Document:

Exhibit 10.1

 

 

CREDIT AGREEMENT

 

by and among

 

SITEL CORPORATION

 

and

 

EACH OF ITS SUBSIDIARIES THAT
ARE SIGNATORIES HERETO

as Borrowers,

 

THE LENDERS THAT ARE
SIGNATORIES HERETO

as the Lenders,

 

WELLS FARGO FOOTHILL, INC.

as the Arranger,
Administrative Agent, European Administrative Agent, Collateral

Agent and Fronting Lender

 

and

 

WELLS FARGO FINANCIAL CORPORATION CANADA,

as Canadian Administrative Agent

 

 

Dated as of August 19,
2005

 

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS AND
  CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Definitions

  	
   

  
	
   

  	
  1.2.

  	
  Accounting Terms

  	
   

  
	
   

  	
  1.3.

  	
  Code

  	
   

  
	
   

  	
  1.4.

  	
  Construction

  	
   

  
	
   

  	
  1.5.

  	
  Schedules and Exhibits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  LOAN AND TERMS OF PAYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Revolver Advances

  	
   

  
	
   

  	
  2.2.

  	
  Term Loan A

  	
   

  
	
   

  	
  2.3.

  	
  Borrowing
  Procedures and Settlements

  	
   

  
	
   

  	
  2.4.

  	
  Payments

  	
   

  
	
   

  	
  2.5.

  	
  Overadvances

  	
   

  
	
   

  	
  2.6.

  	
  Interest
  Rates and Letter of Credit Fee: Rates, Payments, and Calculations

  	
   

  
	
   

  	
  2.7.

  	
  Cash
  Management

  	
   

  
	
   

  	
  2.8.

  	
  Crediting
  Payments; Clearance Charge

  	
   

  
	
   

  	
  2.9.

  	
  Designated
  Account

  	
   

  
	
   

  	
  2.10.

  	
  Maintenance
  of Loan Accounts; Statements of Obligations

  	
   

  
	
   

  	
  2.11.

  	
  Fees

  	
   

  
	
   

  	
  2.12.

  	
  Letters
  of Credit

  	
   

  
	
   

  	
  2.13.

  	
  LIBOR
  Option

  	
   

  
	
   

  	
  2.14.

  	
  Capital
  Requirements

  	
   

  
	
   

  	
  2.15.

  	
  Joint and
  Several Liability of Borrowers

  	
   

  
	
   

  	
  2.16.

  	
  Interest
  Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CONDITIONS; TERM OF
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Conditions
  Precedent to the Initial Extension of Credit

  	
   

  
	
   

  	
  3.2.

  	
  Conditions
  Precedent to all Extensions of Credit

  	
   

  
	
   

  	
  3.3.

  	
  Term

  	
   

  
	
   

  	
  3.4.

  	
  Effect
  of Termination

  	
   

  
	
   

  	
  3.5.

  	
  Early Termination by
  Borrowers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  No
  Encumbrances

  	
   

  
	
   

  	
  4.2.

  	
  Eligible
  Accounts

  	
   

  
	
   

  	
  4.3.

  	
  [Intentionally
  Omitted]

  	
   

  
	
   

  	
  4.4.

  	
  Equipment

  	
   

  
	
   

  	
  4.5.

  	
  Location of Inventory
  and Equipment

  	
   

  
	
   

  	
  4.6.

  	
  Inventory
  Records

  	
   

  
	
   

  	
  4.7.

  	
  State
  of Incorporation; Location of Chief Executive Office; Organizational
  Identification Number; Commercial Tort Claims

  	
   

  

 

ii

 

	
   

  	
  4.8.

  	
  Due
  Organization and Qualification; Subsidiaries

  	
   

  
	
   

  	
  4.9.

  	
  Due Authorization; No
  Conflict

  	
   

  
	
   

  	
  4.10.

  	
  Litigation

  	
   

  
	
   

  	
  4.11.

  	
  No Material Adverse Change

  	
   

  
	
   

  	
  4.12.

  	
  Fraudulent
  Transfer

  	
   

  
	
   

  	
  4.13.

  	
  Employee
  Benefits

  	
   

  
	
   

  	
  4.14.

  	
  Environmental
  Condition

  	
   

  
	
   

  	
  4.15.

  	
  Intellectual
  Property

  	
   

  
	
   

  	
  4.16.

  	
  Leases

  	
   

  
	
   

  	
  4.17.

  	
  Deposit
  Accounts and Securities Accounts

  	
   

  
	
   

  	
  4.18.

  	
  Complete
  Disclosure

  	
   

  
	
   

  	
  4.19.

  	
  Indebtedness

  	
   

  
	
   

  	
  4.20.

  	
  Withholdings and
  Remittances

  	
   

  
	
   

  	
  4.21.

  	
  Payments to Employees
  and Others

  	
   

  
	
   

  	
  4.22.

  	
  Term
  B Debt Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Accounting
  System

  	
   

  
	
   

  	
  5.2.

  	
  Collateral
  Reporting

  	
   

  
	
   

  	
  5.3.

  	
  Financial
  Statements, Reports, Certificates

  	
   

  
	
   

  	
  5.4.

  	
  Inspection

  	
   

  
	
   

  	
  5.5.

  	
  Maintenance
  of Properties

  	
   

  
	
   

  	
  5.6.

  	
  Taxes

  	
   

  
	
   

  	
  5.7.

  	
  Insurance

  	
   

  
	
   

  	
  5.8.

  	
  Location of
  Inventory and Equipment

  	
   

  
	
   

  	
  5.9.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
  5.10.

  	
  Leases

  	
   

  
	
   

  	
  5.11.

  	
  Existence

  	
   

  
	
   

  	
  5.12.

  	
  Environmental

  	
   

  
	
   

  	
  5.13.

  	
  Disclosure
  Updates

  	
   

  
	
   

  	
  5.14.

  	
  Control
  Agreements

  	
   

  
	
   

  	
  5.15.

  	
  Formation
  of Subsidiaries; Further Assurances

  	
   

  
	
   

  	
  5.16.

  	
  Term
  B Debt Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Indebtedness

  	
   

  
	
   

  	
  6.2.

  	
  Liens

  	
   

  
	
   

  	
  6.3.

  	
  Restrictions on
  Fundamental Changes

  	
   

  
	
   

  	
  6.4.

  	
  Disposal
  of Assets

  	
   

  
	
   

  	
  6.5.

  	
  Change Name

  	
   

  
	
   

  	
  6.6.

  	
  Nature
  of Business

  	
   

  
	
   

  	
  6.7.

  	
  Prepayments and Amendments

  	
   

  
	
   

  	
  6.8.

  	
  Change
  of Control

  	
   

  
	
   

  	
  6.9.

  	
  [Intentionally
  Omitted]

  	
   

  
	
   

  	
  6.10.

  	
  Distributions

  	
   

  

 

iii

 

	
   

  	
  6.11.

  	
  Accounting
  Methods

  	
   

  
	
   

  	
  6.12.

  	
  Investments

  	
   

  
	
   

  	
  6.13.

  	
  Transactions with
  Affiliates

  	
   

  
	
   

  	
  6.14.

  	
  Use of
  Proceeds

  	
   

  
	
   

  	
  6.15.

  	
  SITEL
  Mexico Holdings LLC and SITMEX-USA, LLC

  	
   

  
	
   

  	
  6.16.

  	
  Non-Loan
  Party Subsidiaries; Immaterial Subsidiaries

  	
   

  
	
   

  	
  6.17.

  	
  Financial
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  THE LENDER
  GROUP’S RIGHTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Rights
  and Remedies

  	
   

  
	
   

  	
  8.2.

  	
  Remedies
  Cumulative

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TAXES AND EXPENSES.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  WAIVERS; INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Demand;
  Protest; etc.

  	
   

  
	
   

  	
  10.2.

  	
  The
  Lender Group’s Liability for Borrower Collateral

  	
   

  
	
   

  	
  10.3.

  	
  Indemnification

  	
   

  
	
   

  	
  10.4.

  	
  Currency
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  CHOICE OF
  LAW AND VENUE; JURY TRIAL WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS; SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1.

  	
  Assignments and
  Participations

  	
   

  
	
   

  	
  13.2.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  AMENDMENTS; WAIVERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1.

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
  14.2.

  	
  Replacement of Holdout
  Lender

  	
   

  
	
   

  	
  14.3.

  	
  No Waivers; Cumulative
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  AGENT; THE LENDER GROUP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1.

  	
  Appointment and Authorization
  of Administrative Agent

  	
   

  
	
   

  	
  15.2.

  	
  Delegation
  of Duties

  	
   

  
	
   

  	
  15.3.

  	
  Liability
  of Agents

  	
   

  
	
   

  	
  15.4.

  	
  Reliance
  by Agents

  	
   

  
	
   

  	
  15.5.

  	
  Notice of Default
  or Event of Default

  	
   

  
	
   

  	
  15.6.

  	
  Credit
  Decision

  	
   

  
	
   

  	
  15.7.

  	
  Costs and Expenses;
  Indemnification

  	
   

  
	
   

  	
  15.8.

  	
  Agents in Individual
  Capacity

  	
   

  
	
   

  	
  15.9.

  	
  Successor
  Agent

  	
   

  
	
   

  	
  15.10.

  	
  Lender in Individual
  Capacity

  	
   

  
	
   

  	
  15.11.

  	
  Withholding
  Taxes

  	
   

  
	
   

  	
  15.12.

  	
  Collateral
  Matters

  	
   

  

 

iv

 

	
   

  	
  15.13.

  	
  Restrictions
  on Actions by Lenders; Sharing of Payments

  	
   

  
	
   

  	
  15.14.

  	
  Agency
  for Perfection

  	
   

  
	
   

  	
  15.15.

  	
  Payments by Agent to
  the Lenders

  	
   

  
	
   

  	
  15.16.

  	
  Concerning
  the Collateral and Related Loan Documents

  	
   

  
	
   

  	
  15.17.

  	
  Field
  Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
  Other Reports and Information

  	
   

  
	
   

  	
  15.18.

  	
  Several Obligations;
  No Liability

  	
   

  
	
   

  	
  15.19.

  	
  Bank
  Product Providers

  	
   

  
	
   

  	
  15.20.

  	
  Quebec
  Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.1.

  	
  Intentionally
  Omitted

  	
   

  
	
   

  	
  16.2.

  	
  Effectiveness

  	
   

  
	
   

  	
  16.3.

  	
  Section Headings

  	
   

  
	
   

  	
  16.4.

  	
  Interpretation

  	
   

  
	
   

  	
  16.5.

  	
  Severability of Provisions

  	
   

  
	
   

  	
  16.6.

  	
  Counterparts;
  Electronic Execution

  	
   

  
	
   

  	
  16.7.

  	
  Revival and
  Reinstatement of Obligations

  	
   

  
	
   

  	
  16.8.

  	
  Confidentiality

  	
   

  
	
   

  	
  16.9.

  	
  Know
  Your Customer

  	
   

  
	
   

  	
  16.10.

  	
  Integration

  	
   

  
	
   

  	
  16.11.

  	
  Parent as
  Administrative Agent for Borrowers

  	
   

  

 

v

 

EXHIBITS AND SCHEDULES

 

	
  Exhibit A-1

  	
   

  	
  Form of
  Assignment and Acceptance

  	
   

  
	
  Exhibit B-1(A)

  	
   

  	
  Form of US
  Borrowing Base Certificate

  	
   

  
	
  Exhibit B-1(B)

  	
   

  	
  Form of
  Foreign Borrowing Base Certificate

  	
   

  
	
  Exhibit C-1

  	
   

  	
  Form of
  Compliance Certificate

  	
   

  
	
  Exhibit L-1

  	
   

  	
  Form of
  LIBOR Notice

  	
   

  
	
  Exhibit U-1

  	
   

  	
  Form of US
  Security Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule A-1

  	
   

  	
  Administrative
  Agent’s Account

  	
   

  
	
  Schedule A-2

  	
   

  	
  Canadian
  Administrative Agent’s Account

  	
   

  
	
  Schedule A-3

  	
   

  	
  European
  Administrative Agent’s Account

  	
   

  
	
  Schedule C-1

  	
   

  	
  Commitments

  	
   

  
	
  Schedule D-1

  	
   

  	
  Designated
  Account

  	
   

  
	
  Schedule I-1

  	
   

  	
  Immaterial
  Subsidiaries

  	
   

  
	
  Schedule N-1

  	
   

  	
  Non-Loan Party
  Subsidiaries

  	
   

  
	
  Schedule P-1

  	
   

  	
  Permitted Liens

  	
   

  
	
  Schedule R-1

  	
   

  	
  Real Property

  	
   

  
	
  Schedule S-1

  	
   

  	
  Significant
  Subsidiaries

  	
   

  
	
  Schedule 1.1

  	
   

  	
  Definitions

  	
   

  
	
  Schedule 2.7(a)

  	
   

  	
  Cash Management
  Banks

  	
   

  
	
  Schedule 3.1

  	
   

  	
  Conditions Precedent

  	
   

  
	
  Schedule 4.5

  	
   

  	
  Locations of
  Inventory and Equipment

  	
   

  
	
  Schedule 4.7(a)

  	
   

  	
  States of
  Organization

  	
   

  
	
  Schedule 4.7(b)

  	
   

  	
  Chief Executive
  Offices

  	
   

  
	
  Schedule 4.7(c)

  	
   

  	
  Organizational
  Identification Numbers

  	
   

  
	
  Schedule 4.7(d)

  	
   

  	
  Commercial Tort
  Claims

  	
   

  
	
  Schedule 4.8(b)

  	
   

  	
  Capitalization
  of Borrowers

  	
   

  
	
  Schedule 4.8(c)

  	
   

  	
  Capitalization
  of Borrowers’ Subsidiaries

  	
   

  
	
  Schedule 4.10

  	
   

  	
  Litigation

  	
   

  
	
  Schedule 4.13

  	
   

  	
  Employee
  Benefits

  	
   

  
	
  Schedule 4.14

  	
   

  	
  Environmental
  Matters

  	
   

  
	
  Schedule 4.15

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Schedule 4.17

  	
   

  	
  Deposit Accounts
  and Securities Accounts

  	
   

  
	
  Schedule 4.19

  	
   

  	
  Permitted
  Indebtedness

  	
   

  
	
  Schedule 5.2

  	
   

  	
  Collateral
  Reporting

  	
   

  
	
  Schedule 5.3

  	
   

  	
  Financial
  Statements, Reports, Certificates

  	
   

  
	
  Schedule 6.12

  	
   

  	
  Investments

  	
   

  
	
  Schedule 6.13

  	
   

  	
  Transactions
  with Affiliates

  	
   

  

 

 

CREDIT
AGREEMENT

 

THIS
CREDIT AGREEMENT (this “Agreement”), is entered into
as of August 19, 2005 by and among the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
permitted assigns and the Fronting Lender, are referred to hereinafter each
individually as a “Lender” and collectively as the “Lenders”),
and WELLS FARGO FOOTHILL, INC., a
California corporation, as the arranger, administrative agent for the Lenders
(in such capacity, together with its successors and assigns in such capacity, “Administrative
Agent”), European administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, “European
Administrative Agent”), collateral agent for the Lender Group and the Bank
Product Providers (in such capacity, together with its successors and assigns
in such capacity, “Collateral Agent”) and fronting lender for the
Lenders (in such capacity, together with its successors and assigns in such
capacity, “Fronting Lender”), WELLS
FARGO FINANCIAL CORPORATION CANADA, a Nova Scotia unlimited
liability company, as Canadian administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, “Canadian
Administrative Agent”) and SITEL
CORPORATION, a Minnesota corporation (“Parent”), and each of
Parent’s Subsidiaries identified on the signature pages hereof and that
from time to time become parties to this Agreement (such Subsidiaries, together
with Parent, are referred to hereinafter each individually as a “Borrower”,
and collectively, as the “Borrowers”).

 

The parties agree as
follows:

 

1.                                      DEFINITIONS
AND CONSTRUCTION.

 

1.1.                            Definitions.

 

Capitalized terms used in
this Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2.                            Accounting Terms.

 

All accounting terms not
specifically defined herein shall be construed in accordance with GAAP;
provided, that if at any time any change in GAAP or the application thereof
would affect the computation of any financial ratio or financial requirement
set forth in any Loan Document and the Administrative Borrower notifies the
Administrative Agent that the Administrative Borrower requests an amendment of
such provision to eliminate the effect of such change occurring after the date
hereof in GAAP or the application thereof (or if the Administrative Agent
notifies the Administrative Borrower that the Required Lenders request an
amendment of any provision for such purpose), regardless of whether such notice
is given before or after such change, the Administrative Agent, the Lenders and
Borrowers shall negotiate in good faith to amend such provision to preserve the
original intent thereof in light of such change (subject to the approval of the
Required Lenders); provided that,
until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP as in effect and as applied prior to such
change therein and (ii) Borrowers shall

 

 

provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement which include a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP or the application thereof.  When used herein, the term “financial
statements” shall include the notes and schedules thereto.  Whenever the term “Borrowers” or the
term “Parent” is used in respect of a financial covenant or a related
definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated
basis unless the context clearly requires otherwise.

 

1.3.                            Code.

 

Any terms used in this
Agreement that are defined in the Code shall be construed and defined as set
forth in the Code unless otherwise defined herein, provided, however,
that to the extent that the Code is used to define any term herein and such
term is defined differently in different Articles of the Code, the definition
of such term contained in Article 9 of the Code shall govern and when used
to describe a category or categories of Collateral owned by a Canadian
Borrower, such term shall have the definition provided in the PPSA.

 

1.4.                            Construction.

 

Unless the context of
this Agreement or any other Loan Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be. 
Section, subsection, clause, schedule, and exhibit references herein are
to this Agreement unless otherwise specified. 
Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements set forth
herein).  Any reference herein to the
satisfaction or payment or repayment in full of the Obligations shall mean the
payment or repayment in full in cash (or collateralization in accordance with
the terms hereof) of all Obligations other than contingent indemnification
Obligations and other than any Bank Product Obligations that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding and are
not required to be repaid or collateralized pursuant to the provisions of this
Agreement.  Any reference herein to any
Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein
or in the other Loan Documents shall be satisfied by the transmission of a
Record and any Record transmitted shall constitute a representation and
warranty as to the accuracy and completeness of the information contained
therein.

 

2

 

1.5.                            Schedules and Exhibits.

 

All of the schedules and
exhibits attached to this Agreement shall be deemed incorporated herein by
reference.

 

2.                                      LOAN
AND TERMS OF PAYMENT.

 

2.1.                            Revolver Advances.

 

(a)                                  Subject to the terms and conditions
of this Agreement, and during the term of this Agreement, (i) each Lender
with a US Revolver Commitment agrees (severally, not jointly or jointly and
severally) to make advances (“US Advances”) to US Borrowers in an
aggregate Dollar Equivalent principal amount at any one time outstanding not to
exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (x) the Maximum US
Revolver Amount less the US
Letter of Credit Usage, or (y) the US Borrowing Base less the US Letter of Credit Usage, (ii) each
Lender with a Canadian Revolver Commitment agrees (severally, not jointly or
jointly and severally) to make advances (“Canadian Advances”) to
Canadian Borrowers in an aggregate Dollar Equivalent principal amount at any
one time outstanding not to exceed such Lender’s Pro Rata Share of an amount
equal to the lesser of (x) the
Maximum Canadian Revolver Amount less the
Canadian Letter of Credit Usage, or (y) the Canadian Borrowing Base less the Canadian Letter of Credit Usage
and (iii) each Lender with a European Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances (“European
Advances”) to European Borrowers in an aggregate Dollar Equivalent
principal amount at any one time outstanding not to exceed such Lender’s Pro
Rata Share of an amount equal to the lesser
of (x) the Maximum European Revolver Amount less the European Letter of Credit Usage,
or (y) the European Borrowing Base less
the European Letter of Credit Usage. 
Notwithstanding anything to the contrary contained herein, with respect
to any Offshore Currency Rate Loan, the Pro Rata Share of each Non-Offshore
Currency Lender shall be fronted by the Fronting Lender (with each Non-Offshore
Currency Lender hereby agreeing to participate in the risk associated with such
Offshore Currency Rate Loan in accordance with Section 2.17), with
each Non-Offshore Currency Lender having no obligation or commitment to fund in
an Approved Offshore Currency, except as provided in Section 2.17.

 

(b)                                 Anything to the contrary in this Section 2.1
notwithstanding, Administrative Agent shall have the right to establish
reserves (without duplication for reserves established pursuant to the
definitions of US Borrowing Base and Foreign Borrowing Base) in such amounts,
and with respect to such matters, as Administrative Agent in its Permitted
Discretion shall deem necessary or appropriate, against the US Borrowing Base
or the Foreign Borrowing Base, as the case may be, including reserves (i) with
respect to (A) sums that Borrowers are required to pay by any Section of
this Agreement or any other Loan Document (such as taxes, assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts
payable under such leases) and have failed to pay, and (B) amounts owing
by Borrowers or their Significant Subsidiaries to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than a
Permitted Lien), which Lien or trust, in the Permitted Discretion of
Administrative Agent likely would have a

 

3

 

priority
superior to the Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
Liens or trusts for ad valorem,
income, payroll, excise, sales, pension plan obligations, or other taxes where
given priority under Applicable Law) in and to such item of the Collateral and (ii) after
the occurrence and during the continuance of an Event of Default, with respect
to such other matters as Administrative Agent in its Permitted Discretion shall
deem necessary or appropriate.

 

(c)                                  Amounts borrowed pursuant to this Section 2.1
consisting of US Advances or European Advances shall be denominated in Dollars
or an Approved Offshore Currency, and amounts borrowed pursuant to this Section 2.1
consisting of Canadian Advances shall be denominated in Dollars or Canadian
Dollars.

 

(d)                                 Amounts borrowed pursuant to this Section 2.1
may be repaid and, subject to the terms and conditions of this Agreement,
reborrowed at any time during the term of this Agreement.

 

2.2.                            Term Loan A.

 

(a)                                  Subject to the terms and conditions
of Section 3.2 of this Agreement and the prior or contemporaneous
funding of the Term B Debt, within 35 days following the Closing Date each Lender
with a Term Loan A Commitment agrees (severally, not jointly or jointly and
severally) to make in one draw term loans (collectively, the “Term Loan A”)
to US Borrowers in an amount equal to such Lender’s Pro Rata Share of the Term
Loan A Amount.  The Term Loan A shall,
subject to adjustment as provided below, be repaid on the following dates and
in the following amounts:

 

	
  Date

  	
   

  	
  Installment Amount

  	
   

  
	
  The first day of each
  calendar month commencing on the first day of the calendar month immediately
  following the first full calendar month after the making of the Term Loan A

  	
   

  	
  $

  	
  300,000

  	
   

  
					

 

Except as provided in Section 2.4(c) hereof
and except in connection with the repayment of all of the Obligations and the
termination of this Agreement, the US Borrowers may, at any time and from time
to time, upon at least 5 Business Days’ prior written notice to Administrative
Agent, prepay the principal amount of the Term Loan A in whole or in part (each
an “Optional Prepayment”); provided
that any such partial prepayment shall be in an amount equal to $5,000,000 or a
higher integral multiple of $1,000,000. 
The outstanding unpaid principal balance and all accrued and unpaid
interest under the Term Loan A shall be due and payable on the date of
termination of this Agreement, whether by its terms, by prepayment, or by
acceleration.  All amounts outstanding
under the Term Loan A shall constitute Obligations.

 

4

 

(b)                                 Each Optional Prepayment of the Term
Loan A shall be applied to the remaining installments due on the Term Loan A in
inverse order of maturity.

 

(c)                                  Once any portion of the Term Loan A
has been paid or prepaid, it may not be reborrowed.

 

(d)                                 Amounts borrowed pursuant to this Section 2.2
shall be denominated in Dollars.

 

2.3.                            Borrowing Procedures and Settlements.

 

(a)                                  Procedure for
Borrowing.

 

(i)                                     Each
US Borrowing shall be made by an irrevocable written request by an Authorized
Person delivered to Administrative Agent specifying (i) the amount of such
US Borrowing, (ii) the currency in which such US Borrowing will be made
and (iii) the requested Funding Date, which shall be a Business Day.  Unless US Swing Lender is not obligated to
make a US Swing Loan pursuant to Section 2.3(b) below or
Administrative Borrower elects such US Borrowing to be an Offshore Currency
Rate Loan or other LIBOR Rate Loan pursuant to Section 2.13(b),
such notice must be received by Administrative Agent no later than 10:00 a.m.
(California time) on the Business Day that is the requested Funding Date; provided,
however, that if (x) US Swing Lender is not obligated to make a US
Swing Loan as to a requested US Borrowing and Administrative Borrower has not
elected such US Borrowing be an Offshore Currency Rate Loan or other LIBOR Rate
Loan, such notice must be received by Administrative Agent no later than 10:00 a.m.
(California time) on the Business Day prior to the date that is the requested
Funding Date, (y) Administrative Borrower requests that such US Borrowing
be a LIBOR Rate Loan denominated in Dollars, such notice must be received by
Administrative Agent no later than 11:00 a.m. (California time) at least 3
Business Days prior to the requested Funding Date, or (z) Administrative
Borrower requests that such US Borrowing be an Offshore Currency Rate Loan,
such notice must be received by Administrative Agent no later than 10:00 a.m.
(California time) 3 Business Days prior
to the date that is the requested Funding Date. 
At Administrative Agent’s election with respect to US Borrowings
denominated in Dollars, in lieu of delivering the above-described written
request, any Authorized Person may give Administrative Agent telephonic notice
of such request by the required time.  In
such circumstances, US Borrowers agree that any such telephonic notice will be
confirmed in writing within 24 hours of the giving of such telephonic notice,
but the failure to provide such written confirmation shall not affect the
validity of the request.

 

(ii)                                  Each
Canadian Borrowing shall be made by an irrevocable written request by an
Authorized Person delivered to Canadian Administrative Agent specifying (i) the
amount of such Canadian Borrowing, (ii) the currency in which such
Canadian Borrowing will be made and (iii) the requested Funding Date,
which shall be a Business Day.  Unless
Administrative Borrower elects such Canadian Borrowing to be a LIBOR Rate Loan
pursuant to Section 2.13(b), such notice must be received by
Canadian Administrative Agent no later than 10:00 a.m. (California time)
on the Business Day prior to

 

5

 

the date that is the requested Funding Date; provided,
however, that if Administrative Borrower requests that such Canadian
Borrowing be a LIBOR Rate Loan denominated in Dollars or Canadian Dollars, such
notice must be received by Canadian Administrative Agent no later than 11:00 a.m.
(California time) at least 3 Business Days prior to the requested Funding Date.

 

(iii)                               Each
European Borrowing shall be made by an irrevocable written request by an
Authorized Person delivered to European Administrative Agent specifying (i) the
amount of such European Borrowing, (ii) the currency in which such
European Borrowing will be made and (iii) the requested Funding Date,
which shall be a Business Day.  Unless
European Swing Lender is not obligated to make a European Swing Loan pursuant
to Section 2.3(b) below or Administrative Borrower elects such
European Borrowing to be an Offshore Currency Rate Loan or other LIBOR Rate
Loan pursuant to Section 2.13(b), such notice must be received by
European Administrative Agent no later than 10:00 a.m. (California time)
on the Business Day that is the requested Funding Date; provided, however,
that if (x) European Swing Lender is not obligated to make a European
Swing Loan as to a requested European Borrowing and Administrative Borrower has
not elected such European Borrowing be an Offshore Currency Rate Loan or other
LIBOR Rate Loan, such notice must be received by European Administrative Agent
no later than 10:00 a.m. (California time) on the Business Day prior to
the date that is the requested Funding Date, (y) Administrative Borrower
requests that such European Borrowing be a LIBOR Rate Loan denominated in
Dollars, such notice must be received by European Administrative Agent no later
than 11:00 a.m. (California time) at least 3 Business Days prior to the
requested Funding Date, or (z) Administrative Borrower requests that such
European Borrowing be an Offshore Currency Rate Loan, such notice must be
received by European Administrative Agent no later than 10:00 a.m.
(California time) 3 Business Days prior
to the date that is the requested Funding Date. 
At European Administrative Agent’s election with respect to European
Borrowings denominated in Dollars, in lieu of delivering the above-described
written request, any Authorized Person may give European Administrative Agent
telephonic notice of such request by the required time.  In such circumstances, European Borrowers
agree that any such telephonic notice will be confirmed in writing within 24
hours of the giving of such telephonic notice, but the failure to provide such
written confirmation shall not affect the validity of the request.

 

(iv)                              The
Borrowing of the Term Loan A shall be made by an irrevocable written request by
an Authorized Person delivered to Administrative Agent.  Unless Administrative Borrower elects such
Borrowing to be a LIBOR Rate Loan pursuant to Section 2.13(b), such
notice must be received by Administrative Agent no later than 10:00 a.m.
(California time) on the Business Day prior to the date that is the requested
Funding Date specifying the requested Funding Date, which shall be a Business
Day; provided, however, that if Administrative Borrower requests
that such Borrowing be a LIBOR Rate Loan, such notice must be received by
Administrative Agent no later than 11:00 a.m. (California time) at least 3
Business Days prior to the requested Funding Date.  At Administrative Agent’s election, in lieu
of delivering the above-described written request, any Authorized Person may
give Administrative Agent telephonic notice of such request by

 

6

 

the required time. 
In such circumstances, US Borrowers agree that any such telephonic
notice will be confirmed in writing within 24 hours of the giving of such
telephonic notice, but the failure to provide such written confirmation shall
not affect the validity of the request.

 

(b)                                 Making of Swing
Loans.

 

(i)                                     In
the case of a request for a US Advance and so long as (i) such US Advance
is to be denominated in Dollars and (ii) either (A) the aggregate
amount of US Swing Loans made since the last Settlement Date and not since
repaid plus the amount of the requested US Advance does not exceed $5,000,000,
or (B) US Swing Lender, in its sole discretion, shall agree to make a US
Swing Loan notwithstanding the foregoing limitation, US Swing Lender, as a
Lender, shall make a US Advance in the amount of such US Borrowing (any such US
Advance made solely by US Swing Lender as a Lender pursuant to this Section 2.3(b)(i) being
referred to as a “US Swing Loan” and such US Advances being referred to
collectively as “US Swing Loans”) available to US Borrowers on the
Funding Date applicable thereto by transferring immediately available funds to
the applicable US Designated Account. 
Each US Swing Loan shall be deemed to be a US Advance hereunder and
shall be subject to all the terms and conditions applicable to other US
Advances, except that all payments on any US Swing Loan shall be payable to US
Swing Lender as a Lender solely for its own account.  Subject to the provisions of Section 2.3(d)(iv),
US Swing Lender as a Lender shall not make and shall not be obligated to make
any US Swing Loan if US Swing Lender has actual knowledge that (i) one or
more of the applicable conditions precedent set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the requested
Funding Date for the applicable US Borrowing unless such condition has been
waived in accordance with the terms of this Agreement, or (ii) the
requested US Borrowing would exceed the US Availability on such Funding
Date.  US Swing Lender as a Lender shall
not otherwise be required to determine whether the applicable conditions
precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any US Swing Loan.  The US Swing Loans shall be secured by the
Agent’s Liens in the US Collateral, constitute US Advances and Obligations
hereunder, and bear interest at the rate applicable from time to time to US
Advances that are Base Rate Loans.

