Document:

fourth.htm

     

    Exhibit 4.2

    
      Execution
Copy

    

     

    Fourth
Supplemental Indenture

     

    from

     

    Integrys
Energy Group, Inc.

    (f/k/a WPS
Resources Corporation)

     

    to

     

    U.S.
Bank National Association

     

    Trustee

     

    Dated
as of June 1, 2009

     

    Supplemental
to

     

    Indenture
Dated as of October 1, 1999

     

    8.00%
Senior Notes Due June 1, 2016

    

    

    
      

    

    

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    This Fourth
Supplemental Indenture is made as of the 1st day of June, 2009 by and between
Integrys Energy Group, Inc. (f/k/a WPS Resources Corporation), a corporation
duly organized and existing under the laws of the State of Wisconsin (the “Company”), and
U.S. Bank National Association, a national banking association duly
organized and existing under the laws of the United States, as trustee (the
“Trustee”), and
successor to Firstar Bank National Association.

     

    Recitals
of the Company:

     

    Witnesseth:  that

     

    The Company has
heretofore executed and delivered its Indenture (hereinafter referred to as the
“Senior Indenture”),
made as of October 1, 1999; and

     

    Section 3.01
of the Senior Indenture provides that Securities may be issued from time to time
in series pursuant to a supplemental indenture specifying the terms of each
series of Securities; and

     

    The Company desires
to establish a series of Securities to be designated “8.00% Senior Notes Due
June 1, 2016” (the “Notes
of the Series Due 2016”); and

     

    Section 9.01
of the Senior Indenture provides that the Company and the Trustee may enter into
indentures supplemental thereto for the purposes, among others, of establishing
the form or terms of Securities of any series and adding to the covenants of the
Company and events of default with respect to all or any series of Securities;
and

     

    The execution and
delivery of this Fourth Supplemental Indenture (herein, this “Supplemental Indenture”) has
been duly authorized by a Board Resolution;

     

    Now, Therefore,
this Supplemental Indenture

     

    Witnesseth, that,
in order to set forth the terms and conditions upon which the Notes of the
Series Due 2016 are, and are to be, authenticated, issued and delivered,
and in consideration of the premises and the purchase of the Notes of the Series
Due 2016 by the Holders thereof, it is mutually covenanted and agreed for
the equal and proportionate benefit of the respective Holders from time to time
of such Notes of the Series Due 2016 as follows:

     

    Article I

    Relation
to Indenture; Definitions

     

        Section 1.1.    This
Supplemental Indenture constitutes an integral part of the Senior
Indenture.

     

        Section 1.2.    For all
purposes of this Supplemental Indenture:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

        (a)    The following terms
have the respective meanings set forth below or set forth in the Section hereof
following such term:

     

    “2009 Supplemental
Indentures” is defined in the Note Purchase Agreement.

     

    “Affiliate” means, at any
time, and with respect to any Person, any other Person that at such time
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person.  As
used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  Unless the
context otherwise clearly requires, any reference to an “Affiliate” is a reference to
an Affiliate of the Company.

     

    “Bank Credit Facility” means
that certain Credit Agreement, dated as of May 27, 2009 among the Company,
Bank of America, N.A., as agent, and the lenders party thereto, together with
any replacements, refinancings or supplements thereto.

     

    “Business Day” means
(a) for the purposes of Section 3.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of
any other provision of the Transaction Documents, any day other than a Saturday,
a Sunday or a day on which commercial banks in Milwaukee, Wisconsin or New York,
New York are required or authorized to be closed.

     

    “Capitalization” means the
sum of (a) Total Funded Debt plus (b) Net Worth.

     

    “Change in Control” is
defined in Section 3.3(f).

     

    “Closing” is defined in
Section 3 of the Note Purchase Agreement.

     

    “Code” means the Internal
Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.

     

    “Company” means Integrys
Energy Group, Inc., a Wisconsin corporation, or any successor that becomes such
in the manner prescribed in the Senior Indenture.

     

    “Default” means an event or
condition the occurrence or existence of which would, with the lapse of time or
the giving of notice or both, become an Event of Default under the Senior
Indenture.

     

    “Default Rate” means that
rate of interest that is the greater of (i) 2% per annum above the rate of
interest stated in clause (a) of the first paragraph of the Notes or
(ii) 2% over the rate of interest publicly announced by Bank of America,
N.A. in Chicago, Illinois as its “base” or “prime” rate.

     

    “Environmental Laws” means
any and all Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,

     

    
      
        
        

      

      
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    franchises,
licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including but not limited to those related to Hazardous
Materials.

     

    “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
rules and regulations promulgated thereunder from time to time in
effect.

     

    “ERISA Affiliate” means any
trade or business (whether or not incorporated) that is treated as a single
employer together with the Company under Section 414 of the
Code.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

     

    “First Mortgage Indentures”
means (a) that certain First Mortgage and Deed of Trust dated as of
January 1, 1941, from Wisconsin Public Service Corporation to U.S. Bank
National Association (successor to First Wisconsin Trust Company), as trustee,
as heretofore or hereafter amended, modified and supplemented and any substitute
or replacement mortgage indenture, (b) that certain Indenture dated as of
December 1, 1998, between Wisconsin Public Service Corporation and U.S.
Bank National Association (successor to Firstar Bank Milwaukee, N.A.), as
trustee, as heretofore or hereafter amended, modified and supplemented and any
substitute or replacement mortgage indenture, (c) that certain Indenture of
Mortgage dated May 1, 1947, from Upper Peninsula Power Company to U.S. Bank
National Association (successor to City National Bank and Trust Company of
Chicago), as trustee, as heretofore or hereafter amended, modified and
supplemented and any substitute or replacement mortgage indenture and (d) that
certain Indenture dated as of March 1, 1928, between The Peoples Gas Light and
Coke Company and U.S. Bank National Association (successor to Illinois Merchants
Trust Company), as trustee, as heretofore or hereafter amended, modified and
supplemented and any substitute or replacement mortgage indenture (which, among
other things, assumed the First and Refunding Mortgage dated January 2, 1926
form Chicago By-Product Coke Company).

     

    “Funded Debt” of any Person
means, without duplication, the sum of (a) all Indebtedness of such Person
for borrowed money, except to the extent such Indebtedness is “non-recourse” to
such Person or recourse for payment of such Indebtedness is limited to specific
assets of such Person (whether or not included on a consolidated balance sheet
of such Person), (b) the principal portion of all obligations of such
Person under capital lease obligations, (c) all obligations, contingent or
otherwise, relative to the face amount of all letters of credit issued to
support Indebtedness of the kinds referred to in clauses (a) and (b) above,
(d) all Guaranty Obligations of such Person with respect to Indebtedness
and obligations of the type described in clauses (a) through (c) hereof of
another Person; provided that such Guaranty
Obligations are required to be reported as liabilities on a balance sheet of
such Person prepared in accordance with GAAP (and without duplication of any
liability already appearing as a liability on such balance sheet); and further
provided that, in the
event a Guaranty Obligation is limited as to dollar amount, such Guaranty
Obligation shall not exceed such limitation, and (e) all Indebtedness and
obligations of the type described in clauses (a), (b), and (c) hereof of another
Person, secured by a Lien on any property of such Person whether or not such

     

    
      
        
        

      

      
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    Indebtedness or
obligations has been assumed by such Person.  Notwithstanding the
foregoing, Funded Debt shall not include trust preferred securities, if any,
shall not include interest on Indebtedness that is accrued in the ordinary
course of business and shall not include intercompany Indebtedness.

     

    “GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States of America, provided that if the Company
notifies the Holders of the Notes of the Series due 2016 that it wishes to amend
any covenants included in Article V hereof (or any
definition thereof) to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant or definition, then the
Company’s compliance with such covenant or the meaning of such definition shall
be determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Company and the Required Holders (as
defined in the Note Purchase Agreement).  Notwithstanding the
foregoing, any entity that is not a Subsidiary but would be required to be
consolidated in the financial statements of the Company because FIN 46 shall not
be included in any computation of any financial covenant herein.

     

    “Governmental Authority”
means

     

    (a)    the government
of

     

    (i)    the United States of
America or any State or other political subdivision thereof, or

     

    (ii)    any other
jurisdiction in which the Company or any Subsidiary conducts all or any part of
its business, or which asserts jurisdiction over any properties of the Company
or any Subsidiary, or

     

    (b)    any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, any such government.

     

    “Guaranty Obligations” means,
with respect to any Person, without duplication, any obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) guaranteeing any Funded Debt of any other Person in any
manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Funded Debt, or
(b) to advance or provide funds or other support for the payment or purchase of
such Funded Debt or to maintain working capital, solvency or other balance sheet
condition of such other Person.  The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be deemed to be
an amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made; provided that, in the event a
Guaranty Obligation is limited as to dollar amount, such Guaranty Obligation
shall not exceed such limitation. 

     

    
      
        
        

      

      
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    “Hazardous Material” means
any and all pollutants, toxic or hazardous wastes or any other substances, that
might pose a hazard to health and safety, the removal of which may be required
or the generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release, discharge,
spillage, seepage, or filtration of which is or shall be restricted, prohibited
or penalized by any applicable law including, but not limited to, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum
products, lead based paint, radon gas or similar restricted, prohibited or
penalized substances.

     

    “Indebtedness” of any Person
means, without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person to the
extent of the value of such property (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations, other than intercompany items, of
such Person issued or assumed as the deferred purchase price of property or
services purchased by such Person which would appear as liabilities on a balance
sheet of such Person (other than trade payables), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Guaranty Obligations of such Person, (g) the
principal portion of all obligations of such Person under (i) capital lease
obligations and (ii) any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product of such
Person where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP,
(h) all obligations of such Person to repurchase any securities which
repurchase obligation is related to the issuance thereof, including, without
limitation, obligations commonly known as residual equity appreciation potential
shares, (i) the net obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements, Permitted Energy
Transactions, or other interest or exchange rate hedging arrangements, and
(j) the maximum amount of all outstanding performance and standby letters
of credit issued or bankers’ acceptance facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed).  The Indebtedness of any Person shall include the
recourse Indebtedness of any partnership or unincorporated joint venture and for
which such Person is legally obligated.  

     

    “Lien” means, with respect to
any Person, any mortgage, lien, pledge, charge, security interest or other
encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease, upon or with respect to any property or
asset of such Person (including in the case of stock, stockholder agreements,
voting trust agreements and all similar arrangements).

     

    “Make-Whole Amount” is
defined in Section 3.7.

     

    “Material” means material in
relation to the business, operations, affairs, financial condition, assets and
properties of the Company and its Subsidiaries taken as a whole.

     

    
      
        
        

      

      
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    “Material Adverse Effect”
means a material adverse effect on (a) the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole, or (b) the ability of the Company to perform its
obligations under the Transaction Documents, or (c) the validity or
enforceability of the Transaction Documents; provided, however, that in no
event shall any change, event, violation, inaccuracy, circumstance or effect
that results from (i) changes generally affecting the industry in which the
Company and its Subsidiaries operate or conduct business or (ii) changes
generally affecting the United States economy constitute a Material Adverse
Effect.

     

    “MISO” means Midwest
Independent Transmission System Operator, Inc.

     

    “Multiemployer Plan” means a
Plan covered by Title IV of ERISA which is a multiemployer plan as defined in
section 3(37) or 4001(a)(3) of ERISA.

     

    “Multiple Employer Plan”
means a Plan covered by Title IV of ERISA, other than a Multiemployer Plan,
which the Company or any ERISA Affiliate and at least one employer other than
the Company or any ERISA Affiliate are contributing sponsors.

     

    “Net Worth” means, as of any
date, the shareholders’ equity or net worth of the Company and its Subsidiaries,
on a consolidated basis, as determined in accordance with GAAP but excluding
accumulated other comprehensive income.

     

    “Note Purchase Agreement”
means that certain note purchase agreement dated as of June 11, 2009 among
the Company and the purchasers named in Schedule A thereto.

     

    “Notes” is defined in the
Note Purchase Agreement.

     

    “Notes of the Series
Due 2016” means the series of senior debt securities authorized by
this Supplemental Indenture.

     

    “Notes of the Series
Due 2014” is defined in the Note Purchase Agreement.

     

    “Officer’s Certificate” means
a certificate of a Senior Financial Officer or of any other officer of the
Company whose responsibilities extend to the subject matter of such
certificate.

     

    “PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA or any successor
thereto.

     

    “Permitted Energy
Transactions” means commodity sale, purchase or option agreements or
other commodity transactions or purchase or sale of weather derivatives entered
into by the Company or any Principal Subsidiary in the ordinary course of the
energy or energy related industry for non-speculative purposes relating to the
purchase or sale of electric power, electric power transmission capacity,
electric generation capacity, natural gas, natural gas transportation capacity,
natural gas storage, generation spark spreads, heating oil, crude oil, propane,
coal or currency.

     

    
      
        
        

      

      
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    “Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization, business entity or Governmental
Authority.

     

    “Plan” means an “employee
benefit plan” (as defined in section 3(3) of ERISA) subject to Title I
of ERISA that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any
liability.

     

    “Principal Subsidiary” means
any Subsidiary, whether owned directly or indirectly by the Company, which, with
respect to the Company and its Subsidiaries taken as a whole, represents at
least twenty percent (20%) of the Company’s consolidated assets or the Company’s
consolidated net income (or loss), as shown on the most recent financial
statements delivered to the holders of the Notes of the Series Due 2016 pursuant
to Section 7.1 of the Note Purchase Agreement except for Peoples Energy
Corporation.  

     

    “property” or “properties” means, unless
otherwise specifically limited, real or personal property of any kind, tangible
or intangible, choate or inchoate.

     

    “Proposed Redemption Date” is
defined in Section
3.3.

     

    “Proposed Reentry Redemption
Date” is defined in Section 3.8.

     

    “Purchaser” is defined in the
Note Purchase Agreement.

     

    “Reentry Event” is defined in
Section
3.8(f).

     

    “Required Holders” is defined
in the Note Purchase Agreement.

     

    “Reportable Event” means a
“reportable event” as defined in section 4043 of ERISA with respect to
which the notice requirements to the PBGC have not been waived.

     

    “Responsible Officer” means
any Senior Financial Officer and any other officer of the Company with
responsibility for the administration of the relevant portion of this
Agreement.

     

    “SEC” shall mean the
Securities and Exchange Commission of the United States, or any successor
thereto.

     

    “Securities” or Security” shall have the
same meaning as in Section 2(1) of the Securities Act.

     

    “Securities Act” means the
Securities Act of 1933, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

     

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

     

    
      
        
        

      

      
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    “Senior Indebtedness” means
all Indebtedness of the Company which is not expressed to be subordinate or
junior in rank to any other Indebtedness of the Company.

     

    “Single Employer Plan” means
any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer
Plan.

     

    “Subsidiary” means, as to any
Person, any other Person in which such first Person or one or more of its
Subsidiaries or such first Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such second Person, and
any partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such first Person and one or more of its Subsidiaries (unless such partnership
can and does ordinarily take major business actions without the prior approval
of such Person or one or more of its Subsidiaries).  Unless the
context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Company.

     

    “Termination Event” means (a)
with respect to any Single Employer Plan, the occurrence of a Reportable Event
or the substantial cessation of operations (within the meaning of
section 4062(e) of ERISA), (b) the withdrawal of the Company or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan, (c) the
distribution of a notice of intent to terminate or the actual termination of a
Plan pursuant to section 4041(a)(2) or 4041A of ERISA, (d) the institution
of proceedings to terminate or the actual termination of a Plan by the PBGC
under section 4042 of ERISA, (e) any event or condition which might
reasonably constitute grounds under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or (f)
the complete or partial withdrawal of the Company or any ERISA Affiliate from a
Multiemployer Plan.

     

    “Total Assets” means all
assets of the Company and its Subsidiaries as shown on the Company’s most recent
quarterly or audited annual consolidated balance sheet, as determined in
accordance with GAAP.

     

    “Total Funded Debt” means all
Funded Debt of the Company and its Subsidiaries, without duplication, on a
consolidated basis, as determined in accordance with GAAP.  For
purposes of determining Total Funded Debt, any election by the Company to
measure an item of Funded Debt using a value less than par (as permitted by FASB
159 or any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made.

     

    “Transaction Documents” means
the Note Purchase Agreement, the Notes of the Series Due 2016, the Notes of the
Series Due 2014, the 2009 Supplemental Indentures and the Senior
Indenture.

     

    “USA Patriot Act” means
United States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA

     

    
      
        
        

      

      
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    Patriot Act) Act of
2001, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.

     

    “Wholly-owned Subsidiary”
means, at any time, any Subsidiary one hundred percent (100%) of all of the
equity interests (except directors’ qualifying shares) and voting interests of
which are owned by any one or more of the Company and the Company’s other
Wholly-owned Subsidiaries at such time.

     

        (b)    Capitalized terms
used but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Senior Indenture;

     

        (c)    All references herein
to Articles and Sections, unless otherwise specified, refer to the corresponding
Articles and Sections of this Supplemental Indenture; and

     

        (d)    The terms “hereof,”
“herein,” “hereby,” “hereto,” “hereunder,” and “herewith” refer to this
Supplemental Indenture.

     

    Article II

    The
Securities

     

    There is hereby
established a series of Securities pursuant to Section 3.01 of the Senior
Indenture as follows:

     

    (a)    The title of the
Securities of the series hereby established is “8.00% Senior Notes Due
June 1, 2016.”

     

    (b)    The aggregate
principal amount of the Notes of the Series Due 2016 which may be
authenticated and delivered under the Senior Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of other Securities of such series pursuant to
Sections 2.05, 3.04, 3.05, 3.06, 9.06 or 11.07 of the Senior Indenture)
shall be limited to Fifty-Five Million Dollars ($55,000,000).

     

    (c)    All Notes of the
Series Due 2016 will be represented by one or more notes in definitive
form.

     

    (d)    The Stated Maturity
of the Notes of the Series Due 2016 shall be June 1,
2016.

     

    (e)    The Notes of the
Series Due 2016 shall bear interest on the unpaid principal balance thereof
at the rate of 8.00% per annum (computed on the basis of a 360-day year of
twelve 30-day months), and such interest shall accrue from the original issue
date thereof (or from the most recent Interest Payment Date to which interest on
such Notes has been paid or provided for).  The Interest Payment Dates
for the Notes of the Series Due 2016 shall be June 1 and
December 1 of each year commencing December 1, 2009, and the Regular
Record Date will be 15th day of the calendar month immediately preceding each
Interest Payment Date and will bear interest on overdue principal 

     

    
      
        
        

      

      
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    (including any
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the Default
Rate.

     

    (f)    Principal of and
interest on the Notes of the Series Due 2016 shall be payable in U.S.
Dollars at the Corporate Trust Office of the Trustee, provided, however, such
payments of principal and interest shall be subject to the terms of
Section 9 of the Note Purchase Agreement.

     

    Such Securities
shall be initially authenticated and delivered from time to time upon delivery
to the Trustee of the documents required by Section 3.03 of the Senior
Indenture.  The Notes of the Series Due 2016 shall be
substantially in the form of the Security attached hereto as Appendix I, which is
incorporated herein by reference.

     

    Article III

    Redemption
of the Notes of the Series Due 2016

     

    In accordance with
Sections 3.01(7) and (8) of the Senior Indenture and notwithstanding the
terms of Article XI of the Senior Indenture, the Notes of the Series Due
2016 shall be subject to the following rights and terms of
redemption:

     

        Section 3.1.    Maturity. As provided
therein, the entire unpaid principal balance of the Notes of the Series Due 2016
shall be due and payable on the Stated Maturity thereof.

     

        Section 3.2.    Optional Prepayments with Make-Whole
Amount.  The Company may, at its option, upon notice as
provided below, prepay at any time all of, or from time to time any part of, the
Notes of the Series Due 2016, in an amount not less than 5% of the aggregate
principal amount of the Notes of the Series Due 2016 then outstanding in the
case of a partial prepayment, at a Redemption Price equal to 100% of the
principal amount so prepaid, together with interest accrued thereon to the date
of such prepayment, and the Make-Whole Amount determined for the prepayment date
with respect to such principal amount.  The Company will give the
Trustee and each Holder of Notes of the Series Due 2016 written notice of each
optional prepayment under this Section 3.2 not less than
30 days and not more than 60 days prior to the Redemption Date fixed for such
prepayment.  Each such notice shall specify such Redemption Date
(which shall be a Business Day), the aggregate principal amount of the Notes of
the Series Due 2016 to be prepaid on such Redemption Date, the principal amount
of each Note of the Series Due 2016 held by such Holder to be prepaid
(determined in accordance with Section 3.4), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation.  Two
Business Days prior to such prepayment, the Company shall deliver to each Holder
of Notes of the Series Due 2016 a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.

     

    
      
        
        

      

      
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        Section 3.3.    Change in
Control.  

     

        (a)    Notice of Change in Control.
The Company will, within fifteen Business Days after any Responsible
Officer has knowledge of the occurrence of any Change in Control, give written
notice of such Change in Control to the Trustee and each holder of Notes of the
Series Due 2016.  Such notice shall contain and constitute an offer to
prepay Notes of the Series Due 2016 as described in subparagraph (b) of this
Section 3.3 and
shall be accompanied by the certificate described in subparagraph (e) of this
Section 3.3.

     

        (b)    Offer to Prepay
Notes.  The offer to prepay Notes of the Series Due 2016
contemplated by subparagraph (a) of this Section 3.3 shall be an
offer to prepay, in accordance with and subject to this Section 3.3, all, but not
less than all, the Notes of the Series Due 2016 held by each holder (in this
case only, “holder” in
respect of any Note of the Series Due 2016 registered in the name of a nominee
for a disclosed beneficial owner shall mean such beneficial owner) on a date
specified in such offer (the “Proposed Redemption Date”),
which date shall be not less than 30 days and not more than 60 days
after the date of such offer (if the Proposed Redemption Date shall not be
specified in such offer, the Proposed Redemption Date shall be the first
Business Day after the 45th day after the date of such offer).

     

        (c)    Acceptance/Rejection.  A
holder of Notes of the Series Due 2016 may accept the offer to prepay made
pursuant to this Section 3.3 by causing a
notice of such acceptance to be delivered to the Company not later than
15 days after receipt by such holder of the most recent offer of
prepayment.  A failure by a holder of Notes of the Series Due 2016 to
respond to an offer to prepay made pursuant to this Section 3.3 shall be
deemed to constitute rejection of such offer by such holder.

     

        (d)    Prepayment.  Prepayment
of the Notes of the Series Due 2016 to be prepaid pursuant to this Section 3.3 shall be at a
Redemption Price equal to 100% of the principal amount of such Notes, together
with interest on such Notes of the Series Due 2016 accrued to the date of
prepayment, but without Make-Whole Amount or other premium.  The
prepayment shall be made on the Redemption Date which will be the Proposed
Redemption Date.

