Document:

Exhibit

4.10

 

THE SECURITIES REPRESENTED HEREBY

HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE

“ACT”), OR APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE “LAWS”). THE

SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,

SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER (I) AN EFFECTIVE

REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE LAWS, OR (II) AN OPINION OF

COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE AND SCOPE REASONABLY

ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER

THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM THE REGISTRATION

REQUIREMENTS OF THE LAWS.

 

DATE:   AUGUST 1, 2002

 

	

  NOTE #  B-100

  	

   

  	

  Up to U.S.

  $10,000,000

  

 

CYNET, INC.

 

EIGHT  PERCENT (8%) NOTE DUE AUGUST 1, 2007

 

THIS NOTE of Cynet, Inc., a corporation duly organized

and validly existing under the laws of the State of Texas, U.S.A. (the

"Company") designated as its Eight Percent (8%) B Convertible Notes

due five years from the date of issuance, in a principal face value of the

actual amount lent to the Company up to an aggregate amount of $10,000,000.

 

FOR VALUE RECEIVED, the Company

promises to pay to POLARIS ENTERPRISES, LLC, the registered holder hereof and

its successors and assigns (the “Holder”), the aggregate principal sum of all

advances made by the Holder to the Company from time to time as mutually agreed

as reflected by the Schedule A, attached hereto, plus interest hereon as

hereinafter provided. The parties agree and acknowledge that absent mutual

agreement, the Holder is not required to provide any funding hereunder, and

that the highest amount that the Holder would advance by mutual agreement is

$10,000,000. The Company agrees to pay the aggregate principal sum outstanding

on the second anniversary date of the date hereof  (the “Maturity Date”), and to pay interest on the principal sum

outstanding, at the rate of 8% per annum due and payable in quarterly

installments in arrears, on March 31, June 30, September 30, and December 31 of

each year during the term of this Note, with the first such payment to be made

on June 30, 2002. Accrual of interest on the outstanding principal amount,

payable in cash or common stock of the Company as set forth herein at the

Company’s option, shall commence on the date hereof and shall continue until

payment in full of the outstanding principal amount has been made or duly

provided for. The interest so payable will be paid to the person in whose name

this Note (or one or more predecessor

 

 

Notes) is registered on the records of the Company regarding

registration of the Note (the “Note Register”).

 

The principal of, and interest

on, this Note are payable in such coin or currency of the United States of

America as at the time of payment is legal tender for payment of public and

private debts, at the address last appearing on the Note Register of the

Company as designated in writing by the Holder hereof from time to time. The

Company will pay the outstanding principal of and any and all accrued and

unpaid interest due upon this Note on the Maturity Date, less any amounts

required by law to be deducted or withheld, to the record Holder of this Note

as of the fifth business day prior to the Maturity Date and addressed to such

Holder at the last address appearing on the Note Register. The forwarding of

such funds shall constitute a payment of outstanding principal and interest

hereunder and shall satisfy and discharge the liability for principal and

interest on this Note to the extent of the sum represented by such payment plus

any amounts so deducted or withheld. Except as herein provided, this Note may

not be prepaid without the prior written consent of the Holder.

 

This Note is subject to the

following additional provisions:

 

1.             Note Exchangeable.   The Note is exchangeable commencing thirty (30) days from the

date hereof for an equal aggregate principal amount of Notes of different

authorized denominations, as requested by the Holder surrendering the same without

the Company's written consent. No service charge will be made for such

registration or transfer or exchange.

 

2.             Withholding.  

The Company shall be entitled to withhold from all payments of principal

or interest pursuant to this Note any amounts required to be withheld under the

applicable provisions of the United States income tax or other applicable laws

at the time of such payments.

 

3.             Transfer/Exchange

of Note; Legend.   This Note has

been issued subject to investment representations of the original purchaser

hereof and may be transferred or exchanged only in compliance with the

Securities Act of 1933, as amended (the “1933 Act”) and applicable state

securities laws. Prior to due presentment for transfer of this Note, the

Company and any agent of the Company may treat the person in whose name this

Note is duly registered on the Company's Note Register as the owner hereof for

the purpose of receiving payment as herein provided and for all other purposes,

whether or not his Note be overdue, and neither the Company nor any such agent shall

be affected or bound by notice to the contrary.  If presentment for transfer is made, the parties agree hereunder

to execute any and all documents necessary to effectuate said transfer within

thirty days of presentment.

 

4.             Obligations of the Company Herein are Unconditional.   No provision of this Note shall alter or

impair the obligation of the Company, which obligation is absolute and

unconditional, to repay the principal amount of this Note at the time, place,

rate, and in the coin currency, hereinabove stated. This Note and all other

Notes now or hereafter issued in replacement of this Note on the same or

similar terms are direct obligations of the Company. This Note ranks at least

equally with all other Notes now or hereafter issued under the terms set forth

herein. 

 

2

 

5.             No Limitation on Corporate Action.   No provisions of this Note and no right or

option granted or conferred hereunder shall in any way limit, affect or abridge

the exercise by the Company of any of its corporate rights or powers to

recapitalize, amend its Certificate of Incorporation, reorganize, consolidate

or merge with or into another corporation, or to transfer all or any part of

its property or assets, or the exercise of any other of its corporate rights

and powers.

 

6.             Waiver of

Demand, Presentment, Etc.   The

Company hereby expressly waives demand and presentment for payment, notice of

nonpayment, protest, notice of protest, notice of dishonor, notice of

acceleration or intent to accelerate, bringing of suit and diligence in taking

any action to collect amounts called for hereunder and shall be directly and

primarily liable for the payment of all sums owing and to be owing hereunder,

regardless of and without any notice, diligence, act or omission as or with

respect to the collection of any amount called for hereunder.

 

7.             Attorney’s Fees.   The Company agrees to pay all costs and expenses, including

without limitation reasonable attorney's fees, which may be incurred by the

Holder in collecting any amount due under this Note or in enforcing any of

Holder’s conversion rights as described herein.

 

8.             Default.  

If one or more of the following described “Events of Default” shall

occur:

 

(a)           The Company shall continue in default in the payment of

principal or interest on this Note for a period of ten (10) days after a notice

of default is received by the Company with respect to any such payment; or

 

(b)           Any of the representations or warranties made by the

Company herein, or in any certificate or financial or other written statement

heretofore or hereafter furnished by or on behalf of the Company in connection

with the execution and delivery of this Note shall be false or misleading in

any material respect at the time made and the Holder shall have provided seven

(7) days prior written notice to the Company of the alleged misrepresentation

or breach of warranty and the same shall continue uncured for a period of seven

(7) days after such written notice from the Holder; or

 

(c)           The Company shall fail to perform or observe, in any

material respect, any other covenant, term, provision, condition, agreement or

obligation of the Company under this Note and such failure shall continue

uncured for a period of seven (7) days after written notice from the Holder of

such failure; or

 

(d)           The Company shall either: 

(i) become insolvent; (ii) admit in writing its inability to pay its

debts generally or as they become due; (iii) make an assignment for the benefit

of creditors or commence proceedings for its dissolution; or (iv) apply for, or

consent to the appointment of, a trustee, liquidator, or receiver for its or

for a substantial part of its property or business; or

 

(e)           A trustee, liquidator or receiver shall be appointed for

the Company or for a substantial part of its property or business without the

Company's consent and such appointment is not discharged within sixty (60) days

after such appointment; or

 

(f)            Any governmental agency or any court of competent

jurisdiction at the instance of any governmental agency shall assume custody or

control of the whole or any substantial portion of

 

3

 

the properties or assets of the Company and shall not be dismissed

within sixty (60) days thereafter; or

 

(g)           Bankruptcy, reorganization, insolvency or liquidation

proceedings or other proceedings for relief under any bankruptcy law or any law

for the relief of debtors shall be instituted by or against the Company and, if

instituted against the Company, shall

not be dismissed within sixty days after such institution or the Company shall

by any action or answer approve of, consent to, or acquiesce in any such

proceedings or admit the material allegations of, or default in answering a

petition filed in, any such proceeding; or

 

(h)           The Company shall have its Common Stock delisted from the

OTC Bulletin Board Market or suspended from trading thereon, and shall not have

its Common Stock relisted on the same or another national securities exchange,

or have such suspension lifted, as the case may be, within ten (10) business

days; 

 

then, or at any time thereafter, and in any and every such case, unless

such Event of Default shall have been waived in writing by the Holder (which

waiver in one instance shall not be deemed to be a waiver in another instance

or for any other prior or subsequent Event of Default) at the option of the

Holder and in the Holder’s sole discretion, the Holder may immediately

accelerate the maturity hereof, whereupon all principal and interest hereunder

shall be immediately due and payable, without presentment, demand, protest or

notice of any kind, all of which are hereby expressly waived by the Company,

anything herein or in any Note or other instrument contained to the contrary

notwithstanding, and the Holder may immediately, and upon the expiration of any

period of grace, enforce any and all of the Holder’s rights and remedies

provided herein or any other rights or remedies afforded by law or equity.

 

9.             Note a General Unsecured Obligation of the Company.   This Note represents a general unsecured

obligation of the Company. No recourse shall be had for the payment of the

principal of, or the interest on, this Note, or for any claim based thereon, or

otherwise in respect hereof, against any incorporator, shareholder, officer,

director, or agent of the Company or any successor corporation, whether by

virtue of any constitution, statute or rule of law, or by the enforcement of

any assessment or penalty or otherwise, all such liability being, by the

acceptance hereof and as part of the consideration for the issue hereof,

expressly waived and released.

 

10.           Enforceability.  

In case any provision of this Note is held by a court of competent

jurisdiction to be excessive in scope or otherwise invalid or unenforceable,

such provision shall be adjusted rather than voided, if possible, so that it is

enforceable to the maximum extent possible, and the validity and enforceability

of the remaining provisions of this Note will not in any way be affected or impaired

thereby.

 

11.           Entire Agreement.   This Note and constitutes the full and

entire understanding between the Company and the Holder with respect to the

subject matter hereof and thereof. Neither this Note nor any term hereof may be

amended, waived, discharged or terminated other than by a written instrument

signed by the Company and the Holder.

 

4

 

12.           Governing Law.  

This Note shall be governed by and construed in accordance with the laws

of the state of Delaware without giving effect to applicable principles of

conflict of law.

 

13.           Headings.  

Headings in this Note are for convenience only, and shall not be used in

the construction of this Note.

 

IN WITNESS WHEREOF, the Company

has caused this instrument to be duly executed by an officer thereunto duly

authorized, all as of the date first hereinabove written.

 

	

   

  	

  CYNET, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  (authorized signatory)

  

 

5

 

SCHEDULE

A

 

	

  Date of

  Advance

  	

   

  	

  Amount of Advance

  

 

 

 

 

 

 

 

6Exhibit

4.1

 

AMENDED

AND RESTATED CREDIT AGREEMENT

 

by

and between

 

META

GROUP, INC.

 

AND

 

THE

BANK OF NEW YORK

 

 

$20,000,000

 

 

Dated as of November 5, 2001

 

 

TABLE OF CONTENTS

 

	

  1.

  	

  DEFINITIONS

  AND PRINCIPLES OF CONSTRUCTION

  
	

   

  	

   

  
	

   

  	

  1.1.

  	

  Definitions

  
	

   

  	

  1.2.

  	

  Principles of Construction

  
	

   

  	

  1.3.

  	

  Matters

  Regarding the Prior Credit Agreement

  
	

   

  	

  1.4.

  	

  Continuation of Collateral.

  
	

   

  	

   

  	

   

  
	

  2.

  	

  AMOUNT

  AND TERMS OF LOANS

  
	

   

  	

   

  
	

   

  	

  2.1.

  	

  Revolving Credit Loans

  
	

   

  	

  2.2.

  	

  Revolving Credit Note.

  
	

   

  	

  2.3.

  	

  Term Loan.

  
	

   

  	

  2.4.

  	

  Term Note.

  
	

   

  	

  2.5.

  	

  Procedure for Borrowing.

  
	

   

  	

  2.6.

  	

  Termination

  of Commitment; Reduction of Commitment Amount

  
	

   

  	

  2.7.

  	

  Prepayments

  of the Loans; Payment on Maturity

  
	

   

  	

  2.8.

  	

  Payments

  
	

   

  	

  2.9.

  	

  Use of

  Proceeds

  
	

   

  	

  2.10.

  	

  Letter of Credit

  Sub-facility

  
	

   

  	

  2.11.

  	

  Absolute

  Obligation with respect to Letter of Credit Payments

  
	

   

  	

   

  	

   

  
	

  3.

  	

  INTEREST, FEES, YIELD PROTECTIONS,

  ETC.

  
	

   

  	

   

  
	

   

  	

  3.1.

  	

  Interest Rate and

  Payment Dates

  
	

   

  	

  3.2.

  	

  Fees

  
	

   

  	

  3.3.

  	

  Conversions

  
	

   

  	

  3.4.

  	

  Indemnification for Loss

  
	

   

  	

  3.5.

  	

  Capital

  Adequacy

  
	

   

  	

  3.6.

  	

  Reimbursement for

  Increased Costs

  
	

   

  	

  3.7.

  	

  Illegality of Funding

  
	

   

  	

  3.8.

  	

  Substituted Interest Rate

  
	

   

  	

  3.9.

  	

  Taxes

  
	

   

  	

  3.10.

  	

  Option

  to Fund

  
	

   

  	

   

  	

   

  
	

  4.

  	

  REPRESENTATIONS AND

  WARRANTIES

  
	

   

  	

   

  
	

   

  	

  4.1.

  	

  Subsidiaries;

  Capitalization

  
	

   

  	

  4.2.

  	

  Existence

  and Power

  
	

   

  	

  4.3.

  	

  Authority and Execution

  
	

   

  	

  4.4.

  	

  Binding

  Agreement

  
	

   

  	

  4.5.

  	

  Litigation

  
	

   

  	

  4.6.

  	

  Required

  Consents

  
	

   

  	

  4.7.

  	

  Absence

  of Defaults; No Conflicting Agreements

  
	

   

  	

  4.8.

  	

  Compliance with

  Applicable Laws

  

 

i

 

	

   

  	

  4.9.

  	

  Taxes

  
	

   

  	

  4.10.

  	

  Governmental Regulations

  
	

   

  	

  4.11.

  	

  Federal

  Reserve Regulations; Use of Loan Proceeds

  
	

   

  	

  4.12.

  	

  Plans

  
	

   

  	

  4.13.

  	

  Financial Statements

  
	

   

  	

  4.14.

  	

  Property

  
	

   

  	

  4.15.

  	

  Intellectual Property;

  Licenses

  
	

   

  	

  4.16.

  	

  Environmental Matters

  
	

   

  	

  4.17.

  	

  Solvency

  
	

   

  	

  4.18.

  	

  Security

  Interests

  
	

   

  	

  4.19.

  	

  Absence of Certain

  Restrictions

  
	

   

  	

  4.20.

  	

  No Misrepresentation

  
	

   

  	

   

  	

   

  
	

  5.

  	

  CONDITIONS

  TO FIRST LOANS

  
	

   

  	

   

  
	

   

  	

  5.1.

  	

  Evidence

  of Action

  
	

   

  	

  5.2.

  	

  This

  Agreement

  
	

   

  	

  5.3.

  	

  Note

  
	

   

  	

  5.4.

  	

  Security

  Agreement

  
	

   

  	

  5.5.

  	

  Subsidiary Guaranty

  
	

   

  	

  5.6.

  	

  Officer’s Certificate

  
	

   

  	

  5.7.

  	

  Compliance Certificate

  
	

   

  	

  5.8.

  	

  Opinion of Counsel

  to the Borrower

  
	

   

  	

  5.9.

  	

  Search Reports and

  Related Documents

  
	

   

  	

  5.10.

  	

  Approval of Special Counsel

  
	

   

  	

  5.11.

  	

  Fees

  
	

   

  	

  5.12.

  	

  Fees and Expenses

  of Special Counsel

  
	

   

  	

  5.13.

  	

  Other

  Documents

  
	

   

  	

   

  	

   

  
	

  6.

  	

  CONDITIONS

  OF LENDING

  
	

   

  	

   

  
	

   

  	

  6.1.

  	

  Compliance

  
	

   

  	

  6.2.

  	

  Borrowing

  Request / Letter of Credit Agreement

  
	

   

  	

  6.3.

  	

  Loan

  Closings

  
	

   

  	

  6.4.

  	

  Other Documents

  
	

   

  	

   

  	

   

  
	

  7.

  	

  AFFIRMATIVE

  COVENANTS

  
	

   

  	

   

  
	

   

  	

  7.1.

  	

  Financial

  Statements and Information

  
	

   

  	

  7.2.

  	

  Certificates; Other

  Information

  
	

   

  	

  7.3.

  	

  Legal

  Existence

  
	

   

  	

  7.4.

  	

  Taxes

  
	

   

  	

  7.5.

  	

  Insurance

  
	

   

  	

  7.6.

  	

  Performance of Obligations

  
	

   

  	

  7.7.

  	

  Condition of Property

  
	

   

  	

  7.8.

  	

  Observance of Legal

  Requirements

  
	

   

  	

  7.9.

  	

  Inspection

  of Property; Books and Records; Discussions

  
	

   

  	

  7.10.

  	

  Authorizations

  
	

   

  	

  7.11.

  	

  Financial Covenants

  

 

ii

 

	

  8.

  	

  NEGATIVE

  COVENANTS

  
	

   

  	

   

  
	

   

  	

  8.1.

  	

  Indebtedness

  
	

   

  	

  8.2.

  	

  Liens

  
	

   

  	

  8.3.

  	

  Merger; Consolidations

  
	

   

  	

  8.4.

  	

  Dispositions

  
	

   

  	

  8.5.

  	

  Acquisitions, Investments, Loans, Etc.

  
	

   

  	

  8.6.

  	

  Restricted Payments

  
	

   

  	

  8.7.

  	

  Business and Name Changes

  
	

   

  	

  8.8.

  	

  Subsidiaries

  
	

   

  	

  8.9.

  	

  Sale and Leaseback

  Transactions

  
	

   

  	

  8.10.

  	

  Amendments,

  Etc. of Certain Agreements

  
	

   

  	

  8.11.

  	

  Transactions with

  Affiliates

  
	

   

  	

  8.12.

  	

  Limitation on

  Dividend Restrictions

  
	

   

  	

  8.13.

  	

  Limitation on Negative

  Pledges

  
	

   

  	

   

  	

   

  
	

  9.

  	

  DEFAULT

  
	

   

  	

   

  
	

   

  	

  9.1.

  	

  Events

  of Default

  
	

   

  	

  9.2.

  	

  Remedies

  
	

   

  	

   

  	

   

  
	

  10.

  	

  OTHER

  PROVISIONS

  
	

   

  	

   

  
	

   

  	

  10.1.

  	

  Amendments and Waivers

  
	

   

  	

  10.2.

  	

  Notices

  
	

   

  	

  10.3.

  	

  No Waiver;

  Cumulative Remedies

  
	

   

  	

  10.4.

  	

  Survival

  of Representations and Warranties and Certain Obligations

  
	

   

  	

  10.5.

  	

  Expenses

  
	

   

  	

  10.6.

  	

  Successors and Assigns

  
	

   

  	

  10.7.

  	

  Counterparts

  
	

   

  	

  10.8.

  	

  Set-off

  
	

   

  	

  10.9.

  	

  Construction

  
	

   

  	

  10.10.

