenses paid by the Company to third parties (other than
Affiliates) in connection with such event.

 

“Net Worth” means, at any time and from time to
time, the net worth of the Company and its Subsidiaries on a consolidated
basis, determined in accordance with GAAP.

 

“New Lender” has the meaning set forth in Section 2.18(b).

 

17

 

“New Lender Agreement” means an agreement among
the Borrower, the Administrative Agent and a New Lender in substantially in the
form of Exhibit 1.01F or a form that is reasonably satisfactory to
the Administrative Agent.

 

“Obligations” means (a) the due and
punctual payment by the Borrowers or the applicable Loan Parties of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrowers under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties under this Agreement and the other Loan
Documents, (b) the due and punctual payment and performance of all
covenants, agreements, obligations and liabilities of the Loan Parties,
monetary or otherwise, under or pursuant to this Agreement and the other Loan
Documents and (c) the due and punctual payment of all obligations of the
Company under each Swap Agreement entered into (i) prior to the Effective
Date with any counterparty that is a Lender (or an Affiliate thereof) on the
date hereof or (ii) on or after the Effective Date with any counterparty
that is a Lender (or an Affiliate thereof) at the time such Swap Agreement is
entered into.

 

“Order” means an order, writ, judgment, award,
injunction, decree, ruling or decision of any Governmental Authority or
arbitrator.

 

“Original Credit Agreement” has the meaning set
forth in the Preliminary Statement.

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.

 

“Participant” has the meaning set forth in Section 9.04.

 

“PBGC” means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor entity
performing similar functions.

 

“Permitted Encumbrances” means:

 

(a)           Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.05;

 

(b)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing

 

18

 

obligations that are not overdue by more than 90 days or are being
contested in compliance with Section 5.05;

 

(c)           pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

(d)           deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business;

 

(e)           judgment
liens in respect of judgments that do not constitute an Event of Default under clause
(k) of Article VII;

 

(f)            easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Company or any Subsidiary;

 

(g)           any
obligations or duties affecting any of the property of the Company or the
Subsidiaries to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such property for the purposes for which it is held;

 

(h)           Liens
arising from precautionary UCC financing statements regarding operating leases;
and

 

(i)            Liens
arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course
of business.

 

provided that the term “Permitted Encumbrances” shall not
include any Lien securing Indebtedness.

 

“Permitted Foreign Investments” means investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 364 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by any office
of any commercial bank organized under the laws of any jurisdiction outside of
the United States of America.

 

 “Permitted
Investments” means:

 

(a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from
the date of acquisition thereof;

 

19

 

(b)           investments
in commercial paper maturing within one year from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

 

(c)           investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 364 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof which (i) has a combined capital
and surplus and undivided profits of not less than $500,000,000 and (ii) has
short-term credit ratings of at least A1 and P1 by S&P and Moody’s, respectively;

 

(d)           fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above; provided
that the Company shall take possession of all securities purchased by
the Company or any Subsidiary under repurchase agreements and shall adhere to
customary margin and mark-to-market procedures with respect to fluctuations in
value; and

 

(e)           money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA by S&P and Aaa by Moody’s or invest solely in the assets
described in clauses (a) through (d) above and (iii) have
portfolio assets of at least $5,000,000,000;

 

(f)            municipal
investments with a rating of AAA by S&P and Aaa by Moody’s and a maximum
maturity of one year (for securities where the interest rate is adjusted
periodically (e.g. floating rate securities), the interest rate reset date will
be used to determine the maturity date); and

 

(g)           variable
rate notes issued by, or guaranteed by, any state agency, municipality or
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P
or P-1 (or the equivalent thereof) or better by Moody’s and maturing within 364
days from the date of acquisition (the interest rate reset date will be used to
determine the maturity date).

 

“Person” means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.

 

“Plan” means any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Company or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Pledge Agreements” means (a) the Pledge
Agreement dated August 24, 1999 and executed in connection with the
Original Credit Agreement among the Company, the Subsidiaries from time to time
party thereto and the Collateral Agent and (b) in connection with pledges
of shares of or other equity interests in Foreign Subsidiaries, other pledge
agreements or similar agreements in form and substance satisfactory to the
Collateral Agent, as the same may

 

20

 

be amended, modified or
supplemented from time to time in accordance with the provisions hereof.

 

“Prime Rate” means the rate of interest per
annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

 

“Qualified Foreign Subsidiary Holding Company”
means a Domestic Subsidiary that does not own any assets other than, or engage
in any business or activity other than the ownership of, Equity Interests of
one or more Domestic or Foreign Subsidiaries and that does not have any
Indebtedness or liabilities other than (a) liabilities incidental to its
ownership of such Equity Interests and (b) liabilities as a Guarantor of
the Obligations.

 

“Quarterly Dates” means the last day of each
March, June, September and December in each year.

 

“Re-Allocation Date” has the meaning set forth
in Section 2.18(e).

 

“Register” has the meaning set forth in Section 9.04(b).

 

“Related Parties” means, with respect to any
specified Person, such Person’s Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Person’s
Affiliates.

 

“Required Lenders” means, at any time, Lenders
having Revolving Exposures and unused Commitments representing at least 51% of
the sum of the total Revolving Exposures and unused Commitments at such time.

 

“Restricted Payment” means any dividend or
other distribution (whether in cash, securities or other property) with respect
to any Equity Interests in the Company or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the
Company or any option, warrant or other right to acquire any such Equity
Interests in the Company.

 

“Restricted Subsidiary” means (a) any
Domestic Subsidiary and (b) any Foreign Subsidiary that is not an
Unrestricted Subsidiary.

 

“Revolving Exposure” means, with respect to any
Lender at any time, the sum of the (a) outstanding principal amount of
such Lender’s Revolving Loans and (b) such Lender’s LC Exposure, in each
case at such time.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01.

 

“Rolling Period” means any period of four
consecutive Fiscal Quarters (or, if less, the number of full Fiscal Quarters
subsequent to the Effective Date).

 

21

 

“S&P” means Standard & Poor’s
Rating Services, a division of The McGraw-Hill Companies, Inc. and any
successor thereto.

 

“Second Amended and Restated Agreement” has the
meaning set forth in the Preliminary Statement.

 

 “Secured
Parties” means the Administrative Agent, the Collateral Agent, each Lender,
the Issuing Lender and each other person to which any of the Obligations is
owed.

 

“Security Agreements” means (a) the
Security Agreement dated August 24, 1999 and executed in connection with
the Original Credit Agreement among the Company, the Domestic Subsidiaries from
time to time party thereto and the Collateral Agent for the benefit of the
Secured Parties and (b) in connection with the creation of security
interests in the assets of Foreign Subsidiaries, other security agreements or
similar agreements in form and substance satisfactory to the Collateral Agent,
as the same may be ratified, amended, modified or supplemented from time to
time in accordance with the provisions hereof.

 

“Security Documents” means the Security
Agreements, the Pledge Agreements, the Guarantee Agreements, the Joinder to,
Ratification and Amendment of Guarantee Agreements, the Joinder to,
Ratification and Amendment of Pledge Agreement, the Joinder to, Ratification
and Amendment of Security Agreement, the Joinder to, Ratification and Amendment
of the Indemnity Subrogation and Contribution Agreement and each other security
document or pledge agreement delivered pursuant to Section 5.11 or Section 5.13
to secure any of the Obligations or in accordance with applicable local or
foreign law to grant a valid, perfected security interest in any property, and
all UCC or other financing statements or instruments of perfection required by
this Agreement or any security agreement to be filed with respect to the
security interests in property and fixtures created pursuant to the Security
Agreement and any other document or instrument utilized to pledge as collateral
for the Obligations any property of whatever kind or nature.

 

“Statutory Reserve Rate” means a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for
new negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Subordinated Indebtedness” means subordinated
debt securities issued by the Company that (a) are subordinated to the
Obligations pursuant to subordination provisions

 

22

approved by
Administrative Agent, (b) contain covenants, events of default and
mandatory redemption, repayment, prepayment or repurchase requirements approved
by Administrative Agent, and (c) do not mature, and are not subject to any
scheduled amortization, redemption, repayment, prepayment or repurchase
requirement, prior to the date one year after the Maturity Date.

 

“subsidiary” means, with respect to any Person
(the “parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP
as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which Equity Interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held, or (b) that
is, as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

 

“Subsidiary” means any subsidiary of the
Company.

 

“Swap Agreement” means any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

 

“Taxes” means any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

 

“Three-Month Secondary CD Rate” means, for any
day, the secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day) or, if such rate is not
so reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m.,
New York City time, on such day (or, if such day is not a Business Day, on the
next preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.

 

“Total Indebtedness” means, as of any date, the
sum of (a) the aggregate principal amount of Indebtedness of the Company
and its Restricted Subsidiaries outstanding as of such date, in the amount that
would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP, plus (b) the aggregate
principal amount of 

 

 

23

 

Indebtedness of the
Company and its Restricted Subsidiaries outstanding as of such date that is not
required to be reflected on a balance sheet in accordance with GAAP, determined
on a consolidated basis; provided that, (i) for purposes of clause (b) above,
the term “Indebtedness” shall not include contingent obligations of the Company
or any Restricted Subsidiary as an account party in respect of any letter of
credit or letter of guaranty unless such letter of credit or letter of guaranty
supports an obligation that constitutes Indebtedness and (ii) solely
for purposes of calculating the Leverage Ratio but not for any other purpose,
all references to Restricted Subsidiaries in this definition and in the
definitions referred to herein shall be deemed references to Subsidiaries.

 

“Transactions” means the execution, delivery
and performance by the Borrower of this Agreement and the other Loan Documents,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder.

 

“Type”, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate
or the Alternate Base Rate.

 

“UCC” means the Uniform Commercial Code as from
time to time in effect in the State of Texas or, where applicable as to
specific Collateral, any other relevant state.

 

“Unrestricted Subsidiary” means (i) any
Foreign Subsidiary of the Company that at the time of determination shall have
been designated as an Unrestricted Subsidiary by the Company in the manner
provided below (and shall not subsequently have been designated as a Restricted
Subsidiary) and (ii) any subsidiary of an Unrestricted Subsidiary.  The Company may from time to time designate
any Foreign Subsidiary (other than a Foreign Subsidiary that, immediately after
such designation, shall hold any Indebtedness of or Equity Interest in the
Company or any Restricted Subsidiary) as an Unrestricted Subsidiary, and may
designate any Unrestricted Subsidiary as a Restricted Subsidiary so long as,
immediately after giving effect to such designation, no Default shall have
occurred and be continuing.  Any
designation by the Company pursuant to this definition shall be made in an
officer’s certificate delivered to the Administrative Agent and containing a
certification that such designation is in compliance with the terms of this
definition.  Notwithstanding the
foregoing, no Borrowing Subsidiary shall at any time be an Unrestricted
Subsidiary.  Schedule 1.01B
contains a list of the Foreign Subsidiaries that have been designated by the
Company as Unrestricted Subsidiaries as of the Effective Date.

 

“Wholly Owned Subsidiary” means any Subsidiary
of the Company all the Equity Interests of which (other than directors’
qualifying shares and Equity Interests held by other than the Persons to the
extent such Equity Interests are required by applicable law to be held by a
Person other than the Company or one of its Subsidiaries) is owned by the
Company or one or more Wholly Owned Subsidiaries.

 

“Withdrawal Liability” means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of
Title IV of ERISA.

 

24

 

Section 1.02           Terms
Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

Section 1.03           Accounting
Terms; GAAP.  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Company that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until  such notice shall have been withdrawn or such
provision  amended in accordance
herewith.

 

ARTICLE II

 

The Credits

 

Section 2.01           Commitments.  Subject to the terms and conditions set forth
herein each Lender agrees to make Revolving Loans to any Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Lender’s Revolving Exposure exceeding such Lender’s
Commitment or (ii) in the case of any Foreign Borrower, the sum of the
aggregate outstanding principal amount of the Loans of all Foreign Borrowers
exceeding $20,000,000.  Within the
foregoing limits and subject to the terms and conditions set forth herein, any
Borrower may borrow, prepay and reborrow Revolving Loans.

 

Section 2.02           Loans
and Borrowings.  (a) Each Loan
made pursuant to Section 2.01 shall be made as part of a Borrowing
consisting of Loans of the same Type made by the Lenders ratably in accordance
with their respective Commitments.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations

 

 

25

 

hereunder;
provided that the Commitments of the Lenders are several and no Lender
shall be responsible for any other Lender’s failure to make Loans as required.

(b)           Subject
to Section 2.12, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Borrower may request in accordance
herewith.  Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

 

(c)           At
the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $500,000
and not less than $1,000,000.  At the
time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments.  Borrowings of more
than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of eight Eurodollar Borrowings
outstanding.

 

(d)           Notwithstanding
any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.

 

Section 2.03           Requests
for Borrowings.  To request a
Borrowing, the applicable Borrower shall notify the Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than 10:00 a.m., New York City time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:

 

(i)            the
aggregate amount of the requested Borrowing;

 

(ii)           the
date of such Borrowing, which shall be a Business Day;

 

(iii)          whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

 

(iv)          in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

 

(v)           the
Borrower requesting such Borrowing; and

 

(vi)          the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05(a).

 

26

 

If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a  Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

 

Section 2.04           Letters
of Credit.  (a) General.  Subject to the terms and conditions set forth
herein, the Company may request the issuance of Letters of Credit for its own
account or for the joint and several account of the Company and a Borrowing
Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Lender, at any time and from time to time during the Availability
Period.  Such Letters of Credit may be
used for the benefit of any Subsidiary and may identify such Subsidiary in the
text thereof so long as either the Company or any Borrowing Subsidiary is the
account party thereon.  In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Company to, or entered into by the Company with, the
Issuing Lender relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.

 

(b)           Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Company shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) of
this Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Lender, the
Company also shall submit a letter of credit application on the Issuing Lender’s
standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Company shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i) the
LC Exposure shall not exceed $20,000,000 and (ii) the total Revolving
Exposures shall not exceed the total Commitments.

 

(c)           Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the
Maturity Date; provided, however, that any Letter of Credit with
a one-year tenor may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause (ii) above).

 

27

 

(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Lender or the Lenders, the Issuing
Lender hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Lender, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit.  In consideration and
in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Lender, such Lender’s Applicable Percentage of each LC Disbursement
made by the Issuing Lender and not reimbursed by the Company on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Company for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such
LC Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by the Company prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the
Business Day that the Company receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Company receives such
notice, if such notice is not received prior to such time on the day of
receipt.  If the Company fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Company in respect
thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice,
each Lender shall pay to the Administrative Agent its Applicable Percentage of
the payment then due from the Company, in the same manner as provided in Section 2.05
with respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Lender the amounts so received by it from the
Lenders.  Promptly following receipt by
the Administrative Agent of any payment from the Company pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interests may appear. 
Any payment made by a Lender pursuant to this paragraph to reimburse the
Issuing Lender for any LC Disbursement 
shall not constitute a Loan and shall not relieve the Company of its
obligation to reimburse such LC Disbursement.

 

(f)            Obligations
Absolute.  The Company’s obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability

 

 

28

 

of any Letter of Credit or this Agreement, or any term or provision
therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Lender under a Letter of Credit against presentation of a draft
or other document that does not comply with the terms of such Letter of Credit,
or (iv) any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Company’s obligations hereunder. 
Neither the Administrative Agent, the Lenders nor the Issuing Lender,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Lender; provided that the foregoing shall not
be construed to excuse the Issuing Lender from liability to the Company to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Company to the extent permitted by
applicable law) suffered by the Company that are caused by the Issuing Lender’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the
Issuing Lender (as finally determined by a court of competent jurisdiction),
the Issuing Lender shall be deemed to have exercised care in each such
determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Lender
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(g)           Disbursement
Procedures.  The Issuing Lender shall
promptly notify the Administrative Agent and the Company by telephone
(confirmed by telecopy) of any demand for payment under a Letter of Credit and
whether the Issuing Lender has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall
not relieve the Company of its obligation to reimburse the Issuing Lender and
the Lenders with respect to any such LC Disbursement.

 

(h)           Interim
Interest.  If the Issuing Lender
shall make any LC Disbursement, then, unless the Company shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Company
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the Company fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.11(c) shall
apply.  Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Lender, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph (e) of
this Section

 

29

 

to reimburse the Issuing Lender shall be for the account of such Lender
to the extent of such payment.

 

(i)            Replacement
of the Issuing Lender.  The Issuing
Lender may be replaced at any time by written agreement among the Company, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender.  The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Lender.  At the time any such replacement shall become
effective, the Company shall pay all unpaid fees accrued for the account of the
replaced Issuing Lender pursuant to Section 2.10(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the Issuing Lender under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to
the term “Issuing Lender” shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require.  After the
replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Lender under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.

 

(j)            Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Company
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral pursuant to this paragraph, the Company shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash
equal to the LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the
occurrence of any Event of Default described in clause (h) or (i) of
ARTICLE VII.  The Company also
shall deposit cash collateral pursuant to this paragraph as and to the extent
required by Section 2.09(b). 
Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Company
under this Agreement.  The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account.  Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Company’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Lender for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Company for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Lenders with LC Exposure  representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Company under this
Agreement.  If the Company is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Company within three Business Days after all Events of
Default have been cured or waived.  If
the Company is required to provide an amount of cash collateral hereunder
pursuant to Section 2.09(b), such amount (to the extent not applied
as aforesaid) shall be returned 

 

 

30

 

to the Company as and to the extent that, after giving effect to such
return, the Company would remain in compliance with Section 2.09(b) and
no Default shall have occurred and be continuing.

 

Section 2.05   Funding of Borrowings.  (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account
of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders.  The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained with the Administrative Agent in New York City and
designated by such Borrower in the applicable Borrowing Request.

 

(b)           Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the applicable Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans.  If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.

 

Section 2.06   Interest Elections.  (a) Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section.  The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.

 

(b)           To
make an election pursuant to this Section, the applicable Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Interest Election Request
in a form approved by the Administrative Agent and signed by the Borrower.

 

(c)           Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:

 

31

 

(i)            the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);

 

(ii)           the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

 

(iii)          whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

 

(iv)          if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a
Eurodollar Borrowing but does not specify an Interest Period, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.

 

(d)           Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.

 

(e)           If
the applicable Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent so notifies the Company, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

 

Section 2.07   Termination and Reduction of Commitments.

 

(a)           Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)           The
Company may at any time terminate or from time to time reduce the Commitments;
provided that (A) each reduction of the Commitments shall be in an amount
that is an integral multiple of $5,000,000 and (B) the Company shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09, the sum of
the Revolving Exposures would exceed the total Commitments.

 

(c)           The
Company shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the

 

32

 

effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each
notice delivered by the Company pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments
delivered by the Company may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.  Any termination or reduction of the
Commitments shall be permanent.  Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

 

Section 2.08   Repayment of Loans; Evidence of Debt.  (a) Each Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Revolving Loan of such Lender on the
Maturity Date.

 

(b)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of each Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

(c)           The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)           The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima  facie evidence of the existence
and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(e)           Any
Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the applicable
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Administrative
Agent and the Company.  Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).

 

Section 2.09   Prepayment of Loans.  (a) Each Borrower shall have the right
at any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (c) of this Section.

 

 

 

33

 

 

(b)           In
the event and on each occasion that the sum of the Revolving Exposures exceeds
the total Commitments, the Borrowers shall prepay Borrowings (or, if no such
Borrowings are outstanding, deposit cash collateral in an account with the
Administrative Agent pursuant to Section 2.04(j)) in an aggregate
amount equal to such excess.

 

(c)                                  The Company shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment or (ii) in the case of prepayment of an ABR Borrowing,
not later than 11:00 a.m., New York City time, one Business Day before the
date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section 2.07,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.07.  Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof.  Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.11.

 

Section 2.10  Fees. (a) The Company shall pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at
the Applicable Margin on the daily amount of the unused Commitment of such
Lender during the period from and including the Effective Date to but excluding
the date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the third Business Day following the last day of March,
June, September and December of each year and on the date on which
the Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).

 

(b)                                 The Company shall pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender’s Commitment terminates and the date on
which it ceases to have any LC Exposure, and (ii) to the Issuing Lender a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure, as well
as the Issuing Lender’s standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.  Participation fees and
fronting fees accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such

 

34

 

last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Lender
pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).

 

(c)                                  The Company shall pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times set
forth in the Fee Letter.

 

(d)                                 All fees payable hereunder shall be paid
on the dates due, in immediately available funds, to the Administrative Agent
(or to the Issuing Lender, in the case of fees payable to it) for distribution,
in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any
circumstances.

 

Section 2.11  Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Margin.

 

(b)                                 The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Margin.

 

(c)                                  Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Loans as
provided in paragraph (a) of this Section.

 

(d)                                 Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and, in the case
of Loans, upon termination of the Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event
of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

 

(e)                                  All interest hereunder shall be computed
on the basis of a year of 360 days, except that interest computed by reference
to the Alternate Base Rate at times when the Alternate Base Rate is based on
the Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year), and in each case shall be payable for the actual number
of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate,

 

35

 

Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.

 

Section 2.12  Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

(i)                                     the Administrative Agent determines
(which determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or
the LIBO Rate, as applicable, for such Interest Period; or

 

(ii)                                  the Administrative Agent is advised by
the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice
thereof to the Company and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the Company
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing
shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing; provided
that if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.

 

Section 2.13  Increased Costs. (a)  If any Change in Law
shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Lender;
or

 

(ii)                                  impose on any Lender or the Issuing
Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;

 

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
(or of maintaining its obligation to make any such Loan) or to increase the
cost to such Lender or the Issuing Lender of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of
principal, interest or otherwise), then the Company will pay to such Lender or
the Issuing Lender, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)                                 If any Lender or the Issuing Lender
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the Issuing
Lender’s capital or on the capital of such Lender’s or the Issuing

 

36

 

Lender’s holding company, if any, as a consequence of this Agreement or
the Loans made by, or participations in Letters of Credit held by, such Lender,
or the Letters of Credit issued by the Issuing Lender, to a level below that
which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Lender’s policies and the policies
of such Lender’s or the Issuing Lender’s holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
or the Issuing Lender, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Lender or such Lender’s or the
Issuing Lender’s holding company for any such reduction suffered.

 

(c)                                  A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or the Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to
the Company and shall be conclusive absent manifest error.  The Company shall pay such Lender or the
Issuing Lender, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)                                 Failure or delay on the part of any
Lender or the Issuing Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s or the Issuing Lender’s right to
demand such compensation; provided that the Company shall not be
required to compensate a Lender or the Issuing Lender pursuant to this Section for
any increased costs or reductions incurred more than 270 days prior to the date
that such Lender or the Issuing Lender, as the case may be, notifies the
Company of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Lender’s intention to claim compensation
therefor; provided  further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

Section 2.14  Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and
is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the applicable Borrower pursuant to Section 2.17,
then, in any such event, the applicable Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate that
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A

 

37

 

certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The applicable
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

Section 2.15  Taxes. (a)  Any and all payments by or on account
of any obligation of any Loan Party hereunder or under any other Loan Documents
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if such Loan Party shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Lender (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Loan Party shall make such deductions and (iii) such
Loan Party shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)                                 In addition, the Company shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)                                  The Company shall indemnify the
Administrative Agent, each Lender and the Issuing Lender, within 10 Business
Days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by the Administrative Agent, such Lender or the
Issuing Lender, as the case may be, on or with respect to any payment by or on
account of any obligation of any Loan Party hereunder or under any other Loan
Documents (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Company by a Lender or the Issuing
Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Lender, shall be conclusive absent manifest error.

 

(d)                                 As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Company shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which a Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.

 

38

 

(f)                                    If the Administrative Agent, a Lender or
the Issuing Lender determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Company or with respect to which any Loan Party has paid additional amounts
pursuant to this Section 2.15, it shall pay over such refund to the
Company (but only to the extent of indemnity payments made, or additional
amounts paid, by the Company under this Section 2.15 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the Issuing Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Company, upon the
request of the Administrative Agent, such Lender or the Issuing Lender agrees
to repay the amount paid over to the Company (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Issuing Lender in the event the
Administrative Agent, such Lender or the Issuing Lender is required to repay
such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent, any Lender or the Issuing Lender
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Company or any other Person.

 

Section 2.16  Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.
(a)  Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.13, 2.14
or 2.15, or otherwise) prior to 12:00 noon, Houston time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 712 Main Street,
Houston, Texas, except payments to be made directly to the Issuing Lender as expressly
provided herein and except that payments pursuant to Section 2.13, 2.14,
2.15 and 9.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received
by it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments hereunder shall be made in dollars.

 

(b)                                 If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

 

(c)                                  If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans, or participations in LC
Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans, and participations
in LC

 

39

 

Disbursements, and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans, and
participations in LC Disbursements of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans, and participations in LC Disbursements; provided
that (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by a Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.