     

        (e)    Officer’s Certificate. Each
offer to prepay the Notes of the Series Due 2016 pursuant to this Section 3.3 shall be
accompanied by a certificate, executed by a Senior Financial Officer of the
Company and dated the date of such offer, specifying: (i) the Proposed
Redemption Date; (ii) that such offer is made pursuant to this Section 3.3;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be prepaid,
accrued to the Proposed Redemption Date; and (v) in reasonable detail, the
nature and date or proposed date of the Change in Control.

     

        (f)    Certain Definitions.

     

    “Change in Control” means any
of the following events:

     

    (i)    any “person” or
“group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
other than any employee benefit plans of the Company, any “person” 

     

    
      
        
        

      

      
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    organized,
appointed or established pursuant to the terms of any such benefit plan or any
trustee, administrator or fiduciary of such a plan, has become, directly or
indirectly, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all shares that any such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time), by way
of merger, consolidation or otherwise, of 30% or more of the voting power of the
Company’s then outstanding voting Securities on a fully-diluted basis, after
giving effect to the conversion and exercise of all outstanding warrants,
options and other notes of the Company (whether or not such notes are then
currently convertible or exercisable), or

     

    (ii)    during any period of
two consecutive calendar years, individuals who at the beginning of such period
constituted the board of directors of the Company cease for any reason to
constitute a majority of the directors of the Company then in office
unless

     

    (A)    such new directors
were elected or nominated by a majority of the directors of the Company who
constituted the board of directors of the Company at the beginning of such
period, or

     

    (B)    the reason for such
directors failing to constitute a majority is a result of retirement by
directors due to age, death or disability.

     

        (g)    All calculations
contemplated in this Section 3.3 involving the
capital stock of any Person shall be made with the assumption that all
convertible Securities of such Person then outstanding and all convertible
Securities issuable upon the exercise of any warrants, options and other rights
outstanding at such time were converted at such time and that all options,
warrants and similar rights to acquire shares of capital stock of such Person
were exercised at such time.

     

        Section 3.4.    Allocation of Partial
Prepayments.  Notwithstanding Section 11.03 of the Senior
Indenture, in the case of each partial prepayment of Notes of the Series Due
2016 pursuant to Section 3.2, the
principal amount of the Notes of the Series Due 2016 to be prepaid shall be
allocated pro rata
among all Holders of Notes of the Series Due 2016  at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.  All
partial prepayments made pursuant to Section 3.3 or 3.8 shall be applied only to
the Notes of the Series Due 2016 of the Holders who have elected to participate
in such prepayment.

     

        Section 3.5.    Maturity; Surrender,
Etc.  In the case of each prepayment of Notes of the Series Due
2016 pursuant to this Article
III, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment of the Series Due
2016 (which shall be a Business Day), together with interest on such principal
amount accrued to such date and the applicable Make-Whole Amount, if
any.  From and after such date, unless the Company shall fail to pay
such principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue.  Any Note of the Series Due 2016 paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note of the Series 

     

    
      
        
        

      

      
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    Due 2016 shall be
issued in lieu of any prepaid principal amount of any Note of the Series Due
2016.

     

        Section 3.6.    Purchase of
Notes.  The Company will not and will not permit any Affiliate
to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes of the Series Due 2016 except (a) upon the payment or
prepayment of the Notes of the Series Due 2016 in accordance with the terms of
this Supplemental Indenture and the Notes of the Series Due 2016 or
(b) pursuant to an offer to purchase made by the Company or an Affiliate
pro rata to the Holders
of the Notes of the Series Due 2016 at the time outstanding upon the same terms
and conditions.  Any such offer shall provide each Holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 15 Business Days.  If
the Holders of more than 10% of the principal amount of the Notes of the Series
Due 2016 then outstanding accept such offer, the Company shall promptly notify
the remaining Holders of Notes of the Series Due 2016 of such fact and the
expiration date for the acceptance by Holders of Notes of the Series Due 2016 of
such offer shall be extended by the number of days necessary to give each such
remaining Holder at least 5 Business Days from its receipt of such notice to
accept such offer.  The Company will promptly cancel all Notes of the
Series Due 2016 acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes of the Series Due 2016 pursuant to any provision
of this Supplemental Indenture and no Notes of the Series Due 2016 may be issued
in substitution or exchange for any such Notes.

     

        ection 3.7.    Make-Whole
Amount.  The term “Make-Whole Amount” means,
with respect to any Note of the Series Due 2016, an amount equal to the excess,
if any, of the Discounted Value of the Remaining Scheduled Payments with respect
to the Called Principal of such Note of the Series Due 2016 over the amount of
such Called Principal; provided that the Make-Whole
Amount may in no event be less than zero.  For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

     

    “Called Principal” means,
with respect to any Notes of the Series Due 2016, the principal of such Notes of
the Series Due 2016 that is to be prepaid pursuant to Section 3.2 or has become
or is declared to be immediately due and payable pursuant to Section 5.02
of the Senior Indenture, Section 6.2 of this
Supplemental Indenture or Section 6.3 of this
Supplemental Indenture, as the context requires.

     

    “Discounted Value” means,
with respect to the Called Principal of any Notes of the Series Due 2016, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes of the Series Due 2016 is
payable) equal to the Reinvestment Yield with respect to such Called
Principal.

     

    “Reinvestment Yield” means,
with respect to the Called Principal of any Note of the Series Due 2016, 0.50%
(50 basis points) over the yield to maturity implied by (i) the yields reported
as of 10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display

     

    
      
        
        

      

      
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    designated as “Page
PX1” (or such other display as may replace Page PX1) on Bloomberg Financial
Markets for the most recently issued actively traded on the run U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (or any comparable successor publication) for U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date.  In the case of each
determination under clause (i) or clause (ii), as the case may be, of
the preceding paragraph, such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the applicable U.S. Treasury security with the maturity closest
to and greater than such Remaining Average Life and (2) the applicable U.S.
Treasury security with the maturity closest to and less than such Remaining
Average Life.  The Reinvestment Yield shall be rounded to the number
of decimal places as appears in the interest rate of the applicable
Note.

     

    “Remaining Average Life”
means, with respect to any Called Principal, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (a) such Called
Principal into (b) the sum of the products obtained by multiplying
(i) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (ii) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

     

    “Remaining Scheduled
Payments” means, with respect to the Called Principal of any Note of the
Series Due 2016, all payments of such Called Principal and interest thereon that
would be due after the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its scheduled due date;
provided that if such
Settlement Date is not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date pursuant to
Section 3.2 or
Section 5.02 of the Senior Indenture, Section 6.2 of this
Supplemental Indenture or Section 6.3 of this
Supplemental Indenture.

     

    “Settlement Date” means, with
respect to the Called Principal of any Note of the Series Due 2016, the date on
which such Called Principal is to be prepaid pursuant to Section 3.2 or has become
or is declared to be immediately due and payable pursuant to Section 5.02
of the Senior Indenture, Section 6.2 of this
Supplemental Indenture or Section 6.3 of this
Supplemental Indenture, as the context requires.

     

    
      
        
        

      

      
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        Section 3.8.    Reentry
Event.  

     

        (a)    Notice of Reentry Event. The
Company will, within fifteen Business Days after any Responsible Officer has
knowledge of the occurrence of any Reentry Event, give written notice of such
Reentry Event to the Trustee and each holder of Notes of the Series Due
2016.  Such notice shall contain and constitute an offer to prepay
Notes of the Series Due 2016 as described in subparagraph (b) of this Section 3.8 and shall be
accompanied by the certificate described in subparagraph (e) of this Section 3.8.

     

        (b)    Offer to Prepay
Notes.  The offer to prepay Notes of the Series Due 2016
contemplated by subparagraph (a) of this Section 3.8 shall be an
offer to prepay, in accordance with and subject to this Section 3.8, all, but not
less than all, the Notes of the Series Due 2016 held by each holder (in this
case only, “holder” in
respect of any Note of the Series Due 2016 registered in the name of a nominee
for a disclosed beneficial owner shall mean such beneficial owner) on a date
specified in such offer (the “Proposed Reentry Redemption
Date”), which date shall be not less than 60 days and not more than
90 days after the date of such offer (if the Proposed Reentry Redemption
Date shall not be specified in such offer, the Proposed Redemption Date shall be
the first Business Day after the 75th day after the date of such
offer).

     

        (c)    Acceptance/Rejection.  A
holder of Notes of the Series Due 2016 may accept the offer to prepay made
pursuant to this Section 3.8 by causing a
notice of such acceptance to be delivered to the Company not later than
15 days after receipt by such holder of the most recent offer of
prepayment.  A failure by a holder of Notes of the Series Due 2016 to
respond to an offer to prepay made pursuant to this Section 3.8 shall be
deemed to constitute rejection of such offer by such holder.

     

        (d)    Prepayment.  Prepayment
of the Notes of the Series Due 2016 to be prepaid pursuant to this Section 3.8 shall be at a
Redemption Price equal to 100% of the principal amount of such Notes, together
with interest on such Notes of the Series Due 2016 accrued to the date of
prepayment, but without Make-Whole Amount or other premium.  The
prepayment shall be made on the Redemption Date which will be the Proposed
Reentry Redemption Date.

     

        (e)    Officer’s Certificate. Each
offer to prepay the Notes of the Series Due 2016 pursuant to this Section 3.8 shall be
accompanied by a certificate, executed by a Senior Financial Officer of the
Company and dated the date of such offer, specifying: (i) the Proposed
Reentry Redemption Date; (ii) that such offer is made pursuant to this
Section 3.8;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be prepaid,
accrued to the Proposed Reentry Redemption Date; and (v) in reasonable
detail, the nature and date or proposed date of the Reentry Event.

     

        (f)    Certain Definitions.

     

    “Reentry Event” means that
the Company, following completion of a full divestiture of the assets, business
and operations of Integrys Energy Services and its Subsidiaries, acquires and/or
creates a nonregulated natural gas and electric power supply and services
company or 

     

    
      
        
        

      

      
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    companies that
constitute(s) more than thirty-three percent (33%) of Total Assets, as
calculated as of the end of each quarterly fiscal period of the
Company.

     

    Article IV

    Certain
Affirmative Covenants

     

    In accordance with
Section 3.01(14) of the Senior Indenture, the Company covenants that so long as
any of the Notes of the Series Due 2016 are outstanding:

     

        Section 4.1.      (a) The
covenants and agreements of the Company set forth in Article VII (except
Section 7.04) and Article X of the Senior Indenture shall be and remain in
full force and effect, and be observed and complied with by the
Company.

     

        (b)    The Company shall
perform or comply with all terms, provisions and conditions of the Note Purchase
Agreement.

     

        Section 4.2.    Compliance with
Law.  The Company will, and will cause each of its Subsidiaries
to, comply with all laws, ordinances or governmental rules or regulations to
which each of them is subject, including, without limitation, ERISA, the USA
Patriot Act and Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

     

        Section 4.3.    Insurance.  The
Company will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurers or via self-insurance, insurance with
respect to their respective properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated, except for any non-maintenance that would not reasonably be expected
to have a Material Adverse Effect.

     

        Section 4.4.    Legal Existence,
Etc.  Subject to Sections 5.3 and 5.4, the Company will at all
times preserve and keep in full force and effect the legal existence of each of
its Principal Subsidiaries (unless merged into the Company or a Subsidiary) and
all rights and franchises of the Company’s Principal Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such legal existence, right or franchise would
not, individually or in the aggregate, have a Material Adverse
Effect.

     

        Section 4.5.    Books and
Records.  The Company will, and will cause each of its
Subsidiaries to, maintain proper books of record and account in conformity with
GAAP and all 

     

    
      
        
        

      

      
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    applicable
requirements of any Governmental Authority having legal or regulatory
jurisdiction over the Company, or such Subsidiary, as the case may
be.

     

        Section 4.6.    Notes to Rank Pari
Passu.  The Notes of the Series Due 2016 and all other
obligations under the Note Purchase Agreement of the Company are and at all
times shall rank at least pari
passu in right of payment with all other present and future unsecured
Indebtedness (actual or contingent) of the Company which is not expressed to be
subordinate or junior in rank to any other unsecured Indebtedness of the
Company.

     

        Section 4.7.    Guaranty by
Subsidiaries.  (a)  In the event the Company grants a
Lien to secure Indebtedness of the Company under the Bank Credit Facility, the
Company will concurrently make, or cause to be made, effective provision whereby
the Notes of the Series Due 2016 are concurrently secured equally and ratably
with, or prior to, such Indebtedness pursuant to documentation in form and
substance satisfactory to the Required Holders and deliver to each of the
Holders of the Notes of the Series Due 2016 the following items:

     

    (i)    an executed
counterpart of such documents creating such Lien in favor of the Holders of the
Notes of the Series Due 2016 (the “Company Security
Documents”);

     

    (ii)    a certificate signed
by the President, a Vice President or another authorized Responsible Officer of
the Company making representations and warranties to the effect of those
contained in Sections 5.1, 5.2, 5.6 and 5.7 of the Note Purchase Agreement, but
with respect to the Company Security Documents, as applicable;

     

    (iii)    a certificate of a
Responsible Officer of the Company certifying that at such time and after giving
effect to the execution and delivery of the Company Security Documents, no
Default or Event of Default shall have occurred and be continuing;

     

    (iv)    such documents and
evidence with respect to the Company as the Required Holders may reasonably
request in order to establish the authorization of the transactions contemplated
by the Company Security Documents;

     

    (v)    an opinion of counsel
satisfactory to the Required Holders to the effect that the Company Security
Documents have been duly authorized, executed and delivered and constitute the
legal, valid and binding contract and agreement of the Company enforceable in
accordance with its terms, except as an enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles and subject to other customary exceptions and qualifications;
and

     

    (vi)    an executed
counterpart of an intercreditor agreement in form and substance satisfactory to
the Required Holders governing actions of the lenders under the Bank Credit
Facility, any other creditors secured by such Lien, and the Holders of the Notes
of the Series Due 2016, which agreement shall
provide that the proceeds from the enforcement of any such Lien shall be shared
on an equal and ratable basis with the 

     

    
      
        
        

      

      
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    Holders of the
Notes of the Series Due 2016 based on principal, interest and Make-Whole
Amount.

     

        (b)    In the event any
Subsidiary incurs any Guaranty Obligations with respect to Indebtedness under
the Bank Credit Facility, the Company will cause such Subsidiary to concurrently
enter, and deliver to each of the Holders of the Notes of the Series Due 2016
the following items:

     

    (i)    an executed
counterpart of such guaranty of the Notes of the Series Due 2016;

     

    (ii)    a certificate signed
by the President, a Vice President or another authorized Responsible Officer of
such Subsidiary making representations and warranties to the effect of those
contained in Sections 5.1, 5.2, 5.6 and 5.7 of the Note Purchase Agreement, but
with respect to such Subsidiary and such guaranty;

     

    (iii)    a certificate of a
Responsible Officer of the Company certifying that at such time and after giving
effect to the execution and delivery of such guaranty , no Default or Event of
Default shall have occurred and be continuing;

     

    (iv)    such documents and
evidence with respect to such Subsidiary as the Required Holders may reasonably
request in order to establish the existence and good standing of such Subsidiary
and the authorization of the transactions contemplated by such
guaranty;

     

    (v)    an opinion of counsel
satisfactory to the Required Holders to the effect that such guaranty has been
duly authorized, executed and delivered and constitute the legal, valid and
binding contract and agreement of such Subsidiary enforceable in accordance with
its terms, except as an enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
and subject to other customary exceptions and qualifications; and

     

    (vi)    an executed
counterpart of an intercreditor agreement in form and substance satisfactory to
the Required Holders governing actions of the lenders under the Bank Credit
Facility, any other creditors which are beneficiaries of a guaranty from such
Subsidiary, and the Holders of the Notes of the Series Due 2016, which agreement shall
provide that the proceeds from the enforcement of any such guaranties shall be
shared on an equal and ratable basis with the Holders of the Notes of the Series
Due 2016 based on principal, interest and Make-Whole Amount.

     

        (c)    In the event any
Subsidiary grants a Lien to secure Indebtedness of the Company or any Subsidiary
under the Bank Credit Facility, the Company will cause such Subsidiary to make,
or cause to be made, effective provision whereby the Notes of the Series Due
2016 are concurrently secured equally and ratably with, or prior to, such
Indebtedness pursuant to 

     

    
      
        
        

      

      
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    documentation in
form and substance satisfactory to the Required Holders and deliver to each of
the Holders of the Notes of the Series Due 2016 the following
items:

     

    (i)    an executed
counterpart of such documents creating such Lien in favor of the Holders of the
Notes of the Series Due 2016 (the “Subsidiary Security
Documents”);

     

    (ii)    a certificate signed
by the President, a Vice President or another authorized Responsible Officer of
the Subsidiary making representations and warranties to the effect of those
contained in Sections 5.1, 5.2, 5.6 and 5.7 of the Note Purchase Agreement, but
with respect to the Subsidiary Security Documents, as applicable;

     

    (iii)    a certificate of a
Responsible Officer of the Company certifying that at such time and after giving
effect to the execution and delivery of the Subsidiary Security Documents, no
Default or Event of Default shall have occurred and be continuing;

     

    (iv)    such documents and
evidence with respect to the Subsidiary as the Required Holders may reasonably
request in order to establish the authorization of the transactions contemplated
by the Subsidiary Security Documents;

     

    (v)    an opinion of counsel
satisfactory to the Required Holders to the effect that the Subsidiary Security
Documents have been duly authorized, executed and delivered and constitute the
legal, valid and binding contract and agreement of the Subsidiary enforceable in
accordance with its terms, except as an enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles and subject to other customary exceptions and qualifications;
and

     

    (vi)    an executed
counterpart of an intercreditor agreement in form and substance satisfactory to
the Required Holders governing actions of the lenders under the Bank Credit
Facility, any other creditors secured by such Lien, and the Holders of the Notes
of the Series Due 2016, which agreement shall
provide that the proceeds from the enforcement of any such Lien shall be shared
on an equal and ratable basis with the Holders of the Notes of the Series Due
2016 based on principal, interest and Make-Whole Amount.

     

    Article V

    Certain
Negative Covenants

     

    In accordance with
Section 3.01(14) of the Senior Indenture, the Company covenants that so long as
any of the Notes of the Series Due 2016 are outstanding:

     

        Section 5.1.    Leverage
Ratio.  The Company will not permit the ratio of Total Funded
Debt to Capitalization as of the last day of any fiscal quarter to exceed 0.65
to 1.00.

     

        Section 5.2.    Liens.  The Company
will not, and will not permit any of its Principal Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    its property or
assets of any kind (whether real or personal, tangible or intangible), whether
now owned or hereafter acquired, except for 

     

    (a)     Liens
securing the Notes,

     

    (b)     the Lien of
First Mortgage Indentures or any Liens attaching to the property to which the
Lien of the First Mortgage Indentures attach; provided that such Liens do
not secure Funded Debt (other than Funded Debt secured by the First Mortgage
Indentures), 

     

    (c)     Liens for
taxes not yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof),

     

    (d)     Liens in
respect of property imposed by law arising in the ordinary course of business
such as materialmen’s, mechanics’, warehousemen’s, carrier’s, landlords’ and
other nonconsensual statutory Liens which are not yet due and payable, which
have been in existence less than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property subject
to any such Lien is not yet subject to foreclosure, sale or loss on account
thereof),

     

    (e)     pledges or
deposits made in the ordinary course of business to secure payment of worker’s
compensation insurance, unemployment insurance, pensions or social security
programs,

     

    (f)     Liens arising
from good faith deposits in connection with or to secure performance of tenders,
bids, leases, government contracts, performance and return-of-money securities
and other similar obligations incurred in the ordinary course of business (other
than obligations in respect of the payment of borrowed money),

     

    (g)     Liens arising
from good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal securities,

     

    (h)     easements,
rights-of-way (and liens on easements or rights-of-way or the underlying real
estate), restrictions (included zoning restrictions), minor defects or
irregularities in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered property for its intended
purposes,

     

    (i)     judgment
Liens that would not constitute an Event of Default,

     

    (j)     Liens arising
by virtue of any statutory or common law provision relating to banker’s liens,
rights of setoff or similar rights as to deposit accounts or other funds
maintained with a creditor depository institution,

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (k)     any Lien
created or arising over any property which is acquired, constructed or created
by the Company or any Principal Subsidiary, but only if (i) such Lien secures
only principal amounts (not exceeding the cost of such acquisition, construction
or creation) raised for the purposes of such acquisition, construction or
creation together with any costs, expenses, interest and fees incurred in
relation thereto or a guarantee given in respect thereof, (ii) such Lien is
created or arises on or before 180 days after the completion of such
acquisition, construction or creation and (iii) such Lien is confined solely to
the property so acquired, constructed or created and any improvements thereto
and proceeds and products thereof,

     

    (l)     any Lien on
any property or assets acquired from a Person which is merged with or into the
Company or any Principal Subsidiary in accordance with Article VIII of the
Senior Indenture and Section 5.3, as the case
may be, and is not created in anticipation of any such transaction,

     

    (m)     any Lien on
any property or assets existing at the time of acquisition of such property or
assets by the Company or any Principal Subsidiary and which is not created in
anticipation of such acquisition,

     

    (n)    Liens existing on the
date of the Closing and described on Schedule 5.15 of the Note Purchase
Agreement attached thereto,

     

    (o)    pledges or deposits
made in the ordinary course of business to secure obligations of the Company or
any Principal Subsidiary under interest rate protection agreements, foreign
currency exchange agreements, Permitted Energy Transactions, or other interest
or exchange rate hedging arrangements,

     

    (p)    Liens on cash, cash
collateral, cash deposits or deposit accounts furnished to or for the benefit of
MISO or other transmission providers or energy market administrators to secure
the payment and performance of obligations (i) in connection with the purchase
of electric transmission service from MISO or such other transmission providers
or (ii) related to energy, capacity or ancillary service transactions entered
into through markets administered by MISO or such other transmission providers
or energy market administrators,

     

    (q)    Liens, if any,
arising in connection with the securitization of environmental retrofit
receivables,

     

    (r)    any extension,
renewal or replacement (or successive extensions, renewals or replacements), as
a whole or in part, of any Liens referred to in the foregoing clauses (a)
through (q), for amounts not exceeding the maximum principal amount of the
Indebtedness secured by the Lien so extended, renewed or replaced; provided that such extension,
renewal or replacement Lien is limited to all or a part of the same property or
assets that were covered by the Lien extended, renewed or replaced (plus
improvements on such property or assets), and 

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    (s)    any other Lien or
Liens which in the aggregate secure Indebtedness or other obligations at any one
time not in excess of an amount equal to 7.5% of Total Assets.