  	

  Governing

  Law

  
	

   

  	

  10.11.

  	

  Headings Descriptive

  
	

   

  	

  10.12.

  	

  Severability

  
	

   

  	

  10.13.

  	

  Integration

  
	

   

  	

  10.14.

  	

  Consent to Jurisdiction

  
	

   

  	

  10.15.

  	

  Service

  of Process

  
	

   

  	

  10.16.

  	

  No Limitation on

  Service or Suit

  
	

   

  	

  10.17.

  	

  WAIVER OF TRIAL BY JURY

  

 

iii

 

Exhibits

 

	

  Exhibit A-1

  	

   

  	

  Form of Revolving Credit Note

  
	

  Exhibit A-2

  	

   

  	

  Form of Term Note

  
	

  Exhibit B

  	

   

  	

  Form of Borrowing Request

  
	

  Exhibit C

  	

   

  	

  Form of Notice of Conversion

  
	

  Exhibit D

  	

   

  	

  Form of Security Agreement

  
	

  Exhibit E

  	

   

  	

  Form of Subsidiary Guarantee

  
	

  Exhibit F

  	

   

  	

  Form of Compliance Certificate

  
	

  Exhibit G

  	

   

  	

  Form of Borrowing Base Certificate

  

 

Schedules

 

	

  Schedule 4.1

  	

   

  	

  List of

  Subsidiaries; Capitalization

  
	

  Schedule 4.12

  	

   

  	

  List of Plans

  
	

  Schedule 4.15

  	

   

  	

  List of Licenses

  and Intellectual Property Agreements

  
	

  Schedule 8.2

  	

   

  	

  List of Existing

  Liens

  
	

  Schedule 8.5

  	

   

  	

  List of Existing

  Investments

  

 

iv

 

AMENDED AND RESTATED

CREDIT AGREEMENT (this “Agreement”) dated as of November 5, 2001 by and

between META GROUP, INC., a Delaware corporation (the “Borrower”) and

THE BANK OF NEW YORK (the “Bank”).

 

RECITALS:

 

A.            The Bank and the Borrower have previously entered into

that certain Credit Agreement, dated as of September 18, 2000 (as amended, the

“Prior Credit Agreement”).

 

B.            It is the intention of the parties

hereto that this Agreement amend and restate the terms of the Prior Credit

Agreement in its entirety, and that, on the Effective Date, the Loans under and

as defined in the Prior Credit Agreement be Loans under this Agreement,

evidenced and secured by the applicable Loan Documents (hereinafter defined).

 

C.            Subject to and upon the terms and conditions

herein set forth, the Bank is willing to renew, extend, and amend the Prior

Credit Agreement pursuant to the terms of this Agreement.

 

NOW, THEREFORE, IN

CONSIDERATION OF THE PREMISES AND AGREEMENTS CONTAINED HEREIN, THE PARTIES

HERETO AGREE AS FOLLOWS:

 

1.             DEFINITIONS

AND PRINCIPLES OF CONSTRUCTION

 

1.1.          Definitions

 

As used in this Agreement, terms defined in the

recitals have the meanings therein indicated, and the following terms have the

following meanings:

 

“ABR Advances”: the Revolving Credit Loans or

the Term Loan, as the case may be, (or any portions thereof) at such time as

they (or such portions) are made and/or being maintained at a rate of interest

based upon the Alternate Base Rate.

 

“Accountants”: Deloitte & Touche, or such

other independent certified public accountants of nationally recognized

standing chosen by the Borrower and acceptable to the Bank in its reasonable

judgment.

 

“Accounts”: “accounts” as defined in the Uniform

Commercial Code as in effect in the State of New York.

 

“Accumulated Funding Deficiency”: as defined in

Section 302 of ERISA.

 

“Acquisition”: with respect to any Person, the

purchase or other acquisition by such Person, by any means whatsoever

(including through a merger, dividend or otherwise and whether in a single

transaction or in a series of related transactions), of (i) any Capital Stock

of, or other equity securities of, any other Person if, immediately thereafter,

such other Person would be either a Subsidiary of such Person or otherwise

under the control of such Person, (ii)

 

 

any Operating Entity, or

(iii) any property of (A) any other Person or (B) any Operating Entity, in

either case other than in the ordinary course of business, provided, however,

that no acquisition of all or substantially all of the assets of such other

Person or Operating Entity shall be deemed to be in the ordinary course of

business.

 

“Advance”: an ABR Advance or a LIBOR Advance,

as the case may be.

 

“Affiliate”: as to any Person, any other Person

which, directly or indirectly, controls, is controlled by, or is under common

control with, such Person.

 

“Agreement”: this Credit Agreement, as the same

may be amended, supplemented or otherwise modified from time to time.

 

“Alternate Base Rate”: on any date, a rate of

interest per annum equal to the higher of (i) the Federal Funds Rate in effect

on such date plus 0.50% or (ii) the Prime Rate in effect on such date.

 

“Applicable Margin”: with respect to the unpaid

principal balance of Revolving Credit Loans or the Term Loan, as the case may

be (i) consisting of LIBOR Advances, 2.50%, and (ii) consisting of ABR

Advances, 0.00%.

 

“Authorized Signatory”: as to (i) any Person

which is a corporation, the chairman of the board, the president, any vice

president, the chief financial officer or any other officer (acceptable to the

Bank) of such Person, and (ii) any Person which is not a corporation, a general

partner, Managing Person or other appropriate appointed officer (acceptable to

the Bank) thereof.

 

“Available Revolving Credit Commitment”: at any

date of determination, an amount equal to the excess, if any, of (a) the amount

of the Revolving Credit Commitment over (b) the sum of (i) the aggregate unpaid

principal amount at such time of all Revolving Credit Loans plus (ii)

the Letter of Credit Exposure.

 

“Bond Collateral”:  the portion of the Collateral consisting of FHA bonds and the

proceeds thereof, as such Collateral may be substituted from time to time with

other Liquid Investments.

 

“Borrowing Date”: any Business Day on which the

Bank makes a Loan or issues a Letter of Credit.

 

“Borrowing Base”: at any date of determination,

an amount equal to 80% of Eligible Accounts Receivable at such date.  The Borrowing Base shall be determined from

time to time by the Bank by reference to the Borrowing Base Certificate most

recently delivered to it.

 

“Borrowing Base Certificate”: a certificate

substantially in the form of Exhibit G.

 

“Borrowing Request”: a request for one or more

Advances, substantially in the form of Exhibit B.

 

2

 

“Business Day”: any day other than a Saturday,

a Sunday or a day on which commercial banks located in New York City are

authorized or required by law or other governmental action to close and, with

respect to all notices and determinations in connection with, and payments of

principal and interest on, LIBOR Advances, which is also a day on which

eurodollar funding between banks may be carried on in London, England.

 

“Capital Expenditures”: for any period, the

aggregate of all expenditures incurred by the Borrower and its Subsidiaries

during such period which, in accordance with GAAP, are required to be shown as

additions to property, plant, equipment  or similar fixed asset accounts reflected

on the consolidated balance sheet of the Borrower and its Subsidiaries,

provided, however, that “Capital Expenditures” shall not include (i)

capitalized leases, or (ii) expenditures of proceeds of insurance settlements

in respect of lost, destroyed or damaged assets, equipment or other property to

the extent such expenditures are made to replace or repair such lost, destroyed

or damaged assets, equipment or other property within six months of the receipt

of such proceeds.

 

“Capital Lease Obligations”: with respect to

any Person, obligations of such Person with respect to leases which are

required to be capitalized for financial reporting purposes in accordance with

GAAP.

 

“Capital Stock”: as to any Person, all shares,

interests, partnership interests, limited liability company interests,

participations, rights in or other equivalents (however designated) of such

Person’s equity (however designated) and any rights, warrants or options

exchangeable for or convertible into such shares, interests, participations,

rights or other equity.

 

“Change of Control”: 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 date

hereof), of shares representing 50% or more of the aggregate ordinary voting

power or economic interests represented by the issued and outstanding equity

securities of the Borrower on a fully diluted basis.

 

“Code”: the Internal Revenue Code of 1986, as

the same may be amended from time to time, or any successor thereto, and the

rules and regulations issued thereunder, as from time to time in effect.

 

“Collateral”: the property in which a security

interest is granted under the Collateral Documents.

 

“Collateral Documents”: the Security Agreement

and all documents executed or delivered in connection therewith.

 

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

 

“Commitment”: the Revolving Credit Commitment,

the Term Loan Commitment or the Letter of Credit Commitment, as the case may

be.

 

3

 

“Compliance Certificate”: a certificate

substantially in the form of Exhibit F.

 

“Contingent Obligation”: as to any Person (a “secondary

obligor”), any obligation of such secondary obligor (i) guaranteeing or in

effect guaranteeing any return on any investment made by another Person, or

(ii) guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend

or other obligation (a “primary obligation”) of any other Person (a “primary

obligor”) in any manner, whether directly or indirectly, including, without

limitation, any obligation of such secondary obligor, whether contingent, (A)

to purchase any primary obligation or any property constituting direct or indirect

security therefor, (B) to advance or supply funds (x) for the purchase or

payment of any primary obligation or (y) to maintain working capital or equity

capital of the primary obligor or otherwise to maintain the net worth or

solvency of a primary obligor, (C) to purchase property, securities or services

primarily for the purpose of assuring the beneficiary of any primary obligation

of the ability of a primary obligor to make payment of a primary obligation,

(D) otherwise to assure or hold harmless the beneficiary of a primary

obligation against loss in respect thereof, and (E) in respect of the

liabilities of any partnership in which a secondary obligor is a general

partner, except to the extent that such liabilities of such partnership are

nonrecourse to such secondary obligor and its separate property, provided,

however, that the term “Contingent Obligation” shall not include the

indorsement of instruments for deposit or collection in the ordinary course of

business.  The amount of any Contingent

Obligation of a Person shall be deemed to be an amount equal to the stated or

determinable amount of a primary obligation in respect of which such Contingent

Obligation is made or, if not stated or determinable, the maximum reasonably

anticipated liability in respect thereof as determined by such Person in good

faith.

 

“Conversion Date”: the date on which: (i) a

LIBOR Advance is converted to an ABR Advance, (ii) a LIBOR Advance is continued

as a new LIBOR Advance, or (iii) an ABR Advance is converted to a LIBOR

Advance.

 

“Credit Agreement”: this Amended and Restated

Credit Agreement, as the same may be amended from time to time.

 

“Credit Party”: the Borrower and each other

party (other than the Bank) to a Loan Document.

 

“Debt Service”: for any period, with respect to

the Borrower and its Subsidiaries for each of the following, the sum of (i)

Interest Expense for such period, plus (ii) all scheduled payments of

principal during such period on Indebtedness which had, on the date of creation

of such Indebtedness, a final maturity which was more than twelve months after

such date.

 

“Default”: any event or condition which

constitutes an Event of Default or which, with the giving of notice, the lapse

of time, or any other condition, would, unless cured or waived, become an Event

of Default.

 

4

 

“Defaulted Account”: any Account of the

Borrower which has been or should have been charged off as not collectible in

conformity with the accounting policies of the Borrower in effect at the time

of determination.

 

“Disposition”: with respect to any Person, any

sale, assignment, transfer or other disposition by such Person, by any means,

of (i) the Capital Stock of, or other equity interests of, any other Person,

(ii) any Operating Entity, or (iii) any other property of such Person other

than in the ordinary course of business, provided, however, that no such sale,

assignment, transfer or other disposition of property shall be deemed to be in

the ordinary course of business (a) if the fair market value thereof is in

excess of $250,000, or (b) to the extent that the fair market value thereof,

when aggregated with all other sales, assignments, transfers and other

dispositions made by such Person within the same fiscal year, exceeds $500,000,

and then only to the extent of such excess, if any, or (c) if it is the sale,

assignment, transfer or disposition of (1) all or substantially all of the

property of such Person or (2) any Operating Entity.

 

“Dollars” and “$”: lawful currency of the

United States.

 

“Domestic Subsidiary”: any Subsidiary which is

organized and existing under the laws of a jurisdiction of, and conducts its

business primarily in, the United States of America.

 

“EBITDA”: for any period, net income of the

Borrower and its Subsidiaries for such period, determined on a consolidated

basis in accordance with GAAP plus the sum of, without duplication, (i)

Interest Expense, (ii) Income Tax Expense and (iii) depreciation, amortization

and other non-cash charges of the Borrower and its Subsidiaries (including

amortization or other expense recognitions of any costs associated with asset

write-ups), each to the extent deducted in determining such net income for such

period; provided, however, that for purposes of this calculation,

net income shall exclude extraordinary gains and losses from sales, exchanges

and other dispositions of property not in the ordinary course of business and

other non-recurring items.

 

“Effective Date”: November 5, 2001.

 

“Eligible Accounts Receivable”: An amount equal

to the aggregate outstanding balance of all Accounts of the Borrower and its

Domestic Subsidiaries payable in the United States of America in Dollars, as

set forth in the consolidated aging reports of billed Accounts for the Borrower

and its Domestic Subsidiaries as of such time, provided  that,

unless otherwise approved in writing by the Bank, no amount owing in respect of

any Account shall be deemed to be included in any calculation of Eligible

Accounts Receivable if:

 

(a)           (i) such Account is not a bona fide,

valid and legally enforceable obligation of the Obligor thereon arising from

the actual sale and delivery of goods to or rendition to and acceptance of

services by such Obligor, or (ii) such Account otherwise does not represent a

final sale or transfer of title to such Obligor,

 

5

 

(b)           (i) the Obligor thereon is any

Affiliate of the Borrower or any Subsidiary, or any employee, officer, sales

representative, agent (other than any such sales representative or agent which

has an independent contractor relationship with the Borrower or any

Subsidiary), director or stockholder holding 10% or more of the of the

Borrower, any Subsidiary or any of their Affiliates, or (ii) the sale giving

rise to such Account is to an Obligor in any jurisdiction outside the United

States;

 

(c)           such Account was, at the date of the

original issuance of the respective invoice therefor, payable more than 31 days

after such date;

 

(d)           such Account remains unpaid for more

than 60 days after the date set forth for payment in the invoice originally

issued therefor;

 

(f)            such Account is a Defaulted Account;

 

(g)           a proceeding under bankruptcy or

similar laws has occurred and is continuing with respect to the Obligor

thereon;

 

(h)           it is an Account which, pursuant to

any agreement between the Borrower or any of its Subsidiaries and the Obligor

thereon, may be set off or charged against any trade payable, rebate obligation

or other similar liability owing to such Obligor;

 

(i)            such Account is the result of a

chargeback, debit memo or a reinvoice of a disputed Account or Defaulted

Account;

 

(j)            the Obligor thereon has disputed its

liability in writing on, or the Obligor thereon has made any written claim or

defense with respect to, such Account or any other Account due from such

Obligor to the Borrower or any Subsidiary, which has not been resolved (but

only the amount of such Account that is disputed or subject to claim or defense

or is unresolved shall be excluded from the calculation of Eligible Accounts

Receivable);

 

(k)           such Account is not owned solely by

the Borrower or any Subsidiary free and clear of all Liens or other rights or

claims of any other Person (except in favor of the Bank);

 

(l)            such Account is subject to any

material contractual restrictions on the transfer, assignability or sale

thereof, enforceable against the assignee, except pursuant to any Loan Document

or any other agreement or instrument governing any Indebtedness of the Borrower

and its Subsidiaries which is permitted to be incurred by the Borrower and its

Subsidiaries pursuant to this Agreement; or

 

(m)          the Bank does not have a valid and

perfected first priority security interest in such Account or such Account does

not conform in all material respects to the

 

6

 

representations and warranties contained in this

Agreement or any of the Collateral Documents.

 

For purposes of

determining Eligible Accounts Receivable, the aggregate amount owing in respect

of Accounts meeting the foregoing criteria for inclusion in the determination

of Eligible Accounts Receivable shall be reduced by (i) an amount equal to the

net credit balances owed to any customers, (ii) an amount equal to the amount

of any reserve for the value of an accrual for the estimated current liability

for rebates and return and credit memos with respect to such Accounts,

determined in conformity with the accounting policies of the Borrower and its

Subsidiaries as in effect from time to time and (iii) an amount equal to the

portion of any Account representing delivery or freight which has been or

should have been charged-off as not collectable in conformity with the

accounting policies of the Borrower and its Subsidiaries as in effect from time

to time.

 

“Employee Benefit Plan”: an employee benefit

plan within the meaning of Section 3(3) of ERISA maintained, sponsored or

contributed to by the Borrower, any of its Subsidiaries or any ERISA Affiliate.

 

“Employee Stock Options”: options or other

rights to purchase common shares of the Borrower issued exclusively to

directors, officers and employees of the Borrower and its Subsidiaries pursuant

to a plan or arrangement adopted by the board of directors of the Borrower.

 

“Environmental Laws”: any and all federal, state

and local laws relating to the environment, the use, storage, transporting,

manufacturing, handling, discharge, disposal or recycling of hazardous

substances, materials or pollutants or industrial hygiene, and including,

without limitation, (i) the Comprehensive Environmental Response, Compensation

and Liability Act, as amended, 42 USCA §9601 et  seq.; (ii) the

Resource Conservation and Recovery Act of 1976, as amended, 42 USCA §6901 et

seq.; (iii) the Toxic Substance Control Act, as amended, 15 USCA §2601 et

seq.; (iv) the Water Pollution Control Act, as amended, 33 USCA §1251 et

seq.; (v) the Clean Air Act, as amended, 42 USCA §7401 et seq.;

(vi) the Hazardous Materials Transportation Authorization Act of 1994, as

amended, 49 USCA §5101 et  seq. and (vii) all rules, regulations,

judgments, decrees, injunctions and restrictions thereunder and any analogous

state law.

 

“ERISA”: the Employee Retirement Income

Security Act of 1974, as amended from time to time, and the rules and

regulations issued thereunder, as from time to time in effect.

 

“ERISA Affiliate”: when used with respect to an

Employee Benefit Plan, ERISA, the PBGC or a provision of the Code pertaining to

employee benefit plans, any Person which is a member of any group of

organizations within the meaning of Sections 414(b) or (c) of the Code (or,

solely for purposes of potential liability under Section 302(c)(11) of ERISA

and Section 412(c)(11) of the Code and the lien created under Section 302(f) of

ERISA and Section 412(n) of the Code, Sections 414(m) or (o) of the Code) of

which the Borrower or any of its Subsidiaries is a member.

 

7

 

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

 

“Existing L/Cs”: all letters of credit issued

(or deemed issued) pursuant to the Prior Credit Agreement.

 

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

 

“Federal Funds Rate”: for any day, a rate per

annum (expressed as a decimal, rounded upwards, if necessary, to the next

higher 1/100 of 1%) equal to the weighted average of the rates on overnight

federal funds transactions with members of the Federal Reserve System arranged

by federal funds brokers on such day, as published by the Federal Reserve Bank

of New York on the Business Day next succeeding such day, provided that

(i) if the day for which such rate is to be determined is not a Business Day,

the Federal Funds Rate for such day shall be such rate on such transactions on

the next preceding Business Day as so published on the next succeeding Business

Day, and (ii) if such rate is not so published for any day, the Federal Funds

Rate for such day shall be the average of the quotations for such day on such

transactions received by the Bank.

 

“Financial Officer”: as to any Person, the

chief financial officer of such Person or such other officer as shall be

reasonably satisfactory to the Bank.