 

(d)                                 Unless the Administrative Agent shall
have received notice from a Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Lender hereunder that such Borrower will not make such payment, the
Administrative Agent may assume that such Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Lender, as the case may be, the amount
due.  In such event, if such Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Lender,
as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Lender
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

 

(e)                                  If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.04(d), or (e),
2.05(b), 2.16(d) or 9.03(c), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.

 

Section 2.17  Mitigation Obligations; Replacement of
Lenders. (a)  If
any Lender requests compensation under Section 2.13, or if a
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or

 

40

 

expense and would not otherwise be disadvantageous to such Lender. The
Borrowers shall pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)                                 If any Lender requests compensation under
Section 2.13, or if a Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.15, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and if a
Commitment is being assigned, the Issuing Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from
a claim for compensation under Section 2.13 or payments required to
be made pursuant to Section 2.15, such assignment will result in a
reduction in such compensation or payments. 
A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such  assignment and delegation cease to apply.

 

Section 2.18  Increase of Commitments. (a)  If no Default, Event of
Default or Material Adverse Effect shall have occurred and be continuing and
all of the conditions described in Section 4.02(a) and (d) are
satisfied, the Company may at any time and from time to time request an
increase of the aggregate Commitments by notice to the Administrative Agent in
writing of the amount of such proposed increase (such notice, a “Commitment
Increase Notice”); provided, however, that (i) each such increase
shall be at least $10,000,000, (ii) the cumulative increase in Commitments
pursuant to this Section 2.18 shall not exceed $100,000,000, (iii) the
Commitment of any Lender may not be increased without such Lender’s consent,
and (iv) the aggregate amount of the Lenders’ Commitments shall not exceed
$200,000,000. Any such Commitment Increase Notice must offer each Lender the
opportunity to subscribe for its pro rata share of the increased Commitments. If
any portion of the increased Commitments is not subscribed for by such Lenders,
the Company may, in its sole discretion, but with the consent of the
Administrative Agent as to any Person that is not at such time a Lender (which
consent shall not be unreasonably withheld or delayed), offer to any existing
Lender or to one or more additional banks or financial institutions the
opportunity to participate in all or a portion of such unsubscribed portion of
the increased Commitments pursuant to paragraph (b) or (c) below, as
applicable.

 

(b)                                 Any additional bank or financial
institution that the Company selects to offer participation in the increased
Commitments shall become a party to this Agreement by executing and delivering
to the Administrative Agent a New Lender Agreement setting forth its
Commitment, whereupon such bank or financial institution (a “New Lender”)
shall become a

 

41

 

Lender for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement,
and the signature pages hereof shall be deemed to be amended to add the
name of such New Lender and the definition of Commitment in Section 1.01
hereof shall be deemed amended to increase the aggregate Commitments of the
Lenders by the Commitment of such New Lender, provided that the
Commitment of any New Lender shall be an amount not less than $5,000,000 (or
any remaining portion of the increased Commitments not subscribed to by the
Lenders).

 

(c)                                  Any Lender that accepts an offer to it by
the Borrower to increase its Commitment pursuant to this Section 2.18
shall, in each case, execute a Commitment Increase Agreement with the Company
and the Administrative Agent, whereupon such Lender shall be bound by and
entitled to the benefits of this Agreement with respect to the full amount of
its Commitment as so increased, and the definition of Commitment in Section 1.01
hereof shall be deemed to be amended to reflect such increase.

 

(d)                                 The effectiveness of any New Lender
Agreement or Commitment Increase Agreement shall be contingent upon receipt by
the Administrative Agent of such corporate resolutions of the Company and legal
opinions of counsel to the Company as the Administrative Agent shall reasonably
request with respect thereto, in each case in form and substance reasonably
satisfactory to the Administrative Agent.

 

(e)                                  If any bank or financial institution
becomes a New Lender pursuant to Section 2.18(b) or any Lender’s
Commitment is increased pursuant to Section 2.18(c), additional
Loans made on or after the effectiveness thereof (the “Re-Allocation Date”)
shall be made pro rata based on their respective Commitments in effect on or
after such Re-Allocation Date (except to the extent that any such pro rata
borrowings would result in any Lender making an aggregate principal amount of
Loans in excess of its Commitment, in which case such excess amount will be
allocated to, and made by, such New Lender and/or Lenders with such increased
Commitments to the extent of, and pro rata based on, their respective
Commitments), and continuations of Loans outstanding on such Re-Allocation Date
shall be effected by repayment of such Loans on the last day of the Interest
Period applicable thereto and the making of new Loans pro rata based on the
respective Commitments in effect on and after such Re-Allocation Date.

 

(f)                                    If on any Re-Allocation Date there is an
unpaid principal amount of  Eurodollar
Loans or ABR Loans, such Eurodollar Loans or ABR Loans shall remain outstanding
with the respective holders thereof until the expiration of their respective
Interest Periods (unless the Company elects to prepay any thereof in accordance
with the applicable provisions of this Agreement), and interest on and
repayments of such Eurodollar Loans or ABR Loans will be paid thereon to the
respective Lenders holding such Eurodollar Loans or ABR Loans pro rata based on
the respective principal amounts thereof outstanding.

 

Section 2.19  Borrowing Subsidiaries. On or after the Effective Date, the
Company may designate any Restricted Subsidiary of the Company as a Borrowing
Subsidiary by delivery to the Administrative Agent of a Borrowing Subsidiary
Agreement executed by such Restricted Subsidiary and the Company, and five (5) Business
Days following (i) such delivery and (ii) receipt of documentation
reasonably requested by the Lenders in order to comply with

 

42

 

the Act (as defined in Section 9.16), such Restricted
Subsidiary shall for all purposes of this Agreement be a Borrowing Subsidiary
and a party to this Agreement until the Company shall have executed and
delivered to the Administrative Agent a Borrowing Subsidiary Termination with
respect to such Restricted Subsidiary, whereupon such Restricted Subsidiary
shall cease to be a Borrowing Subsidiary and a party to this Agreement. Notwithstanding
the preceding sentence, no Borrowing Subsidiary Termination will become
effective as to any Borrowing Subsidiary at a time when any principal of or
interest on any Revolving Loan to such Borrowing Subsidiary or any Letter of
Credit issued for the account of such Borrowing Subsidiary shall be outstanding
hereunder; provided that such Borrowing Subsidiary Termination shall be
effective to terminate such Borrowing Subsidiary’s right to make further
Borrowings or to request Letters of Credit under this Agreement. As soon as
practicable upon receipt of a Borrowing Subsidiary Agreement, the
Administrative Agent shall send a copy thereof to each Lender.

 

ARTICLE III

 

Representations and
Warranties

 

Each Borrower represents and warrants to the Lenders
that:

 

Section 3.01  Organization. 
As of the Effective Date, each of the Borrower and its Subsidiaries (i) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the requisite power and
authority to conduct its business as it is presently being conducted, and (iii) is
duly qualified or licensed to conduct business and is in good standing in each
jurisdiction listed in Schedule 3.01. 
Each Borrower and its Subsidiaries are qualified and licensed in all
jurisdictions where they are required to be so qualified or licensed to operate
their business and where the failure to so qualify or be in good standing,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.  No proceeding
to dissolve any Loan Party is pending or, to the Borrower’s knowledge,
threatened except for any merger, consolidation, liquidation, or dissolution
permitted under Section 6.03.

 

Section 3.02  Authorization; Enforceability. 
The Transactions to be entered into by each Loan Party are within such
Loan Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. 
This Agreement has been duly executed and delivered by the Borrowers and
constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a
legal, valid and binding obligation of the Borrowers or such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

Section 3.03  Governmental Approvals; No Conflicts. 
The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except (i) such as have been obtained or made and are in full
force and effect, (ii) filings necessary to perfect Liens created under
the Loan Documents and (iii) those the failure to obtain or make which,
individually or in the aggregate, could not reasonably be

 

43

 

expected to result in a Material Adverse Effect, (b) will
not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default
under any indenture, material agreement or other material instrument binding
upon the Company  or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Company or any of its Subsidiaries and (d) will
not result in the creation or imposition of any Lien on any asset of the
Company or any of its Subsidiaries, except Liens created under the Loan
Documents.

 

Section 3.04  Financial Statements; No Material Adverse
Change.  (a) The Company has heretofore furnished
to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended
December 31, 2006, reported on by KPMG LLP, independent certified public
accountants, and (ii) as of and for the fiscal quarter and the portion of
the current fiscal year ended September 30, 2007, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Company and its consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii) above.

 

(b)                                 Except as disclosed in the financial
statements referred to above or the notes thereto and except for the Disclosed
Matters, after giving effect to the Transactions, none of the Company or its
Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses.

 

(c)                                  Since December 31, 2006, there has
been no material adverse change in the business, assets, property, condition
(financial or otherwise), of the Borrower and its Subsidiaries taken as a
whole.

 

Section 3.05  Properties. (a)  Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that (i) do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes and (ii) individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.

 

(b)                                 Each of the Company and its Subsidiaries
owns, or is licensed to use, all trademarks, trade names, copyrights, patents
and other intellectual property material to its business, and the use thereof
by the Company and its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

Section 3.06  Litigation and Environmental Matters. 
(a)  There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result

 

44

 

in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.

 

(b)                                 Except for the Disclosed Matters and
except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Company nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice
of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

 

(c)                                  Since the Effective Date, there has been
no change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

 

Section 3.07  Compliance with Laws and Agreements. 
Each of the Company and its Subsidiaries is in compliance with all Laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, material agreements and other material instruments
binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.  No Default
has occurred and is continuing.

 

Section 3.08  Intellectual Property. 
The Company and each of its Subsidiary owns, or is licensed to use, all
patents, trademarks, trade names, service marks, copyrights, technology,
know-how and processes (together with all applications therefor and licenses
granting rights therein, “Intellectual Property”) reasonably necessary
for the conduct of its business as currently conducted, except for those the
failure to own or be licensed to use which could not reasonably be expected to
result in a Material Adverse Effect.  To
the knowledge of the Company, (a) the use of Intellectual Property by the
Company and its Subsidiaries does not infringe on the rights of any person, (b) no
Intellectual Property of the Company or any of its Subsidiaries is being
infringed upon by any person, and (c) no claim is pending or threatened in
writing challenging the use or the validity of any Intellectual Property of the
Company or any Subsidiary, except for infringements and claims referred to in
the foregoing clauses (a), (b) and (c) that, in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.

 

Section 3.09  Investment Company Status. 
Neither the Company nor any of its Subsidiaries is an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended.

 

Section 3.10  Taxes.  Each of the
Company and its Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) any Taxes that
are being contested in good faith by appropriate proceedings and for which the
Company or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

 

45

 

Section 3.11          ERISA.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. The present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $10,000,000
(inclusive of fees and penalties) the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$25,000,000 (inclusive of fees and penalties) the fair market value of the
assets of all such underfunded Plans.

 

Section 3.12          Labor Matters.  As
of the Effective Date, there are no strikes, lockouts or slowdowns against the
Company or any of its Subsidiaries pending or, to the knowledge of the Company,
threatened. The hours worked by and payments made to employees of the Company
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other Law dealing with such matters in any manner that could reasonably
be expected to have a Material Adverse Effect. All payments due from the
Company or any Subsidiary, or for which any claim may be made against any of
them, on account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the Company
and its Subsidiaries except to the extent non-payment could reasonably be
expected to have a Material Adverse Effect. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining
agreement to which the Company or any of its Subsidiaries is bound.

 

Section 3.13          Insurance.  Schedule
3.13 lists all policies or binders of fire, liability, worker’s
compensation, vehicular or other insurance held by or for the benefit of the
Company or any of its Subsidiaries (specifying the insurer, the policy number
or covering note number with respect to binders) as of the Effective Date. As
of the Effective Date, all premiums in respect of such insurance have been
paid. All insurance required by Section 5.07 is in full force and
effect, is with financially sound and reputable insurers and is in amounts and
provides coverage that are reasonable and customary for Persons engaged in
businesses similar to those conducted by the Company and its Subsidiaries.

 

Section 3.14          Solvency.  Immediately
after the consummation of the Transactions to occur on the Effective Date, and
immediately following the making of each Loan made on the Effective Date and
after giving effect to the application of the proceeds of such Loans, (a) the
fair market value of the assets of each Loan Party (individually and on a
consolidated basis with its subsidiaries) will exceed its debts and
liabilities, subordinate, contingent or otherwise; (b) the present fair saleable
value of the property of each Loan Party (individually and on a consolidated
basis with its subsidiaries) will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities; (c) each
Loan Party (individually and on a consolidated basis with its subsidiaries)
will be able to pay its debts and liabilities, subordinate, contingent or
otherwise as they become absolute and mature; and (d) each Loan Party
(individually and on a consolidated basis with its subsidiaries) will not have

 

46

 

unreasonably
small capital with which to conduct its business as such business is now
conducted and is proposed to be conducted following the Effective Date.

 

Section 3.15          Subsidiaries.  Schedule
3.15 sets forth the name of, and the ownership interest of the Company in,
each Subsidiary of the Company and identifies each Subsidiary that is a
Domestic Subsidiary and each that is a Foreign Subsidiary, in each case as of
the Effective Date. As of Effective Date, there are no Borrowing Subsidiaries
and no Person has executed a Borrowing Subsidiary Agreement (as defined in the
Second Amended and Restated Agreement) or obtained a Loan under Section 2.01
of the Original Credit Agreement, as amended.

 

Section 3.16          Disclosure.  The
Company has disclosed to the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by
or on behalf of the Company or any of its Subsidiaries to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or any
Loan Document or delivered hereunder (as modified or supplemented by other
information so furnished) contain any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial
information, the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

Section 3.17          Margin Stock.  Neither
the Company nor any Subsidiary is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying margin stock (within the meaning of Regulation U of the
Board). The proceeds of the Loans and the Letters of Credit will not be used,
directly or indirectly, immediately, incidentally or ultimately, for the
purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might cause any of the
Loans or the Letters of Credit under this Agreement to be “purpose credit”
within the meaning of Regulation U or Regulation X of the Board.

 

Section 3.18          Use of Proceeds.  The
proceeds of the Loans shall be used only for working capital and other general
corporate purposes, including without limitation, Acquisitions. Each Borrower
represents and warrants to the Lenders and the Administrative Agent that all
Loans will be for business, commercial, investment or other similar purpose and
not primarily for personal, family, household or agricultural use, as such
terms are used in the Texas Finance Code.

 

Section 3.19          No Undisclosed Liabilities.  Except
as set forth in Schedule 3.19, the Company and its Subsidiaries have no
liabilities or obligations of any nature (whether known or unknown, and whether
absolute, accrued, contingent or otherwise) except for (i) liabilities or
obligations reflected or reserved against in the financial statements most
recently delivered by the Borrower pursuant to Section 5.01, (ii) current
liabilities incurred in the ordinary course of business since the date of such
financial statements, (iii) liabilities or obligations that are not

 

47

 

required
to be included in financial statements prepared in accordance with GAAP, (iv) liabilities
or obligations arising under Governmental Approvals or contracts to which the
Company or any of its Subsidiaries is a party or otherwise subject and (v) liabilities
or obligations incurred after the most recently delivered financial statements
and specifically permitted to be incurred under this Agreement.

 

ARTICLE IV

 

Conditions

 

Section 4.01          Effective Date.  The
obligations of the Lenders to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with Section 9.02):

 

(a)           The
Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)           The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent, the Collateral Agent, the Issuing Lender and the
Lenders and dated the Effective Date) of Bracewell & Guiliani, L.L.P.,
counsel for the Company, and of Fees & Burgess, P.C., local Alabama
counsel for the Company, both in form and substance reasonably satisfactory to
the Administrative Agent and Required Lenders, and covering such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as the
Required Lenders shall reasonably request. The Company hereby requests such
counsel to deliver such opinion.

 

(c)           The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the authorization
of the Transactions and any other legal matters relating to the Loan Parties,
this Agreement or the Transactions, all in form and substance reasonably satisfactory
to the Administrative Agent and its counsel.

 

(d)           Intentionally
Deleted.

 

(e)           The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses (including reasonable
legal fees) required to be reimbursed or paid by any Loan Party hereunder or
under any Loan Documents.

 

(f)            All
material governmental and third party approvals necessary or, in the discretion
of the Administrative Agent, advisable in connection with the financing
contemplated

 

48

 

hereby and the continuing operations of the Borrowers and its
Subsidiaries shall have been obtained and be in full force and effect.

 

(g)           The
Lenders shall have received (i) audited consolidated financial statements
of the Company and its Subsidiaries for the two most recent fiscal years ended
prior to the Effective Date as to which such financial statements are available
and (ii) satisfactory unaudited interim consolidated financial statements
of the Borrower and its Subsidiaries for each fiscal quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (i) of this paragraph as to which such financial statements are
available which financial statements shall not be materially inconsistent with
the financial statements or forecasts previously provided.

 

(h)           The
Administrative Agent shall have received (i) Amended and Restated
Promissory Notes for each of the Lenders and (ii) each of the Security
Documents and they shall constitute satisfactory security documentation to
create first priority security interests in the Collateral (free and clear of
all Liens, other than Liens permitted by Section 6.02).

 

(i)            The
Collateral and Guarantee Requirement shall have been satisfied.

 

The Administrative Agent shall notify the Company and
the Lenders of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders to make
Loans and of the Issuing Lender to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.02).

 

Section 4.02          Each Credit Event.  The
obligation of each Lender to make a Loan on the occasion of any Borrowing, and
of the Issuing Lender to issue, amend, renew or extend any Letter of Credit, is
subject to the satisfaction of the following conditions:

 

(a)           The
representations and warranties of each Loan Party set forth in this Agreement
or any other Loan Document shall be deemed to have been made as a part of said
request for a Borrowing and shall be true and correct in all material respects
on and as of the date of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date.

 

(b)           No
Material Adverse Effect shall have occurred since the date of the most recent
Borrowing by the Company.

 

(c)           The
Administrative Agent shall have received a request for a Borrowing as required
by Section 2.03 or the Issuing Lender and the Administrative Agent
shall have received a request for the issuance of a Letter of Credit as
required by Section 2.04(b);

 

(d)           At
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

 

49

 

Each Borrowing and each issuance, amendment, renewal
or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b), (c) and (d) of this
Section.

 

Section 4.03          Initial Credit Event for each
Borrowing Subsidiary.  The obligation of the Lenders
to make Loans to any Borrowing Subsidiary and the obligations of the Issuing
Lender to issue Letters of Credit for the account of any Borrowing Subsidiary
are subject to the satisfaction of the following conditions:

 

(a)           The
Administrative Agent (or its counsel) shall have received a Borrowing
Subsidiary Agreement duly executed by such Borrowing Subsidiary and the other
parties thereto.

 

(b)           The
Administrative Agent shall have received a favorable written opinion of counsel
for such Borrowing Subsidiary, in form and substance reasonably satisfactory to
Administrative Agent and Required Lenders, and covering such other matters
relating to such Borrowing Subsidiary and its Borrowing Subsidiary Agreement as
the Administrative Agent shall reasonably request.

 

(c)           The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of such Borrowing Subsidiary, the
authorization of the Transactions insofar as they relate to such Borrowing
Subsidiary, the satisfaction of the Collateral and Guarantee Requirement
insofar as it relates to the assets of such Borrowing Subsidiary and any other
legal matters relating to such Borrowing Subsidiary, its Borrowing Subsidiary
Agreement or such Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated
and the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:

 

Section 5.01          Financial Statements and Other
Information.  The Company will furnish to the Administrative
Agent and each Lender:

 

(a)           within
90 days after the end of each fiscal year of the Company, the audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, of the
Company and the consolidated Subsidiaries as of such year, all reported on by
KPMG LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of 

 

50

 

operations of the Company and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;

 

(b)           within
45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Company, the consolidated balance sheets and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, of the Company and the consolidated Subsidiaries and
Company and the Restricted Subsidiaries as of such year, all certified by one
of the Company’s Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Company and
its consolidated Subsidiaries or the Company on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

 

(c)           concurrently
with any delivery of financial statements under clause (a) or (b) above,
a certificate of a Financial Officer of the Company (i) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Section 6.15, 6.16 and 6.18, (iii) setting
forth in a reasonably detailed schedule, a comparison of the consolidated
results under clause (a) or (b) above with the financial condition
and results of operations of the Company and its consolidated Restricted
Subsidiaries, and (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;

 

(d)           concurrently
with any delivery of financial statements under clause (a) above, any
management letter delivered to the management of the Company by the accounting
firm that reported on such financial statements, and concurrently with any
delivery of financial statements under clauses (a) or (b) written notice
of any new office or facility at which Collateral owned by a Loan Party is
located;

 

(e)           promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Company or any Subsidiary
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or distributed by the Company to its shareholders
generally, as the case may be;

 

(f)            promptly
following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request;

 

(g)           within
120 days after the end of each fiscal year, a summary description of the
insurance policies of the Company and its Subsidiaries; and

 

51

 

(h)           promptly
following any request thereof, all information and/or documentation necessary
to comply with the Act or for Administrative Agent to confirm compliance with
the Act.

 

Documents required to be delivered pursuant to Section 5.01
may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower’s website on the Internet at www.bench.com or (ii) on which such documents are
delivered to the Administrative Agent. The Administrative Agent shall post such
documents on the Borrower’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that the Borrower shall deliver such documents in a
form acceptable to the Administrative Agent; provided further that
Borrower shall be obligated to pay for all start-up and on-going maintenance
costs associated with such Internet or intranet website. Except for such
compliance certificates, the Administrative Agent shall have no obligation to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

 

Section 5.02          Notices of Material Events.  The
Company will furnish to the Administrative Agent and each Lender prompt and, in
any event, within five Business Days, written notice of the following:

 

(a)           the
occurrence of any Default;

 

(b)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Company or any
Affiliate thereof that, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect or that in any manner questions the
validity of the Loan Documents;

 

(c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$25,000,000 (inclusive of fees and penalties);

 

(d)           the
occurrence of any event or any other development by which the Company or any of
its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any
Environmental Liability or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect; and

 

(e)           any
other development (including the termination of any material contract) that
results in, or could reasonably be expected to result in, a Material Adverse
Effect.

 

Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Company setting forth the details of the event or

 

52

 

development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

Section 5.03          Information Regarding Collateral.  The
Company will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party’s corporate name or in the ownership of its
properties, (ii) in any Loan Party’s identity or corporate structure or (iii) in
any Loan Party’s Federal Taxpayer Identification Number and, at the time of the
delivery of the financial statements required under Section 5.01(a),
the Company will furnish to the Administrative Agent written notice of any
change in the location of any office in which any Loan Party maintains books or
records relating to Collateral owned by it. The Company agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the UCC or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral. The Company
also agrees promptly to notify the Administrative Agent if any material portion
of the Collateral is damaged or destroyed.

 

Section 5.04          Existence; Conduct of Business.  The
Company will, and will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

 

Section 5.05          Payment of Obligations.  The
Company will, and will cause each of its Subsidiaries to, pay its Indebtedness
and other obligations, including Tax liabilities, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Company or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.06          Maintenance of Properties;
Insurance.  The Company will, and will cause each of its
Subsidiaries to keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.07          Insurance.  The
Company will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurance companies (a) insurance in such
amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same
or similar businesses operating in the same or similar locations and (b) all
insurance required to be maintained pursuant to the Security Documents.

 

53

 

Section 5.08          Books and Records; Inspection and
Audit Rights.  The Company will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all material dealings and transactions in
relation to its business and activities. The Company will, and will cause each
of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested, all at the Administrative Agent’s or such Lender’s
expense, except with respect to any inspection or examination and related
discussions during a Default or Event of Default, in which case, the provisions
of Section 9.03 shall apply.

 

Section 5.09          Compliance with Laws.  The
Company will, and will cause each of its Subsidiaries to, comply with all Laws
(including Environmental Laws) and Orders applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.10          Use of Proceeds and Letters of
Credit.  The proceeds of the Loans will be used only for
working capital and other general corporate purposes, including, without
limitation, Acquisitions. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations T, U and X.

 

Section 5.11          Additional Subsidiaries.  If
any additional Subsidiary is formed or acquired after the Effective Date, the
Company will, no more than thirty days after such Subsidiary is formed or
acquired, notify the Administrative Agent and the Lenders thereof and cause the
Collateral and Guarantee Requirement to be satisfied (to the extent applicable)
with respect to such Subsidiary and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned or to be owned by or on behalf of the
Company or any other Subsidiary.

 

Section 5.12          Ownership of Subsidiaries.  (a) The
Company will, and will cause each of the Subsidiaries to, ensure that all
Equity Interests in Domestic Subsidiaries are owned directly or indirectly at
all times only by the Company or one or more other Domestic Subsidiaries and
that all the Equity Interests of such latter Domestic Subsidiaries are pledged
to secure the Obligations.