     

        Section 5.3.    Mergers, Consolidations,
Etc.  The Company will not permit any Principal Subsidiary to
consolidate with or be a party to a merger with any other Person, or sell, lease
or otherwise dispose of all or substantially all of its assets; provided that 

     

    (a)    any Principal
Subsidiary may merge or consolidate with or into the Company, any Subsidiary or
any other Person so long as in (i) any merger or consolidation involving the
Company, the Company shall be the surviving or continuing corporation and (ii)
in any merger or consolidation involving a Subsidiary (and not the Company), the
Subsidiary shall be the surviving or continuing corporation or limited liability
company and

     

    (b)     Integrys
Energy Services, Inc. a Wisconsin corporation (“Integrys Energy Services”)
and/or any or all of its Subsidiaries may merge with any other Person or sell,
lease or otherwise dispose of all or substantially all of its assets or any of
their respective assets in whole or in part.

     

        Section 5.4.    Sale or Lease of
Assets.  

     

        (a)    Without limiting
clause (b) of this Section 5.4, within any
twelve month period, the Company will not, and will not permit its Subsidiaries
to, convey, sell, lease, transfer or otherwise dispose of assets, business or
operations with a book value (net of assumed liabilities associated with the
assets that are the subject of such transaction) in excess of twenty-five
percent (25%) of Total Assets, as calculated as of the end of the most recent
fiscal quarter, provided that the Company and
its Subsidiaries may convey, sell, lease, transfer or otherwise dispose of
assets, business or operations consisting of:

     

    (i)    sales of inventory or
other assets acquired for resale in the ordinary course of
business,

     

    (ii)    sales of accounts
owed by customers for energy provided or to be provided outside the normal
franchise service area of Wisconsin Public Service Corporation and Upper
Peninsula Power Company,

     

    (iii)    sales, transfers or
other dispositions of assets between or among the Company and its wholly owned
Subsidiaries,

     

    (iv)    sales, transfers or
other dispositions of obsolete or worn-out tools, equipment or other property no
longer used or useful in business and sales of intellectual property determined
to be uneconomical, negligible or obsolete,

     

    (v)    sales, transfers or
other dispositions of the assets listed on Schedule 5.4, 

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    (vi)    non-exclusive
licenses of intellectual property, and

     

    (vii)    sales, transfers or
other dispositions of assets the proceeds of which are invested in other energy
related assets; and

     

        (b)    Anything contained in
clause (a) of this Section 5.4 to the
contrary notwithstanding, Integrys Energy Services and/or any or all of its
Subsidiaries may sell, transfer or otherwise dispose of all or any part of its
respective assets, businesses or operations without regard to limitations
contained in clause (a) of this Section 5.4.

     

        Section 5.5.    Restrictions on
Subsidiaries.  The Company will not, and will not permit any
Principal Subsidiary to, enter into any agreement that restricts the ability of
any Principal Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock; provided that it is
understood and agreed that (a) the foregoing covenant does not prohibit the
Company or a Principal Subsidiary from entering into agreements that contain
financial covenants which require the maintenance of a minimum net worth or
compliance with financial ratios without explicitly addressing the ability to
pay dividends or make other distributions with respect to shares of its capital
stock, (b) the foregoing covenant does not apply to limitations or restrictions
imposed by law or in regulatory proceedings and (c) the foregoing covenant does
not apply to limitations or restrictions in the articles of incorporation of
such Principal Subsidiary as in effect on the date hereof or restrictions which
arise only if dividends on preferred stock issued by such Principal Subsidiary
have not been paid.

     

        Section 5.6.    Transactions with
Affiliates.  The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any Material transaction or
Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Subsidiary),
except upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would be obtainable in a comparable arm’s-length transaction
with a Person not an Affiliate. 

     

        Section 5.7.    Line of
Business.  The Company will not and will not permit any
Principal Subsidiary to engage in any business if, as a result, the general
nature of the business in which the Company and its Subsidiaries, taken as a
whole, would then be engaged would be substantially changed from the general
nature of the business in which the Company and its Subsidiaries, taken as a
whole, are engaged on the date of this Agreement as described in the Memorandum;
provided that nothing
contained in this Section 5.7 shall be
deemed or construed to limit the full or partial divestiture by the Company of
the assets, business or operations of Integrys Energy Services and/or any or all
of the Subsidiaries of Integrys Energy Services or any reduction in the scope
and/or scale of the assets, business or operations of Integrys Energy Services
and/or any or all of its Subsidiaries and any such divestiture, reduction, sale
or other disposition shall not be deemed or construed to constitute a change in
the general nature of the business in which the Company and its Subsidiaries,
taken as a whole, are engaged. 

     

        Section 5.8.    Terrorism Sanctions
Regulations.  The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control or in
Section 1 of the Anti-Terrorism Order or (b) engage in any dealings or
transactions with any such Person.

     

    Article VI

    Events
of Default

     

        Section 6.1.      In accordance
with Section 3.01(11) of the Senior Indenture and for purposes of
determining whether an Event of Default exists with respect to the Notes of the
Series Due 2016, but only with respect to such Notes of the Series Due
2016, in addition to the Events of Default set forth in Sections 5.01(2),
(5), (6) and (7) of the Senior Indenture, the Holders of the Notes of the Series
Due 2016 shall have the following Events of Default in replacement of the Events
of Default set forth in Sections 5.01(1), (3) and (4) of the Senior
Indenture or in addition to the Events of Default set forth in Section 5.01
of the Senior Indenture, as the case may be:

     

    (a)    the Company defaults
in the payment of any interest on any Note of the Series Due 2016 for more than
five Business Days after the same becomes due and payable; or

     

    (b)    the Company defaults
in the performance of or compliance with any term contained in the Senior
Indenture or this Supplemental Indenture (other than those referred to in Section 6.1(a) hereof and
Section 5.01(2) of the Senior Indenture) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company receiving written
notice of such default from any Holder of a Note of the Series Due 2016 (any
such written notice to be identified as a “notice of default” and to refer
specifically to this Section 6.1(b));
or

     

    (c)    any representation or
warranty made in writing by or on behalf of the Company or by any officer of the
Company in the Note Purchase Agreement or in any writing furnished in connection
with the transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or

     

    (d)    (i) the Company
or any Principal Subsidiary is in default (as principal or as guarantor or other
surety) in the payment of any principal of or premium or make-whole amount or
interest (in the payment amount of at least $100,000) on any Indebtedness that
is outstanding in an aggregate principal amount of at least $35,000,000 beyond
any period of grace provided with respect thereto, or (ii) the Company or
any Principal Subsidiary is in default (other than any non-material default
under any First Mortgage Indenture) in the performance of or compliance with any
term of any evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $35,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been declared (or one
or more holders of such Indebtedness, or a trustee or agent on behalf of such
holder or holders, are entitled to declare such Indebtedness to be), due

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    and payable before
its stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (1) the
Company or any Principal Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled dates
of payment in an aggregate outstanding principal amount of at least $35,000,000
and the Company or such Principal Subsidiary has failed to purchase or repay
such Indebtedness or (2) one or more holders of such Indebtedness, or a
trustee or agent on behalf of such holder or holders, have the right to require
the Company or any Principal Subsidiary so to purchase or repay such
Indebtedness; provided
that the foregoing cross-default provisions shall not apply to Indebtedness to
the extent recourse to the Company is limited to specific assets in a project
financing (i.e.,
defaults under agreements governing non-recourse project financing
Indebtedness are excluded); or

     

    (e)    any Principal
Subsidiary (i) is generally not paying, or admits in writing its inability
to pay, its debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for the benefit
of its creditors, (iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or

     

    (f)    a court or
Governmental Authority of competent jurisdiction enters an order appointing,
without consent by any of the Company’s Principal Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order
for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of any of the Company’s Principal Subsidiaries, or any such
petition shall be filed against any of the Company’s Principal Subsidiaries and
such petition shall not be dismissed within 60 days; or

     

    (g)    a final judgment or
judgments for the payment of money aggregating in excess of $35,000,000 are
rendered against one or more of the Company and its Principal Subsidiaries and
which judgments are not, within 60 days after entry thereof, bonded, discharged
or stayed pending appeal, or are not discharged within 60 days after the
expiration of such stay; or

     

    (h)    the occurrence of any
of the following events or conditions if any of the same would be reasonably
likely to have a Material Adverse Effect: (i) any “accumulated funding
deficiency,” as such term is defined in section 302 of ERISA and
section 412 of the Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of the Company, any of its
Subsidiaries or any ERISA Affiliate in 

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    favor of the PBGC
or a Plan; (ii) a Termination Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Required Holders,
likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) a Termination Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Required Holders, likely to result in (A) the termination of such
Plan for purposes of Title IV of ERISA, or (B) the Company, any of its
Subsidiaries or any ERISA Affiliate incurring liability in connection with a
withdrawal from, reorganization of (within the meaning of section 4241 of
ERISA), or insolvency (within the meaning of section 4245 of ERISA) of such
Plan; or (iv) any prohibited transaction (within the meaning of section 406
of ERISA or section 4975 of the Code) or breach of fiduciary responsibility
shall occur which would be reasonably likely to subject the Company, any of its
Subsidiaries or any ERISA Affiliate to liability under sections 406, 409,
502(i), or 502(1) of ERISA or section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Company, any of its
Subsidiaries or any ERISA Affiliate has agreed or is required to indemnify any
person against any such liability.

     

        Section 6.2.      In accordance
with Section 3.01 of the Senior Indenture and for purposes of determining
the rights of Holders of the Notes of the Series Due 2016 following an Event of
Default, in addition to the rights set forth in Article V of the Senior
Indenture, if any Event of Default described in Section 6.1(a) hereof or
Section 5.01(2) of the Senior Indenture has occurred and is
continuing, any Holder or Holders of the Notes of the Series Due 2016 at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes of the
Series Due 2016 held by it or them to be immediately due and
payable.

     

        Section
6.3.      Upon any Notes of the
Series Due 2016 becoming due and payable under Section 5.02 of the Senior
Indenture or Section 6.2
of this Supplemental Indenture, whether automatically or by declaration, such
Notes of the Series Due 2016 will forthwith mature and the entire unpaid
principal amount of such Notes of the Series Due 2016, plus (i) all accrued
and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (ii) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby
waived.  The Company acknowledges, and the parties hereto agree, that
each holder of a Note has the right to maintain its investment in the Notes free
from repayment by the Company (except as herein specifically provided for), and
that the provision for payment of a Make-Whole Amount by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

     

        Section 6.4.    The
covenants, agreements and conditions contained in Articles IV, V and VI of this Supplemental
Indenture are solely for the protection and benefit of the registered owners of
the Notes of the Series Due 2016 and, therefore, the exclusive right to
(a) require the Trustee to declare a default hereunder, (b) waive a
default hereunder, (c) waive compliance herewith, or (d) amend any of
such covenants, agreements or conditions herewith shall in each

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    such case be vested
solely in the registered owners of a majority in principal amount of the Notes
of the Series Due 2016 then outstanding.  No benefits by reason of
such provisions shall be deemed to be conferred upon Persons other than the
registered owners of the Notes of the Series Due 2016.

     

    Article VII

    Defeasance

     

        Section
7.1.     Defeasance.  In
accordance with Section 3.01(12) of the Senior Indenture, the provisions of
Sections 13.02 and 13.03 of the Senior Indenture shall in no respect be
applicable to the Notes of the Series Due 2016.

     

    Article VIII

    Miscellaneous

     

        Section 8.1.    The
Trustee has accepted the amendment of the Senior Indenture effected by this
Supplemental Indenture and agrees to execute the trust created by the Senior
Indenture as hereby amended, but only upon the terms and conditions set forth in
the Senior Indenture, including the terms and provisions defining and limiting
the liabilities and responsibilities of the Trustee, and without limiting the
generality of the foregoing, the Trustee shall not be responsible in any manner
whatsoever for or with respect to any of the recitals or statements contained
herein, all of which recitals or statements are made solely by the Company, or
for or with respect to (a) the validity or sufficiency of this Supplemental
Indenture or any of the terms or provisions hereof, (b) the proper
authorization hereof by the Company by corporate action or otherwise, and
(c) the due execution hereof by the Company.

     

        ection 8.2.    This
Supplemental Indenture shall be construed in connection with and as a part of
the Senior Indenture.

     

        Section 8.3.    (a) If
any provision of this Supplemental Indenture conflicts with another provision of
the Senior Indenture required to be included in indentures qualified under the
Trust Indenture Act of 1939, as amended (as enacted prior to the date of this
Supplemental Indenture), by any of the provisions of Sections 310 to 317,
inclusive, of said act, such required provision shall control.

     

        (b)    In case any one or
more of the provisions contained in this Supplemental Indenture or in the
Securities issued hereunder should be invalid, illegal, or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected, impaired,
prejudiced or disturbed thereby.

     

        Section 8.4.    Whenever in
this Supplemental Indenture either of the parties hereto is named or referred
to, such name or reference shall be deemed to include the successors or assigns
of such party, and all the covenants and agreements contained in this
Supplemental Indenture by or on behalf of the Company or by or on behalf of the
Trustee shall bind and inure 

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    to the benefit of
the respective successors and assigns of such parties, whether so expressed or
not.

     

        Section 8.5.    (a) This
Supplemental Indenture may be simultaneously executed in several counterparts,
and all such counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.

     

        (b)    The descriptive
headings of the several Articles of this Supplemental Indenture were formulated,
used and inserted in this Supplemental Indenture for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

     

    In Witness Whereof,
Integrys Energy Group, Inc. has caused this Fourth Supplemental Indenture to be
executed by its Chairman, President, or a Vice President, or any other officer
selected by the Board of Directors, and its corporate seal to be hereunto
affixed, duly attested by its Secretary or an Assistant Secretary, and
U.S. Bank National Association, as Trustee as aforesaid, has caused this
Supplemental Indenture to be executed by one of its authorized signatories, as
of ______________, 2009.

     

    
      	
               
      

            	
              Integrys
      Energy Group, Inc.

            

    

     

    
      	
               
      

            	
              By:
      _________________________

            

    

    Name:  Bradley
A. Johnson

    Title:  Vice
President and Treasurer

     

    
      	
               
      

            	
              (Seal)

            

    

     

    
      	
               
      

            	
              Attest:

            

    

     

     

    __________________________________

     Name:  Barth
J. Wolf

     Title:  Vice
President, Chief Legal Officer

       and Secretary

    

    

    
      	
               
      

            	
              U.S. Bank
      National Association

            

    

     

    
      	
               
      

            	
              By: 
      _________________________

            

    

    Name: 
___________________

    Title: 
_____________________

     

    
      
      

    

    
      Attest:

    

    Name: 
_______________________________

    Title: 
________________________________

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    Appendix I

     

    PPN:  45822P
A@4

    No. __________                                                                                $__________

     

    This
note has not been registered under the Securities Act of 1933, as amended, or
the securities laws of any state.  Neither this note nor any interest
or participation herein may be reoffered, sold, assigned or transferred in the
absence of such registration unless such transaction is exempt from, or not
subject to, such registration.

     

    Integrys
Energy Group, Inc.

    8.00%
Senior Note due June 1, 2016

     

    Original Issue
Date:    June 11,
2009

     

    PPN:     45822P
A@4

     

    Interest Rate:    8.00%

     

    Interest Payment
Dates:    June 1 and
December 1 (commencing December 1, 2009)

     

    Regular Record
Dates:    May 15 and
November 15

     

    Maturity Date:    June 1,
2016

     

    Integrys Energy
Group, Inc., a corporation duly organized and existing under the laws of
Wisconsin (herein called the “Company,” which term
includes any successor corporation under the Senior Indenture hereinafter
referred to), for value received, hereby promises to pay to _____________, or
registered assigns, the principal sum of _____________________________ Dollars
on the Maturity Date specified above and to pay interest on the unpaid principal
amount hereof from the Original Issue Date specified above or from the most
recent Interest Payment Date specified above to which interest has been paid or
duly provided for, semi-annually on the Interest Payment Dates specified above
in each year, commencing December 1, 2009, at the Interest Rate specified
above (computed on the basis of a 360-day year of twelve 30-day months), until
the principal hereof is paid or made available for payment and (to the extent
that the payment of such interest shall be legally enforceable) at the Default
Rate (as defined in the hereinafter defined Senior Indenture) on any overdue
principal and on any overdue installment of interest and any overdue Make-Whole
Amount.  The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the hereinafter defined
Senior Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities (as
defined in the hereinafter defined Senior Indenture) is registered at the close
of business on the Regular Record Date specified above for such interest
(whether or not such day is a Business Day).  Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest (as defined in the hereinafter defined Senior Indenture)
to be fixed by the Trustee (as defined in the hereinafter defined Senior
Indenture), notice of which shall have been given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner, all as more fully provided in said
Senior Indenture.

     

    Payment of the
principal of any Make-Whole Amount, if any, with respect to, and interest on,
this Security will be made at the office or agency of the Trustee maintained for
that purpose in Saint Paul, Minnesota, in Dollars; provided, however, that such
payments of principal and interest shall be subject to the terms of
Section 9 of the Note Purchase Agreement (as defined in the hereinafter
defined Senior Indenture).

     

    Reference is hereby
made to the further provisions of this Security set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as if set
forth at this place.

     

    This Note and the
rights and obligations of the parties hereunder shall be governed by and
construed and interpreted in accordance with the laws (other than choice of law
provisions) of the State of Wisconsin.

     

    Unless the
certificate of authentication hereon has been executed by the Trustee referred
to on the reverse hereof by manual signature, this Security shall not be
entitled to any benefits under the Senior Indenture or be valid or obligatory
for any purpose.

     

    In Witness Whereof,
the Company has caused this instrument to be duly executed under its corporate
seal.

     

    
      	
               
      

            	
              Integrys
      Energy Group, Inc.

            

    

     

    
      	
               
      

            	
              By:______________________

            

    

    Attest:

    _________________________

    [SEAL]

    

     

    

     

    

    
      
         

      

      
        -2-  

        
          

        

      

      
         

      

    

    Form
of Trustee’s Certificate of Authentication.

     

    Dated:  _______________

     

    This is one of the
Securities of the series designated therein referred to in the within-mentioned
Senior Indenture.

     

    
      	
               
      

            	
              U.S. Bank
      National Association

            

    

    
      	
               
      

            	
                as
      Trustee

            

    

     

    
      	
               
      

            	
              By:___________________________

            

    

    Authorized
Signatory

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Form
of Reverse of Security

     

    This Security is
one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued
and to be issued in one or more series under an Indenture, dated as of October
1, 1999 (herein called the “Senior Indenture”), between
the Company (f/k/a WPS Resources Corporation) and a predecessor of
U.S. Bank National Association,  the current trustee (herein
called the “Trustee,”
which term includes any successor trustee under the Senior Indenture), to which
Senior Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.  This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$55,000,000.

     

    Securities of this
series are subject to redemption, in whole or from time to time in part, at the
times and on the terms specified in the Fourth Supplemental Indenture dated as
of June 1, 2009 from the Company to the Trustee (the “Fourth Supplemental
Indenture”).

     

    In the event of
redemption of this Security in part only, a new Security or Securities of this
series for the unredeemed portion hereof, and otherwise of like tenor, will be
issued in the name of the Holder hereof upon the cancellation
hereof.

     

    If any Event of
Default with respect to Securities of this series shall occur and be continuing,
the principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Senior Indenture and the
Fourth Supplemental Indenture.  Upon payment (i) of the amount of
principal so declared due and payable, (ii) of interest on any overdue
principal and overdue interest (in each case to the extent that the payment of
such interest shall be legally enforceable) and (iii) any applicable Make-Whole
Amount, all of the Company’s obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.

     

    This Security is
not subject to Defeasance as described in the Senior Indenture.

     

    The Senior
Indenture may be modified by the Company and the Trustee without consent of any
Holder with respect to certain matters as described in the Senior
Indenture.  In addition, the Senior Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Senior Indenture at any time
by the Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected.  The Senior Indenture also contains provisions permitting
the Holders of a majority in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive certain past defaults under the Senior Indenture and their
consequences.  Any such consent or waiver by the Holder of this
Security shall bind such Holder and all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    No reference herein
to the Senior Indenture and no provision of this Security or of the Senior
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and Make-Whole Amount, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

     

    As provided in the
Senior Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in any place where the principal of (and Make-Whole Amount, if
any) and interest on this Security are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same Stated Maturity and aggregate
principal amount, will be issued to the designated transferee or
transferees.

     

    The Securities of
this series are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.  As
provided in the Senior Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

     

    No service charge
shall be made for any such registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

     

    Prior to due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

     

    A director,
officer, employee or shareholder, as such, of the Company shall not have any
liability for any obligations of the Company under this Security or the Senior
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each Holder, by accepting a Security,
waives and releases all such liability.  The waiver and release are
part of the consideration for the issuance of this Security.

     

    Pursuant to a
recommendation promulgated by the Security Valuation Office of the National
Association of Insurance Commissioners, the Company has caused Private Placement
Numbers (“PPN”) to be
printed on the Securities of this series as a convenience to the Holders of the
Securities of this series.  No representation is made as to the
correctness or accuracy of such numbers as printed on the Securities of this
series and reliance may be placed only on the other identification numbers
printed hereon.

     

    All capitalized
terms used in this Security without definition which are defined in the Senior
Indenture shall have the meanings assigned to them in the Senior
Indenture.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    Assignment
Form

     

    To assign this
Security, fill in the form below:  (I) or (we) assign and transfer
this Security to

     

    ____________________________________________________________________________________________________________________

    (Insert assignee’s
social security or tax I.D. number)

     

    ____________________________________________________________________________________________________________________

     

    ____________________________________________________________________________________________________________________

     

    ____________________________________________________________________________________________________________________

     

    ____________________________________________________________________________________________________________________

    (Print or type
assignee’s name, address and zip code)

     

     

    and irrevocably
appoint __________________________________________________________ agent to
transfer this Security on the books of the Company.  The agent may
substitute another to act for him.

     

    Dated:_________________Your
Signature:___________________________________

    (Sign exactly as
your

    name appears on the
other

    side of this
Security)

    Signature
Guaranty:  _______________________________

    [Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Transfer Agent, which requirements will include membership or participation
in STAMP or such other signature guarantee program as may be determined by the
Transfer Agent in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.]