 

(ii)                                  In
the case of a request for a Canadian Advance denominated in Dollars or Canadian
Dollars and so long as either (i) the Dollar Equivalent of the aggregate
amount of Canadian Swing Loans made since the last Settlement Date and not
since repaid plus the Dollar Equivalent amount of the requested Canadian
Advance does not exceed $2,500,000, or (ii) Canadian Swing Lender, in its
sole discretion, shall agree to make a Canadian Swing Loan notwithstanding the
foregoing limitation, Canadian Swing Lender, as a Lender, shall make a Canadian
Advance in the amount of such Canadian Borrowing (any such Canadian Advance
made solely by Canadian Swing Lender as a Lender pursuant to this Section 2.3(b)(ii) being
referred to as a “Canadian Swing Loan” and such Canadian Advances being
referred to collectively as “Canadian Swing Loans”) available to
Canadian Borrowers on the Funding Date applicable thereto by transferring
immediately available funds to the applicable Canadian Designated Account.  Each Canadian Swing Loan shall be deemed to
be a Canadian Advance hereunder and shall be subject to all the terms and
conditions applicable to other Canadian Advances, except that all payments on
any Canadian

 

7

 

Swing Loan shall be payable to Canadian Swing Lender
as a Lender solely for its own account. 
Subject to the provisions of Section 2.3(d)(iv), Canadian
Swing Lender as a Lender shall not make and shall not be obligated to make any
Canadian Swing Loan if Canadian Swing Lender has actual knowledge that (i) one
or more of the applicable conditions precedent set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the requested
Funding Date for the applicable Canadian Borrowing unless such condition has
been waived in accordance with the terms of this Agreement, or (ii) the
Dollar Equivalent of the requested Canadian Borrowing would exceed the Dollar
Equivalent of the Canadian Availability on such Funding Date.  Canadian Swing Lender as a Lender shall not
otherwise be required to determine whether the applicable conditions precedent
set forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making any Canadian Swing Loan.  The Canadian Swing Loans shall be secured by
the Agent’s Liens in the Collateral, constitute Canadian Advances and
Obligations hereunder, and bear interest at the rate applicable from time to
time to Canadian Advances that are Base Rate Loans.

 

(iii)                               In
the case of a request for a European Advance and so long as (i) such
European Advance is to be denominated in Dollars and (ii) either (A) the
aggregate amount of European Swing Loans made since the last Settlement Date
and not since repaid plus the Dollar Equivalent amount of the requested
European Advance does not exceed $2,500,000, or (B) European Swing Lender,
in its sole discretion, shall agree to make a European Swing Loan
notwithstanding the foregoing limitation, European Swing Lender, as a Lender,
shall make a European Advance in the amount of such European Borrowing (any
such European Advance made solely by European Swing Lender as a Lender pursuant
to this Section 2.3(b)(iii) being referred to as a “European
Swing Loan” and such European Advances being referred to collectively as “European
Swing Loans”) available to European Borrowers on the Funding Date
applicable thereto by transferring immediately available funds to the
applicable European Designated Account. 
Each European Swing Loan shall be deemed to be a European Advance
hereunder and shall be subject to all the terms and conditions applicable to
other European Advances, except that all payments on any European Swing Loan
shall be payable to European Swing Lender as a Lender solely for its own
account.  Subject to the provisions of Section 2.3(d)(iv),
European Swing Lender as a Lender shall not make and shall not be obligated to
make any European Swing Loan if European Swing Lender has actual knowledge that
(i) one or more of the applicable conditions precedent set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the requested
Funding Date for the applicable European Borrowing unless such condition has
been waived in accordance with the terms of this Agreement, or (ii) the
Dollar Equivalent of the requested European Borrowing would exceed the Dollar
Equivalent of the European Availability on such Funding Date.  European Swing Lender as a Lender shall not
otherwise be required to determine whether the applicable conditions precedent
set forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making any European Swing Loan.  The European Swing Loans shall be secured by
the Agent’s Liens in the Collateral, constitute European Advances and
Obligations hereunder, and bear interest at the rate applicable from time to
time to European Advances that are Base Rate Loans.

 

8

 

(c)                                  Making of Loans.

 

(i)                                     In
the event that the US Swing Lender is not obligated to make a US Swing Loan,
then promptly after receipt of a request for a US Borrowing pursuant to Section 2.3(a),
(A) in the case of Borrowings other than Offshore Currency Rate Loans,
Administrative Agent shall notify the US Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately preceding the Funding Date
applicable thereto by telecopy, telephone, or other similar form of
transmission, of the requested US Borrowing (provided, that notice of a
requested LIBOR Rate Loan shall be provided as set forth in Section 2.13(b)),
and (B) in the case of Borrowings consisting of Offshore Currency Rate
Loans, Administrative Agent shall notify the US Lenders, not later than 1:00 p.m.
(California time) at least 3 Business Days prior to the Funding Date applicable
thereto by telecopy, telephone, or other similar form of transmission, of the
requested US Borrowing.  Each US Lender
shall make the amount of such US Lender’s Pro Rata Share of the requested US
Borrowing available to Administrative Agent in immediately available funds and
in the Applicable Currency, to the applicable Administrative Agent’s Account,
not later than 10:00 a.m. (California time) on the Funding Date applicable
thereto.  After Administrative Agent’s
receipt of the proceeds of such US Advances, Administrative Agent shall
promptly make the proceeds thereof available to Administrative Borrower, for
the benefit of the US Borrowers, on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Administrative
Agent to the applicable US Designated Account; provided, however,
that, subject to the provisions of Section 2.3(d)(iv),
Administrative Agent shall not request any US Lender to make, and no US Lender
shall have the obligation to make, any US Advance if Administrative Agent shall
have actual knowledge that (1) one or more of the applicable conditions
precedent set forth in Section 3.1 or 3.2 are required to,
but will not, be satisfied on the requested Funding Date for the applicable US
Borrowing unless such condition has been waived, or (2) the Dollar
Equivalent of the requested US Borrowing would exceed the US Availability on
such Funding Date.

 

(ii)                                  In
the event that the Canadian Swing Lender is not obligated to make a Canadian
Swing Loan, then promptly after receipt of a request for a Canadian Borrowing
pursuant to Section 2.3(a), Canadian Administrative Agent shall
notify the Canadian Lenders, not later than 1:00 p.m. (California time) on
the Business Day immediately preceding the Funding Date applicable thereto by
telecopy, telephone, or other similar form of transmission, of the requested
Canadian Borrowing (provided, that notice of a requested LIBOR Rate Loan shall
be provided as set forth in Section 2.13(b)).  Each Canadian Lender shall make the amount of
such Canadian Lender’s Pro Rata Share of the requested Canadian Borrowing
available to Canadian Administrative Agent in immediately available funds and
in the Applicable Currency, to the applicable Canadian Administrative Agent’s
Account, not later than 10:00 a.m. (California time) on the Funding Date
applicable thereto.  After Canadian
Administrative Agent’s receipt of the proceeds of such Canadian Advances,
Canadian Administrative Agent shall promptly make the proceeds thereof
available to Canadian Administrative Borrower, on the applicable Funding Date
by transferring immediately available funds equal to such proceeds received by
Canadian Administrative Agent to the applicable Canadian Designated Account; provided,
however,

 

9

 

that, subject to the provisions of Section 2.3(d)(iv),
Canadian Administrative Agent shall not request any Canadian Lender to make,
and no Canadian Lender shall have the obligation to make, any Canadian Advance
if Canadian Administrative Agent shall have actual knowledge that (1) one
or more of the applicable conditions precedent set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the requested
Funding Date for the applicable Canadian Borrowing unless such condition has
been waived, or (2) the Dollar Equivalent of the requested Canadian
Borrowing would exceed the Dollar Equivalent of the Canadian Availability on
such Funding Date.

 

(iii)                               In
the event that the European Swing Lender is not obligated to make a European
Swing Loan, then promptly after receipt of a request for a European Borrowing
pursuant to Section 2.3(a), (A) in the case of Borrowings
other than Offshore Currency Rate Loans, European Administrative Agent shall
notify the European Lenders, not later than 1:00 p.m. (California time) on
the Business Day immediately preceding the Funding Date applicable thereto by
telecopy, telephone, or other similar form of transmission, of the requested
European Borrowing (provided, that notice of a requested LIBOR Rate Loan shall
be provided as set forth in Section 2.13(b)), and (B) in the case of
Borrowings consisting of Offshore Currency Rate Loans, European Administrative
Agent shall notify the European Lenders, not later 1:00 p.m. (California
time) at least 3 Business Days prior to the Funding Date applicable thereto by
telecopy, telephone, or other similar form of transmission, of the requested
European Borrowing.  Each European Lender
shall make the amount of such European Lender’s Pro Rata Share of the requested
European Borrowing available to European Administrative Agent in immediately
available funds and in the Applicable Currency, to the applicable European
Administrative Agent’s Account, not later than 10:00 a.m. (California
time) on the Funding Date applicable thereto. 
After European Administrative Agent’s receipt of the proceeds of such
Advances, European Administrative Agent shall promptly make the proceeds
thereof available to European Administrative Borrower, on the applicable
Funding Date by transferring immediately available funds equal to such proceeds
received by European Administrative Agent to the applicable European Designated
Account; provided, however, that, subject to the provisions of Section 2.3(d)(iv),
European Administrative Agent shall not request any European Lender to make,
and no European Lender shall have the obligation to make, any European Advance
if European Administrative Agent shall have actual knowledge that (1) one
or more of the applicable conditions precedent set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the requested
Funding Date for the applicable European Borrowing unless such condition has
been waived, or (2) the Dollar Equivalent of the requested European
Borrowing would exceed the Dollar Equivalent of the European Availability on
such Funding Date.

 

(iv)                              Unless
Administrative Agent or European Administrative Agent, as applicable, receives
notice from a Lender prior to 9:00 a.m. (California time) on the date of a
Borrowing other than Approved Offshore Rate Loans and prior to 1:00 p.m.
(California time) 3 Business Days prior to the date of a Borrowing consisting
of Approved Offshore Rate Loans, that such Lender will not make available as
and when required hereunder to such Agent for the account of the US Borrowers
or the European Borrowers, as

 

10

 

the case may be, the amount of that Lender’s Pro Rata
Share of the Borrowing, such Agent may assume that each Lender has made or will
make such amount available to such Agent in immediately available funds and in
the Applicable Currency on the Funding Date and such Agent may (but shall not
be so required), in reliance upon such assumption, make available on such date,
with respect to any US Borrowing, to the US Borrowers or, with respect to any
European Borrowing, to the European Borrowers, a corresponding amount.  If and to the extent any Lender shall not
have made its full amount available to Administrative Agent or European
Administrative Agent, as applicable, in immediately available funds and such
Agent in such circumstances has made available to US Borrowers or European
Borrowers, as the case may be, such amount, that Lender shall on the Business
Day following such Funding Date make such amount available to such Agent,
together with interest at the Defaulting Lender Rate for each day during such
period.  A notice submitted by
Administrative Agent or European Administrative Agent, as applicable, to any
Lender with respect to amounts owing under this subsection shall be
conclusive, absent manifest error.  If
such amount is so made available, such payment to Administrative Agent or
European Administrative Agent, as applicable, shall constitute such Lender’s
Advance on the date of such Borrowing for all purposes of this Agreement.  If such amount is not made available to
Administrative Agent or European Administrative Agent, as applicable, on the
Business Day following the Funding Date, such Agent will notify Administrative
Borrower of such failure to fund and, upon demand by Administrative Agent, with
respect to any US Borrowing, US Borrowers shall pay such amount to
Administrative Agent for Administrative Agent’s account, and, with respect to
any European Borrowing, European Borrowers shall pay such amount to European
Administrative Agent for European Administrative Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Advances
comprising such Borrowing.  Unless
Canadian Administrative Agent receives notice from a Lender prior to 9:00 a.m.
(California time) on the date of a Borrowing, that such Lender will not make
available as and when required hereunder to Canadian Administrative Agent for
the account of the Canadian Borrowers the amount of that Lender’s Pro Rata
Share of the Borrowing, Canadian Administrative Agent may assume that each
Lender has made or will make such amount available to Canadian Administrative
Agent in immediately available funds and in the Applicable Currency on the
Funding Date and Canadian Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available on such date, with
respect to any Canadian Borrowing, to the Canadian Borrowers, a corresponding
amount.  If and to the extent any
Canadian Lender shall not have made its full amount available to Canadian
Administrative Agent in immediately available funds and Canadian Administrative
Agent in such circumstances has made available to Canadian Borrowers such
amount, that Lender shall on the Business Day following such Funding Date make
such amount available to Canadian Administrative Agent, together with interest
at the Defaulting Lender Rate for each day during such period.  A notice submitted by Canadian Administrative
Agent to any Canadian Lender with respect to amounts owing under this subsection shall
be conclusive, absent manifest error.  If
such amount is so made available, such payment to Canadian Administrative Agent
shall constitute such Canadian Lender’s Advance on the date of such Borrowing
for all purposes of this Agreement.  If
such amount is not made available to Canadian Administrative Agent on the
Business Day following the Funding Date, such

 

11

 

Agent will notify Administrative Borrower of such
failure to fund and, upon demand by Canadian Administrative Agent, with respect
to any Canadian Borrowing, Canadian Borrowers shall pay such amount to Canadian
Administrative Agent for Canadian Administrative Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the
Advances comprising such Borrowing.  The
failure of any Lender to make any Advance on any Funding Date shall not relieve
any other Lender of any obligation hereunder to make an Advance on such Funding
Date, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on any Funding Date.

 

(v)                                 No
Agent shall be obligated to transfer to a Defaulting Lender any payments made
by US Borrowers, Canadian Borrowers or European Borrowers, as the case may be,
to such Agent for the Defaulting Lender’s benefit, and, in the absence of such
transfer to the Defaulting Lender, such Agent shall transfer any such payments
to each other non-Defaulting Lender member of the Lender Group ratably in
accordance with their Commitments (but only to the extent that such Defaulting
Lender’s Advance was funded by the other members of the Lender Group) or, if so
directed by Administrative Borrower and if no Default or Event of Default had
occurred and is continuing (and to the extent such Defaulting Lender’s Advance
was not funded by the Lender Group), such Agent shall retain same to be
re-advanced to the applicable Borrowers as if such Defaulting Lender had made
Advances to such Borrowers.  Subject to
the foregoing, Administrative Agent, Canadian Administrative Agent or European
Administrative Agent, as applicable, may hold and, in its Permitted Discretion,
re-lend to the applicable Borrowers for the account of such Defaulting Lender
the amount of all such payments received and retained by such Agent for the account
of such Defaulting Lender.  Solely for
the purposes of voting or consenting to matters with respect to the Loan
Documents, such Defaulting Lender shall be deemed not to be a “Lender”
and such Lender’s Commitment shall be deemed to be zero.  This Section shall remain effective with
respect to such Lender until (x) the Obligations under this Agreement
shall have been declared or shall have become immediately due and payable,
(y) the non-Defaulting Lenders, Administrative Agent, Canadian Administrative
Agent or European Administrative Agent, as applicable, and Administrative
Borrower shall have waived such Defaulting Lender’s default in writing, or
(z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Administrative Agent, Canadian Administrative Agent or
European Administrative Agent, as applicable, all amounts owing by Defaulting
Lender in respect thereof.  The operation
of this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by Borrowers of their duties and
obligations hereunder to Agents or to the Lenders other than such Defaulting
Lender.  Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender
of this Agreement and shall entitle Administrative Borrower at its option, upon
written notice to Administrative Agent, to arrange for a substitute Lender to
assume the Advances and Commitment of such Defaulting Lender, such substitute
Lender to be acceptable to Administrative Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to

 

12

 

execute and deliver a completed form of Assignment and
Acceptance in favor of the substitute Lender (and agrees that it shall be deemed
to have executed and delivered such document if it fails to do so) subject only
to being repaid its share of the outstanding Obligations (other than Bank
Product Obligations, but including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever; provided however, that any such assumption of the Commitment of
such Defaulting Lender shall not be deemed to constitute a waiver of any of the
Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund.

 

(d)                                 Protective Advances
and Optional Overadvances.

 

(i)                                     Administrative
Agent hereby is authorized by Borrowers and the Lenders, from time to time in
Administrative Agent’s sole discretion, (A) after the occurrence and
during the continuance of a Default or an Event of Default, or (B) at any
time that any of the other applicable conditions precedent set forth in Section 3
are not satisfied, to make US Advances to US Borrowers on behalf of the US
Lenders that Administrative Agent, in its Permitted Discretion, deems necessary
or desirable (1) to preserve or protect the Collateral, or any portion
thereof, (2) to enhance the likelihood of repayment of the Obligations
(other than the Bank Product Obligations), or (3) to pay any other amount
chargeable to US Borrowers pursuant to the terms of this Agreement, including
Lender Group Expenses and the costs, fees, and expenses described in Section 10
(any of the Advances described in this Section 2.3(d)(i) shall
be referred to as “US Protective Advances”); provided, that the
aggregate Dollar Equivalent of the principal amount of US Protective Advances
made pursuant to this Section 2.3(d)(i), when taken together with
the Dollar Equivalent of the outstanding principal amount of Overadvances made
pursuant to Section 2.3(d)(iv), Canadian Protective Advances made
pursuant to Section 2.3(d)(ii) and European Protective
Advances made pursuant to Section 2.3(d)(iii), shall not exceed at
any time an amount equal to the lesser of (x) 10% of the Foreign Borrowing
Base (without giving effect to clause (c) of the definition thereof) then
in effect and (y)  $7,500,000.

 

(ii)                                  Canadian
Administrative Agent hereby is authorized by Borrowers and the Lenders, from
time to time in Canadian Administrative Agent’s sole discretion, (A) after
the occurrence and during the continuance of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent
set forth in Section 3 are not satisfied, to make Canadian Advances
to Canadian Borrowers on behalf of the Canadian Lenders that Canadian
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(1) to preserve or protect the Collateral, or any portion thereof, (2) to
enhance the likelihood of repayment of the Obligations (other than the Bank
Product Obligations), or (3) to pay any other amount chargeable to
Canadian Borrowers pursuant to the terms of this Agreement, including Lender
Group Expenses and the costs, fees, and expenses described in Section 10
(any of the Canadian Advances described in this Section 2.3(d)(ii) shall
be referred to as “Canadian Protective Advances”); provided, that the
aggregate Dollar Equivalent of the principal amount of Canadian Protective
Advances made pursuant to this Section 2.3(d)(ii), when taken
together with the Dollar Equivalent of the outstanding principal amount of
Overadvances made pursuant to Section 2.3(d)(iv), US

 

13

 

Protective Advances made pursuant to Section 2.3(d)(i) and
European Protective Advances made pursuant to Section 2.3(d)(iii),
shall not exceed at any time an amount equal to the lesser of (x) 10% of
the Foreign Borrowing Base (without giving effect to clause (c) of the
definition thereof) then in effect and (y) $7,500,000.

 

(iii)                               European
Administrative Agent hereby is authorized by Borrowers and the Lenders, from
time to time in European Administrative Agent’s sole discretion, (A) after
the occurrence and during the continuance of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent
set forth in Section 3 are not satisfied, to make European Advances
to European Borrowers on behalf of the European Lenders that European
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(1) to preserve or protect the Collateral, or any portion thereof, (2) to
enhance the likelihood of repayment of the Obligations (other than the Bank
Product Obligations), or (3) to pay any other amount chargeable to
European Borrowers pursuant to the terms of this Agreement, including Lender
Group Expenses and the costs, fees, and expenses described in Section 10
(any of the European Advances described in this Section 2.3(d)(iii) shall
be referred to as “European Protective Advances”); provided, that the
aggregate Dollar Equivalent of the principal amount of European Protective
Advances made pursuant to this Section 2.3(d)(ii), when taken
together with the Dollar Equivalent of the outstanding principal amount of
Overadvances made pursuant to Section 2.3(d)(iv), US Protective
Advances made pursuant to Section 2.3(d)(i) and Canadian
Protective Advances made pursuant to Section 2.3(d)(ii), shall not
exceed at any time an amount equal to the lesser of (x) 10% of the Foreign
Borrowing Base (without giving effect to clause (c) of the definition
thereof) then in effect and (y) $7,500,000.

 

(iv)                              Any
contrary provision of this Agreement notwithstanding, the Lenders hereby
authorize Administrative Agent, Canadian Administrative Agent, European
Administrative Agent, Fronting Lender, US Swing Lender, Canadian Swing Lender,
or European Swing Lender, as applicable, and Administrative Agent, Canadian
Administrative Agent, European Administrative Agent, Fronting Lender, US Swing
Lender, Canadian Swing Lender, or European Swing Lender, as applicable, may,
but is not obligated to, knowingly and intentionally, continue to make Advances
(including Swing Loans) to Borrowers notwithstanding that an Overadvance exists
or thereby would be created, so long as (A) after giving effect to such
Advances, (1) the outstanding US Revolver Usage does not exceed the US
Borrowing Base by more than $7,500,000 and (2) the outstanding Revolver
Usage does not exceed the Foreign Borrowing Base (without giving effect to
clause (c) of the definition thereof) by more than the lesser of
(x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of
the definition thereof) then in effect and (y) $7,500,000, (B) after
giving effect to such Advances, the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Accounts for interest, fees, or Lender
Group Expenses) does not exceed the amount equal to the Maximum Revolver Amount
less the Availability Reserve, (C) the aggregate Dollar Equivalent of the
principal amount of Overadvances made pursuant to this Section 2.3(d)(iv),
when taken together with the Dollar Equivalent of the outstanding principal
amount of Protective Advances made pursuant to Sections 2.3(d)(i), (ii) and
(iii), does not exceed at any time an amount equal to the lesser of

 

14

 

(x) 10% of the Foreign Borrowing Base (without
giving effect to clause (c) of the definition thereof) then in effect and
(y) $7,500,000 and (D) at the time of the making of such Advance,
such Agent does not believe, in good faith, that the Overadvance created by
such Advance will be outstanding for more than 90 days.  In the event Administrative Agent, Canadian
Administrative Agent or European Administrative Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the immediately
foregoing provisions, regardless of the amount of, or reason for, such excess,
Administrative Agent shall notify the Lenders as soon as practicable (and prior
to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Accounts for interest, fees, or Lender
Group Expenses) unless such Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with such Agent, jointly determine the
terms of arrangements that shall be implemented with Borrowers intended to
reduce, within a reasonable time, the outstanding principal amount of the
Advances to Borrowers to an amount permitted by the foregoing provisions.  In such circumstances, if any Lender disagrees
with the proposed terms of reduction or repayment of any Overadvance, the terms
of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. 
Each Lender with a Revolver Commitment shall be obligated to settle with
Administrative Agent, Canadian Administrative Agent or European Administrative
Agent, as applicable, as provided in Section 2.3(e) for the
amount of such Lender’s Pro Rata Share of any unintentional Overadvances by
such Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.3(d)(iv), and any Overadvances
resulting from the charging to a Loan Account of interest, fees, or Lender
Group Expenses.

 

(v)                                 Each
Protective Advance and each Overadvance shall be deemed to be an Advance
hereunder, except that no Protective Advance or Overadvance shall be eligible
to be a LIBOR Rate Loan and all payments on the US Protective Advances and
European Protective Advances shall be payable to Administrative Agent or
European Administrative Agent, as the case may be, solely for its own account
(to the extent such Advances have not been settled with Lenders pursuant to
clause (e) of this Section) and all payments on the Canadian Protective
Advances shall be payable to Canadian Administrative Agent solely for its own
account (to the extent such Advances have not been settled with Lenders
pursuant to clause (e) of this Section). 
The Protective Advances and Overadvances shall be repayable on demand,
secured by the Agent’s Liens (provided that Protective Advances and
Overadvances to US Borrowers shall only be secured by the US Collateral), and
shall constitute Obligations hereunder. 
Protective Advances and Overadvances denominated in Dollars shall bear
interest at the rate applicable from time to time to Advances that are Base
Rate Loans denominated in Dollars, Protective Advances and Overadvances
denominated in an Approved Offshore Currency shall bear interest at the rate
applicable from time to time to Advances that are LIBOR Rate Loans denominated
in such Approved Offshore Currency with an Interest Period of one month’s
duration and Canadian Protective Advances and Canadian Overadvances denominated
in Canadian Dollars shall bear interest at the rate applicable from time to
time to Canadian Advances that are Base Rate Loans denominated in Canadian
Dollars.  The provisions of this Section 2.3(d) are
for

 

15

 

the exclusive benefit of Agents, Fronting Lender,
Swing Lenders, and the Lenders and are not intended to benefit any Borrower in
any way.

 

(e)                                  Settlement.  It is agreed, subject to the last sentence of Section 2.1(a),
that each Lender’s funded portion of the Advances is intended by the Lenders to
equal, at all times, such Lender’s Pro Rata Share of the outstanding Advances.  Such agreement notwithstanding, Agents,
Fronting Lender, Swing Lenders, and the other Lenders agree (which agreement
shall not be for the benefit of any Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
the Lenders as to the Advances, the Swing Loans, and the Protective Advances
shall take place on a periodic basis in accordance with the following
provisions:

 

(i)                                     Administrative
Agent, Canadian Administrative Agent or European Administrative Agent, as
applicable, shall request settlement (“Settlement”) with the Lenders on
a weekly basis, or on a more frequent basis if so determined by such Agent, (1) on
behalf of US Swing Lender, with respect to each outstanding US Swing Loan, (2) on
behalf of Canadian Swing Lender, with respect to each outstanding Canadian
Swing Loan, (3) on behalf of European Swing Lender, with respect to each
outstanding European Swing Loan, (4) for itself, with respect to the
outstanding Protective Advances, and (5) with respect to Loan Parties’
Collections received, as to each by notifying the Lenders by telecopy,
telephone, or other similar form of transmission, of such requested Settlement,
no later than 2:00 p.m. (California time) on the Business Day immediately
prior to the date of such requested Settlement (the date of such requested
Settlement being the “Settlement Date”). 
Such notice of a Settlement Date shall include a summary statement of
the amount of outstanding Advances, Swing Loans, and Protective Advances for
the period since the prior Settlement Date. 
Subject to the terms and conditions contained herein (including Section 2.3(c)(v)):  (u) if a Lender’s balance of the US
Advances (including US Swing Loans and US Protective Advances) exceeds such Lender’s
Pro Rata Share of the US Advances (including US Swing Loans and US Protective
Advances) as of a Settlement Date, then Administrative Agent shall, by no later
than 12:00 p.m. (California time) on the Settlement Date, transfer in
immediately available funds to a Deposit Account of such Lender (as such Lender
may designate), an amount in the Applicable Currency such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro
Rata Share of the US Advances (including US Swing Loans and US Protective
Advances), (v) if a Lender’s balance of the European Advances (including
European Swing Loans and European Protective Advances) exceeds such Lender’s
Pro Rata Share of the European Advances (including European Swing Loans and
European Protective Advances) as of a Settlement Date, then European
Administrative Agent shall, by no later than 12:00 p.m. (California time)
on the Settlement Date, transfer in immediately available funds to a Deposit
Account of such Lender (as such Lender may designate), an amount in the
Applicable Currency such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the European
Advances (including European Swing Loans and European Protective Advances),
(w) if a Canadian Lender’s balance of the Canadian Advances (including
Canadian Swing Loans and Canadian Protective Advances) exceeds such Canadian
Lender’s Pro Rata Share of the Canadian Advances (including Canadian Swing

 

16

 

Loans and Canadian Protective Advances) as of a
Settlement Date, then Canadian Administrative Agent shall, by no later than
12:00 p.m. (California time) on the Settlement Date, transfer in
immediately available funds to a Deposit Account of such Canadian Lender (as
such Lender may designate), an amount in the Applicable Currency such that each
such Lender shall, upon receipt of such amount, have as of the Settlement Date,
its Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and
Canadian Protective Advances), (x) if a Lender’s balance of the US
Advances (including US Swing Loans and US Protective Advances) is less than
such Lender’s Pro Rata Share of the US Advances (including US Swing Loans and
US Protective Advances) as of a Settlement Date, such Lender shall no later
than 12:00 p.m. (California time) on the Settlement Date transfer in
immediately available funds to the applicable Administrative Agent’s Account,
an amount in the Applicable Currency such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its Pro Rata Share of
the US Advances (including US Swing Loans and US Protective Advances),
(y) if a Canadian Lender’s balance of the Canadian Advances (including Canadian
Swing Loans and Canadian Protective Advances) is less than such Lender’s Pro
Rata Share of the Canadian Advances (including Canadian Swing Loans and
Canadian Protective Advances) as of a Settlement Date, such Canadian Lender
shall no later than 12:00 p.m. (California time) on the Settlement Date
transfer in immediately available funds to the applicable Canadian
Administrative Agent’s Account, an amount in the Applicable Currency such that
each such Canadian Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Canadian Advances (including
Canadian Swing Loans and Canadian Protective Advances), and (z) if a
Lender’s balance of the European Advances (including European Swing Loans and
European Protective Advances) is less than such Lender’s Pro Rata Share of the
European Advances (including European Swing Loans and European Protective
Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m.
(California time) on the Settlement Date transfer in immediately available
funds to the applicable European Administrative Agent’s Account, an amount in
the Applicable Currency such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the European
Advances (including European Swing Loans and European Protective
Advances).  Such amounts made available
to Administrative Agent under clause (x) of the immediately preceding sentence
shall be applied against the amounts of the applicable US Swing Loans or US
Protective Advances and, together with the portion of such US Swing Loans or US
Protective Advances representing the US Swing Lender’s Pro Rata Share thereof,
shall constitute US Advances of such Lenders, such amounts made available to
Canadian Administrative Agent under clause (y) of the immediately preceding
sentence shall be applied against the amounts of the applicable Canadian Swing
Loans or Canadian Protective Advances and, together with the portion of such
Canadian Swing Loans or Canadian Protective Advances representing the Canadian
Swing Lender’s Pro Rata Share thereof, shall constitute Canadian Advances of
such Canadian Lenders, and such amounts made available to European
Administrative Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable European Swing Loans or
European Protective Advances and, together with the portion of such European
Swing Loans or European Protective Advances representing the European Swing
Lender’s Pro Rata Share thereof, shall constitute European Advances of such
Lenders.  If any such amount is not

 

17

 

made available to Administrative Agent, Canadian
Administrative Agent or European Administrative Agent, as applicable, by any
Lender on the Settlement Date applicable thereto to the extent required by the
terms hereof, such Agent shall be entitled to recover for its account such
amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate.

 

(ii)                                  In
determining whether a Lender’s balance of the Advances, Swing Loans, and
Protective Advances is less than, equal to, or greater than such Lender’s Pro
Rata Share of the Advances, Swing Loans, and Protective Advances as of a
Settlement Date, Administrative Agent, Canadian Administrative Agent or
European Administrative Agent, as applicable, shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received in
good funds by such Agent with respect to principal, interest, fees payable by
Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral;
provided, that, payments received from Foreign Borrowers and proceeds of
Foreign Collateral shall be applied only to the Foreign Advances.  To the extent that a net amount is owed to
any such Lender after such application, such net amount shall be distributed by
such Agent to that Lender as part of the next Settlement.