 

(b)           The
Company will, and will cause each of its Subsidiaries to, ensure that any
Foreign Subsidiary (including each Foreign Subsidiary acquired in connection
with an Acquisition), is owned directly or indirectly at all times by the
Company or a Qualified Foreign Subsidiary Holding Company and that all the
Equity Interests of such Qualified Foreign Subsidiary Holding Company are
pledged to secure the Obligations.

 

Section 5.13          Further Assurances.  The
Company will, and will cause each Subsidiary to, at its own cost and expense,
execute, acknowledge and deliver any and all further documents, financing
statements, agreements and instruments and take all such further actions, (including
the filing and recording of financing statements, and other documents) which may
be required under any applicable Law, or which may from time to time be
reasonably necessary or

 

54

 

as the
Required Lenders may from time to time reasonably request in order to carry out
the intent and purpose of the Loan Documents and the Transactions, including
all such actions to establish, preserve, protect and perfect the estate, right,
title and interest of the Lenders, or the Administrative Agent for the benefit
of the Lenders, to the Collateral (including Collateral acquired after the date
hereof) and preserve, protect and perfect first priority Liens (subject to
Liens permitted by Section 6.02) in favor of the Lenders, or the
Administrative Agent for the benefit of the Lenders, on any and all assets of
the Company and the Subsidiaries, now owned or hereafter acquired, that are not
Collateral on the date hereof.

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or terminated and
the principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit have expired or terminated and
all LC Disbursements shall have been reimbursed, each Borrower covenants and
agrees with the Lenders that:

 

Section 6.01          Indebtedness.  The
Company will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:

 

(a)           the
Obligations;

 

(b)           Subordinated
Indebtedness;

 

(c)           Indebtedness
existing on the Effective Date and set forth in Schedule 6.01 and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or shorten the maturity or the weighted
average life thereof;

 

(d)           Intercompany
Indebtedness (to the extent permitted by Section 6.04);

 

(e)           Guarantees
by the Company or any Subsidiary of Indebtedness of the Company or any
Restricted Subsidiary which Indebtedness is permitted under this Section 6.01,
provided, in no event shall the Company or any Subsidiary guarantee the
Indebtedness of any Unrestricted Subsidiary or any Subsidiary that is not a
Loan Party hereunder other than guarantees of trade payables of Unrestricted
Subsidiaries in the ordinary course of business not to exceed $10,000,000 at
any time outstanding.

 

(f)            Indebtedness
of the Company or any Domestic Subsidiary or any Foreign Borrower incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations, and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decreased
weighted average life thereof; provided that (i) such Indebtedness
is incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (f) shall not exceed
$100,000,000 at any time outstanding;

 

55

(g)           Indebtedness
of any Person that becomes a Domestic Subsidiary or a Foreign Borrower after
the Effective Date; provided that (i) such Indebtedness exists at
the time such Person becomes a Domestic Subsidiary or a Foreign Borrower, as
the case may be, and is not created in contemplation of or in connection with
such Person becoming a Domestic Subsidiary or a Foreign Borrower and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (g) shall
not exceed twenty-five percent (25%) of pro forma Consolidated EBITDA for the
rolling four quarter period ending on the last day of the immediately prior
fiscal quarter at the time such Person becomes a Domestic Subsidiary or a
Foreign Borrower;

 

(h)           Indebtedness
of Unrestricted Subsidiaries for which neither the Company nor any Restricted
Subsidiary shall be liable as obligor, under any Guarantee or otherwise;

 

(i)            other
unsecured Indebtedness so long as, after giving effect thereto, the Company is
in proforma compliance with the financial covenants in Section 6.15,
Section 6.16 and Section 6.18; and

 

(j)            other
secured Indebtedness incurred by Foreign Subsidiaries that are Restricted
Subsidiaries for working capital purposes in an aggregate principal amount not
exceeding twenty-five percent (25%) of Consolidated EBITDA for the rolling four
quarter period ending on the last day of the immediately prior fiscal quarter
at the time such Indebtedness is incurred.

 

Section 6.02     Liens.   The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:

 

(a)           Liens
created under the Loan Documents;

 

(b)           Permitted
Encumbrances;

 

(c)           any
Lien on any property or asset of the Company or any Subsidiary existing on the
Effective Date and set forth in Schedule 6.02; provided that (i) such
Lien shall not apply to any other property or asset of the Company or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the Effective Date, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

(d)           any
Lien existing on any property or asset prior to the acquisition thereof by the
Company or any Subsidiary or existing on any property or asset of any Person
that is merged or consolidated with or into the Company or any of its
Subsidiaries or becomes a Subsidiary after the Effective Date prior to the time
such Person is so merged or consolidated or becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other property or assets of the Company or any
Subsidiary and (iii) such Lien shall secure only those obligations which
it secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

56

 

(e)           Liens
on fixed or capital assets acquired, constructed or improved by the Company or
any Subsidiary, including Liens deemed to exist in respect of assets subject to
Capital Lease Obligations; provided that (i) such security
interests secure Indebtedness permitted by clause (f) of Section 6.01,
(ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured thereby
does not exceed the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any
other property or assets of the Company or any Subsidiary;

 

(f)            Liens
securing Intercompany Indebtedness permitted under Section 6.01(d);

 

(g)           Extensions,
renewals or replacements of any Lien referred to in clauses (c), (d) and
(e); provided that the principal amount of the Indebtedness or
obligations secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby;

 

(h)           Liens
on the assets of Unrestricted Subsidiaries securing Indebtedness permitted
under Section 6.01(h);

 

(i)            Liens
securing Indebtedness permitted under Section 6.01(j); and

 

(j)            additional
Liens incurred by the Company and its Subsidiaries so long as the value of the
property subject to such Liens, and the Indebtedness and other obligations
secured thereby do not exceed $5,000,000 at any time.

 

Section 6.03     Fundamental Changes.   (a)     The Company will not, and will not permit
any Subsidiary to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or substantially all of its assets, or all or substantially all of the Equity
Interests of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing

 

(i)            any
Person may merge into the Company in a transaction in which the Company is the
surviving corporation;

 

(ii)           any
Person may merge with or into any Subsidiary in a transaction in which the
surviving entity is a Subsidiary; provided that (A) if any party to
such merger is a Loan Party the surviving Person must also be a Loan Party and
must succeed to all the obligations of such Loan Party under the Loan Documents
and (B) if any party to such merger is a Restricted Subsidiary the
surviving Person shall also be a Restricted Subsidiary unless designated as an
Unrestricted Subsidiary pursuant to the definition of such term;

 

(iii)          any
Subsidiary (other than a Loan Party) may liquidate or dissolve if the Company
determines in good faith that such liquidation or dissolution is in the best
interests of the Company and is not materially disadvantageous to the Lenders;
and

 

57

 

(iv)          sales
permitted by Section 6.05.

 

provided that any such merger
involving a Person that is not a Wholly Owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.

 

(b)           The
Company will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by
the Company and its Subsidiaries on the Effective Date and businesses
reasonably related thereto.

 

Section 6.04     Investments, Loans, Advances, Guarantees
and Acquisitions.  The Company will
not, and will not permit any of its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Wholly Owned
Subsidiary prior to such merger) any Equity Interests in or evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person (all of the foregoing
being collectively called “Investments”), or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person (other than inventory acquired in the ordinary course of business)
constituting a business unit or are substantial in relation to the consolidated
assets of the Company, except:

 

(a)           Permitted
Investments by the Company and any Subsidiary and Permitted Foreign Investments
by any Foreign Subsidiary, to the extent such Permitted Foreign Investments are
either (i) generated by a Foreign Subsidiary organized in the same
jurisdiction of organization of the commercial bank with which such Investment
is maintained or (ii) consist of capital contributions made to such
Foreign Subsidiary for the purpose of operations in the ordinary course of
business;

 

(b)           Investments
existing on the Effective Date and set forth on Schedule 6.04;

 

(c)           Investments
existing on the Effective Date in Subsidiaries;

 

(d)           additional
Investments in Persons that, immediately prior to such investments, are
Restricted Subsidiaries;

 

(e)           Investments
by Unrestricted Subsidiaries in Persons that, immediately prior to such
investments, are Unrestricted Subsidiaries;

 

(f)            Investments
consisting of all the issued and outstanding capital stock, or all or
substantially all the assets, of Persons engaged in lines of business permitted
under Section 6.03(b); provided that (A) no Default
shall have occurred and be continuing at the time any such Investment is made
or would occur as a result thereof and (B) immediately after giving effect
to such Investments permitted under this subsection (f), the proforma Leverage
Ratio shall not exceed 2.0 to 1.0; or the cash consideration payable for such
investments made under this clause (f) in the capital stock or assets of
other persons shall not exceed $100,000,000 in the aggregate over the term of
this Agreement;

 

58

 

(g)           Guarantees
constituting Indebtedness permitted by Section 6.01; provided
that a Subsidiary shall not Guarantee any Subordinated Indebtedness;

 

(h)           investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;

 

(i)            accounts
receivable arising in the ordinary course of business;

 

(j)            Investments
held by any Subsidiary at the time it becomes a Subsidiary in a transaction
permitted by this Section;

 

(k)           reasonable
advances to officers and employees of the Company and any Subsidiary for travel
arising in the ordinary course of business;

 

(l)            loans
to officers and employees of the Company or any Subsidiary, not to exceed
$1,000,000 in the aggregate at any one time outstanding;

 

(m)          promissory
notes and other noncash consideration received by the Company and its
Subsidiaries in connection with any asset sale permitted hereunder;

 

(n)           advances
in the form of prepayments of expenses, so long as such expenses were incurred
in the ordinary course of business and are paid in accordance with customary
trade terms of the Company or any of its Subsidiaries;

 

(o)           Guarantees
by the Company of obligations of Restricted Subsidiaries incurred in the
ordinary course of business and not constituting Indebtedness; and

 

(p)           other
Investments made by the Company, any Domestic Subsidiary or any Foreign
Subsidiary at times when no Default or Event of Default shall have occurred and
be continuing or would occur as a result thereof and that, taken together with
all other investments made after the Effective Date under this clause (p) would
not exceed $25,000,000.

 

Section 6.05     Asset Sales, etc.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, sell, transfer, lease or otherwise dispose
of any asset, including any Equity Interest, except:

 

(a)           sales
of inventory, used or surplus equipment, Permitted Investments and Permitted
Foreign Investments in the ordinary course of business or as expressly
permitted elsewhere in this Agreement;

 

(b)           sales,
transfers and dispositions to the Company or a Restricted Subsidiary;

 

(c)           sales,
transfers and dispositions to any Unrestricted Subsidiary; provided that
such sales, transfers and dispositions are in the ordinary course of business
at prices and on terms and conditions not less favorable to the Borrower or
such Unrestricted Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties; and

 

59

 

(d)           sales,
transfers and other dispositions of other assets (other than transfers of less
than 100% of the Equity Interests in any Subsidiary); provided that (x) the
aggregate proceeds from such sales, transfers and other dispositions during any
fiscal year shall not exceed the greater of (A) 10% of Consolidated Net
Tangible Assets as of the beginning of such fiscal year and (B) 10% of
Consolidated Net Income of the Company (excluding Unrestricted Subsidiaries)
for such fiscal year and (y) not more than 25% of the aggregate proceeds
from such sales, transfers and other dispositions shall be received in noncash
proceeds during any fiscal year.

 

Section 6.06     Sale and Leaseback Transactions.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

 

Section 6.07     Swap Agreements.  The Company will not, and will not permit any
of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Company or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Company or any of its Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or otherwise) with respect to any interest-bearing liability or investment of
the Company or any Subsidiary.

 

Section 6.08     Restricted Payments; Certain Payments in
Respect of Indebtedness. 
(a) The Company will not, and will not permit any Restricted
Subsidiary to, declare or make, or agree to make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that (i) Restricted Subsidiaries may declare and pay dividends
ratably with respect to their capital stock and (ii) if no Default or
Event of Default has occurred and is continuing or would occur as a result thereof,
the Company may make any Restricted Payment if after giving effect to such
Restricted Payment the proforma Leverage Ratio would not exceed 1.75 to 1.0.

 

(b)           The
Company will not, and will not permit any Restricted Subsidiary to, make or
agree to make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of the
principal of or interest on any Subordinated Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, defeasance, cancellation or termination of any Subordinated
Indebtedness, except scheduled and other mandatory payments of interest and
principal in respect of Subordinated Indebtedness; provided that no payment
shall be made in respect of Subordinated Indebtedness that is prohibited by the
subordination provisions applicable to such Subordinated Indebtedness.

 

Section 6.09     Transactions with Affiliates.  The Company will not, and will not permit any
of its Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) in the ordinary course of business at 

 

60

 

prices and on terms and conditions not less favorable
to the Company or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among the
Company and its Restricted Subsidiaries not involving any other Affiliate,
(c) transactions among or between Unrestricted Subsidiaries and
(d) any Restricted Payment permitted by Section 6.08.

 

Section 6.10     Restrictive Agreements.  The Company will not, and will not permit any
Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Company or any Restricted
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Restricted Subsidiary
(i) to pay dividends or other distributions with respect to any shares of
its capital stock, (ii) to make or repay loans or advances to the Company
or any other Restricted Subsidiary, (iii) to Guarantee Indebtedness of the
Company or any other Subsidiary, or (iv) sell, lease or transfer any of
its Property to the Company or any other Restricted Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the Effective Date identified on Schedule
6.10 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Restricted Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Restricted Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and (v) clause (a) of the
foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.

 

Section 6.11     Change in Fiscal Year.  The Company will not change the end if its
fiscal year to a date other than December 31.

 

Section 6.12     Constitutive Documents.  The Company will not, and will not permit any
Subsidiary to, amend it charter or by-laws or other constitutive documents in
any manner which could adversely and materially affect the rights of the
Lenders under this Agreement or their ability to enforce the same, except as
otherwise permitted pursuant to Sections 6.03 or 6.04.

 

Section 6.13     Sales and Assignments of Income,
Revenues and Receivables.  The
Company will not, and will not permit any Restricted Subsidiary to, sell or
assign, with or without recourse, for discount or otherwise, any income or
revenues, including notes and accounts receivable.

 

Section 6.14     Amendment of Material Documents.  The Company will not, and will not permit any
Subsidiary to, amend, modify or waive in any respect materially adverse to the
Company or to the rights or interests of the Lenders any of its rights under
any document evidencing or governing Subordinated Indebtedness.

 

61

 

Section 6.15     Adjusted Leverage Ratio; Leverage Ratio.  (a)  The Company will not permit
the Adjusted Leverage Ratio as of the end of any fiscal quarter to exceed the
ratio of 2.75 to 1.00.

 

(b)           The
Company will not permit the Leverage Ratio as of the end of any fiscal quarter
to exceed the ratio of 2.75 to 1.00.

 

Section 6.16     Fixed Charge Coverage Ratio.  The Company will not permit the Fixed Charge
Coverage Ratio for any Rolling Period ending after the Effective Date to be
less than the ratio of 1.20 to 1.00.

 

Section 6.17     Intentionally Deleted.

 

Section 6.18     Minimum Tangible Net Worth.  The Company will not permit Consolidated
Tangible Net Worth as of any date to be less than the sum of
(a) $680,000,000 plus (b) 50% of Consolidated Net Income of the
Company and its Restricted Subsidiaries (but only to the extent such amount is
positive) for fiscal quarters ended after September 30, 2007 plus
(z) 75% of the aggregate Net Proceeds from the issuance by the Company of
Equity Interests subsequent to the Effective Date.

 

ARTICLE VII

Events of Default and Remedies

 

Section 7.01     Events of Default.  If any of the following events (“Events of
Default”) shall occur:

 

(a)           any
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

 

(b)           any
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Section 7.01)
payable under this Agreement or the other Loan Documents, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five days;

 

(c)           any
representation or warranty made or deemed made by or on behalf of the Company
or any Subsidiary in or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, or in any report, certificate,
financial statement, Loan Document or other document furnished pursuant to or
in connection with this Agreement or any amendment or modification hereof or
waiver hereunder, shall prove to have been incorrect in any material respect
when made or deemed made;

 

(d)           the
Company or any Subsidiary shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of any Borrower) or 5.10 or in Article VI;

 

62

 

(e)           any
Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause
(a), (b) or (d) of this Article) or in any other Loan Document, and
such failure shall continue unremedied for a period of 30 days after the
earlier of (i) the Company’s obtaining knowledge thereof or (ii) written
notice thereof from the Administrative Agent to the Company (which notice will
be given at the request of any Lender);

 

(f)            the
Company or any Subsidiary shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable after giving effect to any
applicable grace period;

 

(g)           any
event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) shall not apply to secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;

 

(h)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect
of the Company or any Subsidiary or its debts, or of a substantial part of its
assets, under any  Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any Subsidiary
or for a substantial part of its assets, and, in any such case, such proceeding
or petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(i)            the
Company or any Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Company or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

(j)            the
Company or any Subsidiary shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;

 

(k)           one
or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 shall be rendered against the Company, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a 

 

63

 

judgment creditor to
attach or levy upon any assets of the Company or any Subsidiary to enforce any
such judgment;

 

(l)            an
ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Company and its
Subsidiaries in an aggregate amount exceeding (i) $10,000,000 (inclusive
of fees and penalties) in any year or (ii) $25,000,000 (inclusive of fees
and penalties) for all periods;

 

(m)          any
Loan Document or any material provision thereof shall at any time cease to be
in full force and effect, or a proceeding shall be commenced by any Loan Party
or any other Person seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation thereof), or any Loan Party
shall repudiate or deny that it has any liability or obligation for the payment
of principal or interest or other obligations purported to be created under any
Loan Document;

 

(n)           any
Lien created by any of the Security Documents shall at any time fail to
constitute a valid and (to the extent required by the Security Documents)
perfected Lien on any material portion of the Collateral purported to be
subject thereto, securing the obligations purported to be secured thereby, with
the priority required by the Loan Documents, or any Loan Party shall so assert
in writing; or

 

(o)           a
Change in Control shall occur;

 

then, and in every such event (other than an event
with respect to the Company described in clause (h) or (i) of this
Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Company, take any or all of the following actions, at the same or
different times:  (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become  due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and in case of any event with respect to the
Company described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers, and (iii) exercise any or
all of the remedies available to it under the Security Documents, at law or in
equity.

 

Section 7.02     Cash Collateral.  Upon the occurrence and during the continuance
of any Event of Default, the Company shall, if requested by the Administrative
Agent or the Required Lenders, pay to the Administrative Agent an amount in
immediately available funds (which funds shall be held as collateral pursuant
to arrangements satisfactory to the Administrative Agent) equal to the LC
Exposure as of such date plus any accrued and unpaid 

 

64

 

interest thereon under all Letters of Credit then
outstanding at such time; provided that, upon the occurrence of any Event of
Default specified in Section 7.01(h) or (i), the
Company shall pay such amount forthwith without any notice or demand or any
other act by the Administrative Agent or the Lenders.

 

 

 

ARTICLE VIII

The Administrative Agent

 

Each of the Lenders and the Issuing Lender hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof,
together with such actions and powers as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Company or any Subsidiary
or other Affiliate thereof as if it were not the Administrative Agent
hereunder.

 

The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein.  Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent
is required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly
set forth herein, the Administrative Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating
to the Company or any of its Subsidiaries that is communicated to or obtained
by the bank serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Company or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith, (iii)
the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in Article
IV or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

 

 

65

 

 

The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying
thereon.  The Administrative Agent may
consult with legal counsel (who may be counsel for the Company), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties.  The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

 

In addition, each of the Lenders and the Issuing
Lender hereby indemnifies the Administrative Agent (to the extent not
reimbursed by the Borrowers), ratably according to its respective pro rata
share of the total of the Commitments, or if no Commitments are outstanding,
the respective pro rata share of the total of the Commitments immediately prior
to the time Commitments ceased to be outstanding held by each of them, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement or
the other Loan Documents (including any action taken or omitted under Article II
of this Agreement); provided that such indemnity shall not be available
to the extent such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements are determined by a
court of competent jurisdiction by final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of the Administrative
Agent.  Without limitation of the foregoing,
each Lender and the Issuing Lender agrees to reimburse the Administrative Agent
promptly upon demand for its respective pro rata share of the total of the
Commitments of any out-of-pocket expenses (including reasonable counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, administration or enforcement of, or legal advice in respect of
rights or responsibilities under, this Agreement or the other Loan Documents to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrowers.  The provisions of this
section shall survive the termination of this Agreement and the payment of the
Obligations.

 

Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Lender and
the Company.  Upon any such resignation,
the Required Lenders shall have the right, with the consent of Company unless
an Event of Default has occurred and is continuing, to appoint a
successor.  If no successor shall have
been so appointed

 

 

66

 

by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Lender,
appoint a successor Administrative Agent which shall be a bank with an office
in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the Company to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Company and such
successor.  After the Administrative
Agent’s resignation hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

 

Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

 

It is expressly understood that the Co-Documentation
Agent shall not have any duties or responsibilities under this Agreement.

 

ARTICLE IX

 

Miscellaneous

 

Section 9.01           Notices.  (a) Except in the case of notices and
other communications expressly permitted to be given by telephone (and subject
to paragraph (b) below), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

 

(i)            if to the Company or any Borrowing
Subsidiary, to it, or to it in care of the Company:

 

Benchmark Electronics, Inc.

3000 Technology Drive

Angleton, Texas

Attention: 
Kenneth S. Barrow

Telecopy No.: 
979-848-5225

Telephone No.: 979-849-6550 (ext. 1247)

 

 

67

 

(ii)           if to the Administrative Agent, to

 

JPMorgan Chase Bank, N.A.

2200 Ross Avenue, Floor 3

Dallas, Texas 75201

Attention: 
Brian McDougal

Telecopy No.: 214-965-2044

Telephone
No.: 214-965-3049

 

with a
copy to:

 

JPMorgan
Chase, N.A.

10
South Dearborn, Floor 7

IL1-0010

Chicago,
Illinois  60603-2003

Attention:  Maribel Lorenzo

Telecopy
No.: 312-385-7096

Telephone
No.: 312-732-5548

 

with a
copy to:

 

Andrews
Kurth LLP

600
Travis, Suite 4200

Houston,
Texas 77002

Attention:  Thomas J. Perich

Telecopy
No.:  713-220-4285

Telephone
No.: 713-220-4268

 

(iii)          if
to the Issuing Lender, to

 

JPMorgan
Chase Bank, N.A.

2200 Ross Avenue, Floor 3

Dallas, Texas 75201

Attention: 
Brian McDougal

Telecopy No.: 214-965-2044

Telephone
No.: 214-965-3049

 

with a
copy to:

 

JPMorgan
Chase, N.A.

10
South Dearborn, Floor 7

IL1-0010

Chicago,
Illinois  60603-2003

Attention:  Maribel Lorenzo

Telecopy
No.: 312-385-7096

Telephone
No.: 312-732-5548

 

68

 

(iv)          if
to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

 

(b)           Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. 
The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

 

(c)           Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

 

Section 9.02           Waivers; Amendments.  (a)  No
failure or delay by the Administrative Agent, the Issuing Lender or any Lender
in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies
of the Administrative Agent, the Issuing Lender and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any
provision of this Agreement or consent to any departure by the Loan Parties
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Lender may have had notice or
knowledge of such Default at the time.

 

(b)           Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Company and the Required Lenders or, in the case of any other Loan Documents,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that
no such agreement shall (i) increase 
the Commitment of any Lender without the written consent of such Lender,
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.16(b) or (c) in
a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of “Required Lenders” or any

 

69

 

other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender, (vi) release all or substantially all the Guarantors from
their Guarantees under the Guarantee Agreement except as expressly provided in
the Guarantee Agreement or Section 9.14, or limit the
liability of the Guarantors in respect of their Guarantee, without the written
consent of each Lender or (vii) release all or substantially all of the
Collateral without the written consent of each Lender, provided, that nothing
herein shall prohibit the Administrative Agent from releasing any Collateral,
or require the consent of the other Lenders for such release, in respect of
items sold to the extent such sale is permitted or not prohibited hereunder;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the Issuing Lender
hereunder without the prior written consent of the Administrative Agent or the
Issuing Lender, as the case may be. 
Notwithstanding the foregoing, any provision of this Agreement may be
amended by an agreement in writing entered into by the Company, the Required
Lenders and the Administrative Agent (and, if their rights or obligations are
affected thereby the Issuing Lender) if (i) by the terms of such agreement
the Commitment of each Lender not consenting to the amendment provided for
therein shall terminate upon the effectiveness of such amendment and (ii) at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
made by it and all other amounts owing to it or accrued for its account under
this Agreement.