 

“Fixed Charge Coverage Ratio”: at any date of

determination, the ratio of (a) EBITDA minus Capital Expenditures to (b)

the sum of Debt Service plus Income Tax Expense, in each case for the

four fiscal quarter period ending on such date.

 

“Fixed Rate Funding Loss” means all liquidated

damages, break funding losses and other losses, claims, damages or other

amounts payable by the Borrower to the Bank under any Interest Rate Protection

Product, including, without limitation, any amounts payable by reason of an

early termination of any Interest Rate Protection Product.

 

“Foreign Subsidiary”: any Subsidiary which does

not qualify under the definition of Domestic Subsidiary.

 

“Funded Debt”: on any date (x) during the

Revolving Credit Commitment Period, the sum of (i) the aggregate principal

amount of Revolving Credit Loans outstanding on such date plus (ii) the

principal amount of all senior indebtedness for borrowed money of the Borrower

and its Subsidiaries outstanding on such date which has a final maturity of

more than twelve months from such date, and (y) after the Revolving Credit

Commitment Period, the sum of (i) the outstanding principal balance of the Term

Loan on such date plus (ii) the principal amount of all senior

indebtedness for borrowed money of the Borrower and its Subsidiaries (other

than the Term Loan) outstanding on such date which has a final maturity of more

than twelve months from such date.

 

“GAAP”: generally accepted accounting

principles in effect in the United States of America as of the date of

determination, consistently applied.

 

8

 

“Governmental Authority”: any foreign, federal,

state, municipal or other government, or any department, commission, board,

bureau, agency, public authority or instrumentality thereof, or any court or

arbitrator.

 

“Hazardous Substance”: any hazardous or toxic

substance, material or waste, including, but not limited to, (i) those

substances, materials, and wastes listed in the United States Department of

Transportation Hazardous Materials Table (49 CFR 172.101) or by the

Environmental Protection Agency as hazardous substances (40 CFR Part 302) and

amendments thereto and replacements thereof and (ii) any substance, pollutant

or material defined as, or designated in, any Environmental Law as a “hazardous

substance,” “toxic substance,” “hazardous material,” “hazardous waste,”

“restricted hazardous waste,” “pollutant,” “toxic pollutant” or words of similar

import.

 

“Income Tax Expense”: for any period, the

greater of (i) accrued income tax expense calculated in accordance with GAAP,

or (ii) income taxes paid in cash, in each case for such period of the Borrower

and its Subsidiaries determined on a consolidated basis.

 

“Indebtedness”: as to any Person, at a

particular time, all items which constitute, without duplication, (i)

indebtedness for borrowed money, (ii) indebtedness in respect of the deferred

purchase price of property (other than trade payables incurred in the ordinary

course of business), (iii) indebtedness evidenced by notes, bonds, debentures

or similar instruments, (iv) obligations with respect to any conditional sale

or title retention agreement, (v) indebtedness arising under acceptance facilities

and the amount available to be drawn under all letters of credit issued for the

account of such Person and, without duplication, all drafts drawn thereunder to

the extent such Person shall not have reimbursed the issuer in respect of the

issuer’s payment thereof, (vi) all liabilities secured by any Lien on any

property owned by such Person even though such Person has not assumed or

otherwise become liable for the payment thereof (other than carriers’,

warehousemen’s, mechanics’, repairmen’s or other like non-consensual statutory

Liens arising in the ordinary course of business), (vii) Capital Lease

Obligations, (viii) obligations under interest rate or foreign currency hedging

arrangements at market value, (ix) all obligations of such Person in respect of

Capital Stock subject to mandatory redemption or redemption at the option of

the holder thereof, in whole or in part, and (x) all Contingent Obligations of

such Person in respect of any of the foregoing.

 

“Intellectual Property”: as defined in Section

4.15.

 

“Intercompany Indebtedness”: loans which are

made (i) by the Borrower to any Subsidiary Guarantor, or (ii) by a direct or

indirect wholly-owned Subsidiary of the Borrower to the Borrower or to a

Subsidiary Guarantor.

 

“Interest Expense”: for any period, the sum of,

without duplication, all interest (adjusted to give effect to all interest rate

swap, cap or other interest rate hedging arrangements and fees and expenses

paid in connection therewith) paid in cash in respect of all Indebtedness during

such period of the Borrower and its Subsidiaries as determined on a

consolidated basis.

 

9

 

“Interest Payment Date”: (i) during the

Revolving Credit Commitment Period (x) as to any ABR Advance, the first day of

each month commencing on the first of such days to occur after such ABR Advance

is made or any LIBOR Advance is converted to an ABR Advance, (y) as to any

LIBOR Advance as to which the Borrower has selected an Interest Period of one,

two or three months, the last day of such Interest Period, and (z) as to any

LIBOR Advance as to which the Borrower has selected an Interest Period of six

months, the date which occurs three months from the first day of such Interest

Period and the last day of such Interest Period; (ii) after the Revolving

Credit Commitment Period, with respect to all Advances, the first day of each

month; and (iii) the Maturity Date.

 

“Interest Period”: with respect to any LIBOR

Advance, the period commencing on, as the case may be, the Borrowing Date or

Conversion Date with respect to such LIBOR Advance and ending one, two, three

or six months thereafter as selected by the Borrower and agreed to by the Bank,

provided, however, that:

 

(a)           if any Interest Period would otherwise

end on a day which is not a Business Day, such Interest Period shall be

extended to the next succeeding Business Day unless the result of such

extension would be to carry such Interest Period into another calendar month,

in which event such Interest Period shall end on the immediately preceding

Business Day;

 

(b)           any Interest Period which begins on

the last Business Day of a calendar month (or on a day for which there is no

numerically corresponding day in the calendar month at the end of such Interest

Period) shall end on the last Business Day of the calendar month at the end of

the Interest Period;

 

(c)           no Interest Period selected in

respect of the conversion of any LIBOR Advance shall end after (i) the

Revolving Credit Termination Date, for the period prior to the Revolving Credit

Termination Date, and (ii) the Maturity Date, for the period after the Term

Loan Conversion Date;

 

(d)           the Borrower shall select Interest

Periods such that, on each date that a mandatory scheduled principal payment is

required to be made with respect to the Term Loan, (i) the aggregate principal

balance of all ABR Advances comprising the Term Loan outstanding on such date,

plus (ii) the aggregate principal balance of each LIBOR Advance comprising the

Term Loan, the applicable Interest Period of which shall end on or before such

date, shall equal or exceed the aggregate principal balance of the Term Loan

required to be paid on such date;

 

(e)           the Borrower shall select Interest

Periods so that not more than ten (10) different Interest Periods shall be

outstanding at any one time under the Loans; and

 

(f)            if the Borrower shall enter into any

Interest Rate Protection Product with respect to the Term Loan, each Interest

Period with respect to the amount of

 

10

 

the Term Loan equal to the notional amount in such Interest Rate

Protection Product shall be one month.

 

“Interest Rate Protection Product”  means

any interest rate swap, cap, collar or floor agreement, hedge device or other

agreement or arrangement entered into by the Borrower with the Bank at any time

with respect to a notional amount equal to the all or any portion of the

outstanding principal balance of the Term Loan, the purpose of which is to

provide a fixed rate of interest payable by the Borrower with respect to such

portion of the Term Loan.

 

“Investments”: as defined in Section 8.5.

 

“Letter of Credit Agreement”: each Application

and Agreement for Standby Letter of Credit, in the form provided by the Bank

from time to time.

 

“Letter of Credit Commitment”: the commitment

of the Bank to issue Letters of Credit under and in accordance with the terms

of this Agreement.

 

“Letter of Credit Commitment Amount”:

$5,000,000, as reduced from time to time pursuant to Section 2.6.

 

“Letter of Credit Commitment Period”: the

period from the date hereof until the Business Day immediately preceding the

Maturity Date.

 

“Letter of Credit Exposure”: at any date, the

sum, without duplication, of (i) the aggregate amount which may be drawn under

all unexpired Letters of Credit outstanding on such date (whether or not the

conditions for drawing thereunder have or may be satisfied), and (ii) the

aggregate unpaid reimbursement obligations in respect of the Letters of Credit

on such date.

 

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

 

“Leverage Ratio”: at any date of determination,

the ratio of (x) Funded Debt on such date to (y) EBITDA for the period of four

fiscal quarters ending on such date.

 

“LIBOR Advances”: collectively, the Revolving

Credit Loans or the Term Loan, as the case may be, (or any portions thereof),

at such time as they (or such portions) are made and/or being maintained at a

rate of interest based upon LIBOR.

 

“LIBOR”: with respect to the Interest Period

applicable to any LIBOR Advance, a rate of interest per annum, as determined by

the Bank, (rounded, if necessary, to the nearest one hundred-thousandth of a

percentage point) equal to the rate for deposits in U.S. Dollars for a period

comparable to such Interest Period which appears on the Telerate Page 3750 as

of 11:00 a.m., London time, on the day that is two London Banking Days prior to

the first day of such Interest Period. 

If such rate does not appear on the Telerate Page 3750, LIBOR shall

mean, for such Interest Period, the rate per annum (rounded, if necessary, to

the nearest one hundred-thousandth of a percentage point) at which deposits in

U.S. Dollars are offered by four major banks in the London interbank market at

approximately 11:00 a.m., London time, on the day that

 

11

 

is two London Banking

Days prior to the first day of such Interest Period to prime banks in the

London interbank market for a period comparable to such Interest Period and in

an amount comparable to the outstanding principal amount of such LIBOR Advance.

The Bank will request the principal London office of each such bank to provide

a quotation of its rate.  If at least

two such quotations are provided as requested, the rate for that Interest

Period will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as requested, the rate

for that Interest Period will be the arithmetic mean of the rates quoted by

major banks in New York City, selected by the Bank, at approximately 11:00

a.m., New York City time, on the date that is two Business Days prior to the

first day of such Interest Period for loans in U.S. Dollars to leading European

banks for a period comparable to such Interest Period and in an amount

comparable to the outstanding principal amount of such LIBOR Advance.

 

“License”: as defined in Section 4.15.

 

“Lien”: any mortgage, pledge, hypothecation,

assignment, deposit or preferential arrangement, encumbrance, lien (statutory

or other), or other security agreement or security interest of any kind or

nature whatsoever, including, without limitation, any conditional sale or other

title retention agreement and any capital or financing lease having

substantially the same economic effect as any of the foregoing.

 

“Liquid Investments”: (i)

normal business banking accounts, (ii) dollar denominated time deposits,

certificates of deposit and bankers acceptances maturing within 180 days 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 whose (or whose parent company’s) unsecured non-credit

supported short-term commercial paper rating at the time of such acquisition is

the highest credit rating obtainable from Standard & Poor’s Ratings

Services, a division of The McGraw-Hill Companies, Inc., or any successor

thereto (“S&P”) and Moody’s Investors Service, Inc. or any successor

thereto (“Moody’s”) or, if rated by only one such rating agency, the

highest credit rating obtainable from such rating agency, (iii) securities

issued, or directly and fully guaranteed, or insured, by the United States of

America or any agency or instrumentality thereof (provided that the full faith

and credit of the United States of America is pledged in full support thereof)

having maturities of not more than one year from the date of acquisition, (iv)

commercial paper maturing within 270 days from the date of acquisition thereof

and having, at such date of acquisition, the highest credit rating obtainable from

S&P or from Moody’s, (v) marketable direct obligations issued by any state

of the United States of America or any political subdivision of any such state

or any public instrumentality thereof maturing within one year from the date of

acquisition thereof and, at the time of acquisition, having one of the two

highest ratings obtainable from either S&P or Moody’s, and (vi) equity

securities traded on any nationally recognized securities exchange in the

United States of America.

 

“Loan Documents”: collectively, this Agreement,

the Note, each Letter of Credit Agreement, the Collateral Documents and any

documentation governing an Interest Rate Protection Product.

 

12

 

“Loans”: the Revolving Credit Loans and/or the

Term Loan, as the case may be.  The term

“Loans” shall also include all loans made under the Prior Credit Agreement

which are outstanding on the Effective Date.

 

“London Banking Day”: any day on which

commercial banks are open for general business (including dealings in foreign

exchange and foreign currency deposits) in London, England.

 

“Margin Stock”: any “margin stock”, as defined

in Regulation U of the Board of Governors of the Federal Reserve System, as

amended, supplemented or otherwise modified from time to time.

 

“Material Adverse Change”: a material adverse

change in (i) the financial condition, operations, business, prospects or

property of (A) the Borrower or (B) the Borrower and its Subsidiaries taken as

a whole, (ii) the ability of the Borrower or any of its Subsidiaries to perform

its obligations under the Loan Documents to which it is a party or (iii) the

ability of the Bank to enforce the Loan Documents.

 

“Material Adverse Effect”: a material adverse

effect on (i) the financial condition, operations, business, prospects or

property of (A) the Borrower or (B) the Borrower and its Subsidiaries taken as

a whole, (ii) the ability of the Borrower or any of its Subsidiaries to perform

its obligations under the Loan Documents to which it is a party or (iii) the

ability of the Bank to enforce the Loan Documents.

 

“Maturity Date”: November 4, 2004, or, with

respect to either Note, such earlier date on which such Note shall become due

and payable, whether by acceleration or otherwise.

 

“Multiemployer Plan”: a Pension Plan which is a

multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Note”: the Revolving Credit Note or the Term

Note, as the context requires; and “Notes” means the Revolving Credit Note and

Term Note, collectively.

 

“Notice of Conversion”: a notice substantially

in the form of Exhibit C.

 

“Obligor”: the purchaser of goods and services

giving rise to an Account or any other Person obligated to make payment in

respect to such Account.

 

“Operating Entity”: any Person or any business

or operating unit of a Person which is, or could be, operated separate and

apart from (i) the other businesses and operations of such Person, or (ii) any

other line of business or business segment.

 

“Organizational Documents”: as to any Person

which is (i) a corporation, the certificate or articles of incorporation and by–laws

of such Person, (ii) a limited liability company, the limited liability company

agreement or similar agreement of such Person, (iii) a

 

13

 

partnership, the

partnership agreement or similar agreement of such Person, or (iv) any other

form of entity or organization, the organizational documents analogous to the

foregoing.

 

“PBGC”: the Pension Benefit Guaranty

Corporation established pursuant to Subtitle A of Title IV of ERISA, or any

Governmental Authority succeeding to the functions thereof.

 

“Pension Plan”: at any date of determination,

any Employee Benefit Plan (including a Multiemployer Plan), the funding

requirements of which (under Section 302 of ERISA or Section 412 of the Code)

are, or at any time within the six years immediately preceding such date, were

in whole or in part, the responsibility of the Borrower, any of its

Subsidiaries or any ERISA Affiliate.

 

“Permitted Lien”: a Lien permitted to exist

under Section 8.2.

 

“Person”: any individual, firm, partnership,

limited liability company, joint venture, corporation, association, business

enterprise, joint stock company, unincorporated association, trust,

Governmental Authority or any other entity, whether acting in an individual,

fiduciary, or other capacity, and for the purpose of the definition of “ERISA

Affiliate”, a trade or business.

 

“Prime Rate”: a rate of interest per annum

equal to the rate of interest publicly announced in New York City by the Bank

from time to time as its prime commercial lending rate (which rate is not the

lowest rate at which the Bank may make extensions of credit), such rate to be

adjusted automatically (without notice) on the effective date of any change in

such publicly announced rate.

 

“Prior Credit Agreement”: as defined in the

Recitals hereto.

 

“Prohibited Transaction”: a transaction which

is prohibited under Section 4975 of the Code or Section 406 of ERISA and not

exempt under Section 4975 of the Code or Section 408 of ERISA.

 

“Real Property”: all real property owned or

leased by the Borrower or any of its Subsidiaries.

 

“Regulatory Change”: (i) the introduction or

phasing in of any law, rule or regulation after the Effective Date, (ii) the

issuance or promulgation after the Effective Date of any directive, guideline

or request from any central bank or United States or foreign Governmental

Authority (whether or not having the force of law), or (iii) any change after

the Effective Date in the interpretation of any existing law, rule, regulation,

directive, guideline or request by any central bank or United States or foreign

Governmental Authority charged with the administration thereof.

 

14

 

“Reimbursement Obligations”: all of the

obligations and liabilities of the Borrower (a) under each Letter of Credit

Agreement, and (b) hereunder in respect of the Letters of Credit.

 

“Reportable Event”: with respect to any Pension

Plan, (i) any event set forth in Sections 4043(c) (other than a Reportable

Event as to which the 30 day notice requirement is waived by the PBGC under

applicable regulations), 4062(c) or 4063(a) of ERISA or the regulations

thereunder, (ii) an event requiring the Borrower, any of its Subsidiaries or

any ERISA Affiliate to provide security to a Pension Plan under Section

401(a)(29) of the Code, or (iii) any failure to make any payment required by

Section 412(m) of the Code.

 

“Restricted Payment”: as to any Person (i) any

dividend or other distribution, direct or indirect, on account of any shares of

Capital Stock or other equity interest in such Person now or hereafter

outstanding (other than a dividend payable solely in shares of such Capital

Stock to the holders of such shares), (ii) any redemption, retirement, sinking

fund or similar payment, purchase or other acquisition, direct or indirect, of

any shares of any class of Capital Stock or other equity interest in such

Person now or hereafter outstanding, and (iii) any payment of principal or

premium with respect to Indebtedness of such Person to any Affiliate, whether

at maturity, upon acceleration, or otherwise.

 

“Revolving Credit Commitment”: the Bank’s

undertaking during the Revolving Credit Commitment Period to make Revolving

Credit Loans, subject to the terms and conditions hereof, in an aggregate

outstanding principal amount not exceeding at any time the lesser of (i) the

Revolving Credit Commitment Amount, or (ii) the Borrowing Base at such time

 

“Revolving Credit Commitment Amount”: $12,000,000,

as reduced from time to time pursuant to Section 2.6.

 

“Revolving Credit Commitment Period”: the

period from the date hereof until the Business Day immediately preceding the

Revolving Credit Termination Date.

 

“Revolving Credit Loan” and “Revolving

Credit Loans”: as defined in Section 2.1.

 

“Revolving Credit Termination Date”: the

earlier of the Business Day immediately preceding the Maturity Date or such

other date upon which the Revolving Credit Commitment shall have been

terminated in accordance with Section 2.6 or Section 9.2.

 

“Sale and Leaseback Transaction”: any

transaction or series of related transactions pursuant to which a Person sells

or transfers any property in connection with the leasing, or the resale against

installment payments, of such property to the seller or transferor.

 

“Security Agreement”: the Amended and Restated

Security Agreement, substantially in the form of Exhibit D, as the same may be

amended, supplemented or otherwise modified from time to time.

 

15

 

“Solvent”: as to any Person, (i) such Person’s

total assets exceed its total liabilities, and (ii) such Person is not insolvent,

as such term is defined in Section 101(32) of the Bankruptcy Code (11 U.S.C. §

101 et

seq.).

 

“Special Counsel”: Emmet, Marvin & Martin,

LLP, special counsel to the Bank.

 

“Subsidiary”: as to any Person, any

corporation, association, partnership, limited liability company, joint venture

or other business entity of which such Person or any Subsidiary of such Person,

directly or indirectly, either (i) in respect of a corporation, owns or

controls more than 50% of the outstanding Capital Stock having ordinary voting

power to elect a majority of the board of directors, irrespective of whether a

class or classes shall or might have voting power by reason of the happening of

any contingency, or (ii) in respect of an association, partnership, limited

liability company, joint venture or other business entity, is entitled to share

in more than 50% of the profits and losses, however determined.