     

    Social Security
Number or Taxpayer Identification

    Number:_______________________________________

    

    

    
      
         

      

      
        -3-  

        
          

        

      

      
         

      

    

    Schedule
5.4

    Sale,
Transfers or Other Dispositions of Assets

     

    

     

    

     

    

     

    None.Exhibit 10.1

EXECUTION COPY 

LETTER OF CREDIT COMMITMENT AND REIMBURSEMENT
AGREEMENT

                    THIS
LETTER OF CREDIT COMMITMENT AND REIMBURSEMENT AGREEMENT (this “Agreement”),
dated as of June 11, 2009 (“Closing Date”),
is entered into by and among MTM TECHNOLOGIES, INC., a New York
corporation (“MTM”), MTM TECHNOLOGIES (US), INC., a Delaware
corporation (“MTM-US”), MTM
TECHNOLOGIES (MASSACHUSETTS), LLC, a Delaware limited liability company
(“MTM-MA”), and INFO SYSTEMS, INC., a Delaware corporation
(“ISI”; MTM, MTM-US, MTM-MA, and ISI are
collectively, the “Borrowers” and
each a “Borrower”); NATIONAL ELECTRICAL BENEFIT FUND (“NEBF”),
FIRSTMARK III L.P.
(f/k/a
Pequot Private Equity Fund III, L.P.) (“FMIII”),
FIRSTMARK III
OFFSHORE PARTNERS, L.P. (f/k/a
Pequot Offshore Private Equity Partners III, L.P.) (“FMIIIOP”), CONSTELLATION VENTURE
CAPITAL II, L.P. (“CVCII”),
CONSTELLATION VENTURE CAPITAL OFFSHORE II, L.P.
(“CVCOII”),
CVC II PARTNERS, LLC (“CVCIIP”),
and THE BSC EMPLOYEE FUND VI, L.P. (“BSC”;
NEBF, FMIII, FMIIIOP, CVCII, CVCOII,
CVCIIP, and BSC are collectively, the “L/C
Guarantors” and each a “L/C
Guarantor”); and COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, as
Investment Manager for the L/C Guarantors (“Investment
Manager”).  

RECITALS

          A.
The Borrowers, GE Commercial Distribution Finance Corporation, as
administrative agent to the lenders (“CDF”), certain lenders and other entities
are parties to that certain Credit Facilities Agreement (the “CDF Agreement”)
pursuant to which certain lenders have made and shall continue to make credit
available to the Borrowers.  

          B.
As a condition to CDF continuing to make advances under the CDF Agreement, CDF
requires that the L/C Guarantors provide letters of credit in the aggregate
amount of $8,500,000 to provide credit support and additional collateral to
secure the Borrowers’ obligations under the CDF Agreement. 

          C.
The L/C Guarantors are willing to cause to be issued for the benefit of CDF
certain letters of credit (the “Letters of Credit”) in an aggregate amount of
$8,500,000, and the Borrowers are willing to enter into this Agreement with
respect to the Borrowers’ payment and reimbursement obligations in connection
with the Letters of Credit.  

          D.
This Agreement sets forth the terms under which all Letters of Credit are to be
issued and reimbursed unless otherwise specified. 

          E.
All capitalized terms herein shall have the meanings ascribed thereto in Annex A
hereto which is incorporated herein by reference. 

AGREEMENT

          NOW,
THEREFORE, Investment Manager, the L/C Guarantors and the Borrowers agree as
follows: 

1. LETTERS OF CREDIT COMMITMENT. 

1

          1.1
Letters of Credit Commitment. The L/C Guarantors agree, on the terms and
conditions hereinafter set forth, to cause to be issued Letters of Credit, in
form reasonably acceptable to CDF and the Borrowers for the benefit of CDF, in
the amounts as set forth opposite the names of each L/C Guarantor on Schedule of L/Cs attached hereto, which equal
an aggregate face amount of $8,500,000 (the “Letters
of Credit Limit”). 

          1.2
Issuance of Letters of Credit. The L/C Guarantors will cause to be
issued the Letters of Credit, in the amounts set forth on the Schedule of L/Cs,
on the Closing Date (the “Closing”). The Letters of Credit shall not have
expiry dates later than May 31, 2010 and shall not have face amounts in
aggregate no more than or less than the Letters of Credit Limit. If the
Borrowers satisfy all of their Loan Obligations (as defined in the CDF
Agreement) in respect of the CDF Agreement, within three (3) Business Days of
the termination of the CDF Agreement the Borrowers will cause CDF to return the
Letters of Credit to each issuing bank for cancellation. Notwithstanding the
foregoing, in the event the Borrowers satisfy their Loan Obligations in respect
of the CDF Agreement, the Borrowers’ Obligations under this Agreement shall
remain and survive the cancellation of the Letters of Credit and shall
terminate only on the Termination Date, upon the indefeasible payment of all
Fees and expenses due hereunder. Notwithstanding any provision of this
Agreement to the contrary, the L/C Guarantors shall have no obligation to cause
any additional Letters of Credit to be issued after the Closing Date. 

2. REIMBURSEMENT; OBLIGATIONS; AND SECURITY. 

          2.1 Reimbursement Obligation. The
Borrowers shall reimburse the L/C Guarantors for any payment made on a Letter
of Credit (a “Drawing”) by making
(or causing to be made) to the L/C Guarantors a payment in the amount of such
Drawing (the “Reimbursement Payment”)
immediately following any payment made on such Letter of Credit by the issuing
bank of such Letter of Credit. 

          2.2
Fees. In consideration of the L/C Guarantors entering into this Agreement: 

               (a) Facility
Fee. The Borrowers shall pay the L/C Guarantors an aggregate
facility fee (the “Facility Fee”)
in cash equal to $170,000.00 on the Closing Date (for the purpose of
reimbursing the L/C Guarantors for the fees charged by the Letters of Credit
issuing banks), such fee is to be paid to the L/C Guarantors on a pro rata
basis in accordance with each L/C Guarantor’s commitment amount, as specified
on the Schedule of L/Cs.

               (b) Success Fee. In
consideration of the
L/C Guarantors entering into this Agreement, the Borrowers shall pay the L/C
Guarantors a success fee (the “Success Fee”)
in cash equal to four times (4x) the Letters of Credit Limit (or
$34,000,000.00), such fee is to be paid to the L/C Guarantors on a pro rata
basis in accordance with each L/C Guarantor’s Letter of Credit amount, as
specified on the Schedule of L/Cs,
and the Success Fee shall be immediately due and payable upon the occurrence of
a Change of Control, an Event of Default, or a Liquidity Event. 

               (c) Drawing Fee. The
Borrowers shall also
pay the L/C Guarantors, in addition to all other amounts due hereunder, a
drawing fee (the “Drawing Fee”)
equal to the amount required to provide the L/C Guarantors with an IRR on any Drawing
of fifteen percent (15%) per annum. Such drawing fee shall be due within three
(3) Business Days after the date of a Drawing and is to be paid to the L/C
Guarantors on a pro rata basis in accordance with each L/C Guarantor’s
commitment amount, as specified on the Schedule
of L/Cs.

          2.3
Expenses; Other Fees; and Attorneys Fees. The Borrowers agree to pay or
reimburse 

2

Investment
Manager and the L/C Guarantors for: (a) all costs, expenses and other charges
in respect of any lien, tax and judgment searches performed by a service firm,
to be chosen by Investment Manager in its sole discretion, in connection with
the transactions contemplated by the Loan Documents and other collateral
searches and filings; (b) all costs and expenses of Investment Manager and the
L/C Guarantors, including the legal fees and disbursements, incurred in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Loan Documents and the other instruments and agreements
entered into pursuant hereto and thereto; (c) all reasonable out-of-pocket
costs and expenses of Investment Manager and the L/C Guarantors including the
fees and disbursements of counsel for Investment Manager and the L/C
Guarantors, incurred in connection with the negotiation, preparation, execution
and delivery of any modification, supplement or waiver of this Agreement and
any other Loan Documents (whether or not consummated); (d) all expenses of
Investment Manager and the L/C Guarantors including the fees and disbursements
of counsel for Investment Manager and the L/C Guarantors in connection with (1)
any Default or Event of Default and any enforcement or collection proceedings
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (A) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (B) judicial or regulatory
proceedings and (C) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction contemplated thereby
is consummated) and (2) the enforcement of this Section 2.3; (e) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Loan Documents or any other document referred to herein or therein and
all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any security
interest contemplated by the Collateral Documents or any other document
referred to therein; and (f) all costs, fees, expenses and other charges in
respect of any Letters of Credit paid by Investment Manager or the L/C
Guarantors to the issuing banks of such Letters of Credit. Payments under this
Section 2.3 shall be made promptly and in any case no later than ten (10) days
after written demand therefor. Any payments under this Section 2.3 which remain
outstanding more than sixty (60) after written demand therefor shall accrue
interest at a per annum rate equal to (x) the “prime rate” as set forth in the
Wall Street Journal on the date of determination, plus (y) two percent (2.00%).

          2.4 Security Interest. The
Obligations of the Borrowers hereunder shall be secured in accordance with the
terms of the Collateral Documents. 

          2.5 Prepayment. The Borrowers may
prepay, prior to the occurrence of any Drawing, any Obligations outstanding
under this Agreement and terminate this Agreement after (i) three (3) Business
Days notice, (ii) payment of the Success Fee set forth in Section 2.2(b), (iii) payment of all
amounts owed pursuant to Section 2.3,
and (iv) pledging cash to the L/C Guarantors on terms reasonably acceptable to
the L/C Guarantors in an amount equal to the aggregate face amount of any
outstanding Letters of Credit; provided that the Borrowers shall also be
required to obtain prior written consent from the Senior Lender, if the Senior
Indebtedness is outstanding at the time of such prepayment. 

          2.6
Term. Following a prepayment pursuant to Section 2.5, this Agreement may be terminated by either party
after the Closing Date; provided that the Borrowers shall also be required to
obtain prior written consent from the Senior Lender, if the Senior Indebtedness
is outstanding at the time of such termination. The Borrowers’ obligation to
pay the fees specified in Section 2.2(c) for each Drawing and any interest
accrued under Section 2.3 shall
survive the Termination Date. 

3. CONDITIONS TO CLOSING 

3

          The
obligations of Investment Manager and the L/C Guarantors hereunder, shall be
subject to the performance by the Borrowers of their agreements to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions: 

          3.1 Closing.

               (a)
Representations and Warranties. The
representations and warranties of the Borrowers contained in Section 4 hereof
shall be true and correct in all material respects as of the Closing Date (as
modified by the Disclosure Schedules delivered as of the Closing Date) as
though such warranties and representations were made at and as of such date,
except as otherwise affected by the transactions contemplated hereby. 

               (b)
Compliance with Loan Documents, No Default or
Event of Default. The Borrowers shall have performed and complied
with all agreements, covenants and conditions contained in the Loan Documents
which are required to be performed or complied with by it prior to or on the
Closing Date. No Default or Event of Default shall exist prior to or after
giving effect to the transactions contemplated on the Closing Date. 

               (c)
Injunction. There shall be no
effective injunction, writ, preliminary restraining order or any order of any
nature issued by a court of competent jurisdiction directing that the
transactions provided for herein or any of them not be consummated as herein
provided. 

               (d)
Counsel’s Opinion. Investment Manager
shall have received from the Borrowers’ counsel, an opinion, dated the Closing
Date, substantially in the form of Exhibit 3.1(d) hereto.  

               (e)
Approval of Proceedings. All proceedings
to be taken in connection with the transactions contemplated by this Agreement,
and all documents incident thereto, shall be satisfactory in form and substance
to Investment Manager or the L/C Guarantors and their counsels; and Investment
Manager shall have received copies of all documents or other evidence which
they and their counsel may request in connection with such transactions and of
all records of corporate proceedings in connection therewith in form and
substance satisfactory to Investment Manager or the L/C Guarantors and their
counsels. 

               (f)
Other Fees and Expenses. The Borrowers
shall have paid to Investment Manager all other amounts payable hereunder,
including the payment of the fees and expenses of Cooley Godward Kronish LLP,
counsel to Investment Manager, invoiced prior to the Closing Date. 

               (g)
Secretary’s Certificate. Investment
Manager shall have received a certificate, dated the Closing Date, signed by
the Secretary or Assistant Secretary, as the case may be, of each Borrower
certifying that (i) its articles or certificate of incorporation, certificate
of formation or certificate of organization annexed thereto are in full force
and effect without any amendment, (ii) the by-laws or operating agreement
annexed thereto are correct and complete as in effect on the date thereof; and
(iii) the resolutions annexed thereto approving the transactions contemplated
herein have been duly approved by the Board of Directors and/or Managers of
such Borrower and remain in full force and effect. 

               (h)
Security Interests. All action
necessary or determined by Investment Manager to be desirable to create and
perfect the security interests purported to be created by the Collateral

4

Documents
shall have been taken or completed, including the execution and delivery of the
Collateral Documents and the filing of the Uniform Commercial Code financing
statements. 

               (i)
Insurance. Investment Manager shall
have received evidence that the insurance required to be maintained under this
Agreement and the Collateral Documents is in full force and effect and that
Investment Manager or the L/C Guarantors have been named as loss payee or
additional insured, as appropriate, under the applicable insurance policies. 

               (j)
Accounts Aging Report. The Borrowers
shall have delivered to Investment Manager, a report listing all accounts
receivable (aged by invoice date) and all accounts payable (aged by invoice
date) for all accounts outstanding for more than 90 days from its invoice date,
or the most recent comparable report delivered by the Borrowers to the Senior
Lender. 

               (k)
Other Documents. The Borrowers shall
have executed and delivered to Investment Manager and the L/C Guarantors, the Loan
Documents. 

4. REPRESENTATIONS AND WARRANTIES 

          To
induce Investment Manager and the L/C Guarantors to enter into the Loan
Documents, the Borrowers, jointly and severally, represent and warrant to
Investment Manager and the L/C Guarantors that the following statements are
true, correct and complete as of the Closing Date. Such representations and
warranties are subject to the qualifications and exceptions set forth in the
Disclosure Schedules delivered to Investment Manager and the L/C Guarantors in
connection herewith. References to the knowledge or awareness of the Borrowers
are deemed to include the actual knowledge of any officer or director of any
Borrower or any of their respective Subsidiaries after due inquiry. 

          4.1
Disclosure. No representation or warranty of any
Borrower contained in this Agreement, the Financial Statements, or any other
document, certificate or written statement furnished to Investment Manager or
the L/C Guarantors by the Borrowers or their auditors at Closing contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. 

          4.2 No Conflict; Compliance. The
consummation of the transactions contemplated by this Agreement and the other
Loan Documents does not and will not violate or conflict with any laws, rules,
regulations or orders of any Governmental Authority or violate, conflict with,
result in a breach of, or constitute a default (with due notice or lapse of
time or both) under any Contractual Obligation or organizational documents of
any Borrower or any of their Subsidiaries except if such violations, conflicts,
breaches or defaults could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. The Borrowers (i)
are in compliance and each of their Subsidiaries is in compliance with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority and the obligations, conditions and covenants contained
in all Contractual Obligations other than those laws, rules, regulations,
orders and provisions of such Contractual Obligations the noncompliance with
which could not be reasonably expected to have a Material Adverse Effect, and
(ii) maintains and each of their Subsidiaries maintains all licenses,
qualifications and permits necessary for the conduct of their respective
businesses as presently conducted and expected to be conducted. 

5

          4.3
Organization, Powers, Capitalization and Good Standing. 

               (a) Organization and
Powers. Each Borrower
and each of their respective Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and
qualified to do business in all states where such qualification is required
except where failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect. The jurisdiction of organization and all
jurisdictions in which each Borrower is qualified to do business are set forth
on Schedule 4.3(a). Each Borrower
and each of their respective Subsidiaries has all requisite organizational
power and authority to own and operate its properties, to carry on its business
as now conducted and proposed to be conducted, to enter into each of the Loan
Documents to which it is a party and to incur the Obligations, grant liens and
security interests in the Collateral and carry out the transactions
contemplated by this Agreement and the other Loan Documents. 

               (b) Capitalization.
As of the Closing Date:
(i) the authorized Stock of each Borrower and each of their respective
Subsidiaries is as set forth on Schedule
4.3(b); (ii) all issued and outstanding Stock of each Borrower and
each of their respective Subsidiaries is duly authorized and validly issued,
fully paid, nonassessable, free and clear of all Liens other than those in
favor of Senior Lenders, the holders of Subordinated Debt, and Investment
Manager for the benefit of Investment Manager and the L/C Guarantors, and such
Stock was issued in compliance with all applicable state, federal and foreign
laws concerning the issuance of securities; (iii) MTM is the sole holder of the
Stock of each Borrower (other than MTM); (iv) the capitalization of MTM is as
set forth on Schedule 4.3(b); and
(v) no Stock of any Borrower or any of their respective Subsidiaries, other
than those described above, are issued and outstanding. Except as provided in Schedule 4.3(b), as of the Closing Date,
there are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the purchase or
acquisition from any Borrower or any of their respective Subsidiaries of any
Stock of any such entity. 

               (c) Binding Obligation.
This Agreement is,
and the other Loan Documents when executed and delivered will be, the legally
valid and binding obligations of the applicable parties thereto, each
enforceable against each of such parties, as applicable, in accordance with
their respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium and laws affecting the rights of creditors
generally and by general principles of equity whether considered at law or in
equity. 

          4.4 Financial Statements. The
Financial Statements of MTM and its consolidated Subsidiaries that have been
filed with the Securities and Exchange Commission, have been prepared in
accordance with GAAP consistently applied (except as disclosed therein) and
present fairly in all material respects the financial condition of MTM and its
consolidated subsidiaries as at the dates thereof and the results of their
operations for the periods then ended, subject to, in the case of unaudited
financial statements, the absence of footnotes and normal year end adjustments.

          4.5
Intellectual Property. Each Borrower and each of their respective
Subsidiaries owns, is licensed to use or otherwise has the right to use, all
Intellectual Property used in or necessary for the conduct of its business as
currently conducted and all such Intellectual Property (other than off the
shelf software) is identified on the Perfection Certificate and fully protected
and/or duly and properly registered, filed or issued in the appropriate office
and jurisdictions for such registrations, filings or issuances. Except as
disclosed in the Perfection Certificate, the use of such Intellectual Property
by the Borrowers and their Subsidiaries and the conduct of their businesses do
not, and, to the knowledge of

6

the Borrowers,
have not been alleged in writing by any Person to infringe on the rights of any
Person. 

          4.6
Investigations, Audits, Etc. As of the Closing Date, except as set forth
on Schedule 4.6, no Borrower nor
any Subsidiary of any Borrower is the subject of any review or audit by the IRS
or any governmental investigation concerning the violation or possible
violation of any law. 

          4.7
Litigation; Adverse Facts. Except as set forth on Schedule 4.7, there are no judgments
outstanding against any Borrower or any Subsidiary of any Borrower or affecting
any property of any Borrower or any Subsidiary of any Borrower, nor is there
any Litigation pending, or to the best knowledge of the Borrowers threatened,
against any Borrower or any Subsidiary of any Borrower which could reasonably
be expected to result in any Material Adverse Effect. 

          4.8 Use of Proceeds; Margin Regulations.

               (a)
No part of the proceeds of the loans secured by the Letters of Credit will be
used for “buying” or “carrying” “margin stock” within the respective meanings
of such terms under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect or for any
other purpose that violates the provisions of the regulations of the Board of
Governors of the Federal Reserve System. If requested by Investment Manager,
the Borrowers will furnish to Investment Manager and the L/C Guarantors a
statement to the foregoing effect in conformity with the requirements of FR
Form G 3 or FR Form 0 1, as applicable, referred to in Regulation U. 

               (b) The Borrowers
shall utilize the
proceeds of the loans secured by the Letters of Credit solely for the financing
of the Borrowers’ general corporate needs. 

          4.9
Ownership of Property; Liens. Each Borrower and
each Subsidiary of the Borrowers owns good and marketable fee simple title to
all of its owned real estate (“Real Estate”),
and valid and marketable leasehold interests in all of its leased Real Estate,
and copies of all such leases have been delivered to Investment Manager. Each
Borrower and each Subsidiary of the Borrowers also has good and marketable
title to, or valid leasehold interests in or licenses of, all of its personal
property and assets. As of the Closing Date, none of the properties and assets
of any Borrower or any Subsidiary of any Borrower are subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to the Borrowers that may result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances against the
properties or assets of any Borrower or any of their Subsidiaries. As of the
Closing Date, no portion of any Borrower’s or any Subsidiary of any Borrower’s
Real Estate has suffered any material damage by fire or other casualty loss
that has not heretofore been repaired and restored in all material respects to
its original condition or otherwise remedied. As of the Closing Date, all
permits required to have been issued to enable the Real Estate to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect. 

          4.10 Environmental Matters. 

                 (a)
None of the operations of any Borrower is the subject of any federal, state or
local investigation to determine whether any remedial action is needed to
address the presence or disposal of any environmental pollution, hazardous
material or environmental clean-up of the Real Estate or any of such Borrower’s
leased Real Estate. No enforcement proceeding, complaint, summons, citation, notice,
order, claim, litigation, investigation, letter or other communication from a

7

federal, state
or local authority has been filed against or delivered to any Borrower,
regarding or involving any release of any environmental pollution or hazardous
material on any real property now or previously owned or operated by any
Borrower. 

                 
(b) No Borrower has any known contingent liability
with respect to any release of any environmental pollution or hazardous
material on any real property now or previously owned or operated by any
Borrower. 

                 
(c) Each Borrower is in compliance with all
environmental statutes, acts, rules, regulations and orders applicable to the
operation of such Borrower’s business, except to the extent that the failure to
so comply would not be reasonably likely to have a Material Adverse Effect. 

                 
(d) The Borrowers hereby acknowledge and agree that
neither Investment Manager nor any L/C Guarantor (i) is now, or has ever been,
in control of any of the Real Estate or affairs of any Borrower or Subsidiary
of any Borrower, and (ii) has the capacity through the provisions of the Loan
Documents or otherwise to influence the Borrowers’ or their Subsidiaries’
conduct with respect to the ownership, operation or management of any of their
Real Estate or compliance with Environmental Laws or Environmental Permits. 

          4.11 Brokers. No broker or finder
acting on behalf of any Borrower or Affiliate of any Borrower brought about the
obtaining, making or closing of this Agreement, and Borrower or Affiliate of
any Borrower has any obligation to any Person in respect of any finder’s or
brokerage fees in connection therewith. 

          4.12
Deposit and Disbursement Accounts. The Perfection Certificate lists all
banks and other financial institutions at which any Borrower maintains deposit
or other accounts as of the Closing Date, and such Perfection Certificate
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor. 

          4.13 Material Agreements; Customers and
Suppliers. 

                 (a)
Each Material Agreement is valid and binding on the Borrowers that are parties
thereto, is in full force and effect and is enforceable against the applicable
Borrower and, to the Borrowers’ knowledge, the other parties thereto, in
accordance with its terms, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) state and federal securities laws with respect to rights to
indemnification or contribution. Except as set forth on Schedule 4.13, no Borrower is in default or
breach under any of the Material Agreements, nor, to the knowledge of the
Borrowers, is any other party thereto in default or breach thereunder, nor are
there facts or circumstances which have occurred which, with or without the
giving of notice or the passage of time or both, would constitute a material
default or breach under any of the Material Agreements. 

                 (b)
To the Borrowers’ knowledge, no material customer or
material supplier intends to cancel or materially curtail its relationship with
any Borrower in a way that could reasonably be expected to have a Material
Adverse Effect. 