 

Section 9.03           Expenses; Indemnity; Damage Waiver.  (a)  The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel and consultants for the Administrative
Agent and such Affiliates, in connection with the syndication of the credit
facilities provided for herein, due diligence undertaken by the Administrative
Agent with respect to the financing contemplated by this Agreement, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Lender in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Lender or, after the
occurrence and during the continuance of any Default, any Lender, including the
fees, charges and disbursements of any counsel and consultant for the
Administrative Agent, the Issuing Lender or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made
or Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.

 

(b)           The
Company shall indemnify the Administrative Agent, the Issuing Lender and each
Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the Commitment Letter dated November 6, 2007 among the
Borrower, the

 

70

 

Administrative Agent and JP Morgan Securities, Inc., or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Lender to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property currently or
formerly owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is
a party thereto and whether or not caused by
the ordinary, sole or contributory negligence of any Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

 

(c)           Reserved.

 

(d)           To
the extent permitted by applicable Law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e)           All
amounts due under this Section shall be payable promptly after written
demand therefor.

 

Section 9.04           Successors and Assigns.  (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
(including any Affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) a Borrower may not 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 a Borrower without
such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance
with this Section.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
any legal or equitable right, remedy or claim under or by reason of this
Agreement, other than rights, remedies or claims in favor of the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Lender that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Lender and the Lenders.

 

(b)           (i) Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations
under

 

71

 

this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it) with the prior written consent (such consent not
to be unreasonably withheld) of:

 

(A) the Borrower, provided that no consent of
the Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default under clause (a), (b), (h) or
(i) of Article VII has occurred and is continuing, any other
assignee; and

 

(B) the Administrative Agent and the Issuing Lender, provided
that no such consent shall be required for an assignment of any Commitment to
an assignee that is a Lender with a Commitment immediately prior to giving
effect to such assignment;

 

(ii)           Assignments
shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Company and the Administrative Agent otherwise consent, provided that no
such consent of the Company shall be required if an Event of Default under
clause (a), (b), (h) or (i) of Article VII has occurred
and is continuing;

 

(B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement;

 

(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500;

 

(D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire; and

 

(E) in the case of an assignment to  CLO (as defined below), the assignment Lender
shall retain the sole right to approve any amendment, modification or waiver of
any provisions of this Agreement, provided that the Assignment and Assumption
between such Lender and such CLO may provide that such Lender will not, without
the consent of such CLO, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that
affects such CLO.

 

For
the purposes of this Section 9.04(b), the terms “Approved
Fund” “CLO” have the following meanings:

 

72

 

“Approved
Fund” means (a) a CLO and (b) with respect to any Lender that is
a fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such lender or by an Affiliate of such
investment advisor.

 

“CLO”
means any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Assumption, 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
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption 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 Section 2.13,
2.14, 2.15 and 10.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 9.04
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 (c) of
this Section.

 

(iv)          The
Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements 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 Borrowers, the
Administrative Agent, the Issuing Lender 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 any Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

 

(v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register.  No assignment shall be effective

 

 

73

 

for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(c)           (i) Any
Lender may, without the consent of the Company, the Administrative Agent or the
Issuing Lender, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  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 the first proviso to Section 9.02(b) that
affects such Participant.  Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.13,
2.14 and 2.15 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 9.08
as though it were a Lender, provided such Participant agrees to be subject to Section 2.16(c) as
though it were a Lender.

 

(ii)           A
Participant shall not be entitled to receive any greater payment under Section 2.13
or 2.15 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 Company’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 2.15 unless the Company is notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Company, to comply with Section 2.15(e) as
though it were a Lender.

 

(d)           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 any pledge or assignment to secure
obligations to a Federal Reserve Bank, 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 9.05           Survival.  All covenants, agreements, representations
and warranties made by the Loan Parties herein and in the certificates or other
instruments  delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the

 

74

 

Issuing
Lender or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.  The provisions of Section 2.13,
2.14, 2.15 and 9.03 and Article VIII
shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

Section 9.06           Counterparts; Integration;
Effectiveness. 
This Agreement may be executed in counterparts and may be delivered in
original or facsimile form (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and
the Fee Letter constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

 

Section 9.07           Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

Section 9.08           Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any Borrower
against any and all of the obligations of any Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured.  The
rights of each Lender under this Section are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.

 

Section 9.09           Governing Law; Consent to Service
of Process.  (a)      This Agreement and the Loan Documents
shall be construed in accordance with and governed by the law of the State of
Texas.

 

(b)           The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the court of the State of Texas
sitting in

 

 

75

 

 

Harris County and of the United States District Court of the Southern
District of Texas, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas State or, to the extent
permitted by law, in such Federal court. 
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Lender or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Borrower or its properties in the courts of any
jurisdiction.

 

(c)           Each
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any court referred to in paragraph (b) of
this Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

Without limitation of the foregoing, nothing in this
Agreement, or in the Notes or in any other Loan Document shall be deemed to
constitute a waiver of any rights which any Lender, or the holder of any Note
may have under applicable federal legislation relating to the amount of
interest which such Lender or holder may contract for, take, receive or charge
in respect of the Loan and the Loan Documents, including any right to take,
receive, reserve and charge interest at the rate allowed by the law of the
state where any Lender is located.  The
Administrative Agent, each Lender and the Borrower further agree that insofar
as the provisions of Chapter 303 of the Texas Finance Code, as amended, are
applicable to the determination of the Highest Lawful Rate with respect to the
Notes and the Obligations hereunder and under the other Loan Documents, the
indicated rate ceiling of such Article shall be applicable; provided,
however, that to the extent permitted by such Article, the Administrative Agent
may from time to time by notice to the Borrower revise the election of such
interest rate ceiling as such ceiling affects the then current or future
balances of the Loans.  The provisions of
Chapter 346 of the Texas Finance Code, as amended, do not apply to this
Agreement, any Note issued hereunder or the other Loan Documents.

 

Section 9.10           WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

76

 

Section 9.11           Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.

 

Section 9.12           Confidentiality.  Each of the Administrative Agent, the Issuing
Lender and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii)  any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Borrower and
its obligations, (g) with the consent of the Company or (h) to the
extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Lender or any Lender on a nonconfidential
basis from a source other than the Borrower. 
For the purposes of this Section, “Information” means all
information received from the Company relating to the Company or its business,
other than any such information that is available to the Administrative Agent,
the Issuing Lender or any Lender on a nonconfidential basis prior to disclosure
by the Company; provided that, in the case of information received from
the Company after the date hereof, such information is clearly identified at
the time of delivery as confidential. 
Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

 

Section 9.13           Interest.  Each provision in this Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, to the Administrative Agent or
any Lender or charged, contracted for, reserved, taken or received by the
Administrative Agent or any such Lender, for the use, forbearance or detention
of the money to be loaned under this Agreement or any Loan Document or
otherwise (including any sums paid as required by any covenant or obligation
contained herein or in any other Loan Document which is for the use,
forbearance or detention of such money), exceed that amount of money which
would cause the effective rate of interest to exceed the Highest Lawful Rate,
and all amounts owed under this Agreement and each other Loan Document shall be
held to be subject to reduction to the effect that such amounts so paid or
agreed to be paid, charged, contracted for, reserved, taken or received which
are for the use, forbearance or detention of money under this Agreement or such
Loan Document shall in no event exceed that amount of money which would cause
the effective rate of interest to exceed the Highest Lawful Rate.  Anything in any Note or any other Loan
Document to the contrary notwithstanding, the Borrowers shall not be required
to pay unearned interest on any Note and the Borrowers shall not be required to
pay interest on the Obligations at a rate in excess of the

 

77

 

Highest Lawful Rate, and if the effective rate of interest which would
otherwise be payable under such Note and such Loan Documents would exceed the
Highest Lawful Rate, or if the holder of such Note shall receive any unearned
interest or shall receive monies that are deemed to constitute interest which
would increase the effective rate of interest payable by the Borrowers under
such Note and the other Loan Documents to a rate in excess of the Highest
Lawful Rate, then (a) the amount of interest which would otherwise be
payable by the Borrowers shall be reduced to the amount allowed under
applicable law and (b) any unearned interest paid by the Borrowers or any
interest paid by the Borrowers in excess of the Highest Lawful Rate shall in
the first instance be credited on the principal of the obligations of the
Borrowers (or if all such obligations shall have been paid in full, refunded to
the Borrowers).  It is further agreed
that, without the limitation of the foregoing, all calculations of the rate of
interest contracted for, reserved, taken, charged or received by any Lender
under the Notes and the Obligations and under the other Loan Documents are made
for the purpose of determining whether such rate exceeds the Highest Lawful
Rate, and shall be made, to the extent permitted by usury laws applicable to such
Lender, by amortizing, prorating and spreading in equal parts during the period
of the full stated term of the Notes and this Agreement and all interest at any
time contracted for, charged or received by such Lender in connection
therewith.

 

Section 9.14           Release
of Liens and Guarantees.  In the
event that the Company or any Subsidiary sells, transfers or otherwise disposes
of all or any portion of any of the Equity Interests, assets or property owned
by the Company or such Subsidiary in a transaction not prohibited by this
Agreement, the Administrative Agent and the Collateral Agent shall promptly
(and the Lenders hereby authorize and instruct the Administrative Agent and the
Collateral Agent to) take such action and execute any such documents as may be
reasonably requested by the Company and at the Company’s expense to release any
Liens created by any Loan Document in respect of such Equity Interests, assets
or property, including the release and satisfaction of record of any mortgage
or deed of trust granted in connection herewith, and, in the case of a
disposition of all or substantially all the Equity Interests or assets of any
Subsidiary that is a Loan Party, terminate such Subsidiary’s obligations under
the Guarantee Agreement and each other Loan Document. In addition, the
Administrative Agent and the Collateral Agent agree to take such actions as are
reasonably requested by the Company and at the Borrower’s expense to terminate
the Liens and security interests created by the Loan Documents when all the
Obligations have been paid in full and all Letters of Credit and Commitments
terminated.

 

Section 9.15           No
Novation.  The execution, delivery
and effectiveness of this Agreement shall not extinguish the obligations for
the payment of money outstanding under the Original Credit Agreement, as
amended or discharge or release the Lien or priority of any Security Document
or any other security therefor. Nothing herein contained shall be construed as
a substitution or novation of the obligations outstanding under the Original
Credit Agreement, as amended or any agreements securing the same, which shall
remain in full force and effect, except as modified hereby or by agreements
executed concurrently herewith. Nothing expressed or implied in this Agreement
or any other document contemplated hereby shall be construed as a release or
other discharge of Company under the Original Credit Agreement, as amended, or
any Guarantor under any Loan Document from any of its obligations and
liabilities thereunder. Each of the Amended and Restated Agreement and the
other Loan Documents shall remain in full force and effect until and except as
expressly modified hereby.

 

78

 

Section 9.16           USA
Patriot Act.  Each Lender hereby notifies the Borrowers that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001) (the “Act”), it is
required to obtain, verify and record information that identifies the
Borrowers, which information includes the name and address of any Borrower and
other information that will allow such Lender to identify any Borrower in
accordance with the Act.

 

Section 9.17           Release
of Benchmark BV Holdings, Inc. 
Notwithstanding anything in this Agreement to the contrary, the Lenders
hereby acknowledge and agree that, so long as no Default or Event of Default
exists hereunder, upon delivery to the Administrative Agent of (a) a
written request by the Company that Benchmark BV Holdings, Inc., a
Delaware corporation (“Benchmark BV”) be released as a Guarantor and (b) written
evidence satisfactory to Administrative Agent that Benchmark BV has no assets
and that proceedings have been commenced to dissolve Benchmark BV, Benchmark BV
shall be released as a Guarantor and upon the request of Company, the
Administrative Agent shall provide evidence of such release to the Company.

 

Section 9.18           Joint
and Several Liability.  The
Obligations of the Company and each of its Domestic Subsidiaries that are
Borrowing Subsidiaries hereunder and under the Loan Documents are joint and
several and the obligations of the Domestic Subsidiaries that are Guarantors
under the Loan Documents are joint and several. 
The Obligations of the Foreign Borrowers hereunder and under the Loan
Documents are joint and several. 
Notwithstanding anything to the contrary herein or under the Loan
Documents, no Foreign Borrower shall have any liability whatsoever in respect
of the Obligations of the Company or any of its Domestic Subsidiaries.

 

Section 9.19           FINAL
AGREEMENT OF THE PARTIES.  THIS
AGREEMENT (INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND OTHER
LOAN DOCUMENTS CONSTITUTE A “LOAN AGREEMENT” AS DEFINED IN SECTION 26.02(a) OF
THE TEXAS BUSINESS AND COMMERCIAL CODE, AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF 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.

 

79

 

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

 

	
   

  	
  BENCHMARK ELECTRONICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gayla J. Delly

  
	
   

  	
  Name:

  	
  Gayla
  J. Delly

  
	
   

  	
  Title:

  	
  President

  

 

80

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and
  Issuing Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian McDougal

  
	
   

  	
  Name:

  	
  Brian
  McDougal

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

81

 

	
   

  	
  BANK OF AMERICA, N.A., individually and as Co-Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Sugeet Machanda Madan

  
	
   

  	
  Name:

  	
  Sugeet
  Machanda Madan

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

82

 

	
   

  	
  WELLS FARGO BANK, N.A., individually and as Co-Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Melanie M. Ottens

  
	
   

  	
  Name:

  	
  Sugeet
  Machanda Madan

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

83

 

	
   

  	
  COMERICA BANK, individually and as Co-Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  De Von Lang

  
	
   

  	
  Name:

  	
  De
  Von Lang

  
	
   

  	
  Title:

  	
  Corporate
  Banking Officer

  

 

84

 

	
   

  	
  CREDIT SUISSE, Cayman Islands Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Karim Blasetti

  
	
   

  	
  Name:

  	
  Karim
  Blasetti

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James Neira

  
	
   

  	
  Name:

  	
  James
  Neira

  
	
   

  	
  Title:

  	
  Associate

  

 

85ex101.htm

    
 

    AGREEMENT
      AND PLAN OF MERGER

    

    AMONG

    

    TRUSTCASH
      HOLDINGS, INC.

    

    TCHH
      ACQUISITION CORP.

    

    AND

    

    PAIVIS,
      CORP.

    

    

    DATED
      AS OF DECEMBER 20, 2007

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    
 

    
      
        	
                ARTICLE
                  I - THE MERGER

              	 
	 	 
	
                Section
                  1.01                                
                  The Merger

              	
                7

              
	
                Section
                  1.02                                
                  Closing

              	
                8

              
	
                Section
                  1.03                                
                  Effective Time

              	
                8

              
	
                Section
                  1.04                                
                  Effect of the Merger

              	
                8

              
	
                Section
                  1.05                                
                  Certificate of Incorporation and Bylaws; Directors and
                  Officers

              	
                8

              
	
                Section
                  1.06                                
                  Further Actions

              	
                8

              
	
                Section
                  1.07                                
                  Conversion

              	
                9

              
	
                Section
                  1.08                                
                  Restrictions on Resale

              	
                9

              
	
                Section
                  1.09                                
                  Exchange of Certificates

              	
                10

              
	
                Section
                  1.10                                
                  Registration of Issuable Shares

              	
                10

              
	
                Section
                  1.11                                
                  Listing of Issuable Shares for Trading

              	
                11

              
	
                Section
                  1.12                                
                  Financing

              	
                11

              
	 	 
	
                ARTICLE
                  II - REPRESENTATIONS AND WARRANTIES OF PARENT

              	 
	 	 
	
                Section
                  2.01                                
                  Organization, Standing and Power

              	
                11

              
	
                Section
                  2.02                                
                  Capitalization

              	
                11

              
	
                Section
                  2.03                                
                  Authority for Agreement

              	
                12

              
	
                Section
                  2.04                                
                  Issuance of Common Stock

              	
                12

              
	
                Section
                  2.05                                
                  Status of SUB and PARENT; Financial Statements

              	
                12

              
	
                Section
                  2.06                                
                  Governmental Consent

              	
                13

              
	
                Section
                  2.07                                
                  Litigation

              	
                13

              
	
                Section
                  2.08                                
                  Interested Party Transactions

              	
                13

              
	
                Section
                  2.09                                
                  Compliance with Applicable Laws

              	
                13

              
	
                Section
                  2.10                                
                  No Undisclosed Liabilities

              	
                13

              
	
                Section
                  2.11                                
                  Tax-Free Reorganization

              	
                13

              
	
                Section
                  2.12                                
                  Tax Returns and Payment

              	
                13

              

      

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
        	
                Section
                  2.13                                
                  Board Approval

              	
                14

              
	
                Section
                  2.14                                
                  Full Disclosure

              	
                14

              
	
                Section
                  2.15                                
                  Brokers and Finders Fees

              	
                14

              
	
                Section
                  2.16                                
                  PARENT SEC Reports

              	
                14

              
	 	 
	
                ARTICLE
                  III - REPRESENTATIONS AND WARRANTIES OF TARGET

              	 
	 	 
	
                Section
                  3.01                                
                  Organization, Standing and Power

              	
                15

              
	
                Section
                  3.02                                
                  Capitalization

              	
                15

              
	
                Section
                  3.03                                
                  Authority for Agreement

              	
                15

              
	
                Section
                  3.04                                
                  Subsidiaries

              	
                15

              
	
                Section
                  3.05                                
                  Stockholders

              	
                15

              
	
                Section
                  3.06                                
                  Governmental Consent

              	
                15

              
	
                Section
                  3.07                                
                  Status of TARGET, Financial Statements

              	
                16

              
	
                Section
                  3.08                                
                  Litigation

              	
                16

              
	
                Section
                  3.09                                
                  Restrictions on Business Activities

              	
                16

              
	
                Section
                  3.10                                
                  Interested Party Transactions

              	
                16

              
	
                Section
                  3.11                                
                  Compliance with Applicable Laws

              	
                16

              
	
                Section
                  3.12                                
                  Governmental Authorization

              	
                17

              
	
                Section
                  3.13                                
                  Absence of Changes

              	
                17

              
	
                Section
                  3.14                                
                  Operations Since Financial Statements Date

              	
                17

              
	
                Section
                  3.15                                
                  No Undisclosed Liabilities

              	
                18

              
	
                Section
                  3.16                                
                  Accounts Receivable

              	
                18

              
	
                Section
                  3.17                                
                  Insurance

              	
                18

              
	
                Section
                  3.18                                
                  Title to Properties; Liens

              	
                18

              
	
                Section
                  3.19                                
                  Material Contracts

              	
                18

              
	
                Section
                  3.20                                
                  Non-Contravention

              	
                19

              
	
                Section
                  3.21                                
                  Labor relations

              	
                19

              
	
                Section
                  3.22                                
                  Tax Returns and Payment

              	
                19

              
	
                Section
                  3.23                                
                  Intellectual Property

              	
                19

              

      

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
        	
                Section
                  3.24                                
                  Environmental Matters

              	
                19

              
	
                Section
                  3.25                                
                  Employment Agreements

              	
                20

              
	
                Section
                  3.26                                
                  Warranty claims

              	
                20

              
	
                Section
                  3.27                                
                  Brokers’ and Finders’ Fees

              	
                20

              
	
                Section
                  3.28                                
                  Board Approval

              	
                20

              
	
                Section
                  3.29                                
                  Full Disclosure

              	
                20

              
	
                Section
                  3.30                                
                  TARGET SEC Reports

              	
                20

              
	 	 
	
                ARTICLE
                  IV - CERTAIN COVENANTS AND AGREEMENTS

              	 
	 	 
	
                Section
                  4.01                                
                  Covenants of TARGET

              	
                21

              
	
                Section
                  4.02                                
                  Covenants of SUB and PARENT

              	
                22

              
	
                Section
                  4.03                                
                  Covenants of the Parties

              	
                23

              
	 	 
	
                ARTICLE
                  V - CONDITIONS PRECEDENT

              	 
	 	 
	
                Section
                  5.01                                
                  Conditions Precedent to the Parties' Obligations

              	
                24

              
	
                Section
                  5.02                                
                  Conditions Precedent to the Obligations of SUB and PARENT

              	
                25

              
	
                Section
                  5.03                                
                  Conditions Precedent to the Obligations of TARGET

              	
                25

              
	 	 
	
                ARTICLE
                  VI - TERMINATION, AMENDMENT AND WAIVER

              	 
	 	 
	
                Section
                  6.01                                
                  Termination

              	
                26

              
	
                Section
                  6.02                                
                  Effect of Termination

              	
                26

              
	 	 
	
                ARTICLE
                  VII - CONFIDENTIALITY; NON-SOLICITATION; EXCLUSIVITY

              	 
	 	 
	
                Section
                  7.01                                
                  Confidentiality

              	
                27

              
	
                Section
                  7.02                                
                  Non-Solicitation

              	
                27

              
	
                Section
                  7.03                                
                  Exclusivity

              	
                27

              

      

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      
        	 	 
	
                ARTICLE
                  VIII - INDEMNIFICATION

              	 
	 	 
	
                Section
                  8.01                                
                  Indemnification by SUB and PARENT

              	
                27

              
	
                Section
                  8.02                                
                  Indemnification by TARGET

              	
                28

              
	
                Section
                  8.03                                
                  Survival of Indemnification

              	
                28

              
	 	 
	
                ARTICLE
                  IX - MISCELLANEOUS

              	 
	 	 
	
                Section
                  9.01                                
                  Non-survival of Representations and Warranties

              	
                28

              
	
                Section
                  9.02                                
                  Expenses

              	
                28

              
	
                Section
                  9.03                                
                  Applicable Law

              	
                28

              
	
                Section
                  9.04                                
                  Notices

              	
                
                  29

                

              
	
                Section
                  9.05                                
                  Entire Agreement

              	
                29

              
	
                Section
                  9.06                                
                  Assignment

              	
                29

              
	
                Section
                  9.07                                
                  Headings; References

              	
                30

              
	
                Section
                  9.08                                
                  Counterparts

              	
                30

              
	
                Section
                  9.09                                
                  No Third Party Beneficiaries

              	
                30

              
	
                Section
                  9.10                                
                  Severability; Enforcement

              	
                30

              
	 	
                30

              
	
                List
                  of Schedules

              	 
	
                PARENT
                  Disclosure Schedule

              	 
	
                SUB
                  Disclosure Schedule

              	 
	 	 
	
                EXHIBITS

              	 
	
                Preferred
                  Designation

              	
                32

              
	
                Merger
                  Certificate

              	
              

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

    AGREEMENT
      AND PLAN OF MERGER

    

    AGREEMENT
      AND PLAN OF MERGER
      dated as of December 20, 2007 (the “Agreement”) by and among TRUSTCASH HOLDINGS,
      INC., a Delaware corporation (“PARENT”), TCHH
      ACQUISITION CORP., a Nevada corporation (“SUB”) and PAIVIS,
      CORP., a Nevada corporation (“TARGET”).  PARENT,
      SUB and TARGET are each referred to herein individually as a “Party” and
      collectively as the “Parties.”

    

    PREAMBLE

    

    WHEREAS,
      the respective Boards
      of Directors of each of PARENT, SUB and TARGET deem it advisable and in the
      best
      interests of each corporation and its respective shareholders, that SUB and
      TARGET combine in order to advance the long-term business strategies of PARENT
      and TARGET;

    

    WHEREAS,
      the Board of
      Directors of TARGET has unanimously determined that the merger of SUB with
      and
      into TARGET (the “Merger”) and this Agreement are fair to, and in the best
      interests of, TARGET and the holders of all the common stock of TARGET, par
      value $0.0002 per share (the “TARGET Common Stock”);

    

    WHEREAS,
      the Board of
      Directors of PARENT has unanimously determined that the Merger and this
      Agreement are fair to, and in the best interests of, PARENT and the holders
      of
      the common stock of Parent, par value $0.001 per share (the “PARENT Common
      Stock”);

    

    WHEREAS,
      the respective Boards
      of Directors of each of PARENT, SUB and TARGET have approved this Agreement
      and
      the Merger on the terms and conditions contained in this Agreement and in so
      doing, have recommended approval of the Merger to the shareholders of the
      respective corporations;

    

    WHEREAS,
      PARENT, as the sole
      stockholder of SUB, has approved this Agreement, the Merger and the transactions
      contemplated by this Agreement pursuant to action taken by unanimous written
      consent in accordance with the requirements of the Nevada Revised
      Statutes;

    

    WHEREAS,
      for federal income
      tax purposes, it is intended by the parties hereto that the Merger shall qualify
      as a tax-free “reorganization” within the meaning of Section 368 of the Internal
      Revenue Code of 1986, as amended (the “Code”).