 

“Subsidiary Guarantor”: collectively, MG

(Bermuda) Ltd., META Group Australia Holdings PTY. Limited, Cenntinum PTE LTD.

and 1422722 Ontario Inc. and each other each Subsidiary of the Borrower which

has executed and delivered to the Bank a Subsidiary Guaranty or a supplement

thereto.

 

“Subsidiary Guaranty”: the Amended and Restated

Subsidiary Guaranty, substantially in the form of Exhibit E, as amended,

supplemented or otherwise modified from time to time.

 

“Taxes”: any and all present or future income,

stamp, franchise or other taxes, levies, imposts, duties, fees, assessments,

deductions, withholdings, or other charges of whatever nature, now or hereafter

imposed, levied, collected, withheld, or assessed by any jurisdiction, or by

any department, agency, state or other political subdivision thereof or

therein.

 

“Telerate Page 3750”: the display page so

designated on Bridge’s Telerate Service (or such other page as may replace that

page on that service), or such other service as may be nominated as the

information vendor, for purposes of displaying rates or prices comparable to

LIBOR.

 

“Term Loan”: as defined in Section 2.3.

 

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

 

“Term Note”: as defined in Section 2.4.

 

“Termination Event”: with respect to any

Pension Plan, (i) a Reportable Event, (ii) the termination of a Pension Plan,

or the filing of a notice of intent to terminate a Pension Plan, or the

treatment of a Pension Plan amendment as a termination under Section 4041(c) of

ERISA, (iii) the institution of proceedings to terminate a Pension Plan under

Section 4042 of ERISA, or (iv) the appointment of a trustee to administer any

Pension Plan under Section 4042 of ERISA.

 

16

 

“Total Commitment Amount”:  at any time, the sum of the Revolving Credit

Commitment Amount and the Term Loan Commitment Amount at such time.

 

1.2.                              Principles of Construction

 

(a)           All terms defined in

this Agreement shall have the meanings given such terms herein when used in the

other Loan Documents or any certificate, opinion or other document made or

delivered pursuant hereto or thereto, unless otherwise defined therein.

 

(b)           As used in the Loan

Documents and in any certificate, opinion or other document made or delivered

pursuant thereto, accounting terms not defined in Section 1.1, and accounting

terms partly defined in Section 1.1, to the extent not defined, shall have the

respective meanings given to them under GAAP. 

If at any time any change in GAAP would affect the computation of any

financial ratio or requirement set forth in this Agreement, the Bank and the

Borrower shall negotiate in good faith to amend such ratio or requirement to

reflect such change in GAAP, provided that, until so amended, (i) such

ratio or requirement shall continue to be computed in accordance with GAAP

prior to such change therein and (ii) the Borrower shall provide to the Bank

financial statements and other documents required under this Agreement or as

reasonably requested hereunder setting forth a reconciliation between

calculations of such ratio or requirement made before and after giving effect

to such change in GAAP.

 

(c)           The words “hereof”,

“herein”, “hereto” and “hereunder” and similar words when used in a Loan

Document shall refer to such Loan Document as a whole and not to any particular

provision thereof, and Section, schedule and exhibit references contained

therein shall refer to Sections thereof or schedules or exhibits thereto unless

otherwise expressly provided therein.

 

(d)           Unless the context

otherwise requires, words in the singular number include the plural, and words

in the plural include the singular.

 

(e)           Unless specifically

provided in a Loan Document to the contrary, any reference to a time shall

refer to such time in New York City.

 

(f)            Unless specifically

provided in a Loan Document to the contrary, in the computation of periods of

time from a specified date to a later specified date, the word “from” means

“from and including” and the words “to” and “until” each means “to but

excluding”.

 

(g)           References in any

Loan Document to a fiscal period shall refer to that fiscal period of the

Borrower.

 

1.3.                              Matters Regarding the Prior Credit

Agreement

 

On the Effective

Date, (i) if the aggregate amount of the Revolving Credit Loans and Letter of

Credit Exposure (as such terms are defined in the Prior Credit Agreement)

exceeds the Total Commitment Amount, the Borrower shall pay to the Bank (as a

prepayment under the Prior Credit Agreement) the amount of such excess plus all

accrued and unpaid interest thereon and any other sums payable in connection

therewith pursuant to the Prior Credit Agreement, and (ii) loans

outstanding under the Prior Credit Agreement shall thereafter be converted

first to the

 

17

 

Term

Loan pursuant to Section 2.3, and to the extent of any such loans in excess of

the Term Loan Commitment Amount, the balance of such loans shall be converted

to Revolving Credit Loans hereunder pursuant to Section 2.1.

 

1.4.                              Continuation of Collateral.

 

The parties

expressly agree that all Collateral pledged as Collateral under the security

documents for the Prior Credit Agreement which continues to be collateral as of

the date hereof under the security documents for the Prior Credit Agreement

shall be deemed to be Collateral as of the date hereof for all purposes under

the Collateral Documents and this Agreement.

 

2.                                       AMOUNT AND TERMS OF LOANS

 

2.1.                              Revolving Credit Loans

 

Subject to the terms and conditions hereof, the Bank

agrees to make revolving credit loans (each a “Revolving Credit Loan”

and collectively with all other Revolving Credit Loans, the “Revolving

Credit Loans”) to the Borrower from time to time during the Revolving

Credit Commitment Period; provided that (a) the aggregate principal

amount of the Revolving Credit Loans outstanding at any time shall not exceed

(1) the Revolving Credit Commitment Amount minus (2) the Letter of

Credit Exposure, and (b) after giving effect to any requested Revolving Credit

Loan, the sum of all Revolving Credit Loans plus the outstanding principal

balance of the Term Loan shall not exceed the Borrowing Base.  During the Revolving Credit Commitment

Period, the Borrower may borrow, prepay in whole or in part and reborrow under

the Revolving Credit Commitment, all in accordance with the terms and

conditions of this Agreement.  Subject

to the provisions of Sections 2.5(a) and 3.3, at the option of the Borrower,

Revolving Credit Loans may be made as (i) one or more ABR Advances, (ii) one or

more LIBOR Advances or (iii) any combination thereof.  Loans outstanding under the Prior Credit Agreement on the

Effective Date in excess of the Term Loan Commitment Amount shall be deemed to

be Revolving Credit Loans under this Agreement.  Each LIBOR Advance and each ABR Advance with respect to such

loans shall continue as a LIBOR Advance or ABR Advance hereunder, as the case

may be.

 

2.2.                              Revolving Credit Note.

 

The Revolving Credit Loans to the Borrower shall be

evidenced by a promissory note (the “Revolving Credit Note”)

substantially in the form of Exhibit A-1, with appropriate insertions therein,

payable to the order of the Bank, dated the Effective Date, and in a principal

amount equal to the Revolving Credit Commitment Amount.  The outstanding principal balance of the

Revolving Credit Loans shall be due and payable on the Maturity Date.

 

2.3.                              Term Loan.

 

Subject to the terms and conditions hereof, on the

Effective Date, a portion of the loans outstanding under the Prior Credit

Agreement in an amount equal to the Term Loan

 

18

 

Commitment Amount shall

be converted to a fully advanced, non-revolving term loan hereunder (the “Term

Loan”).  Each LIBOR Advance and each

ABR Advance with respect to such loans shall continue as a LIBOR Advance or ABR

Advance hereunder, as the case may be. 

From the Effective Date, and subject to the provisions of Sections

2.5(a) and 3.3, at the option of the Borrower, the Term Loan may be comprised

of (i) one or more ABR Advances, (ii) one or more LIBOR Advances or (iii) any

combination thereof, provided that if the Borrower shall enter into any

Interest Rate Protection Product with respect to the Term Loan, the portion of

the Term Loan equal to the notional amount in such Interest Rate Protection

Product shall be a LIBOR Advance through and including the date that such

Interest Rate Protection Product shall expire or be terminated.

 

2.4.                              Term Note.

 

(a)           The

Term Loan shall be evidenced by a promissory note (the “Term Note”) substantially

in the form of Exhibit A-2, with appropriate insertions therein, payable to the

order of the Bank, dated the Effective Date, and in the principal amount of the

Term Loan.

 

(b)           The

principal amount of the Term Loan shall be payable in 36 consecutive monthly

installments of $222,222.22 each, payable on the first day of each month

commencing on the first such date following the Effective Date, and the balance

thereof, plus all accrued and unpaid interest thereon, shall be payable on the

Maturity Date.

 

2.5.                              Procedure for Borrowing.

 

(a)           The

Borrower may borrow under the Revolving Credit Commitment on any Business Day

during the Revolving Credit Commitment Period, provided that the

Borrower shall have delivered a Borrowing Request, together with a current

Borrowing Base Certificate, to the Bank, which shall be sent by

telecopy (confirmed promptly, and in any event within five Business Days, by

the delivery to the Bank of a manually signed counterpart), no later than:

11:00 a.m. of the third Business Day prior to the requested Borrowing Date, in

the case of LIBOR Advances, and 11:00 a.m. on the requested Borrowing Date, in

the case of ABR Advances, specifying (A) the aggregate principal amount to be

borrowed, (B) the requested Borrowing Date, (C) whether such borrowing is to

consist of one or more LIBOR Advances, an ABR Advance, or a combination thereof

and (D) if the borrowing is to consist of one or more LIBOR Advances, the

length of the Interest Period for each such LIBOR Advance.  Each (i) LIBOR Advance made on each

Borrowing Date, when aggregated with all amounts to be converted to a LIBOR

Advance on such date and having the same Interest Period as the LIBOR Advance

to be made, shall equal no less than $500,000 or a whole multiple of $100,000

in excess thereof, and (ii) ABR Advance made on each Borrowing Date shall equal

no less than $100,000 or an integral multiple thereof (or, if less, the

Available Revolving Credit Commitment on such date).

 

(b)           Subject

to the satisfaction of the terms and conditions of this Agreement, as

determined by the Bank, the requested Loans shall be made available by the Bank

on the requested Borrowing Date to the Borrower at the office of the Bank

specified in Section 10.2 by

 

19

 

crediting the account of

the Borrower on the books of such office with the amount of such requested

Loans.

 

(c)           If

the Bank makes a new Loan on a Borrowing Date on which the Borrower is to repay

a Loan, the Bank shall apply the proceeds of the new Loan to make such

repayment, and only the excess of the proceeds of the new Loan over the Loan

being repaid need be made available to the Borrower.

 

2.6.                              Termination of Commitment; Reduction

of Commitment Amount

 

(a)           The

Borrower shall have the right, upon at least three Business Days’ prior written

notice to the Bank, to terminate the Revolving Credit Commitment or from time

to time to permanently reduce the Revolving Credit Commitment Amount, provided

that (x) any such reduction shall be in the amount of $1,000,000 or a whole

multiple of $500,000 in excess thereof, and (y) the Revolving Credit Commitment

Amount may not be reduced to less than $1,000,000 without terminating the

Revolving Credit Commitment. Simultaneously with each reduction of the Revolving

Credit Commitment Amount under this Section, the Borrower shall pay the

Commitment Fee accrued on the amount by which the Revolving Credit Commitment

Amount has been reduced.

 

(b)           Reduction

of the Letter of Credit Commitment Amount. 

The Letter of Credit Commitment Amount shall not be reduced until such

time as the Revolving Credit Commitment Amount shall equal such Letter of

Credit Commitment Amount, and thereafter shall in each case be reduced,

automatically, by a sum equal to the amount of each such reduction in the

Revolving Credit Commitment Amount.

 

2.7.                              Prepayments of the Loans; Payment on

Maturity

 

(a)           Voluntary

Prepayments. The Borrower may, at its option, prepay the Loans without

premium or penalty (but subject to Section 3.4), in full at any time or in part

from time to time by notifying the Bank in writing no later than 12:00 noon on

the proposed prepayment date, in the case of Loans consisting of ABR Advances,

and at least three Business Days prior to the proposed prepayment date, in the

case of Loans consisting of LIBOR Advances, specifying whether the Advances to

be prepaid are ABR Advances or LIBOR Advances or a combination thereof, the

amount to be prepaid and the date of prepayment.  Each such notice shall be irrevocable and the amount specified in

each such notice, together with interest accrued on such amount to the date of

prepayment, shall be due and payable on the date specified.  Each partial prepayment pursuant to this

subsection shall be in an aggregate principal amount of $250,000 or a whole

multiple of $50,000 in excess thereof, or, if less, the outstanding principal

balance of the Revolving Credit Loans or Term Loan, as the case may be.  After giving effect to any partial

prepayment with respect to LIBOR Advances which were made (whether as the

result of a borrowing or a conversion) on the same date and which had the same

Interest Period, the outstanding principal balance of such LIBOR Advances shall

exceed (subject to Section 3.3) $500,000 or a whole multiple of $100,000 in

excess thereof.

 

20

 

(b)           Mandatory

Prepayments Relating to Sales of Capital Stock. An amount equal to 100% of

the net proceeds of any public secondary offering of Capital Stock of the

Borrower shall be applied to prepay the Loans within one Business Day after the

receipt thereof by the Borrower.

 

(c)           Mandatory

Prepayments Relating to Terminations of the Revolving Credit Commitment and

Reductions of the Revolving Credit Commitment Amount.  (i) Simultaneously with the termination of

the Revolving Credit Commitment under Section 2.6, the Borrower shall prepay

the Revolving Credit Loans in full; and (ii) simultaneously with a reduction of

the Revolving Credit Commitment Amount under Section 2.6, the Borrower shall

prepay the Revolving Credit Loans by the aggregate amount, if any, by which the

sum of the aggregate principal amount of the Revolving Credit Loans plus

the Letter of Credit Exposure exceeds the Revolving Credit Commitment Amount as

so reduced.

 

(d)           Mandatory Borrowing

Base Prepayment.  On any date that

the aggregate amount of all Loans then outstanding exceeds the Borrowing Base,

the Borrower shall prepay the Loans on such date in an amount equal to such

excess.

 

(e)           Prepayments

Generally. With each prepayment of a Loan, the Borrower shall pay all

interest accrued on the principal amount prepaid to the date of

prepayment.  Each prepayment of the Term

Loan shall be applied against the remaining installments of principal required

to be paid pursuant to Section 2.4(b) in the inverse order of the maturity

thereof.  Unless otherwise specified by

the Borrower, each prepayment of Loans shall first be applied to ABR Advances.

 

(f)            Maturity.  The outstanding principal balance of the

Loans, all accrued and unpaid interest thereon and all fees and expenses

payable hereunder shall be due and payable on the Maturity Date.

 

2.8.          Payments

 

(a)           Each payment of

principal and interest on the Loans and of all of the fees to be paid to the

Bank in connection with this Agreement shall be made by the Borrower prior to

1:00 p.m. on the date such payment is due to the Bank at the Bank’s office

specified in Section 10.2, in each case in lawful money of the United States,

in immediately available funds and without set-off or counterclaim.  The failure of the Borrower to make any such

payment by such time shall not constitute a Default, provided that such

payment is made on such due date, but any such payment made after 1:00 p.m. on

such due date shall be deemed to have been made on the next Business Day for

the purpose of calculating interest on amounts outstanding on the Loans.

 

(b)           If any payment

hereunder or under the Notes shall be due and payable on a day which is not a

Business Day, the due date thereof (except as otherwise provided in the

definition of Interest Period) shall be extended to the next Business Day and

(except with respect to payments in respect of the Fees) interest shall be

payable at the applicable rate specified herein

 

21

 

during such

extension, provided, however that if such next Business Day is after the

Maturity Date, any such payment shall be due on the immediately preceding

Business Day.

 

2.9.          Use of

Proceeds

 

The Borrower agrees that the proceeds of the Loans

shall be applied first to the refinancing of the loans outstanding under the

Prior Credit Agreement in accordance with the provisions of Sections 2.1 and

2.3.  Thereafter, Revolving Credit Loans

shall be used solely, directly or indirectly, to (i) fund the Acquisition of

independent sales representative offices of the Borrower and other

Acquisitions, in either case, subject to the provisions of Section 8.5(e), and

(ii) provide working capital for the Borrower and its Subsidiaries and for

their general corporate purposes not inconsistent with the provisions

hereof.  No part of the proceeds of any

Loan nor any Letter of Credit will be used, directly or indirectly, for a

purpose which violates any law, including, without limitation, the provisions

of Regulations T, U or X of the Board of Governors of the Federal Reserve

System, as amended.

 

2.10.        Letter

of Credit Sub-facility

 

(a)           Subject to the terms

and conditions of this Agreement, the Bank agrees to issue standby letters of

credit (each, a “Letter of Credit”) during the Letter of Credit

Commitment Period for the account of the Borrower, provided that immediately

after the issuance of each Letter of Credit (i) the Letter of Credit Exposure

shall not exceed the Letter of Credit Commitment Amount, (ii) the sum of the aggregate

principal amount of the Revolving Credit Loans plus the Letter of Credit

Exposure would not exceed the Revolving Credit Commitment Amount, and (iii) the

sum of the aggregate principal amount of all Loans plus the Letter of Credit

Exposure would not exceed the Borrowing Base. 

Each of the Existing L/Cs shall be deemed to have been issued under the

Letter of Credit Commitment and shall be a “Letter of Credit” under this

Agreement.

 

(b)           Each Letter of

Credit shall have an expiration date which shall not be later than the Business

Day immediately preceding the Maturity Date, provided however, that the

Bank may agree, in its sole discretion, to issue Letters of Credit which have

an expiration date later than the Revolving Credit Termination Date, at such time

or times prior to the Term Loan Election having occurred.  In the event that any Letters of Credit

remain outstanding on the Maturity Date, whether the Maturity Date has occurred

because of the Term Loan Election not having occurred or otherwise, the Borrower

shall deposit with the Bank on the Maturity Date an amount equal to the Letter

of Credit Exposure on the Maturity Date in a cash collateral account under the

exclusive control of the Bank.

 

(c)           Each Letter of

Credit shall be issued for the account of the Borrower in support of an

obligation of the Borrower in favor of a beneficiary who has requested the

issuance of such Letter of Credit as a condition to a transaction entered into

in connection with the business of the Borrower.  The Borrower shall give the Bank a Letter of Credit Agreement for

such Letter of Credit by 12:00 noon on the requested date of issuance of a

Letter of Credit.  Each Letter of Credit

shall be in form and substance reasonably satisfactory to the Bank, with such

 

22

 

provisions with

respect to the conditions under which a drawing may be made thereunder and the

documentation required in respect of such drawing as the Bank shall reasonably

require.

 

(d)           In determining

whether to pay under any Letter of Credit, the Bank shall have no obligation to

the Borrower other than to confirm that any documents required to be delivered

under such Letter of Credit have been delivered and that they appear to comply

on their face with the requirements of such Letter of Credit.  Upon each payment by the Bank under a Letter

of Credit, the Borrower shall reimburse the Bank for the amount thereof upon

demand therefor by the Bank.  If all or

any portion of any Reimbursement Obligation in respect of a Letter of Credit

shall not be paid when due (whether upon demand, by acceleration or otherwise),

such overdue  amount shall bear

interest, payable upon demand by the Bank, at a rate per annum equal to the

Alternate Base Rate plus the Applicable Margin applicable to ABR

Advances plus 2%, from the date of such nonpayment until paid in full

(whether before or after the entry of a judgment thereon).