          4.14
Insurance. The Borrowers have general commercial, product liability,
fire and casualty

8

insurance
policies with coverage customary for companies similarly situated to the
Borrowers. 

5. AFFIRMATIVE COVENANTS 

          The
Borrowers hereby, jointly and severally, agree that from and after the date
hereof and until the Termination Date: 

          5.1
Maintenance of Financial Records; Inspections. The Borrowers agree to
maintain books and records pertaining to their financial matters in such
detail, form and scope, as Investment Manager reasonably may require. Each
Borrower agrees that Investment Manager, accompanied by any of the L/C
Guarantors, and/or any agent designated by Investment Manager, upon notice to
the Borrowers (provided that such notice shall not be required after any
Default or Event of Default shall have occurred), may enter upon such
Borrower’s premises at any time during normal business hours, and from time to
time, in order to (i) examine and inspect the books and records of such Borrower,
and make copies thereof and take extracts therefrom, and (ii) verify, inspect
and perform physical counts and other valuations of the Collateral and any and
all records pertaining thereto. Each Borrower irrevocably authorizes all
accountants and third parties to disclose and deliver directly to Investment
Manager and the L/C Guarantor, at such Borrower’s expense, all financial
statements and information, books, records, work papers and management reports
generated by them or in their possession regarding such Borrower or the
Collateral. All costs, fees and expenses incurred by Investment Manager in
connection with such examinations, inspections, physical counts and other
valuations shall constitute Fees reimbursable by the Borrowers pursuant to Section 2.3 for purposes of this Agreement.

          5.2
Further Assurances. Each Borrower agrees to
comply with the requirements of all state and federal laws in order to grant to
Investment Manager, for the benefit of Investment Manager and the L/C Guarantors,
valid and perfected first priority security interests in the Collateral
pursuant to the Collateral Documents, subject only to the Permitted
Encumbrances. Investment Manager is hereby authorized by each Borrower to file
any financing statements, continuations and amendments covering the Collateral
without such Borrower’s signature in accordance with the provisions of the
Code. Each Borrower hereby consents to and ratifies the filing of any financing
statements covering the Collateral by Investment Manager on or prior to the
Closing Date. Each Borrower agrees to do whatever Investment Manager reasonably
may request from time to time, by way of (i) filing notices of liens, financing
statements, amendments, renewals and continuations thereof, (ii) cooperating
with agents and employees of Investment Manager, (iii) keeping Collateral
records, (iv) transferring proceeds of Collateral to Investment Manager’s
possession in accordance with the terms of this Agreement and the Collateral
Documents and (v) performing such further acts as Investment Manager reasonably
may require in order to effect the purposes of this Agreement and the
Collateral Documents, including the execution of control agreements with
respect to deposit accounts and investment property. 

          5.3
Insurance and Condemnation. 

                (a)
Required Insurance. Each Borrower
agrees to maintain insurance on the Real Estate, Equipment and Inventory under
such policies of insurance, with such insurance companies, in such reasonable
amounts and covering such insurable risks, as are at all times reasonably
satisfactory to Investment Manager (the “Required
Insurance”). All policies covering the Real Estate, Equipment and
Inventory are, subject to the rights of any holder of a Permitted Encumbrance
having priority over the security interests of Investment Manager, to be made
payable solely to Investment Manager, for the benefit of Investment Manager and
the L/C Guarantors, in case of loss, under a standard non contributory
“mortgagee”, “secured party” or “lender’s loss payable” clause or endorsement,
and are to 

9

contain such
other provisions as Investment Manager reasonably may require to fully protect
Investment Manager’s interest in the Real Estate, Inventory and Equipment and
to any payments to be made under such policies. Each loss payable endorsement
in favor of Investment Manager shall provide (x) for not less than thirty (30)
days prior written notice to Investment Manager of the exercise of any right of
cancellation and (y) that Investment Manager’s right to payment under any
property insurance policy will not be invalidated by any act or neglect of, or
any breach of warranty or condition by, any Borrower or any other party. If an
Event of Default shall have occurred and remain outstanding, Investment
Manager, subject to the rights of any holder of a Permitted Encumbrance having
priority over the security interests of Investment Manager, shall have the sole
right, in the name of Investment Manager or any Borrower, to file claims under
any insurance policies, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies. 

                (b)
Investment Manager’s Purchase of Insurance. Unless the Borrowers provide
Investment Manager with evidence of the Required Insurance in the manner set forth
in Section 5.3(a) above, Investment Manager may purchase insurance at the
Borrowers’ expense to protect Investment Manager’s interests in the Collateral.
The insurance purchased by Investment Manager may, but need not, protect the
Borrowers’ interests in the Collateral, and therefore such insurance may not
pay any claim which any Borrower makes or any claim which is made against any
Borrower in connection with the Collateral. The Borrowers may later request
that Investment Manager cancel any insurance purchased by Investment Manager,
but only after providing Investment Manager with satisfactory evidence that the
Borrowers have the Required Insurance. If Investment Manager purchases
insurance covering all or any portion of the Collateral, the Borrowers shall be
responsible for the costs of such insurance, including interest (at the
applicable rate set forth hereunder) and other charges accruing on the purchase
price therefor, until the effective date of the cancellation or the expiration
of the insurance. The costs of the premiums of any insurance purchased by
Investment Manager may exceed the costs of insurance which the Borrowers may be
able to purchase on their own. In the event that Investment Manager purchases
insurance, Investment Manager will notify the Borrowers of such purchase within
thirty (30) days after the date of such purchase. If, within thirty (30) days
after the date of receipt of such notice, the Borrowers provide Investment
Manager with proof that the Borrowers had the Required Insurance as of the date
on which Investment Manager purchased insurance and the Borrowers have
continued at all times thereafter to have the Required Insurance, then
Investment Manager agrees to cancel the insurance purchased by Investment
Manager. 

                
(c) Application of Insurance and Condemnation Proceeds. So long as
no Default or Event of Default shall have occurred and remain outstanding as of
the date of Investment Manager’s receipt of any Casualty Proceeds: 

          (i)
Except as may otherwise be provided in any intercreditor or subordination
agreement between Investment Manager and another creditor of the Borrowers, in
the event of any loss or damage to any item of Equipment by condemnation, fire
or other casualty, if the Casualty Proceeds relating to such condemnation, fire
or other casualty exceed $100,000, the applicable Borrower may elect (by
delivering written notice to Investment Manager within ten (10) Business Days
following Investment Manager’s receipt of such Casualty Proceeds) to replace or
repair such item of Equipment. 

          (ii)
In the event of any loss or damage to any Real Estate leased by a Borrower by
condemnation, fire or other casualty, such Borrower may use the Casualty
Proceeds in the manner

10

required or
permitted by the lease agreement relating thereto. In the event of any loss or
damage to any Real Estate owned by a Borrower by condemnation, fire or other
casualty, if the Casualty Proceeds relating to such condemnation, fire or other
casualty exceed $100,000, and so long as such Borrower has sufficient business
interruption insurance to replace the lost profits of the facilities affected
by the condemnation, fire or other casualty, such Borrower may elect to repair
or replace such Real Estate, subject to the following terms: 

          (1)
If such Borrower reasonably determines that the Real Estate may be repaired to
substantially the same condition of the Real Estate prior to the condemnation,
fire or other casualty, such Borrower may elect to repair the Real Estate by
delivering written notice to Investment Manager within thirty (30) days
following Investment Manager’s receipt of such Casualty Proceeds. 

          (2)
Such Borrower may elect to replace the Real Estate owned by such Borrower only
on terms and conditions satisfactory to Investment Manager in its sole
discretion. 

          If
a Default or an Event of Default shall have occurred and remain outstanding as
of the date of Investment Manager’s receipt of any Casualty Proceeds, or if a
Borrower does not or cannot elect to use the Casualty Proceeds in the manner
set forth in paragraphs (i) or (ii) above, Investment Manager may, subject to
the terms of any intercreditor or subordination agreement between Investment
Manager and another creditor of the Borrowers, and subject to the rights of any
holder of a Permitted Encumbrance having priority over the security interests
of Investment Manager, apply the Casualty Proceeds to the payment of the
Obligations in such manner and in such order as Investment Manager may elect in
its sole discretion. 

          5.4
Payment of Taxes. Each Borrower agrees to pay
when due all Taxes lawfully levied, assessed or imposed upon such Borrower or
the Collateral (including all sales taxes collected by a Borrower on behalf of
such Borrower’s customers in connection with sales of Inventory and all payroll
taxes collected by such Borrower on behalf of such Borrower’s employees),
unless such Borrower is contesting such Taxes in good faith, by appropriate
proceedings, and is maintaining adequate reserves for such Taxes in accordance
with GAAP. Notwithstanding the foregoing, if a lien securing any Taxes is not a
Permitted Tax Lien, then the applicable Borrower shall pay all taxes secured by
such lien immediately and remove such lien of record promptly. Pending the
payment of such taxes and removal of such lien, Investment Manager may, at its
election and without curing or waiving any Event of Default which may have
occurred as a result thereof, pay such taxes on behalf of such Borrower, and the
amount paid by Investment Manager shall become an Obligation which is due and
payable by Borrower upon demand by Investment Manager. 

          5.5
Compliance With Laws. 

                (a)
Each Borrower agrees to comply with all federal, state and local acts, rules
and regulations, and all orders of any federal, state or local legislative,
administrative or judicial body or official, if the failure to so comply would
be reasonably likely to have a Material Adverse Effect, provided that such
Borrower may contest any acts, rules, regulations, orders and directions of
such bodies or officials in any reasonable manner which Investment Manager
determines, in the exercise of its reasonable business judgment, will not
materially and adversely effect Investment Manager’s or the L/C Guarantors’
rights or priorities in the Collateral. 

                (b)
Without limiting the generality of the foregoing, each Borrower agrees to
comply with all environmental statutes, acts, rules, regulations or orders, as
presently existing or as adopted or amended in the future, applicable to the
ownership and/or use of its real property and 

11

operation of
its business, if the failure to so comply would be reasonably likely to have a
Material Adverse Effect. No Borrower shall be deemed to have breached any
provision of this Section 5.5(b)
if (x) the failure to comply with the requirements of this Section 5.5 resulted from good faith error
or innocent omission, (y) such Borrower promptly commences and diligently
pursues a cure of such breach and (z) such failure is cured within thirty (30)
days following such Borrower’s receipt of notice from Investment Manager of
such failure, or if such breach cannot in good faith be cured within thirty
(30) days following such Borrower’s receipt of such notice, then such breach is
cured within a reasonable time frame based on the extent and nature of the
breach and the necessary remediation, and in conformity with any applicable
consent order, consensual agreement and applicable law. 

          5.6
Notices Concerning Environmental, Employee Benefit and Pension Matters.
The Borrowers agree to notify Investment Manager in writing of: 

                (a)
any expenditure (actual or anticipated) by any Borrower in excess of $100,000
for environmental clean up, environmental compliance or environmental testing
and the impact of said expenses on such Borrower’s working capital; 

                (b)
any Borrower’s receipt of notice from any local, state or federal authority
advising such Borrower of any environmental liability (real or potential)
arising from such Borrower’s operations, its premises, its waste disposal
practices, or waste disposal sites used by such Borrower; and 

                (c)
any Borrower’s receipt of notice from any governmental agency or any sponsor of
any “multiemployer plan” (as that term is defined in ERISA) to which such
Borrower has contributed, relating to any ERISA Event. 

          Each
Borrower agrees to provide Investment Manager promptly with copies of all such
notices and other information pertaining to any matter set forth above if
Investment Manager so requests. 

          5.7
Business Qualification. Each Borrower agrees to
qualify to do business, and to remain qualified to do business and in good
standing, in each jurisdiction where the failure to so qualify, or to remain
qualified or in good standing, would have, or would be reasonably likely to
have, a Material Adverse Effect. 

          5.8 Anti-Money Laundering and Terrorism
Regulations. Each Borrower agrees to comply with all applicable anti-money
laundering and terrorism laws, regulations and executive orders in effect from
time to time (including, without limitation, the USA Patriot Act (Pub. L. No.
107-56)). Each Borrower also agrees to ensure that no person who owns a
controlling interest in or otherwise controls such Borrower is a person
designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (issued
September 23, 2001) or any other similar Executive Order. Each Borrower
acknowledges that Investment Manager’s and the L/C Guarantors’ performance
hereunder is subject to compliance with all such laws, regulations and
executive orders, and in furtherance of the foregoing, each Borrower agrees to
provide to Investment Manager and the L/C Guarantors all information about such
Borrower’s ownership, officers, directors, customers and business structure as
Investment Manager and the L/C Guarantors reasonably may require to comply
with, such laws, regulations and executive orders. 

         5.9 Maintenance
of Properties. Each Borrower will maintain or cause to be maintained in
good repair, working order and condition all material properties used in the
business of such Borrower 

12

and its
Subsidiaries and will make or cause to be made all appropriate repairs, renewals
and replacements thereof, ordinary wear and tear excepted. 

          5.10 L/C Guarantors Meeting. The
Borrowers will participate and will cause its key management personnel and
those of its Subsidiaries to participate in a meeting with Investment Manager
and the L/C Guarantors at least once during each year, which meeting shall be
held at such time and such place as may be reasonably requested by Investment
Manager. 

          5.11
Organizational Existence. Except as permitted by Section 6.4, each Borrower will and will
cause its Subsidiaries to at all times preserve and keep in full force and
effect its organizational existence and all rights and franchises the absence
of which could reasonably be expected to have a Material Adverse Effect. 

          5.12
Landlords’ Agreements, Mortgagee Agreements, Bailee
Letters and Real Estate Purchases. The Borrowers shall use reasonable
efforts to obtain a landlord’s agreement, mortgagee agreement or bailee letter,
as applicable, from each lessor of leased property, mortgagee of owned property
or bailee with respect to any warehouse, processor or converter facility or
other location where Collateral is stored or located, which agreement or letter
shall contain a waiver or subordination of all Liens or claims that the
landlord, mortgagee or bailee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to Investment Manager. After the Closing Date, no real property or warehouse
space shall be leased by any Borrower or any Subsidiary of any Borrower and no
Inventory shall be shipped to a processor or converter under arrangements
established after the Closing Date without the prior written consent of
Investment Manager or, unless and until a satisfactory landlord agreement or
bailee letter, as appropriate, shall first have been obtained with respect to
such location. The Borrowers shall and shall cause each of their Subsidiaries
to timely and fully pay and perform their obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located. In the event any Borrower acquires a fee
interest in real property after the Closing Date, the Borrowers shall deliver
to Investment Manager a fully executed mortgage or deed of trust over such real
property in form and substance satisfactory to Investment Manager, together
with such title insurance policies, surveys, appraisals, evidence of insurance,
legal opinions, environmental assessments and other documents and certificates
as shall be reasonably requested by Investment Manager. 

          5.13 New Subsidiaries. The Borrowers
shall (a) cause each Person, upon its becoming a Subsidiary of any Borrower
(provided that this shall not be construed to constitute consent by the L/C
Guarantors to any transaction not expressly permitted by the terms of this
Agreement), promptly to guaranty the Obligations and to grant to Investment
Manager, for the benefit of Investment Manager and the L/C Guarantors, a
security interest in the real, personal and mixed property of such Person to
secure the Obligations and (b) pledge, or cause to be pledged, to Investment
Manager, for the benefit of Investment Manager and the L/C Guarantors, all of
the Stock of such Subsidiary owned by any Borrower to secure the Obligations.
The documentation for such guaranty, security and pledge shall be substantially
similar to the Loan Documents executed concurrently herewith with such
modifications as are reasonably requested by Investment Manager. 

6. NEGATIVE COVENANTS 

          The
Borrowers hereby, jointly and severally, agree that from and after the date
hereof until the Termination Date that no Borrower shall, nor shall it permit
any Subsidiary to: 

13

          6.1
Liens and Encumbrances; No Negative Pledges. Mortgage, assign, pledge,
transfer or otherwise permit any lien, charge, security interest, encumbrance
or judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of the
Collateral or its other assets, whether now owned or hereafter acquired, except
for the Permitted Encumbrances. No Borrower shall, or cause or permit its
Subsidiaries to, directly or indirectly, enter into or assume any agreement
(other than the Loan Documents, the Subordinated Debt and the Senior
Indebtedness) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired 

          6.2
Indebtedness. Incur or create any Indebtedness other than the Permitted
Indebtedness. 

          6.3
Sale of Assets. Sell, lease, assign, transfer or otherwise dispose of
(i) Collateral, except for the disposition of Inventory and Equipment in the
ordinary course of business or as otherwise specifically permitted by this
Agreement or the terms of any Senior Indebtedness, or (ii) all or any
substantial part of its assets, if any, which do not constitute Collateral.
Each Borrower may sell obsolete Equipment or surplus Equipment from time to
time, provided that in each such instance: (i) no Event of Default shall have
occurred and remain outstanding at the time of such sale; (ii) the aggregate
book value of all Equipment owned by all of the Borrowers subject to sale does
not exceed $100,000 in any fiscal year of MTM, and (iii) all net proceeds of
such sales are either (x) promptly used by such selling Borrower to repay
Senior Indebtedness, or (y) within 90 days of such sale, used to purchase
replacement Equipment that such selling Borrower determines in its reasonable
business judgment to have a value at least equal to the Equipment sold. Upon
the sale, transfer, lease or other disposition of Equipment, the security
interest of Investment Manager and the L/C Guarantors in the Equipment shall,
without break in continuity and without further formality or act, continue in,
and attach to, all proceeds thereof. As to any such sale, transfer, lease or
other disposition, Investment Manager shall have all of the rights of an unpaid
seller, including stoppage in transit, replevin, rescission and reclamation. 

          6.4
Corporate Change. (i) Merge or consolidate with any other entity except
in connection with a Change of Control, (ii) change its name or principal place
of business, (iii) change its structure or organizational form, or
reincorporate or reorganize in a new jurisdiction, (iv) enter into or engage in
any operation or activity materially different from that presently being
conducted by such Borrower provided that such Borrower may (x) change its name
or its principal place of business or (y) change its structure or
organizational form, or reincorporate or reorganize in a new jurisdiction, so
long as such Borrower provides Investment Manager with thirty (30) days prior
written notice thereof and such Borrower executes and delivers to Investment
Manager, prior to making such change, all documents and agreements required by
Investment Manager in order to ensure that the liens and security interests
granted to Investment Manager, for the benefit of Investment Manager and the
L/C Guarantors, hereunder continue in effect without any break or lapse in
perfection. For the purposes of this Section, any operation or activity by a
Borrower that materially involves producing, manufacturing, designing,
reselling, marketing, licensing or providing products (including intellectual
property and software) or services relating to information technology shall be
deemed not to be an operation or activity materially different from that
presently conducted by such Borrower. 

          6.5 Guaranty Obligations. Assume,
guarantee, endorse, or otherwise become liable upon the obligations of any
person, firm, entity or corporation, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business and other than guarantees permitted under the definition of
Permitted Indebtedness herein. 

          6.6
Dividends and Distributions. Declare or pay any dividend or distribution
of any kind 

14

on, or
purchase, acquire, redeem or retire, any of its equity interests (of any class
or type whatsoever), whether now or hereafter issued and outstanding, other
than Permitted Distributions. 

          6.7
Investments. (i) Create any new subsidiary, or
(ii) make any advance or loan to, or any investment in, any firm, entity,
person or corporation, or (iii) acquire all or substantially all of the assets
of, or any capital stock or any equity interests in, any firm, entity or
corporation, other than current investments of such Borrower in its existing
subsidiaries, provided, however that such Borrower may make loans
and advances on an unsecured basis, in the ordinary course of its business and
on fair and reasonable terms, to any other Borrower. 

          6.8 Related Party Transactions.
Enter into any transaction, including, without limitation, any purchase, sale,
lease, loan or exchange of property, with any shareholder, officer, director,
parent (direct or indirect), subsidiary (direct or indirect) or other person or
entity otherwise affiliated with such Borrower unless (i) such transaction
otherwise complies with the provisions of this Agreement, (ii) such transaction
is for the sale of goods or services rendered in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower or for the
sale of Subordinated Debt or equity interests of the Borrower and, in each
case, and upon standard terms and conditions and fair and reasonable terms, no
less favorable to such entity than such entity could obtain in a comparable
arms length transaction with an unrelated third party, and (iii) no Event of
Default shall have occurred and remain outstanding at the time such transaction
occurs, or would occur after giving effect to such transaction. For the
avoidance of doubt, the parties acknowledge and agree that any Borrower may,
after the date hereof, enter into one or more transactions with a portfolio
company of any shareholder of MTM, provided that each such transaction complies
with this Section 6.8. 

          6.9
Restricted Payments. (i) Make any payment of
the principal of, or interest on, any Subordinated Debt, or purchase, acquire
or redeem any of the Subordinated Debt, unless (x) such payment, purchase,
acquisition or redemption is expressly permitted by the terms of the applicable
intercreditor or subordination agreement and (y) no Default or Event of Default
shall have occurred and remain outstanding on the date on which such payment or
transaction occurs, or would occur as a result thereof; provided, that so long
as such payment, purchase, acquisition or redemption does not cause a Default
or Event of Default to occur, it may be paid in stock or other equity interests
of any Borrower or from the proceeds of Subordinated Debt; and (ii) pay any
management, consulting or other similar fees to any shareholder, director,
parent (direct or indirect), subsidiary (direct or indirect) or other person or
entity otherwise affiliated with such Borrower or any subsidiary of the
Borrower, (other than the current, customary or prevailing fees and expenses to
members of such Borrower’s Board of Directors, and fees and salaries of any
shareholder or other person paid to such person in their capacity as officer or
employee of such Borrower, including, without limitation, fees, salaries,
bonuses and other forms of compensation pursuant to employment or other
agreements. 

          6.10 Use of Proceeds. Use the
proceeds of any loan secured by the Letters of Credit, directly or indirectly,
(i) in violation of any applicable law or regulation, including without
limitation Regulations T, U or X of the Board of Governors of the Federal
Reserve System as from time to time in effect (and any successor regulation or
official interpretation of such Board), (ii) to purchase or carry any “margin
stock”, as defined in Regulations U and X, or any “margin security”,
“marginable OTC stock” or “foreign margin stock” within the meaning of
Regulation T, U or X, (iii) for any purpose other than to fund the working
capital needs of the Borrowers. 

          6.11
No Restrictions on Subsidiary Distributions to the
Borrowers. Except as provided herein, no Borrower shall, or cause or permit
its Subsidiaries to, directly or indirectly, create or

15

otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to: (1) pay
dividends or make any other distribution on any of such Subsidiary’s Stock
owned by any Borrower or any other Subsidiary; (2) pay any Indebtedness owed to
any Borrower or any other Subsidiary; (3) make loans or advances to any
Borrower or any other Subsidiary; or (4) transfer any of its property or assets
to any Borrower or any other Subsidiary. 