    

    NOW,
      THEREFORE, in
      consideration of the foregoing and the respective representations, warranties,
      covenants and agreements contained in this Agreement and intending to be legally
      bound hereby, the parties hereto agree as follows:

    

    CERTAIN
      DEFINITIONS

    

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

    

    “Applicable
      Law” means any domestic or foreign law, statute, regulation, rule, policy,
      guideline or ordinance applicable to the businesses of the Parties, the Merger
      and/or the Parties.

    

    “Common
      Stock” means the common stock of PARENT, par value $0.001 per
      share.

    

    “Commission”
      means the United States Securities and Exchange Commission.

    

    “Dollar”
      and “$” means lawful money of the United States of America.

    

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.

    

    “GAAP”
      means generally accepted accounting principles in the United States of America
      as promulgated by the American Institute of Certified Public Accountants and
      the
      Financial Accounting Standards Board or any successor Institutes concerning
      the
      treatment of any accounting matter, and applied in a consistent
      manner.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    “Knowledge”
      means the knowledge, which either is obtained after reasonable inquiry, or
      which
      would have been obtained if one made a reasonable inquiry.

    

    “Lien”
      means, with respect to any property or asset, any mortgage, lien, pledge,
      charge, security interest, encumbrance or other adverse claim of any kind in
      respect of such property or asset.

    

    “Material
      Adverse Effect” with respect to any entity or group of entities means any event,
      change or effect that has or would have a materially adverse effect on the
      financial condition, business or results of operations of such entity or group
      of entities, taken as a whole.

    

    “Parent”
      means Trustcash Holdings, Inc. , a Delaware corporation.

    

    “Parent
      Disclosure Schedule” means the disclosure schedule delivered by Parent to Target
      concurrently with the execution and delivery of this Agreement, as the same
      may
      be amended or supplemented by Parent.

    

    “Parent
      SEC Reports” means all filings required to be made by Parent with, or submitted
      by Parent to, the Commission under the Securities Act and the Exchange
      Act.

    

    “Person”
      means any individual, corporation, partnership, limited liability company,
      trust
      or unincorporated organization or a government or any agency or political
      subdivision thereof.

    

    “Preferred
      Share:  means the Series B Preferred Stock of PARENT.

    

    “Securities
      Act” means the Securities Act of 1933, as amended.

    

    “Target
      SEC Reports” means all filings required to be made by Target with, or submitted
      by Target to, the Commission under the Securities Act and the Exchange
      Act.

    

    “Tax”
      (and, with correlative meaning, “Taxes” and “Taxable”) means:

    

    (i)
      any net income, alternative or
      add-on minimum tax, gross income, gross receipts, sales, use, ad valorem,
      transfer, franchise, profits, license, withholding, payroll employment, excise,
      severance, stamp, occupation, property, environmental or windfall profit tax,
      custom, duty or other tax, governmental fee or other like assessment or charge
      of any kind whatsoever together with any interest or any penalty, addition
      to
      tax or additional amount imposed by any governmental entity (a “Tax Authority”)
      responsible for the imposition of any such tax (domestic or foreign),
      and

    

    (ii)
      any liability for the payment of
      any amounts of the type described in clause (i) above as a result of being
      a
      member of an affiliated, consolidated, combined or unitary group for any Taxable
      period, and

    

    (iii)
      any liability for the payment of
      any amounts of the type described in clauses (i) or (ii) above as a result
      of
      any express or implied obligation to indemnify any other person.

    

    “Tax
      Return” means any return, statement, report or form, including, without
      limitation, estimated Tax Returns and reports, withholding Tax Returns and
      reports and information reports and returns required to be filed with respect
      to
      Taxes.

    

    ARTICLE
      I

    THE
      MERGER

    

    SECTION
      1.01  THE MERGER

    

    Upon
      the terms and subject to the
      conditions set forth in this Agreement and in accordance with the statutes
      of
      the State of Nevada, at the Effective Time (as defined herein), SUB shall be
      merged with and into TARGET, the separate existence of SUB shall cease and
      TARGET shall continue as the surviving entity of the Merger (whereappropriate, the “Surviving Entity”).

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    SECTION
      1.02  CLOSING

    

    The
      closing of the Merger (the
“Closing”) will take place at the offices of the PARENT AND SUB , at 400 Park
      Avenue Suite 1420 NY, NY 10022, on the day immediately following the
      satisfaction or waiver of the conditions precedent set forth in Article V or
      at
      such other date as SUB and TARGET shall agree; provided,
      however, that (a) the Parties shall use their best efforts to effect the
      Closing on or before January 31, 2008, or as soon thereafter as is practicable,
      and (b) the Closing may take place by facsimile or other means as may be
      mutually agreed upon in advance by the Parties. The date on which the Closing
      is
      held is referred to in this Agreement as the “Closing
      Date.”  Unless extended in writing by each of the PARENT and
      TARGET in the event the Closing shall not occur by February 28, 2008 (the “Outside Closing
      Date”) then either PARENT or TARGET may terminate this Agreement without
      any further liability to the other.

    

    SECTION
      1.03  EFFECTIVE TIME

    

    On
      the Closing Date, the Parties shall
      cause the Merger to be effective by the filing of articles or a certificate
      of
      merger, and the Merger shall become effective immediately upon the acceptance
      of
      such filings, (the “Merger Certificate”)
      with the Secretary of State of the State of Nevada in substantially the form
      attached hereto as Exhibit A executed
      in
      accordance with the relevant provisions of the statutes of the Nevada Revised
      Statutes. The Merger shall become effective at the time such Merger Certificate
      is duly accepted for filing or at such other time as may be specified as the
      date and time of effectiveness in the Merger Certificate, (the “Effective Time”). The
      date on which the Effective Time occurs is referred to as the “Effective
      Date.”

    

    SECTION
      1.04  EFFECT OF THE MERGER

    

    At
      and after the Effective Time, the
      Merger shall be effective as provided in the applicable provisions of the Nevada
      Revised Statutes.  The existence of TARGET, as the Surviving Entity,
      with all of its purposes and powers, shall continue unaffected and unimpaired
      by
      the Merger, and, as the Surviving Entity, it shall be governed by the laws
      of
      the State of Nevada and succeed to all rights, assets, liabilities and
      obligations of SUB in accordance with the Nevada Revised Statutes. Without
      limiting the generality of the foregoing, and subject thereto, at the Effective
      Time, except as otherwise provided herein, all the property, rights, privileges,
      powers and franchises of SUB shall vest in the Surviving Entity, and all debts,
      liabilities and duties of SUB shall become the debts, liabilities and duties
      of
      the Surviving Entity. The separate existence and corporate organization of
      SUB
      shall cease at the Effective Time and thereafter SUB and TARGET shall be a
      single entity, to wit, the Surviving Entity.

    

    SECTION
      1.05  CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND
      OFFICERS

    

    Pursuant
      to the Merger:

    

    (i)           
      The Certificate of Incorporation and Bylaws of TARGET as in effect immediately
      prior to the Effective Time shall be the Certificate of Incorporation and Bylaws
      of the Surviving Entity following the Merger, until thereafter changed or
      amended as provided therein or by applicable law.

    

    (ii)           
      The officers and directors of the Parent following the Merger shall be those
      persons listed on Schedule 1.05(a),
      until the earlier of their death, resignation or removal or until their
      respective successors are duly appointed and qualified.

    

    SECTION
      1.06  FURTHER ACTIONS

    

    If
      at any time after the Effective
      Time, SUB and TARGET shall consider or be advised that any further assignment
      or
      assurances or any other things that are necessary or desirable to vest, perfect
      or confirm, of record or otherwise, in the Surviving Entity, the title to any
      property or right of SUB acquired or to be acquired by reason of or as a result
      of the Merger, then SUB and TARGET and their respective officers and directors
      in office shall use all reasonable efforts to execute and deliver, or cause
      to
      be executed and delivered, all such proper deeds, assignments and assurances
      and
      do all things reasonably necessary and proper to vest, perfect or confirm title
      to such property orrights in the Surviving Entity and
      otherwise carry out the purpose of this Agreement, and the officers of SUB
      and
      the Surviving Entity are fully authorized in the name of TARGET or otherwise
      to
      take any and all such action with the same effect as if such persons were
      officers of TARGET.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    SECTION
      1.07  CONVERSION

    

    As
      of the Effective Time, by virtue of
      the Merger and without any action on the part of SUB or TARGET:

    

    CONVERSION
      OF THE COMMON STOCK OF TARGET.

    

    
      	
              (i)  

            	
              Conversion
                Ratio. The PARENT will exchange one (1) TRUSTCASH Preferred Share
                (the
                “Issuable Shares”) for every five (5) shares of PAIVIS Common Stock issued
                and outstanding immediately prior to the Effective Time (the “Conversion
                Ratio”).

            

    

    

    

    
      	
              (ii)  

            	
              Purchase
                Price. The PARENT is paying the equivalent of $0.65 in TRUSTCASH
                Preferred
                Shares currency for each PAIVIS Common Share. (the “Purchase
                Price”)

            

    

    

    
      	
              (iii)  

            	
              Conversion
                Ratio Calculation. The Conversion ratio of 1 for 5 is based on the
                Purchase Price divided by the price/share of the TRUSTCASH Preferred
                Shares. Each TRUSTCASH Preferred Share has a fixed stated value of
                $3.25/share as per the Preferred Shares rights and preferences listed
                in
                Exhibit A.

            

    

    

    
      	
              (iv)  

            	
              Fractional
                Shares. In calculating the number of Issuable Shares to issue to
                each
                TARGET shareholder, general rounding principles should control the
                actual
                calculation, which shall result in no issuance of any fractional
                shares to
                the TARGET shareholders.

            

    

    

    
      	
              (v)  

            	
              Misc.
                Upon such issuance of the Preferred Shares, all shares of Common
                Stock of
                TARGET exchanged for shares of Preferred Shares shall automatically
                be
                canceled and retired and shall cease to exist. Each holder of a
                certificate representing any such TARGET Common Stock shall, to the
                extent
                such certificate represents such TARGET Common Stock , cease to have
                any
                rights with respect to such TARGET Common Stock, except the right
                to
                receive the Issuable Shares allocable to the shares represented by
                such
                certificate upon surrender of such certificate in accordance with
                Section
                1.09.

            

    

    
      	
               

            	
               

            

    

    
      SECTION
        1.08 RESTRICTIONS ON RESALE 

    All
      series of the issuable Preferred
      Shares of the PARENT  will not be registered under the Securities Act,
      or the securities laws of any state, and absent an exemption from registration
      contained in such laws, cannot be transferred, hypothecated, sold or otherwise
      disposed of until; (i) a registration statement with respect to such securities
      is declared effective under the Securities Act, or (ii) PARENT receives an
      opinion of counsel for PARENT that an exemption from the registration
      requirements of the Securities Act is available.

    

    The
      certificates representing the
      number of Issuable Shares into which the TARGET Common Stock shall have been
      converted pursuant to this Agreement shall contain legends substantially as
      follows:

    

    “THE
      SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
      HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
      RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES
      AN
      OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF SUCH ACT IS AVAILABLE.”

    

    
      	
               

            	
               

            

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    SECTION
      1.09 EXCHANGE OF CERTIFICATES 

    (i)           
      EXCHANGE OF CERTIFICATES. After the Effective Time and pursuant to a customary
      letter of transmittal or other instructional form provided by the Exchange
      Agent
      (hereafter defined) to each of the Shareholders (as appropriate, the
“Stockholders”) of the TARGET Common Stock, the Stockholders shall be required
      to surrender all the TARGET Common Stock to the stock transfer agent of the
      Parent (Signature Stock Transfer, Inc., 2301 Ohio Drive, Suite 100, Plano,
      Texas, 75093) upon such surrender to receive in exchange therefor certificates
      representing the number of Issuable Shares into which the TARGET Common Stock
      theretofore represented by the certificate or certificates so surrendered shall
      have been converted pursuant to this Agreement.  Until so surrendered,
      each such outstanding certificate which, prior to the Effective Time,
      represented TARGET Common Stock shall be deemed for all corporate purpose,
      subject to the further provisions of this Article I to evidence the ownership
      of
      the number of whole Issuable Shares into which such TARGET Common Stock have
      been so converted.  No dividend payable to holders of Issuable Shares
      of record as of any date subsequent to the Effective Time shall be paid to
      the
      Stockholders as the owner of any certificate which, prior to the Effective
      Time,
      represented TARGET Common Stock, until such certificate or certificates are
      surrendered as provided in this Article I or pursuant to letters of transmittal
      or other instructions with respect to lost certificates provided by the Exchange
      Agent.

    

    (ii)           
      SUB shares of Common Stock. Each share of Common Stock of SUB issued and
      outstanding immediately prior to the Effective Time shall be converted into
      one
      fully paid and nonassessable share of common stock of the Surviving
      Corporation.

    

    (iii)           
      FRACTIONAL SHARES. No certificate or scrip representing fractional Issuable
      Shares shall be issued upon the surrender of certificates representing TARGET
      Common Stock pursuant to this Agreement, and no dividend declaration by the
      Board of Directors of PARENT shall relate to any such fractional share.
      Fractional shares shall be rounded up to the nearest whole share.

    

    (iv)           
      FULL SATISFACTION OF RIGHTS. All Issuable Shares into which the TARGET Common
      Stock shall have been converted pursuant to this Article 1 shall be deemed
      to
      have been issued in full satisfaction of all rights pertaining to the TARGET
      Common Stock.

    

    (v)           
      CANCELLATION OF CERTIFICATES. All certificates representing TARGET Common Stock
      converted into Issuable Shares pursuant to this Article I shall be canceled
      upon
      delivery thereof to the Exchange Agent pursuant to this Agreement.

    

    (vi)           
      CLOSING OF TRANSFER BOOKS. On the Effective Date, the stock transfer book of
      TARGET shall be deemed to be closed and no transfer of Private Shares shall
      thereafter be recorded thereon.

     

    
      SECTION
        1.10 REGISTRATION OF ISSUABLE SHARES 

       

    

    The
      Parent shall file a registration statement with the Securities and Exchange
      Commission (the “Commission”) to register the Issuable Shares within ninety (90)
      days after issuance of the Issuable Shares.

    

    The
      Parent shall use best efforts to effect, as soon as practicable, such
      registration under the applicable Securities Act (the “Act”) (including, without
      limitation, filing post-effective amendments, appropriate qualifications under
      applicable blue sky or other state securities laws, and appropriate compliance
      with the Act) as would permit or facilitate the sale and distribution of all
      or
      such portion of the Series B Stock.

    

    Although
      stated under this paragraph that the holders of Series B Stock have the right
      to
      have their Series B shares registered for resale with the Commission there
      can
      be no assurance given by the Parent on the time period it may take to approve
      the registration of such shares, or that the Commission will ultimately declare
      the proposed registration statement covering those shares to be
      effective.

    

    

    
      	
               

            	
               

            

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    SECTION
      1.11 LISTING OF ISSUABLE SHARES FOR TRADING 

    The
      Parent will make application for the listing of the Series B Stock for trading
      on the exchange or quotation system that the Parent’s common stock is then
      listed on or other senior exchange or quotation system that the Parent plans
      to
      make application to list its common stock within ninety (90) days of the
      effectiveness of the registration of the Series B Stock.

    

    Upon
      making application for listing the Parent will use best efforts to list the
      Series B Stock on the American Stock Exchange, or to cause the Series B Stock
      to
      be authorized for quotation on the NASDAQ Small Cap or National Market System,
      as soon as practicable (it being understood that the Parent will not be in
      violation of this provision if it is unable to obtain such listing or quotation
      primarily as a result of its failure to satisfy the quantitative listing
      requirements of the American Stock Exchange or NASDAQ Small Cap or National
      Market).

     

    SECTION
      1.12 FINANCING 

     

    The
      Parties agree that Closing is subject to the execution by Parent of an agreement
      for an equity or debt financing to the Parent of up to Ten Million Dollars
      ($10,000,000) but no less than Seven Million Dollars ($7,000,000) on terms
      agreeable to both Parent and Target for the purposes of completing the
      acquisition of Detroit Phone Cards Inc. (“DPC”), AAAA Media Services Ltd. (“A4”)
      by the Target and working capital for the Parent (“the Financing”). 

    

    The
      Closing is further subject to the Financing being advanced to the
      Parent.

    

    ARTICLE
      II

     

    REPRESENTATIONS
      AND WARRANTIES OF SUB AND PARENT

     

    Except
      as set forth in the PARENT SEC
      Reports or the PARENT Disclosure Schedule or the SUB Disclosure Schedule,
      disclosure in any one of which shall apply to any and all representations and
      warranties made in this Agreement, and except as otherwise disclosed in writing
      by PARENT and/or SUB to TARGET, PARENT and SUB hereby represent and warrant
      to
      TARGET, as of the date of this Agreement and as of the Effective Time, as
      follows:

    

    SECTION
      2.01 ORGANIZATION, STANDING AND POWER

    

    SUB
      is a Nevada company and PARENT is a
      Nevada corporation.  Both SUB and PARENT are duly incorporated,
      validly existing and in good standing under the laws of the State of Nevada,
      and
      have corporate power and authority to conduct their business as presently
      conducted by it and to enter into and perform this Agreement and to carry out
      the transactions contemplated by this Agreement. SUB and PARENT are duly
      qualified to do business as a foreign limited liability company and corporation,
      respectively, doing business in each state in which they own or lease real
      property and where the failure to be so qualified and in good standing would
      have a Material Adverse Effect on SUB and PARENT or their business. Except
      as
      disclosed on Schedule
      2.01 hereto, neither SUB nor PARENT have any material ownership interest
      in any corporation, partnership (general or limited), limited liability company
      or other entity, whether foreign or domestic (collectively such ownership
      interests including capital stock).

    

    SECTION
      2.02 CAPITALIZATION

    

    Subject
      to modification by the PARENT
      prior to the Closing for purposes of effectuating the terms of this Agreement,
      the authorized capital stock of PARENT consists of 350,000,000 shares of common
      stock, $0.001 par value per share, and 50,000,000 of preferred stock. As of
      the
      date of this Agreement, there were 77,549,138 shares of common stock issued
      and
      outstanding. Except as disclosed on Schedule 2.02(a)
      hereto, no shares have been reserved for issuance to any person, and there
      are
      no other outstanding rights, warrants, options or agreements for the purchase
      of
      capital stock from PARENT except as provided in this Agreement. Except as
      disclosed on Schedule
      2.02(b) hereto, no Person is entitled to any rights with respect to the
      issuance or transfer of the Issuable Shares. The outstanding shares are validly
      issued, fully paid, non-assessable, and have been issued in compliance with
      all
      state and federal securities laws or other Applicable Law.

    

    The
      authorized capital stock of SUB consists of 1,000 shares of common stock,
      $0.0001 par value per share, and no authorized shares of preferred stock. As
      of
      the date of this Agreement, there were 10 shares ofcommon
      stock issued and outstanding.  Except as disclosed on Schedule 2.02(b)
      hereto, no shares have been reserved for issuance to any person, and there
      are
      no other outstanding rights, warrants, options or agreements for the purchase
      of
      capital stock from SUB except as provided in this Agreement. Except as disclosed
      on Schedule
      2.02(b) hereto, no Person is entitled to any rights with respect to the
      issuance or transfer of the Issuable Shares. The outstanding shares are validly
      issued, fully paid, non-assessable, and have been issued in compliance with
      all
      state and federal securities laws or other Applicable Law. As of the Effective
      Time, SUB shall not have filed a registration statement as to any of its
      shares.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    SECTION
      2.03 AUTHORITY FOR AGREEMENT

    

    The
      execution, delivery, and
      performance of this Agreement by SUB and PARENT have been duly authorized by
      all
      necessary corporate action, except for the approval of SUB's Stockholders (the
      “SUB Stockholders”), and this Agreement, upon its execution by the Parties, will
      constitute the valid and binding obligation of SUB and PARENT enforceable
      against it in accordance with and subject to its terms, except as enforceability
      may be affected by bankruptcy, insolvency or other laws of general application
      affecting the enforcement of creditors' rights, provided, that no such
      obligation shall arise or be binding unless the SUB Stockholders approve this
      Agreement. Except as set forth above or in Schedule 2.03
      attached hereto, the execution and consummation of the transactions contemplated
      by this Agreement and compliance with its provisions by SUB and PARENT will
      not
      violate any provision of Applicable Law and will not conflict with or result
      in
      any breach of any of the terms, conditions, or provisions of, or constitute
      a
      default under, SUB's Certificate of Incorporation or Bylaws or PARENT’s
      Certificate of Incorporation or Bylaws, as the case may be and in each case
      as
      amended, or, in any material respect, any indenture, lease, loan agreement
      or
      other agreement or instrument to which SUB and PARENT are a party or by which
      they or any of their properties are bound, or any decree, judgment, order,
      statute, rule or regulation applicable to SUB and PARENT except to the extent
      that any breach or violation of any of the foregoing would not constitute or
      result in a Material Adverse Effect on SUB or PARENT taken as a
      whole.

     

    
      SECTION
        2.04 ISSUANCE OF PARENT COMMON STOCK 

       

    

    The
      Issuable Shares issuable to the
      Stockholders as the holders of the TARGET Common Stock will when issued pursuant
      to this Agreement be duly and validly authorized and issued, fully paid and
      non-assessable.

    

    SECTION
      2.05  STATUS OF PARENT AND SUB; FINANCIAL STATEMENTS

    

    (i) Currently
      the shares of common stock of PARENT are traded on the Electronic Bulletin
      Board
      in the over-the-counter market (“OTCBB”).  Currently the shares of
      common stock of SUB are not traded.

    

    
      	
              (ii)  

            	
              SUB
                is a non-reporting company.

            

    

    

    
      	
              (iii)  

            	
              PARENT
                is a reporting company.

            

    

    

    
      	
              (iv)  

            	
              SUB
                does not have any material liabilities, except as provided in Schedule
                2.05.

            

    

    

    
      	
              (v)  

            	
              PARENT
                has made available to TARGET copies of its audited financial statements
                at
                December 31, 2004, 2005 and 2006 for the three fiscal years then
                ended
                (collectively, “PARENT  Financial
                Statements”).

            

    

    

    
      	
              (vi)  

            	
              The
                PARENT Financial Statements (i) are consistent in all material respects
                with the books and records of PARENT; (ii) have been or will be prepared
                in accordance with GAAP consistently applied; (iii) reflect and provide
                adequate reserves and disclosures in respect of all liabilities of
                PARENT,
                including all contingent liabilities, as of the respective dates
                of the
                Financial Statements, and (iv) present fairly in all material respects
                the
                financial position of PARENT at such dates and the results of operations
                and cash flows of PARENT for the periods then
                ended.

            

    

    

    
      	
              (vii)  

            	
              Except
                as otherwise disclosed in the PARENT Disclosure Schedule or in the
                PARENT
                Financial Statements, PARENT does not have any liabilities or obligations
                that would be required to be set forth in PARENT Financial Statements
                in
                accordance with GAAP.

            

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    
      	
              (viii)  

            	 

    

     

    SECTION
      2.06  GOVERNMENTAL CONSENT

    

    No
      consent, waiver, approval, order or
      authorization of, or registration, declaration or filing with, any court,
      administrative agency or commission or other federal, state, county, local
      or
      other foreign governmental authority, instrumentality, agency or commission
      or
      any third party (other than the approval of the SUB Stockholders), including
      a
      party to any agreement with SUB or PARENT, is required by or with respect to
      SUB
      or PARENT in connection with the execution and delivery of this Agreement or
      the
      consummation of the transactions contemplated hereby, except for (i) such
      consents, waivers, approvals, orders, authorizations, registrations,
      declarations and filings as may be required under applicable securities laws
      thereby, and (ii) the filing of the Certificate of Merger with the Secretary
      of
      State of the State of Nevada.

     

    
      SECTION
        2.07 LITIGATION 

       

    

    Except
      as disclosed on Schedule 2.07 hereof,
      there is no action, suit, investigation, audit or proceeding pending against,
      or
      to the best knowledge of SUB and PARENT threatened against or affecting, SUB
      and
      PARENT or any of their assets or properties before any court or arbitrator
      or
      any governmental body, agency or official.

     

    SECTION
      2.08 INTERESTED PARTY TRANSACTIONS 

     

    Intentionally omitted.

    

    SECTION
      2.09  COMPLIANCE WITH APPLICABLE LAWS

    

    To
      the Knowledge of SUB and PARENT, the
      business of SUB and PARENT has not been, and is not being, conducted in
      violation of any Applicable Law, except for possible violations which
      individually or in the aggregate have not had and are not reasonably likely
      to
      have a Material Adverse Effect. No investigation or review by any governmental
      entity with respect to SUB and PARENT is pending or, to the Knowledge of SUB
      and
      PARENT, threatened, nor has any governmental entity indicated an intention
      to
      conduct the same, except for investigations or reviews which individually or
      in
      the aggregate would not have, nor be reasonably likely to have, a Material
      Adverse Effect.