 

(iii)                               Between
Settlement Dates, (A) Administrative Agent, to the extent no US Protective
Advances or US Swing Loans are outstanding, may pay over to US Swing Lender any
payments received by Administrative Agent, that in accordance with the terms of
this Agreement would be applied to the reduction of the US Advances, for application
to US Swing Lender’s Pro Rata Share of the US Advances, (B) Canadian
Administrative Agent, to the extent no Canadian Protective Advances or Canadian
Swing Loans are outstanding, may pay over to Canadian Swing Lender any payments
received by Canadian Administrative Agent, that in accordance with the terms of
this Agreement would be applied to the reduction of the Canadian Advances, for
application to Canadian Swing Lender’s Pro Rata Share of the Canadian Advances,
and (C) European Administrative Agent, to the extent no European
Protective Advances or European Swing Loans are outstanding, may pay over to
European Swing Lender any payments received by European Administrative Agent,
that in accordance with the terms of this Agreement would be applied to the
reduction of the European Advances, for application to European Swing Lender’s
Pro Rata Share of the European Advances. 
If, as of any Settlement Date, Collections of US Loan Parties received
since the then immediately preceding Settlement Date have been applied to US
Swing Lender’s Pro Rata Share of the Advances other than to US Swing Loans, as
provided for in the first sentence of this clause (iii), US Swing Lender shall
pay to Administrative Agent for the accounts of the Lenders, and Administrative
Agent shall pay to the Lenders, to be applied to the outstanding US Advances of
such Lenders, an amount such that each Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the US
Advances.  If, as of any Settlement Date,
Collections of Foreign Loan Parties received since the then immediately
preceding Settlement Date have been applied to Canadian Swing Lender’s Pro Rata
Share of the Canadian Advances other than to Canadian Swing Loans, as provided
for in the first sentence of this clause (iii), Canadian Swing Lender shall pay
to Canadian Administrative Agent for the accounts of the Canadian Lenders, and
Canadian Administrative Agent shall pay to the Canadian Lenders, to be applied
to the outstanding

 

18

 

Canadian Advances of such Canadian Lenders, an amount
such that each Canadian Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Canadian Advances.  If, as of any Settlement Date, Collections of
Foreign Loan Parties received since the then immediately preceding Settlement
Date have been applied to European Swing Lender’s Pro Rata Share of the
Advances other than to European Swing Loans, as provided for in the first sentence
of this clause (iii), European Swing Lender shall pay to European
Administrative Agent for the accounts of the Lenders, and European
Administrative Agent shall pay to the Lenders, to be applied to the outstanding
European Advances of such Lenders, an amount such that each Lender shall, upon
receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of
the European Advances.  During the period
between Settlement Dates, US Swing Lender with respect to US Swing Loans,
Canadian Swing Lender with respect to Canadian Swing Loans, European Swing
Lender with respect to European Swing Loans, Administrative Agent with respect
to US Protective Advances, Canadian Administrative Agent with respect to
Canadian Protective Advances, European Administrative Agent with respect to
European Protective Advances, and each Lender (subject to the effect of
agreements between such Agent and individual Lenders) with respect to the
Advances other than Swing Loans and Protective Advances, shall be entitled to
interest at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lenders, Agents, or the Lenders, as
applicable.

 

(f)                                    Notation.  Administrative Agent shall record on its books the
principal amount of the US Advances (or portion of the Term Loan A, as
applicable) owing to each US Lender, including the US Swing Loans owing to each
Swing Lender, and US Protective Advances owing to Administrative Agent, and the
interests therein of each US Lender, from time to time and such records shall,
absent manifest error, conclusively be presumed to be correct and
accurate.  Administrative Agent and/or
Canadian Administrative Agent shall record on its books the principal amount of
the Canadian Advances owing to each Canadian Lender, including the Canadian
Swing Loans owing to Canadian Swing Lender, and Canadian Protective Advances
owing to Canadian Administrative Agent, and the interests therein of each
Canadian Lender, from time to time and such records shall, absent manifest
error, conclusively be presumed to be correct and accurate.  European Administrative Agent shall record on
its books the principal amount of the European Advances owing to each European
Lender, including European Protective Advances owing to European Administrative
Agent, and the interests therein of each European Lender, from time to time and
such records shall, absent manifest error, conclusively be presumed to be
correct and accurate.  In addition, each
Lender is authorized, at such Lender’s option, to note the date and amount of
each payment or prepayment of principal of such Lender’s Advances (or portion
of the Term Loan A, as applicable) in its books and records, including computer
records.

 

(g)                                 Lenders’ Failure to
Perform.  All Advances (other than Swing Loans
and Protective Advances) and Term Loan A shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its obligation
to make any Advance or Term Loan A (or other extension of credit) hereunder,
nor shall any Commitment of any Lender be increased or decreased as a result of
any failure by any other

 

19

 

Lender
to perform its obligations hereunder, and (ii) no failure by any Lender to
perform its obligations hereunder shall excuse any other Lender from its
obligations hereunder.

 

2.4.                            Payments.

 

(a)                                  Payments by
Borrowers.

 

(i)                                     Except
as otherwise expressly provided herein, all payments by US Borrowers shall be
made in the Applicable Currency to the applicable Administrative Agent’s
Account for the account of the Lender Group and shall be made in immediately
available funds, no later than 11:00 a.m. (California time) on the date
specified herein, all payments by Canadian Borrowers shall be made in the
Applicable Currency to the applicable Canadian Administrative Agent’s Account
for the account of the Lender Group and shall be made in immediately available
funds, no later than 11:00 a.m. (California time) on the date specified
herein and all payments by European Borrowers shall be made in the Applicable
Currency to the applicable European Administrative Agent’s Account for the
account of the Lender Group and shall be made in immediately available funds,
no later than 11:00 a.m. (California time) on the date specified
herein.  Any payment received by the
applicable Agent later than 11:00 a.m. (California time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue until such following Business Day.  If any payment hereunder becomes due and
payable on a day other than a Business Day, except to the extent the amount thereof
is charged to a Loan Account pursuant to the terms of this Agreement on or as
of such due date, the due date of such payment shall be extended to the next
succeeding Business Day.

 

(ii)                                  Unless
the applicable Agent receives notice from Administrative Borrower prior to the
date on which any payment is due to the Lenders that the applicable Borrowers
will not make such payment in full as and when required, such Agent may assume
that such Borrowers have made (or will make) such payment in full to such Agent
on such date in immediately available funds in the Applicable Currency and such
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent
the applicable Borrowers do not make such payment in full to the applicable
Agent on the date when due, each Lender severally shall repay to such Agent on
demand such amount distributed to such Lender, together with interest thereon
at the Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.

 

(iii)                               If,
notwithstanding the terms of this Agreement, any Agent receives any payment
from or on behalf of any Borrower in a currency other than the Applicable
Currency, such Agent may convert the payment (including the monetary proceeds
of realization upon any Collateral and any funds then held in a cash collateral
account) into the Applicable Currency at the Currency Exchange Rate in the
manner contemplated by Section 10.4.  To the extent permitted by law, the obligation
shall be satisfied only to the extent of the amount actually received by such
Agent upon such conversion.

 

20

 

(b)                                 Apportionment and
Application.

 

(i)                                     Except
as otherwise provided with respect to Defaulting Lenders and except as
otherwise provided in the Loan Documents, aggregate principal and interest
payments shall be apportioned ratably among the Lenders (according to the
unpaid principal balance of the Obligations to which such payments relate held
by each Lender) and payments of fees and expenses (other than fees or expenses
that are for an Agent’s separate account, after giving effect to any agreements
between an Agent and individual Lenders) shall be apportioned ratably among the
Lenders having a Pro Rata Share of the type of Commitment or Obligation to
which a particular fee or expense relates. 
Except as otherwise specifically provided in paragraph (b)(iv) below
or Section 2.4(c) or (d), all Collections, proceeds of
Accounts or other Collateral owned by any US Loan Party and payments by any US
Loan Party shall be applied in the order of payment set forth in subsection (A) below
and all Collections, proceeds of Accounts or other Collateral owned by any
Foreign Borrower or Foreign Guarantor and payments by any Foreign Borrower or
Foreign Guarantor shall be applied in the order of payment set forth in subsection (B) below.

 

(A)                    Except as set
forth above and subject to the terms of the Intercreditor Agreement, all
Collections, proceeds of Accounts or other Collateral owned by any US Loan
Party and payments by any US Loan Party shall be applied in the following order
of payment:

 

(1)                                  first,
ratably to pay any Lender Group Expenses payable by the US Loan Parties then
due to Administrative Agent or Collateral Agent or any of the Lenders under the
Loan Documents, until paid in full,

 

(2)                                  second,
ratably to pay any fees or premiums payable by US Loan Parties then due to
Administrative Agent or Collateral Agent (for their separate account, after
giving effect to any agreements between Administrative Agent or Collateral
Agent and individual Lenders) or any of the Lenders under the Loan Documents
until paid in full,

 

(3)                                  third,
to pay interest due in respect of all US Protective Advances until paid in
full,

 

(4)                                  fourth,
ratably to pay interest due in respect of the US Advances (other than US
Protective Advances), the US Swing Loans, and the Term Loan A until paid in
full,

 

(5)                                  fifth,
to pay the principal of all US Protective Advances until paid in full,

 

21

 

(6)                                  sixth,
ratably to pay all principal amounts then due and payable (other than as a
result of an acceleration thereof) with respect to the Term Loan A until paid
in full,

 

(7)                                  seventh,
to pay the principal of all US Swing Loans until paid in full,

 

(8)                                  eighth,
so long as no Event of Default has occurred and is continuing, and at
Administrative Agent’s election (which election Administrative Agent agrees
will not be made if an Overadvance would be created thereby), to pay amounts
then due and owing by US Loan Parties in respect of Bank Products, until paid
in full,

 

(9)                                  ninth,
so long as no Event of Default has occurred and is continuing, to pay the
principal of all US Advances until paid in full; provided, that payments
shall be applied first to US Advances that are Base Rate Loans until paid in
full and, second, to US Advances that are LIBOR Rate Loans until paid in full,

 

(10)                            tenth,
if an Event of Default has occurred and is continuing, ratably (i) to pay
the principal of all US Advances until paid in full, (ii) to Collateral
Agent, to be held by Collateral Agent, for the ratable benefit of Issuing
Lender and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the US Letter of Credit Usage until collateralized in
full, and (iii) to Collateral Agent, to be held by Collateral Agent, for
the benefit of the Bank Product Providers, as cash collateral in an amount up
to the amount of the Bank Product Reserve in respect of Bank Products provided
to any US Loan Party established prior to the occurrence of, and not in
contemplation of, the subject Event of Default until US Loan Parties’
obligations in respect of such Bank Products have been paid in full or the cash
collateral amount has been exhausted,

 

(11)                            eleventh, if an Event of Default has occurred and is continuing, to pay the
outstanding principal balance of Term Loan A (in the inverse order of the
maturity of the installments due thereunder) until Term Loan A is paid in full,

 

(12)                            twelfth,
if an Event of Default has occurred and is continuing, to pay any other US
Obligations (including the provision of amounts to Collateral Agent, to be held
by Collateral Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount determined by Collateral Agent in its
Permitted Discretion as the amount necessary to secure US Loan Parties’
obligations in respect of Bank Products),

 

22

 

(13)                            thirteenth,
to the payment of the Foreign Obligations in the order of payment set forth in
subsection (B) below, until paid in full; and

 

(14)                            fourteenth,
to US Borrowers (to be wired to the applicable US Designated Account) or such other
Person entitled thereto under Applicable Law.

 

(B)                      Except as
set forth above, all Collections, proceeds of Accounts or other Collateral
owned by any Foreign Borrower or Foreign Guarantor and payments by any Foreign
Borrower or Foreign Guarantor shall be applied in the following order of
payment:

 

(1)                                  first,
ratably to pay any Lender Group Expenses payable by the Foreign Borrowers and
Foreign Guarantors then due to Canadian Administrative Agent, the European
Administrative Agent or Collateral Agent or any of the Lenders under the Loan
Documents, until paid in full,

 

(2)                                  second,
ratably to pay any fees or premiums payable by the Foreign Borrowers and
Foreign Guarantors then due to Administrative Agent (for its separate account)
or any of the Lenders under the Loan Documents until paid in full,

 

(3)                                  third,
to pay interest due in respect of all Protective Advances to Foreign Borrowers
until paid in full,

 

(4)                                  fourth,
ratably to pay interest due in respect of the Foreign Advances (other than
Protective Advances to Foreign Borrowers), the European Swing Loans and the
Canadian Swing Loans until paid in full,

 

(5)                                  fifth,
to pay the principal of all Protective Advances to Foreign Borrowers until paid
in full,

 

(6)                                  sixth,
ratably to pay the principal of all European Swing Loans and Canadian Swing
Loans until paid in full,

 

(7)                                  seventh,
so long as no Event of Default has occurred and is continuing, and at
Administrative Agent’s election (which election Administrative Agent agrees
will not be made if an Overadvance would be created thereby), to pay amounts
then due and owing by Foreign Borrowers or Foreign Guarantors in respect of
Bank Products, until paid in full,

 

(8)                                  eighth,
so long as no Event of Default has occurred and is continuing, ratably, to pay
the principal of all Foreign Advances until

 

23

 

paid in full; provided, that payments applied
to Canadian Advances shall be applied first to Canadian Advances that are Base
Rate Loans until paid in full and, second, to Canadian Advances that are LIBOR
Rate Loans until paid in full,

 

(9)                                  ninth,
if an Event of Default has occurred and is continuing, ratably (i) to pay
the principal of all Foreign Advances until paid in full, and (ii) to
Collateral Agent, to be held by Collateral Agent, for the ratable benefit of
the Canadian Issuing Lender and those Lenders having a Canadian Revolver
Commitment, as cash collateral in an amount up to 105% of the Canadian Letter
of Credit Usage until collateralized in full, and (iii) to Collateral
Agent, to be held by Collateral Agent, for the ratable benefit of the European
Issuing Lender and those Lenders having a European Revolver Commitment, as cash
collateral in an amount up to 105% of the European Letter of Credit Usage until
collateralized in full, and (iv) to Collateral Agent, to be held by
Collateral Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount of the Foreign Bank Product Reserve in
respect of Bank Products provided to Foreign Loan Parties until Foreign Loan
Parties’ and the Significant Subsidiaries’ obligations in respect of such Bank
Products have been paid in full or the cash collateral amount has been
exhausted,

 

(10)                            tenth,
if an Event of Default has occurred and is continuing, to pay any other Foreign
Obligations (including the provision of amounts to Collateral Agent, to be held
by Collateral Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount determined by Collateral Agent in its
Permitted Discretion as the amount necessary to secure Foreign Loan Parties’
obligations in respect of Bank Products), and

 

(11)                            eleventh,
to Foreign Borrowers (to be wired to the applicable Canadian Designated Account
or European Designated Account) or such other Person entitled thereto under
Applicable Law;

 

(ii)                                  Notwithstanding
the foregoing Section 2.4(b)(i)(B), so long as no Event of Default
has occurred and is continuing, except as set forth above, all Collections,
proceeds of Accounts or other Collateral owned by (i) Canadian Borrowers
shall first be applied only to Foreign Obligations of Canadian Borrowers in
accordance with Section 2.4(b)(i)(B) and (ii) European
Borrowers shall first be applied only to Foreign Obligations of European
Borrowers in accordance with Section 2.4(b)(i)(B).

 

(iii)                               The
applicable Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds
as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

 

24

 

(iv)                              In
each instance, so long as no Event of Default has occurred and is continuing,
the order of payment provisions of this Section 2.4(b) shall
not apply to any payment made by any Loan Party to Administrative Agent,
Canadian Administrative Agent or European Administrative Agent, as applicable,
and specified by such Loan Party to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of this Agreement.

 

(v)                                 For purposes of the foregoing, “paid in full”
means payment of all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, whether or not any of the foregoing would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.

 

(vi)                              In
the event of a direct conflict between the priority provisions of this Section 2.4
and other provisions contained in any other Loan Document, it is the intention
of the parties hereto that such priority provisions in such documents shall be
read together and construed, to the fullest extent possible, to be in concert
with each other.  In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.4 shall control and govern.

 

(c)                                  Mandatory
Prepayments.

 

(i)                                     Within
5 days after delivery to Administrative Agent of the audited annual financial
statements pursuant to Section 5.3 with respect to any fiscal year,
commencing with the delivery to Administrative Agent of the financial
statements for the fiscal year ended December 31, 2005 or, if such
financial statements are not delivered to Administrative Agent on or prior to
the date such statements are required to be delivered pursuant to Section 5.3,
5 days after the date such statements are required to be delivered to
Administrative Agent pursuant to Section 5.3, US Borrowers shall
(unless the obligation to make such payment is waived in writing by the
Required Lenders prior to the date on which such payment is required to be
made) prepay the outstanding principal of the Term Loan A and, unless the
obligation to make such payment is waived under the Term B Debt Documents, Term
B Debt, in an aggregate amount equal to 50% of the Excess Cash Flow of
Administrative Borrower and its Subsidiaries for such fiscal year (or with
respect to the fiscal year ended December 31, 2005, for the period
commencing on August 1, 2005 and ending on the last day of such fiscal
year), such prepayment to be applied to the outstanding Term Loan A and Term B
Debt in accordance with clause (d)(i) below.

 

(ii)                                  Within
three Business Days following the consummation of any voluntary or involuntary
sale or disposition by any US Loan Party of property or assets (other than
sales or dispositions described in clauses (b), (c), (d), (f), (g), (i), (j),
(k)(y), (l), or (n) of the definition of “Permitted Dispositions”), US
Borrowers shall (unless the obligation to make such payment is waived in
writing by the Required Lenders prior to the date on which such payment is
required to be made) prepay the outstanding principal of the Obligations and,
unless the obligation to make such payment is waived under the Term B

 

25

 

Debt Documents, Term B Debt in accordance with
clause (d)(ii) below in an aggregate amount equal to 100% of the Net
Cash Proceeds received by such Person in connection with such sale or
disposition but only to the extent that the Dollar Equivalent of the aggregate
amount of Net Cash Proceeds received by the US Loan Parties (and not applied as
a prepayment of the Obligations or the Term B Debt) for all such sales or
dispositions shall exceed $1,000,000 in any fiscal year; provided, that
US Borrowers shall not be required to make such prepayment if (A) such
sale involves the property described in, and is subject to the terms of, the
Pre-approved Asset Disposition Letter, (B) such sale is consummated in
accordance with the terms of the Pre-approved Asset Disposition Letter and (C) the
Net Cash Proceeds of such sale are used to prepay the Term B Debt.  Nothing contained in this subclause (ii) shall
permit any US Loan Party to sell or otherwise dispose of any property or assets
other than in accordance with Section 6.4.

 

(iii)                               Within
three Business Days following the receipt by any US Loan Party of any
Extraordinary Receipts, US Borrowers shall (unless the obligation to make such
payment is waived in writing by the Required Lenders prior to the date on which
such payment is required to be made) prepay the outstanding principal of the
Obligations and, unless the obligation to make such payment is waived under the
Term B Debt Documents,  Term B Debt, in
accordance with clause (d)(ii) below in an aggregate amount equal to 100%
of such Extraordinary Receipts, net of any amounts payable by such Person as a
result of such event and of any taxes, fees payable to Persons that are not
Affiliates of any US Loan Party or reasonable expenses incurred in collecting
such Extraordinary Receipts, but only to the extent that the Dollar Equivalent
of the aggregate amount of such net Extraordinary Receipts received by the US Loan Parties (and not applied as a
prepayment of the principal of the Obligations or the Term B Debt) for any
single or related series of Extraordinary Receipts shall exceed $75,000 or for
all such Extraordinary Receipts shall exceed $750,000 in any fiscal year.

 

(iv)                              Within
three Business Days following the sale, issuance or incurrence by any US Loan
Party of any Stock or Indebtedness (other than (i) Indebtedness permitted
under Section 6.1 (other than Indebtedness in respect of a
Convertible Note Offering), (ii) Stock issued by any US Loan Party on or
before the Closing Date, (iii) Stock issued pursuant to a stock or option
plan to any officer, independent contractor in a manner consistent with
historical practices, employee or director of Administrative Borrower or any of
its Subsidiaries, (iv) Stock issued upon exercise of any Stock referred to
in clause (iii), and (v) Stock issued to any Loan Party), US Borrowers
shall (unless the obligation to make such payment is waived in writing by the
Required Lenders prior to the date on which such payment is required to be
made) prepay the outstanding principal of the Obligations and, unless the
obligation to make such payment is waived under the Term B Debt Documents, Term
B Debt, in accordance with clause (d)(iii) in an aggregate amount equal to
(A) 50% of the Net Cash Proceeds received by such US Loan Party in
connection with such sale, issuance, or incurrence until the aggregate amount
of Net Cash Proceeds received by US Loan Parties in connection with all such
sales, issuances, and incurrences after the Closing Date is greater than
$5,000,000 and (B) 100% of the Net Cash Proceeds received by such US Loan
Party in connection with such sale, issuance, or incurrence after the aggregate
amount

 

26

 

of Net Cash Proceeds received by US Loan Parties in
connection with all such sales, issuances, and incurrences after the Closing
Date is greater than $5,000,000; provided, that US Borrowers shall not be
required to make such prepayment if (A) the proceeds arise from a
Convertible Note Offering permitted hereunder, and (B) the Net Cash
Proceeds of such Convertible Note Offering are used to prepay the Term B Debt
in full.

 

(v)                                 In
the event (A) the sum of the Revolver Usage (after giving effect to any
repayment or prepayment of the Loans made on or prior to the applicable date of
determination but excluding Letter of Credit Usage cash collateralized in an
amount up to 105% of such Letter of Credit Usage) and the outstanding principal
balance of the Term Loan A at any time exceeds 2.25 times the amount of EBITDA
for the most recently ended 12 month period, (B) the sum of the Revolver
Usage (after giving effect to any repayment or prepayment of the Loans made on
or prior to the applicable date of determination but excluding Letter of Credit
Usage cash collateralized in an amount up to 105% of such Letter of Credit
Usage) and the outstanding principal balance of the Term Loan A and the Term B
Debt at any time exceeds 2.75 times the amount of EBITDA for the most recently
ended 12 month period, or (C) the sum of the Revolver Usage (after giving
effect to any repayment or prepayment of the Loans made on or prior to the
applicable date of determination but excluding Letter of Credit Usage cash
collateralized in an amount up to 105% of such Letter of Credit Usage) and the
outstanding principal balance of the Term Loan A and the Term B Debt and the
aggregate principal amount of all other Indebtedness (other than cash
collateralized letters of credit) of Parent and its Subsidiaries outstanding as
of such date in the amount that would be reflected as debt on a balance sheet
prepared as of such date on a consolidated basis in accordance with GAAP at any
time exceeds 3 times the amount of EBITDA for the most recently ended 12 month
period, US Borrowers (unless the obligation to make such payment is waived in
writing by the Required Lenders prior to the date on which such payment is
required to be made) shall prepay the outstanding Obligations and, unless the
obligation to make such payment is waived under the Term B Debt Documents, Term
B Debt in accordance with clause (d)(iv) below in an aggregate amount
equal to the greater of the excess resulting from Clause (A) above, the
excess resulting from Clause (B) above or the excess resulting from Clause
(C) above.

 

(d)                                 Application of
Payments.

 

(i)                                     Each
prepayment pursuant to subclause (c)(i) above (Excess Cash Flow) shall first,
be applied to the outstanding principal amount of Term Loan A, until paid
in full, and second, unless the prepayment requirement shall have been
waived thereunder, paid to Term B Agent for application to the outstanding
principal amount of Term B Debt, until paid in full; provided, that if
an Event of Default shall have occurred and be continuing, (x) at
Administrative Agent’s election, any payment to be paid to Term B Agent for
application to the outstanding principal amount of Term B Debt shall be applied
in the manner set forth in Section 2.4(b)(i)(A) and
(y) at Administrative Agent’s election, any prepayment of the Term Loan A
required pursuant to subclause (c)(i) above shall be applied in the manner
set forth in Section 2.4(b)(i)(A). 
Each such prepayment of the Term Loan A shall be without penalty or
premium and shall be applied against the remaining installments of principal of
the Term Loan A in the inverse order of maturity.

 

27

 

(ii)                                  Each
prepayment pursuant to subclauses (c)(ii) above (Sales and Dispositions)
and (c)(iii) above (Extraordinary Receipts), shall be applied as follows:

 

(1)                                  if
the proceeds are from any sale or disposition of any Accounts of a US Loan
Party or otherwise constitute proceeds of Accounts of a US Loan Party, such
proceeds shall be applied, first, to the outstanding principal amount of
the US Advances, until paid in full, second, to cash collateralize the
US Letters of Credit in an amount equal to 105% at the then extant US Letter of
Credit Usage, until cash collateralized in full, third, to the
outstanding principal amount of Term Loan A, until paid in full, and fourth,
unless the prepayment requirement shall have been waived under the Term B Debt
Documents, paid to Term B Agent for application to the outstanding principal
amount of Term B Debt, until paid in full; provided, that, any such proceeds
that would be applied to cash collateralize the US Letters of Credit pursuant
to clause second above may be retained by Borrowers to the extent US
Availability, after giving effect to such sale or disposition, would be greater
than $0 notwithstanding the failure to cash collateralize such US Letters of
Credit.  Each such prepayment of the Term
Loan A shall be without penalty or premium and shall be applied against the
remaining installments of principal of the Term Loan A in the inverse order of
maturity.

 

(2)                                  subject
to clause (3) below, if the proceeds are from the sale or disposition of
any other assets of a US Loan Party not described in clause (1) above or
any insurance policy or condemnation award of a US Loan Party, such proceeds
shall be applied, first, to the outstanding principal amount of Term
Loan A, until paid in full, and second, unless the prepayment
requirement shall have been waived under the Term B Debt Documents, paid to
Term B Agent for application to the outstanding principal amount of Term B
Debt, until paid in full.  Each such
prepayment of the Term Loan A shall be without penalty or premium and shall be
applied against the remaining installments of principal of the Term Loan A in
the inverse order of maturity. Notwithstanding the foregoing, except during the
continuance of an Event of Default, such proceeds shall not be required to be
so applied to the extent that such proceeds are used to replace, repair, or
restore the properties or assets in respect of which such proceeds were paid or
are used to acquire equipment or other tangible fixed assets to be used in the
business of the US Loan Parties if (i) the amount of proceeds received in
respect of such sales, dispositions, insurance policies, condemnation awards or
Extraordinary Receipts, that are used to replace, repair, or restore the
properties or assets in respect of which such proceeds were paid or are used to
acquire equipment or other tangible fixed assets are less than $2,000,000 in
the aggregate during

 

28

 

any 12 consecutive month period, (ii) Administrative
Borrower delivers a certificate to Administrative Agent within 10 days after
such sale or loss, destruction, or taking or Extraordinary Receipts event,
stating that such proceeds shall be used to replace, repair, or restore such
properties or assets or will be used to acquire equipment or other tangible
fixed assets to be used in the business of the US Loan Parties within a period
specified in such certificate not to exceed the earlier of (x) 180 days
after the receipt of such proceeds, and (y) the Maturity Date (which certificate
shall set forth estimates of the proceeds to be so expended), and (iii) such
proceeds are immediately deposited in a Deposit Account subject to a Control
Agreement in favor of Administrative Agent. 
If all or any portion of such proceeds not so applied to the prepayment
of the Obligations or the Term B Debt in accordance with this clause (2) are
not used in accordance with the preceding sentence within the period specified
in the relevant certificate furnished pursuant hereto, such remaining portion
shall be applied to the Obligations and the Term B Debt in accordance with this
clause (2) on the last day of such specified period; and

 

(3)                                  if
the proceeds are from a sale or disposition of all or substantially all of the
assets or Stock of any Person or any insurance, which sale, disposition, or
proceeds of insurance includes both Accounts and other assets of a US Loan
Party, such proceeds shall be applied as follows:  (x) an amount equal to the net book
value of such Accounts of US Loan Parties (determined at the time of such sale
or disposition or event resulting in such insurance proceeds) shall be applied first,
to the outstanding principal amount of the US Advances, until paid in full, second,
to cash collateralize the US Letters of Credit in an amount equal to 105% at
the then extant US Letter of Credit Usage, until collateralized in full, third,
to the outstanding principal balance of Term Loan A, until paid in full,
and fourth, unless such prepayment requirement shall have been waived
under the Term B Debt Documents, paid to Term B Agent for application to the
outstanding principal amount of Term B Debt, until paid in full; provided,
that, any such proceeds that would be applied to cash collateralize the US
Letters of Credit pursuant to clause second above may be retained by
Borrowers to the extent US Availability, after giving effect to such sale,
disposition or casualty, would be greater than $0 notwithstanding the failure
to cash collateralize such US Letters of Credit, and (y) the remaining
proceeds shall be applied, first, to the outstanding principal amount of
Term Loan A, until paid in full and second, unless such prepayment
requirement shall have been waived under the Term B Debt Documents, paid to
Term B Agent for application to the outstanding principal amount of Term B
Debt, until paid in full.  Each such
prepayment of the Term Loan A shall be

 

29

 

without penalty or premium and shall be applied
against the remaining installments of principal of the Term Loan A in the
inverse order of maturity; and

 

(4)                                  subject
to clauses (1), (2) and (3) above, any other prepayment pursuant to
subclauses (c)(ii) and (iii) above shall, be applied, first,
to the outstanding principal amount of Term Loan A, until paid in full,
and second, unless such prepayment requirement shall have been waived
under the Term B Debt Documents, paid to Term B Agent for application to the
outstanding principal amount of Term B Debt, until paid in full.  Each such prepayment of the Term Loan A shall
be without penalty or premium and shall be applied against the remaining
installments of principal of the Term Loan A in the inverse order of maturity;
and

 

(5)                                  if
an Event of Default shall have occurred and be continuing, (x) at
Administrative Agent’s election, any payment to be paid to Term B Agent for
application to the outstanding principal amount of Term B Debt shall be applied
in the manner set forth in Section 2.4(b)(i)(A) and
(y) at Administrative Agent’s election, any prepayment of the Obligations
required pursuant to subclause (c)(ii) or (c)(iii) above shall be
applied in the manner set forth in Section 2.4(b)(i)(A).

 

(iii)                               Each
prepayment pursuant to subclause (c)(iv) above (Issuance of Stock or
incurrence of Indebtedness) shall first, be applied to the outstanding
principal amount of Term Loan A, until paid in full, and second,
unless such prepayment requirement shall have been waived under the Term B Debt
Documents, paid to Term B Agent for application to the outstanding principal
amount of Term B Debt, until paid in full; provided, that if an Event of
Default shall have occurred and be continuing, (x) at Administrative Agent’s
election, any payment to be paid to Term B Agent for application to the
outstanding principal amount of Term B Debt shall be applied in the manner set
forth in Section 2.4(b)(i)(A) and (y) at Administrative
Agent’s election, any prepayment of the Term Loan A required pursuant to
subclause (c)(iv) above shall be applied in the manner set forth in Section 2.4(b)(i)(A).  Each such prepayment of the Term Loan A shall
be without penalty or premium and shall be applied against the remaining
installments of principal of the Term Loan A in the inverse order of maturity.