 

(e)           Notwithstanding

anything to the contrary contained in any Letter of Credit Agreement, to the

extent that the terms of this Agreement shall be inconsistent with the terms of

such Letter of Credit Agreement, the terms of this Agreement shall govern.

 

2.11.        Absolute Obligation with respect to

Letter of Credit Payments

 

The Borrower’s obligation to reimburse the Bank for

each payment under or in respect of a Letter of Credit shall be absolute and

unconditional under any and all circumstances and irrespective of any set–off,

counterclaim or defense to payment which the Borrower may have or have had

against the beneficiary of such Letter of Credit, the Bank or any other Person,

including any defense based on the failure of any drawing to conform to the

terms of such Letter of Credit, any drawing document proving to be forged,

fraudulent or invalid, or the illegality, invalidity, irregularity or

unenforceability of such Letter of Credit, this Agreement or any other Loan

Document, provided that with respect

to any Letter of Credit, the foregoing shall not relieve the Bank of any

liability it may have to the Borrower for any actual damages sustained by the

Borrower arising from a wrongful pay­ment under such Letter of Credit made as a

result of the Bank’s gross negligence or will­ful misconduct.

 

3.             INTEREST,

FEES, YIELD PROTECTIONS, ETC.

 

3.1.          Interest

Rate and Payment Dates

 

(a)           Prior to Maturity.  Except as otherwise provided in Sections

3.1(b) and 3.1(c), prior to maturity, the Loans shall bear interest on the

outstanding principal balance thereof at the applicable interest rate or rates

per annum set forth below:

 

23

 

	

  Advances

  	

   

  	

  Interest

  Rate

  
	

   

  	

   

  	

   

  
	

  Each ABR Advance

  	

   

  	

  Alternate Base Rate

  
	

   

  	

   

  	

   

  
	

  Each LIBOR Advance

  	

   

  	

  LIBOR for the

  applicable Interest Period plus the Applicable Margin

  

 

(b)           Late Charges.  If all or any portion of the principal

balance of or interest payable on any of the Loans or any other amount payable

under the Loan Documents shall not be paid when due (whether at the stated

maturity thereof, by acceleration or otherwise), such overdue amount shall bear

interest at a rate per annum (whether before or after the entry of a judgment

thereon) equal to 2% plus the rate which would otherwise be applicable

pursuant to Section 3.1(a), from the date such amount was due to the date such

amount is paid in full.  For purposes of

the preceding sentence, the rate applicable pursuant to Section 3.1(a) to any

overdue principal, interest or other amount payable under the Loan Documents

shall be (i) in the case of an overdue principal balance of any LIBOR Advance,

the applicable LIBOR plus the Applicable Margin until the last day of

the applicable Interest Period (or the earlier termination thereof pursuant to

this Agreement) and thereafter at the Alternate Base Rate and (ii) in all other

cases, the Alternate Base Rate.  All

such interest shall be payable on demand.

 

(c)           Computation.  Interest on (i) ABR Advances to the extent

based on the Prime Rate shall be calculated on the basis of a 365 or 366-day

year (as the case may be), and (ii) ABR Advances (to the extent based on the

Federal Funds Rate), and LIBOR Advances shall be calculated on the basis of a

360-day year for the actual number of days elapsed.  Except as otherwise provided in Section 3.1(b), interest shall be

payable in arrears on each Interest Payment Date and upon each payment

(including prepayment) of the Loans. 

Any change in the interest rate on the Loans resulting from a change in

the Alternate Base Rate or reserve requirements shall become effective as of

the opening of business on the day on which such change shall become

effective.  Each determination of the

Alternate Base Rate or a LIBOR by the Bank pursuant to this Agreement shall be

conclusive and binding on all parties hereto absent manifest error.  At no time shall the interest rate payable

on the Loans, together with the fees and all other amounts payable under the

Loan Documents to the Bank, to the extent the same are construed to constitute

interest, exceed the maximum rate of interest permitted by applicable law.

 

3.2.          Fees

 

(a)           Commitment Fee.

The Borrower agrees to pay to the Bank a fee on the amount of the average daily

difference between the outstanding Revolving Credit Loans and the Revolving

Credit Commitment Amount at the rate of 0.25% per annum (the “Commitment Fee”).

The Commitment Fee shall be payable quarterly in arrears, calculated through

the last day of each March, June, September and December of each year,

commencing on the first such day following the Effective Date, and ending on

the Revolving Credit Termination Date. The Commitment Fee shall be calculated

on the basis of a 365 or 366 day year, as the case may be, for the actual

number of days elapsed.  As soon as

possible on or after each quarter-end date, the

 

24

 

Bank shall notify the Borrower of the Commitment Fee due for the

preceding quarter, and the Borrower shall remit payment thereof to the Bank

within ten (10) Business Days thereafter.

 

(b)           Facility Fee.  The Borrower agrees to pay to the Bank a

non-refundable fee based upon the Total Commitment Amount (the “Facility Fee”)

in the amount of $85,000.  The Facility

Fee shall be payable to the Bank on the Effective Date in funds immediately

available to the Bank

 

(c)           Letter of Credit

Fees.  The Borrower agrees to pay to

the Bank the Bank’s standard fees with respect to each Letter of Credit, plus

an issuance fee equal to 1.50% of the face amount of such Letter of Credit.

 

3.3.          Conversions

 

(a)           Provided no Default

or Event of Default shall exist, the Borrower may elect from time to time to

convert one or more LIBOR Advances to ABR Advances by submitting a duly

executed Notice of Conversion to the Bank at least one Business Day prior to

such election, which notice shall be irrevocable, specifying the amount to be

converted, provided that any such conversion of LIBOR Advances shall

only be made on the last day of the Interest Period applicable thereto.  In addition, the Borrower may elect from

time to time to (i) convert ABR Advances to LIBOR Advances and (ii) continue

LIBOR Advances as new LIBOR Advances, in each case by giving the Bank at least

three Business Days’ prior irrevocable notice of such election, specifying the

amount to be so converted and the initial Interest Period relating thereto, provided

that any such conversion of ABR Advances to LIBOR Advances shall only be

made on a Business Day and any such conversion of LIBOR Advances to new LIBOR

Advances shall only be made on the last day of the Interest Period applicable

to the LIBOR Advances which are to be converted to such new LIBOR Advances.  Advances may be converted pursuant to this

Section in whole or in part, provided that the amount to be converted to

a LIBOR Advance, when aggregated with any LIBOR Advance to be made on such date

in accordance with Section 2.5(a) and having the same Interest Period, shall be

$500,000 or a whole multiple of $100,000 in excess thereof.

 

(b)           Provided no Default

or Event of Default shall exist, the Borrower may enter into an Interest Rate

Protection Product with respect to all or a portion of the outstanding balance

of the Term Loan, provided that on the effective date of such Interest Rate

Protection Product, such portion of the Term Loan to be made subject to such

Interest Rate Protection Product (the “Term Loan Notional Amount”) shall

not be a LIBOR Advance having an Interest Period longer than one month.  The Borrower shall give the Bank at least

three Business Day’s prior notice thereof, specifying the amount to be made

subject to such Interest Rate Protection Product.

 

(c)           Upon the occurrence

and during the continuance of a Default or an Event of Default, all LIBOR

Advances shall be automatically converted to ABR Advances on the last day of

the applicable Interest Period.

 

25

 

(d)           Each conversion

shall be effected by the Bank by applying the proceeds of the new ABR Advance

or LIBOR Advance, as the case may be, to the Advances (or portion thereof)

being converted. Any such conversion shall not constitute a borrowing for

purposes of Section 6.

 

(e)           If the Borrower

shall have failed to elect to continue a LIBOR Advance as a new LIBOR Advance

prior to the expiration of its Interest Period, the amount of the Loan

represented by such Advance shall be automatically converted to an ABR Advance

at the expiration of its Interest Period.

 

3.4.          Indemnification

for Loss

 

(a)           Notwithstanding

anything contained herein to the contrary, if the Borrower shall fail for any

reason to borrow or convert an Advance after it shall have given notice to do

so in which it shall have requested a LIBOR Advance, or if a LIBOR Advance

shall be terminated for any reason prior to the last day of the Interest Period

applicable thereto, or if any repayment or prepayment of the principal amount

of a LIBOR Advance is made by the Borrower for any reason on a date which is

prior to the last day of the Interest Period applicable thereto, the Borrower

agrees to indemnify the Bank against, and to pay on demand directly to the Bank

the amount (calculated by the Bank using any method chosen by the Bank which is

customarily used by the Bank for such purpose) equal to any loss or

out-of-pocket expense suffered by the Bank as a result of such failure to

borrow or convert, or such termination, repayment or prepayment, including any

loss, cost or expense suffered by the Bank in liquidating or employing deposits

acquired to fund or maintain the funding of such LIBOR Advance, or redeploying

funds prepaid or repaid, in amounts which correspond to such LIBOR Advance, and

any internal processing charge customarily charged by the Bank in connection

therewith.

 

(b)           If (i) for any

reason after the Borrower has entered into an Interest Rate Protection Product,

any Fixed Rate Funding Loss shall occur under or pursuant to such Interest Rate

Protection Product the Borrower shall pay the amount of such Fixed Rate Funding

Loss to the Bank immediately upon demand.

 

3.5.          Capital

Adequacy

 

If the amount of capital required or expected to be

maintained by the Bank or any Person directly or indirectly owning or

controlling the Bank (each a “Control Person”), shall be affected by the

occurrence of a Regulatory Change and the Bank shall have determined that such

Regulatory Change shall have had or will thereafter have the effect of reducing

(i) the rate of return on the Bank’s or such Control Person’s capital, or (ii)

the asset value to the Bank or such Control Person of the Loans made or

maintained by the Bank or the Reimbursement Obligations, in any case to a level

below that which the Bank or such Control Person could have achieved or would

thereafter be able to achieve but for such Regulatory Change (after taking into

account the Bank’s or such Control Person’s policies regarding capital

adequacy) by an amount deemed by the Bank to be material to the Bank or Control

Person, then, within ten days after demand by the Bank, the Borrower shall pay

to the Bank or such Control Person such additional amount or

 

26

 

amounts as shall be

sufficient to compensate the Bank or such Control Person, as the case may be,

for such reduction.

 

3.6.          Reimbursement for Increased Costs

 

If the Bank shall determine that a Regulatory Change:

 

(a)           does or shall subject it to any Taxes

of any kind whatsoever with respect to any LIBOR Advances or its obligations under

this Agreement to make LIBOR Advances, or change the basis of taxation of

payments to it of principal, interest or any other amount payable hereunder in

respect of its LIBOR Advances, or impose on the Bank any other condition,

including any Taxes required to be withheld from any amounts payable under the

Loan Documents (except for imposition of, or change in the rate of, tax on the

overall net income of the Bank); or

 

(b)           does or shall impose, modify or make

applicable any reserve, special deposit, compulsory loan, assessment, increased

cost or similar requirement against assets held by, or deposits of, or advances

or loans by, or other credit extended by, or any other acquisition of funds by,

any office of the Bank in respect of its LIBOR Advances which is not otherwise

included in the determination of a LIBOR;

 

and the result of

any of the foregoing is to increase the cost to the Bank of making, renewing,

converting or maintaining its LIBOR Advances or its commitment to make such

LIBOR Advances, or to reduce any amount receivable hereunder in respect of its

LIBOR Advances, then, in any such case, the Borrower shall pay the Bank within

ten days after demand therefor, such additional amount as is sufficient to

compensate the Bank for such additional cost or reduction in such amount

receivable which the Bank deems to be material as determined by the Bank;

provided, however, that nothing in this Section shall require the Borrower to

indemnify the Bank with respect to withholding Taxes for which the Borrower has

no obligation under Section 3.9.  No

failure by the Bank to demand, and no delay in demanding, compensation for any

increased cost shall constitute a waiver of its right to demand such

compensation at any time.  A statement

setting forth the calculations of any additional amounts payable pursuant to

this Section submitted by the Bank to the Borrower shall be conclusive absent

manifest error.

 

3.7.          Illegality

of Funding

 

Notwithstanding any other provision hereof, if the

Bank shall reasonably determine that any law, regulation, treaty or directive,

or any change therein or in the interpretation or application thereof, shall

make it unlawful for the Bank to make or maintain any LIBOR Advance as

contemplated by this Agreement, the Bank shall promptly notify the Borrower

thereof, and (i) the commitment of the Bank to make such LIBOR Advances or

convert ABR Advances to LIBOR Advances shall forthwith be suspended, (ii) the

Bank shall fund each requested LIBOR Advance as an ABR Advance and (iii) the

Loans then outstanding as such LIBOR Advances shall be converted automatically

to ABR Advances on the last day of the then current Interest Period applicable

thereto or at such earlier time as may be required by

 

27

 

law.  If the commitment of the Bank with respect

to LIBOR Advances is suspended pursuant to this Section and the Bank shall have

obtained actual knowledge that it is once again legal for the Bank to make or

maintain LIBOR Advances, the Bank shall promptly notify the Borrower thereof

and, upon receipt of such notice by the Borrower, the Bank’s commitment to make

or maintain LIBOR Advances shall be reinstated.

 

3.8.          Substituted

Interest Rate

 

In the event that (i) the Bank shall have determined

(which determination shall be conclusive and binding upon the Borrower) that by

reason of circumstances affecting the interbank eurodollar market either

adequate and reasonable means do not exist for ascertaining LIBOR applicable

pursuant to Section 3.1 or (ii) the Bank shall have determined (which

determination shall be conclusive and binding on the Borrower) that the

applicable LIBOR will not adequately and fairly reflect the cost to the Bank of

maintaining or funding loans bearing interest based on such LIBOR, with respect

to any portion of the Loans that the Borrower has requested be made as or

converted to LIBOR Advances (each, an “Affected Advance”), the Bank

shall promptly notify the Borrower (by telephone or otherwise, to be promptly

confirmed in writing) of such determination, on or, to the extent practicable,

prior to the requested Borrowing Date or Conversion Date for such Affected

Advances.  If the Bank shall give such

notice, (a) any Affected Advances shall be made as ABR Advances, (b) the

Advances (or any portion thereof) that were to have been converted to Affected

Advances shall be converted to ABR Advances and (c) any outstanding Affected

Advances shall be converted, on the last day of the then current Interest

Period with respect thereto, to ABR Advances. 

Until any notice under clauses (i) or (ii), as the case may be, of this

section has been withdrawn by the Bank (by notice to the Borrower promptly upon

either (x) the Bank having determined that such circumstances affecting the

interbank eurodollar market no longer exist and that adequate and reasonable

means do exist for determining LIBOR pursuant to Section 3.1 or (y) the Bank

having determined that circumstances no longer render the Advances (or any

portion thereof) Affected Advances), no further LIBOR Advances shall be

required to be made by the Bank, nor shall the Borrower have the right to

convert all or any portion of the Loans to or as LIBOR Advances.

 

3.9.          Taxes

 

All payments made by each Credit Party under the Loan

Documents shall be made free and clear of, and without reduction for or on

account of, any Taxes required by law to be withheld from any amounts payable

under the Loan Documents.  In the event

that such Credit Party is prohibited by law from making payments hereunder free

of deductions or withholdings, then such Credit Party shall pay such additional

amounts to the Bank as may be necessary in order that the actual amounts

received by the Bank in respect of interest and any other amounts payable under

the Loan Documents after deduction or withholding (and after payment of any

additional Taxes or other charges due as a consequence of the payment of such

additional amounts) shall equal the amount that would have been received if

such deduction or withholding were not required.

 

28

 

3.10.        Option to Fund

 

The Bank has indicated that, if the Borrower requests

a LIBOR Advance, the Bank may wish to purchase one or more deposits in order to

fund or maintain its funding of such LIBOR Advance during the Interest Period

with respect thereto; it being understood that the provisions of this Agreement

relating to such funding are included only for the purpose of determining the

rate of interest to be paid in respect of such LIBOR Advance and any amounts

owing under Sections 3.4 and 3.6.  The

Bank shall be entitled to fund and maintain its funding of all or any part of

each LIBOR Advance in any manner it sees fit, but all such determinations

hereunder shall be made as if the Bank had actually funded and maintained each

LIBOR Advance during the applicable Interest Period through the purchase of

deposits in an amount equal to such LIBOR Advance having a maturity

corresponding to such Interest Period. 

The Bank may fund each LIBOR Advance from or for the account of any

branch or office of the Bank as the Bank may choose from time to time.

 

4.             REPRESENTATIONS AND WARRANTIES

 

In order to induce the Bank to enter into this

Agreement and to make the Loans to the Borrower, the Borrower represents and

warrants that:

 

4.1.          Subsidiaries;

Capitalization

 

As of the Effective Date, the only Subsidiaries of the

Borrower are MG (Bermuda) Ltd., META Group Australia Holdings PTY. Limited,

Cenntinum PTE LTD. and 1422722 Ontario Inc., and the authorized, issued and

outstanding Capital Stock of the Borrower and each such Subsidiary is as set

forth on Schedule 4.1.  As of the

Effective Date, except as set forth on Schedule 4.1, (i) the shares of, or

partnership or other interests in, each Subsidiary of the Borrower are owned

beneficially and of record by the Borrower or another Subsidiary of the

Borrower, are free and clear of all Liens, and are duly authorized, validly

issued, fully paid and nonassessable, (ii) neither the Borrower nor any of its

Subsidiaries has issued any securities convertible into, or options or warrants

for, any common or preferred equity securities thereof, (iii) there are no

agreements, voting trusts or understandings binding upon the Borrower or any of

its Subsidiaries with respect to the voting securities of the Borrower or any

of its Subsidiaries or affecting in any manner the sale, pledge, assignment or

other disposition thereof, including any right of first refusal, option,

redemption, call or other right with respect thereto, whether similar or

dissimilar to any of the foregoing, and (iv) all of the outstanding Capital

Stock of each Subsidiary of the Borrower is owned by the Borrower or another

Subsidiary of the Borrower.

 

4.2.          Existence

and Power

 

The Borrower and each of its Subsidiaries is duly

organized or formed and validly existing in good standing under the laws of the

jurisdiction of its incorporation or formation, as the case may be, has all

requisite power and authority to own its property and to carry on its business

as now conducted, and is in good standing and authorized to do business in each

jurisdiction in which the nature of the business conducted therein or the

property owned by it

 

29

 

therein makes such

qualification necessary, except where the failure to be so qualified could have

a Material Adverse Effect.

 

4.3.          Authority

and Execution

 

The Borrower and each of its Subsidiaries has full

legal power and authority to enter into, execute, deliver and perform the terms

of the Loan Documents to which it is a party, all of which have been duly

authorized by all proper and necessary corporate, partnership or other

applicable action and are in full compliance with its Organizational

Documents.  The Borrower and each of its

Subsidiaries has duly executed and delivered the Loan Documents to which it is

a party.

 

4.4.          Binding

Agreement

 

The Loan Documents (other than the Note) constitute,

and the Note, when issued and delivered pursuant hereto for value received,

will constitute, the valid and legally binding obligations of each Credit

Party, in each case, to the extent it is a party thereto, enforceable in

accordance with their respective terms, except as such enforceability may be

limited by applicable bankruptcy, insolvency, reorganization or other similar

laws affecting the enforcement of creditors’ rights generally.