    

    SECTION
      2.10  NO UNDISCLOSED LIABILITIES

    

    Except
      as set forth on Schedule 2.10 hereto,
      there are no liabilities, debts or other obligations of SUB and PARENT of any
      kind whatsoever, whether accrued, contingent, absolute, determined, determinable
      or otherwise, and there is no existing condition, situation or set of
      circumstances which could reasonably be expected to result in such a liability
      or debt.

    

    SECTION
      2.11  TAX FREE REORGANIZATION

    

    Neither
      SUB nor PARENT (i) has
      undertaken the obligation to investigate as to whether SUB or any entity
      affiliated therewith has taken or agreed to take any action that would prevent
      the Merger from qualifying as a reorganization within the meaning of Section
      368
      of the Code; or (ii) made any representation or warranty as to the qualification
      of the Merger as a reorganization within the meaning of Section 368 of the
      Code.
      Based on the foregoing, to the knowledge of SUB and PARENT, nether SUB nor
      PARENT nor any entity affiliated therewith has taken or agreed to take any
      action or is aware of any fact or circumstance that would prevent the Merger
      from qualifying as a reorganization within the meaning of Section 368 of the
      Code.

     

    SECTION
      2.12 TAX RETURNS AND PAYMENT 

     

    SUB and PARENT have filed all
      material Tax Returns required by it and have paid all Taxes shown thereon to
      be
      due, except for Taxes being contested in good faith.   There is
      no material claim for Taxes that is a lien against the property of SUB and
      PARENT other than liens for taxes not yet due and payable.  Neither
      SUB nor PARENT have received notification of any audit of any Tax Return of
      SUB
      and PARENT being conducted orpending by a Tax Authority where an
      adverse determination could have a Material Adverse Effect, no extension or
      waiver of the statute of limitations on the assessment of any taxes has been
      granted by SUB and PARENT which is currently in effect, and SUB and PARENT
      are
      not a party to any agreement, contract or arrangement with any Tax Authority,
      which may result in the payment of any material amount.  Neither SUB
      nor PARENT are a party
      to
      any tax-sharing or allocation agreement, nor does they owe any amount under
      any
      tax-sharing or allocation agreement. Neither SUB nor PARENT have been (nor
      does
      it have any liability for unpaid Taxes because it once was) a member of an
      “affiliated group” within the meaning of Code Section
      1502.

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      SECTION
        2.13  BOARD
        APPROVAL AND SHAREHOLDER APPROVAL. 

       

    

    The
      Board of Directors of SUB and
      PARENT have approved this Agreement and the transactions contemplated hereby
      and
      SUB will submit it to the sole Stockholder for its approval. To the extent
      that
      shareholder approval of PARENT, SUB and/or TARGET is required by state corporate
      law, such shareholders have approved this Agreement and the transactions
      contemplated hereby.

    

    SECTION
      2.14  FULL DISCLOSURE

    

    The
      representations and warranties of
      SUB and PARENT contained in Article II of this Agreement or to be furnished
      in
      or in connection with documents mailed or delivered to the SUB Stockholders
      in
      connection with soliciting their consent to this Agreement, do not contain
      or
      will not contain, any untrue statement of a material fact, or omit to state
      a
      material fact required to be stated herein or therein or necessary to make
      the
      statements herein or therein, in the light of the circumstances under which
      they
      were made, not misleading.

    

    SECTION
      2.15  BROKERS’ AND FINDERS’ FEES

    

    Neither
      SUB nor PARENT has incurred,
      nor will they incur, directly or indirectly, any liability for brokers’ or
      finders’ fees or agents’ commissions or investment bankers’ fees or any similar
      charges in connection with this Agreement or any transaction contemplated
      hereby.

    

    SECTION
      2.16  PARENT SEC REPORTS

    

    Except
      as
      disclosed in the PARENT Schedules, PARENT has filed all forms, statements,
      reports and documents required to be filed or, if permissible, furnished by
      it
      with the Commission since such reports were required. The PARENT SEC Reports
      (i)
      were prepared in accordance with the requirements of the Securities Act or
      the
      Exchange Act, as the case may be, and the rules and regulations promulgated
      thereunder, and (ii) did not, at the time they were filed, or, if amended,
      as of
      the date of such amendment, contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary in
      order to make the statements made therein, in the light of the circumstances
      under which they were made, not misleading.  As of its filing date,
      each PARENT SEC Report complied as to form in all material respects with the
      applicable requirements of the Securities Act and the Exchange Act, as the
      case
      may be.  There has not occurred any material adverse change, or any
      development constituting a prospective material adverse change, in the
      condition, financial or otherwise, or in the earnings, business or operations
      of
      PARENT since its latest report on Form 10-QSB.  Neither the offer or
      sale of the PARENT Stock pursuant hereto nor the consummation of the
      transactions as contemplated by this Agreement give rise to any rights for
      or
      relating to the registration of shares of PARENT Common Stock or other
      securities of PARENT except as set forth on the PARENT Disclosure
      Schedule.  PARENT is not required to prepare and deliver to its
      shareholders and file with the Commission any proxy, information statement
      or
      similar report in advance of the consummation of the transactions contemplated
      hereby, except for such reports as may need be filed in accordance with Form
      8-K
      and Schedule 14F-1.

    

    In
      the
      event that PARENT is not current in filing all PARENT SEC Reports when due,
      or
      in the event that PARENT is no longer eligible to have its securities quoted
      on
      the Electronic Bulletin Board maintained by the Nasdaq Stock Market, Inc. on
      the
      Closing Date, TARGET may elect to terminate this Agreement.

    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF TARGET

     

    Except
      as set forth in the TARGET SEC
      Reports or the TARGET Disclosure Schedule, disclosure in any one of which shall
      apply to any and all representations and warranties made in this Agreement,
      and
      except as otherwise disclosed in writing by TARGET to PARENT, TARGET hereby
      represents and warrants to PARENT, as of the date of this Agreement and as
      of
      the Effective Time, as follows:

    

    SECTION
      3.01  ORGANIZATION, STANDING AND POWER

    

    (i)           
      TARGET is a Nevada corporation duly formed, validly existing and in good
      standing under the laws of the State of Nevada and has full corporate power
      and
      authority to conduct its business as presently conducted by it and to enter
      into
      and perform this Agreement and to carry out the transactions contemplated by
      this Agreement. TARGET is duly qualified to do business in each state or other
      jurisdiction it owns or leases real property and where the failure to be so
      qualified and in good standing would have a Material Adverse Effect. A schedule
      of TARGET’S subsidiaries is attached hereto as Schedule 3.04, which discloses
      TARGET’S interests in any corporation, partnership (general or limited), limited
      liability company or other entity, whether foreign or domestic (collectively
      such ownership interests including capital stock).

    

    SECTION
      3.02  CAPITALIZATION

    

    The
      authorized capital stock of TARGET
      consists of 125,000,000 shares of common stock, $0.0002 par value per share,
      and
      15,000,000 shares of preferred stock, $.0001 par value per share. As of the
      date
      of this Agreement, there were approximately 93,004,647 shares of common stock
      issued and outstanding, and there were 3,350,750 shares of preferred stock
      issued and outstanding. Except as disclosed on Schedule 3.02(a)
      hereto, no shares have been reserved for issuance to any person, and there
      are
      no other outstanding rights, warrants, options or agreements for the purchase
      of
      capital stock from TARGET except as provided in this Agreement. Except as
      disclosed on Schedule
      3.02(b) hereto, no Person is entitled to any rights with respect to the
      issuance or transfer of the Issuable Shares. The outstanding shares are validly
      issued, fully paid, non-assessable, and have been issued in compliance with
      all
      state and federal securities laws or other Applicable Law.

    

    SECTION
      3.03  AUTHORITY FOR AGREEMENT

    

    The
      execution, delivery and performance
      of this Agreement by TARGET has been duly authorized by all necessary corporate
      or company action, as the case may be, and this Agreement constitutes the valid
      and binding obligation of TARGET, enforceable against it in accordance with
      its
      terms, except as enforceability may be affected by bankruptcy, insolvency or
      other laws of general application affecting the enforcement of creditors'
      rights. The execution and consummation of the transactions contemplated by
      this
      Agreement and compliance with its provisions by TARGET will not violate any
      provision of Applicable Law and will not conflict with or result in any breach
      of any of the terms, conditions, or provisions of, or constitute a default
      under, its certificate of incorporation or bylaws, or, in any material respect,
      any indenture, lease, loan agreement or other agreement instrument to which
      TARGET is a party or by which it or any of its properties are bound, or any
      decree, judgment, order, statute, rule or regulation applicable to TARGET except
      to the extent that any breach or violation of any of the foregoing would not
      constitute or result in a Material Adverse Effect.

    

    SECTION
      3.04  SUBSIDIARIES

    

    Except
      as disclosed on Schedule 3.04 hereof,
      TARGET has no other subsidiaries.

     

    
      SECTION
        3.05 STOCKHOLDERS 

       

    

    Except
      as disclosed on Schedule 3.05, there
      are no other holders of the TARGET Common Stock.

    

    SECTION
      3.06  GOVERNMENTAL CONSENT

    

    No
      consent, waiver, approval, order or
      authorization of, or registration, declaration or filing with, any court,
      administrative agency or commission or other federal, state, county, local
      or
      other foreign governmental authority,instrumentality,
      agency or commission or any third party, including a party to any agreement
      with
      TARGET, is required by or with respect to TARGET in connection with the
      execution and delivery of this Agreement or the consummation of the transactions
      contemplated hereby, except for (i) such consents, waivers, approvals, orders,
      authorizations, registrations, declarations and filings as may be required
      under
      applicable securities laws thereby, and (ii) the filing of the Certificate
      of
      Merger with the Secretary of State of the State of Nevada.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    SECTION
      3.07  STATUS OF TARGET; FINANCIAL STATEMENTS

    

    (i) Currently
      the shares of common stock of TARGET are quoted on the OTC:BB.

    

    (ii) Target
      is
      a reporting company.

    

    (iii) TARGET
      has made available to PARENT copies of its audited financial statements as
      of
      December 31, 2003, 2004 and 2005 for the three fiscal years then ended
      (collectively, “TARGET
      Financial Statements”).

    

    (iv) The
      TARGET Financial Statements (i) are consistent in all material respects with
      the
      books and records of TARGET; (ii) have been or will be prepared in accordance
      with GAAP consistently applied; (iii) reflect and provide adequate reserves
      and
      disclosures in respect of all liabilities of TARGET, including all contingent
      liabilities, as of the respective dates of the Financial Statements, and (iv)
      present fairly in all material respects the financial position of TARGET at
      such
      dates and the results of operations and cash flows of TARGET for the periods
      then ended.

    

    (v) Except
      as
      otherwise disclosed in the TARGET Disclosure Schedule or in the TARGET Financial
      Statements, TARGET does not have any liabilities or obligations that would
      be
      required to be set forth in TARGET Financial Statements in accordance with
      GAAP.

     

    
      SECTION
        3.08 LITIGATION 

       

    

    Except
      as otherwise disclosed in the
      TARGET Disclosure Schedule there is no action, suit, investigation, audit or
      proceeding pending against, or to the best knowledge of TARGET, threatened
      against or affecting, TARGET or any of its assets or properties before any
      court
      or arbitrator or any governmental body, agency or official.

    

    SECTION
      3.09  RESTRICTIONS ON BUSINESS ACTIVITIES

    

    There
      is no agreement (non-compete or
      otherwise), commitment, judgment, injunction, order or decree to which TARGET
      is
      a party or otherwise binding upon TARGET which has or may have the effect of
      prohibiting or impairing any business practice of TARGET, any acquisition of
      property (tangible or intangible) by TARGET or the conduct of business by
      TARGET.  Without limiting the foregoing, TARGET has not entered into
      any agreement under which TARGET is restricted from selling, licensing or
      otherwise distributing any of its technology or products to or providing
      services to, customers or potential customers or any class of customers, in
      any
      geographic area, during any period of time or in any segment of the
      market.

     

    
      SECTION
        3.10 INTERESTED PARTY TRANSACTIONS 

       

    

    Intentionally
      omitted.

    

    SECTION
      3.11  COMPLIANCE WITH APPLICABLE LAWS

    

    To
      the Knowledge of TARGET, the
      business of TARGET has not been, and is not being, conducted in violation of
      any
      Applicable Law, except for possible violations which individually or in the
      aggregate have not had and are not reasonably likely to have a Material Adverse
      Effect. No investigation or review by any governmental entity with respect
      to
      TARGET is pending or, to the Knowledge of TARGET, threatened, nor has any
      governmental entity indicated an intention to conduct the same, except for
      investigations or reviews which individually or in theaggregate
      would not have, nor be reasonably likely to have, a Material Adverse
      Effect.

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    SECTION
      3.12  GOVERNMENTAL AUTHORIZATION

    

    Schedule
      3.12
      accurately lists each consent, license, permit, grant or other authorization
      issued to TARGET by a governmental entity (i) pursuant to which TARGET currently
      operates or holds any interest in any of their properties or (ii) which is
      required for the operation of the business of TARGET or the holding of any
      such
      interest (collectively, the “TARGET
      Authorizations”).  The TARGET Authorizations are in full force
      and effect and constitute all TARGET Authorizations required to permit TARGET
      to
      operate or conduct its business or hold any interest in its properties or
      assets.

     

    
      SECTION
        3.13 ABSENCE OF CHANGES 

       

    

    Since
      the TARGET Financial Statements
      Date there has not been:

    

    (i)           
      any event, occurrence, development or state of circumstances or facts which
      would, individually or in the aggregate, have a Material Adverse Effect on
      TARGET;

    

    (ii)           
      any amendment of any material term of any outstanding security of
      TARGET;

    

    (iii)           
      any incurrence, assumption or guarantee by TARGET of any indebtedness for
      borrowed money;

    

    (iv)           
      any creation or other incurrence by TARGET of any Lien on any material
      asset;

    

    (v)           
      the making of any loan, advance or capital contributions to or investment in
      any
      Person;

    

    (vi)           
      any damage, destruction or other casualty loss (whether or not covered by
      insurance) affecting the business or any asset(s) of TARGET which would,
      individually or in the aggregate, have a Material Adverse Effect on
      TARGET;

    

    (vii)           
      any transaction or commitment made, or any contract or agreement entered into,
      by TARGET or any relinquishment by TARGET of any contract or other
      right;

    

    (viii)           
      any change in any method of accounting, method of tax accounting, or accounting
      practice by TARGET;

    

    (ix)           
      any (a) grant of any severance or termination pay to any current or former
      director, officer or employee of TARGET, (b) increase in benefits payable under
      any existing severance or termination pay policies or employment agreements,
      (c)
      entering into any employment, deferred compensation or other similar agreement
      (or any amendment to any such existing agreement) with any current or former
      director, officer or employee of TARGET, (d) establishment, adoption or
      amendment (except as required by applicable law) of any collective bargaining,
      bonus, profit sharing, thrift, pension, retirement, deferred compensation,
      compensation, stock option, restricted stock or other benefit plan or
      arrangement covering any current or former director, officer or employee of
      TARGET, or (e) increase in compensation, bonus or other benefits payable or
      otherwise made available to any current or former director, officer or employee
      of TARGET;

    

    (x)           
      any labor dispute, other than routine individual grievances; or

    

    (xi)           
      any tax election or any settlement or compromise of any tax liability, in either
      case that is material to TARGET.

    

    SECTION
      3.14  OPERATIONS SINCE FINANCIAL STATEMENTS DATE

    

    Since
      the TARGET Financial Statements
      Date, except for as contemplated by this Agreement or in the TARGET Financial
      Statements, TARGET:

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (i)           
      has operated its businesses substantially as it was operated prior to that
      date
      and only in the ordinary course;

    

    (ii)           
      has not declared or otherwise become liable with respect to any dividend or
      distribution of cash, assets or capital stock;

    

    (iii)           
      has maintained or kept current its books, accounts, records, payroll, and
      filings in the usual and ordinary course of business, consistent in all material
      respects with past practice; and

    

    (iv)           
      has not made any capital expenditure, commitment or investment other than in
      the
      ordinary course of business.

    

    SECTION
      3.15  NO UNDISCLOSED LIABILITIES

    

    Except
      as set forth on Schedule 3.15 hereto,
      there are no liabilities or debts of TARGET of any kind whatsoever, whether
      accrued, contingent, absolute, determined, determinable or otherwise, and there
      is no existing condition, situation or set of circumstances which could
      reasonably be expected to result in such a liability or debt.

     

    
      SECTION
        3.16 ACCOUNTS RECEIVABLE 

       

    

    (i) TARGET
      has made available to SUB a list of all consolidated accounts receivable of
      TARGET (“Accounts
      Receivable”) as of June 30, 2007 along with a range of days elapsed since
      the date of each invoice.

    

    (ii)           
      Except as set forth on Schedule 3.16(a), all
      Accounts Receivable of TARGET arose in the ordinary course of business and
      are
      collectible except to the extent of reserves therefore set forth in the TARGET
      Financial Statements Date.  Except as set forth on Schedule 3.16(b), no
      person has any Lien on any of such Accounts Receivable and no request or
      agreement for deduction or discount has been made with respect to any of such
      Accounts Receivable.

    

    SECTION
      3.17  INSURANCE

     

    TARGET
      has obtained and maintained in
      full force and effect insurance with responsible and reputable insurance
      companies or associations in such amounts, on such terms and covering such
      risks, including fire and other risks insured against by extended coverage,
      as
      is reasonably prudent.  With respect to the insurance policies and
      fidelity bonds covering the assets, business, equipment, properties, operations,
      employees, officers and directors of TARGET, there is no claim by TARGET pending
      under any of such policies or bonds as to which coverage has been questioned,
      denied or disputed by the underwriters of such policies or bonds.  All
      premiums due and payable under all such policies and bonds have been
      paid.  TARGET is otherwise in material compliance with the terms of
      such policies and bonds (or other policies and bonds providing substantially
      similar insurance coverage).  TARGET has no Knowledge of any
      threatened termination of, or material premium increase with respect to, any
      of
      such policies.

    

    SECTION
      3.18  TITLE TO PROPERTIES; LIENS

    

    TARGET
      does not own any real
      property.  All of the assets of TARGET, except those disposed of in
      the ordinary course of business, are free and clear of all Liens, security
      interests, charges and encumbrances, except (i) as disclosed on the TARGET
      Financial Statements, (ii) Liens for current taxes not yet due and payable,
      (iii) Liens in favor of any lessor with respect to capital lease obligations
      disclosed in Schedule
      3.18 attached hereto, (iv) such imperfections of title or zoning
      restrictions, easements or encumbrances, if any, as do not materially interfere
      with the present use of such property or assets, and (vi) Liens which arise
      by
      operation of law.

     

    
      SECTION
        3.19 MATERIAL CONTRACTS 

       

    

    Except
      for:  (i) contracts
      with clients and other contracts executed by TARGET in the ordinary course
      of
      business; (ii) employment agreements with officers; and (iii) other material
      contracts which are listed on Schedule 3.19(a)
      hereof, TARGET is not a party to or bound by any material indenture, lease,
      license, loan agreement, otheragreement or other instrument
      (collectively, the “Material
      Contracts”).  Except as disclosed on Schedule
      3.19(b)
      hereof, TARGET’s Material Contracts are enforceable in accordance with their
      respective terms, and to the knowledge of TARGET, TARGET is not in violation
      of,
      and has received no notice of being in violation of such Material
      Contracts.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    
      SECTION
        3.20 NON-CONTRAVENTION 

       

    

    The
      execution and delivery by TARGET of
      this Agreement and the consummation by TARGET of the transactions contemplated
      hereby and performance of their obligations hereunder do not and will not (i)
      violate the Certificate of Incorporation or Bylaws of TARGET, (ii) violate
      any
      applicable law, rule, regulation, judgment, injunction, order or decree, (iii)
      require any consent or other action by any Person under, constitute a default
      under, result in a violation of, conflict with, or give rise to any right of
      termination, cancellation or acceleration of any right or obligation of TARGET,
      or to a loss of any benefit to which TARGET is entitled under any provision
      of
      any agreement or other instrument binding upon TARGET, or any license,
      franchise, permit, certificate, approval or other similar authorization
      affecting, or relating in any way to, the assets or business of TARGET, or
      (iv)
      result in the creation or imposition of any Lien (as defined herein) on any
      asset of TARGET.

     

    SECTION
      3.21 LABOR RELATIONS 

     

    TARGET is not a party to any
      collective bargaining agreement and, to the Knowledge of TARGET, no
      organizational efforts are presently being made with respect to any employees
      of
      TARGET.  TARGET has complied in all material respects with all
      applicable laws (including, but not limited to, the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”)), and
      regulations relating to employment matters including, but not limited to, those
      relating to wages, hours, discrimination and payment of social security and
      similar taxes.

     

    
      SECTION
        3.22 TAX RETURNS AND PAYMENT 

       

    

    Except
      as disclosed on Schedule 3.22 hereof,
      TARGET has filed all material Tax Returns required from it and has paid all
      Taxes shown thereon to be due, except as reflected in the TARGET Financial
      Statements and except for Taxes being contested in good faith and except for
      such delinquent tax returns that TARGET is required to file within 90 days
      after
      the Effective Time of the Merger.   Except as disclosed in the
      TARGET Financial Statements, there is no material claim for Taxes that is a
      lien
      against the property of TARGET other than liens for taxes not yet due and
      payable.  TARGET has not received notification of any audit of any Tax
      Return of TARGET being conducted or pending by a Tax Authority where an adverse
      determination could have a Material Adverse Effect, no extension or waiver
      of
      the statute of limitations on the assessment of any taxes has been granted
      by
      TARGET which is currently in effect, and TARGET is not a party to any agreement,
      contract or arrangement with any Tax Authority, which may result in the payment
      of any material amount in excess of the amount reflected on the TARGET Financial
      Statements. .  TARGET is not a party
      to
      any tax-sharing or allocation agreement, nor does it owe any amount under any
      tax-sharing or allocation agreement. TARGET has never been (nor does it have
      any
      liability for unpaid Taxes because it once was) a member of an “affiliated
      group” within the meaning of Code Section 1502.

     

    
      SECTION
        3.23 INTELLECTUAL PROPERTY 

    

     

    Except
      as disclosed on Schedule 3.23 hereof,
      TARGET has title to all material patents, trademarks or trade secrets, or
      adequate licenses and rights to use the patents, trademarks, copyrights, trade
      names and trade secrets of others, necessary to the conduct of its business.
      The
      business of TARGET is being carried on without known conflicts with patents,
      licenses, trademarks, copyrights, trade names and trade secrets of others and,
      to the Knowledge of TARGET, no other persons are conducting their businesses
      in
      conflict with patents, licenses, trademarks, copyrights, trade names and trade
      secrets used by TARGET.

     

    
      SECTION
        3.24 ENVIRONMENTAL MATTERS 

       

    

    To
      the Knowledge of TARGET: (i) TARGET
      has obtained all material permits and licenses which are required in connection
      with its business under all applicable laws and regulations relating to
      pollution or protection of the environment (the “Environmental Laws”)
      and is in material compliance therewith; (ii) TARGET has at all times conducted
      its business in material compliance with all Environmental Laws and TARGET
      has
      not receivedany written notice of any past, present or
      future events, conditions or circumstances, which would interfere with or
      prevent material compliance or continued material compliance with any
      Environmental Laws or which form the basis of any material claim, demand or
      investigation, based on or related to TARGET’s business or other activities;
      (iii) there is no civil, criminal or administrative action or proceeding pending
      or threatened against TARGET, arising under any Environmental Laws; and (iv)
      there does not exist, and at no time since TARGET acquired any premises leased
      or used by it, has there existed any conditions that TARGET believes would
      require remediation by TARGET under any Environmental Laws

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    
      SECTION
        3.25 EMPLOYMENT AGREEMENTS 

    

    

    Schedule
      3.25 hereof
      lists each employment agreement between TARGET and any director, officer or
      employee of TARGET and copies of all such agreements have been provided to
      SUB
      prior to the date hereof. Except as provided in such employment agreements,
      all
      other employees of TARGET are terminable at will without expense or liability
      to
      TARGET other than as may be set forth in said Schedule 3.25
      attached hereto or as may be required by law.

    

    
      SECTION
        3.26 WARRANTY CLAIMS 

    

    

    To
      the Knowledge of TARGET and except
      as set forth in Schedule 3.26
      attached hereto, there are no pending or threatened material claims against
      TARGET for any work performed by TARGET for any client, including but not
      limited to, any services rendered under any warranties.

    

    SECTION
      3.27  BROKERS’ AND FINDERS’ FEES

    

    TARGET
      has not incurred, nor will it
      incur, directly or indirectly, any liability for brokers’ or finders’ fees or
      agents’ commissions or investment bankers’ fees or any similar charges in
      connection with this Agreement or any transaction contemplated
      hereby.