 

(iv)                              Each
prepayment pursuant to subclause (c)(v) (Leverage) above shall be applied,
first, to outstanding principal amount of the US Advances, second,
to cash collateralize the US Letters of Credit in an amount equal to 105% at
the then extant US Letter of Credit Usage, until cash collateralized in full, third,
to the outstanding principal balance of Term Loan A, until paid in full,
and fourth, unless such prepayment requirement shall have been waived
under the Term B Debt Documents, paid to Term B Agent for application to the
outstanding principal amount of Term B Debt, until paid in full; provided, that
if an Event of Default shall have occurred and be continuing, (x) at
Administrative

 

30

 

Agent’s election, any payment to be paid to Term B
Agent for application to the outstanding principal amount of Term B Debt shall
be applied in the manner set forth in Section 2.4(b)(i)(A) and
(y) at Administrative Agent’s election, any prepayment of the Obligations
required pursuant to subclause (c)(v) above shall be applied in the manner
set forth in Section 2.4(b)(i)(A). 
Each prepayment of Term Loan A shall be without penalty or premium.  Each prepayment shall be applied against the
remaining installments of principal of the Term Loan A in the inverse order of
maturity.  With respect to any prepayment
required under Section 2.4(c)(v), Administrative Agent shall
establish and maintain a reserve against the US Borrowing Base and the Maximum
Revolver Amount in an amount equal to such prepayment applied to the principal
amount of the Advances (the “Leverage Reserve”).  Administrative Agent shall maintain the
Leverage Reserve until such time as no Event of Default exists and (A) the
sum of the Revolver Usage (excluding Letter of Credit Usage cash collateralized
in an amount up to 105% of such Letter of Credit Usage), the outstanding
principal balance of Term Loan A and the Leverage Reserve is less than 2.25
times the amount of EBITDA for the most recently ended 12 month period, (B) the
sum of the Revolver Usage (excluding Letter of Credit Usage cash collateralized
in an amount up to 105% of such Letter of Credit Usage) and the outstanding
principal balance of Term Loan A and the Term B Debt and the Leverage Reserve
is less than 2.75 times the amount of EBITDA for the most recently ended 12
month period and (C) the sum of the Revolver Usage (excluding Letter of
Credit Usage cash collateralized in an amount up to 105% of such Letter of
Credit Usage), the outstanding principal balance of Term Loan A and the Term B
Debt, the aggregate principal amount of all other Indebtedness (other than cash
collateralized letters of credit) of Parent and its Subsidiaries outstanding as
of such date in the amount that would be reflected as debt on a balance sheet
prepared as of such date on a consolidated basis in accordance with GAAP and
the Leverage Reserve is less than 3 times the amount of EBITDA for the most
recently ended 12 month period.

 

(v)                                 Notwithstanding
anything to the contrary contained in this Section 2.4(d), if the
Dollar Equivalent of Excess Availability would be less than or equal to
$25,000,000 (or, at any time after the Term Loan A has been repaid in full,
$20,000,000) immediately after giving effect to any prepayment that is required
to be paid to the Term B Agent pursuant to any provision of this Section 2.4(d),
no such prepayment shall be paid to the Term B Agent and
(x) Administrative Agent shall apply such amounts to the payment of the US
Advances and, concurrently with such payment of the US Advances, a
corresponding reserve shall be established and maintained against the US
Borrowing Base and the Maximum US Revolver Amount in an amount equal to the
amount that would have otherwise been required to be paid by US Borrowers to
the Term B Agent, and (y) the amount that was applied to the US Advances
pursuant to subclause (x) shall be paid to the Term B Agent for
application to the outstanding principal amount of Term B Debt, and the
corresponding reserve against the US Borrowing Base and the Maximum US Revolver
Amount shall be released, once the Dollar Equivalent of Excess Availability
would be greater than $25,000,000 (or, at any time after the Term Loan A has
been repaid in full, $20,000,000) immediately after giving effect to such
prepayment of the Term B Debt so long as no Event of Default then exists.

 

31

 

2.5.                            Overadvances.

 

If, at any time or for
any reason, the amount of US Revolver Usage owed by US Borrowers to the Lender
Group pursuant to Section 2.1 or Section 2.12 is
greater than any of the limitations set forth in Section 2.1 or Section 2.12,
as applicable (an “US Overadvance”), the applicable US Borrowers
immediately shall pay to Administrative Agent, in cash, the amount of such
excess, which amount shall be used by Administrative Agent to reduce US
Revolver Usage in accordance with the priorities set forth in Section 2.4(b).  If, at any time or for any reason, the amount
of Canadian Revolver Usage owed by Canadian Borrowers to the Lender Group
pursuant to Section 2.1 or Section 2.12 is greater than
any of the limitations set forth in Section 2.1 or Section 2.12,
as applicable (a “Canadian Overadvance”), the applicable Canadian
Borrowers immediately shall pay to Canadian Administrative Agent, in cash, the
amount of such excess, which amount shall be used by Canadian Administrative
Agent to reduce the Canadian Revolver Usage in accordance with the priorities
set forth in Section 2.4(b). 
If, at any time or for any reason, the amount of European Revolver Usage
owed by European Borrowers to the Lender Group pursuant to Section 2.1
or Section 2.12 is greater than any of the limitations set forth in
Section 2.1 or Section 2.12, as applicable (an “European
Overadvance”; US Overadvances, Canadian Overadvances and European
Overadvances are collectively, the “Overadvances”), the applicable
European Borrowers immediately shall pay to European Administrative Agent, in
cash, the amount of such excess, which amount shall be used by European
Administrative Agent to reduce the European Revolver Usage in accordance with
the priorities set forth in Section 2.4(b).  In addition, US Borrowers hereby promise to
pay the US Obligations (including principal, interest, fees, costs, and
expenses) in the Applicable Currency in full and Foreign Borrowers hereby
promise to pay the Foreign Obligations (including principal, interest, fees,
costs, and expenses) in the Applicable Currency in full, in each case as and
when due and payable under the terms of this Agreement and the other Loan
Documents.

 

2.6.                            Interest Rates and Letter of Credit
Fee:  Rates, Payments, and Calculations.

 

(a)                                  Interest
Rates.  Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) whether or not charged to the Loan Accounts pursuant to
the terms hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is an Advance (whether a US Advance, Canadian Advance
or European Advance) denominated in Dollars that is a LIBOR Rate Loan, at a per
annum rate equal to the US LIBOR Rate plus the LIBOR Rate Margin, (ii) if
the relevant Obligation is a Canadian Advance denominated in Canadian Dollars
that is a LIBOR Rate Loan, subject to Section 2.16, at a per annum
rate equal to the Canadian LIBOR Rate plus the LIBOR Rate Margin, (iii) if
the relevant Obligation is an Advance (whether a US Advance or European
Advance) that is an Offshore Currency Rate Loan, at a per annum rate equal to
the applicable Approved Offshore Currency Rate plus the LIBOR Rate Margin, (iv) if
the relevant Obligation is a portion of the Term Loan A that is a LIBOR Rate
Loan, at a per annum rate equal to the US LIBOR Rate plus the LIBOR Rate Term
Loan A Margin, (v) if the relevant Obligation is a portion of the Term
Loan A that is a Base Rate Loan, at a per annum rate equal to the US Base Rate
plus the Base Rate Term Loan A

 

32

 

Margin, (vi) if
the relevant Obligation is a Canadian Advance denominated in Canadian Dollars
that is a Base Rate Loan, subject to Section 2.16, at a per annum
rate equal to the Canadian Base Rate plus the Base Rate Margin, and (vii) otherwise
with respect to Advances and other amounts corresponding to principal, at a per
annum rate equal to the US Base Rate plus the Base Rate Margin.

 

The foregoing
notwithstanding, at no time shall any portion of the Obligations (other than
Bank Product Obligations) bear interest on the Daily Balance thereof at a per
annum rate less than 3%.  To the extent
that interest accrued hereunder at the rate set forth herein would be less than
the foregoing minimum daily rate, the interest rate chargeable hereunder for
such day automatically shall be deemed increased to the minimum rate.

 

(b)                                 Letter of Credit
Fee.

 

(i)                                     US
Borrowers shall pay Administrative Agent (for the ratable benefit of the Lenders
with a US Revolver Commitment), a Letter of Credit fee (in addition to the
charges, commissions, fees, and costs set forth in Section 2.12(a)(v))
which shall accrue at a rate equal to 2% per annum times the Daily Balance of
the undrawn amount of all outstanding US Letters of Credit.

 

(ii)                                  Canadian
Borrowers shall pay Canadian Administrative Agent (for the ratable benefit of
the Lenders with a Canadian Revolver Commitment), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section 2.12(b)(v))
which shall accrue at a rate equal to 2% per annum times the Daily Balance of
the undrawn amount of all outstanding Canadian Letters of Credit.

 

(iii)                               European
Borrowers shall pay European Administrative Agent (for the ratable benefit of
the Lenders with a European Revolver Commitment), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section 2.12(c)(v))
which shall accrue at a rate equal to 2% per annum times the Daily Balance of
the undrawn amount of all outstanding European Letters of Credit.

 

(c)                                  Default Rate.  Upon the occurrence and during the continuation of an
Event of Default,

 

(i)                                     at
the election of Administrative Agent or the Required Lenders, all Obligations
(except for undrawn Letters of Credit and except for Bank Product Obligations)
whether or not charged to a Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per annum rate equal to 200
basis points above the per annum rate otherwise applicable hereunder, and

 

(ii)                                  at
the election of Administrative Agent or the Required Lenders, the Letter of
Credit fee provided for above shall be increased to 200 basis points above the
per annum rate otherwise applicable hereunder.

 

(d)                                 Payment.  Except as provided to the contrary in Section 2.11
or Section 2.13(a), interest, Letter of Credit fees, and all other
fees payable hereunder shall be

 

33

 

due and
payable, in arrears, on the first Business Day of each month at any time that
Obligations or Commitments are outstanding. 
US Borrowers hereby authorize Administrative Agent, from time to time,
without prior notice to Borrowers, to charge all interest and fees (when due
and payable), all Lender Group Expenses (as and when incurred), all charges,
commissions, fees, and costs provided for in Section 2.12(a)(v) (as
and when accrued or incurred), all fees and costs provided for in Section 2.11
(as and when accrued or incurred), and all other payments as and when due and
payable under any Loan Document (including the amounts due and payable with
respect to the Term Loan A and including any amounts due and payable to the
Bank Product Providers in respect of Bank Products up to the amount of the Bank
Product Reserve), in each case attributable to the US Borrowers to the US Loan
Account, which amounts thereafter shall constitute US Advances hereunder and,
to the extent such amounts are denominated in Dollars, shall accrue interest at
the rate then applicable to US Advances that are Base Rate Loans denominated in
Dollars hereunder and, to the extent such amounts are denominated in an
Approved Offshore Currency, shall accrue interest at the rate then applicable
to US Advances that are LIBOR Rate Loans denominated in such Approved Offshore
Currency with an Interest Period of one month’s duration hereunder.  Canadian Borrowers hereby authorize Canadian
Administrative Agent, from time to time, without prior notice to Borrowers, to
charge all interest and fees (when due and payable) owed by Canadian Borrowers,
all Lender Group Expenses (as and when incurred) owed by Canadian Borrowers,
all charges, commissions, fees, and costs provided for in Section 2.12(b)(v) (as
and when accrued or incurred), all fees and costs provided for in Section 2.11
(as and when accrued or incurred) owed by Canadian Borrowers, and all other
payments as and when due and payable under any Loan Document by Canadian
Borrowers to the Canadian Loan Account, which amounts thereafter shall constitute
Canadian Advances hereunder and shall accrue interest at the rate then
applicable to Canadian Advances that are Base Rate Loans denominated in the
Applicable Currency hereunder.  European
Borrowers hereby authorize European Administrative Agent, from time to time,
without prior notice to Borrowers, to charge all interest and fees (when due
and payable) owed by European Borrowers, all Lender Group Expenses (as and when
incurred) owed by European Borrowers, all charges, commissions, fees, and costs
provided for in Section 2.12(c)(v) (as and when accrued or
incurred), all fees and costs provided for in Section 2.11 (as and
when accrued or incurred) owed by European Borrowers, and all other payments as
and when due and payable under any Loan Document by European Borrowers to the
European Loan Account, which amounts thereafter shall constitute European
Advances hereunder and, to the extent such amounts are denominated in Dollars,
shall accrue interest at the rate then applicable to European Advances that are
Base Rate Loans denominated in Dollars hereunder and, to the extent such
amounts are denominated in an Approved Offshore Currency, shall accrue interest
at the rate then applicable to European Advances that are LIBOR Rate Loans
denominated in such Approved Offshore Currency with an Interest Period of one
month’s duration hereunder.  To the
extent permitted by law, (i) any interest with respect to US Obligations
that is not paid when due shall be compounded by being charged to the
applicable Borrowers’ Loan Account and shall thereafter constitute US Advances
to such Borrowers hereunder and shall accrue interest at the rate then
applicable to US Advances that are Base Rate Loans denominated in Dollars
hereunder, (ii) any interest with respect to Foreign Obligations owed by
Canadian Borrowers that is not paid when due

 

34

 

shall be
compounded by being charged to the applicable Borrowers’ Loan Account and shall
thereafter constitute Canadian Advances to such Borrowers hereunder and shall
accrue interest at the rate then applicable to Canadian Advances that are Base
Rate Loans denominated in the Applicable Currency hereunder and (iii) any
interest with respect to Foreign Obligations owed by European Borrowers that is
not paid when due shall be compounded by being charged to the applicable
Borrowers’ Loan Account and shall thereafter constitute European Advances to
such Borrowers hereunder and, to the extent such amounts are denominated in
Dollars, shall accrue interest at the rate then applicable to European Advances
that are Base Rate Loans denominated in Dollars hereunder and, to the extent
such amounts are denominated in an Approved Offshore Currency, shall accrue
interest at the rate then applicable to European Advances that are LIBOR Rate
Loans denominated in such Approved Offshore Currency with an Interest Period of
one month’s duration hereunder.

 

(e)                                  Computation.  Subject to the Interest Act (Canada) and Section 2.16,
all interest and fees chargeable under the Loan Documents shall be computed on
the basis of a 360 day year for the actual number of days elapsed.  In the event the Base Rate is changed from
time to time hereafter, the rates of interest hereunder based upon the Base
Rate automatically and immediately shall be increased or decreased by an amount
equal to such change in the Base Rate.

 

(f)                                    Intent to Limit
Charges to Maximum Lawful Rate.  In no event shall the interest rate
or rates payable under this Agreement, plus any fees, charges, costs and payments
construed to be equivalent to interest and any other amounts paid in connection
herewith, exceed the highest rate permissible under any Law that a court of
competent jurisdiction shall, in a final determination, deem applicable.  Borrowers and the Lender Group, in executing
and delivering this Agreement, intend legally to agree upon the rate or rates
of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate
or rates of interest or manner of payment exceeds the maximum allowable under
Applicable Law, then, ipso facto,
as of the date of this Agreement, Borrowers are and shall be liable only for
the payment of such maximum as allowed by Law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such
excess.

 

2.7.                            Cash Management.

 

(a)                                  Borrowers shall (i) establish
and maintain cash management services of a type and on terms reasonably
satisfactory to Collateral Agent at one or more of the banks set forth on Schedule 2.7(a) as
amended or modified from time to time pursuant to clause (c) below (each a
“Cash Management Bank”), and shall request in writing and otherwise take
such reasonable steps to ensure that all of their Account Debtors forward
payment of the amounts owed by them directly to such Cash Management Banks, and
(ii) deposit or cause to be deposited promptly, and in any event no later
than the first Business Day after the date of receipt thereof, all of their
Collections from Account Debtors (including those sent directly

 

35

 

by their
Account Debtors to Borrowers) into a bank account (a “Cash Management
Account”) at one of the Cash Management Banks.

 

(b)                                 Each Cash Management Bank shall
establish and maintain Cash Management Agreements, in form and substance
reasonably acceptable to Collateral Agent. 
Unless the Collateral Agent otherwise agrees, each such Cash Management
Agreement shall provide, among other things, that (i) at any time after
notice from Collateral Agent and prior to the rescinding of such notice, the
Cash Management Bank will comply with any instructions originated by Collateral
Agent directing the disposition of the funds in such Cash Management Account
without further consent by Borrowers, (ii) the Cash Management Bank has no
rights of setoff or recoupment or any other claim against the applicable Cash
Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) at any time
after notice from Collateral Agent and prior to the rescinding of such notice,
it will forward by daily sweep all amounts in the applicable Cash Management
Account to the applicable Agent’s Account; provided that,
unless (y) an Enforcement Event under and as such term is defined in the German
account pledge agreements dated on or about the date hereof entered into or to
be entered into between each of the German Borrowers and the Collateral Agent
in connection with this Agreement has occurred, or (x) an Event of Default of a
German Borrower has occurred and is continuing which Event of Default was not
caused solely by an act or omission to act of a Borrower other than the German
Borrowers through a cross default provision under this Agreement, the
Collateral Agent shall not be entitled to provide any notice referred to in
clause (i) or clause (iii) above pursuant to any Cash Management
Agreement to which such German Borrower is a party if such German Borrower
proves to the reasonable satisfaction of the Collateral Agent that such notice
would constitute or result in an interference destroying the existence (existenzvernichtender Eingriff) of such German Borrower.  Collateral Agent agrees that at any time
prior to the occurrence of a Cash Management Triggering Event and at any time
after the occurrence of a subsequent Cash Management Reinstatement Event (to
the extent no subsequent Cash Management Triggering Event has occurred),
Collateral Agent shall instruct the Cash Management Banks to direct the funds
in the Cash Management Accounts to such Deposit Accounts of Borrowers as
Collateral Agent is directed by Administrative Borrower.  After the occurrence of a Cash Management
Reinstatement Event, Collateral Agent further agrees to promptly notify each
Cash Management Bank of the occurrence of such Cash Management Reinstatement
Event and that such Cash Management Bank may resume directing the funds in the
Cash Management Accounts to such Deposit Accounts of Borrowers as directed by
Administrative Borrower.

 

(c)                                  So long as no Event of Default has
occurred and is continuing, Administrative Borrower may amend Schedule 2.7(a) to
add or replace a Cash Management Bank or Cash Management Account; provided,
however, that (i) such prospective Cash Management Bank shall be
reasonably satisfactory to Collateral Agent, and (ii) prior to the time of
the opening of such Cash Management Account, the applicable Borrower and such
prospective Cash Management Bank shall have executed and delivered to
Collateral Agent a Cash Management Agreement. 
Borrowers shall close any of their Cash Management

 

36

 

Accounts
(and establish replacement cash management accounts in accordance with the
foregoing sentence) promptly and in any event within 60 days of notice from
Collateral Agent (or such longer period as Administrative Borrower and
Collateral Agent may agree) that the creditworthiness of any Cash Management
Bank is no longer acceptable in Collateral Agent’s reasonable judgment, or as
promptly as practicable and in any event within 90 days of notice from
Collateral Agent (or such longer period as Administrative Borrower and
Administrative Agent may agree) that the operating performance, funds transfer,
or availability procedures or performance of the Cash Management Bank with
respect to Cash Management Accounts or Collateral Agent’s liability under any
Cash Management Agreement with such Cash Management Bank is no longer
acceptable in Administrative Agent’s reasonable judgment.

 

(d)                                 The Cash Management Accounts shall
be cash collateral accounts subject to Control Agreements.

 

2.8.                            Crediting Payments; Clearance Charge.

 

The receipt of any
payment item by an Agent (whether from transfers to Administrative Agent by the
Cash Management Banks pursuant to the Cash Management Agreements or otherwise)
shall not be considered a payment on account unless such payment item is in the
Applicable Currency and is a wire transfer of immediately available federal
funds made to the applicable Agent’s Account or unless and until such payment
item is honored when presented for payment. 
Should any payment item not be honored when presented for payment, then
the applicable Borrowers shall be deemed not to have made such payment and
interest shall be calculated accordingly. 
Anything to the contrary contained herein notwithstanding, any payment
item shall be deemed received by an Agent only if it is received into such
Agent’s Account on a Business Day on or before 11:00 a.m. (California
time).  If any payment item is received
into an Agent’s Account on a non-Business Day or after 11:00 a.m.
(California time) on a Business Day, it shall be deemed to have been received
by such Agent as of the opening of business on the immediately following
Business Day.  From and after the Closing
Date, the applicable Agent shall be entitled to charge (i) the US
Borrowers for 1 Business Day of ‘clearance’ at the rate then applicable under Section 2.6
to US Advances that are Base Rate Loans denominated in Dollars on the Dollar
Equivalent of all Collections that are received by Loan Parties other than Foreign
Loan Parties (regardless of whether forwarded by the Cash Management Banks to
such Agent), (ii) the Canadian Borrowers (A) for 1 Business Day of ‘clearance’
at the rate then applicable under Section 2.6 to Canadian Advances
that are Base Rate Loans denominated in Canadian Dollars on all Collections
denominated in Canadian Dollars that are received by Canadian Borrowers
(regardless of whether forwarded by the Cash Management Banks to such Agent)
and (B) for 1 Business Day of ‘clearance’ at the rate then applicable
under Section 2.6 to Canadian Advances that are Base Rate Loans
denominated in Dollars on the Dollar Equivalent of all Collections denominated
in a currency other than Canadian Dollars that are received by Canadian
Borrowers (regardless of whether forwarded by the Cash Management Banks to such
Agent) and (iii) the European Borrowers for 1 Business Day of ‘clearance’
at the rate then applicable under Section 2.6 to Advances that are
Base Rate Loans denominated in Dollars on the Dollar Equivalent of all
Collections that are received by European

 

37

 

Borrowers
(regardless of whether forwarded by the Cash Management Banks to such
Agent).  This across-the-board 1 Business
Day clearance charge on all Collections of Borrowers is acknowledged by the
parties to constitute an integral aspect of the pricing of the financing of
Borrowers and shall apply irrespective of whether or not there are any
outstanding monetary Obligations; the effect of such clearance charge being the
equivalent of charging interest on such Collections through the completion of a
period ending 1 Business Day after the receipt thereof.  The parties acknowledge and agree that the
economic benefit of the foregoing provisions of this Section 2.8
shall be for the exclusive benefit of Agents.

 

2.9.                            Designated Account.

 

Administrative Agent is
authorized to make the US Advances and the Term Loan A, and US Issuing Lenders
are authorized to issue the US Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section 2.6(d).  Canadian Administrative Agent is authorized
to make the Canadian Advances, and Canadian Issuing Lenders are authorized to
issue the Canadian Letters of Credit, under this Agreement based upon
telephonic or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section 2.6(d).  European Administrative Agent is authorized
to make the European Advances, and European Issuing Lenders are authorized to
issue the European Letters of Credit, under this Agreement based upon
telephonic or other instructions received from anyone purporting to be an Authorized
Person or, without instructions, if pursuant to Section 2.6(d).  Administrative Borrower agrees to establish
and maintain each US Designated Account with the US Designated Account Bank for
the purpose of receiving the proceeds of the US Advances requested by US
Borrowers and made by Administrative Agent or the US Lenders hereunder.  Unless otherwise agreed by Administrative
Agent and Administrative Borrower, any US Advance, US Protective Advance, or US
Swing Loan requested by US Borrowers and made by Administrative Agent or the US
Lenders hereunder shall be made to the applicable US Designated Account.  Administrative Borrower further agrees to
cause Canadian Administrative Borrower to establish and maintain each Canadian
Designated Account with the Canadian Designated Account Bank for the purpose of
receiving the proceeds of the Canadian Advances requested by Canadian Borrowers
and made by Canadian Administrative Agent or the Canadian Lenders
hereunder.  Unless otherwise agreed by
Canadian Administrative Agent and Administrative Borrower, any Canadian
Advance, Canadian Protective Advance, or Canadian Swing Loan requested by
Canadian Borrowers and made by Canadian Administrative Agent or the Canadian
Lenders hereunder shall be made to the applicable Canadian Designated
Account.  Administrative Borrower further
agrees to cause European Administrative Borrower to establish and maintain each
European Designated Account with the European Designated Account Bank for the
purpose of receiving the proceeds of the European Advances requested by
European Borrowers and made by European Administrative Agent or the European
Lenders hereunder.  Unless otherwise
agreed by European Administrative Agent and Administrative Borrower, any
European Advance, European Swing Loan or European Protective Advance requested
by European Borrowers

 

38

 

and made by
European Administrative Agent or the European Lenders hereunder shall be made
to the applicable European Designated Account.

 

2.10.                     Maintenance of Loan Accounts;
Statements of Obligations.

 

Administrative Agent
shall maintain an account on its books in the name of US Borrowers (the “US
Loan Account”) on which US Borrowers will be charged with the Term Loan A,
all US Advances (including Protective Advances to US Borrowers and US Swing
Loans) made by Administrative Agent, US Swing Lender, Fronting Lender, or the
US Lenders to US Borrowers or for US Borrowers’ account, the US Letters of
Credit issued by a US Issuing Lender for US Borrowers’ account, and with all
other payment US Obligations hereunder or under the other Loan Documents
(except for Bank Product Obligations), including, accrued interest, fees and
expenses, and Lender Group Expenses. 
Canadian Administrative Agent shall maintain an account on its books in
the name of Canadian Borrowers (the “Canadian Loan Account”) on which
all Canadian Advances (including Protective Advances to Canadian Borrowers and
Canadian Swing Loans) made by Canadian Administrative Agent, Canadian Swing
Lender, or the Canadian Lenders to Canadian Borrowers or for Canadian Borrowers’
account, the Canadian Letters of Credit issued by a Canadian Issuing Lender for
Canadian Borrowers’ account, and with all other payment Foreign Obligations
hereunder or under the other Loan Documents (except for Bank Product
Obligations), including, accrued interest, fees and expenses, and Lender Group
Expenses attributable to the Canadian Borrowers.  European Administrative Agent shall maintain
an account on its books in the name of European Borrowers (the “European
Loan Account”; together with the US Loan Account and the Canadian Loan
Account, each a “Loan Account” and, collectively, the “Loan Accounts”)
on which European Borrowers will be charged with all European Advances
(including Protective Advances to European Borrowers and European Swing Loans)
made by European Administrative Agent, or the European Lenders to European
Borrowers or for European Borrowers’ account, the European Letters of Credit
issued by a European Issuing Lender for European Borrowers’ account, and with
all other payment Foreign Obligations hereunder or under the other Loan
Documents (except for Bank Product Obligations), including, accrued interest,
fees and expenses, and Lender Group Expenses attributable to the European
Borrowers.  In accordance with Section 2.8,
the US Loan Account will be credited with all payments received by
Administrative Agent from US Borrowers or for US Borrowers’ account, including
all amounts received in the applicable Administrative Agent’s Account from any
Cash Management Bank of any US Borrower, the Canadian Loan Account will be
credited with all payments received by Canadian Administrative Agent from
Canadian Borrowers or for Canadian Borrowers’ account, including all amounts
received in the applicable Canadian Administrative Agent’s Account from any
Cash Management Bank of any Canadian Borrower and the European Loan Account
will be credited with all payments received by European Administrative Agent
from European Borrowers or for European Borrowers’ account, including all
amounts received in the applicable European Administrative Agent’s Account from
any Cash Management Bank of any European Borrower.  Administrative Agent shall render statements
regarding the Loan Accounts to Administrative Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such

 

39

 

statements, absent
manifest error, shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Administrative Borrower, Administrative
Borrower shall deliver to Administrative Agent written objection thereto
describing the error or errors contained in any such statements.

 

2.11.                     Fees.

 

Borrowers shall pay to
the applicable Agent, as and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter.

 

2.12.                     Letters of Credit.

 

(a)                                  US Letters of
Credit.

 

(i)                                     Subject
to the terms and conditions of this Agreement, the US Issuing Lender agrees to
issue letters of credit for the account of US Borrowers (each, a “US L/C”)
or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, a “US L/C Undertaking”) with respect
to letters of credit issued by a US Underlying Issuer (as of the Closing Date,
the prospective US Underlying Issuer is to be Wells Fargo) for the account of
US Borrowers.  Each request for the
issuance of a US Letter of Credit or the amendment, renewal, or extension of
any outstanding US Letter of Credit shall be made in writing by an Authorized
Person and delivered to the applicable US Issuing Lender and Administrative
Agent via hand delivery, telefacsimile, or other electronic method of
transmission reasonably in advance of the requested date of issuance,
amendment, renewal, or extension.  Each
such request shall be in form and substance satisfactory to the US Issuing
Lender in its Permitted Discretion and shall specify (i) the amount of
such US Letter of Credit, (ii) the currency in which amounts under such US
Letter of Credit shall be payable, (iii) the date of issuance, amendment,
renewal, or extension of such US Letter of Credit, (iv) the expiration
date of such US Letter of Credit, (v) the name and address of the
beneficiary thereof (or the beneficiary of the US Underlying Letter of Credit,
as applicable), and (vi) such other information (including, in the case of
an amendment, renewal, or extension, identification of the outstanding US
Letter of Credit to be so amended, renewed, or extended) as shall be necessary
to prepare, amend, renew, or extend such US Letter of Credit.  If requested by the US Issuing Lender, US
Borrowers also shall be an applicant under the application with respect to any
US Underlying Letter of Credit that is to be the subject of a US L/C
Undertaking.  The US Issuing Lender shall
have no obligation to issue a US Letter of Credit if any of the following would
result after giving effect to the issuance of such requested US Letter of
Credit:

 

(A)                    the US Letter
of Credit Usage would exceed the US Borrowing Base less the Dollar Equivalent of the outstanding principal amount
of US Advances, or

 

(B)                      the US
Letter of Credit Usage would exceed $30,000,000 less the sum of the Canadian
Letter of Credit Usage and European Letter of Credit Usage, or

 

40

 

(C)                      the US
Letter of Credit Usage would exceed the Maximum US Revolver Amount less the Dollar Equivalent of the
outstanding principal amount of US Advances.

 

US Borrowers and the
Lender Group acknowledge and agree that certain US Underlying Letters of Credit
may be issued to support letters of credit that already are outstanding as of
the Closing Date.  Each US Letter of
Credit (and corresponding US Underlying Letter of Credit) shall be in form and
substance acceptable to the US Issuing Lender (in the exercise of its Permitted
Discretion), including the requirement that the amounts payable thereunder must
be payable in Dollars or an Approved Offshore Currency.  If US Issuing Lender is obligated to advance
funds under a US Letter of Credit, US Borrowers immediately shall reimburse
such US L/C Disbursement to US Issuing Lender by paying to Administrative Agent
an amount equal to such US L/C Disbursement not later than 11:00 a.m.,
California time, on the date that such US L/C Disbursement is made, if
Administrative Borrower shall have received written or telephonic notice of
such US L/C Disbursement prior to 10:00 a.m., California time, on such
date, or, if such notice has not been received by Administrative Borrower prior
to such time on such date, then not later than 11:00 a.m., California
time, on (x) the Business Day that Administrative Borrower receives such
notice, if such notice is received prior to 10:00 a.m., California time,
on the date of receipt of such notice or (y) the next Business Day, if such
notice is not received before such time on the date of receipt of such notice,
and, in the absence of such reimbursement, the US L/C Disbursement immediately
and automatically shall, if the US L/C Disbursement is payable in an Approved
Offshore Currency, be converted at the Currency Exchange Rate from the
applicable Approved Offshore Currency to Dollars and shall be deemed to be a US
Advance hereunder and, thereafter, shall bear interest at the rate then
applicable to US Advances that are US Base Rate Loans denominated in Dollars
under Section 2.6.  To the
extent a US L/C Disbursement is deemed to be a US Advance hereunder, US
Borrowers’ obligation to reimburse such US L/C Disbursement shall be discharged
and replaced by the resulting US Advance. 
Promptly following receipt by Administrative Agent of any payment from
US Borrowers pursuant to this paragraph, Administrative Agent shall distribute
such payment to the US Issuing Lender or, to the extent that Lenders have made
payments pursuant to Section 2.12(a)(ii) to reimburse the US
Issuing Lender, then to such Lenders and the US Issuing Lender as their
interests may appear.