          6.12
Conduct of Business. No Borrower shall, or
cause or permit its Subsidiaries to, directly or indirectly, engage in any
business other than businesses of the type described on Schedule 6.12. 

          6.13
Changes Relating to Subordinated Debt. No
Borrower shall, or cause or permit its Subsidiaries to, directly or indirectly,
change or amend the terms of any of its Subordinated Debt if the effect of such
amendment is to: (a) increase the interest rate on such Indebtedness; (b)
accelerate the dates upon which payments of principal or interest are due on
such Indebtedness; (c) add or make more likely any event of default or add or
make more restrictive any covenant with respect to such Indebtedness; (d) add
or make more onerous on any Borrower the redemption or prepayment provisions of
such Indebtedness; (e) change the subordination provisions thereof (or the
subordination terms of any guaranty thereof) in a manner adverse to any
Borrower, Investment Manager or any L/C Guarantor; (f) change or amend any
other term if such change or amendment would materially increase the
obligations of the obligor or confer additional material rights on the holder
of such Indebtedness in a manner adverse to any Borrower or any L/C Guarantor;
or (g) increase the portion of interest payable in cash with respect to any
Indebtedness for which interest is payable by the issuance of payment-in-kind
notes or is permitted to accrue. 

          6.14
Press Release; Public Offering Materials. Each
Borrower agrees that neither it nor its Affiliates will in the future issue any
press releases, using the name of Investment Manager or the L/C Guarantors or
their respective Affiliates or referring to this Agreement or the other Loan
Documents without at least two (2) Business Days’ prior notice to Investment
Manager or the L/C Guarantors unless (and only to the extent that) such
Borrower or such Affiliate is required to do so under law and then, in any
event, the Borrowers or such Affiliate will consult with Investment Manager
before issuing such press release. The Borrowers consent to the publication by
Investment Manager or the L/C Guarantors of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement;
provided that such tombstone or material complies with applicable law.
Investment Manager or the L/C Guarantors shall provide a draft of any such
tombstone or similar advertising material to the Borrowers for review and
comment prior to the publication thereof. Investment Manager and the L/C
Guarantors reserve the right to provide to industry trade organizations
information necessary and customary for inclusion in league table measurements.

          6.15
Bank Accounts. No Borrower shall, or cause or
permit its Subsidiaries to, establish any new bank accounts without prior
written notice to Investment Manager and unless Investment Manager and the bank
at which the account is to be opened enter into a tri-party agreement regarding
such bank account pursuant to which such bank (i) acknowledges the security
interest of Investment Manager in such bank account, (ii) subject to the terms
of the Subordination Agreement, agrees to comply with instructions originated
by Investment Manager directing disposition of the funds in the bank account without
further consent from any Borrower or Subsidiary of any Borrower following the
occurrence and during the continuance of an Event of Default, and (iii) agrees
to subordinate and limit any security interest the bank may have in the bank
account on terms satisfactory to Investment Manager.

          6.16
ERISA. No Borrower shall, or cause or permit
any ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent
such ERISA Event could reasonably be expected to have a

16

Material
Adverse Effect.

7. REPORTING 

          The
Borrowers hereby, jointly and severally, covenant and agree that from and after
the date hereof until the Termination Date, the Borrowers shall perform and
comply with all covenants in this Article 7.

          7.1
Reports. The Borrowers will deliver each of the
reports described below to Investment Manager: 

                    (a)
Appraisals. At the Borrowers’ expense, Investment
Manager may, from time to time, obtain appraisal reports in form and substance
and from appraisers satisfactory to Investment Manager, stating the then
current market values of all or any portion of the Real Estate and personal
property owned by any Borrower. 

                    (b)
Senior Indebtedness Reports. Upon the request of
Investment Manager or any L/C Guarantor, the Borrowers will promptly deliver to
Investment Manager any reports or other information delivered by the Borrowers
to any Senior Lender under any of the Senior Indebtedness. 

                    (c)
Events of Default, Etc. Promptly upon any officer of
any Borrower obtaining knowledge of any of the following events or conditions,
the Borrowers shall deliver copies of all written notices given or received by
such Borrower or any of their Subsidiaries with respect to any such event or
condition and a certificate of such Borrower’s chief executive officer
specifying the nature and period of existence of such event or condition and
what action such Borrower or its Subsidiary has taken, is taking and proposes
to take with respect thereto: (1) any condition or event that constitutes, or
which could reasonably be expected to result in the occurrence of, an Event of
Default or; (2) any notice that any Person has given to any Borrower or any of
their Subsidiaries or any other action taken with respect to a claimed default
or event or condition of the type referred to in Section 8.1(c); (3) any event or condition that could
reasonably be expected to result in any Material Adverse Effect; or (4) any
default or event of default with respect to any Indebtedness of any Borrower or
any of their Subsidiaries. 

                    
(d) Litigation. Promptly upon any officer of any
Borrower obtaining knowledge of (1) the institution of any action, charge,
claim, demand, suit, proceeding, petition, governmental investigation, tax
audit or arbitration now pending or, to the best knowledge of the Borrowers
after due inquiry, threatened in writing against any Borrower or any of their
Subsidiaries or affecting any property of Borrower or any of their Subsidiaries
(“Litigation”)
not previously disclosed by the Borrowers to Investment Manager or (2) any
material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against any Borrower or
affecting any property of any Borrower which, in each case, could reasonably be
expected to have a Material Adverse Effect, the Borrowers will promptly give
notice thereof to Investment Manager and provide such other information as may
be reasonably available to them to enable Investment Manager and its counsel to
evaluate such matter. 

                    (e)
Notice of Corporate and other Changes. The Borrowers
shall provide prompt written notice of (1) all jurisdictions in which any
Borrower becomes qualified after the Closing Date to transact business, (2) any
change after the Closing Date in the authorized and issued Stock of any
Borrower or any Subsidiary of any Borrower or any amendment to their articles
or certificate of

17

incorporation,
by-laws, partnership agreement or other organizational documents, (3) any
Subsidiary created or acquired by any Borrower or any of their Subsidiaries
after the Closing Date, such notice, in each case, to identify the applicable
jurisdictions, capital structures or Subsidiaries, as applicable, and (4) any
other event that occurs after the Closing Date which would cause any of the
representations and warranties in Section 4 of
this Agreement or in any other Loan Document to be untrue or misleading in any
material respect. The foregoing notice requirement shall not be construed to
constitute consent by the L/C Guarantors to any transaction referred to above
which is not expressly permitted by the terms of this Agreement. 

                    (f)
Other Information. With reasonable promptness, the
Borrowers will deliver such other information, reports and data with respect to
the Borrowers or any Subsidiary as from time to time may be reasonably
requested by Investment Manager. 

                    (g)
Taxes. The Borrowers shall provide prompt written
notice of (i) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges by any
Borrower or any of their Subsidiaries and (ii) any agreement by any Borrower or
any of their Subsidiaries or request directed to any Borrower or any of their
Subsidiaries to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which could reasonably be expected to
have a Material Adverse Effect. 

          7.2
Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to such terms in conformity with GAAP. Financial Statements and other
information furnished to Investment Manager pursuant to this Agreement (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP as
in effect at the time of such preparation; provided
that no Accounting Change shall affect financial covenants, standards or terms
in this Agreement; provided further that the Borrowers shall prepare
footnotes to the Financial Statements required to be delivered hereunder that
show the differences between the Financial Statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting Changes). 

8. DEFAULT. 

          8.1
Events of Default. The occurrence or existence
of any one or more of the following shall constitute an “Event of Default” hereunder: 

                    (a)
Payment. The Borrowers fails to pay when due any
Reimbursement Payment, Fees (including, without limitation, the Facility Fee,
Success Fee and Drawing Fee) or other monetary obligation provided for herein;
or 

                    (b)
Change of Control. The occurrence of a Change of
Control; or 

                    (c)
Default in Other Agreements. Any Borrower or any of
their Subsidiaries fails to pay when due or within any applicable grace period
any principal or interest on Indebtedness (other than with respect to the
Obligations hereunder) or breaches or defaults under the terms of any
Indebtedness (other than with respect to the Obligations hereunder), or any
condition or event occurs with respect to any Indebtedness (other than with
respect to the Obligations hereunder), if the effect of such failure to pay,
breach, default or occurrence is to cause the holder or holders of Indebtedness

18

having an
aggregate principal amount in excess of $250,000 to declare such Indebtedness
due and payable prior to its stated maturity; or 

                    (d)
Involuntary Bankruptcy; Appointment of Receiver, Etc.
(1) A court enters a decree or order for relief with respect to any Borrower in
an involuntary case under the Bankruptcy Code, which decree or order is not
stayed or other similar relief is not granted under any applicable federal or state
law; or (2) the continuance of any of the following events for sixty (60) days
unless dismissed, bonded or discharged: (a) an involuntary case is commenced
against any Borrower, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or (b) a decree or order of a court for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Borrower, or over all or a
substantial part of its property, is entered; or (c) a receiver, trustee or
other custodian is appointed without the consent of any Borrower, for all or a
substantial part of the property of such Borrower; or 

                    (e)
Voluntary Bankruptcy; Appointment of Receiver, Etc.
(1) Any Borrower commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) any
Borrower makes any assignment for the benefit of creditors; or (3) the Board of
Directors of any Borrower adopts any resolution or otherwise authorizes action
to approve any of the actions referred to in this Section 8.1(e); or 

                    (f)
Dissolution. Any Borrower files a certificate of
dissolution under applicable state law, or is liquidated or dissolved (except
in connection with the consolidation of such Borrower with another Borrower),
or any order, judgment or decree is entered against any Borrower decreeing the
dissolution or split up of such Borrower and such order remains undischarged or
unstayed for a period in excess of fifteen (15) days. 

          8.2
Remedies. Upon the occurrence of any Event of
Default, (i) the outstanding Reimbursement Payment and all Fees hereunder shall
become immediately due and payable, and shall bear interest at the lesser of
(a) the interest rate applicable to such amount immediately preceding such
Event of Default, plus an additional two percent (2%) per annum, or (b) the
maximum amount permitted by law, and (ii) Investment Manager and the L/C
Guarantors may exercise any right, power or remedy permitted to it under the
Uniform Commercial Code and applicable law. Subject to the Subordination
Agreement, without limiting the generality of the foregoing, Investment Manager
and the L/C Guarantors may hold any cash, and dispose of any other property and
hold the proceeds thereof, as collateral to secure payment obligations under
this Agreement. 

9. PROVISIONS RELATED TO INVESTMENT MANAGER 

          9.1
Appointment. The L/C Guarantors hereby
designate and appoint Investment Manager as its agent under this Agreement and
the other Loan Documents, and the L/C Guarantors hereby irrevocably authorize
Investment Manager to execute and deliver the Collateral Documents and to take
such action or to refrain from taking such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. Investment Manager is authorized and
empowered to amend, modify, or waive any provisions of this Agreement or the
other Loan Documents on behalf of the L/C Guarantors subject to the requirement
that the L/C Guarantors’ consent be obtained in certain instances as provided
in this Article 9 and Section 10.2. The provisions of this

19

Article 9 are solely
for the benefit of Investment Manager and the L/C Guarantors and no Borrower
nor any other Person shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement, Investment Manager shall act solely as agent of the L/C Guarantors
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Borrower. Investment
Manager may perform any of its duties hereunder, or under the Loan Documents,
by or through its agents or employees. 

          9.2
Reliance. Investment Manager shall be entitled
to rely, and shall be fully protected in relying, upon any written or oral
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, fax or telegram)
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining
to this Agreement or any of the Loan Documents and its duties hereunder or
thereunder. Investment Manager shall be entitled to rely upon the advice of
legal counsel, independent accountants, and other experts selected by
Investment Manager in its sole discretion. 

          9.3
Successor Investment Manager. 

                    (a)
Resignation. Investment Manager may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days’ prior written notice to the
Borrowers and the L/C Guarantors. Such resignation shall take effect upon the
acceptance by a successor Investment Manager of appointment pursuant to clause
(b) below or as otherwise provided in clause (b) below. 

                    (b)
Appointment of Successor. Upon any such notice of
resignation pursuant to clause (a) above, the L/C Guarantors shall appoint a
successor Investment Manager which, unless an Event of Default has occurred and
is continuing, shall be acceptable to the Borrowers (the Borrowers’ approval
not to be unreasonably conditioned, delayed or withheld). If a successor
Investment Manager shall not have been so appointed within the thirty (30)
Business Day period referred to in clause (a) above, the retiring Investment
Manager, upon notice to the Borrowers and the L/C Guarantors, shall then
appoint a successor Investment Manager who shall serve as Investment Manager
until such time, if any, as the L/C Guarantors appoint a successor Investment
Manager as provided above. 

                    (c)
Successor Investment Manager. Upon the acceptance of
any appointment as Investment Manager under the Loan Documents by a successor
Investment Manager, such successor Investment Manager shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Investment Manager, and the retiring Investment Manager shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Investment Manager’s resignation as Investment Manager, the provisions
of this Article 9 shall continue
to inure to its benefit as to any actions taken or omitted to be taken by it in
its capacity as Investment Manager. 

          9.4
Collateral Matters. 

                    (a)
Release of Collateral. The L/C Guarantors hereby
irrevocably authorize Investment Manager, at its option and in its discretion,
to release any Lien granted to or held by Investment Manager upon any
Collateral (x) upon payment and satisfaction of all Obligations (other than
contingent indemnification obligations to the extent no claims giving rise
thereto have been asserted) or (y) constituting property being sold or disposed
of if the Borrowers certify to Investment Manager that the sale or disposition
is made in compliance with the provisions of this Agreement (and

20

Investment
Manager may rely in good faith conclusively on any such certificate, without
further inquiry). 

                    (b)
Confirmation of Authority; Execution of Releases.
Without in any manner limiting Investment Manager’s authority to act without
any specific or further authorization or consent by the L/C Guarantors (as set
forth in Section 9.4(a)), the L/C
Guarantors agree to confirm in writing, upon request by Investment Manager or
the Borrowers, the authority to release any Collateral conferred upon
Investment Manager under clauses (x) and (y) of Section 9.4(a). Upon receipt by Investment Manager of any
required confirmation from the L/C Guarantors of their authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days’ prior written request by the Borrowers, Investment Manager shall (and is
hereby irrevocably authorized by the L/C Guarantors to) execute such documents
as may be necessary to evidence the release of the Liens granted to Investment
Manager upon such Collateral; provided,
however, that (x) Investment
Manager shall not be required to execute any such document on terms which, in
Investment Manager’s opinion, would expose Investment Manager to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (y) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens upon, all
interests retained by the Borrowers, including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral. 

                    (c)
Absence of Duty. Investment Manager shall have no
obligation whatsoever to the L/C Guarantors or any other Person to assure that
the property covered by the Collateral Documents exists or is owned by any
Borrower or is cared for, protected or insured or has been encumbered or that
the Liens granted to Investment Manager have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Investment Manager in
this Section 9.4 or in any of the
Loan Documents, it being understood and agreed that in respect of the property
covered by the Collateral Documents or any act, omission or event related
thereto, Investment Manager may act in any manner it may deem appropriate, in
its discretion, given Investment Manager’s own interest in property covered by
the Collateral Documents and that Investment Manager shall have no duty or liability
whatsoever to the L/C Guarantors, provided
that Investment Manager shall exercise the same care which it would in dealing
with loans for its own account. 

          9.5
Agency for Perfection. Investment Manager and
the L/C Guarantors hereby appoint each other L/C Guarantor as agent for the
purpose of perfecting Investment Manager’s security interest in assets which,
in accordance with the Code in any applicable jurisdiction, can be perfected by
possession or control. Should an L/C Guarantor obtain possession or control of
any such assets, such L/C Guarantor shall notify Investment Manager thereof,
and, promptly upon Investment Manager’s request therefor, shall deliver such
assets to Investment Manager or in accordance with Investment Manager’s instructions
or transfer control to Investment Manager in accordance with Investment
Manager’s instructions. The L/C Guarantors agree that they will not have any
right individually to enforce or seek to enforce any Collateral Document or to
realize upon any collateral security for the Obligations unless instructed to
do so by Investment Manager in writing, it being understood and agreed that
such rights and remedies may be exercised only by Investment Manager. 

          9.6
Notice of Default. Investment Manager shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default unless Investment Manager shall have received written notice from
the L/C Guarantors or the Borrowers referring to this Agreement,

21

describing
such Default or Event of Default and stating that such notice is a “notice of
default”. Investment Manager will use reasonable efforts to notify the L/C
Guarantors of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and Fees, in which
case Investment Manager will notify the L/C Guarantors of its receipt of such
notice. Investment Manager shall take such action with respect to such Default
or Event of Default as may be requested by the L/C Guarantors. Unless and until
Investment Manager has received any such request, Investment Manager may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interests of the L/C Guarantors. 

          9.7
The L/C Guarantor Actions Against Collateral.
With respect to any action by Investment Manager to enforce the rights and
remedies of Investment Manager and the L/C Guarantors under this Agreement and
the other Loan Documents, the L/C Guarantors hereby consent to the jurisdiction
of the court in which such action is maintained, and agrees to deliver any
requested documentation (with respect to the Loan Documents) to Investment
Manager to the extent necessary to enforce the rights and remedies of
Investment Manager for the benefit of Investment Manager and the L/C Guarantors
under the mortgages or similar Liens or encumbrances in accordance with the
provisions hereof. 

          9.8
Payment; Information; Actions in Concert. 

                    (a)
Return of Payments. 

                              (i)
If Investment Manager pays an amount to any L/C
Guarantor under this Agreement in the belief or expectation that a related
payment has been or will be received by Investment Manager from any Borrower
and such related payment is not received by Investment Manager, then Investment
Manager will be entitled to recover such amount from such L/C Guarantor on
demand without setoff, counterclaim or deduction of any kind. 

                              
(ii) If Investment Manager determines at any time that
any amount received by Investment Manager under this Agreement must be returned
to the Borrowers or paid to any other Person pursuant to any insolvency law or otherwise,
then, notwithstanding any other term or condition of this Agreement or any
other Loan Document, Investment Manager will not be required to distribute any
portion thereof to the L/C Guarantors. In addition, the L/C Guarantors will
repay to Investment Manager on demand any portion of such amount that
Investment Manager has distributed to the L/C Guarantors, together with
interest at such rate, if any, as Investment Manager is required to pay to the
Borrowers or such other Person, without setoff, counterclaim or deduction of
any kind. 

                    (b)
Dissemination of Information. Investment Manager shall
use reasonable efforts to provide the L/C Guarantors with any notice of Default
or Event of Default received by Investment Manager from, or delivered by
Investment Manager to, the Borrowers, with notice of any Event of Default of
which Investment Manager has actually become aware and with notice of any
action taken by Investment Manager following any Event of Default; provided, that Investment Manager shall
not be liable to the L/C Guarantors for any failure to do so. 

          9.9
Exculpatory Provisions. Neither Investment
Manager nor any of its directors, officers, agents or employees shall be (i)
liable for any action lawfully taken or omitted to be taken by it or them under
or in connection with this Agreement (except for its, their or such Person’s
own gross negligence or willful misconduct or, in the case of Investment
Manager, the breach of its obligations expressly set

22

forth in this
Agreement, unless such action was taken or omitted to be taken by Investment
Manager at the direction of the L/C Guarantors), or (ii) responsible in any
manner to the L/C Guarantors for any recitals, statements, representations or
warranties made by the Borrowers contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document furnished in connection herewith, or for any
failure of Borrower to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article
3. Investment Manager shall not be under any obligation to any L/C
Guarantor to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement,
or to inspect the properties, books or records of the Borrowers. 

10. MISCELLANEOUS. 

          10.1
Indemnities. The Borrowers agree, jointly and
severally, to indemnify, pay, and hold Investment Manager, the L/C Guarantors
and their respective officers, directors, employees, agents, and attorneys (the
“Indemnitees”) harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs and expenses (including all reasonable
fees and expenses of counsel to such Indemnitees) of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against an
Indemnitee as a result of such Indemnitee being a party to this Agreement or
the transactions consummated pursuant to this Agreement; provided, that the Borrowers shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrowers agree
to make the maximum contribution to the payment and satisfaction thereof which
is permissible under applicable law. 

          10.2
Amendments and Waivers. Except for actions expressly
permitted to be taken by Investment Manager, no amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan
Document, or any consent to any departure by any Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Borrowers, Investment Manager and the L/C Guarantors providing a majority of
the principal amount of Letters of Credit. 

          10.3
Notices. Any notice or other communication required
shall be in writing addressed to the respective party as set forth below and
may be personally served, telecopied, sent by overnight courier service or U.S.
mail and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. Eastern Time; (c) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed;
or (d) if delivered by U.S. mail, four (4) Business Days after deposit with
postage prepaid and properly addressed. 

23

	
 

	
 

	
 

	
Notices
 shall be addressed as follows: 

	
 

	
 

	
 

	
 

	
If to the
 Borrowers: 

	
 

	
 

	
 

	
 

	
MTM Technologies, Inc.

	
 

	
 

	
MTM Technologies (US), Inc. 

	
 

	
 

	
MTM Technologies (Massachusetts), LLC

	
 

	
 

	
Info Systems, Inc. 

	
 

	
 

	
1200 High
 Ridge Road

	
 

	
 

	
Stamford,
 Connecticut 06905

	
 

	
 

	
ATTN:
 General Counsel

	
 

	
 

	
Fax: (281)
 668-0154 

	
 

	
 

	
 

	
 

	
With a copy
 to: 

	
 

	
 

	
 

	
 

	
Ballard Spahr Andrews & Ingersoll, LLP

	
 

	
 

	
1225 17th
 Street, Suite 2300

	
 

	
 

	
Denver, CO
 80202

	
 

	
 

	
ATTN: John
 L. Ruppert, Esq.

	
 

	
 

	
Fax: (303)
 382-4604 

	
 

	
 

	
 

	
 

	
If to
 Investment Manager: 

	
 

	
 

	
 

	
 

	
Columbia Partners, L.L.C. Investment Management

	
 

	
 

	
5425
 Wisconsin Avenue

	
 

	
 

	
Suite 700

	
 

	
 

	
Chevy Chase,
 MD 20815

	
 

	
 

	
ATTN: Jason
 Crist

	
 

	
 

	
Fax: (240)
 482-0401 

	
 

	
 

	
 

	
 

	
With a copy
 to: 

	
 

	
 

	
 

	
 

	
 

	
Cooley Godward Kronish LLP

	
 

	
 

	
777 6th
 Street, N.W., Suite 1100

	
 

	
 

	
Washington,
 DC 20001

	
 

	
 

	
ATTN: Aaron
 J. Velli, Esq.