 

4.5.          Litigation

 

There are no actions, suits or proceedings at law or

in equity or by or before any Governmental Authority (whether purportedly on

behalf of the Borrower, any of its Subsidiaries or any other Credit Party)

pending or, to the knowledge of the Borrower, threatened against the Borrower,

any of its Subsidiaries or any other Credit Party or which may affect the

property or rights of the Borrower, any of its Subsidiaries or any other Credit

Party, which (i) could reasonably be expected to have a Material Adverse

Effect, (ii) call into question the validity or enforceability of, or otherwise

seek to invalidate, any Loan Document, or (iii) might, individually or in the

aggregate, materially and adversely affect any of the transactions contemplated

by the Loan Documents.

 

4.6.          Required

Consents

 

Except for information filings required to be made in

the ordinary course of business which are not a condition to the performance by

the Borrower or any of its Subsidiaries under the Loan Documents to which it is

a party, no consent, authorization or approval of, filing with, notice to, or

exemption by, stockholders or holders of any other equity interest, any

Governmental Authority or any other Person is required to authorize, or is

required in connection with the execution, delivery and performance of the Loan

Documents to which the Borrower or any of its Subsidiaries or any other Credit

Party is a party or is required as a condition to the validity or

enforceability of the Loan Documents to which any of the same is a party.

 

30

 

4.7.          Absence of Defaults; No Conflicting

Agreements

 

(a)           Neither the

Borrower, nor any of its Subsidiaries or any other Credit Party is in default

under any mortgage, indenture, contract or agreement to which it is a party or

by which it or any of its property is bound, the effect of which default could

reasonably be expected to have a Material Adverse Effect.  The execution, delivery or carrying out of

the terms of the Loan Documents will not constitute a default under, or result

in the creation or imposition of, or obligation to create, any Lien upon any

property of the Borrower or any of its Subsidiaries or result in a breach of or

require the mandatory repayment of or other acceleration of payment under or

pursuant to the terms of any such mortgage, indenture, contract or agreement.

 

(b)           Neither the

Borrower, any of its Subsidiaries nor any other Credit Party is in default with

respect to any judgment, order, writ, injunction, decree or decision of any

Governmental Authority which default could reasonably be expected to have a

Material Adverse Effect.

 

4.8.          Compliance

with Applicable Laws

 

The Borrower and each of its Subsidiaries is complying

in all material respects with all statutes, regulations, rules and orders of

all Governmental Authorities which are applicable to the Borrower or such

Subsidiary, a violation of which could reasonably be expected to have a

Material Adverse Effect.

 

4.9.          Taxes

 

The Borrower and each of its Subsidiaries has filed or

caused to be filed all tax returns required to be filed and has paid, or has

made adequate provision for the payment of, all taxes shown to be due and

payable on said returns or in any assessments made against it (other than those

being contested as required under Section 7.4) which would be material to the

Borrower or any of its Subsidiaries, and no tax Liens have been filed with

respect thereto.  The charges, accruals

and reserves on the books of the Borrower and each of its Subsidiaries with

respect to all taxes are, to the best knowledge of the Borrower, adequate for

the payment of such taxes, and the Borrower knows of no unpaid assessment which

is due and payable against the Borrower or any of its Subsidiaries or any

claims being asserted which could reasonably be expected to have a Material

Adverse Effect, except such thereof as are being contested as required under

Section 7.4, and for which adequate reserves have been set aside in accordance

with GAAP.

 

4.10.        Governmental

Regulations

 

Neither the Borrower, any of its Subsidiaries nor any

Person controlled by, controlling, or under common control with, the Borrower

or any of its Subsidiaries, is subject to regulation under the Investment

Company Act of 1940, as amended, or is subject to any statute or regulation

which prohibits or restricts the incurrence of Indebtedness.

 

31

 

4.11.        Federal Reserve Regulations; Use of

Loan Proceeds

 

Neither the Borrower nor any of its Subsidiaries is

engaged principally, or as one of its important activities, in the business of

extending credit for the purpose of purchasing or carrying any Margin

Stock.  After giving effect to the

making of each Loan, Margin Stock will constitute less than 25% of the assets

(as determined by any reasonable method) of the Borrower and its Subsidiaries.

 

4.12.        Plans

 

The only Pension Plans in effect as of the Effective

Date are listed on Schedule 4.12. 

Each Employee Benefit Plan is in compliance with ERISA and the Code,

where applicable, in all material respects. 

The Borrower and each of its Subsidiaries and ERISA Affiliates has

complied with the requirements of Section 515 of ERISA with respect to each

Pension Plan which is a Multiemployer Plan. 

As of the Effective Date, the Borrower and its Subsidiaries and ERISA

Affiliates have no liability under Section 4201 or 4204 of ERISA (including the

obligation to satisfy secondary liability as a result of purchaser default).  The Borrower and its Subsidiaries and ERISA

Affiliates have, as of the Effective Date, made all contributions or payments

to or under each such Pension Plan required by law or the terms of such Pension

Plan or any contract or agreement with respect thereto.  No material liability to the PBGC has been,

or is expected by the Borrower, any of its Subsidiaries or any ERISA Affiliate

to be, incurred by the Borrower, any such Subsidiary or any ERISA Affiliate.

Each Employee Benefit Plan which is a group health plan within the meaning of

Section 5000(b)(1) of the Code is in material compliance with the continuation

of health care coverage requirements of Section 4980B of the Code.

 

4.13.        Financial

Statements

 

The Borrower has heretofore delivered to the Bank

copies of the audited consolidated balance sheets of the Borrower as of

December 31, 2000 and the related consolidated statements of operations,

stockholder’s equity and cash flows for the fiscal years then ended (with the

related notes and schedules, the “Financial Statements”).  The Financial Statements fairly present the

consolidated financial condition and results of the operations of the Borrower

and its Subsidiaries as of the dates and for the periods indicated therein and

have been prepared in conformity with GAAP. 

Except as reflected in the Financial Statements or in the notes thereto,

neither the Borrower nor any of its Subsidiaries has any obligation or

liability of any kind (whether fixed, accrued, Contingent, unmatured or

otherwise) which, in accordance with GAAP, should have been shown on the

Financial Statements and was not.  Since

the date of the Financial Statements, the Borrower has conducted its business

only in the ordinary course and there has been no Material Adverse Change.

 

4.14.        Property

 

The Borrower and each of its Subsidiaries has (i) good

and marketable title to all of its property, title to which is material to the

Borrower or such Subsidiary and (ii) a valid

 

32

 

leasehold interest in all

property, a leasehold interest in which is material to the Borrower or such

Subsidiary, in each case subject to no Liens, except Permitted Liens.

 

4.15.        Intellectual

Property; Licenses

 

(a)           The Borrower and

each of its Subsidiaries owns, or has the legal right to use, all United States

trademarks, trademark applications, trade names, service marks, and copyrights

and all technology, know-how, and processes necessary for each of them to

conduct its business as currently conducted (the “Intellectual Property”),

except for those the failure to own or have the legal right to use would not be

reasonably expected to have a Material Adverse Effect.  No claim has been asserted and is pending by

any Person challenging or questioning the use of any such Intellectual

Property, nor does the Borrower know of any such claim, and to the knowledge of

the Borrower the use of such Intellectual Property by the Borrower and its

Subsidiaries does not infringe on the rights of any Person, except for such

claims and infringements that in the aggregate would not be reasonably expected

to have a Material Adverse Effect.  No

event has occurred which permits or, to the best knowledge of the Borrower,

after notice or the lapse of time or both, or any other condition, could reasonably

be expected to permit, the revocation or termination of any license or other

right to use Intellectual Property which revocation or termination could

reasonably be expected to have a Material Adverse Effect.

 

(b)           Schedule 4.15

contains a list of each material license or other agreement in effect on the

Effective Date under which the Borrower has the right to utilize and exploit

any Intellectual Property owned or controlled by another Person (each, a “License”),

including (i) the name of the licensor, (ii) a description of the Intellectual

Property covered by the License, (iii) the territory in which the License is

exercisable, and (iv) the expiration date of the License.  Except as indicated on Schedule 4.15 or a

supplement thereto delivered to the Bank, no material default has occurred

under any such License which is continuing or unremedied on the Effective Date.

 

4.16.        Environmental

Matters

 

(a)           No Hazardous

Substances have been generated or manufactured on, transported to or from,

treated at, stored at or discharged from any Real Property in material

violation of any Environmental Laws; no Hazardous Substances have been

discharged into subsurface waters under any Real Property in material violation

of any Environmental Laws; no Hazardous Substances have been discharged from

any Real Property on or into property or waters (including subsurface waters)

adjacent to any Real Property in material violation of any Environmental Laws;

and there are not now, nor ever have been, on any Real Property any underground

or above ground storage tanks regulated under any Environmental Laws.

 

(b)           Neither the Borrower

nor any of its Subsidiaries (i) has received notice (written or oral) or

otherwise learned of any claim, demand, suit, action, proceeding, event,

condition, report, directive, Lien, violation, non-compliance or investigation

indicating or concerning any potential or actual liability (including, without

limitation, potential liability for enforcement, investigatory costs, cleanup

costs, government response costs, removal costs,

 

33

 

remedial costs,

natural resources damages, property damages, personal injuries or penalties)

arising in connection with: (x) any non-compliance with or violation of the

requirements of any applicable Environmental Laws, or (y) the presence of any

Hazardous Substance on any Real Property (or any Real Property previously owned

by the Borrower or any of its Subsidiaries) or the release or threatened

release of any Hazardous Substance into the environment, (ii) has any

threatened or actual liability in connection with the presence of any Hazardous

Substance on any Real Property (or any Real Property previously owned by the

Borrower or any of its Subsidiaries) or the release or threatened release of

any Hazardous Substance into the environment, (iii) has received notice of any

federal or state investigation evaluating whether any remedial action is needed

to respond to the presence of any Hazardous Substance on any Real Property (or

any Real Property previously owned by the Borrower or any of its Subsidiaries)

or a release or threatened release of any Hazardous Substance into the

environment for which the Borrower or any of its Subsidiaries is or may be

liable, or (iv) has received notice that the Borrower or any of its

Subsidiaries is or may be liable to any Person under any Environmental Law.

 

4.17.        Solvency

 

Immediately after giving effect to the transactions

contemplated by the Loan Documents, the Borrower and each of its Subsidiaries

will be Solvent.

 

4.18.        Security

Interests

 

Subject to the continuing possession by the Bank of

the Collateral, the security interests granted under the Collateral Documents

will constitute valid, binding and continuing duly perfected first priority

Liens in and to the Collateral.

 

4.19.        Absence

of Certain Restrictions

 

No indenture, certificate of designation for preferred

stock, agreement or instrument to which the Borrower or any of its Subsidiaries

is a party (other than this Agreement), prohibits or limits in any way,

directly or indirectly the ability of any Subsidiary of the Borrower to make

Restricted Payments or repay any Indebtedness to the Borrower or to another

Subsidiary of the Borrower.

 

4.20.        No

Misrepresentation

 

No representation or warranty contained in any Loan

Document and no certificate or report from time to time furnished by the

Borrower or any of its Subsidiaries in connection with the transactions

contemplated hereby and thereby, contains or will contain a misstatement of

material fact, or, to the best knowledge of the Borrower, omits or will omit to

state a material fact required to be stated in order to make the statements

therein contained not misleading in the light of the circumstances under which

made, provided that any projections or pro-forma financial information

contained therein are based upon good faith estimates and assumptions believed

by the Borrower to be reasonable at the time made, it being recognized by the

Bank that

 

34

 

such projections as to

future events are not to be viewed as facts, and that actual results during the

period or periods covered thereby may differ from the projected results.

 

5.             CONDITIONS

TO FIRST LOANS

 

In addition to the

conditions precedent set forth in Article 6, the obligation of the Bank to make

Loans on the first Borrowing Date shall be subject to the fulfillment of the

following conditions precedent:

 

5.1.          Evidence

of Action

 

The Bank shall have received a certificate, dated the

Effective Date, of the Secretary or Assistant Secretary of each Credit Party

(i) attaching a true and complete copy of the resolutions of its board of

directors or the equivalent and of all documents evidencing all necessary

corporate or similar action (in form and substance satisfactory to the Bank)

taken by it to authorize the Loan Documents to which it is a party and the

transactions contemplated thereby, (ii) attaching a true and complete copy of

its Organizational Documents, (iii) setting forth the incumbency of its officers

who may sign the Loan  Documents, including therein a signature

specimen of such officer or officers and (iv) attaching a certificate of good

standing of the Secretary of State of the jurisdiction of its formation and of

each other jurisdiction in which it is qualified to do business.

 

5.2.          This

Agreement

 

The Bank shall have received counterparts of this

Agreement duly executed by an Authorized Signatory of the Borrower.

 

5.3.          Note

 

The Bank shall have received the Notes, dated the

Effective Date and duly executed by an Authorized Signatory of the Borrower.

 

5.4.          Security

Agreement

 

The Bank shall have received the Security Agreement,

dated the Effective Date and duly executed by an Authorized Signatory of the

Borrower, together with the following:

 

(a)           one or more share

certificates, representing (i) all of the issued and outstanding Capital Stock

of each Domestic Subsidiary of the Borrower (provided that the Borrower shall

have 30 days from the date hereof to deliver such share certificates) and (ii)

60% of the issued and outstanding Capital Stock of each Foreign Subsidiary of

the Borrower which is not a Subsidiary Guarantor, in each case together with

one undated stock power, executed in blank by an Authorized Signatory of the

Borrower;

 

(b)           verification that

the Bond Collateral continues to be held in a restricted safekeeping account

#241033 maintained by the Bank; and

 

35

 

(c)           such other documents

as the Bank may require in connection with the perfection of its security

interests therein.

 

5.5.          Subsidiary

Guaranty

 

The Bank shall have received the Subsidiary Guaranty,

dated the Effective Date and duly executed by an Authorized Signatory of each

Subsidiary Guarantor.

 

5.6.          Officer’s

Certificate

 

The Bank shall have received a certificate, in all

respects satisfactory to the Bank, of an officer of the Borrower, dated the

Effective Date, certifying that:

 

(a)           Absence of

Litigation.  There shall be no

injunction, writ, preliminary restraining order or other order of any nature

issued by any Governmental Authority in any respect affecting the transactions

provided for in the Loan Documents and no action or proceeding by or before any

Governmental Authority shall have been commenced or be pending or, to the knowledge

of the Borrower, threatened, seeking to prevent or delay the transactions

contemplated by the Loan Documents or challenging any other terms and

provisions hereof or thereof or seeking any damages in connection therewith.

 

(b)           Approvals and

Consents.  All approvals and

consents of all Persons required to be obtained in connection with the

consummation of the transactions contemplated by the Loan Documents shall have

been obtained and shall be in full force and effect, and all required notices

shall have been given and all required waiting periods shall have expired.

 

(c)           Absence of

Material Adverse Change.  No

Material Adverse Change in the business, assets, liabilities, financial

condition or results of operations of the Borrower shall have occurred since

the date of the Financial Statements.

 

(d)           No Liens other

than Permitted Liens.  Upon the

making of Loans on the Effective Date, there will exist no Liens other than

Permitted Liens.

 

5.7.          Compliance

Certificate

 

The Bank shall have received a Compliance Certificate,

certified by a Financial Officer of the Borrower.

 

5.8.          Opinion

of Counsel to the Borrower

 

The Bank shall have received an opinion, dated the

Effective Date, of Wiggin & Dana, counsel to the Borrower, which shall be

addressed to the Bank and in form and substance satisfactory to the Bank and

Special Counsel.  It is understood that

such opinion is being delivered to the Bank at the direction of the Borrower

and that the Bank may and will rely on such opinion.

 

36

 

5.9.          Search Reports and Related Documents

 

The Bank shall have received UCC, tax and judgment

lien search reports with respect to each applicable public office where Liens

are or may be filed, disclosing that there are no Liens of record in such

office showing the Borrower or any of its Subsidiaries as debtor thereunder

(other than Permitted Liens).

 

5.10.        Approval

of Special Counsel

 

All legal matters incident to the making of the Loans

on the Effective Date shall be reasonably satisfactory to Special Counsel.

 

5.11.        Fees

 

The Facility Fee, and all other fees payable to the

Bank on the Effective Date, shall have been paid.

 

5.12.        Fees

and Expenses of Special Counsel

 

The fees and expenses of Special Counsel in connection

with the preparation, negotiation and closing of the Loan Documents shall have

been paid.

 

5.13.        Other

Documents

 

The Bank shall have received such other documents,

each in form and substance reasonably satisfactory to the Bank, as the Bank

shall reasonably require in connection with the making of the first Loans.

 

6.             CONDITIONS

OF LENDING

 

The obligation of the

Bank to make any Loan or issue any Letter of Credit on each Borrowing Date is

subject to the satisfaction of the following conditions precedent as of such

Borrowing Date:

 

6.1.          Compliance

 

On each Borrowing Date and after giving effect to the

Loans to be made thereon (i) there shall exist no Default or Event of Default

and (ii) the representations and warranties contained in the Loan Documents

shall be true and correct with the same effect as though such representations

and warranties had been made on such Borrowing Date, except to the extent such

representations and warranties specifically relate to an earlier date, in which

case such representa­tions and warranties shall have been true and correct on

and as of such earlier date.  Each

borrowing by the Borrower shall constitute a certification by the Borrower as

of such Borrowing Date to the foregoing effect.

 

37

 

6.2.          Borrowing Request / Letter of Credit

Agreement

 

(i) With respect to each Loan, the Bank shall have

received a Borrowing Request, and (ii) with respect to each Letter of Credit,

the Bank shall have received a Letter of Credit Agreement, in each case duly

executed by an Authorized Signatory of the Borrower.

 

6.3.          Loan Closings

 

All documents required by the provisions of the Loan

Documents to be executed or delivered to the Bank on or before the applicable

Borrowing Date shall have been executed and shall have been delivered at the

office of the Bank set forth in Section 10.2 on or before such Borrowing Date.

 

6.4.          Other Documents

 

The Bank shall have received such other documents as

the Bank shall reasonably request.

 

7.             AFFIRMATIVE

COVENANTS

 

The Borrower agrees that, so long as this Agreement is

in effect, any Loan remains outstanding and unpaid, any Letter of Credit

remains outstanding, or any other amount is owing under any Loan Document to

the Bank:

 

7.1.          Financial Statements and Information

 

The Borrower shall maintain, and cause each of its

Subsidiaries to maintain, a standard system of accounting in accordance with

GAAP, and furnish or cause to be furnished to the Bank:

 

(a)           As soon as

available, but in any event within 90 days after the end of each fiscal year, a

copy of an audited consolidated and consolidating balance sheet of the Borrower

and its Subsidiaries as at the end of such fiscal year, together with the

related consolidated and consolidating statements of operations, stockholder’s

equity and cash flows as of and for such fiscal year, setting forth in

comparative form the figures for the preceding fiscal year, together with an

unqualified report thereon of the Accountants.

 

(b)           As soon as

available, but in any event within 60 days after the end of each of the first

three fiscal quarters of each fiscal year, a copy of an unaudited consolidated

and consolidating balance sheet of the Borrower and its Subsidiaries as at the

end of each such quarterly period, together with the related consolidated and

consolidating statements of operations and cash flows for such period and for

the elapsed portion of the fiscal year through such date, setting forth in

comparative form the figures for the corresponding periods of the preceding

fiscal year, certified by a Financial Officer of the Borrower as being complete

and

 

38

 

correct in all

material respects and as presenting fairly the financial condition and the

results of operations of the Borrower and its Subsidiaries (subject to normal

year-end adjustments).