 

(ii)                                  Promptly
following receipt of a notice of a US L/C Disbursement pursuant to Section 2.12(a)(i),
each Lender with a US Revolver Commitment agrees to fund its Pro Rata Share of
any US Advance deemed made pursuant to the foregoing subsection on the
same terms and conditions as if US Borrowers had requested such US Advance and
Administrative Agent shall promptly pay to US Issuing Lender the amounts so
received by it from the Lenders.  By the
issuance of a US Letter of Credit (or an amendment to a US Letter of Credit
increasing the amount thereof) and without any further action on the part of
the US Issuing Lender or the Lenders with US Revolver Commitments, the US
Issuing Lender shall be deemed to have granted to each Lender with a US
Revolver Commitment, and each Lender with a US Revolver Commitment shall be
deemed to have purchased, a participation in each US Letter of Credit, in an
amount equal to its Pro Rata

 

41

 

Share of the US Risk Participation Liability of such
US Letter of Credit, and each such Lender agrees to pay to Administrative
Agent, for the account of the US Issuing Lender, such Lender’s Pro Rata Share
of any payments made by the US Issuing Lender under such US Letter of
Credit.  In consideration and in
furtherance of the foregoing, each Lender with a US Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Administrative Agent, for the
account of the US Issuing Lender, such Lender’s Pro Rata Share of each US L/C
Disbursement made by the US Issuing Lender and not reimbursed by US Borrowers
on the date due as provided in clause (a) of this Section, or of any
reimbursement payment required to be refunded to US Borrowers for any
reason.  Each Lender with a US Revolver
Commitment acknowledges and agrees that its obligation to deliver to
Administrative Agent, for the account of the US Issuing Lender, an amount equal
to its respective Pro Rata Share of each US L/C Disbursement made by the US
Issuing Lender pursuant to this Section 2.12(a)(ii) shall be
absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3 hereof.  If any such Lender fails to make available to
Administrative Agent the amount of such Lender’s Pro Rata Share of each US L/C
Disbursement made by the US Issuing Lender in respect of such US Letter of
Credit as provided in this Section, such Lender shall be deemed to be a
Defaulting Lender and Administrative Agent (for the account of the US Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in
full.

 

(iii)                               Each
US Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group
harmless from any loss, cost, expense, or liability, and reasonable attorneys
fees incurred by the Lender Group arising out of or in connection with any US
Letter of Credit; provided, however, that no US Borrower shall be
obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the US Issuing Lender or any other member of the Lender Group.  Each US Borrower agrees to be bound by the US
Underlying Issuer’s regulations and interpretations of any US Underlying Letter
of Credit or by US Issuing Lender’s interpretations of any US L/C issued by US
Issuing Lender to or for such US Borrower’s account, even though this
interpretation may be different from such US Borrower’s own, and each US
Borrower understands and agrees that the Lender Group shall not be liable for
any error, negligence, or mistake, whether of omission or commission, in
following US Borrowers’ instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto, other than those
resulting from the gross negligence or willful misconduct of the US Issuing
Lender or any other member of the Lender Group. 
Each US Borrower understands that the US L/C Undertakings may require US
Issuing Lender to indemnify the US Underlying Issuer for certain costs or
liabilities arising out of claims by US Borrowers against such US Underlying
Issuer.  Each US Borrower hereby agrees
to indemnify, save, defend, and hold the Lender Group harmless with respect to
any loss, cost, expense (including reasonable attorneys fees), or liability incurred
by the Lender Group under any US L/C Undertaking as a result of the Lender
Group’s indemnification of any US Underlying Issuer; provided, however,
that no US Borrower shall be obligated hereunder to indemnify for any loss,
cost, expense, or liability to

 

42

 

the extent that it is caused by the gross negligence
or willful misconduct of the US Issuing Lender or any other member of the
Lender Group.  Each US Borrower hereby
acknowledges and agrees that neither the Lender Group nor the US Issuing Lender
shall be responsible for delays, errors, or omissions resulting from the
malfunction of equipment in connection with any Letter of Credit.

 

(iv)                              Each
US Borrower hereby authorizes and directs any US Underlying Issuer to deliver
to the US Issuing Lender all instruments, documents, and other writings and
property received by such US Underlying Issuer pursuant to such US Underlying
Letter of Credit and to accept and rely upon the US Issuing Lender’s
instructions with respect to all matters arising in connection with such US
Underlying Letter of Credit and the related application.

 

(v)                                 Any
and all issuance charges, commissions, fees, and costs incurred by the US
Issuing Lender relating to US Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by US Borrowers to Administrative Agent for the account of the US
Issuing Lender; it being acknowledged and agreed by each US Borrower that, as
of the Closing Date, the issuance charge imposed by the prospective US
Underlying Issuer is .825% per annum times the face amount of each US
Underlying Letter of Credit, that such issuance charge may be changed from time
to time, and that the US Underlying Issuer also imposes a schedule of
charges for amendments, extensions, drawings, and renewals.

 

(vi)                              If
by reason of (i) any change after the Closing Date in any Applicable Law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the US
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):

 

(A)                    any reserve,
deposit, or similar requirement is or shall be imposed or modified in respect
of any US Letter of Credit issued hereunder, or

 

(B)                      there shall
be imposed on the US Underlying Issuer or the Lender Group any other condition
regarding any US Underlying Letter of Credit or any US Letter of Credit issued
pursuant hereto;

 

and the result of the
foregoing is to increase, directly or indirectly, the cost to the Lender Group
of issuing, making, guaranteeing, or maintaining any US Letter of Credit or to
reduce the amount receivable in respect thereof by the Lender Group, then, and
in any such case, Administrative Agent may, at any time within a reasonable
period (not exceeding 180 days) after the additional cost is incurred or the
amount received is reduced, notify Administrative Borrower, and US Borrowers
shall pay on demand such amounts as Administrative Agent may specify to be
necessary to compensate the Lender Group for such additional cost or reduced
receipt, together with interest on such amount from the date of such demand
until payment in full thereof at the rate then applicable to Base Rate Loans
denominated in Dollars

 

43

 

hereunder.  The determination by Administrative Agent of
any amount due pursuant to this Section, as set forth in a certificate
delivered to the Administrative Borrower setting forth the calculation thereof
in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.

 

(b)                                  Canadian Letters of
Credit.

 

(i)                                     Subject
to the terms and conditions of this Agreement, the Canadian Issuing Lender
agrees to issue letters of credit for the account of Canadian Borrowers (each,
a “Canadian L/C”) or to purchase participations or execute indemnities
or reimbursement obligations (each such undertaking, a “Canadian L/C
Undertaking”) with respect to letters of credit issued by a Canadian
Underlying Issuer (as of the Closing Date, the prospective Canadian Underlying
Issuer is to be Wells Fargo) for the account of Canadian Borrowers.  Each request for the issuance of a Canadian
Letter of Credit or the amendment, renewal, or extension of any outstanding
Canadian Letter of Credit shall be made in writing by an Authorized Person and
delivered to the applicable Canadian Issuing Lender and Canadian Administrative
Agent via hand delivery, telefacsimile, or other electronic method of
transmission reasonably in advance of the requested date of issuance,
amendment, renewal, or extension.  Each
such request shall be in form and substance satisfactory to the Canadian
Issuing Lender in its Permitted Discretion and shall specify (i) the
amount of such Canadian Letter of Credit, (ii) the currency in which
amounts under such Canadian Letter of Credit shall be payable, (iii) the
date of issuance, amendment, renewal, or extension of such Canadian Letter of
Credit, (iv) the expiration date of such Canadian Letter of Credit, (v) the
name and address of the beneficiary thereof (or the beneficiary of the Canadian
Underlying Letter of Credit, as applicable), and (vi) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Canadian Letter of Credit to be so amended,
renewed, or extended) as shall be necessary to prepare, amend, renew, or extend
such Canadian Letter of Credit.  If
requested by the Canadian Issuing Lender, Canadian Borrowers also shall be an
applicant under the application with respect to any Canadian Underlying Letter
of Credit that is to be the subject of a Canadian L/C Undertaking.  The Canadian Issuing Lender shall have no obligation
to issue a Canadian Letter of Credit if any of the following would result after
giving effect to the issuance of such requested Canadian Letter of Credit:

 

(A)                    the Canadian
Letter of Credit Usage would exceed the Canadian Borrowing Base less the Dollar Equivalent of the
outstanding principal amount of Canadian Advances, or

 

(B)                      the Canadian
Letter of Credit Usage would exceed the lesser of (x) $10,000,000 and
(y) $30,000,000 less the sum of the US Letter of Credit Usage and European
Letter of Credit Usage, or

 

(C)                      the Canadian
Letter of Credit Usage would exceed the Maximum Canadian Revolver Amount less the Dollar Equivalent of the
outstanding principal amount of Canadian Advances.

 

44

 

Canadian Borrowers and
the Lender Group acknowledge and agree that certain Canadian Underlying Letters
of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date.  Each
Canadian Letter of Credit (and corresponding Canadian Underlying Letter of
Credit) shall be in form and substance acceptable to the Canadian Issuing
Lender (in the exercise of its Permitted Discretion), including the requirement
that the amounts payable thereunder must be payable in Dollars or Canadian
Dollars.  If Canadian Issuing Lender is
obligated to advance funds under a Canadian Letter of Credit, Canadian
Borrowers immediately shall reimburse such Canadian L/C Disbursement to
Canadian Issuing Lender by paying to Canadian Administrative Agent an amount in
the Applicable Currency equal to such Canadian L/C Disbursement not later than
11:00 a.m., California time, on the date that such Canadian L/C
Disbursement is made, if Administrative Borrower shall have received written or
telephonic notice of such Canadian L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Administrative Borrower prior to such time on such date, then not later than
11:00 a.m., California time, on (x) the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
California time, on the date of receipt of such notice or (y) the next Business
Day, if such notice is not received before such time on the date of receipt of
such notice, and, in the absence of such reimbursement, the Canadian L/C
Disbursement immediately and automatically shall be deemed to be a Canadian
Advance hereunder and, thereafter, shall bear interest at the rate then
applicable to Canadian Advances that are Base Rate Loans denominated in the
Applicable Currency under Section 2.6.  To the extent a Canadian L/C Disbursement is
deemed to be a Canadian Advance hereunder, Canadian Borrowers’ obligation to
reimburse such Canadian L/C Disbursement shall be discharged and replaced by
the resulting Canadian Advance.  Promptly
following receipt by Canadian Administrative Agent of any payment from Canadian
Borrowers pursuant to this paragraph, Canadian Administrative Agent shall
distribute such payment to the Canadian Issuing Lender or, to the extent that
Lenders have made payments pursuant to Section 2.12(b)(ii) to
reimburse the Canadian Issuing Lender, then to such Lenders and the Canadian
Issuing Lender as their interests may appear.

 

(ii)                                  Promptly
following receipt of a notice of a Canadian L/C Disbursement pursuant to Section 2.12(b)(i),
each Lender with a Canadian Revolver Commitment agrees to fund its Pro Rata
Share of any Canadian Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Canadian Borrowers had requested such
Canadian Advance and Canadian Administrative Agent shall promptly pay to
Canadian Issuing Lender the amounts so received by it from the Lenders.  By the issuance of a Canadian Letter of
Credit (or an amendment to a Canadian Letter of Credit increasing the amount
thereof) and without any further action on the part of the Canadian Issuing
Lender or the Lenders with Canadian Revolver Commitments, the Canadian Issuing
Lender shall be deemed to have granted to each Lender with a Canadian Revolver
Commitment, and each Lender with a Canadian Revolver Commitment shall be deemed
to have purchased, a participation in each Canadian Letter of Credit, in an
amount equal to its Pro Rata Share of the Canadian Risk Participation Liability
of such Canadian Letter of Credit, and each such Lender agrees to pay in the
Applicable Currency to Canadian Administrative Agent, for the account of the
Canadian Issuing Lender, such Lender’s Pro

 

45

 

Rata Share of any payments made by the Canadian
Issuing Lender under such Canadian Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender with a Canadian Revolver Commitment hereby absolutely
and unconditionally agrees to pay to Canadian Administrative Agent, for the
account of the Canadian Issuing Lender, such Lender’s Pro Rata Share of each
Canadian L/C Disbursement made by the Canadian Issuing Lender and not
reimbursed by Canadian Borrowers on the date due as provided in clause (b) of
this Section, or of any reimbursement payment required to be refunded to
Canadian Borrowers for any reason.  Each
Lender with a Canadian Revolver Commitment acknowledges and agrees that its
obligation to deliver to Canadian Administrative Agent, for the account of the
Canadian Issuing Lender, an amount in the Applicable Currency equal to its
respective Pro Rata Share of each Canadian L/C Disbursement made by the
Canadian Issuing Lender pursuant to this Section 2.12(b)(ii) shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3 hereof.  If any such Lender fails to make available to
Canadian Administrative Agent the amount of such Lender’s Pro Rata Share of
each Canadian L/C Disbursement made by the Canadian Issuing Lender in respect
of such Canadian Letter of Credit as provided in this Section, such Lender
shall be deemed to be a Defaulting Lender and Canadian Administrative Agent
(for the account of the Canadian Issuing Lender) shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.

 

(iii)                               Each
Canadian Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection
with any Canadian Letter of Credit; provided, however, that no
Canadian Borrower shall be obligated hereunder to indemnify for any loss, cost,
expense, or liability to the extent that it is caused by the gross negligence
or willful misconduct of the Canadian Issuing Lender or any other member of the
Lender Group.  Each Canadian Borrower
agrees to be bound by the Canadian Underlying Issuer’s regulations and
interpretations of any Canadian Underlying Letter of Credit or by Canadian
Issuing Lender’s interpretations of any Canadian L/C issued by Canadian Issuing
Lender to or for such Canadian Borrower’s account, even though this
interpretation may be different from such Canadian Borrower’s own, and each
Canadian Borrower understands and agrees that the Lender Group shall not be
liable for any error, negligence, or mistake, whether of omission or
commission, in following Canadian Borrowers’ instructions or those contained in
the Canadian Letter of Credit or any modifications, amendments, or supplements
thereto; other than those resulting from the gross negligence or willful misconduct
of the Canadian Issuing Lender or any other member of the Lender Group.  Each Canadian Borrower understands that the
Canadian L/C Undertakings may require Canadian Issuing Lender to indemnify the
Canadian Underlying Issuer for certain costs or liabilities arising out of
claims by Canadian Borrowers against such Canadian Underlying Issuer.  Each Canadian Borrower hereby agrees to
indemnify, save, defend, and hold the Lender Group harmless with respect to any
loss, cost, expense (including reasonable attorneys fees), or liability
incurred by the Lender Group under any Canadian L/C Undertaking as a result of
the Lender Group’s indemnification of any Canadian Underlying

 

46

 

Issuer; provided, however, that no Canadian
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense,
or liability to the extent that it is caused by the gross negligence or willful
misconduct of the Canadian Issuing Lender or any other member of the Lender
Group.  Each Canadian Borrower hereby
acknowledges and agrees that neither the Lender Group nor the Canadian Issuing
Lender shall be responsible for delays, errors, or omissions resulting from the
malfunction of equipment in connection with any Canadian Letter of Credit.

 

(iv)                              Each
Canadian Borrower hereby authorizes and directs any Canadian Underlying Issuer
to deliver to the Canadian Issuing Lender all instruments, documents, and other
writings and property received by such Canadian Underlying Issuer pursuant to
such Canadian Underlying Letter of Credit and to accept and rely upon the
Canadian Issuing Lender’s instructions with respect to all matters arising in
connection with such Canadian Underlying Letter of Credit and the related
application.

 

(v)                                 Any
and all issuance charges, commissions, fees, and costs incurred by the Canadian
Issuing Lender relating to Canadian Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Canadian Borrowers to Canadian Administrative Agent for the
account of the Canadian Issuing Lender; it being acknowledged and agreed by
each Canadian Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Canadian Underlying Issuer is .825% per annum times
the face amount of each Canadian Underlying Letter of Credit, that such
issuance charge may be changed from time to time, and that the Canadian
Underlying Issuer also imposes a schedule of charges for amendments,
extensions, drawings, and renewals.

 

(vi)                              If
by reason of (i) any change after the Closing Date in any Applicable Law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Canadian
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):

 

(A)                    any reserve,
deposit, or similar requirement is or shall be imposed or modified in respect
of any Canadian Letter of Credit issued hereunder, or

 

(B)                      there shall
be imposed on the Canadian Underlying Issuer or the Lender Group any other
condition regarding any Canadian Underlying Letter of Credit or any Canadian
Letter of Credit issued pursuant hereto;

 

and the result of the
foregoing is to increase, directly or indirectly, the cost to the Lender Group
of issuing, making, guaranteeing, or maintaining any Canadian Letter of Credit
or to reduce the amount receivable in respect thereof by the Lender Group,
then, and in any such case, Canadian Administrative Agent may, at any time
within a reasonable period (not exceeding 180 days) after the additional cost
is incurred or the amount received is reduced,

 

47

 

notify Administrative
Borrower, and Canadian Borrowers shall pay on demand such amounts as Canadian
Administrative Agent may specify to be necessary to compensate the Lender Group
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans denominated in Dollars hereunder.  The determination by Canadian Administrative
Agent of any amount due pursuant to this Section, as set forth in a certificate
delivered to the Administrative Borrower setting forth the calculation thereof
in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.

 

(c)                                  European Letters of
Credit.

 

(i)                                     Subject
to the terms and conditions of this Agreement, the European Issuing Lender
agrees to issue letters of credit for the account of European Borrowers (each,
a “European L/C”) or to purchase participations or execute indemnities
or reimbursement obligations (each such undertaking, a “European L/C
Undertaking”) with respect to letters of credit issued by a European
Underlying Issuer (as of the Closing Date, the prospective European Underlying
Issuer is to be Wells Fargo) for the account of European Borrowers.  Each request for the issuance of a European
Letter of Credit or the amendment, renewal, or extension of any outstanding
European Letter of Credit shall be made in writing by an Authorized Person and
delivered to the applicable European Issuing Lender and European Administrative
Agent via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension.  Each such request shall be in
form and substance satisfactory to the European Issuing Lender in its Permitted
Discretion and shall specify (i) the amount of such European Letter of
Credit, (ii) the currency in which amounts under such European Letter of
Credit shall be payable, (iii) the date of issuance, amendment, renewal,
or extension of such European Letter of Credit, (iv) the expiration date
of such European Letter of Credit, (v) the name and address of the
beneficiary thereof (or the beneficiary of the European Underlying Letter of
Credit, as applicable), and (vi) such other information (including, in the
case of an amendment, renewal, or extension, identification of the outstanding
European Letter of Credit to be so amended, renewed, or extended) as shall be
necessary to prepare, amend, renew, or extend such European Letter of
Credit.  If requested by the European Issuing
Lender, European Borrowers also shall be an applicant under the application
with respect to any European Underlying Letter of Credit that is to be the
subject of a European L/C Undertaking. 
The European Issuing Lender shall have no obligation to issue a European
Letter of Credit if any of the following would result after giving effect to
the issuance of such requested European Letter of Credit:

 

(A)                    the European
Letter of Credit Usage would exceed the European Borrowing Base less the Dollar Equivalent of the
outstanding principal amount of European Advances, or

 

(B)                      the European
Letter of Credit Usage would exceed $30,000,000 less the sum of US Letter of
Credit Usage and Canadian Letter of Credit Usage, or

 

48

 

(C)                      the European
Letter of Credit Usage would exceed the Maximum European Revolver Amount less the Dollar Equivalent of the
outstanding principal amount of European Advances.

 

European Borrowers and
the Lender Group acknowledge and agree that certain European Underlying Letters
of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date.  Each
European Letter of Credit (and corresponding European Underlying Letter of
Credit) shall be in form and substance acceptable to the European Issuing Lender
(in the exercise of its Permitted Discretion), including the requirement that
the amounts payable thereunder must be payable in Dollars or an Approved
Offshore Currency.  If European Issuing
Lender is obligated to advance funds under a European Letter of Credit,
European Borrowers immediately shall reimburse such European L/C Disbursement
to European Issuing Lender by paying to European Administrative Agent an amount
in the Applicable Currency equal to such European L/C Disbursement not later
than 11:00 a.m., California time, on the date that such European L/C
Disbursement is made, if Administrative Borrower shall have received written or
telephonic notice of such European L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Administrative Borrower prior to such time on such date, then not later than
11:00 a.m., California time, on (x) the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
California time, on the date of receipt of such notice or (y) the next Business
Day, if such notice is not received before such time on the date of receipt of
such notice,, and, in the absence of such reimbursement, the European L/C
Disbursement immediately and automatically shall, if the European L/C
Disbursement is payable in an Approved Offshore Currency, be converted at the
Currency Exchange Rate from the applicable Approved Offshore Currency to
Dollars and shall be deemed to be a European Advance hereunder and, thereafter,
shall bear interest at the rate then applicable to European Advances that are
European Base Rate Loans denominated in Dollars under Section 2.6.  To the extent a European L/C Disbursement is
deemed to be a European Advance hereunder, European Borrowers’ obligation to
reimburse such European L/C Disbursement shall be discharged and replaced by
the resulting European Advance.  Promptly
following receipt by European Administrative Agent of any payment from European
Borrowers pursuant to this paragraph, European Administrative Agent shall
distribute such payment to the European Issuing Lender or, to the extent that
Lenders have made payments pursuant to Section 2.12(c)(ii) to
reimburse the European Issuing Lender, then to such Lenders and the European
Issuing Lender as their interests may appear.

 

(ii)                                  Promptly
following receipt of a notice of a European L/C Disbursement pursuant to Section 2.12(c)(i),
each Lender with a European Revolver Commitment agrees to fund its Pro Rata
Share of any European Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if European Borrowers had requested such
European Advance and European Administrative Agent shall promptly pay to
European Issuing Lender the amounts so received by it from the Lenders.  By the issuance of a European Letter of
Credit (or an amendment to a European Letter of Credit increasing the amount
thereof) and without any further action on the part of the

 

49

 

European Issuing Lender or the Lenders with European
Revolver Commitments, the European Issuing Lender shall be deemed to have
granted to each Lender with a European Revolver Commitment, and each Lender
with a European Revolver Commitment shall be deemed to have purchased, a
participation in each European Letter of Credit, in an amount equal to its Pro
Rata Share of the European Risk Participation Liability of such European Letter
of Credit, and each such Lender agrees to pay in the Applicable Currency to
European Administrative Agent, for the account of the European Issuing Lender,
such Lender’s Pro Rata Share of any payments made by the European Issuing
Lender under such European Letter of Credit. 
In consideration and in furtherance of the foregoing, each Lender with a
European Revolver Commitment hereby absolutely and unconditionally agrees to
pay to European Administrative Agent, for the account of the European Issuing
Lender, such Lender’s Pro Rata Share of each European L/C Disbursement made by
the European Issuing Lender and not reimbursed by European Borrowers on the
date due as provided in clause (c) of this Section, or of any
reimbursement payment required to be refunded to European Borrowers for any
reason.  Each Lender with a European Revolver
Commitment acknowledges and agrees that its obligation to deliver to European
Administrative Agent, for the account of the European Issuing Lender, an amount
in the Applicable Currency equal to its respective Pro Rata Share of each
European L/C Disbursement made by the European Issuing Lender pursuant to this Section 2.12(c)(ii) shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3 hereof.  If any such Lender fails to make available to
European Administrative Agent the amount of such Lender’s Pro Rata Share of
each European L/C Disbursement made by the European Issuing Lender in respect
of such European Letter of Credit as provided in this Section, such Lender
shall be deemed to be a Defaulting Lender and European Administrative Agent
(for the account of the European Issuing Lender) shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.

 

(iii)                               Each
European Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable attorneys
fees incurred by the Lender Group arising out of or in connection with any
European Letter of Credit; provided, however, that no European
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense,
or liability to the extent that it is caused by the gross negligence or willful
misconduct of the European Issuing Lender or any other member of the Lender
Group.  Each European Borrower agrees to
be bound by the European Underlying Issuer’s regulations and interpretations of
any European Underlying Letter of Credit or by European Issuing Lender’s
interpretations of any European L/C issued by European Issuing Lender to or for
such European Borrower’s account, even though this interpretation may be
different from such European Borrower’s own, and each European Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
European Borrowers’ instructions or those contained in the European Letter of
Credit or any modifications, amendments, or supplements thereto; other than
those resulting from the gross negligence or willful misconduct of the European
Issuing Lender or any other member of the

 

50

 

Lender Group. 
Each European Borrower understands that the European L/C Undertakings
may require European Issuing Lender to indemnify the European Underlying Issuer
for certain costs or liabilities arising out of claims by European Borrowers
against such European Underlying Issuer. 
Each European Borrower hereby agrees to indemnify, save, defend, and
hold the Lender Group harmless with respect to any loss, cost, expense
(including reasonable attorneys fees), or liability incurred by the Lender
Group under any European L/C Undertaking as a result of the Lender Group’s
indemnification of any European Underlying Issuer; provided, however,
that no European Borrower shall be obligated hereunder to indemnify for any
loss, cost, expense, or liability to the extent that it is caused by the gross
negligence or willful misconduct of the European Issuing Lender or any other
member of the Lender Group.  Each
European Borrower hereby acknowledges and agrees that neither the Lender Group
nor the European Issuing Lender shall be responsible for delays, errors, or
omissions resulting from the malfunction of equipment in connection with any
European Letter of Credit.

 

(iv)                              Each
European Borrower hereby authorizes and directs any European Underlying Issuer
to deliver to the European Issuing Lender all instruments, documents, and other
writings and property received by such European Underlying Issuer pursuant to
such European Underlying Letter of Credit and to accept and rely upon the
European Issuing Lender’s instructions with respect to all matters arising in
connection with such European Underlying Letter of Credit and the related
application.

 

(v)                                 Any
and all issuance charges, commissions, fees, and costs incurred by the European
Issuing Lender relating to European Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by European Borrowers to European Administrative Agent for the
account of the European Issuing Lender; it being acknowledged and agreed by
each European Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective European Underlying Issuer is .825% per annum times
the face amount of each European Underlying Letter of Credit, that such
issuance charge may be changed from time to time, and that the European
Underlying Issuer also imposes a schedule of charges for amendments,
extensions, drawings, and renewals.

 

(vi)                              If
by reason of (i) any change after the Closing Date in any Applicable Law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the European
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):

 

(A)                    any reserve,
deposit, or similar requirement is or shall be imposed or modified in respect
of any European Letter of Credit issued hereunder, or

 

51

 

(B)                      there shall
be imposed on the European Underlying Issuer or the Lender Group any other
condition regarding any European Underlying Letter of Credit or any European
Letter of Credit issued pursuant hereto;

 

and the result of the
foregoing is to increase, directly or indirectly, the cost to the Lender Group
of issuing, making, guaranteeing, or maintaining any European Letter of Credit
or to reduce the amount receivable in respect thereof by the Lender Group,
then, and in any such case, European Administrative Agent may, at any time
within a reasonable period (not exceeding 180 days) after the additional cost
is incurred or the amount received is reduced, notify Administrative Borrower,
and European Borrowers shall pay on demand such amounts as European
Administrative Agent may specify to be necessary to compensate the Lender Group
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans denominated in Dollars hereunder.  The determination by European Administrative
Agent of any amount due pursuant to this Section, as set forth in a certificate
delivered to the Administrative Borrower setting forth the calculation thereof
in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.

 

2.13.                     LIBOR Option.

 

(a)                                  Interest and
Interest Payment Dates.  In lieu of having interest charged
at the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Advances or the Term
Loan A be charged at a rate of interest based upon the applicable LIBOR
Rate.  Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period
applicable thereto, (provided, however, that, subject to the
following clauses (ii) and (iii), in the case of any Interest Period
greater than 1 month in duration, interest shall be payable at 1 month
intervals after the commencement of the applicable Interest Period and on the
last day of such Interest Period), (ii) the occurrence of an Event of
Default in consequence of which the Required Lenders or Administrative Agent on
behalf thereof have elected to accelerate the maturity of all or any portion of
the Obligations, or (iii) termination of this Agreement pursuant to the
terms hereof.  On the last day of each
applicable Interest Period, unless Administrative Borrower properly has
exercised the LIBOR Option with respect thereto, the interest rate applicable
to such LIBOR Rate Loan automatically shall convert to the rate of interest
then applicable to Base Rate Loans of the same type hereunder and, with respect
to Approved Offshore Rate Loans, the outstanding principal balance of such
Approved Offshore Rate Loan automatically shall be continued as a LIBOR Rate
Loan with an Interest Period of one month’s duration.  At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to
request that Advances or the Term Loan A bear interest at a rate based upon the
applicable LIBOR Rate and Administrative Agent shall have the right to convert
the interest rate on all outstanding LIBOR Rate Loans to the rate then
applicable to Base Rate Loans hereunder and to convert the outstanding
principal balance of all outstanding Offshore Currency Rate Loans to Dollars.

 

52

 

(b)                                 LIBOR Election.

 

(i)                                     Administrative
Borrower may, at any time and from time to time, so long as no Event of Default
has occurred and is continuing, elect to exercise the LIBOR Option by notifying
the Administrative Agent, Canadian Administrative Agent or European
Administrative Agent, as applicable, prior to 11:00 a.m. (California time)
at least 3 Business Days prior to the commencement of the proposed Interest
Period (the “LIBOR Deadline”). 
Notice of Administrative Borrower’s election of the LIBOR Option for a
permitted portion of the Advances or the Term Loan A and an Interest Period
pursuant to this Section shall be made by delivery to the applicable Agent
of a LIBOR Notice received by such Agent before the LIBOR Deadline, or by
telephonic notice received by such Agent before the LIBOR Deadline (to be
confirmed by delivery to such Agent of a LIBOR Notice received by such Agent
prior to 5:00 p.m. (California time) on the same day).  Promptly upon its receipt of each such LIBOR
Notice, Administrative Agent shall provide a copy thereof to each of the US
Lenders, Canadian Administrative Agent shall provide a copy thereof to each of
the Canadian Lenders and European Administrative Agent shall provide a copy
thereof to each of the European Lenders, as applicable.

 

(ii)                                  Each
LIBOR Notice shall be irrevocable and binding on Borrowers.  In connection with each LIBOR Rate Loan,
Borrowers shall jointly and severally indemnify, defend, and hold the applicable
Agent and the Lenders harmless against any loss, cost, or expense incurred by
such Agent or any Lender as a result of (a) the payment of any principal
of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow (other than solely
as a result of the failure of such Agent or a Lender to make an Advance or Term
Loan A required to be made pursuant to the terms hereof), convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, “Funding
Losses”); provided, that Foreign Borrowers shall only provide indemnities
with respect to Funding Losses arising in connection with Foreign Borrowings
and LIBOR Rate Loans made to Foreign Borrowers. 
Funding Losses shall, with respect to any Agent or any Lender, be deemed
to equal (i) with respect to Offshore Currency Rate Loans, any currency
conversion costs incurred by any Agent, Fronting Lender or any other Lender and
(ii) with respect to all LIBOR Rate Loans, the amount determined by such
Agent or such Lender to be the excess, if any, of (A) the amount of
interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period therefor), minus (B) the
amount of interest that would accrue on such principal amount for such period
at the interest rate which such Agent or such Lender would be offered were it
to be offered, at the commencement of such period, Dollar deposits, Canadian
Dollar deposits or Approved Offshore Currency deposits, as applicable, of a
comparable amount and period in the London interbank market.  A certificate of an Agent or a Lender
delivered to Administrative Borrower setting forth any

 

53

 

amount or amounts that such Agent or such Lender is
entitled to receive pursuant to this Section 2.13 shall be
conclusive absent manifest error.