    

    SECTION
      3.28  BOARD APPROVAL

    

    The
      Board of Directors of TARGET has
      approved this Agreement and the transactions contemplated hereby and will submit
      it to the Stockholders for their approval.

    

    SECTION
      3.29  FULL DISCLOSURE

    

    The
      representations and warranties of
      TARGET contained in this Article III of this Agreement or to be furnished in
      or
      in connection with documents mailed or delivered to the Stockholders of TARGET
      in connection with soliciting their consent to this Agreement, do not contain
      or
      will not contain, any untrue statement of a material fact, or omit to state
      a
      material fact required to be stated herein or therein or necessary to make
      the
      statements herein or therein, in the light of the circumstances under which
      they
      were made, not misleading.

    

    SECTION
      3.30  TARGET SEC REPORTS

    

    Except
      as
      disclosed in the TARGET Schedules, TARGET has filed all forms, statements,
      reports and documents required to be filed or, if permissible, furnished by
      it
      with the Commission since such forms have been required. The TARGET SEC Reports
      (i) were prepared in accordance with the requirements of the Securities Act
      or
      the Exchange Act, as the case may be, and the rules and regulations promulgated
      thereunder, and (ii) did not, at the time they were filed, or, if amended,
      as of
      the date of such amendment, contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary in
      order to make the statements made therein, in the light of the circumstances
      under which they were made, not misleading.  As of its filing date,
      each TARGET SEC Report complied as to form in all material respects with the
      applicable requirements of the Securities Act and the Exchange Act, as the
      case
      may be.

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    ARTICLE
      IV

     

    CERTAIN
      COVENANTS AND AGREEMENTS

    

    
      SECTION
        4.01 COVENANTS OF TARGET 

    

    

    TARGET
      covenants and agrees that,
      during the period from the date of this Agreement until the Closing Date, TARGET
      shall conduct its business as presently operated and solely in the ordinary
      course, and consistent with such operation, and, in connection therewith,
      without the written consent of SUB and PARENT:

    

    (i)           
      shall not amend its Certificate of Incorporation or Bylaws;

    

    (ii)           
      shall not pay or agree to pay to any employee, officer or director compensation
      that is in excess of the current compensation level of such employee, officer
      or
      director other than salary increases or payments made in the ordinary course
      of
      business or as otherwise provided in any contracts or agreements with any such
      employees;

    

    (iii)           
      shall not merge or consolidate with any other entity or acquire or agree to
      acquire any other entity;

    

    (iv)           
      shall not sell, transfer, or otherwise dispose of any assets required for the
      operations of TARGET’s business except in the ordinary course of business
      consistent with past practices;

    

    (v)           
      shall not create, incur, assume, or guarantee any indebtedness for money
      borrowed except in the ordinary course of business, or create or suffer to
      exist
      any mortgage, lien or other encumbrance on any of its assets, except those
      in
      existence on the date hereof or those granted pursuant to agreements in effect
      on the date of this Agreement or provided by SUB and PARENT and/or any of their
      affiliates;

    

    (vi) shall
      not
      make any capital expenditure or series of capital expenditures except in the
      ordinary course of business, with the exception of the acquisition referred
      to
      in Section 4.01(iii) hereof;

    

    (vii) shall
      not
      declare or pay any dividends on or make any distribution of any kind with
      respect to the TARGET Common Stock;

    

    (viii)           
      shall maintain its facilities, assets and properties in reasonable repair,
      order
      and condition, reasonable wear and tear excepted, and to notify SUB and PARENT
      immediately in the event of any material loss or damage to any of TARGET’s
      material assets;

    

    (ix)           
      shall maintain in full force and effect all present insurance coverage of the
      types and in the amounts as are in effect as of the date of this
      Agreement;

    

    (x)           
      shall seek to preserve the present employees, reputation and business
      organization of TARGET and TARGET’s relationship with its clients and others
      having business dealings with it;

    

    (xi)           
      shall not issue any additional TARGET Common Stock or take any action affecting
      the capitalization of TARGET;

    

    (xii)           
      shall use commercially reasonable efforts to comply with and not be in default
      or violation under any law, regulation, decree or order applicable to TARGET’s
      business, operations or assets where such violation would have a Material
      Adverse Effect;

    

    (xiii)           
      shall not grant any severance or termination pay to any director, officer or
      any
      other employees of TARGET, other than pursuant to agreements in effect on the
      date of this Agreement or as otherwise disclosed in the documents delivered
      pursuant to this Agreement;

    

    (xiv)           
      shall not change any of the accounting principles or practices used by it,
      except as may be required as a result of a change in law or in GAAP, whether
      in
      respect of Taxes or otherwise;

    

    (xv)           
      shall not terminate or waive any right of substantial value other than in the
      ordinary course of business; and

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

    (xvi) shall
      not
      enter into any material contract or commitment other than in the ordinary course
      of business.

     

    SECTION
      4.02  COVENANTS OF PARENT

    

    PARENT
      covenants and agrees that,
      during the period from the date of this Agreement until the Closing Date, PARENT
      shall conduct its business as presently operated and solely in the ordinary
      course, and consistent with such operation, and, in connection therewith,
      without the written consent of TARGET:

    

    (i)           
      Employment
      Additionally, PARENT shall employ such employees of TARGET as determined by
      PARENT, upon such terms and conditions as shall be acceptable to PARENT and
      such
      individuals.

    

    (ii)           
      Resignation of
      Directors, Nomination of Directors and Officers.  PARENT shall,
      prior to the Closing, cause none of its directors to resign subsequent to the
      Effective Time.  In addition, PARENT agrees and accepts the officers
      and directors of the PARENT following the Merger of persons listed on Schedule 1.05(a),
      until the earlier of their death, resignation or removal or until their
      respective successors are duly appointed and qualified.

    

    (iii)           
      shall not amend its Certificate of Incorporation or Bylaws;

    

    (iv)           
      shall not pay or agree to pay to any employee, officer or director compensation
      that is in excess of the current compensation level of such employee, officer
      or
      director other than salary increases or payments made in the ordinary course
      of
      business or as otherwise provided in any contracts or agreements with any such
      employees;

    

    (v)           
      shall not merge or consolidate with any other entity or acquire or agree to
      acquire any other entity;

    

    (vi)           
      shall not sell, transfer, or otherwise dispose of any assets required for the
      operations of PARENT’s business except in the ordinary course of business
      consistent with past practices;

    

    (vii)           
      shall not create, incur, assume, or guarantee any indebtedness for money
      borrowed except in the ordinary course of business, or create or suffer to
      exist
      any mortgage, lien or other encumbrance on any of its assets, except those
      in
      existence on the date hereof or those granted pursuant to agreements in effect
      on the date of this Agreement or provided by TARGET and/or any of its
      affiliates;

    

    (viii)           
      shall not make any capital expenditure or series of capital expenditures except
      in the ordinary course of business;

    

    (ix)           
      shall not declare or pay any dividends on or make any distribution of any kind
      with respect to its securities;

    

    (x)           
      shall maintain its facilities, assets and properties in reasonable repair,
      order
      and condition, reasonable wear and tear excepted, and to notify TARGET
      immediately in the event of any material loss or damage to any of PARENT’s
      material assets;

    

    (xi)           
      shall maintain in full force and effect all present insurance coverage of the
      types and in the amounts as are in effect as of the date of this
      Agreement;

    

    (xii)           
      shall seek to preserve the present employees, reputation and business
      organization of SUB and PARENT and SUB’s and PARENT’s relationship with its
      clients and others having business dealings with it;

    

    (xiii)           
      shall not issue any securities other than as contemplated hereby.

    

    (xiv)           
      shall use commercially reasonable efforts to comply with and not be in default
      or violation under any law, regulation, decree or order applicable to SUB’s and
      PARENT’s business, operations or assets where such violation would have a
      Material Adverse Effect;

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    (xv)           
      shall not grant any severance or termination pay to any director, officer or
      any
      other employees of SUB and PARENT except as otherwise disclosed in the documents
      delivered pursuant to this Agreement;

    

    (xvi)           
      shall not change any of the accounting principles or practices used by it,
      except as may be required as a result of a change in law or in GAAP, whether
      in
      respect of Taxes or otherwise;

    

    (xvii) shall
      not
      terminate or waive any right of substantial value other than in the ordinary
      course of business;

    

    (xviii) shall
      not
      enter into any material contract or commitment other than in the ordinary course
      of business; and

    

    (xix) during
      the period from the date of this Agreement until the Closing Date, SUB and
      PARENT shall conduct its business as presently operated and solely in the
      ordinary course, and consistent with such operation, and, in connection
      therewith, without the written consent of TARGET.

    

    SECTION
      4.03  COVENANTS OF THE PARTIES

    

    (i)           
      Tax-free
      Reorganization.  The Parties intend that the transactions
      contemplated hereby qualify as a tax free reorganization under Code Section
      368(a)(1)(A) and the parties will take the position for all purposes that the
      transactions contemplated hereby qualify as a reorganization under such
      Section.  In addition, the Parties covenant and agree that they will
      not engage in any action, or fail to take any action, which action or failure
      to
      act would reasonably be expected to cause the Merger to fail to qualify as
      a
“reorganization” under Code Section 368(a), whether or not otherwise permitted
      by the provisions of this Agreement;

    

    (ii)           
      Announcement.  Neither
      TARGET, on the one hand, nor SUB and PARENT on the other hand, shall issue
      any
      press release or otherwise make any public statement with respect to this
      Agreement or the transactions contemplated hereby without the prior consent
      of
      the other Parties (which consent shall not be unreasonably withheld), except
      as
      may be required by applicable law or securities regulation. Notwithstanding
      anything in this Section 4.03 to the contrary, the Parties will, to the extent
      practicable, consult with each other before issuing, and provide each other
      the
      opportunity to review and comment upon, any such press release or other public
      statements with respect to this Agreement and the transactions contemplated
      hereby whether or not required by Applicable Law.

    

    (iii)           
      Notification of
      Certain Matters.  TARGET shall give prompt notice to SUB and
      PARENT, and SUB and PARENT shall give prompt notice to TARGET, of:

    

    (a)           
      The occurrence, or nonoccurrence, of any event the occurrence, or nonoccurrence,
      of which would be reasonably likely to cause any representation or warranty
      contained in this Agreement to be untrue or inaccurate in any material respect
      at or prior to the Effective Time; and

    

    (b)           
      Any material failure of TARGET on the one hand, or SUB and PARENT, on the other
      hand, to comply with or satisfy any covenant, condition or agreement to be
      complied with or satisfied by it hereunder.

    

    (iv)           
      Reasonable Best
      Efforts.  Before Closing, upon the terms and subject to the
      conditions of this Agreement, the Parties agree to use their respective
      reasonable best efforts to take, or cause to be taken, all actions, and to
      do,
      or cause to be done, all things necessary, proper or advisable (subject to
      applicable laws) to consummate and make effective the Merger and other
      transactions contemplated by this Agreement as promptly as practicable
      including, but not limited to:

    

    (a)           
      The preparation and filing of all forms, registrations and notices required
      to
      be filed to consummate the Merger, including without limitation, the corporate
      resolutions to be sent to the SUB Stockholders (including the definitive and any
      amendments thereto, the “Shareholder Resolution”), and the other approvals,
      consents, orders, exemptions or waivers by any third party or governmental
      entity; and

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    

    (b)           
      The satisfaction of the other Parties' conditions precedent to
      Closing.

    

    (v)           
      Representation of
      Counsel. Each of the Parties has engaged separate counsel and have relied
      upon the advice provided by their counsel.  .

    

    (vi)           
      Shareholder
      Resolution.  SUB will use its reasonable best efforts to seek
      the approval of the SUB Stockholders for the Merger. As promptly as is
      reasonably practicable after the date of this Agreement, SUB shall deliver
      to
      its sole Stockholder a corporate resolution and copy of this Agreement for
      the
      purpose of approving and authorizing this Agreement.

    

    (vii)           
      Access to
      Information

    

    (a)           
      Inspection by
      TARGET.  SUB and PARENT will make available for inspection by
      TARGET, during normal business hours and in a manner so as not to interfere
      with
      normal business operations, all of SUB’s and PARENT’s records (including tax
      records), books of account, premises, contracts and all other documents in
      SUB’s
      and PARENT’s possession or control that are reasonably requested by TARGET to
      inspect and examine the business and affairs of SUB and PARENT. SUB and PARENT
      will cause its managerial employees and regular independent accountants to
      be
      available upon reasonable advance notice to answer questions of TARGET
      concerning the business and affairs of SUB and PARENT.  TARGET will
      treat and hold as confidential any information they receive from SUB and PARENT
      in the course of the reviews contemplated by this Section
      4.03(vii).  No examination by TARGET will, however, constitute a
      waiver or relinquishment by TARGET of its rights to rely on SUB’s and PARENT’s
      covenants, representations and warranties made herein or pursuant
      hereto.

    

    (b)           
      Inspection by
      SUB.  TARGET will make available for inspection by SUB and
      PARENT, during normal business hours and in a manner so as not to interfere
      with
      normal business operations, all of TARGET’s records (including tax records),
      books of account, premises, contracts and all other documents in TARGET’s
      possession or control that are reasonably requested by SUB and PARENT to inspect
      and examine the business and affairs of TARGET. TARGET will cause its managerial
      employees and regular independent accountants to be available upon reasonable
      advance notice to answer questions of SUB and PARENT concerning the business
      and
      affairs of TARGET.  SUB and PARENT will treat and hold as confidential
      any information they receive from TARGET in the course of the reviews
      contemplated by this Section 4.03 (vii).  No examination by SUB and
      PARENT will, however, constitute a waiver or relinquishment by SUB and PARENT
      of
      its rights to rely on TARGET’s covenants, representations and warranties made
      herein or pursuant hereto.

    

    ARTICLE
      V

     

    CONDITIONS
      PRECEDENT

    

    SECTION
      5.01  CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS

    

    The
      obligations of the Parties as
      provided herein shall be subject to each of the following conditions precedent,
      unless waived by the parties:

    

    (i)           
      Consents,
      Approvals.  The Parties shall have obtained all consents and
      approvals of their respective boards of directors and stockholders, and all
      material consents, including any material consents and waivers by the Parties’
respective lenders and other third-parties, if necessary, to the consummation
      of
      the transactions contemplated by this Agreement.

    

    (ii)           
      Absence of Certain
      Litigation.  No action or proceeding shall be threatened or
      pending before any governmental entity or authority which, in the reasonable
      opinion of counsel for the Parties, is likely to result in a restraint,
      prohibition or the obtaining of damages or other relief in connection with
      this
      Agreement or the consummation of the Merger.

    

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    SECTION
      5.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUB AND PARENT 

    The
      obligations of SUB and PARENT as
      provided herein shall be subject to each of the following conditions precedent,
      unless waived by SUB and PARENT:

    

    (i)           
      Consents And
      Approvals.  TARGET shall have obtained all material consents,
      including any material consents and waivers by TARGET's lenders and other
      third-parties, if necessary, to the consummation of the transactions
      contemplated by this Agreement.

    

    (ii)           
      Representations
      and
      Warranties. The representations and warranties by TARGET in Article III
      herein shall be true and accurate in all material respects on and as of the
      Closing Date with the same force and effect as though such representations
      and
      warranties had been made at and as of the Closing Date, except to the extent
      that any changes therein are specifically contemplated by this
      Agreement.

    

    (iii)           
      Performance.
      TARGET shall have performed and complied in all material respects with all
      agreements to be performed or complied with by them pursuant to this Agreement
      prior at or prior to the Closing.

    

    (iv)           
      Proceedings and
      Documents. All corporate and other proceedings in connection with the
      transactions contemplated by this Agreement and all documents and instruments
      incident to such transactions shall be reasonably satisfactory in substance
      and
      form to SUB and PARENT and its counsel, and SUB and its counsel shall have
      received all such counterpart originals (or certified or other copies) of such
      documents as they may reasonably request.

    

    (vi)           
      Certificate of Good
      Standing. TARGET shall have delivered to SUB and PARENT a certificate as
      to the good standing of TARGET in the State of Nevada certified by the Secretary
      of State of the State of Nevada on or within 20 calendar days of the Closing
      Date.

    

    (vii)           
      Material
      Changes. Except as contemplated by this Agreement, since the date hereof,
      TARGET shall not have suffered a Material Adverse Effect.

    

    (viii) Certified
      List of
      Shareholders. TARGET shall have delivered to PARENT a certified list of
      shareholders and their shareholdings from the Transfer Agent, as well as a
      schedule showing any options, warrants, scrip or any other rights to purchase
      stock, plus the terms of any such purchase rights.

    

    (ix) Audited
      Financial Statements
      of TARGET, DPC and A4. TARGET shall have been delivered to PARENT, a
      certified list of shareholders and their shareholdings from the Transfer Agent,
      as well as a schedule showing any options, warrants, scrip or any other rights
      to purchase stock, plus the terms of any such purchase rights.

    

    
      SECTION
        5.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TARGET 

    

    

    The
      obligation of TARGET on the Closing
      Date as provided herein shall be subject to the satisfaction, on or prior to
      the
      Closing Date, of the following conditions precedent, unless waived by
      TARGET:

    

    (i)           
      Consents And
      Approvals.  SUB and PARENT shall have obtained the consent and
      approval of their respective lenders and other third-parties, if necessary,
      to
      the consummation of the transactions contemplated by this
      Agreement.

    

    (ii)           
      Representations
      And
      Warranties. The representations and warranties by SUB and PARENT in
      Article II herein shall be true and accurate in all material respects on and
      as
      of the Closing Date with the same force and effect as though such
      representations and warranties had been made at and as of the Closing Date,
      except to the extent that any changes therein are specifically contemplated
      by
      this Agreement.

    

    (iii)           
      Performance.
      SUB and PARENT shall have performed and complied in all material respects with
      all agreements to be performed or complied with by them pursuant to this
      Agreement prior to or at the Closing.

    

    (iv)           
      Proceedings And
      Documents. All corporate, company and other proceedings in connection
      with

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    the
      transactions contemplated by this Agreement and all documents and instruments
      incident to such transactions shall be reasonably satisfactory in substance
      and
      form to TARGET and its counsel, and TARGET and its counsel shall have received
      all such counterpart originals (or certified or other copies) of such documents
      as they may reasonably request.

    

    (v)           
      Certificate of Good
      Standing. SUB and PARENT shall have delivered to TARGET a certificate as
      to the good standing of SUB certified by the Secretary of State of the State
      of
      Nevada, on or within 2 business days of the Closing Date.

    

    (vi) Material
      Changes.
      Except as contemplated by this Agreement, since the date hereof, SUB shall
      not
      have suffered a Material Adverse Effect.

    

    (vii) Certified
      List of
      Shareholders. PARENT shall have delivered to TARGET a certified list of
      shareholders and their shareholdings from the Transfer Agent, as well as a
      schedule showing any options, warrants, scrip or any other rights to purchase
      stock, plus the terms of any such purchase rights.

    

    (viii) FINANCING.
      Delivery
      of FINANCING as described in Section 1.12 herein.

    

    ARTICLE
      VI

     

    TERMINATION,
      AMENDMENT AND WAIVER

    

    SECTION
      6.01  TERMINATION

    

    This
      Agreement may be terminated and
      the Merger may be abandoned at any time prior to the Effective Time
      by:

    

    (i)           
      The mutual written consent of the Boards of Directors of the
      Parties;

    

    (ii)           
      Either SUB and PARENT, on the one hand, or TARGET, on the other hand, if any
      governmental entity or court of competent jurisdiction shall have issued an
      order, decree or ruling or taken any other action (which order, decree, ruling
      or other action the parties to this Agreement shall use their reasonable efforts
      to lift), which restrains, enjoins or otherwise prohibits the Merger or the
      acceptance for payment of, or payment for, Issuable Shares pursuant to the
      Merger and such order, decree, ruling or other action shall have become final
      and non-appealable;

    

    (iii)           
      SUB and PARENT, if TARGET shall have breached in any material respect any of
      their respective representations, warranties, covenants or other agreements
      contained in this Agreement, and the breach cannot be or has not been cured
      within 15 calendar days after the giving of written notice by SUB and PARENT
      to
      TARGET;

    

    (iv)           
      TARGET, if SUB and PARENT shall have breached in any material respect any of
      their representations, warranties, covenants or other agreements contained
      in
      this Agreement, and the breach cannot be or has not been cured within 15
      calendar days after the giving of written notice by TARGET to SUB and PARENT;
      or

    

    
      (ix)  Without
        any action on the part of the Parties if required by Applicable
        Law.

    

    

    (x) On
      January 31, 2008 if the Merger is not closed prior thereto, unless this date
      is
      extended by the mutual agreement in writing of the Parties prior
      thereto.

    

    (xi) TARGET
      and/or PARENT if the provisions of Section 4.02(iii) have not been
      satisfied.

    

    SECTION
      6.02  EFFECT OF TERMINATION

    

    If
      this Agreement is terminated as
      provided in Section 6.01, written notice of such termination shall be given
      by
      the terminating Party to the other Party specifying the provision of this
      Agreement pursuant to which such termination is made, this Agreement shall
      become null and void and there shall be no liability on the part of
      SUBand PARENT or TARGET; provided that nothing in this
      Agreement shall relieve any Party from any liability or obligation with respect
      to any willful breach of this Agreement.

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII

     

    CONFIDENTIALITY;
      NON-SOLICITATION; EXCLUSIVITY

    

    SECTION
      7.01  CONFIDENTIALITY

    

    SUB
      and PARENT, on the one hand, and
      TARGET, on the other hand, will keep confidential all information and documents
      obtained from the other, including but not limited to any information or
      documents provided pursuant to Section 4.03(vii) hereof, which are designated
      by
      such Party as confidential (except for any information disclosed to the public
      pursuant to a press release authorized by the Parties) and in the event the
      Closing does not occur or this Agreement is terminated for any reason, will
      promptly return such documents and all copies of such documents and all notes
      and other evidence thereof, including material stored on a computer, and will
      not use such information for its own advantage, except to the extent that (i)
      the information must be disclosed by law, (ii) the information becomes publicly
      available by reason other than disclosure by the Party subject to the
      confidentiality obligation, (iii) the information is independently developed
      without use of or reference to the other Party’s confidential information, (iv)
      the information is obtained from another source not obligated to keep such
      information confidential, or (v) the information is already publicly known
      or
      known to the receiving Party when disclosed as demonstrated by written
      documentation in the possession of such Party at such time.

    

    SECTION
      7.02  NON-SOLICITATION

    

    During
      the period from the date of this
      Agreement until the consummation or termination of this Agreement or the Merger
      and, in the event of the termination of this Agreement or the Merger for any
      reason, during the one (1) year period following the date of such termination,
      neither Party shall, without the consent of the other Party, directly or
      indirectly solicit the employment or engagement, as an employee or consultant,
      any “restricted employee” or encourage any “restricted employee” to leave the
      employment of the other Party or any subsidiary of the other Party.  A
“restricted employee” shall mean any person who is employed by a Party or any of
      its subsidiaries on the date of this Agreement or at any time during the six
      (6)
      months prior thereto.

    

    
      SECTION
        7.03 EXCLUSIVITY 

    

    

    Except
      for the transactions
      contemplated by this Agreement, none of the Parties shall (i) solicit, initiate,
      or encourage the submission of any proposal or offer relating to the acquisition
      of any capital stock or other voting securities or any substantial portion
      of
      the assets of such or any other Party hereto (including any acquisition
      structured as a merger, consolidation, or share exchange) or (ii) participate
      in
      any discussions or negotiations regarding, furnish any information with respect
      to, assist or participate in, or facilitate in any other manner any effort
      or
      attempt by any Person to do or seek any of the foregoing.  The Parties
      shall notify each other Party immediately if any Person makes any proposal,
      offer, inquiry, or contact with respect to any of the foregoing.

    

    ARTICLE
      VIII

     

    INDEMNIFICATION

    

    
      SECTION
        8.01 INDEMNIFICATION BY SUB AND PARENT 

    

    

    SUB
      and PARENT shall indemnify, defend
      and hold harmless, TARGET, and each person who is now, or has been at any time
      prior to the date hereof or who becomes prior to the Closing, an officer,
      director or partner of, TARGET or an employee of, TARGET and their respective
      heirs, legal representatives, successors and assigns (the “TARGET Indemnified
      Parties”) against all losses, claims, damages, costs, expenses (including
      attorneys’ fees), liabilities or judgments or amounts that are paid in
      settlement of or in connection with any threatened or actual claim, action,
      suit, proceeding or investigation based in whole or in part on or arising in
      whole or in part out of (i) any breach of this Agreement by SUB and PARENT,
      including but not limited to failure of any representation or warranty to be
      true and correct at or before the Closing, or (ii) any act, omission or conduct
      of any officer, director or agent of SUB and PARENT prior to the Closing,
      whether asserted or claimed prior to, or at or after, the Closing, or (iii)
      relating to the consummation of the transactions contemplated herein, and any
      action taken in connectiontherewith (“TARGET Indemnified
      Liabilities”).  Any TARGET Indemnified Party wishing to claim
      indemnification under this Section 8.01, upon learning of any such claim,
      action, suit, proceeding or investigation, shall notify SUB and PARENT, but
      the
      failure so to notify shall not relieve SUB and PARENT from any liability that
      it
      may have under this Section 8.01, except to the extent that such failure would
      materially prejudice SUB and PARENT.