 

(c)           Concurrently with

the delivery of the financial statements specified in paragraphs (a) and (b) of

this section, a Compliance Certificate, signed by a Financial Officer of the

Borrower.

 

(d)           As soon as

available, but in any event within 45 days after the end of each month, an

accounts receivable aging as of the end of such month, in form and substance

reasonably satisfactory to the Bank.

 

(e)           Within 15 days after

the end of each month, a Borrowing Base Certificate, signed by a Financial

Officer of the Borrower.

 

(f)            Such other

information as the Bank may reasonably request from time to time.

 

7.2.          Certificates;

Other Information

 

The Borrower shall furnish to the Bank:

 

(a)           Prompt written

notice if there shall occur and be continuing a Default or an Event of Default;

and

 

(b)           Prompt written

notice of: (i) any citation, summons, subpoena, order to show cause or other

document naming the Borrower or any of its Subsidiaries a party to any

proceeding before any Governmental Authority which could reasonably be expected

to have a Material Adverse Effect or which calls into question the validity or

enforceability of any of the Loan Documents, and include with such notice a

copy of such citation, summons, subpoena, order to show cause or other

document, (ii) any lapse or other termination of any material license, permit,

franchise or other authorization issued to the Borrower or any of its

Subsidiaries by any Person or Governmental Authority, and (iii) any refusal by

any Person or Governmental Authority to renew or extend any such material

license, permit, franchise or other authorization, which lapse, termination,

refusal or dispute could reasonably be expected to have a Material Adverse

Effect.

 

7.3.          Legal Existence

 

Except as may otherwise be permitted by Sections 8.3

and 8.4, the Borrower shall maintain, and cause each of its Subsidiaries to

maintain, its corporate, partnership or analogous existence, as the case may

be, in good standing in the jurisdiction of its incorporation or formation and

in each other jurisdiction in which the failure so to do could reasonably be

expected to have a Material Adverse Effect.

 

39

 

7.4.          Taxes

 

The Borrower shall pay and discharge when due, and

cause each of its Subsidiaries so to do, all Taxes upon or with respect to the

Borrower or such Subsidiary and all Taxes upon the income, profits and property

of the Borrower and its Subsidiaries, which if unpaid, could reasonably be expected

to have a Material Adverse Effect or become a Lien on property of the Borrower

or such Subsidiary (other than a Lien described in clause (ii) of

Section 8.2), unless and to the extent only that such Taxes shall be

contested in good faith and by appropriate proceedings diligently conducted by

the Borrower or such Subsidiary and provided that any such contested Tax, shall

not constitute, or create, a Lien on any property of the Borrower or such

Subsidiary senior to the Liens, if any, granted to the Bank by the Collateral

Documents on such property, and, provided further, that the Borrower shall give

the Bank prompt notice of such contest and that such reserve or other

appropriate provision as shall be required in accordance with GAAP shall have

been made therefor.

 

7.5.          Insurance

 

The Borrower shall maintain, and cause each of its

Subsidiaries to maintain, with financially sound and reputable insurance

companies insurance in at least such amounts and against at least such risks

(but including in any event public liability, product liability and business

interruption coverage) as are usually insured against in the same general area

by companies engaged in the same or a similar business; and furnish to the

Bank, upon written request, full information as to the insurance carried.

 

7.6.          Performance

of Obligations

 

The Borrower shall pay and discharge when due, and

cause each of its Subsidiaries so to do, all lawful Indebtedness, obligations

and claims for labor, materials and supplies or otherwise which, if unpaid,

might (i) have a Material Adverse Effect, or (ii) become a Lien upon property

of the Borrower or any of its Subsidiaries other than a Permitted Lien, unless

and to the extent only that the validity of such Indebtedness, obligation or

claim shall be contested in good faith and by appropriate proceedings

diligently conducted and that any such contested Indebtedness, obligations or

claims shall not constitute, or create, a Lien on any property of the Borrower

or any of its Subsidiaries senior to the Lien, if any, granted to the Bank

under the Collateral Documents on such property, and provided that the Borrower

shall give the Bank prompt notice of any such contest and that such reserve or

other appropriate provision as shall be required in accordance with GAAP shall

have been made therefor.

 

7.7.          Condition

of Property

 

The Borrower shall at all times, maintain, protect and

keep in good repair, working order and condition (ordinary wear and tear

excepted), and cause each of its Subsidiaries so to do, all property necessary

to the operation of the Borrower’s or such Subsidiary’s business.

 

40

 

7.8.          Observance

of Legal Requirements

 

The Borrower shall observe and comply in all respects,

and cause each of its Subsidiaries so to do, with all laws, ordinances, orders,

judgments, rules, regulations, certifications, franchises, permits, licenses,

directions and requirements of all Governmental Authorities, which now or at

any time hereafter may be applicable to it, a violation of which could

reasonably be expected to have a Material Adverse Effect, except such thereof

as shall be contested in good faith and by appropriate proceedings diligently

conducted by it, provided that the Borrower shall give the Bank prompt notice

of such contest and that such reserve or other appropriate provision as shall

be required in accordance with GAAP shall have been made therefor.

 

7.9.          Inspection of Property; Books and

Records; Discussions

 

Upon reasonable prior notice, the Borrower shall

permit representatives of the Bank to visit the offices of the Borrower and

each of its Subsidiaries during normal business hours, to examine the books and

records thereof and the reports of independent accountants relating thereto,

and to make copies or extracts therefrom, to discuss the affairs of the

Borrower and each such Subsidiary with the respective officers thereof, and to

examine and inspect the property of the Borrower and each such Subsidiary and

to meet and discuss the affairs of the Borrower and each such Subsidiary with

the Accountants.

 

7.10.        Authorizations

 

The Borrower shall maintain, and cause each of its

Subsidiaries to maintain, in full force and effect, all material licenses,

franchises, permits, licenses, authorizations and other rights as are necessary

for the conduct of its business.

 

7.11.        Financial

Covenants

 

(a)           Leverage Ratio.

The Borrower shall maintain as of the last day of each fiscal quarter ending

during the periods set forth below, a Leverage Ratio of not more than the ratios

set forth below:

 

41

 

	

  Period

  	

   

  	

  Ratio

  
	

   

  	

   

  	

   

  
	

  December 31,

  2001

  	

   

  	

  1.12:1.00

  
	

   

  	

   

  	

   

  
	

  March 31, 2002

  	

   

  	

  1.08:1.00

  
	

   

  	

   

  	

   

  
	

  June 30, 2002

  	

   

  	

  1.00:1.00

  
	

   

  	

   

  	

   

  
	

  September 30,

  2002

  	

   

  	

  1.00:1.00

  
	

   

  	

   

  	

   

  
	

  December 31,

  2002 and each fiscal quarter end thereafter

  	

   

  	

  1.00:1.00

  

 

(b)           Fixed Charge

Coverage Ratio. The Borrower shall maintain as of the last day of each

fiscal quarter ending during the periods set forth below, a Fixed Charge

Coverage Ratio of not less than the ratios set forth below:

 

	

  Period

  	

   

  	

  Ratio

  
	

   

  	

   

  	

   

  
	

  December 31,

  2001

  	

   

  	

  1.50:1.00

  
	

   

  	

   

  	

   

  
	

  March 31, 2002

  	

   

  	

  1.50:1.00

  
	

   

  	

   

  	

   

  
	

  June 30, 2002

  	

   

  	

  1.50:1.00

  
	

   

  	

   

  	

   

  
	

  September 30,

  2002

  	

   

  	

  1.50:1.00

  
	

   

  	

   

  	

   

  
	

  December 31,

  2002 and each fiscal quarter end thereafter

  	

   

  	

  1.50:1.00

  

 

42

 

(c)           Minimum EBITDA.  EBITDA for each four fiscal quarter period

of the Borrower ending during the periods set forth below shall not be less

than the amounts set forth below:

 

	

  Period

  	

   

  	

  Amount

  
	

   

  	

   

  	

   

  
	

  December 31,

  2001

  	

   

  	

  $

  	

  6,500,000

  
	

   

  	

   

  	

   

  
	

  March 31, 2002

  	

   

  	

  $

  	

  7,118,000

  
	

   

  	

   

  	

   

  
	

  June 30, 2002

  	

   

  	

  $

  	

  8,065,000

  
	

   

  	

   

  	

   

  
	

  September 30,

  2002

  	

   

  	

  $

  	

  10,657,000

  
	

   

  	

   

  	

   

  
	

  December 31,

  2002 and each fiscal quarter end thereafter

  	

   

  	

  $

  	

  15,000,000

  

 

8.             NEGATIVE

COVENANTS

 

The Borrower agrees that,

so long as this Agreement is in effect, any Loan remains outstanding and

unpaid, any Letter of Credit remains outstanding, or any other amount is owing

under any Loan Document to the Bank, the Borrower shall not, directly or

indirectly:

 

8.1.          Indebtedness

 

Create, incur, assume or suffer to exist any liability

for Indebtedness, or permit any of its Subsidiaries so to do, except (i)

Indebtedness due under the Loan Documents, (ii) Indebtedness of the Borrower or

any of its Subsidiaries existing on the Effective Date as set forth on Schedule

8.1, (iii) Intercompany Indebtedness, and (iv) other Indebtedness not in excess

of $450,000 in the aggregate.

 

8.2.          Liens

 

Create, incur, assume or suffer to exist any Lien upon

any of its property (including, without limitation, Intellectual Property,

Licenses and Real Property), whether now owned or hereafter acquired, or permit

any of its Subsidiaries so to do, except (i) Liens in favor of the Bank under

the Loan Documents, (ii) Liens for Taxes in the ordinary course of business

which are not delinquent or which are being contested in accordance with

Section 7.4, provided that enforcement of such Liens is stayed pending

such contest, (iii) Liens in connection with workers’ compensation,

unemployment insurance or other social security obligations, (iv) deposits or

pledges to secure bids, tenders, contracts (other than contracts for the

payment of money), leases, statutory obligations, surety and appeal bonds and

other obligations of like nature arising in the ordinary course of business,

(v) zoning ordinances, easements, rights of way, minor defects, irregularities,

and other similar restrictions affecting real property which do not adversely

affect the value of such real property or the financial condition of the

Borrower or such Subsidiary or impair its use for the operation of the business

of the Borrower or such Subsidiary, (vi) Liens arising by operation of law such

as mechanics’, materialmen’s, carriers’, warehousemen’s liens incurred in the

ordinary course of business which are not delinquent or which are being

contested in accordance with Section 7.6, provided that enforcement of such

 

43

 

Liens is stayed pending

such contest, (vii) Liens arising out of judgments or decrees which are being

contested in accordance with Section 7.6, provided that enforcement of

such Liens is stayed pending such contest, and (viii) Liens on property of the

Borrower and its Subsidiaries existing on the Effective Date as set forth on

Schedule 8.2 as renewed from time to time, but not any increases in the amounts

secured thereby.

 

8.3.          Merger;

Consolidations

 

Consolidate with, be acquired by, merge into or with

any Person or enter into any binding agreement to do any of the foregoing which

is not contingent on obtaining the consent of the Bank, or permit any of its

Subsidiaries so to do, except, provided that (i) the Bank shall have

received ten days prior written notice and (ii) immediately before and after

giving effect thereto no Default or Event of Default shall exist, any direct or

indirect wholly-owned Subsidiary of the Borrower may merge or consolidate with

the Borrower or any other direct or indirect wholly-owned Subsidiary of the

Borrower, provided that in the event of a merger of the Borrower and

such wholly-owned Subsidiary, the Borrower shall be the survivor and in the

event of a merger of a Subsidiary with a Subsidiary Guarantor, the Subsidiary

Guarantor shall be the survivor.

 

8.4.          Dispositions

 

Make any Disposition, or permit any of its

Subsidiaries so to do, except:

 

(a)           Dispositions of any

Investments permitted under Section 8.5;

 

(b)           Dispositions of

property which, in the reasonable opinion of the Borrower or such Subsidiary,

is obsolete or no longer useful in the conduct of its business; and

 

(c)           Dispositions as to

which the following conditions have been satisfied:

 

(i)            the Bank shall have consented

thereto,

 

(ii)           no Default or Event of Default shall

exist immediately before or after giving effect thereto, and

 

(iii)          the total consideration received or to

be received therefor by the Borrower or any of its Subsidiaries shall be

payable in cash on or before the closing thereof and shall not be less than the

fair market value thereof as reasonably determined by the board of directors of

the Borrower or such Subsidiary.

 

8.5.          Acquisitions,

Investments, Loans, Etc.

 

At any time, directly or indirectly purchase, hold,

own or otherwise acquire or invest in any Capital Stock, evidence of

indebtedness or other obligation or security or any

 

44

 

interest whatsoever in

any other Person, or make or permit to exist any loans, advances or other

extensions of credit to, or any investment (whether in cash or other property)

in, any other Person, or enter into any arrangement for the purpose of

providing funds or credit to any other Person, or make any Acquisition, or

become a partner or joint venturer in any partnership or joint venture, or make

any other investment, whether by way of capital contribution, time deposit or

otherwise, in or with any Person, or make any commitment or otherwise to agree

to do any of the foregoing (all of which are sometimes referred to herein as “Investments”),

or permit any of its Subsidiaries so to do, or except:

 

(a)           Investments in

Liquid Investments;

 

(b)           Investments existing

on the Effective Date as set forth on Schedule 8.5;

 

(c)           Investments in

Subsidiaries permitted by Section 8.8, provided that the Bank has given its

prior written consent thereto;

 

(d)           Investments by the

Borrower or any Subsidiary in Intercompany Indebtedness, provided that the Bank

has given its prior written consent thereto; and

 

(e)           Acquisitions of the

assets of (i) independent sales representative offices of the Borrower existing

on the Effective Date, or (ii) other Persons engaged in the same line of

business as the Borrower or its independent sales representative offices,

provided that with respect to Acquisitions to be made after the Effective Date:

 

(i)            At least 30 days prior to the date

such Acquisition is to be consummated, the Borrower shall deliver to the Bank a

detailed description of the proposed Acquisition;

 

(ii)           At least 15  days prior to the date such

Acquisition is to be consummated, the Borrower shall deliver to the Bank the

following pro-forma information and projections: (1) a pro-forma consolidated

balance sheet and income statement of the Borrower and its Subsidiaries

demonstrating to the satisfaction of the Bank that no Event of Default shall

occur after giving effect to such Acquisition and (2) financial projections of

the Borrower and its consolidated Subsidiaries demonstrating to the

satisfaction of the Bank that immediately after giving effect so such

Acquisition, EBITDA of the Borrower and its Subsidiaries on a consolidated

basis shall increase in an amount commensurate with the cost of such

Acquisition; and

 

(iii)          The aggregate consideration paid for

all such Acquisitions shall not exceed $7,500,000, and the actual cash

consideration paid in the aggregate for all such Acquisitions prior to the

Maturity Date shall not exceed $2,000,000.

 

45

 

8.6.          Restricted

Payments

 

Make any Restricted Payments payable in cash or

otherwise or apply any of its property thereto or set apart any sum therefor,

or permit any of its Subsidiaries so to do, except that a wholly-owned

Subsidiary may make Restricted Payments to the Borrower.

 

8.7.          Business

and Name Changes

 

Materially change the nature of the business of the

Borrower and its Subsidiaries from that conducted on the Effective Date, or

alter or modify its name, structure or status, or change its fiscal year from

that in effect on the Effective Date, or permit any Subsidiary so to do.

 

8.8.          Subsidiaries

 

Create or acquire any other Subsidiary, or permit any

of its Subsidiaries so to do unless prior to or simultaneously with the

consummation of the creation or acquisition of (a) (i) a Domestic Subsidiary or

(ii) a Foreign Subsidiary which is not prevented, for tax reasons, from

guaranteeing the Borrower’s obligations hereunder, (x) such Subsidiary shall

have executed and delivered to the Bank a Subsidiary Guaranty or a supplement

to the Subsidiary Guaranty in accordance with the terms thereof and become a

Subsidiary Guarantor and (y) each Credit Party owning Capital Stock of such

Subsidiary shall deliver certificates evidencing 100% (in the case of a

Domestic Subsidiary) or 60% (in the case of a Foreign Subsidiary) of such

Capital Stock to the Bank as additional Collateral, together with appropriate

stock powers; or (b) a Foreign Subsidiary which is prevented, for tax reasons,

from guaranteeing the Borrower’s obligations hereunder, each Credit Party

owning Capital Stock of such Foreign Subsidiary shall deliver certificates

evidencing 60% of such Capital Stock to the Bank as additional Collateral,

together with appropriate stock powers; and in each case, the Bank shall have

received such other documents as the Bank shall have reasonably requested.

 

8.9.          Sale

and Leaseback Transactions

 

Enter into any Sale and Leaseback Transaction or

permit any of its Subsidiaries so to do.

 

8.10.        Amendments,

Etc. of Certain Agreements

 

Enter into or agree to any amendment, modification or

waiver of any term or condition of its Organizational Documents in any way

which would adversely affect the interests of the Bank under any of the Loan

Documents or permit any of its Subsidiaries so to do.

 

8.11.        Transactions

with Affiliates

 

Become a party to any transaction with an Affiliate

unless the board of directors of the Borrower shall have determined that the

terms and conditions relating thereto are as favorable to the Borrower as those

which would be obtainable at the time in a comparable

 

46

 

arms-length transaction

with a Person other than an Affiliate, or permit any of its Subsidiaries so to

do.

 

8.12.        Limitation on Dividend Restrictions

 

Permit or cause any of its Subsidiaries to enter into

or agree, or otherwise be or become subject, to any agreement, contract or

other arrangement (other than this Agreement) with any Person pursuant to the

terms of which such Subsidiary is or would be prohibited from declaring or

paying any cash dividends on any class of its Capital Stock owned directly or

indirectly by the Borrower or any other Subsidiary or from making any other

distribution on account of any class of any such Capital Stock.

 

8.13.        Limitation

on Negative Pledges

 

Enter into any agreement, other than (i) this

Agreement and (ii) purchase money mortgages or capital leases permitted by this

Agreement (in which cases, any prohibition or limitation shall only be

effective against the assets financed thereby), or permit any of its

Subsidiaries so to do, which prohibits or limits the ability of the Borrower or

such Subsidiary to create, incur, assume or suffer to exist any Lien upon any

of its property or revenues, whether now owned or hereafter acquired.