 

(iii)                               Borrowers
shall have not more than 8 LIBOR Rate Loans in effect at any given time.  With respect to LIBOR Rate Loans other than
Approved Offshore Rate Loans, Borrowers only may exercise the LIBOR Option for
LIBOR Rate Loans of a Dollar Equivalent principal amount of at least $1,000,000
and integral multiples of a Dollar Equivalent principal amount of $500,000 in
excess thereof and, with respect to LIBOR Rate Loans consisting of Approved
Offshore Rate Loans, Borrowers only may exercise the LIBOR Option for LIBOR
Rate Loans of a Dollar Equivalent principal amount of at least $2,000,000 and
integral multiples of a Dollar Equivalent principal amount of $1,000,000 in
excess thereof.

 

(c)                                  Prepayments.  Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that (i) Borrowers may only prepay Approved Offshore Rate
Loans upon notice to Administrative Agent or European Administrative Agent, as
applicable, 3 Business Days prior to any date of prepayment of Approved
Offshore Rate Loans and (ii) in the event that LIBOR Rate Loans are
prepaid on any date that is not the last day of the Interest Period applicable
thereto, including as a result of any automatic prepayment through the required
application by the applicable Agent of proceeds of Loan Parties’ Collections in
accordance with Section 2.4(b) or for any other reason,
including early termination of the term of this Agreement or acceleration of
all or any portion of the Obligations pursuant to the terms hereof, each
Borrower shall indemnify, defend, and hold such Agent and the Lenders and their
Participants harmless against any and all Funding Losses in accordance with
clause (b)(ii) above; provided, that Foreign Loan Parties shall only
provide indemnities with respect to Funding Losses arising in connection with
Foreign Borrowings and LIBOR Rate Loans made to Foreign Borrowers.

 

(d)                                 Special Provisions
Applicable to LIBOR Rate.

 

(i)                                     The
applicable LIBOR Rate may be adjusted by the applicable Agent with respect to
any Lender on a prospective basis to take into account any additional or
increased costs to such Lender of maintaining or obtaining any eurodollar
deposits, Canadian Dollar deposits or Approved Offshore Currency deposits or
increased costs, in each case, due to changes in Applicable Law occurring
subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except for (A) changes of general applicability
in corporate income tax laws or changes in tax laws with respect to franchise
taxes imposed in lieu of income taxes and (B) changes in tax laws with
respect to any Taxes required to be withheld or deducted by Borrowers, which
shall be addressed in Section 15.11) and changes in the reserve
requirements imposed by the Board of Governors of the Federal Reserve System
(or any successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest at
the applicable LIBOR Rate.  In any such
event, the affected Lender shall give Administrative Borrower and the
applicable Agent notice of such a determination and adjustment and such Agent
promptly shall transmit the notice to each other Lender and, upon its receipt
of the notice from the affected Lender, Administrative Borrower may, by notice
to such affected

 

54

 

Lender (y) require such Lender to furnish to
Administrative Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such adjustment, or
(z) repay the LIBOR Rate Loans with respect to which such adjustment is
made (together with any amounts due under clause (b)(ii) above).  Notwithstanding anything to the contrary
herein, no such adjustment of the applicable LIBOR Rate shall be effective in
respect of any additional or increased costs incurred prior to the
Administrative Borrower’s receipt of the notice referred to below, if the event
giving rise to such additional or increased costs occurred more than 180 days
before the relevant Lender’s notice of such event and the related adjustment is
received by the Administrative Borrower.

 

(ii)                                  In
the event that any change in market conditions or any law, regulation, treaty,
or directive, or any change therein or in the interpretation or application
thereof, shall at any time after the date hereof, in the reasonable opinion of
any Lender, make it unlawful or impractical for such Lender to fund or maintain
LIBOR Advances or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall give notice of such
changed circumstances to the applicable Agent and Administrative Borrower and
such Agent promptly shall transmit the notice to each other Lender and
(y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender’s notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the
rate then applicable to Base Rate Loans and the outstanding principal balance
of the Approved Offshore Rate Loans shall convert to Dollars, and
(z) Borrowers shall not be entitled to elect the LIBOR Option until such
Lender determines that it would no longer be unlawful or impractical to do so; provided,
that if any such notice is delivered, Borrowers shall be entitled, at their
option at any time that Borrowings denominated in an Approved Offshore Currency
are unavailable, to terminate this Agreement in accordance with Section 3.5,
except that no Applicable Prepayment Premium shall be due.  Each Lender agrees to use reasonable efforts
to designate a different Lending Office if such designation will avoid the need
for such notice of changed circumstances and would not, in the good faith
judgment of such Lender, otherwise be disadvantageous to such Lender.

 

(e)                                  No Requirement of
Matched Funding.  Anything to the contrary contained
herein notwithstanding, neither any Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar, Canadian Dollar or
Approved Offshore Currency deposits to fund or otherwise match fund any
Obligation as to which interest accrues at the applicable LIBOR Rate.  The provisions of this Section shall
apply as if each Lender or its Participants had match funded any Obligation as
to which interest is accruing at the applicable LIBOR Rate by acquiring
eurodollar, Canadian Dollar or Approved Offshore Currency deposits for each
Interest Period in the amount of the LIBOR Rate Loans.

 

(f)                                    Offshore Currency
Rate Loans.  All Offshore Currency Rate Loans shall be
LIBOR Rate Loans.

 

55

 

2.14.                     Capital Requirements.

 

If, after the date
hereof, any Lender determines that (i) the adoption of or change in any
law, rule, regulation or guideline regarding capital requirements for banks or
bank holding companies, or any change in the interpretation or application
thereof by any Governmental Authority charged with the administration thereof,
or (ii) compliance by such Lender or its parent bank holding company with
any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing
the return on such Lender’s or such holding company’s capital as a consequence
of such Lender’s Commitments hereunder to a level below that which such Lender
or such holding company could have achieved but for such adoption, change, or
compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify Administrative Borrower and the
applicable Agent thereof.  Following
receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is
determined, payable within 90 days after presentation by such Lender of a
statement in the amount and setting forth in reasonable detail such Lender’s
calculation thereof and the assumptions upon which such calculation was based
(which statement shall be deemed true and correct absent manifest error).  In determining such amount, such Lender may
use any reasonable averaging and attribution methods.  Notwithstanding anything to the contrary in
this Section 2.14, (i) no Borrower will be required to
compensate any Lender pursuant to this Section 2.14 for any
reduction incurred more than 180 days before such Lender notified
Administrative Borrower of the change in law (or other circumstance) giving
rise to such reduction and of its claim to compensation therefore and (ii) Foreign
Borrowers shall not be required to compensate any Lender for any reduction
incurred with respect to US Borrowings.

 

2.15.                     Joint and Several Liability of
Borrowers.

 

(a)                                  Each US Borrower is accepting joint
and several liability with respect to the Obligations hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Lender Group under this Agreement, for the mutual benefit, directly
and indirectly, of each Borrower and in consideration of the undertakings of
the other US Borrowers to accept joint and several liability for the
Obligations.  Each US Borrower hereby
further irrevocably and unconditionally guaranties as and for its own debt,
until final payment in full thereof has been made, (a) the payment of the
Obligations, when and as the same shall become due and payable, whether at
maturity, pursuant to a mandatory prepayment requirement, by acceleration, or
otherwise; it being the intent of each US Borrower that the guaranty set forth
herein shall be a guaranty of payment and not a guaranty of collection; and (b) the
punctual and faithful performance, keeping, observance, and fulfillment by each
Borrower of all of the agreements, conditions, covenants, and obligations of
such Borrower contained in this Agreement and under each of the other Loan
Documents.  Each Foreign Borrower is
accepting joint and several liability with respect to the Obligations of the
Foreign Borrowers hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Lender

 

56

 

Group
under this Agreement, for the mutual benefit, directly and indirectly, of each
Foreign Borrower and in consideration of the undertakings of the other Foreign
Borrowers to accept joint and several liability for the Foreign
Obligations.  The Obligations of the
Foreign Borrowers under this Agreement, including all indemnities, reimbursement
obligations and expense recovery obligations hereunder, shall be limited to the
Foreign Obligations.

 

(b)                                 Each US Borrower, jointly and
severally, hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other US
Borrowers, with respect to the payment and performance of all of the
Obligations (including, without limitation, any Obligations arising under this Section 2.15),
it being the intention of the parties hereto that all the Obligations shall be
the joint and several obligations of each US Borrower without preferences or
distinction among them.  Each Foreign
Borrower, jointly and severally, hereby irrevocably and unconditionally accepts,
not merely as a surety but also as a co-debtor, joint and several liability
with the other Foreign Borrowers, with respect to the payment and performance
of all of the Foreign Obligations (including, without limitation, any Foreign
Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Foreign Obligations shall be the
joint and several obligations of each Foreign Borrower without preferences or
distinction among them.

 

(c)                                  If and to the extent that any
Borrower shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event each US Borrower agrees that it will
make such payment with respect to, or perform, such Obligation.  If and to the extent that any Foreign
Borrower shall fail to make any payment with respect to any of the Foreign
Obligations as and when due or to perform any of the Foreign Obligations in
accordance with the terms thereof, then in each such event the other Foreign
Borrowers will make such payment with respect to, or perform, such Foreign
Obligation.

 

(d)                                 The Obligations of each Borrower
under the provisions of this Section 2.15 constitute the absolute
and unconditional, full recourse Obligations of each Borrower enforceable
against each Borrower to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Agreement or
any other circumstances whatsoever.

 

(e)                                  Except as otherwise expressly
provided in this Agreement, each Borrower hereby waives notice of acceptance of
its joint and several liability, notice of any Advances or Letters of Credit
issued under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agents or
Lenders under or in respect of any of the Obligations, any requirement of
diligence or to mitigate damages and, generally, to the extent permitted by
Applicable Law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this
Agreement).  Each Borrower hereby assents
to, and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any

 

57

 

waiver,
consent or other action or acquiescence by Agents or Lenders at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agents or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the
foregoing, each Borrower assents to any other action or delay in acting or
failure to act on the part of any Agent or Lender with respect to the failure
by any Borrower to comply with any of its respective Obligations, including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with Applicable Laws or regulations thereunder,
which might, but for the provisions of this Section 2.15 afford
grounds for terminating, discharging or relieving any Borrower, in whole or in
part, from any of its Obligations under this Section 2.15, it being
the intention of each Borrower that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.15
shall not be discharged except by performance and then only to the extent of
such performance.  The Obligations of
each Borrower under this Section 2.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or any Agent or Lender; it being understood that other Persons may also become
liable for the Obligations in connection with mergers, consolidations or other corporate
reorganizations.

 

(f)                                    Each Borrower represents and
warrants to Agents and Lenders that such Borrower is currently informed of the
financial condition of Borrowers and of all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations.  Each Borrower further
represents and warrants to Agents and Lenders that such Borrower has read and
understands the terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such
Borrower will continue to keep informed of Borrowers’ financial condition, the
financial condition of guarantors, if any, and of all other circumstances which
bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g)                                 The provisions of this Section 2.15
are made for the benefit of Agents, Lenders and their respective successors and
assigns, and may be enforced by it or them from time to time against any or all
Borrowers as often as occasion therefor may arise and without requirement on
the part of any such Agent, Lender, successor or assign first to marshal any of
its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any
Borrower or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 2.15
shall remain in effect until all of the Obligations shall have been paid in
full or otherwise fully satisfied.  If at
any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by any
Agent or Lender upon the insolvency, bankruptcy or reorganization of any
Borrower, or otherwise, the provisions of this Section 2.15 will
forthwith be reinstated in effect, as though such payment had not been made.

 

58

 

(h)                                 Until such time as all of the
Obligations have been finally paid in full: 
(i) each Borrower hereby waives and postpones any right of
subrogation such Borrower has or may have as against any other Borrower with
respect to the Obligations; (ii) each Borrower hereby waives and postpones
any right to proceed against any other Borrower, now or hereafter, for
contribution, indemnity, reimbursement, or any other suretyship rights and
claims (irrespective of whether direct or indirect, liquidated or contingent),
with respect to the Obligations; and (iii) each Borrower also hereby
waives and postpones any right to proceed or to seek recourse against or with
respect to any property or asset of any other Borrower with respect to the
Obligations.

 

(i)                                     Notwithstanding anything to the
contrary set forth in this Agreement, it is the intent of the parties hereto that
the liability incurred by each Borrower in respect of the Obligations of the
other Borrowers (and any Lien granted by each Borrower to secure such
Obligations), not constitute a fraudulent conveyance under Section 548 of
the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the
provisions of any Applicable Law of any state, province or other governmental
unit (“Fraudulent Conveyance”). Consequently, each Borrower, each Agent
and each Lender hereby agrees that if a court of competent jurisdiction
determines that the incurrence of liability by any Borrower in respect of the
Obligations of any other Borrower (or any Liens granted by such Borrower to
secure such Obligations) would, but for the application of this sentence,
constitute a Fraudulent Conveyance, such liability (and such Liens) shall be
valid and enforceable only to the maximum extent that would not cause the same
to constitute a Fraudulent Conveyance, and this Agreement and the other Loan
Documents shall automatically be deemed to have been amended accordingly.

 

(j)                                     The Lenders shall not be entitled to request payment
or performance from a German Borrower under the joint and several liability
pursuant to this Section 2.15 if and to the extent that the joint
and several liability of a German Borrower extends to Obligations of an
affiliated company (verbundenes Unternehmen)
within the meaning of Section 15 et seq. of the German Stock Corporation
Act (Aktiengesetz) of such German Borrower
(other than such German Borrower’s subsidiaries and their subsidiaries) and if
and to the extent that such enforcement would lead to a situation in which such
German Borrower’s assets (the calculation of which shall take into account the
captions reflected in Section 266 subsection (2) A, B and C of
the German Commercial Code (HGB, Handelsgesetzbuch))
less the sum of (A) the liabilities of such German Borrower (the
calculation of which shall take into account the captions reflected in Section 266
sub-section (3) B, C and D of the German Commercial Code), and (B) the
stated share capital (Stammkapital)
of such German Borrower (the “Net Assets”) are less than zero;

 

(i)                                     for the purposes of the calculation of the
Net Assets following balance sheet items shall be adjusted as follows:

 

(A)                    the amount of any increase of the
stated share capital after the date hereof (excluding any such increase of
stated share capital permitted pursuant to any other agreement to which the
Loan Parties and such German Borrower are a party) (A) that has been
effected without the prior written consent of the Lenders, (B) that has
been

 

59

 

effected out of
retained earnings (Kapitalerhöhung
aus Gesellschaftsmitteln) or to the
extent that it is not fully paid up, shall be deducted from the stated share
capital; and

 

(B)                      loans and other contractual
liabilities incurred in grossly negligent (grob fahrlässig)
or wilful (vorsätzlich) violation of the provisions
of the Loan Documents shall be disregarded;

 

(ii)                                  in
addition, such German Borrower shall realise, to the extent legally permitted
and commercially justifiable, in a situation where such German Borrower’s Net
Assets are or become as a consequence of payment or performance under the joint
and several liability less than zero any and all of its assets that are shown
in the balance sheet with a book value (Buchwert) that
is significantly lower than the market value of the assets if the asset is not
necessary for such German Borrower’s business (betriebsnotwendig);

 

(iii)                               for the purpose of the calculation of the Net
Assets and thus the enforceable amount, such German Borrower will deliver
within thirty days following the demand against such German Borrower under this
Section 2.15 by the Lenders, to the Lenders an up to date balance
sheet drawn-up by a firm of auditors of international standard and repute
together with a determination of the Net Assets.  Such balance sheet and determination of Net
Assets shall be prepared in accordance with accounting principles pursuant to
the German Commercial Code and be based on the same principles that were
applied when establishing the previous year’s balance sheet;

 

(iv)                              the determination by the auditors (as set
forth above, the “Auditors’ Determination”) pertaining to such German
Borrower shall be up to date and in any event such Auditors’ Determination
shall have been prepared as of a date no earlier than fifteen Business Days
prior to the date of the enforcement of the security interest created under
this Agreement; and

 

(v)                                 should
such German Borrower fail to deliver such balance sheet and/or determination of
the Net Assets, the Lenders shall be entitled to enforce the joint and several
liability created under this Section 2.15 without limitation, but
agree to release proceeds from such enforcement to the extent required to
ensure that the Net Assets shall not be less than zero.

 

2.16.                     Interest Act (Canada); Criminal Rate
of Interest; Nominal Rate of Interest.

 

Notwithstanding anything
to the contrary contained in this Agreement or in any other Loan Document,
solely to the extent that a court of competent jurisdiction finally determines
that the calculation or determination of interest payable by a Foreign Borrower
created or organized under the laws of Canada or any province thereof in
respect of the Obligations pursuant to this Agreement and the other Loan
Documents shall be governed by the laws of the province of Ontario or the
federal laws of Canada:

 

60

 

(a)                                  whenever interest payable by such
Foreign Borrower is calculated on the basis of a period which is less than the
actual number of days in a calendar year, each rate of interest determined
pursuant to such calculation, expressed as an annual rate of interest for the
purposes of the Interest Act (Canada), shall be equivalent to such rate
multiplied by the actual number of days in the calendar year in which such rate
is to be ascertained and divided by the number of days used as the basis of
such calculation;

 

(b)                                 in no event shall the aggregate “interest”
(as defined in Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as
the same shall be amended, replaced or re-enacted from time to time) payable by
such Foreign Borrower to any Agent or any Lender under this Agreement or any
other Loan Document exceed the effective annual rate of interest on the “credit
advanced” (as defined in that section) under this Agreement or such other Loan
Document lawfully permitted under that section and, if any payment,
collection or demand pursuant to this Agreement or any other Loan Document in
respect of “interest” (as defined in that section) is determined to be contrary
to the provisions of that section, such payment, collection or demand shall be
deemed to have been made by mutual mistake of Agents, Lenders and such Foreign
Borrower and the amount of such payment or collection shall be refunded by the
applicable Agent and Lenders to such Foreign Borrower.  For the purposes of this Agreement and each
other Loan Document to which such Foreign Borrower is a party, the effective
annual rate of interest payable by such Foreign Borrower shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the loans on the basis of annual compounding for the lawfully permitted
rate of interest and, in the event of dispute, a certificate of a Fellow of the
Institute of Actuaries appointed by Canadian Administrative Agent for the
account of Foreign Borrower will be conclusive for the purpose of such
determination in the absence of evidence to the contrary; and

 

(c)                                  all calculations of interest payable
by such Foreign Borrower under this Agreement or any other Loan Document are to
be made on the basis of the nominal interest rate described herein and therein
and not on the basis of effective yearly rates or on any other basis which
gives effect to the principle of deemed reinvestment of interest.  The parties acknowledge that there is a
material difference between the stated nominal interest rates and the effective
yearly rates of interest and that they are capable of making the calculations
required to determine such effective yearly rates of interest.

 

2.17.                     Additional Provisions Regarding
Offshore Currency Rate Loans and Fronting Lender.

 

(a)                                  Non-Offshore Currency Lender. If any Lender (other than the
Fronting Lender) determines (which determination shall be conclusive) that an
Approved Offshore Currency is not freely transferable and convertible by such
Lender into Dollars or that it will be impracticable for such Lender to fund Advances
in such Approved Offshore Currency, then such Lender shall immediately so
notify the Administrative Agent which notification shall be given immediately
by the Administrative Agent to the Fronting Lender, and such Lender shall
thereafter be deemed to be a Non-Offshore Currency Lender hereunder.

 

61

 

(b)                                 Application of Interest Payments. 
As promptly as is practicable following each date upon which
Administrative Agent or European Administrative Agent receives a payment of
interest under this Agreement on account of any Offshore Currency Rate Loans,
such Agent shall distribute to the Fronting Lender the amount thereof that is
allocable to the Offshore Currency Rate Loans held by the Fronting Lender.  In consideration of the agreement of the
Non-Offshore Currency Lenders to purchase participating interests in any
Offshore Currency Rate Loans held by the Fronting Lender, the Fronting Lender
shall, with respect to US Advances consisting of Offshore Currency Rate Loans,
pay to the Administrative Agent, for the ratable accounts of each Non-Offshore
Currency Lender that is a US Lender, a risk participation fee, in the currency
of such interest payment or, if requested by each Non-Offshore Currency Lender
that is a US Lender and agreed to by the Administrative Agent, in Dollars, in
an amount equal to the portion of such interest payment which constitutes the
LIBOR Rate Margin less 0.50% (other than any such proceeds payable for the
account of any Defaulting Lender, which proceeds shall be retained by the
Fronting Lender for its own account) and, with respect to European Advances
consisting of Offshore Currency Rate Loans, pay to the European Administrative
Agent, for the ratable accounts of each Non-Offshore Currency Lender that is a
European Lender, a risk participation fee, in the currency of such interest
payment or, if requested by each Non-Offshore Currency Lender and agreed to by
the European Administrative Agent, in Dollars, in an amount equal to the
portion of such interest payment which constitutes the LIBOR Rate Margin less
0.50% (other than any such proceeds payable for the account of any Defaulting
Lender, which proceeds shall be retained by the Fronting Lender for its own
account); provided, however, that with respect to each
Non-Offshore Currency Lender which has funded the purchase of participating
interests in the extensions of credit on account of which such interest was
paid hereunder, the Fronting Lender shall instead pay to applicable Agent, for
the account of such Non-Offshore Currency Lender which has so funded such
purchase, the amount equal to such Lender’s Pro Rata Share of such interest
payment.  Such amount shall be payable to
the applicable Agent, in the currency of such interest payment or from a
conversion of such currency to Dollars, if requested by each Non-Offshore
Currency Lender and agreed to by applicable Agent, on the date upon which the
Fronting Lender receives the interest payment (or, as applicable, the proceeds
of such conversion).

 

(c)                                  Currency Conversion and Contingent
Funding Agreement.  Each Non-Offshore Currency Lender that is a
US Lender hereby unconditionally and irrevocably agrees to purchase (in the
currency in which the applicable Offshore Currency Rate Loan is made) as and when
requested by the Administrative Agent or the Fronting Lender at any time, an
undivided participating interest equal to its Pro Rata Share of all Offshore
Currency Rate Loans that are US Advances that are made by the Fronting Lender
and each Non-Offshore Currency Lender that is a European Lender hereby
unconditionally and irrevocably agrees to purchase (in the currency in which
the applicable Offshore Currency Rate Loan is made) as and when requested by
the European Administrative Agent or the Fronting Lender at any time, an
undivided participating interest equal to its Pro Rata Share of all Offshore
Currency Rate Loans that are European Advances that are made by the Fronting
Lender, provided that:

 

62

 

(i)                                     the
Administrative Agent, the European Administrative Agent and the Fronting Lender
hereby agree that, unless an Event of Default has occurred and is continuing or
a Fronting Loan Event has occurred, such Persons will not request any such
purchase of participating interests; and

 

(ii)                                  in
the event that any Event of Default specified in Section 7.4 or 7.5 shall
have occurred with respect to any Borrower, each Non-Offshore Currency Lender
shall be deemed to have purchased, automatically and without request, such
participating interest in the Advances denominated in the applicable Approved
Offshore Currency.

 

Any such request with
respect to US Advances shall be made in writing to each Non-Offshore Currency
Lender that is a US Lender and shall specify the amount of the applicable
Approved Offshore Currency required from such Non-Offshore Currency Lender in
order to effect the purchase by such Non-Offshore Currency Lender of a
participating interest in the amount equal to its Pro Rata Share times the
aggregate then outstanding principal amount (in the applicable Approved
Offshore Currency) of the US Advances denominated in such Applicable Offshore
Currency and any such request with respect to European Advances shall be made
in writing to each Non-Offshore Currency Lender that is a European Lender and
shall specify the amount of the applicable Approved Offshore Currency required
from such Non-Offshore Currency Lender in order to effect the purchase by such
Non-Offshore Currency Lender of a participating interest in the amount equal to
its Pro Rata Share times the aggregate then outstanding principal amount (in
the applicable Approved Offshore Currency) of the European Advances denominated
in such Applicable Offshore Currency. 
Promptly upon receipt of such request by any Non-Offshore Currency
Lender, such Non-Offshore Currency Lender shall deliver to the applicable Agent
(in immediately available funds) the amount so specified by such Agent.  The applicable Agent shall promptly deliver
the proceeds of such payments to the Fronting Lender in immediately available
funds.  Promptly following receipt
thereof, the Fronting Lender will deliver to such Non-Offshore Currency Lender
(through the applicable Agent) a certificate setting forth the amount of the
Advances purchased by such Non-Offshore Currency Lender, dated the date of
receipt of such funds and in such amount. 
Notwithstanding anything to the contrary contained in this Section 2.17,
the failure of any Non-Offshore Currency Lender to purchase its participating
interest in any Advances shall not relieve any other Non-Offshore Currency
Lender of its obligations hereunder to purchase its participating interest in a
timely manner, but no Non-Offshore Currency Lender shall be responsible for the
failure of any other Non-Offshore Currency Lender to purchase the participating
interest to be purchased by such other Non-Offshore Currency Lenders on any
date.

 

(d)                                 Interest Payable for the Benefit of
the Fronting Lender.  If any amount required to be paid by any
Non-Offshore Currency Lender with respect to any Advance pursuant to Section 2.17(c) is
not paid to the applicable Agent within one (1) Business Day following the
date upon which such Non-Offshore Currency Lender receives a request from the
applicable Agent or the Fronting Lender that such Non-Offshore Currency Lender
fund its participating interest relating to such Advance, such Non-Offshore
Currency Lender shall pay to the applicable Agent on demand interest on such
amount at a rate per annum equal to the Defaulting Lender Rate, during the
period from and including the date such payment is

 

63

 

required
to be made to the date on which such payment is immediately available to such
Agent.  A certificate from an Agent
submitted to any Non-Offshore Currency Lender with respect to any amounts owing
under Section 2.17(c) or this Section 2.17(d) shall be
conclusive in the absence of manifest error. Amounts payable by any
Non-Offshore Currency Lender pursuant to Section 2.17(c) or this Section 2.17(d) shall
be paid to the applicable Agent, for the account of the Fronting Lender;
provided that, if the applicable Agent (in its sole discretion) has elected to
fund on behalf of such Non-Offshore Currency Lender the amounts owing to the Fronting
Lender then the amounts shall be paid to such Agent, for its own account.

 

(e)                                  Distributions of Payments Made on
Fronted Loans.  Whenever, at any time after the Fronting
Lender has received from any Non-Offshore Currency Lender payment in respect of
such Non-Offshore Currency Lender’s participating interest in an Advance
pursuant to the above provisions of this Section 2.17, the Fronting Lender
receives any payment on account thereof, the Fronting Lender will distribute to
the Administrative Agent with respect to US Advances and to the European
Administrative Agent with respect to European Advances, for the account of such
Non-Offshore Currency Lender, such Non-Offshore Currency Lender’s participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Non-Offshore Currency
Lender’s participating interest was outstanding and funded) in like funds
received; provided,  however, that in the event that any such
payment received by the Fronting Lender is required to be returned, such
Non-Offshore Currency Lender will return to the Fronting Lender any portion
thereof previously distributed by the Fronting Lender to the Non-Offshore
Currency Lender in like funds as such payment is required to be returned by the
Fronting Lender.

 

(f)                                    Obligations Unconditional Regarding
Fronted Loans.  Each Non-Offshore Currency Lender’s
obligation to purchase participating interests pursuant to this Section 2.17
shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the Fronting Lender, any Loan
Party or any other Person for any reason whatsoever; (ii) the occurrence
and continuation of any Default or Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of any Person party hereto; (iv) any
breach of any of the Loan Documents by any Person; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

(g)                                 Resignation of Fronting Lender.  
The Fronting Lender may resign as such upon 60 days notice to the
Lenders and the Administrative Borrower. 
If the Fronting Lender resigns under this Agreement, the Required
Lenders shall, so long as no Event of Default has occurred and is continuing in
consultation with Administrative Borrower, appoint a successor Fronting Lender
for the Lenders.  If no successor Fronting
Lender shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty 30 days after the retiring Fronting
Lender’s giving of notice of resignation, then the retiring Fronting Lender
shall, on behalf of the Lenders so long as no Event of Default has occurred and
is continuing in consultation with Administrative Borrower, appoint a successor
Fronting Lender.  Upon the acceptance of
any appointment as Fronting Lender hereunder by a

 

64

 

successor
Fronting Lender such successor Fronting Lender shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Fronting Lender and the retiring Fronting Lender shall be discharged
from its duties and obligations hereunder. After any retiring Fronting Lender’s
resignation, the provisions of this Agreement and the other Loan Documents
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Fronting Lender.

 

3.                                      CONDITIONS;
TERM OF AGREEMENT.

 

3.1.                            Conditions Precedent to the Initial
Extension of Credit.

 

This Agreement shall be
effective upon the fulfillment, to the satisfaction of Administrative Agent and
each Lender, of each of the conditions precedent set forth on Schedule 3.1.

 

3.2.                            Conditions Precedent to all
Extensions of Credit.

 

The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder at any time
(or to extend any other credit hereunder) shall be subject to the following
conditions precedent:

 

(a)                                  the representations and warranties
contained in this Agreement or in the other Loan Documents shall be true and
correct in all material respects on and as of the date of such extension of
credit, as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);

 

(b)                                 no Default or Event of Default shall
have occurred and be continuing on the date of such extension of credit, nor
shall either result from the making thereof;

 

(c)                                  no injunction, writ, restraining
order, or other order of any nature restricting or prohibiting, directly or
indirectly, the extending of such credit shall have been issued and remain in
force by any Governmental Authority against any Borrower, any Agent, any
Lender, or any of their Affiliates; and

 

(d)                                 no Material Adverse Change shall
have occurred since the date of the latest financial statements submitted to
Administrative Agent on or before the Closing Date.

 

3.3.                            Term.

 

This Agreement shall
continue in full force and effect for a term ending on August 19, 2010
(the “Maturity Date”).  The
foregoing notwithstanding, the Lender Group, upon the election of the Required
Lenders, shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.