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    
      SECTION
        8.02 INDEMNIFICATION BY TARGET 

    

    

    TARGET
      shall indemnify, defend and hold
      harmless SUB and PARENT and each person who is now, or has been at any time
      prior to the date hereof or who becomes prior to the Closing, an officer,
      director or partner of SUB and PARENT, or an employee of SUB and PARENT and
      their respective heirs, legal representatives, successors and assigns
      (collectively the “SUB Indemnified Parties”) against all losses, claims,
      damages, costs, expenses (including attorneys’ fees), liabilities or judgments
      or amounts that are paid in settlement of or in connection with any threatened
      or actual claim, action, suit, proceeding or investigation based in whole or
      in
      part on or arising in whole or in part out of (i) any breach of this Agreement
      by TARGET, including but not limited to failure of any representation or
      warranty to be true and correct at or before the Closing, or (ii) any act,
      omission or conduct of any officer, director or agent of TARGET prior to the
      Closing, whether asserted or claimed prior to, or at or after, the Closing,
      or
      (iii) relating to the consummation of the transactions contemplated herein,
      and
      any action taken in connection therewith (collectively “SUB Indemnified
      Liabilities”).  Any SUB Indemnified Party wishing to claim
      indemnification under this Section 8.02, upon learning of any such claim,
      action, suit, proceeding or investigation, shall notify TARGET, but the failure
      so to notify shall not relieve TARGET from any liability that it may have under
      this Section 8.02, except to the extent that such failure would materially
      prejudice TARGET.

    

    
      SECTION
        8.03 SURVIVAL OF INDEMNIFICATION 

    

    

    All
      rights to indemnification under
      this Article 8 shall survive the consummation of the Merger and the termination
      of this Agreement.  The provisions of this Article 8 are intended to
      be for the benefit of, and shall be enforceable by, each TARGET Indemnified
      Party and each SUB Indemnified Party, and his or her heirs and
      representatives.  No Party shall enter into any settlement regarding
      the foregoing without prior approval of the TARGET Indemnified Party or SUB
      Indemnified Party, as the case may be.

    

    ARTICLE
      IX

     

    MISCELLANEOUS

    

    SECTION
      9.01  NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES

    

    None
      of the representations and
      warranties in this Agreement or in any instrument delivered pursuant to this
      Agreement shall survive the Effective Time, except as set forth in Article
      VIII.
      All such representations and warranties will be extinguished on consummation
      of
      the Merger and none of the Parties nor any of their officers, directors,
      employees or stockholders shall be under any liability whatsoever with respect
      to any such representation or warranty after such time. This Section 9.01 shall
      not limit any covenant or agreement of the Parties which by its terms
      contemplates performance after the Effective Time.

    

    SECTION
      9.02  EXPENSES

    

    Except
      as contemplated by this
      Agreement, all costs and expenses incurred in connection with this Agreement
      and
      the consummation of the transactions contemplated by this Agreement shall be
      paid by the Party incurring such expenses.

    

    SECTION
      9.03  APPLICABLE LAW AND CONSENT TO JURISDICTION

    

    The
      interpretation and enforcement of
      this Agreement shall be exclusively governed by the laws of the State of Nevada
      as applied to agreements entered into and to be performed in such state. The
      parties hereto also consent to the exclusive jurisdiction and venue of the
      United States District Court—District of Nevada  in the event that any
      dispute among the parties arises from this Agreement or any other dispute among
      the parties hereto.

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    SECTION
      9.04  NOTICES

    

    All
      notices and other communications
      under this Agreement shall be in writing and shall be deemed to have been duly
      given or made as follows:

    

    (i)           
      If sent by registered or certified mail in the United States, return receipt
      requested, upon receipt;

    

    (ii)           
      If sent by reputable overnight air courier (such as Federal Express), 2 business
      days after being sent;

    

    (iii)           
      If sent by facsimile transmission, with a copy mailed on the same day in the
      manner provided in clauses (i) or (ii) above, when transmitted and receipt
      is
      confirmed by telephone; or

    

    
      	
               

            	
              (iv)

            	
              If
                otherwise actually personally delivered, when delivered.
                

            

    

    

    All
      notices and other communications
      under this Agreement shall be sent or delivered as follows:

    

    If
      to TARGET (a Nevada corporation),
      to:

    

    Paivis
      Corp

    #400
      3475
      Lenox Road

    Atlanta,
      GA, 30326

    Telephone:
      (404) 601-2885

    Attention:
      Edwin Kwong, Interim CEO

    

    with
      a copy to (which shall not
      constitute notice):

    

    Gregory
      Bartko, Esq.

    Law
      Office of Gregory Bartko

    3475
      Lenox Road, Suite 400

    Atlanta,
      GA  30326

    Telephone:
      (404) 238-0550

    Facsimile:  (404)
      238-0551

    Email:
      gbartko@mindspring.com

    

    If
      to SUB (Nevada corporation and
      PARENT (Delaware corporation), to:

    

    TRUSTCASH
      HOLDINGS, INC.

    400
      Park
      Avenue Suite 1420

     NY
      NT 10022

    

    Each
      Party may change its address by
      written notice in accordance with this Section.

    

    SECTION
      9.05  ENTIRE AGREEMENT

    

    This
      Agreement (including the documents
      and instruments referred to in this Agreement) contains the entire understanding
      of the Parties with respect to the subject matter contained in this Agreement,
      and supersedes and cancels all prior agreements, negotiations, correspondence,
      undertakings and communications of the Parties, oral or written, respecting
      such
      subject matter.

    

    SECTION
      9.06  ASSIGNMENT

    

    Neither
      this Agreement nor any of the
      rights, interests or obligations under this Agreement shall be assigned by
      any
      of the Parties (whether by operation of law or otherwise) without the prior
      written consent of the other Parties. Subject to the immediately foregoing
      sentence of this Section 9.06, this Agreement will be bindingupon,
      inure to the benefit of and be enforceable by, the Parties and their respective
      successors and assigns.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    SECTION
      9.07  HEADINGS; REFERENCES

    

    The
      article, section and paragraph
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this Agreement. All
      references herein to “Articles” or “Sections” shall be deemed to be references
      to Articles or Sections of this Agreement unless otherwise
      indicated.

    

    SECTION
      9.08  COUNTERPARTS

    

    This
      Agreement may be executed in one
      or more counterparts, each of which shall be deemed to be an original but all
      of
      which shall be considered one and the same agreement.

    

    SECTION
      9.09  NO THIRD PARTY BENEFICIARIES

    

    Except
      as otherwise contemplated by
      this Agreement, nothing herein is intended to confer upon any person or entity
      not a Party to this Agreement any rights or remedies under or by reason of
      this
      Agreement.

    

    SECTION
      9.10  SEVERABILITY; ENFORCEMENT

    

    Any
      term or provision of this Agreement
      that is invalid or unenforceable in any jurisdiction shall, as to that
      jurisdiction, be ineffective to the extent of such invalidity or
      unenforceability without rendering invalid or unenforceable the remaining terms
      and provisions of this Agreement or affecting the validity or enforceability
      of
      any of the terms or provisions of this Agreement in any other jurisdiction.
      If
      any provision of this Agreement is so broad as to be unenforceable, the
      provisions shall be interpreted to be only so broad as is
      enforceable.

    

    [THE
      BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK – SIGNATURE PAGES
      FOLLOW]

    

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

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

    

    
      
        	SUB     	 	 	PARENT	 
	 	 	 	 	 
	TCHH
                ACQUISITION
                CORP.     	 	 	TRUSTCASH
                HOLDINGS,
                INC.	 
	A
                Nevada corporation  	 	 	A
                Delaware corporation	 
	 	 	 	 	 
	
                /s/

              	 	 	
                /s/
                  Greg Moss 

              	 
	
                Name

              	 	 	
                Greg
                  Moss 

              	 
	
                Title 

              	 	 	
                CEO

              	 

      

    

     

    
      
        	TARGET	 	 	 	 
	 	 	 	 	 
	PAIVIS,
                CORP.	 	 	 	 
	A
                Nevada corporation	 	 	 	 
	 	 	 	 	 
	
                /s/
                  Edwin Kwong

              	 	 	
              	 
	
                Edwin
                  Kwong

              	 	 	
              	 
	
                Interim
                  CEO

              	 	 	
              	 

      

    

    

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A – Series B
      Preferred Stock Designation

    

    

    Certificate
      of Designation of Rights and Preferences of

    Series
      B Convertible Preferred Stock (“Certificate of Designation”)

    

    DESIGNATION
      AND AMOUNT

    The
      class
      of Series B Convertible Preferred Stock, $0.0001 par value per share, of
      TRUSTCASH Holdings, Inc. (the “Corporation” or “TRUSTCASH”) shall consist of
      20,000,000 shares and shall be designated the “Series B Convertible Preferred
      Stock” (hereinafter “Series B Stock”).

    

    The
      Preferred Stock may be issued as
      uncertificated shares registered in book-entry form or as certificated
      shares.

    

    The
      holders of outstanding shares of Series B Stock shall have rights as
      follows:

    

    STATED
      VALUE

    The
      shares of Series B Stock shall have
      a stated value of $3.25/share.

     

    RANK

    The
      Series B Stock shall rank prior to:
      (1) any other Class or Series of Series B Stock established and designated
      by
      the Board of Directors as junior to the Series B Stock, and (2) common stock
      of
      the Corporation par value
      $.001(collectively, “Junior
      Securities”), both as to payment of dividends and as to distributions of assets
      upon the liquidation, dissolution or winding up of the Corporation, whether
      voluntary or involuntary. The Series B Stock shall rank junior to any Series
      or
      Class of Preferred stock designated by the Board of Directors as senior to
      the
      Series B Stock (“Senior Securities”) both as to payment of dividends and as to
      distributions of assets upon the liquidation, dissolution or winding up of
      the
      Corporation, whether voluntary or involuntary.

    

    CONVERSION

    Any
      shares of Series B Stock may, at the option of the holder, be converted at
      any
      time after the Conversion Time into such number of fully paid and non-assessable
      shares of common stock equal to two thirds of the number of Paivis, Corp.
      (“Paivis”) common shares that the holder exchanged for their Series B Shares in
      the merger transaction between the Corporation and Paivis under the Agreement
      and Plan of Merger dated December ___, 2007 (Merger Agreement).

    

    The
      holder may convert their Series B Stock in common shares only after the earliest
      of the following events: a) eighteen (18) months following the issuance of
      the
      Series B Stock or b) six (6) months after the Corporation’s common stock and
      Series B Stock has commenced trading after successful listing on a exchange
      such
      as the American Stock Exchange or quotation system such as the NASDAQ Small
      Cap
      or National Market System the (“Conversion Time”).

    

    If
      the
      Corporation fails to file a registration statement as per the Registration
      Rights section herein or fails to make application to list the Series B Stock
      on
      a senior exchange or quotation system as per the Listing Rights section herein
      the holders of Series B Stock shall have the right to convert to common shares
      of the Corporation immediately upon such failure.

    

    If
      the
      shares of common stock issuable upon the conversion of shares of Series B Stock
      shall be changed into the same or a different number of shares of any class
      or
      classes of stock, whether by capital reorganization, reclassification or
      otherwise, then and in each such event, the holder of each share of Series
      B
      Stock shall have the right thereafter to convert such share into the kind and
      amount of shares of stock and other securities and property receivable upon
      such
      reorganization, reclassification or other change by holders of the number of
      shares of common stock into which such share of Series B Stock might have been
      converted immediately prior to such reorganization, reclassification or
      change.

    

    Before
      any holder of shares of Series B Stock shall be entitled to convert the same
      into shares of common stock, such holder shall surrender the certificate or
      certificates therefore, duly endorsed, at the principal executive office of
      the
      Corporation or of any transfer agent for such shares, and shall give written
      notice by mail, postage prepaid, to theCorporation at its
      principal executive office, of the election to convert the same and shall state
      therein the name or names in which the certificate or certificates for shares
      of
      common stock are to be issued in the written
      Notice of
      Conversion form of Exhibit B attached hereto.  The Corporation
      shall, as soon as practicable thereafter, issue and deliver at such office
      to
      such holder of shares of Series B Stock, a certificate or certificates for
      the
      number of shares of common stock to which each holder shall be entitled as
      aforesaid.  Such conversion shall be deemed to have been made
      immediately prior to the close of business on the date of such surrender of
      the
      certificate or certificates representing the shares of Series B Stock to be
      converted, and the person or persons entitled to receive the shares of common
      stock issuable upon such conversion shall be treated for all purposes as the
      record holder or holders of such shares of common stock as of such
      date.

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    In
      the
      event some but not all of the shares of Series B Stock represented by a
      certificate or certificates surrendered by a holder are converted, the
      Corporation shall execute and deliver to the holder or to such other person
      as
      the holder may request in writing, at the expense of the Corporation, a new
      certificate representing the number of shares of Series B Stock which were
      not
      converted.

    

    No
      fractional shares shall be issued upon conversion of shares of Series B
      Stock.

    

    VOTING
      RIGHTS

    Each
      share of Series B Stock shall be able to vote the equivalent of one (1) shares
      of common stock.

    

    The
      holders of record of outstanding shares of Series B Stock shall be entitled
      to
      cast on any matter to be voted upon by the holders of common stock of the
      Corporation, that number of votes which the number of shares of common stock
      into which such outstanding Series B Stock is then convertible would be entitled
      to cast multiplied by one (1).

    

    REGISTRATION
      RIGHTS

    The
      Corporation shall file a registration statement with the Securities and Exchange
      Commission (the “Commission”) to register the Series B stock within ninety (90)
      days after issuance of the Series B Stock.

    

    The
      Corporation shall use best efforts to effect, as soon as practicable, such
      registration under the applicable Securities Act (the “Act”) (including, without
      limitation, filing post-effective amendments, appropriate qualifications under
      applicable blue sky or other state securities laws, and appropriate compliance
      with the Act as would permit or facilitate the sale and distribution of all
      or
      such portion of the Series B Stock.

    

    Although
      stated under this paragraph that the holders of Series B Stock have the right
      to
      have their Series B shares registered for resale with the Commission there
      can
      be no assurance given by the Corporation on the time period it may take to
      approve the registration of such shares, or that the Commission will ultimately
      declare the proposed registration statement covering those shares to be
      effective.

    

    LISTING
      RIGHTS

    The
      Corporation will make application for the listing of the Series B Stock for
      trading on the exchange or quotation system that the Corporation’s common stock
      is then listed on or other senior exchange or quotation system that the
      Corporation plans to make application to list its common stock within ninety
      (90) days of the effectiveness of the registration of the Series B
      Stock.

    

    Upon
      making application the Corporation will use best efforts to list the Series
      B
      Stock on the American Stock Exchange, or to cause the Series B Stock to be
      authorized for quotation on the NASDAQ Small Cap or National Market System,
      as
      soon as practicable (it being understood that the Corporation will not be in
      violation of this provision if it is unable to obtain such listing or quotation
      primarily as a result of its failure to satisfy the quantitative listing
      requirements of the American Stock Exchange or NASDAQ Small Cap or National
      Market).

    

    REORGANIZATION,
      CONSOLIDATION, MERGER, ETC.

    If
      at any
      time, or from time to time, there shall be a reorganization, recapitalization,
      transfer of assets, consolidation, merger or, dissolution (the, “Corporate
      Transaction”), provisions shall be made so that the holders of the Series B
      Stock shall thereafter be entitled to receive, upon conversion of their Series
      B
      Stock, such shares or other securities or property of the Corporation or
      otherwise to which a holder of the common stock deliverable upon conversion
      of
      the Series B Stock would have been entitled upon such Corporate
      Transaction.  In any such case, appropriateadjustment shall be made in the application of the provisions
      of this
      paragraph with respect to the rights of the holders of the Series B Stock after
      the Corporate Transaction, to the end that the provisions of this paragraph
      shall be applicable after the Corporate Transaction in as nearly equivalent
      a
      manner as may be practicable.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    DIVIDENDS

    From
      the date of issuance
      of shares of Series B Stock the holders of outstanding shares of Series B Stock
      shall be entitled to receive an annual dividend, payable semi-annually on April
      1 and October 1 (the “Payment Date”), in cash out of funds legally available for
      such purpose or in shares of Series B Stock or a combination of both, in
      preference and priority to any payment of any dividend on Common Stock. Whether
      the dividend is paid in cash from funds legally available for such purposes
      or
      in shares of Series B Stock will be at the sole discretion of the Board and
      such
      dividends shall not accrue and be non-cumulative.  From the date of
      issuance for a period of one (1) year Dividends herein will only be paid in
      Series B Stock. After one (1) year from the date of Issuance of the
      Series B Stock the Corporation shall deliver to the Holder a written irrevocable
      notice in the form of Exhibit B attached hereto electing to pay such Dividend
      in
      full on such Payment Date in either cash or Series B Stock, or a combination
      of
      both (" Payment Election Notice "). Such Payment Election Notice shall be
      delivered to the Holder at least twenty (20) days prior to the applicable
      Payment Date (the date of such notice being hereinafter referred to as the
      "Notice Date"). If such Payment Election Notice is not delivered within the
      prescribed period set forth in the preceding sentence, then the Corporation
      shall be deemed to have elected to pay the applicable Dividend in Series B
      Stock.

    

    If
      the
      Dividend is to be paid in Series B Stock it shall be paid at a ratio of five
      percent (5%). If the Dividend is to be paid in Series B Stock, the number of
      shares shall be determined by multiplying the number of Series B Stock held
      by
      5%. Such shares
      shall be issued and delivered no later than within 30 calendar days following
      such Payment Date.

    

    If
      Dividend is to be paid as cash the amount of cash to be distributed to all
      Series B Stock holders will be determined by the Board and then paid to the
      Series B Stock holders on a prorated basis. If the Dividend is to be paid in
      cash from funds legally available for such purposes the cash payment shall
      be
      paid by check or electronic transfer to holders of record as they appear on
      the
      books of the Corporation on the Payment Dates. Such
      cash
      payment shall be issued and delivered no later than within 30 calender days
      following such Payment Date.

    

    The
      holders of the Series B Stock shall be entitled to receive any dividend declared
      in respect of the Common Stock based upon the number of shares of Common Stock
      into which the outstanding shares of Series B Stock are convertible at the
      time
      the dividend is declared as if such shares of Common Stock issuable upon
      conversion of the Series B Stock were outstanding for purposes of the Common
      Stock dividend.

    

    LIQUIDATION

    All
      liquidation rights of the shares of Series B Convertible Preferred Stock shall
      be the same as the liquidation rights of the common shares into which the shares
      of Series B Convertible Preferred Stock would be convertible immediately prior
      to any liquidation.

     

    LIQUIDATION
      PREFERENCE. In the event of a liquidation, dissolution or winding up of the
      Corporation, whether voluntary or involuntary, the holders of Series B Stock
      shall be entitled to receive out of the assets of the Corporation available
      thereof an amount equal to the consideration paid per share, and no more, before
      any payment shall be made or any assets distributed to the holders of any Junior
      Security. The entire assets of the Corporation available for distribution after
      the liquidation preferences of any Senior Securities are fully met shall be
      distributed ratably among the holders of the Series B Stock and any other
      capital stock of the Corporation which ranks on a parity as to liquidation
      rights with the Series B Stock in proportion to the respective preferential
      amounts to which each is entitled (but only to the extent of such preferential
      amounts). After payment in full of the liquidation preference of the shares
      of
      the Series B Stock, the holders of such shares shall not be entitled to any
      further participation in any distribution of assets by the
      Corporation.

    

    REACQUIRED
      SHARES

    Any
      shares of Series B Convertible Preferred Stock purchased or otherwise acquired
      by the Corporation in any manner whatsoever shall be retired and cancelled
      promptly after the acquisition thereof. All such shares shall upon their
      cancellation become authorized but unissued shares of Preferred Stock and may
      be
      reissued as part of a new series of Preferred Stock to be created by resolution
      or resolutions of the Board of Directors, subject to the conditions and
      restrictions on issuance set forth herein.

    

    At
      the
      time that the Corporation exercises its Redemption Rights it shall give written
      notice by mail, postage prepaid, to the holder at his/her principal address
      as
      they appear on the books of the Corporation, of the election to exercise the
      Redemption Rights and such holder shall surrender the Series B Stock certificate
      or certificates therefore, duly endorsed, at the principal executive office
      of
      the Corporation or of any transfer agent for such shares. The Corporation shall
      have 30 days to provide the holder with a payment to the holder equal to the
      number of Series B shares the Corporation has elected to call multiplied by
      the
      Redemption Price (the “Redemption Consideration”). The Corporation shall deliver
      the Redemption Consideration to the holder on a delivery versus payment basis
      to
      the holder at his her principal address as they appear on the books of the
      Corporation.

    

    NO
      IMPAIRMENT

    The
      Corporation will not, by amendment of its Articles of Incorporation or through
      any reorganization, recapitalization, transfer of assets, consolidation, merger,
      dissolution, issuance or sale of securities or any other voluntary action,
      avoid
      or seek to avoid the observance or performance of any of the terms to be
      observed or performed hereunder by the Corporation, but will at all times in
      good faith assist in the carrying out of all the provisions of this section
      and
      in the taking of all such action as may be reasonably necessary or appropriate
      in order to protect the conversion rights of the holders of the Series B Stock
      against impairment.

     

    No
      fractional shares shall be issued upon conversion of shares of Series B
      Stock.

    

    RESERVATION
      OF STOCK ISSUABLE UPON CONVERSION

    The
      Corporation shall at all times, after the Conversion Time,  reserve
      and keep available out of its authorized but unissued shares of common stock
      solely for the purpose of effecting the conversion of the shares of Series
      B
      Stock, such number of its shares of common stock as shall from time to time
      be
      sufficient to effect the conversion of all outstanding shares of Series B Stock;
      and if at any time, the number of authorized, but unissued and unreserved,
      shares of common stock shall not be sufficient to effect the conversion of
      all
      then outstanding shares of Series B Stock, the Corporation will take such
      corporate action as may, in the opinion of its counsel, be necessary to increase
      its authorized, but unissued and unreserved, shares of common stock to such
      number of shares as shall be sufficient for such purposes.

    

    NOTICES
      OF RECORD DATE

    Upon
      (i)
      any taking by the Corporation of a record  of the  holders
      of any  class of  securities  for the purpose of
      determining  the  holders thereof  who
      are  entitled to receive any dividend or other
      distribution,  or (ii) any sale of
      the  Corporation,  capital reorganization of the
      Corporation, any  reclassification or recapitalization of
      the  capital  stock
      of  the  Corporation,  or
      any  voluntary  or involuntary dissolution, liquidation or
      winding up of the Corporation, the Corporation shall mail to
      each  holder of Series B Convertible Preferred Stock  at
      least  twenty  (20) days  prior to the record date
      specified therein a notice specifying (A) the date on which any such record
      is
      to be taken for the  purpose of such  dividend  or
      distribution  and a description of such  dividend or
      distribution,  (B) the date on which any such sale of the
      Corporation,  reorganization,  reclassification,  recapitalization,
      dissolution, liquidation or winding up is expected to become effective, and
      (C)
      the date, if any, that is to be fixed as to when the holders of record of Common
      Stock (or other securities) shall be entitled to exchange their shares of Common
      Stock (or other  securities) for securities or other property
      deliverable  upon such  sale of  the Corporation,
      reorganization, reclassification, recapitalization, dissolution, liquidation
      or
      winding up.

    

    NOTICES

    Any
      notice required by the provisions of this Certificate of Designation shall
      be in
      writing and shall be deemed effectively given:  (i) upon personal
      delivery to the party to be notified, (ii) when sent by confirmed facsimile
      if
      sent during normal business hours of the recipient; if not, then on the next
      business day, (iii) three (3) days after having been sent by regular mail,
      postage prepaid, or (iv) one (1) day after deposit with a nationally
      recognized  overnight courier, specifying next day
      delivery,  with written verification of receipt. All notices shall be
      addressed to each holder of record at the address of such holder appearing
      on
      the books of the Corporation.

    

    

    
      
        
        

      

      
        -34-

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