 

9.             DEFAULT

 

9.1.          Events of

Default

 

The following shall each constitute an “Event of

Default” hereunder:

 

(a)           The failure of the

Borrower to make any payment of principal on the Note, or in respect of any

Reimbursement Obligation, when due and payable; or

 

(b)           The failure of the

Borrower to make any payment of interest, fees, expenses or other amounts

payable under any Loan Document or otherwise, to the Bank within five Business

Days after the date when due and payable; or

 

(c)           The failure of the

Borrower to observe or perform any covenant or agreement contained in Sections

2.9, 7.3 or 7.11, or Article 8; or

 

(d)           The failure of any

Credit Party to observe or perform any other term, covenant, or agreement

contained in any Loan Document and such failure shall have continued unremedied

for a period of 30 days after such Credit Party shall have obtained knowledge

thereof; or

 

(e)           Any representation

or warranty made by any Credit Party (or by an officer thereof on its behalf)

in any Loan Document or in any certificate, report, opinion (other than an

opinion of counsel) or other document delivered or to be delivered pursuant

thereto, shall

 

47

 

prove to have been

incorrect or misleading (whether because of misstatement or omission) in any

material respect when made; or

 

(f)            Liabilities and/or

other obligations of the Borrower (other than the obligations under the Note

and the Reimbursement Obligations), any of its Subsidiaries or any other Credit

Party, whether as principal, guarantor, surety or other obligor, for the

payment of any Indebtedness or operating leases (i) shall become or shall be

declared to be due and payable prior to the expressed maturity thereof, or (ii)

shall not be paid when due or within any grace period for the payment thereof,

(iii) any holder of any such obligation shall have the right to declare such

obligation due and payable prior to the expressed maturity thereof or (iv) as a

consequence of the occurrence or continuation of any event or condition, the

Borrower, any of its Subsidiaries or such other Credit Party has become

obligated to purchase or repay any Indebtedness before its regularly scheduled

maturity date; or

 

(g)           Any Change of

Control shall occur; or

 

(h)           The Borrower, any of

its Subsidiaries or any other Credit Party shall (i) suspend or discontinue its

business, (ii) make an assignment for the benefit of creditors, (iii) generally

not be paying its debts as such debts become due, (iv) admit in writing its

inability to pay its debts as they become due, (v) file a voluntary petition in

bankruptcy, (vi) become insolvent (however such insolvency shall be evidenced),

(vii) file any petition or answer seeking for itself any reorganization,

arrangement, composition, readjustment of debt, liquidation or dissolution or

similar relief under any present or future statute, law or regulation of any

jurisdiction, (viii) petition or apply to any tribunal for any receiver,

custodian or any trustee for any substantial part of its property, (ix) be the

subject of any such proceeding filed against it which remains undismissed for a

period of 60 days, (x) file any answer admitting or not contesting the material

allegations of any such petition filed against it or any order, judgment or

decree approving such petition in any such proceeding, (xi) seek, approve,

consent to, or acquiesce in any such proceeding, or in the appointment of any

trustee, receiver, sequestrator, custodian, liquidator, or fiscal agent for it,

or any substantial part of its property, or an order is entered appointing any

such trustee, receiver, custodian, liquidator or fiscal agent and such order

remains in effect for 60 days, or (xii) take any formal action for the purpose

of effecting any of the foregoing or looking to the liquidation or dissolution

of the Borrower, such Subsidiary or such other Credit Party; or

 

(i)            An order for relief

is entered under the United States bankruptcy laws or any other decree or order

is entered by a court having jurisdiction (i) adjudging the Borrower, any of

its Subsidiaries or any other Credit Party bankrupt or insolvent, (ii)

approving as properly filed a petition seeking reorganization, liquidation,

arrangement, adjustment or composition of or in respect of the Borrower, any of

its Subsidiaries or any other Credit Party under the United States bankruptcy

laws or any other applicable Federal or state law, (iii) appointing a receiver,

liquidator, assignee, trustee, custodian, sequestrator (or other similar

official) of the Borrower, any of its Subsidiaries or any other Credit Party or

of any substantial part of the property of any thereof, or (iv) ordering the

winding up or liquidation of the affairs of

 

48

 

the Borrower, any

of its Subsidiaries or any other Credit Party, and any such decree or order

continues unstayed and in effect for a period of 60 days; or

 

(j)            Judgments or

decrees against the Borrower, any of its Subsidiaries or any other Credit Party

aggregating in excess of $100,000 shall remain unpaid, unstayed on appeal,

undischarged, unbonded or undismissed for a period of 30 days; or

 

(k)           The occurrence of an

Event of Default (beyond any applicable notice or cure period) as defined in

any Collateral Document; or

 

(l)            Any Loan Document

shall cease, for any reason, to be in full force and effect, or any Credit

Party shall so assert in writing or shall disavow any of its obligations

thereunder; or

 

(m)          (i) any Termination

Event shall occur; (ii) any Accumulated Funding Deficiency, whether waived,

shall exist with respect to any Pension Plan; (iii) any Person shall engage in

any Prohibited Transaction involving any Employee Benefit Plan; (iv) the

Borrower, any of its Subsidiaries or any ERISA Affiliate shall fail to pay when

due an amount which is payable by it to the PBGC or to a Pension Plan under

Title IV of ERISA; (v) the imposition of any tax under Section 4980B(a) of the

Code; (vi) the assessment of a civil penalty with respect to any Employee

Benefit Plan under Section 502(c) of ERISA; or (vii) any other event or

condition shall occur or exist with respect to an Employee Benefit Plan which

in the case of clauses (i) through (vi) would, individually or in the aggregate,

have a Material Adverse Effect.

 

9.2.          Remedies

 

(a)           Upon the occurrence

of an Event of Default or at any time thereafter during the continuance

thereof, (i) if such event is an Event of Default specified in clause (h) or

(i) above, the Commitments shall immediately and automatically terminate and

the Loans, all accrued and unpaid interest thereon, any Reimbursement

Obligations owing in respect of all outstanding Letters of Credit and all other

amounts owing under the Loan Documents shall immediately become due and

payable, the Borrower shall forthwith deposit with the Bank an amount equal to

the Letter of Credit Exposure in a cash collateral account under the exclusive

control of the Bank, and the Bank may exercise any and all remedies and other

rights provided in the Loan Documents, and (ii) if such event is any other

Event of Default, any or all of the following actions may be taken: (A) the

Bank may, by notice to the Borrower, declare the Commitments terminated

forthwith, whereupon the Commitments shall immediately terminate, and (B) the

Bank may, by notice of default to the Borrower, declare the Loans, all accrued

and unpaid interest thereon, any Reimbursement Obligations owing in respect of

all outstanding Letters of Credit and all other amounts owing under the Loan

Documents to be due and payable forthwith, whereupon the same shall immediately

become due and payable, the Borrower shall forthwith deposit with the Bank an

amount equal to the Letter of Credit Exposure in a cash collateral account under

the exclusive control of the Bank, and the Bank may exercise any and all

remedies and other rights provided in the Loan Documents.  Except as otherwise provided in this

Section, presentment, demand, protest and all other notices of any kind are

hereby expressly

 

49

 

waived. The

Borrower hereby further expressly waives and covenants not to assert any

appraisement, valuation, stay, extension, redemption or similar laws, now or at

any time hereafter in force which might delay, prevent or otherwise impede the

performance or enforcement of any Loan Document.

 

(b)           In the event that

the Commitments shall have been terminated or the Loans, all accrued and unpaid

interest thereon and all other amounts owing under the Loan Documents shall

have been declared due and payable pursuant to the provisions of this section,

any funds received by the Bank from or on behalf of the Borrower shall be

applied by the Bank in liquidation of the Loans, the Reimbursement Obligations

and the other obligations of the Borrower under the Loan Documents in the

following manner and order: (i) to the payment of interest on the Loans; (ii)

to the payment of the principal portion of any Loans in such order as the Bank

may determine in its absolute discretion; (iii) to the payment of the

Reimbursement Obligations; (iv) to the payment of any fees or expenses due the

Bank from the Borrower; (v) to reimburse the Bank for any expenses (to the

extent not paid pursuant to clause (iv) above) due from the Borrower pursuant

to the provisions of Section 10.5; and (vi) to the payment of any other amounts

owed to the Bank under any Loan Document.

 

10.           OTHER

PROVISIONS

 

10.1.        Amendments

and Waivers

 

No amendment or waiver of any provision of this

Agreement or any Loan Document shall in any event be effective unless the same

shall be in writing and signed by all parties, and such waiver or consent shall

be effective only in the spe­cific instance and for the specific purpose for

which given.

 

10.2.        Notices

 

All notices, requests and demands to or upon the

respective parties to the Loan Documents to be effective shall be in writing

and, unless otherwise expressly provided therein, shall be deemed to have been

duly given, made and received (i) when delivered by hand, (ii) one Business Day

after having been sent by overnight courier service, (iii) five days after

being deposited with the United States Postal Service as certified or

registered mail, with first–class postage and fees prepaid, or, (iv) when

sent by facsimile transmission upon electronic confirmation of receipt,

addressed as follows in the case of the Borrower or the Bank or addressed to

such other addresses as to which the Bank may be hereafter notified by the

respective parties thereto or any future holders of the Note:

 

50

 

The Borrower:

 

Meta Group Inc.

208 Harbor Drive

Stamford,

Connecticut   06912

Attention:     Bernard Denoyer

Telephone:    (203) 973-6813

Telecopy:      (203) 973-6921

 

with a copy to:

 

Valerie A. Seiling, Esq.

Wiggin & Dana

One City Place

185 Asylum Street

Hartford,

Connecticut  06103-3402

 

The Bank:

 

The Bank of New York

10 Mason Street

Greenwich, Connecticut

06830

Attention:     Mark Sicinski,

                            Vice President

Telephone:    (203) 863-2794

Telecopy:      (203) 863-2610

 

except that any

notice, request or demand by the Borrower to or upon the Bank pursuant to

Sections 2.5 or 3.3 and any notice by either party of a change of address shall

not be effective until received.  Any

party to a Loan Document may rely on signatures of the parties thereto which

are transmitted by facsimile or other electronic means as fully as if

originally signed.

 

10.3.        No Waiver;

Cumulative Remedies

 

No failure to exercise and no delay in exercising, on

the part of the Bank, any right, remedy, power or privilege under any Loan

Document shall operate as a waiver thereof; nor shall any single or partial

exercise of any right, remedy, power or privilege under any Loan Document

preclude any other or further exercise thereof or the exercise of any other

right, remedy, power or privilege.  The

rights, remedies, powers and privileges under the Loan Documents are cumulative

and not exclusive of any rights, remedies, powers and privileges provided by

law.

 

51

 

10.4.        Survival of Representations and

Warranties and Certain Obligations

 

(a)           All representations

and warranties made under the Loan Documents and in any document, certificate

or statement delivered pursuant thereto or in connection therewith shall

survive the execution and delivery of the Loan Documents.

 

(b)           The obligations of

the Borrower under Sections 3.4, 3.5, 3.6 (to the extent that such obligations

under Sections 3.5 and 3.6 arose prior to the termination of the Revolving

Credit Commitment and the payment of the Loans), 3.9 and 10.5 shall survive the

termination of the Revolving Credit Commitment and the payment of the Loans and

all other amounts payable under the Loan Documents.

 

10.5.        Expenses

 

The Borrower agrees, promptly upon presentation of a

statement or invoice therefor, and whether or not any Loan is made or any

Letter of Credit is issued (i) to pay or reimburse the Bank for all its

out-of-pocket costs and expenses reasonably incurred in connection with the

development, preparation and execution of, the Loan Documents and any

amendment, supplement or modification thereto (whether or not executed or

effective), any documents prepared in connection therewith and the consummation

of the transactions contemplated thereby, including without limitation the

reasonable fees and disbursements of Special Counsel, (ii) to pay or reimburse

the Bank for the cost of all audits undertaken from time to time with respect

to any Collateral (provided that prior to the occurrence of an Event of Default

the Borrower shall not be obligated to pay for the cost of audits undertaken

more frequently than once per year), all costs incurred by the Bank to perfect

its Lien in the Collateral, and any costs or expenses incurred by the Bank in

protecting its interest in the Collateral, (iii) to pay or reimburse the Bank

for all of its costs and expenses, including, without limitation, reasonable

fees and disbursements of Special Counsel or any other counsel, incurred in

connection with (A) any Default or Event of Default and any enforcement or

collection proceedings resulting therefrom or in connection with the

negotiation of any restructuring or “work-out” (whether consummated or not) of

the obligations of any Credit Party under any of the Loan Documents and (B) the

enforcement of this section, and (iv) to pay, indemnify and hold the Bank and

each of its officers, directors and employees harmless from and against any and

all other liabilities, obligations, claims, losses, damages, penalties,

actions, judgments, suits, costs, expenses or disbursements of any kind or

nature whatsoever (including, without limitation, reasonable counsel fees and

disbursements) with respect to the enforcement and performance of the Loan

Documents, the use of the proceeds of the Loans and the enforcement and

performance of the provisions of any subordination agreement involving the Bank

(all the foregoing in this clause (iv), collectively, the “Indemnified

Liabilities”) and, if and to the extent that the foregoing indemnity may be

unenforceable for any reason, the Borrower agrees to make the maximum payment

not prohibited under applicable law; provided, however, that the

Borrower shall have no obligation to pay Indemnified Liabilities to the Bank

arising from the finally adjudicated gross negligence or willful misconduct of

the Bank or claims between one indemnified party and another indemnified party.

 

52

 

10.6.        Successors

and Assigns

 

This Agreement, the Note and the other Loan Documents

to which any Credit Party is a party shall be binding upon and inure to the

benefit of such Credit Party and the Bank, all future holders of the Note and

their respective successors and assigns, provided, however, that such Credit

Party may neither delegate its liabilities and obligations, nor assign its

rights and benefits, under any Loan Document to any Person.  Notwithstanding anything to the contrary

contained in this Section, the Bank may at any time or from time to time assign

all or any portion of its rights under the Loan Documents to a Federal Reserve

Bank, provided that any such assignment shall not release such assignor

from its obligations thereunder.

 

10.7.        Counterparts

 

Each Loan Document (other than the Note) may be

executed by one or more of the parties thereto on any number of separate

counterparts and all of said counterparts taken together shall be deemed to

constitute one and the same document. 

It shall not be necessary in making proof of any Loan Document to

produce or account for more than one counterpart signed by the party to be

charged.  A counterpart of any Loan

Document and of any an amendment, modification, consent or waiver to or of any

Loan Document transmitted by facsimile shall be deemed to be an originally

executed counterpart.

 

10.8.        Set-off

 

In addition to any rights and remedies of the Bank

provided by law, upon the occurrence of an Event of Default and the

acceleration of the obligations owing in connection with the Loan Documents, or

at any time upon the occurrence and during the continuance of an Event of

Default under Sections 9.1(a) or (b), the Bank shall have the right, without

prior notice to the Borrower or any other Credit Party, any such notice being

expressly waived by the Borrower and each other Credit Party to the extent not

prohibited by applicable law, to set-off and apply against any indebtedness,

whether matured or unmatured, of the Borrower or such other Credit Party, as

the case may be, to the Bank any amount owing from the Bank to the Borrower or

such other Credit Party, as the case may be, at, or at any time after, the

happening of any of the above-mentioned events.  To the extent not prohibited by applicable law, the aforesaid

right of set-off may be exercised by the Bank against the Borrower or such

other Credit Party, as the case may be, or against any trustee in bankruptcy,

custodian, debtor in possession, assignee for the benefit of creditors,

receiver, or execution, judgment or attachment creditor of the Borrower or such

other Credit Party, as the case may be, or against anyone else claiming through

or against the Borrower or such other Credit Party, as the case may be, or such

trustee in bankruptcy, custodian, debtor in possession, assignee for the

benefit of creditors, receiver, or execution, judgment or attachment creditor,

notwithstanding the fact that such right of set-off shall not have been

exercised by the Bank prior to the making, filing or issuance, or service upon

the Bank of, or of notice of, any such petition, assignment for the benefit of

creditors, appointment or application for the appointment of a receiver, or

issuance of execution, subpoena, order or warrant.  The Bank agrees promptly to notify the Borrower after any such

set-off and 

 

53

 

application made by the

Bank, provided that the failure to give such notice shall not affect the

validity of such set-off and application.

 

10.9.        Construction

 

Each party to a Loan Document represents that it has

been represented by counsel in connection with the Loan Documents and the

transactions contemplated thereby and that the principle that agreements are to

be construed against the party drafting the same shall be inapplicable.

 

10.10.      Governing Law

 

The Loan Documents and the rights and obligations of

the parties thereunder shall be governed by, and construed and interpreted in

accordance with, the internal laws of the State of New York, without regard to

principles of conflict of laws, but including Section 5-1401 of the General

Obligations Law.

 

10.11.      Headings

Descriptive

 

Section headings have been inserted in the Loan

Documents for convenience only and shall not be construed to be a part thereof.

 

10.12.      Severability

 

Every provision of the Loan Documents is intended to

be severable, and if any term or provision thereof shall be invalid, illegal or

unenforceable for any reason, the validity, legality and enforceability of the

remaining provisions thereof shall not be affected or impaired thereby.

 

10.13.      Integration

 

All exhibits to a Loan Document shall be deemed to be

a part thereof.  Except for agreements

between the Bank and the Borrower with respect to certain fees, the Loan

Documents embody the entire agreement and understanding between the Borrower

and the Bank with respect to the subject matter thereof and supersede all prior

agreements and understandings between the Borrower and the Bank with respect to

the subject matter thereof.

 

10.14.      Consent

to Jurisdiction

 

Each Credit Party hereby irrevocably submits to the

jurisdiction of any New York State or Federal court sitting in the City of New

York over any suit, action or proceeding arising out of or relating to the Loan

Documents.  Each Credit Party hereby

irrevocably waives, to the fullest extent permitted or not prohibited by law,

any objection which it may now or hereafter have to the laying of the venue of

any such suit, action or proceeding brought in such a court and any claim that

any such suit, action or proceeding brought in such a court has been brought in

an inconvenient forum.  Each Credit

Party hereby agrees that a final judgment in any such suit,

 

54

 

action or proceeding

brought in such a court, after all appropriate appeals, shall be conclusive and

binding upon it.

 

10.15.      Service of

Process

 

Each party to a Loan Document hereby irrevocably

consents to the service of process in any suit, action or proceeding by sending

the same by first class mail, return receipt requested or by overnight courier

service, to the address of such party set forth in Section 10.2 or in the

applicable Loan Document executed by such party.  Each party to a Loan Document hereby agrees that any such service

(i) shall be deemed in every respect effective service of process upon it in

any such suit, action, or proceeding, and (ii) shall to the fullest extent

enforceable by law, be taken and held to be valid personal service upon and

personal delivery to it.

 

10.16.      No

Limitation on Service or Suit

 

Nothing in the Loan Documents or any modification,

waiver, consent or amendment thereto shall affect the right of the Bank to

serve process in any manner permitted by law or limit the right of the Bank to

bring proceedings against any Credit Party in the courts of any jurisdiction or

jurisdictions in which such Credit Party may be served.

 

10.17.      WAIVER OF

TRIAL BY JURY

 

EACH OF THE BANK AND THE CREDIT PARTIES HEREBY

KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A

TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION

WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN.  FURTHER, EACH CREDIT PARTY HEREBY CERTIFIES

THAT NO REPRESENTATIVE OR AGENT OF THE BANK, OR COUNSEL TO THE BANK, HAS

REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF

SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL

PROVISION.  EACH CREDIT PARTY

ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER

ALIA, THE PROVISIONS OF THIS SECTION.

 

[THE REMAINDER OF

THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]

 

55

 

IN WITNESS WHEREOF, the parties hereto have caused

this Amended and Restated Credit Agreement to be duly executed and delivered by

their proper and duly authorized officers as of the day and year first above

written.

 

	

   

  	

   

  	

   

  
	

   

  	

  META GROUP, INC.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John A.

  Piontkowski

  	

   

  
	

   

  	

  Name:

  	

  John A.

  Piontkowski

  	

   

  
	

   

  	

  Title:

  	

  Senior Vice

  President and Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  THE BANK OF NEW

  YORK

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Mark J.

  Sicinski

  	

   

  
	

   

  	

   

  	

  Mark J. Sicinski,

  
	

   

  	

   

  	

  Vice President

  
						

 

56

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