 

65

 

3.4.                            Effect of Termination.

 

On the date of
termination of this Agreement, all Obligations (including contingent
reimbursement obligations of Borrowers with respect to outstanding Letters of
Credit and including all Bank Product Obligations other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding and are not required to be repaid or cash
collateralized by the applicable Bank Product Provider) immediately shall
become due and payable without notice or demand (including (a) (i) providing
cash collateral to be held by Collateral Agent for the benefit of those Lenders
with a Revolver Commitment in an amount equal to 105% of the Letter of Credit
Usage, (ii) causing the original Letters of Credit to be returned to the
Issuing Lenders or (iii) providing the applicable Issuing Lender with a
letter of credit issued by a financial institution reasonably satisfactory to
such Issuing Lender in a face amount equal to 105% of the aggregate face amount
of all extant Letters of Credit issued by such Issuing Lender, and (b) providing
cash collateral (in an amount determined by Collateral Agent as sufficient to
satisfy the reasonably estimated credit exposure) to be held by Collateral
Agent for the benefit of the Bank Product Providers with respect to the Bank
Product Obligations other than any Bank Product Obligations that, at such time,
are allowed by the applicable Bank Product Provider to remain outstanding and
are not required to be repaid or cash collateralized by the applicable Bank
Product Provider).  Such cash collateral
shall be provided (i) with respect to any Letter of Credit Usage
denominated in Canadian Dollars, in Canadian Dollars, (ii) with respect to
any Letter of Credit Usage denominated in an Approved Offshore Currency, in the
applicable Approved Offshore Currency, and (iii) with respect to any
Letter of Credit Usage denominated in Dollars, in Dollars.  No termination of this Agreement, however,
shall relieve or discharge Loan Parties of their duties, Obligations, or
covenants hereunder or under any other Loan Document and the Agent’s Liens in
the Collateral shall remain in effect until all Obligations have been paid in
full (or collateralized as provided above) and the Lender Group’s obligations
to provide additional credit hereunder have been terminated.  When this Agreement has been terminated and
all of the Obligations have been paid in full (or collateralized as provided
above) and the Lender Group’s obligations to provide additional credit under
the Loan Documents have been terminated irrevocably, Collateral Agent will, at
Borrowers’ sole expense, return to Borrowers any possessory Collateral held in
its possession, execute and deliver any termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the Agent’s Liens and all notices of security interests and liens
previously filed by Collateral Agent with respect to the Obligations; provided,
however, that the Foreign Borrowers shall only be responsible for the expenses
of the Collateral Agent relating to the Foreign Obligations and the security
held therefor.

 

3.5.                            Early Termination by Borrowers.

 

Borrowers have the
option, at any time upon 15 days (or such lesser period as agreed by the
Administrative Agent) prior written notice by Administrative Borrower to
Administrative Agent, to terminate this Agreement by paying to the applicable
Agent, in

 

66

 

cash, the
Obligations (including (a) (i) providing cash collateral to be held
by Collateral Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the Letter of Credit Usage, (ii) causing the
original Letters of Credit to be returned to the Issuing Lenders or (iii) providing
the applicable Issuing Lender with a letter of credit issued by a financial
institution reasonably satisfactory to such Issuing Lender in a face amount
equal to 105% of the aggregate face amount of all extant Letters of Credit
issued by such Issuing Lender, and (b) providing cash collateral (in an
amount determined by Collateral Agent as sufficient to satisfy the reasonably
estimated credit exposure) to be held by Collateral Agent for the benefit of
the Bank Product Providers with respect to the Bank Products Obligations other
than any Bank Product Obligations that, at such time, are allowed by the
applicable Bank Product Provider to remain outstanding and are not required to
be repaid or cash collateralized by the applicable Bank Product Provider) in
full.  If Administrative Borrower has
sent a notice of termination pursuant to the provisions of this Section, then
the Commitments shall terminate and Borrowers shall be obligated to repay the
Obligations (including (a) (i) providing cash collateral to be held
by Collateral Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the Letter of Credit Usage, (ii) causing the
original Letters of Credit to be returned to the Issuing Lenders or (iii) providing
the applicable Issuing Lender with a letter of credit issued by a financial
institution reasonably satisfactory to such Issuing Lender in a face amount
equal to 105% of the aggregate face amount of all extant Letters of Credit
issued by such Issuing Lender, and (b) providing cash collateral (in an
amount determined by Collateral Agent as sufficient to satisfy the reasonably
estimated credit exposure) to be held by Collateral Agent for the benefit of
the Bank Product Providers with respect to the Bank Products Obligations other
than any Bank Product Obligations that, at such time, are allowed by the
applicable Bank Product Provider to remain outstanding and are not required to
be repaid or cash collateralized by the applicable Bank Product Provider), in
full on the date set forth as the date of termination of this Agreement in such
notice.  Cash collateral provided with
respect to Letter of Credit Usage shall be required to be provided (i) with
respect to any Letter of Credit Usage denominated in Canadian Dollars, in
Canadian Dollars, (ii) with respect to any Letter of Credit Usage
denominated in an Approved Offshore Currency, in the applicable Approved
Offshore Currency, and (iii) with respect to any Letter of Credit Usage
denominated in Dollars, in Dollars.

 

4.                                      REPRESENTATIONS
AND WARRANTIES.

 

In order to induce the
Lender Group to enter into this Agreement, each Borrower makes the following
representations and warranties to the Lender Group which shall be true,
correct, and complete, in all material respects, as of the date hereof, and
shall be true, correct, and complete, in all material respects, as of the
Closing Date, and at and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of
such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

67

 

4.1.                            No Encumbrances.

 

Each Loan Party and each
Significant Subsidiary has good title to, or a valid leasehold interest in, its
material personal property assets and good and marketable title to, or a valid
leasehold interest in, its material Real Property, in each case, free and clear
of Liens except for Permitted Liens.

 

4.2.                            Eligible Accounts.

 

As to each Account that
is identified by a Borrower as an Eligible Account or an Eligible Unbilled
Account in a borrowing base report submitted to Administrative Agent, (a) such
Account is a bona fide existing payment obligation of the applicable Account
Debtors created by the sale and delivery of goods or the rendition of services
to such Account Debtors in the ordinary course of such Borrower’s business, (b) the
portion of such Account identified as an Eligible Account or an Eligible
Unbilled Account is owed to Borrowers without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, and (c) such
Account is, with respect to Eligible US Accounts, not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible US Accounts, with respect to Eligible Foreign Accounts, not excluded
as ineligible by virtue of one or more of the excluding criteria set forth in
the definition of Eligible Foreign Accounts, with respect to Eligible Unbilled
US Accounts, not excluded as ineligible by virtue of one or more of the
excluding criteria set forth in the definition of Eligible Unbilled US
Accounts, and with respect to Eligible Unbilled Foreign Accounts, not excluded
as ineligible by virtue of one or more of the excluding criteria set forth in
the definition of Eligible Unbilled Foreign Accounts.

 

4.3.                            [Intentionally Omitted].

 

4.4.                            Equipment.

 

Each material item of
Equipment of Loan Parties and the Significant Subsidiaries is used or held for
use in their business and is in good working order, ordinary wear and tear and
damage by casualty excepted.

 

4.5.                            Location of Inventory and Equipment.

 

The Inventory and
Equipment (other than vehicles or Equipment out for repair) of Loan Parties and
the Significant Subsidiaries are located only at, or in-transit between, the
locations identified on Schedule 4.5 (as such Schedule may be
updated pursuant to Section 5.8(a)) or locations (i) not in
existence on the Closing Date and not then required to be disclosed pursuant to
Section 5.8(a), or (ii) at which there are not more than 100
seats and at which the aggregate book value of all assets at such location does
not exceed $750,000.

 

68

 

4.6.                            Inventory Records.

 

Each Loan Party and
Significant Subsidiary keeps records that are correct and accurate in all
material respects itemizing and describing the type, quality, and quantity of
its Inventory and the book value thereof.

 

4.7.                            State of Incorporation; Location of
Chief Executive Office; Organizational Identification Number; Commercial Tort
Claims.

 

(a)                                  The jurisdiction of organization or
continuance of each Loan Party and each Significant Subsidiary is set forth on Schedule 4.7(a) except
to the extent such jurisdiction of organization or continuance has changed
pursuant to a transaction permitted by Section 6.3(a) or (b).

 

(b)                                 As of the Closing Date, the chief
executive office of each Loan Party and each Significant Subsidiary is located
at the address indicated on Schedule 4.7(b).

 

(c)                                  Each Loan Party’s and each
Significant Subsidiary’s organizational identification number, if any, (or, in
the case of the Canadian Borrowers, the business number assigned by Canada
Revenue Agency (Canada), if any) is identified on Schedule 4.7(c) (as
such schedule may be updated by notice to Administrative Agent).

 

(d)                                 As of the Closing Date, Loan Parties
do not, to their knowledge, hold any commercial tort claims involving a claim
of more than $500,000, except as set forth on Schedule 4.7(d).

 

4.8.                            Due Organization and Qualification;
Subsidiaries.

 

(a)                                  Each Borrower is duly organized and
existing and, if applicable, in good standing under the laws of the
jurisdiction of its organization and qualified to do business in any state,
province or territory where the failure to be so qualified reasonably could be
expected to result in a Material Adverse Change.

 

(b)                                 Set forth on Schedule 4.8(b),
is a complete and accurate description as of the Closing Date of the authorized
capital Stock of each Borrower, by class, and, as of the Closing Date, a
description of the number of shares of each Borrower (other than the Parent) of
each such class that are issued and outstanding.  Other than as described on Schedule 4.8(b),
as of the Closing Date, there are no subscriptions, options, warrants, or calls
relating to any shares of each Borrower’s (other than Parent’s) capital Stock,
including any right of conversion or exchange under any outstanding security or
other instrument.  Other than as
described on Schedule 4.8(b) and other than the obligation to
convert or exchange Indebtedness with respect to a Convertible Note Offering to
Stock, no Borrower is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital Stock or
any security convertible into or exchangeable for any of its capital Stock.

 

69

 

(c)                                  Set forth on Schedule 4.8(c),
is a complete and accurate list of each Borrower’s direct and indirect
Subsidiaries as of the Closing Date, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the
percentage of the outstanding shares of each such class owned directly or
indirectly by the applicable Borrower. 
All of the outstanding capital Stock of each such Subsidiary has been
validly issued and, if applicable, is fully paid and non-assessable.

 

(d)                                 Except as set forth on Schedule 4.8(c),
as of the Closing Date, there are no subscriptions, options, warrants, or calls
relating to any shares of any Borrower’s Subsidiaries’ capital Stock, including
any right of conversion or exchange under any outstanding security or other
instrument.  No Borrower or any of its
respective Subsidiaries is subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire (i) any shares of any
Borrower’s Subsidiaries’ capital Stock or (ii) any security convertible
into or exchangeable for any such capital Stock.

 

4.9.                            Due Authorization; No Conflict.

 

(a)                                  As to each Borrower, the execution,
delivery, and performance by such Borrower of this Agreement and the other Loan
Documents to which it is a party have been duly authorized by all necessary
action on the part of such Borrower.

 

(b)                                 As to each Borrower, the execution,
delivery, and performance by such Borrower of this Agreement and the other Loan
Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation applicable to such
Borrower, the Governing Documents of such Borrower, or any order, judgment, or
decree of any court or other Governmental Authority binding on such Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of such Borrower
(other than a conflict with, or breach of, the Term B Debt Documents arising
during the continuance of an Event of Default solely as a result of
Administrative Agent electing pursuant to Section 2.4(d) that any
payment to be otherwise paid to Term B Agent in accordance with Section 2.4(d) for
application to the outstanding principal amount of Term B Debt shall be applied
in the manner set forth in Section 2.4(b)(i)(A)), (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of such Borrower, other than Permitted Liens, or (iv) require
any approval of any of such Borrower’s interestholders or any approval or
consent of any Person under any material contractual obligation of such
Borrower, other than consents or approvals that have been obtained and that are
still in force and effect.

 

(c)                                  Other than the filing of financing
statements and intellectual property security agreements and any filings and
registrations required to be made to perfect Agent’s Liens in the Foreign
Collateral, and continuations thereof, and the recordation of the Mortgages,
the execution, delivery, and performance by each Borrower of this Agreement and
the other Loan Documents to which such Borrower is a party do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any

 

70

 

Governmental
Authority, other than consents or approvals that have been obtained and that
are still in force and effect.

 

(d)                                 As to each Borrower, this Agreement
and the other Loan Documents to which such Borrower is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by such
Borrower will be the legally valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.

 

(e)                                  [Intentionally
Omitted]

 

(f)                                    The execution, delivery, and
performance by each Guarantor of the Loan Documents to which it is a party have
been duly authorized by all necessary action on the part of such Guarantor.

 

(g)                                 The execution, delivery, and
performance by each Guarantor of the Loan Documents to which it is a party do
not and will not (i) violate any provision of federal, state, or local law
or regulation applicable to such Guarantor, the Governing Documents of such
Guarantor, or any order, judgment, or decree of any court or other Governmental
Authority binding on such Guarantor, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of such Guarantor (other than a
conflict with, or breach of, the Term B Debt Documents arising during the
continuance of an Event of Default solely as a result of Administrative Agent
electing pursuant to Section 2.4(d) that any payment to be otherwise
paid to Term B Agent in accordance with Section 2.4(d) for
application to the outstanding principal amount of Term B Debt shall be applied
in the manner set forth in Section 2.4(b)(i)(A)), (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of such Guarantor, other than Permitted Liens, or
(iv) require any approval of such Guarantor’s interestholders or any
approval or consent of any Person under any material contractual obligation of
such Guarantor, other than consents or approvals that have been obtained and
that are still in force and effect.

 

(h)                                 Other than the filing of financing
statements and intellectual property security agreements and any filings and
registrations required to be made to perfect Agent’s Liens in the Foreign
Collateral, and continuations thereof, the execution, delivery, and performance
by each Guarantor of the Loan Documents to which such Guarantor is a party do
not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority, other than
consents or approvals that have been obtained and that are still in force and
effect.

 

(i)                                     The Loan Documents to which each
Guarantor is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Guarantor will be the legally valid and
binding obligations of such Guarantor, enforceable against such Guarantor in
accordance with their respective terms, except as enforcement may

 

71

 

be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights
generally.

 

4.10.                     Litigation.

 

Other than those matters
disclosed on Schedule 4.10, and other than matters that reasonably
could not be expected to result in a Material Adverse Change, there are no
actions, suits, or proceedings pending or, to the best knowledge of each
Borrower, threatened against any Loan Party or any Significant Subsidiary.

 

4.11.                     No Material Adverse Change.

 

All financial statements
relating to Borrowers and their Subsidiaries that have been delivered by
Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly
in all material respects, Borrowers’ and their Subsidiaries’ financial
condition as of the date thereof and results of operations for the period then
ended.  There has not been a Material
Adverse Change since the date of the latest financial statements submitted to
Administrative Agent on or before the Closing Date.

 

4.12.                     Fraudulent Transfer.

 

(a)                                  Each Borrower is Solvent.

 

(b)                                 No transfer of property is being
made by any Loan Party and no obligation is being incurred by any Loan Party in
connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of such Loan Party.

 

4.13.                     Employee Benefits.

 

(a)                                  None of Loan Parties, the Significant
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan, and, except as set forth in Schedule 4.13, none of
Loan Parties nor the Significant Subsidiaries to which Canadian Employee
Benefits Legislation applies has maintained, contributed or currently maintains
or contributes to any Benefit Plan.

 

(b)                                 Except as set forth in Schedule 4.13,
no Canadian Borrower has, or is subject to, any present or future material
obligation or liability under, any pension plan, retirement income plan, stock
option or stock purchase plan, profit sharing plan, or bonus plan, with respect
to its employees.

 

(c)                                  Schedule 4.13 lists all the material employee
bonus, pension, profit sharing, stock compensation, stock purchase, retirement,
and similar plans or arrangements or practices relating to the employees or
former employees of each Canadian Borrower

 

72

 

which
are currently maintained or were maintained at any time in the five calendar years
preceding the Closing Date (the “Canadian Employee Plans”).

 

(d)                                 All of the Canadian Employee Plans
are and have been established, registered, qualified, invested and administered
in all material respects in accordance with all Laws applicable to the Canadian
Employee Plans.  No material fact or
circumstance exists that could adversely affect the tax-exempt status of a
Canadian Employee Plan.

 

(e)                                  All material obligations regarding
the Canadian Employee Plans have been satisfied, there are no material
outstanding defaults or violations by any party to any Canadian Employee Plan
and no material taxes, penalties or fees are owing or eligible under any of the
Canadian Employee Plans.

 

4.14.                     Environmental Condition.

 

Except as could not
reasonably be expected to result in a Material Adverse Change or as set forth
on Schedule 4.14, (a) to Borrowers’ knowledge, none of Loan
Parties’ or the Significant Subsidiaries’ properties or assets has ever been
used by Loan Parties, the Significant Subsidiaries, or by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such use, production, storage,
handling, treatment, release or transport was in violation, in any material
respect, of any applicable Environmental Law, (b) to Borrowers’ knowledge,
none of Loan Parties’ nor the Significant Subsidiaries’ properties or assets
has been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of
Loan Parties nor the Significant Subsidiaries have received notice that a Lien
arising under any Environmental Law has attached to any revenues or to any Real
Property owned or operated by Loan Parties or the Significant Subsidiaries, and
(d) none of Loan Parties nor the Significant Subsidiaries have received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by any Loan Party or any Significant Subsidiary
resulting in the releasing or disposing of Hazardous Materials into the
environment.

 

4.15.                     Intellectual Property.

 

Each Loan Party owns, or
holds licenses in, all trademarks, trade names, copyrights, patents, patent
rights, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 4.15 (as
updated from time to time) is a true, correct, and complete listing of all
material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which any US Loan Party is the
owner or is an exclusive licensee.

 

4.16.                     Leases.

 

Loan Parties and the
Significant Subsidiaries enjoy peaceful and undisturbed possession under all
leases material to their business and to which they are parties or under

 

73

 

which they are
operating and all of such material leases are valid and subsisting and no
material default by Loan Parties and the Significant Subsidiaries exists under
any of them.

 

4.17.                     Deposit Accounts and Securities
Accounts.

 

Set forth on Schedule 4.17
is a listing of all of Loan Parties’ Deposit Accounts and Securities Accounts
as of the Closing Date, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.

 

4.18.                     Complete Disclosure.

 

All factual information
(taken as a whole) furnished by or on behalf of Borrowers or their Subsidiaries
in writing to any Agent or any Lender (including all information contained in
the Schedules hereto or in the other Loan Documents, as updated from time to
time in accordance with the terms of the Loan Documents) for purposes of or in
connection with this Agreement, the other Loan Documents, or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of Borrowers or their
Subsidiaries in writing to any Agent or any Lender will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided; provided, that any projections and forecasts shall be subject to the
next sentence.  On the Closing Date, the
Closing Date Projections represent, and as of the date on which any other
Projections are delivered to Administrative Agent, such additional Projections
represent, Borrowers’ good faith estimate of their and their Subsidiaries’ future
performance for the periods covered thereby (it being understood that such
projections and forecasts are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Borrowers and that
no assurance can be given that such projections or forecasts will be realized).

 

4.19.                     Indebtedness.

 

Set forth on Schedule 4.19
is a true and complete list of all Indebtedness (other than Indebtedness
permitted under Section 6.1 (other than clause (b) thereof))
of each Loan Party and each Significant Subsidiary outstanding immediately
prior to the Closing Date that is to remain outstanding after the Closing Date
and such Schedule accurately reflects the aggregate principal amount of
such Indebtedness and describes the maturity date thereof as of the Closing
Date.

 

4.20.                     Withholdings and Remittances.

 

Each Canadian Borrower
has withheld from each payment made to any of its present or former employees,
officers and directors, and to all persons who are non-residents of Canada for
the purposes of the Canadian Income Tax Act
all material amounts required by Applicable Law to be withheld, including all
payroll deductions required to be withheld, and

 

74

 

furthermore, has
remitted, where applicable, such withheld amounts within the prescribed periods
to the appropriate Governmental Authority. 
Such Canadian Borrower has remitted all Canadian Pension Plan
contributions, provincial pension plan contributions, workers compensation
assessments, employment insurance premiums, employer health taxes, municipal
real estate taxes and other taxes payable under the Applicable Law by it (the “Statutory
Lien Payments”) and has remitted such amounts to the proper Governmental
Authority within the time required under the Applicable Law, save and except
for contributions, assessments, premiums and taxes which are the subject of
Permitted Protests.

 

4.21.                     Payments to Employees and Others.

 

Each Canadian Borrower
has paid or accrued as a liability on its books and will pay, all material
payments due from it to any employee, independent contractor, Person or
Governmental Authority on account of wages, workers’ compensation or other
compensation and, as applicable, employee health and welfare insurance and
other benefits.

 

4.22.                     Term B Debt Documents.

 

Borrowers have delivered
to Administrative Agent true and correct copies of the Term B Debt
Documents.  The transactions contemplated
by the Term B Debt Documents will be, contemporaneously with the Closing Date,
consummated in accordance with their respective terms.  All of the representations and warranties of
the US Borrowers in the Term B Debt Documents are true and correct in all
material respects.

 

5.                                      AFFIRMATIVE
COVENANTS.

 

Each Borrower covenants
and agrees that, until termination of all of the Commitments and payment in
full of the Obligations, Borrowers shall and shall cause each other Loan Party
and each Significant Subsidiary to do all of the following:

 

5.1.                            Accounting System.

 

Maintain a system of
accounting that enables Borrowers to produce financial statements in accordance
with GAAP and maintain records pertaining to the Collateral that contain
information as from time to time reasonably may be requested by Administrative
Agent.  Borrowers also shall keep a
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to their sales (it being understood that Borrowers’
reporting system as in effect on the Closing Date shall be deemed to satisfy
the requirements of this sentence).

 

5.2.                            Collateral Reporting.

 

Provide Administrative
Agent (and if so requested by Administrative Agent, with copies for each
Lender) with each of the reports set forth on Schedule 5.2 at the
times specified therein.  In addition,
each Borrower agrees to cooperate fully with Administrative Agent to facilitate
and implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth on Schedule 5.2,
it being

 

75

 

understood that
the system of electronic reporting used by Borrowers on the Closing Date is
acceptable to Administrative Agent.

 

5.3.                            Financial Statements, Reports,
Certificates.

 

Deliver to Administrative
Agent, with copies for each Lender, each of the financial statements, reports,
or other items set forth on Schedule 5.3 at the time specified
therein.  In addition, Parent agrees that
no Loan Party will have a fiscal year different from that of Parent.  Parent and Borrowers agree to cooperate with
Administrative Agent to allow Administrative Agent to consult with its
independent certified public accountants if Administrative Agent reasonably
requests the right to do so and that, in such connection, its independent
certified public accountants are authorized to communicate with Administrative
Agent and to release to Administrative Agent whatever financial information
concerning the Loan Parties and the Significant Subsidiaries that
Administrative Agent reasonably may request.

 

5.4.                            Inspection.

 

Permit Administrative
Agent and, if an Event of Default shall have occurred and be continuing, any
Lender, and each of their duly authorized representatives or agents to visit
any of its properties and inspect any of its assets or books and records, to examine
and make copies of its books and records, and to discuss its affairs, finances,
and accounts with, and to be advised as to the same by, its officers, employees
handling financial matters and managerial employees at such reasonable times
and intervals during normal business hours as Administrative Agent or any such
Lender may designate and, so long as no Default or Event of Default exists,
with reasonable prior notice to Administrative Borrower.

 

5.5.                            Maintenance of Properties.

 

Maintain and preserve all
of their properties which are necessary or useful in the proper conduct of
their business in good working order and condition, ordinary wear, tear, and
casualty excepted, in each case except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change.  Comply at all times with the provisions of
all material leases to which it is a party as lessee, so as to prevent any loss
or forfeiture thereof or thereunder except to the extent the subject of a
Permitted Protest or except where the failure to do so could not reasonably be
expected to result in a Material Adverse Change.

 

5.6.                            Taxes.

 

Cause all assessments and
taxes, whether real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against Borrowers, the other Loan Parties, the Significant
Subsidiaries, or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that (a) the validity of such assessment or tax shall be the
subject of a Permitted Protest or (b) the aggregate amount of all such
unpaid past due (taking into account any extensions) taxes that

 

76

 

are not the
subject of a Permitted Protest (other than with respect to taxes due to any
taxing authority in the United States or any state thereof or the District of
Columbia) does not exceed, at any one time, $100,000.  Borrowers will and will cause the other Loan
Parties and the Significant Subsidiaries to make timely payment or deposit of
all withholding taxes, social security and unemployment taxes required of them
by Applicable Laws, including the Canadian
Income Tax Act, Statutory Lien Payments and those laws concerning
F.I.C.A., F.U.T.A., and state disability, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest,
and will, upon request, furnish Administrative Agent with proof reasonably
satisfactory to Administrative Agent indicating that the applicable Borrower,
Loan Party or Significant Subsidiary has made such payments or deposits.

 

5.7.                            Insurance.

 

(a)                                  At Borrowers’ expense, maintain
insurance respecting their and their Subsidiaries’ assets wherever located,
covering loss or damage by fire, theft, explosion, and all other hazards and
risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses; provided, that no Borrower shall be required to maintain
insurance with respect to leased real property if the landlord thereof
maintains such insurance.  Borrowers also
shall maintain business interruption, and public liability insurance, as well
as insurance against larceny, embezzlement, and criminal misappropriation.  All such policies of insurance shall be in
such amounts and with such insurance companies (or with respect to health
insurance and workers compensation insurance, self insurance programs) as are
reasonably satisfactory to Collateral Agent. 
Borrowers shall deliver copies of all such policies to Collateral Agent
with an endorsement naming Collateral Agent as the sole (other than the Term B
Agent) loss payee (under a satisfactory lender’s loss payable endorsement) or
additional insured, as appropriate.  Each
policy of insurance or endorsement shall contain a clause requiring the insurer
to give not less than 30 days prior written notice to Collateral Agent in the
event of cancellation of the policy for any reason whatsoever, or otherwise
acceptable to Collateral Agent.

 

(b)                                 Administrative Borrower shall give
Collateral Agent prompt notice of any property or casualty loss in a Dollar
Equivalent amount exceeding $500,000 covered by such insurance.  So long as no Event of Default has occurred
and is continuing, Borrowers shall have the exclusive right to adjust any losses
payable under any such insurance policies which are in a Dollar Equivalent
amount less than $1,000,000.  Following
the occurrence and during the continuation of an Event of Default, or in the
case of any losses payable under such insurance in a Dollar Equivalent amount
exceeding $1,000,000, Collateral Agent shall have the exclusive right to adjust
any losses payable under any such insurance policies, without any liability to
Borrowers whatsoever in respect of such adjustments.  Any monies received as payment for any loss
under any insurance policy of a US Borrower mentioned above (other than
liability insurance policies) or as payment of any award or compensation for
condemnation or taking by eminent domain, shall be paid over to Collateral
Agent to be applied to the prepayment of the Obligations in accordance with Section 2.4
or to be disbursed to Administrative Borrower for application to the cost of
repairs, replacements, restorations or acquisitions in accordance with Section 2.4.

 

77

 

5.8.                            Location of Inventory and Equipment.

 

(a)                                  Keep Loan Parties’ Inventory and
Equipment (other than vehicles and Equipment out for repair and items in
transit) only at the locations identified on Schedule 4.5 or
locations (i) not in existence on the Closing Date and not then required
to be disclosed pursuant to the following proviso, or (ii) at which there
are not more than 100 seats and at which the aggregate book value of all assets
at such location does not exceed $750,000; provided, however,
that Administrative Borrower may amend Schedule 4.5 (it being
understood that the Administrative Borrower shall, to the extent necessary,
update such schedule as part of the quarterly Compliance Certificate for
the second fiscal quarter of each fiscal year, as part of the annual Compliance
Certificate and upon the request of Administrative Agent), so long as any such
new location of a US Borrower is within the continental United States and any
such new location of a Foreign Borrower is within the continental United
States, Ireland, United Kingdom, Germany or Canada, and so long as, with
respect to any such location at which a US Borrower’s books and records are
located, at the time of such written notification, the applicable US Borrower
uses commercially reasonable efforts to obtain a Collateral Access Agreement
with respect thereto.

 

(b)                                 Keep Loan Parties’ and Significant
Subsidiaries’ chief executive offices only at the locations identified on Schedule 4.7(b);
provided, however, that Administrative Borrower may change any
Loan Party’s or any Significant Subsidiary’s chief executive office and notify
Administrative Agent of such change of a Loan Party’s or such Significant
Subsidiary’s chief executive office (i) 30 days prior to the date on which
such chief executive office is relocated to the extent any Borrower’s books and
records are located at such office or (ii) otherwise as part of the
quarterly Compliance Certificate for the second fiscal quarter of each fiscal
year, as part of the annual Compliance Certificate and upon the request of
Administrative Agent, in each case so long as any such new location of a US
Loan Party is within the continental United States and any such new location of
a Foreign Loan Party is within the continental United States, Ireland, United
Kingdom, Germany or Canada, and so long as, with respect to any such location
at which a US Borrower’s books and records are located, at the time of such
written notification, the applicable US Borrower uses commercially reasonable
efforts to obtain a Collateral Access Agreement with respect thereto.

 

5.9.                            Compliance with Laws.

 

Comply with the
requirements of all Applicable Laws, rules, regulations, and orders of any
Governmental Authority, other than Laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change.

 

5.10.                     Leases.

 

Pay when due all rents
and other amounts payable under any material leases to which any Loan Party or
any Significant Subsidiary is a party or by which any Loan Party’s or any
Significant Subsidiary’s properties and assets are bound, unless such payments
are the

 

78

 

subject of a
Permitted Protest or failure to make such payments could not reasonably be
expected to result in a Material Adverse Change.

 

5.11.                     Existence.

 

At all times preserve and
keep in full force and effect each Loan Party’s and each Significant Subsidiary’s
(a) valid existence and, if applicable, good standing in its jurisdiction
of organization and (b) qualifications to do business as a foreign entity
in each jurisdiction in which it is required to be so qualified and any rights
and franchises material to their businesses except to the extent (i) permitted
under Section 6.3 or 6.4 or (ii) failure to maintain
such qualifications, rights or franchises could not reasonably be expected to
result in a Material Adverse Change.

 

5.12.                     Environmental.

 

(a) Except as could
not reasonably be expected to result in a Material Adverse Change, keep any
property either owned or operated by any Borrower or any Subsidiary of a
Borrower free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply with Environmental Laws except to the
extent non-compliance could not reasonably be expected to result in a Material
Adverse Change and provide to Administrative Agent documentation of such
compliance which Administrative Agent reasonably requests, (c) promptly
upon obtaining knowledge thereof, notify Administrative Agent of any release of
a Hazardous Material in any reportable quantity from or onto property owned or
operated by any Borrower or any Subsidiary of a Borrower that could reasonably
be expected to result in a Material Adverse Change and take any Remedial
Actions required to come into compliance with applicable Environmental Law
(except to the extent such noncompliance could not reasonably be expected to result
in a Material Adverse Change), and (d) promptly, but in any event within
10 days of its receipt thereof, provide Administrative Agent with written
notice of any of the following:  (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of any Borrower or any Subsidiary of a Borrower, (ii) commencement
of any Environmental Action or notice that an Environmental Action will be
filed against any Borrower or any Subsidiary of a Borrower, and (iii) notice
of a violation, citation, or other administrative order relating to
Environmental Laws or Environmental Liabilities which reasonably could be
expected to result in a Material Adverse Change.

 

5.13.                     Disclosure Updates.

 

Promptly and in no event
later than 10 Business Days after obtaining knowledge thereof, notify
Administrative Agent if any written information, exhibit, or report furnished
on its behalf to the Lender Group contained, at the time it was furnished, when
taken together with all other information, exhibits or reports previously
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in any material respect in light of the circumstances in which made.  The foregoing to the contrary
notwithstanding, any

 

79

 

notification
pursuant to the foregoing provision will not cure or remedy the effect of the
prior untrue statement of a material fact or omission of any material fact nor
shall any such notification have the affect of amending or modifying this
Agreement or any of the Schedules hereto.