	
 

	
 

	
Fax: (202)
 842-7899 

	
 

	
 

	
 

	
The L/C
 Guarantors: 

	
 

	
 

	
 

	
 

	
 

	
National Electrical Benefit Fund

	
 

	
 

	
c/o Columbia
 Partners, L.L.C. Investment Management

	
 

	
 

	
5425
 Wisconsin Avenue

	
 

	
 

	
Suite 700

	
 

	
 

	
Chevy Chase,
 MD 20815

	
 

	
 

	
ATTN: Jason
 Crist

	
 

	
 

	
Fax: (240)
 482-0401 

24

	
 

	
 

	
 

	
 

	
 

	
FirstMark III L.P. 

	
 

	
 

	
FirstMark III Offshore Partners, L.P.

	
 

	
 

	
c/o
 FirstMark Capital

	
 

	
 

	
1221 Avenue
 of the Americas, 26th Floor

	
 

	
 

	
New York, NY
 10020 

	
 

	
 

	
ATTN: Brian
 Kempner, COO & General Counsel

	
 

	
 

	
Fax: (212)
 278-0146 

	
 

	
 

	
 

	
 

	
 

	
Constellation Venture Capital II, L.P. 

	
 

	
 

	
Constellation Venture Capital Offshore II, L.P.

	
 

	
 

	
CVC II Partners, LLC

	
 

	
 

	
The BSC Employee Fund VI, L.P. 

	
 

	
 

	
C/o
 Constellation Growth Capital

	
 

	
 

	
40 West 57th
 Street, 30th Floor

	
 

	
 

	
New York, NY
 10019

	
 

	
 

	
ATTN: Thomas
 Wasserman

	
 

	
 

	
Phone:
 212-287-6792 

	
 

	
 

	
 

	
 

	
With a copy
 to: 

	
 

	
 

	
 

	
 

	
 

	
Cooley Godward Kronish LLP

	
 

	
 

	
777 6th
 Street, N.W., Suite 1100

	
 

	
 

	
Washington,
 DC 20001

	
 

	
 

	
ATTN: Aaron
 J. Velli, Esq.

	
 

	
 

	
Fax: (202)
 842-7899 

	
 

	
 

	
 

	
 

	
 

	
Edwards Angell Palmer & Dodge LLP

	
 

	
 

	
One
 Financial Plaza

	
 

	
 

	
Providence,
 RI 02903

	
 

	
 

	
ATTN: Thomas
 Jefferson IV, Esq.

	
 

	
 

	
Fax: (888)
 325-9628 

          10.4
Obligations Absolute; Failure or Indulgence Not Waiver; Remedies Cumulative.
The payment and performance by the Borrowers of all of the Obligations shall be
absolute and unconditional, irrespective of any defense or rights of set-off,
recoupment or counterclaim the Borrowers might otherwise have against
Investment Manager or the L/C Guarantors, and the Borrowers shall pay and
perform all of the Obligations, free of any deductions and without abatement,
diminution, recoupment, counterclaim or set-off. Until payment in full of all
of the Obligations, (a) no Borrower shall suspend or discontinue any payments
required pursuant to this Agreement or any other Loan Document; and (b) each
Borrower shall perform and observe all of the other terms and provisions of
this Agreement or any other Loan Documents. No failure or delay on the part of
Investment Manager or the L/C Guarantors to exercise, nor any partial exercise
of, any power, right or privilege hereunder or under any other Loan Documents
shall impair such power, right, or privilege or be construed to be a waiver of
any Default or Event of Default. All rights and remedies existing hereunder or
under any other Loan Document are cumulative to and not exclusive of any rights
or remedies otherwise available. 

          10.5
Marshaling; Payments Set Aside. Neither Investment
Manager nor any L/C Guarantor

25

shall be under
any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that any Borrower makes payment(s) or Investment
Manager enforces its Liens or Investment Manager or any L/C Guarantor exercises
its right of set-off, and such payment(s) or the proceeds of such enforcement
or set-off is subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid by anyone, then to the extent
of such recovery, the Obligations or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or set off had not occurred. 

          10.6
Severability. The invalidity, illegality, or
unenforceability in any jurisdiction of any provision under the Loan Documents
shall not affect or impair the remaining provisions in the Loan Documents.
Furthermore, in lieu of any such provision, there shall be added automatically
as part of the applicable agreement a legal and enforceable provision as
similar in terms to such provision as may be possible. 

          10.7
Headings. Section and subsection headings are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purposes or be given substantive effect. 

          10.8
Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER
LOAN DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE
GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. 

          10.9
Successors and Assigns. This Agreement and the other
Loan Documents shall be binding on and shall inure to the benefit of the
Borrowers, Investment Manager, the L/C Guarantors and their respective
successors and assigns (including, in the case of the Borrowers, a
debtor-in-possession on behalf of any Borrower), except as otherwise provided
herein or therein. No Borrower may assign, transfer, hypothecate or otherwise
convey its rights, benefits, obligations or duties hereunder or under any of
the other Loan Documents without the prior express written consent of
Investment Manager and the L/C Guarantors providing a majority in principal
amount of the Letters of Credit. Any such purported assignment, transfer,
hypothecation or other conveyance by any Borrower without the prior express
written consent of Investment Manager and the L/C Guarantors providing a
majority in principal amount of the Letters of Credit shall be void. The terms
and provisions of this Agreement are for the purpose of defining the relative
rights and obligations of the Borrowers, Investment Manager and the L/C Guarantors
with respect to the transactions contemplated hereby and no Person shall be a
third party beneficiary of any of the terms and provisions of this Agreement or
any of the other Loan Documents. 

          10.10
No Fiduciary Relationship; Limited Liability. No
provision in the Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty owing to any Borrower by
Investment Manager or the L/C Guarantors. Each Borrower agrees that neither
Investment Manager nor any L/C Guarantor shall have liability to such Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by such
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless and to the extent that it is determined that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery is
sought as determined by a final non-appealable order by a court of

26

competent
jurisdiction. Neither Investment Manager nor any L/C Guarantor shall have any
liability with respect to, and each Borrower hereby waives, releases and agrees
not to sue for, any special, indirect or consequential damages suffered by
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby. 

          10.11
Construction. Investment Manager, the L/C Guarantors
and the Borrowers acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review the
Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by Investment Manager, the L/C Guarantors and
the Borrowers. 

          10.12
Confidentiality. Investment Manager and the L/C
Guarantors agree to exercise reasonable efforts to keep confidential any
non-public information delivered pursuant to the Loan Documents and not to
disclose such information to Persons other than to potential assignees or
participants or to Persons employed by or engaged by Investment Manager or the
L/C Guarantors or the L/C Guarantors’ assignees or participants including attorneys,
auditors, professional consultants, rating agencies, provided that each of the
foregoing has agreed to comply with confidentiality provisions substantially
similar to those contained herein. The confidentiality provisions contained in
this Section 10.12 shall not apply
to disclosures (i) required to be made by Investment Manager or the L/C
Guarantors to any regulatory or governmental agency or pursuant to legal
process or (ii) consisting of general portfolio information that does not
identify the Borrowers or separately state information regarding the Borrowers.
The obligations of Investment Manager and the L/C Guarantors under this Section 10.12 shall supersede and replace
the obligations of Investment Manager and the L/C Guarantors under any confidentiality
agreement in respect of this financing executed and delivered by Investment
Manager or the L/C Guarantors prior to the date hereof. 

          10.13
CONSENT TO JURISDICTION. EACH BORROWER HEREBY CONSENTS
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF
NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO INVESTMENT MANAGER’S ELECTION,
ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
UPON SUCH BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO SUCH BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS OF EACH BORROWER SHALL BE DEEMED TO BE EMPLOYEES
OR MANAGING AGENTS OF SUCH BORROWER FOR PURPOSES OF ALL APPLICABLE LAW OR COURT
RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN
A DEPOSITION, AT TRIAL OR OTHERWISE). EACH BORROWER AGREES THAT INVESTMENT
MANAGER’S OR THE L/C GUARANTORS’ COUNSELS IN ANY SUCH DISPUTE RESOLUTION
PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION
AND THAT ANY DISCOVERY DEPOSITION OF ANY OF

27

THEM MAY BE
USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. EACH BORROWER IN
ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH
DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY
INVESTMENT MANAGER OR THE L/C GUARANTORS, ALL PERSONS, DOCUMENTS (WHETHER IN
TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER THEIR CONTROL AND
RELATING TO THE DISPUTE. 

          10.14
WAIVER OF JURY TRIAL. THE BORROWERS, INVESTMENT
MANAGER OR THE L/C GUARANTORS EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. THE BORROWERS, INVESTMENT MANAGER AND
THE L/C GUARANTORS EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE BORROWERS,
INVESTMENT MANAGER AND THE L/C GUARANTORS EACH WARRANT AND REPRESENT THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. 

          10.15
Survival of Warranties and Certain Agreements. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Borrowers set
forth in Sections 2.3 and 10.1
shall survive the repayment of the Obligations and the termination of this
Agreement. 

          10.16
Entire Agreement. This Agreement and the other Loan
Documents embody the entire agreement among the parties hereto and supersede
all prior commitments, agreements, representations, and understandings, whether
oral or written, relating to the subject matter hereof, and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent
oral agreements or discussions of the parties hereto. All Exhibits, Schedules
and Annexes referred to herein are incorporated in this Agreement by reference
and constitute a part of this Agreement. 

          10.17
Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one in the same instrument.
This Agreement shall become effective upon the execution of a counterpart
hereof by each of the parties hereto. 

          10.18
Delivery of Termination Statements and Mortgage Releases.
Upon payment in full in cash and performance of all of the Obligations (other
than indemnification Obligations), and a release of all claims against
Investment Manager and the L/C Guarantors, and so long as no suits, actions
proceedings, or claims are pending or threatened against any Indemnitee
asserting any damages, losses or liabilities that are indemnified liabilities
hereunder, Investment Manager shall deliver to the Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations. 

          10.19
Suretyship Waivers. The Borrowers shall be jointly and
severally liable for all

28

obligations
hereunder. Each Borrower hereby expressly waives (a) diligence, presentment,
demand for payment, protest, benefit of any statute of limitations affecting
such Borrower’s liability under the Loan Documents; (b) discharge due to any
disability of any Borrower; (c) any defenses of any Borrower to obligations
under the Loan Documents not arising under the express terms of the Loan
Documents or from a material breach thereof by the L/C Guarantors which under
applicable law has the effect of discharging any Borrower from the Obligations
as to which this Agreement or any other Loan Document is sought to be enforced;
(d) the benefit of any act or omission by the L/C Guarantors which directly or
indirectly results in or aids the discharge of any Borrower from any of the
Obligations by operation of law or otherwise; (e) except as expressly provided
herein, all notices whatsoever, including notice of acceptance of the incurring
of the Obligations; (f) any right it may have to require the L/C Guarantors to
disclose to it any information that the L/C Guarantors may now or hereafter
acquire concerning the financial condition or any circumstances that bears on
the risk of nonpayment by any other Borrower, including the release of such
other Borrower from its Obligations hereunder; and (g) any requirement that the
L/C Guarantors exhaust any right, power or remedy or proceed against any other
Borrower or any other security for, or any guarantor of, or any other party
liable for, any of the Obligations, or any portion thereof. Each Borrower
specifically agrees that it shall not be necessary or required, and Borrowers
shall not be entitled to require, that the L/C Guarantors (i) file suit or
proceed to assert or obtain a claim for personal judgment against any other
Borrower for all or any part of the Obligations; (ii) make any effort at
collection or enforcement of all or any part of the Obligations from any
Borrower; (iii) foreclose against or seek to realize upon the Collateral or any
other security now or hereafter existing for all or any part of the
Obligations; (iv) file suit or proceed to obtain or assert a claim for personal
judgment against any Borrower or any guarantor or other party liable for all or
any part of the Obligations; (v) exercise or assert any other right or remedy
to which the L/C Guarantors are or may be entitled in connection with the
Obligations or any security or guaranty relating thereto to assert; or (vi)
file any claim against assets of one Borrower before or as a condition of
enforcing the liability of any other Borrower under this Agreement. WITHOUT
LIMITING THE FOREGOING IN ANY WAY, EACH BORROWER HEREBY IRREVOCABLY WAIVES AND
RELEASES: 

                              (i)
Any and all rights it may have at any time (whether
arising directly or indirectly, by operation of law, contract or otherwise) to
require the marshaling of any assets of any Borrower, which right of marshaling
might otherwise arise from any such payments made or obligations performed; 

                              
(ii) Any and all rights that would result in such
Borrower being deemed a “creditor” under the United States Code of any other
Borrower or any other Person, on account of payments made or obligations
performed by such Borrower; and 

          Until
such time as the Obligations have been satisfied in full, any claim, right or
remedy which it may now have or hereafter acquire against any other Borrower
that arises hereunder and/or from the performance by it hereunder including any
claim, remedy or right of subrogation, reimbursement, exoneration,
contribution, indemnification, or participation in any claim, right or remedy
of the L/C Guarantors against any other Borrower or any collateral security
which the L/C Guarantors now have or may hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise. 

          10.20
Subordination to Senior Indebtedness. This Agreement
is subject to the terms of the Subordination Agreement, which agreement is
incorporated herein by reference. Notwithstanding any

29

statement to
the contrary contained in this Agreement, no remedies shall be pursued, except
in accordance with the terms of such agreement. Notwithstanding the
incorporation by reference of the Subordination Agreement, the Borrowers
acknowledge that no other parties, including any Borrower or any of their
successors or assigns, are intended to be benefited, in any way, by the
Subordination Agreement. If MTM refinances or renegotiates the Senior
Indebtedness or replaces it with other Senior Indebtedness, Investment Manager
and the L/C Guarantors hereby agree to enter into any subordination agreement
requested by any Person or Persons who are MTM’s Senior Lenders or agents
therefor, pursuant to which Investment Manager and the L/C Guarantors agree to
subordinate their respective rights and interests hereunder and the liens
securing same to such Person, on terms consistent with or no less favorable to Investment
Manager and the L/C Guarantors than those contained in the Subordination
Agreement and the subordination agreement of even date herewith by and between
Investment Manager and the holders of Subordinated Debt. 

[Signature Pages to Follow]

30

          IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.

The
Borrowers:

	
 

	
 

	
 

	
 

	
 

	
MTM TECHNOLOGIES,
 INC., 

	
 

	
 

	
 

	
 

	
 

	
a New York
 corporation

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Steven
 Stringer

	
 

	
 

	

	
 

	
Name:

	
Steven
 Stringer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
President and Chief Executive Officer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
MTM TECHNOLOGIES
 (US), INC., 

	
 

	
 

	
 

	
 

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
By:

	
 

	
/s/ Steven
 Stringer

	
 

	
 

	

	
 

	
Name: 

	
Steven
 Stringer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
President and Chief Executive Officer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
INFO SYSTEMS, INC.,
 

	
 

	
 

	
 

	
 

	
 

	
a Delaware corporation

	
 

	
 

	
 

	
By:

	
 

	
/s/ Steven
 Stringer

	
 

	
 

	

	
 

	
Name: 

	
Steven
 Stringer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
President and Chief Executive Officer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
MTM TECHNOLOGIES
 (MASSACHUSETTS), LLC, 

	
 

	
 

	
 

	
 

	
 

	
a Delaware
 limited liability company

	
 

	
 

	
 

	
By:

	
 

	
/s/ Steven
 Stringer

	
 

	
 

	

	
 

	
Name:

	
Steven
 Stringer

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
President and Chief Executive Officer

	
 

	
 

	

1

	
 

	
 

	
 

	
 

	
Investment Manager:

	
 

	
 

	
 

	
COLUMBIA PARTNERS, L.L.C. INVESTMENT 
MANAGEMENT

	
 

	
 

	
 

	
By:

	
 

	
/s/ Jason Crist

	
 

	
 

	

	
 

	
Name:

	
Jason Crist

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
The L/C Guarantors:

	
 

	
 

	
NATIONAL ELECTRICAL BENEFIT FUND

	
 

	
 

	
 

	
By: Columbia Partners,
 L.L.C. Investment Management, 
its
 Authorized Signatory

	
 

	
 

	
 

	
By:

	
 

	
/s/ Jason Crist

	
 

	
 

	

	
 

	
Name:

	
Jason Crist

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
FIRSTMARK III L.P.

	
 

	
 

	
 

	
By: FirstMark
 Capital LLC, its Investment Manager

	
 

	
 

	
 

	
By:

	
 

	
/s/ Gerald A. Poch

	
 

	
 

	

	
 

	
Name:

	
Gerald A. Poch

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
FIRSTMARK III OFFSHORE
 PARTNERS, L.P.

	
 

	
 

	
 

	
By: FirstMark
 Capital LLC, its Investment Manager

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Gerald A. Poch

	
 

	
 

	

	
 

	
Name:

	
Gerald A. Poch

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

2

	
 

	
 

	
 

	
 

	
 

	
CONSTELLATION VENTURE CAPITAL II, L.P.

	
 

	
 

	
 

	
By: Constellation
 Ventures Management II, LLC, its 
General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Tom Wasserman

	
 

	
 

	

	
 

	
Name:

	
Tom Wasserman

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
CONSTELLATION VENTURE CAPITAL OFFSHORE II, L.P.

	
 

	
 

	
 

	
By: Constellation
 Ventures Management II, LLC, its 
General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Tom Wasserman

	
 

	
 

	

	
 

	
Name:

	
Tom Wasserman

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
CVC II PARTNERS, LLC

	
 

	
 

	
 

	
By: The
 Bear Stearns Companies Inc., its Managing Member

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Tom Wasserman

	
 

	
 

	

	
 

	
Name:

	
Tom Wasserman

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
THE BSC EMPLOYEE FUND VI, L.P.

	
 

	
 

	
 

	
By: Constellation
 Ventures Management II, LLC, its 
General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
/s/ Tom Wasserman

	
 

	
 

	

	
 

	
Name:

	
Tom Wasserman

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Managing Director

	
 

	
 

	

3

Schedule
of L/Cs

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
L/C GUARANTORS

	
 

	
Letter of
 Credit

 Amounts

	
 

	
Percentage
 of

 Total Letter of

 Credit 

 Amounts

	
 

	

	

	

	

	

	
 

	
NATIONAL ELECTRICAL BENEFIT FUND

	
 

	
$

	
7,000,000.00

	
 

	
82.35

	
%

	
 

	
FIRSTMARK III L.P.

	
 

	
$

	
876,450.00

	
 

	
10.32

	
%

	
 

	
FIRSTMARK III OFFSHORE PARTNERS, L.P.

	
 

	
$

	
123,550.00

	
 

	
1.45

	
%

	
 

	
CONSTELLATION VENTURE CAPITAL II, L.P.

	
 

	
$

	
23,360.41

	
 

	
0.28

	
%

	
 

	
CONSTELLATION VENTURE CAPITAL OFFSHORE
 II, L.P.

	
 

	
$

	
123,549.13

	
 

	
1.45

	
%

	
 

	
CVC II PARTNERS, LLC

	
 

	
$

	
11,162.42

	
 

	
0.13

	
%

	
 

	
THE BSC EMPLOYEE FUND VI, L.P.

	
 

	
$

	
341,928.04

	
 

	
4.02

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	
 

	
Total:

	
 

	
$

	
8,500,000.00

	
 

	
100

	
%

	
 

	
 

	
 

	

	

	

	

	

	
 

ANNEX
A

to

LETTER OF CREDIT COMMITMENT AND REIMBURSEMENT AGREEMENT

DEFINITIONS

          Capitalized
terms used in the Loan Documents shall have (unless otherwise provided
elsewhere in the Loan Documents) the following respective meanings and all
references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to
the Agreement: 

          “Accounting Changes” means: (a) changes
in
accounting principles required by GAAP and implemented by any Borrower; and (b)
changes in accounting principles recommended by the Borrowers’ certified public
accountants and implemented by any Borrower.

          “Affiliate” means, with respect to any
Person, (a) each Person that, directly or indirectly, owns or controls, whether
beneficially, or as a trustee, guardian or other fiduciary, 5% or more of the
Stock having ordinary voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under common control with
such Person, (c) each of such Person’s officers, directors, joint venturers and
partners and (d) in the case of Borrower, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of Borrower. For the
purposes of this definition, “control”
of a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that the term “Affiliate” shall
specifically exclude Investment Manager and the L/C Guarantors.

          “Agreement” means this Letter of Credit
Commitment and Reimbursement Agreement (including all schedules, subschedules,
annexes and exhibits hereto), as the same may be amended, supplemented,
restated or otherwise modified from time to time.

          “Bankruptcy Code” means the provisions of
Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. or any other
applicable bankruptcy, insolvency or similar laws.

          “Borrowers” has the meaning ascribed to
it
in the Preamble.

          “Business Day” means any day that is not
a
Saturday, a Sunday or a day on which banks are required or permitted to be
closed in the State of New York.

          “Capital Lease” means, with respect to
any
Borrower, any lease of any property (whether real, personal or mixed) by such
Borrower as lessee that, in accordance with GAAP, would be required to be
classified and accounted for as a capital lease on a balance sheet of MTM.

          “Capital Lease Obligation” means, with
respect to any Capital Lease of any Person, the amount of the obligation of the
lessee thereunder that, in accordance with GAAP, would appear on a balance
sheet of such lessee in respect of such Capital Lease.

          “Casualty
Proceeds” means (a) payments or other proceeds from an
insurance carrier with respect to any loss, casualty or damage to Collateral,
and (b) payments received on account of any condemnation or other
governmental taking of any of the Collateral.

          “CDF” means GE Commercial Distribution
Finance Corporation, as administrative
agent for itself and the other lenders under the CDF Agreement.

          “CDF
Agreement” means that certain Credit Facilities Agreement dated
August 21, 2007, by and among CDF, the Borrowers and the other parties thereto,
as amended, modified, restated or replaced from time to time.

          “Change of Control” means (i) a sale,
lease,
license or other disposition of all or substantially all of the assets of MTM,
(ii) the acquisition by any person or group (as such term is used in Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), other than
one or more of the institutional investors that are the L/C Guarantors and that
own voting stock of MTM on the Closing Date, of beneficial ownership of more
than 50% of the voting power of the total issued and outstanding shares of
voting stock of MTM, or (iii) MTM shall cease to own directly, or indirectly
through one or more of the other Borrowers, 100% of the total issued and
outstanding capital stock of each of the other Borrowers; provided, however,
that, nothing herein shall be construed as a waiver of MTM’s or any other
Borrower’s obligations under Sections 6.4, 6.6 or 6.7 in connection with the
transfer of the capital stock of any Borrower to another Borrower or any other
corporate restructuring.

          “Charges” means all federal, state,
county,
city, municipal, local, foreign or other governmental taxes (including premiums
and other amounts owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of the Borrowers, (d) the Borrowers’ ownership or use of any
properties or other assets, or (e) any other aspect of the Borrowers’
businesses.

          “Closing” has the meaning ascribed to it
in Section 1.2.

          “Closing Date” has the meaning ascribed
to
it in the Preamble.

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

          “Collateral” means the
“Collateral” as
defined in the Security Agreement and the other Collateral Documents and any
other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of, or for the benefit of, Investment Manager or the
L/C Guarantors, to secure the Obligations or any portion thereof.

          “Collateral Documents” means the Security
Agreement, the Pledge Agreements, the Intellectual Property Security Agreement
and all similar agreements entered into guaranteeing payment of, or granting a
Lien upon property as security for payment of, the Obligations or any portion
thereof.

          “Contingent Obligation” means, as
applied to
any Person, means any direct or indirect liability of that Person: (i) with
respect to Guaranteed Indebtedness and with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the purpose or intent of the
Person incurring such liability, or the effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto; (ii) any agreement, contract or transaction
involving commodity options or future contracts, (iii) to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, or (iv) pursuant to any agreement to purchase, repurchase
or otherwise acquire any obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or
to maintain the solvency, financial condition or any balance sheet item or
level of income of another. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported or,
if not a fixed and determined amount, the maximum amount so guaranteed.

          “Contractual Obligations” means, as
applied
to any Person, any indenture, mortgage, deed of trust, contract, undertaking,
agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject. 

          “Copyright License” means any and all
rights
now owned or hereafter acquired by any Borrower under any written agreement
granting any right to use any Copyright or Copyright registration.

          “Copyrights” means all of the following
now
owned or hereafter adopted or acquired by any Borrower: (a) all copyrights and
General Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof; and (b) all reissues, extensions or renewals thereof.

          “Default” means any event that, with the
passage of time or notice or both, would, unless cured or waived, become an
Event of Default.

          “Disclosure Schedules” means the
Schedules
prepared by Borrowers and denominated as Schedules
4.3(a) through 6.12 in the index to the Agreement.

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

          “Drawing Fee” has the meaning ascribed
to it
in Section 2.2(c).

          “Environmental Laws” means all applicable
federal, state, local and foreign laws, statutes, ordinances, codes, rules,
standards and regulations, now or hereafter in effect, and any applicable
judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental
Laws include the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation
Authorization
Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

          “Environmental Permits” means all
permits,
licenses, authorizations, certificates, approvals or registrations required by
any Governmental Authority under any Environmental Laws.

          “Equipment” means all
“equipment,” as such
term is defined in the Code, now owned or hereafter acquired by any Borrower,
wherever located and, in any event, including all of the Borrowers’ machinery
and equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment, including embedded software and peripheral
equipment and all engineering, processing and manufacturing equipment, office
machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies,
stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property,
together with all additions and accessions thereto, replacements therefor, all
parts therefor, all substitutes for any of the foregoing, fuel therefor, and
all manuals, drawings, instructions, warranties and rights with respect
thereto, and all products and proceeds thereof and condemnation awards and
insurance proceeds with respect thereto.

          “ERISA” means the Employee Retirement
Income
Security Act of 1974, as amended from time to time, and any regulations
promulgated thereunder.

          “ERISA Affiliate” means, with respect to
any
Borrower, any trade or business (whether or not incorporated) that, together
with such Borrower, are treated as a single employer within the meaning of
Sections 414(b), (c) or (m) of the IRC.

          “ERISA Event” means, with respect to any
Borrower or any ERISA Affiliate, (a) any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan; (b) the withdrawal 

of any
Borrower or ERISA Affiliate from a Title IV Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Borrower or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of
a notice of intent to terminate a Title IV Plan or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f)
the failure by any Borrower or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within 30 days; (g) any other event or condition that might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or
Multiemployer Plan or for the imposition of liability under Section 4069 or 4212(c)
of ERISA; (h) the termination of a Multiemployer Plan under Section 4041A of
ERISA or the reorganization or insolvency of a Multiemployer Plan under Section
4241 or 4245 of ERISA; or (i) the final determination that a Qualified Plan’s
qualification or tax exempt status should be revoked; or (j) the termination of
a Plan described in Section 4064 of ERISA.

          “Event of Default” has the meaning
ascribed
to it in Section 8.1.

          “Facility Fee” has the meaning ascribed
to
it in Section 2.2(a).

          “Fees” means any and all fees payable to
Investment Manager or the L/C Guarantors pursuant to the Agreement or any of
the other Loan Documents, including without limitation, the Facility Fees,
Success Fee and Drawing Fee.

          “Financial Statements” means the
consolidated and consolidating income statements, statements of cash flows and
balance sheets of the Borrowers and their Subsidiaries.

          “Fixtures” means all
“fixtures” as such term
is defined in the Code, now owned or hereafter acquired by any Borrower.

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

          “General Intangibles” means “general
intangibles,” as such term is defined in the Code, now owned or hereafter
acquired by any Borrower, including all right, title and interest that any
Borrower may now or hereafter have in or under any Contractual Obligation, all
payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents,
and all applications therefor and reissues, extensions or renewals thereof,
rights in Intellectual Property, interests in partnerships, joint ventures and
other business associations, licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know how,
software, data bases, data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill (including the goodwill associated
with any Trademark or Trademark License), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss and casualty,
whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, chooses in
action, deposit, checking and other bank accounts, rights to receive tax
refunds and other payments, rights to receive dividends, distributions, cash, 

instruments
and other property in respect of or in exchange for pledged Stock and
Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of any Borrower or any computer bureau or service company from time
to time acting for any Borrower.

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

          “Guaranteed Indebtedness” means, as to
any
Person, any obligation of such Person guaranteeing, providing comfort or
otherwise supporting any Indebtedness, lease, dividend, or other obligation (“primary obligation”) of any other
Person
(the “primary obligor”) in any
manner, including any obligation or arrangement of such Person to (a) purchase
or repurchase any such primary obligation, (b) advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, (d) protect
the beneficiary of such arrangement from loss (other than product warranties
given in the ordinary course of business) or (e) indemnify the owner of such
primary obligation against loss in respect thereof. The amount of any
Guaranteed Indebtedness at any time shall be deemed to be an amount equal to
the lesser at such time of (x) the stated or determinable amount of the primary
obligation in respect of which such Guaranteed Indebtedness is incurred and (y)
the maximum amount for which such Person may be liable pursuant to the terms of
the instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.

          “Hazardous Material” means any substance,
material or waste that is regulated by, or forms the basis of liability now or
hereafter under, any Environmental Laws, including any material or substance
that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous
material,” “hazardous substance,” “extremely hazardous waste,” “restricted
hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special
waste,” “toxic substance” or other similar term or phrase under any
Environmental Laws, or (b) petroleum or any fraction or by product thereof,
asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance.

          “Indebtedness” means, with respect to any
Person, without duplication (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property payment for which is
deferred six (6) months or more, but excluding obligations to trade creditors
incurred in the ordinary course of business that are unsecured and not overdue
by more than six (6) months unless being contested in good faith, (b) all
reimbursement and other obligations with respect to letters of credit, bankers’
acceptances and surety bonds, whether or not matured, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of 

such
property), (e) all Capital Lease Obligations, (f) all obligations of such
Person under commodity purchase or option agreements or other commodity price
hedging arrangements, in each case whether contingent or matured, (g) all
obligations of such Person under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising
from fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
(i) “earnouts” and similar payment obligations, except for such obligations
which are payable solely in Stock, (j) Contingent Obligations, and (k) the
Obligations.

          “Indemnitees” has the meaning ascribed
to it
in Section 10.1.

          “Intellectual Property” means any and all
Licenses, Patents, Copyrights, Trademarks, and the goodwill associated with
such Trademarks.

          “Intellectual Property Security
Agreement”
means the Intellectual Property Security Agreement made in favor of Investment
Manager, for the benefit of itself and the L/C Guarantors, by the Borrowers.

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

          “Investment Manager” means Columbia
Partners, L.L.C. Investment Management in its capacity as Investment Manager
for the L/C Guarantors or its successor appointed pursuant to Section 9.3.

          “Investment Property” means all
“investment
property,” as such term is defined in the Code, now owned or hereafter acquired
by any Borrower, wherever located, including: (i) all securities, whether
certificated or uncertificated, including stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of
deposit, and mutual fund shares; (ii) all securities entitlements of any
Borrower, including the rights of any Borrower to any securities account and
the financial assets held by a securities intermediary in such securities
account and any free credit balance or other money owing by any securities
intermediary with respect to that account; (iii) all securities accounts of any
Borrower; (iv) all commodity contracts of any Borrower; and (v) all commodity accounts
held by any Borrower.

          “IRC” means the Internal Revenue Code of
1986, as amended, and all regulations promulgated thereunder.

          “IRR” means, with respect to the
calculation
of a Drawing Fee then due or owing pursuant to the terms of this Agreement, a
referenced interest rate that, when used as a discount rate, causes (a) the net
present value (as of the date of a Drawing) of the aggregate payments made by
the Borrowers of principal, any accrued interest and the applicable Drawing Fee
from the date of such Drawing through the payment date to which the applicable
Drawing Fee relates (excluding, for avoidance of doubt, all others payments,
including the Facility Fee, Success Fee and other fees and expenses), to equal
(b) the net present value (as of the date of such Drawing) of principal of the
Letter(s) of Credit provided by the L/C Guarantor from the date of such Drawing
through the payment date to which the applicable Drawing Fee relates.

          “IRS” means the Internal Revenue
Service.

          “L/C Guarantor(s)” has the meaning set
forth
in the Preamble.

          “Letters of Credit” has the meaning
ascribed
to it in the Recitals.

          “License” means any Copyright License,
Patent License, Trademark License or other license of rights or interests now
held or hereafter acquired by any Borrower.

          “Lien” means any mortgage or deed of
trust,
pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).

          “Liquidity Event” means the issuance
after
the Closing Date by any Borrower of indebtedness for borrowed money or the sale
by any Borrower of equity securities in a public offering or in a private sale
to a Person that is not a Borrower for cash in which such Borrower receives
aggregate net proceeds in excess of Twenty-Five Million Dollars ($25,000,000);
provided none of the following events shall constitute a Liquidity Event: (i)
the issuance of equity securities in connection with MTM’s Series A Preferred
Stock (including upon conversion of such stock, the payment of “in kind”
dividends, the issuance of shares upon the exercise of warrants or the
operation of anti-dilution provisions), (ii) the issuance, vesting or exercise
of board, employee, management and consultant equity incentives, (iii) the
incurrence by Borrowers of Senior Indebtedness, the Obligations, or short term
inventory, receivables or vendor financing, (iv) the issuance of acquisition
consideration and related earn-outs, notes and similar payments, or (v) the
issuance of securities upon the exercise of any warrant issued by MTM on or
prior to the Closing Date.

          “Litigation” has the meaning ascribed to
it
in Section 7.1(d).

          “Loan Documents” means the Agreement, the
Collateral Documents and all other agreements, instruments, documents and
certificates executed and delivered to, or in favor of, Investment Manager or
the L/C Guarantors and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
now or hereafter executed by or on behalf of any Borrower and delivered to
Investment Manager or the L/C 

Guarantors in
connection with the Agreement or the transactions contemplated hereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
the Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.

          “Material Adverse Effect” means a
material
adverse effect on (a) the business, assets, operations, prospects or financial
or other condition of Borrowers taken as a whole, (b) the Borrowers’ ability to
pay any of the Reimbursement Payments or pay, or perform any of the other
Obligations in accordance with the terms of the Agreement and the other Loan
Documents, (c) the Collateral or Investment Manager’s Liens, on behalf of
itself and the L/C Guarantors, on the Collateral or the priority of such Liens,
or (d) Investment Manager’s or the L/C Guarantors’ rights and remedies under
the Agreement and the other Loan Documents. 

          “Material Agreement” means any written
contract, agreement, instrument, commitment or other written arrangement to
which any Borrower is a party, the absence of which would reasonably be
expected to have a Material Adverse Effect (other than the Loan Documents).

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

          “Obligations” means all loans, advances,
debts, liabilities and obligations, for the performance of covenants, tasks or
duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or such amounts are liquidated or determinable),
owing by any Borrower to Investment Manager or the L/C Guarantors, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument, in
each case, arising under the Agreement or any of the other Loan Documents. This
term includes all principal, interest (including all interest that accrues
after the commencement of any case or proceeding by or against any Borrower in
bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges,
expenses, attorneys’ fees and any other sum chargeable to any Borrower under
the Agreement or any of the other Loan Documents.

          “Patent License” means rights under any
written agreement now owned or hereafter acquired by any Borrower granting any
right with respect to any invention on which a Patent is in existence.

          “Patents” means all of the following in
which any Borrower now holds or hereafter acquires any interest: (a) all
letters patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or of any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State or any other country, and (b)
all reissues, continuations, continuations in part or extensions thereof.

          “PBGC” means the Pension Benefit Guaranty
Corporation.

          “Pension Plan” means a Plan described in
Section 3(2) of ERISA.

          “Perfection Certificate” shall have the
meaning
ascribed to it in the Security Agreement.

          “Permitted Distributions” shall mean
(a) dividends declared and paid in cash by any subsidiary of
MTM to MTM, and by any subsidiary of a Borrower (other than MTM) to such
Borrower; (b) purchases, acquisitions, redemptions, retirements and
dividends payable solely in stock or other equity interests of any Borrower and
(c) cash dividends payable with respect to MTM’s Series A Preferred Stock.

          “Permitted Encumbrances” means the
following
encumbrances: (a) all Liens existing on the Closing Date on Equipment and Real
Estate; (b) Purchase Money Liens; (c) statutory Liens of landlords and Liens of
carriers, warehousemen, bailees, mechanics, materialmen and other like Liens
imposed by law, created in the ordinary course of business and securing amounts
not yet due (or which are being contested in good faith, by appropriate
proceedings or other appropriate actions which are sufficient to prevent imminent
foreclosure of such Liens), and with respect to which adequate reserves or
other appropriate provisions are being maintained by the applicable Borrower in
accordance with GAAP; (d) deposits made (and the Liens thereon) in the ordinary
course of business of the applicable Borrower (including, without limitation,
security deposits for leases, indemnity bonds, surety bonds and appeal bonds)
in connection with workers’ compensation, unemployment insurance and other
types of social security benefits or to secure the performance of tenders,
bids, contracts (other than for the repayment or guarantee of borrowed money or
purchase money obligations), statutory obligations and other similar
obligations arising as a result of progress payments under government contracts;
(e) Liens granted to Investment Manager, for the benefit of Investment Manager
and the L/C Guarantors, by each Borrower; (f) Liens of judgment creditors,
provided that such Liens do not exceed $100,000 in the aggregate at any time
(other than Liens bonded or insured to the reasonable satisfaction of
Investment Manager); (g) Permitted Tax Liens; (h) easements (including, without
limitation, reciprocal easement agreements and utility agreements),
encroachments, minor defects or irregularities in title, variation and other
restrictions, charges or encumbrances (whether or not recorded) affecting the
Real Estate, if applicable, and which in the aggregate (i) do not materially
interfere with the occupation, use or enjoyment by any Borrower of its business
or property so encumbered and (ii) in the reasonable business judgment of
Investment Manager, do not materially and adversely affect the value of such
Real Estate; (i) Liens granted by one or more of the Borrowers on personal
and/or real property to secure the payment and performance of Senior
Indebtedness; (j) Liens granted by one or more of the Borrowers on personal
and/or real property to secure the payment and performance of Subordinated
Debt; and (k) bid and performance bonds and Liens in respect thereof in the
ordinary course of business and in an aggregate amount not to exceed $5,000,000
outstanding at any time, on reasonable and customary terms.

          “Permitted
Indebtedness” means (a) current Indebtedness maturing in less
than one year and incurred in the ordinary course of business for raw
materials, supplies, equipment, services, Taxes or labor; (b) Indebtedness
secured by Purchase Money Liens; (c) Indebtedness arising under this
Agreement; (d) deferred Taxes and other expenses incurred in the ordinary
course of business; (e) Subordinated Debt; (f) Senior Indebtedness;
(g) other Indebtedness existing on the Closing Date and listed on Schedule 6.2
attached hereto; (h) guarantees of Capital Leases; and (i) unsecured
guarantees by any Borrower of any Indebtedness or other obligation of any other

Borrower
permitted hereunder or of obligations under any real property lease for
premises occupied by any Borrower; (j) bid and performance bonds in the
ordinary course of business and in an aggregate amount not to exceed $5,000,000
outstanding at any time, on reasonable and customary terms; and (k) all
reimbursement and other obligations with respect to letters of credit, bankers’
acceptances and surety bonds, whether or not matured.

          “Permitted Tax Liens” means liens for
Taxes
not due and payable and liens for Taxes that the applicable Borrower is
contesting in good faith, by appropriate proceedings which are sufficient to
prevent imminent foreclosure of such liens, and with respect to which adequate
reserves are being maintained by such Borrower in accordance with GAAP; provided
that in either case, such liens (a) are not filed of record in any public
office, (b) other than with respect to Real Estate, are not senior in
priority to the liens granted by such Borrower to Investment Manager, for the
benefit of Investment Manager and the L/C Guarantors, or (c) do not secure
taxes owed to the United States of America (or any department or agency
thereof) or any State or State authority, if applicable State law provides for
the priority of tax liens in a manner similar to the laws of the United States
of America.

          “Person” means any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, public
benefit corporation, other entity or government (whether federal, state,
county, city, municipal, local, foreign, or otherwise, including any
instrumentality, division, agency, body or department thereof).

          “Plan” means, at any time, an
“employee
benefit plan,” as defined in Section 3(3) of ERISA (other than a Title IV
Plan), that any Borrower or any ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by such Borrower.

          “Pledge Agreements” means any pledge
agreement in favor of Investment Manager or the L/C Guarantors, including
without limitation, the Stock Pledge Agreement.

          “Purchase
Money Liens” shall mean (i) liens on any item of Equipment
acquired by the applicable Borrower after the date of this Agreement, provided
that (a) each such lien shall attach only to the Equipment acquired,
(b) a description of the Equipment so acquired is furnished by such
Borrower to Investment Manager, (ii) liens
on any item of Equipment acquired by the applicable Borrower after the date of
this Agreement arising in connection with a Capital Lease of such Equipment, provided,
that each such lien shall attach only to the Equipment leased and (iii) any
other liens incurred to secure the unpaid purchase price of assets and which
the applicable Borrower is permitted to incur pursuant to the terms of its
Senior Indebtedness.

          “Qualified Plan” means a Pension Plan
that
is intended to be tax-qualified under Section 401(a) of the IRC.

          “Real Estate” has the meaning ascribed
to it
in Section 4.9.

          “Release” means any release, threatened
release, spill, emission, leaking, pumping, pouring, emitting, emptying,
escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Material in the indoor or outdoor environment,
including the 

movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.

          “Required
Insurance” has the meaning ascribed to it in Section 5.3.

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

          “Security Agreement” means the Security
Agreement of even date herewith entered into by and among Investment Manager,
on behalf of itself and the L/C Guarantors, and the Borrowers.

          “Senior
Indebtedness” means, collectively, Indebtedness to CDF and the other
lenders named in the CDF Agreement and any renewals, refinancings or
replacements of such Indebtedness so long as the aggregate principal amount of
such Indebtedness does not at any time exceed $37,000,000.

          “Senior
Lenders” means each lender with respect to any Senior Indebtedness.

          “Stock” means all shares, options,
warrants,
general or limited partnership interests, membership interests or other
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other “equity security” (as such
term is defined in Rule 3a11 1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934).

          “Stockholder” means, with respect to any
Person, each holder of Stock of such Person.

          “Stock Pledge
Agreement” means that certain Stock Pledge Agreement dated of even
date herewith, executed by MTM in favor of Investment Manager.

          “Subordinated Debt” means any
Indebtedness
of any Borrower subordinated to the Obligations in a manner and form reasonably
satisfactory to Investment Manager and the L/C Guarantors in their sole
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.

          “Subordination
Agreement” means that certain Subordination Agreement dated as of
the date hereof, executed by Investment Manager in favor of CDF, as
administrative agent for certain lenders, as the same may be amended, modified,
supplemented or restated from time to time, or any other subordination or
intercreditor agreement entered into between Investment Manager and any holder
of Senior Indebtedness in replacement thereof.

          “Subsidiary” means, with respect to any
Person, (a) any corporation of which an aggregate of more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by such Person or one or
more Subsidiaries of such Person, or with respect to which any such Person has
the right to vote or designate the vote of more than 50% of such Stock whether
by proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited 

liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person
is a general partner or may exercise the powers of a general partner. Unless
the context otherwise requires, each reference to a Subsidiary shall be a
reference to a Subsidiary of a Borrower.

          “Taxes”
shall mean all federal, state, municipal and other governmental taxes, levies,
charges, claims and assessments which are or may be owed or collected by each
Borrower with respect to its business, operations, Collateral or otherwise.

          “Termination Date” means the date on
which
both (a) the Reimbursement Payment and all Fees under this Agreement have been
indefeasibly repaid in full, and (b) all other Obligations under this Agreement
and the other Loan Documents have been completely discharged.

          “Title IV Plan” means a Pension Plan
including a Multiemployer Plan, that is covered by Title IV of ERISA.

          “Trademark License” means rights under
any
written agreement now owned or hereafter acquired by any Borrower granting any
right to use any Trademark.

          “Trademarks” means all of the following
now
owned or hereafter adopted or acquired by any Borrower: (a) all trademarks,
trade names, corporate names, business names, trade styles, service marks,
logos, internet domain names, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.

          “Welfare Plan” means a Plan described in
Section 3(1) of ERISA.

          Rules
of construction with respect to accounting terms used in the Agreement or the
other Loan Documents shall be as set forth or referred to in this Annex A. All other undefined terms
contained in any of the Loan Documents which are defined in Article 9 of the
Code shall, unless the context indicates otherwise, have the meanings provided
in Article 9 of the Code. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.

          Wherever
from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without 

limitation”;
the word “or” is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Borrower or Borrowers, such words
are intended to signify that any Borrower has actual knowledge or awareness of
a particular fact or circumstance or that any Borrower, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.

INDEX OF APPENDICES

	
 

	
 

	
 

	
Annexes

	
 

	
 

	
 

	
 

	
 

	
Annex A

	
-

	
Definitions

	
 

	
 

	
 

	
Exhibits

	
 

	
 

	
 

	
 

	
 

	
Exhibit
 3.1(d)

	
-

	
Opinion

	
 

	
 

	
 

	
Schedules

	
 

	
 

	
 

	
 

	
 

	
Schedule of
 L/Cs

	
 

	
 

	
Schedule
 4.3(a)

	
-

	
Jurisdictions
 of Organization and Qualifications

	
Schedule
 4.3(b)

	
-

	
Capitalization

	
Schedule 4.6

	
-

	
Investigations
 and Audits

	
Schedule 4.7

	
-

	
Litigation

	
Schedule
 4.13

	
-

	
Material
 Agreements Defaults/Breaches

	
Schedule 6.2

	
-

	
Indebtedness

	
Schedule
 6.12

	
-

	
Business
 Description

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