 

5.14.                     Control
Agreements.

 

Take all reasonable steps
in order for Collateral Agent to obtain control in accordance with Sections 8-106,
9-104, and 9-106 of the Code with respect to (subject to the proviso contained
in Section 6.12) all of the US Borrowers’ Securities Accounts and
Deposit Accounts.  Take all reasonable
steps in order for Collateral Agent to obtain control in accordance with
Applicable Law with respect to (subject to the proviso contained in Section 6.12)
all of the Foreign Borrowers’ Securities Accounts and Deposit Accounts.  Provide written notice to Collateral Agent of
any electronic chattel paper, investment property, and letter of credit rights
of any US Loan Party and, upon the request of Collateral Agent, take all
reasonable steps in order for Collateral Agent to obtain control in accordance
with Sections 8-106, 9-105, 9-106, and 9-107 of the Code with respect thereto,
in each case to the extent required by the US Security Agreement.  Notwithstanding anything in this Agreement or
in any Control Agreement or any other Loan Document to the contrary, Collateral
Agent agrees that unless and until an Event of Default has occurred and is
continuing, Collateral Agent shall not give the applicable bank or securities
intermediary notice instructing the bank or securities intermediary to cease
honoring the applicable Loan Party’s instructions.

 

5.15.                     Formation of Subsidiaries; Further
Assurances.

 

(a)                                  At the time that any Borrower or any
Guarantor forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date, other than a Non-Loan Party
Subsidiary or an Immaterial Subsidiary, or any Borrower or any Guarantor
designates any Non-Loan Party Subsidiary or any Immaterial Subsidiary to be a
Loan Party after the Closing Date, such Borrower or such Guarantor shall (i) cause
such new Subsidiary (or such newly designated Loan Party) created or organized
under the laws of the United States, Ireland, United Kingdom, Germany or Canada
or any state or province thereof or the District of Columbia to provide to
Administrative Agent a joinder to this Agreement and a Security Agreement,
together with such other security documents (including, if requested by
Administrative Agent, Mortgages with respect to any Real Property of any such
new US Borrower), as well as appropriate financing statements (and with respect
to all property subject to a Mortgage, fixture filings), all in form and
substance satisfactory to Administrative Agent and Collateral Agent (including
being sufficient to grant Collateral Agent a first priority Lien (subject to
Permitted Liens) in and to substantially all of the assets of such newly formed
or acquired Subsidiary); provided, that any new Subsidiary (or such newly
designated Loan Party) created or organized under the laws of the Ireland,
United Kingdom, Germany or Canada or any state or province thereof shall not be
required to grant a Lien in any of its assets other than its Accounts and
rights related thereto, and any guaranty or security provided by any such
Foreign Subsidiary shall support only the Foreign Obligations; provided,
that any such pledge with respect to the Accounts and related rights of

 

80

 

a
Subsidiary created or organized under the laws of Ireland, United Kingdom,
Germany or Canada or any state or province thereof shall be substantially in
the form of the pledge provided under the laws of such jurisdiction on the
Closing Date, (ii) if such Borrower or Guarantor is a US Loan Party,
provide to Collateral Agent a pledge agreement and appropriate certificates and
powers or financing statements, hypothecating all of the direct or beneficial
ownership interest in such new Subsidiary (or such newly designated Loan Party)
created or organized under the laws of the United States or any state thereof
or the District of Columbia owned directly by such Borrower or Guarantor, in
form and substance reasonably satisfactory to Collateral Agent, (iii) if
such Borrower or Guarantor is a US Loan Party, upon the request of Collateral
Agent, provide to Collateral Agent a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating 65% of all of
the total outstanding voting Stock in such new Subsidiary (or such newly
designated Loan Party) created or organized under the laws of any jurisdiction
other than the United States or any state thereof or the District of Columbia
owned directly by such Borrower or Guarantor, in form and substance reasonably
satisfactory to Collateral Agent, to secure the US Obligations; provided,
that (x) any such pledge with respect to the Stock of a Subsidiary created
or organized under the laws of United Kingdom or Canada or any state or
province thereof shall be substantially in the form of the pledge provided
under the laws of such jurisdiction on the Closing Date and (y) the
Administrative Agent shall not require any legal opinion with respect to any
pledge with respect to the Stock of a Subsidiary created or organized under any
jurisdiction other than Ireland, United Kingdom, Germany or Canada or any state
or province thereof, and (iv) provide to Administrative Agent and Collateral
Agent all other documentation, including (subject to the proviso in clause (iii) above)
one or more opinions of counsel satisfactory to Administrative Agent, which in
its opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage).  Any document, agreement, or
instrument executed or issued pursuant to this Section 5.15(a) shall
be a Loan Document.

 

(b)                                 Upon the request of Collateral
Agent, each US Loan Party shall (i) provide to Collateral Agent a pledge
agreement and appropriate certificates and powers or financing statements,
hypothecating 65% of all of the direct or beneficial ownership interest of such
US Loan Party in each Non-Loan Party Subsidiary, in form and substance
satisfactory to Collateral Agent, to secure the US Obligations, and (ii) provide
to Collateral Agent all other documentation (excluding opinions of counsel)
satisfactory to Collateral Agent, which in its opinion is necessary and
appropriate with respect to the pledges referred to above.  Any document, agreement, or instrument
executed or issued pursuant to this Section 5.15(b) shall be a
Loan Document.

 

5.16.                     Term B Debt Documents.

 

Promptly provide
Administrative Agent with true and complete copies of any and all material
documents and other material information delivered by or to any US Loan Party
pursuant to the terms of the Term B Debt Documents, except any such documents
or other information otherwise required to be delivered hereunder.

 

81

 

6.                                      NEGATIVE
COVENANTS.

 

Each Borrower covenants
and agrees that, until termination of all of the Commitments and payment in full
of the Obligations, Borrowers will not and will not permit any other Loan Party
or any Significant Subsidiary to do any of the following:

 

6.1.                            Indebtedness.

 

Create, incur, assume,
suffer to exist, or otherwise become or remain, directly or indirectly, liable
with respect to, any Indebtedness, except:

 

(a)                                  Indebtedness evidenced by this
Agreement and the other Loan Documents, together with Indebtedness owed to US
Underlying Issuers with respect to US Underlying Letters of Credit, owed to
Canadian Underlying Issuers with respect to Canadian Underlying Letters of
Credit or owed to European Underlying Issuers with respect to European
Underlying Letters of Credit;

 

(b)                                 Indebtedness set forth on Schedule 4.19;

 

(c)                                  Permitted Purchase Money
Indebtedness;

 

(d)                                 refinancings, renewals, or
extensions of Indebtedness originally permitted under clauses (b) and (o)
of this Section 6.1 (and continuance or renewal of any Permitted
Liens associated therewith) so long as: (i) such refinancings, renewals,
or extensions do not result in an increase in the principal amount of (except
for increases related to the costs of such issuances that do not exceed 1.5% of
the original principal amount), or interest rate with respect to, the
Indebtedness so refinanced, renewed, or extended or add one or more Loan
Parties as liable with respect thereto if such additional Loan Parties were not
liable with respect to the original Indebtedness, (ii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions, that, taken as a whole, are materially more burdensome
or restrictive to the applicable Borrowers, and (iii) if the Indebtedness
that is refinanced, renewed, or extended was subordinated in right of payment
to the Obligations, then the terms and conditions of the refinancing, renewal,
or extension Indebtedness must include subordination terms and conditions that
are at least as favorable to the Lender Group as those that were applicable to
the refinanced, renewed, or extended Indebtedness;

 

(e)                                  endorsement of instruments or other
payment items for deposit;

 

(f)                                    Indebtedness comprising Permitted
Investments;

 

(g)                                 (i) guaranties of any
Indebtedness permitted under this Section 6.1 solely to the extent
such Loan Party or such Significant Subsidiary would be permitted to incur such
Indebtedness under this Section 6.1 as a primary obligor (other
than pursuant to this clause (g)) and (ii) other guarantees issued by Loan
Parties and Significant Subsidiaries of Purchase Money Indebtedness incurred by
any Subsidiary of Parent in connection with the

 

82

 

acquisition
of such Subsidiary in an aggregate Dollar Equivalent amount not to exceed
$1,000,000 at any one time outstanding;

 

(h)                                 (i) Indebtedness under Hedge
Agreements entered into for business and not speculative purposes incurred in
order to protect against (A) price fluctuations with respect to materials
used in or services provided for the business of a Borrower, (B) fluctuations
in interest rates or (C) fluctuations in foreign exchange rates and (ii) Indebtedness
of Loan Parties that are not Borrowers and Significant Subsidiaries under Hedge
Agreements entered into for business and not speculative purposes incurred in
order to protect against (A) price fluctuations with respect to materials
used in or services provided for the business of a Loan Party or Significant
Subsidiary, (B) fluctuations in interest rates or (C) fluctuations in
foreign exchange rates;

 

(i)                                     Indebtedness in respect of (i) intercompany
loans among US Borrowers, (ii) intercompany loans among Foreign Borrowers
made with the proceeds of Foreign Advances and (iii) intercompany loans
made by a Foreign Subsidiary to a US Borrower; provided, that (x) such
intercompany loans are evidenced by promissory notes, in form and substance
acceptable to Collateral Agent, and, in the case of notes evidencing
Indebtedness owed to a US Loan Party, which promissory notes have been pledged
to Collateral Agent and (y) such intercompany loans are unsecured;

 

(j)                                     Indebtedness of Loan Parties and
their respective Subsidiaries in respect of intercompany loans permitted under
clauses (g) and (h) of the definition of Permitted Investments;

 

(k)                                  Indebtedness in an aggregate Dollar
Equivalent amount not to exceed $5,000,000 for all Loan Parties and Significant
Subsidiaries at any one time outstanding arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business so long as such
Indebtedness is extinguished within 10 Business Days of the incurrence thereof;

 

(l)                                     Indebtedness of SITEL Iberica
Teleservices, S.A. in an aggregate Dollar Equivalent principal amount not to
exceed $20,000,000 at any time outstanding;

 

(m)                               the Term B Debt;

 

(n)                                 Indebtedness of any Loan Party or
Significant Subsidiary in respect of a Convertible Note Offering, so long as
the Term B Debt has been paid in full (or will be paid in full with the
proceeds of the Convertible Note Offering) and, immediately before and after
giving effect to the incurrence of such Convertible Note Offering, no Event of
Default has occurred and is continuing;

 

(o)                                 so long as the Term Loan A and Term
B Debt have been paid in full (or will be paid in full with the proceeds of
Additional Permitted Debt), Indebtedness of any Loan Party or Significant
Subsidiary in respect of the Additional Permitted Debt; provided,

 

83

 

that,
the principal amount of Indebtedness permitted under this clause (o) shall be
reduced by the outstanding principal amount of any refinancings, renewals, or
extensions of such Indebtedness made under clause (d) of this Section 6.1;

 

(p)                                 at any time prior to the incurrence
of the Term B Debt, Indebtedness under the Indenture; and

 

(q)                                 additional Indebtedness of Loan
Parties and Significant Subsidiaries (other than SITEL Iberica Teleservices,
S.A.) not incurred in reliance on clauses (a) through (p) above in an
aggregate Dollar Equivalent principal amount that does not exceed $5,000,000 at
any one time outstanding.

 

6.2.                            Liens.

 

Create, incur, assume, or
suffer to exist, directly or indirectly, any Lien on or with respect to any of
its assets, of any kind, whether now owned or hereafter acquired, or any income
or profits therefrom, except for Permitted Liens.

 

6.3.                            Restrictions on Fundamental Changes.

 

(a)                                  Enter into any amalgamation, merger,
consolidation, reorganization, or recapitalization, or reclassify its Stock,
except that, if at the time thereof and immediately after giving effect thereto
no Event of Default shall have occurred and be continuing, (1) any
Subsidiary of a Borrower may be amalgamated, merged or consolidated with or
into any Loan Party or any Significant Subsidiary (provided that in any such amalgamation,
merger or consolidation involving
(w) a US Borrower, a US Borrower shall be the continuing or surviving
entity, (x) a US Loan Party but not a US Borrower, a US Loan Party shall
be the continuing or surviving entity, (y) a Foreign Borrower but not a US
Loan Party, a Foreign Borrower shall be the continuing or surviving entity and
(z) a Foreign Loan Party but not a US Loan Party or a Foreign Borrower, a
Foreign Loan Party shall be the continuing or surviving entity) and (2) the
transactions described in the Pre-approved Restructurings Letter shall be
permitted,

 

(b)                                 Liquidate, wind up, or dissolve
itself (or suffer any liquidation or dissolution), except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing, (1) a Significant Subsidiary may
liquidate, wind-up or dissolve with and into a Subsidiary of a Borrower if the
Administrative Borrower determines in good faith that such transaction is in
the best interests of the Administrative Borrower, and such transaction is not
materially disadvantageous to the Lenders; provided, that, a Significant
Subsidiary that is not a Foreign Subsidiary may only liquidate, wind-up or
dissolve with and into another Subsidiary that is not a Foreign Subsidiary and (2) the transactions described in the
Pre-approved Restructurings Letter shall be permitted,

 

84

 

(c)                                  Except as permitted under Section 6.4,
convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets, or

 

(d)                                 Suspend or go out of a substantial
portion of its or their business except (1) to the extent such suspension
or going out of business could not reasonably be expected to result in a
Material Adverse Change and (2) the
transactions described in the Pre-approved Restructurings Letter shall be
permitted.

 

6.4.                            Disposal of Assets.

 

Other than as permitted
under Section 6.3 and Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of any of the assets of any
Loan Party or any Significant Subsidiary.

 

6.5.                            Change Name.

 

Except in connection with
a transaction permitted pursuant to Section 6.3, change any Loan
Party’s or any Significant Subsidiary’s name, organizational identification
number, state of organization, or organizational identity; provided, however,
that a Loan Party or a Significant Subsidiary may change its name or
organizational identification number upon at least 15 Business Days prior
written notice by Administrative Borrower to Collateral Agent of such change
and so long as, at the time of such written notification, such Loan Party or
such Significant Subsidiary provides any financing statements necessary to
perfect and continue perfected the Agent’s Liens.

 

6.6.                            Nature of Business.

 

Make any material change
in the principal nature of the business of the Loan Parties and the Significant
Subsidiaries, taken as a whole.

 

6.7.                            Prepayments and Amendments.

 

Except in connection with
a refinancing permitted by Section 6.1(c), (d), or (n),

 

(a)                                  optionally prepay, redeem, defease,
purchase, or otherwise acquire any Indebtedness of any Loan Party or
Significant Subsidiary (other than (i) the Obligations in accordance with
this Agreement, (ii) the Term B Debt or (iii) intercompany loans owed
to US Borrowers, intercompany loans among Foreign Borrowers, intercompany loans
among US Guarantors, intercompany loans among Foreign Guarantors, intercompany
loans among Foreign Subsidiaries that are not Loan Parties, intercompany loans
owed by any US Guarantor to a US Borrower, intercompany loans owed by any
Foreign Subsidiary to a Borrower or intercompany loans owed by any Foreign
Subsidiary that is not a Loan Party to a Loan Party), unless (x) with
respect to Indebtedness other than intercompany Indebtedness subordinated
pursuant to the terms of the Intercompany Subordination Agreement, such
Indebtedness has not been contractually subordinated to the Obligations in
right of payment,

 

85

 

(y) no
Event of Default shall have occurred and be continuing or would result from
such prepayment, redemption, defeasement, purchase or acquisition and
(z) daily average Dollar Equivalent of Excess Availability for the
immediately preceding 30 consecutive day period is at least $15,000,000 and,
immediately prior to such prepayment, redemption, defeasement, purchase or
acquisition and immediately after giving effect to such prepayment, redemption,
defeasement, purchase or acquisition, the Dollar Equivalent of Excess
Availability is at least $15,000,000; provided, that, any Loan Party or
Significant Subsidiary may make optional prepayments of intercompany
Indebtedness by set off (and not in cash) against obligations owed to such Loan
Party or Significant Subsidiary by another Borrower or Subsidiary of a Borrower
so long as no Event of Default shall have occurred and be continuing or would
result from such set off, provided, that, no Foreign Subsidiary may make
any optional prepayment of intercompany Indebtedness owed by such Foreign
Subsidiary to a US Loan Party by set off to the extent such prepayment is
prohibited in the definition of “Permitted Investment”,

 

(b)                                 optionally prepay, redeem, defease,
purchase, or otherwise acquire any Term B Debt, except (i) using the
proceeds of a Convertible Note Offering permitted hereunder or using the
proceeds of the sale involving the property described in, and subject to the
terms of, the Pre-approved Asset Disposition Letter, in each case to the extent
permitted under Section 2.4(c) and (ii) using other funds
available to such Person unless (A) an Event of Default shall have
occurred and be continuing or would result from such prepayment, redemption,
defeasement, purchase or acquisition, (B) after giving effect to such
prepayment, redemption, defeasement, purchase or acquisition, Borrowers are not
in compliance with the financial covenants included in Section 6.17
on a pro forma basis as of the most recent month end for which financial
statements have been delivered or (C) immediately prior to such
prepayment, redemption, defeasement, purchase or acquisition and immediately
after giving effect to such prepayment, redemption, defeasement, purchase or
acquisition, daily average Dollar Equivalent of Excess Availability for the
immediately preceding 30 consecutive day period is less than $25,000,000 and
the Dollar Equivalent of Excess Availability as of such date is less than
$25,000,000,

 

(c)                                  make any payment on account of
Indebtedness that has been contractually subordinated in right of payment if such
payment is not permitted at such time under the subordination terms and
conditions, or

 

(d)                                 directly or indirectly, amend,
modify, alter, or change any of the terms or conditions of (i) the Term B
Debt Documents to the extent that
the Intercreditor Agreement prohibits the holders of the Term B Debt from so
amending, modifying or supplementing the same or (ii) any
agreement, instrument, document, indenture, or other writing evidencing or
concerning Indebtedness permitted under Section 6.1(b) in a
manner that is materially adverse to the Lenders.

 

6.8.                            Change of Control.

 

Cause, permit, or suffer,
directly or indirectly, any Change of Control.

 

86

 

6.9.                            [Intentionally Omitted].

 

6.10.                     Distributions.

 

Make any distribution or
declare or pay any dividends (in cash or other property) on, or purchase,
acquire, redeem, or retire, any of any Borrower’s Stock, of any class, (any of
the foregoing, a “Restricted Payment”), whether now or hereafter
outstanding; provided that the following shall be permitted: (a) Restricted
Payments by a Foreign Borrower to another Borrower (including, solely for
purposes thereof, Restricted Payments to any intermediate holding company) or
by a US Borrower to another US Borrower, (b) Restricted Payments paid
solely in common Stock, (c) Restricted Payments in amounts necessary to
permit a Borrower to repurchase Stock of such Borrower from employees of such
Borrower or another Borrower upon the termination of their employment, so long
as no Default or Event of Default exists at the time of or would be caused by
the making of such Restricted Payment and so long as the aggregate Dollar
Equivalent amount of all such Restricted Payments for all Borrowers made
pursuant to this clause (c) does not exceed $2,000,000 during any fiscal
year of Borrowers, and (d) commencing on the date the Term Loan A has been
repaid in full, so long as (i) either the Term B Debt has been repaid in
full or the holders of the Term B Debt have consented to any such Restricted
Payment under the Term B Debt Documents, (ii) no Event of Default exists
or would result from the making of any such Restricted Payments and (iii) immediately
prior to the making of any such Restricted Payments and immediately after
giving effect to the making of any such Restricted Payments, daily average
Dollar Equivalent of Excess Availability for the immediately preceding 30
consecutive day period is at least $15,000,000 and the Dollar Equivalent of
Excess Availability as of such date is at least $15,000,000, Restricted
Payments by Borrowers in an aggregate Dollar Equivalent amount not exceeding
$5,000,000 with respect to all such Restricted Payments made pursuant to this
clause (d) made by all Borrowers within any fiscal year of Borrowers.

 

6.11.                     Accounting Methods.

 

Modify or change their
fiscal year or their method of accounting (other than as may be required to
conform to GAAP) or enter into, modify, or terminate any agreement currently
existing, or at any time hereafter entered into, with any third party
accounting firm or service bureau for the preparation or storage of Borrowers’
or their Subsidiaries’ accounting records without said accounting firm or
service bureau agreeing to provide Administrative Agent information regarding
Borrowers’ and their Subsidiaries’ financial condition.

 

6.12.                     Investments.

 

Except for Permitted
Investments, directly or indirectly, make or acquire any Investment; provided,
however, that US Borrowers shall not have Permitted Investments (other
than in the Deposit Accounts and Securities Accounts subject to Control
Agreements and Excluded Deposit Accounts) in Deposit Accounts or Securities
Accounts in an aggregate Dollar Equivalent amount in excess of $500,000 at any
one time and the Borrowers shall not

 

87

 

have Permitted
Investments (other than in the Deposit Accounts and Securities Accounts subject
to Control Agreements and Excluded Deposit Accounts) in Deposit Accounts or
Securities Accounts in an aggregate Dollar Equivalent amount in excess of
$5,000,000 at any one time unless the applicable Borrower and the applicable
securities intermediary or bank have entered into Control Agreements governing
such Permitted Investments in order to perfect (and further establish) the
Agent’s Liens in such Permitted Investments. 
Subject to the foregoing proviso, Borrowers shall not establish or
maintain any Deposit Account or Securities Account unless Collateral Agent
shall have received a Control Agreement in respect of such Deposit Account or
Securities Account.

 

6.13.                     Transactions with Affiliates.

 

Directly or indirectly
enter into or permit to exist any transaction with any Affiliate of any
Borrower except:

 

(i)                                     transactions
that (a) are upon fair and reasonable terms, (b) if they involve one
or more payments by any Borrower or any of its Subsidiaries which are in a
Dollar Equivalent amount in excess of $250,000 for any single transaction or
series of transactions, are fully disclosed to Administrative Agent, and (c) are
no less favorable to Borrowers or their respective Subsidiaries, as applicable,
than would be obtained in an arm’s length transaction with a non-Affiliate;

 

(ii)                                  intercompany
loans among Loan Parties and their Subsidiaries permitted under Section 6.1,
investments permitted under Section 6.12 or any transaction
expressly permitted under Section 6.2, 6.3, 6.4 or 6.10;

 

(iii)                               transactions
among Loan Parties and transactions among Significant Subsidiaries;

 

(iv)                              reasonable
director’s fees for any director;

 

(v)                                 indemnification
arrangements for directors, officers, employees or consultants;

 

(vi)                              any
arrangements as in effect as of the date of this Agreement and described on Schedule 6.13
hereto or any transaction contemplated thereby (including pursuant to an
amendment thereto or any replacement agreement thereto so long as any amendment
or replacement agreement is not more disadvantageous to the Administrative
Agent and Lenders in any material respect than the original agreement on the
date of this Agreement);

 

(vii)                           transactions
in the ordinary course of business between and among Loan Parties and
Subsidiaries of Parent in connection with subcontractor arrangements and
guarantees of ordinary course obligations of Subsidiaries of Parent not
constituting Indebtedness; and

 

88

 

(viii)                        management
fees payable to US Borrowers and management fees payable by any Foreign
Subsidiary to any Foreign Borrower organized in the United Kingdom.

 

6.14.                     Use of Proceeds.

 

Use the proceeds of the
Advances for any purpose other than (a) on the Closing Date, (i) to
repay in full the outstanding principal, accrued interest, and accrued fees and
expenses owing to Existing Lender, and (ii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, and (b) thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted
purposes.  Use the proceeds of the Term
Loan A for any purpose other than, together with the proceeds of Advances and
the Term B Debt, to repay in full the outstanding principal, accrued interest,
and accrued fees and expenses evidenced by the Indenture.

 

6.15.                     SITEL Mexico Holdings LLC and
SITMEX-USA, LLC

 

Permit SITEL Mexico
Holdings LLC, a Nebraska limited liability company, or SITMEX-USA, LLC, a
Delaware limited liability company, to engage in any business, other than acting as a holding company and
transactions incidental thereto, the making of Investments in Persons
that are not Loan Parties, the performance of ministerial activities and the
payment of taxes and administrative fees and expenses; provided, that the
transactions described in the Pre-approved Restructurings Letter shall be
permitted to the extent such transactions are consummated on the terms set
forth in the Pre-approved Restructurings Letter.

 

6.16.                     Non-Loan Party Subsidiaries;
Immaterial Subsidiaries.

 

(a)                                  Permit (i) any Liens (other
than Agent’s Liens and Liens in favor of Term B Agent, if any) on the capital
stock of any Non-Loan Party Subsidiary, (ii)  the Non-Loan Party
Subsidiaries to (A) incur any Indebtedness (other than intercompany loans
permitted under Section 6.12) in an aggregate amount at any time
outstanding in excess of $7,000,000 less any outstanding Indebtedness incurred
in reliance on clause (q) of Section 6.1, or (B) incur any
Liens other than Liens that would constitute Permitted Liens if all such
Subsidiaries were deemed to be Significant Subsidiaries or (iii) (A) the
aggregate revenue of all Non-Loan Party Subsidiaries for any fiscal quarter to
exceed the Maximum Non-Loan Party Percentage of the aggregate revenue of
Administrative Borrower and its Subsidiaries for such fiscal quarter or (B) the
revenue of all Non-Loan Party Subsidiaries organized under the laws of any
single jurisdiction for any fiscal quarter to exceed 2.5% of the aggregate
revenue of Administrative Borrower and its Subsidiaries for such fiscal
quarter; provided, that, any failure of Borrowers to comply with this clause (iii) shall
not constitute a breach of this Agreement if, on or prior to the earlier of
(x) 10 days of such failure becoming known to an officer of Administrative
Borrower and (y) the date of Administrative Borrower’s filing of its quarterly
report on form 10-Q for any fiscal quarter, Administrative Borrower designates
in a written notice certain Non-Loan Party Subsidiaries to be Loan Parties or
Significant

 

89

 

Subsidiaries
such that, after giving effect to such designation, on a pro forma basis,
Borrowers shall be in compliance with this clause (iii), so long as immediately
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing.

 

(b)                                 Permit any Immaterial Subsidiary to (i) engage
in any type of business activity or (ii) own assets with a fair market
value in excess of $250,000.

 

6.17.                     Financial Covenants.

 

(a)                                  At any time prior to the Covenant
Suspension Date and at any time on or after the occurrence of a Covenant Event,
fail to maintain or achieve:

 

(i)                                     Minimum EBITDA. 
EBITDA, measured on a month-end basis, of at least the
required amount set forth in the following table for the applicable period set
forth opposite thereto:

 

	
  Applicable Period

  	
   

  	
  Applicable Amount

  	
   

  
	
  For the 12 month periods ending August 31, 2005
  and September 30, 2005

  	
   

  	
  $

  	
  44,000,000

  	
   

  
	
  For the 12 month period ending each month thereafter

  	
   

  	
  $

  	
  45,000,000

  	
   

  

 

(ii)                                  Fixed Charge Coverage Ratio.  A Fixed Charge Coverage Ratio,
measured on a month-end basis, of at least the required ratio set forth in the
following table for the applicable period set forth opposite thereto:

 

	
  Applicable Ratio

  	
   

  	
  Applicable Period

  	
   

  
	
  1.0:1.0

  	
   

  	
  For the 12 month periods

  ending August 31, 2005 and September 30, 2005

  	
   

  
	
  1.1:1.0

  	
   

  	
  For the 12 month period

  ending each month thereafter

  	
   

  

 

(iii)                               Leverage Ratio. 
A Leverage Ratio, measured on a quarter-end basis, of not
more than the ratio set forth in the following table for the applicable period
set forth opposite thereto:

 

90

 

	
  Applicable
  Ratio

  	
   

  	
  Applicable Period

  	
   

  
	
  2.75:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending September 30, 2005 and December 31, 2005

  	
   

  
	
  2.50:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending March 31, 2006

  	
   

  
	
  2.25:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending June 30, 2006

  	
   

  
	
  2.00:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending each fiscal quarter thereafter

  	
   

  

 

(b)                                 Capital
Expenditures.  Make, or permit any Subsidiary of
Parent to make, Capital Expenditures in any fiscal year, (i) at any time
prior to the Covenant Suspension Date, (ii)(A) at any time on or after the
occurrence of a Covenant Event or (B) if a Covenant Event would occur upon
the making of such Capital Expenditures, that would cause the aggregate amount
of all Capital Expenditures made by the Parent and its Subsidiaries to exceed
the amount set forth in the following table for the applicable period:

 

	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  2005

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  42,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  44,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  46,000,000

  	
   

  
	
  each Fiscal Year thereafter

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

(c)                                  US Excess
Availability.  Fail to maintain at any time US
Excess Availability equal to or in excess of $7,500,000.

 

7.                                      EVENTS
OF DEFAULT.

 

Any one or more of the
following events shall constitute an event of default (each, an “Event of
Default”) under this Agreement:

 

7.1.                              If any Loan Party
fails to pay when due and payable, or when declared due and payable, (a) all
or any portion of the Obligations consisting of interest, fees, or charges

 

91

 

due the Lender Group, reimbursement of Lender Group
Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of 3 Business Days, or (b) all
or any portion of the principal of the Obligations;

 

7.2.                              If any Loan Party

 

(a)                                  fails to perform or observe any
covenant or other agreement contained in any of Sections 2.7, 5.2,
5.3, 5.4, 5.7, 5.11, 5.13, 5.14, and 6.1
through 6.17 of this Agreement;

 

(b)                                 fails to perform or observe any
covenant or other agreement contained in any of Sections 5.5, 5.6,
5.8, 5.9, 5.10 and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the
date on which such failure shall first become known to any officer of any Loan
Party or (ii) written notice thereof is given to Administrative Borrower
by Administrative Agent; or

 

(c)                                  fails to perform or observe any
covenant or other agreement contained in this Agreement, or in any of the other
Loan Documents (giving effect to any grace periods, cure periods, or required
notices, if any, provided for therein), in each case, other than any such
covenant or agreement that is the subject of another provision of this Section 7
(in which event such other provision of this Section 7 shall
govern), and such failure continues for a period of 20 days after the earlier
of (i) the date on which such failure shall first become known to any
officer of any Loan Party or (ii) written notice thereof is given to
Administrative Borrower by Administrative Agent;

 

7.3.                              If any material
portion of US Loan Parties’ assets, taken as a whole, or Foreign Loan Parties’
assets, taken as a whole, is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or, in connection with a claim of any third Person,
comes into the possession of such third Person and the same is not discharged
before the earlier of 30 days after the date it first arises or 5 days prior to
the date on which such property or asset is subject to forfeiture by such Loan
Party;

 

7.4.                              If an Insolvency
Proceeding is commenced by any Loan Party or any Subsidiary of a Loan Party;

 

7.5.                              If an Insolvency
Proceeding is commenced against any Loan Party or any Subsidiary of a Loan
Party (other than Immaterial Subsidiaries), and any of the following events occur:  (a) the applicable Loan Party or
Subsidiary consents to the institution of such Insolvency Proceeding against
it, (b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof; (d) an
interim trustee (or if applicable, a trustee, an administrator, administrative
or other receiver or similar officer) is appointed to take possession of all or
any substantial portion of the properties or assets of, or

 

92

 

to operate all or any substantial portion of the business
of, any Loan Party or any Subsidiary of a Borrower, or (e) an order for
relief shall have been issued or entered therein;

 

7.6.                              If any Loan Party
or any Significant Subsidiary is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any material part of its
business affairs;

 

7.7.                              If one or more
judgments involving an aggregate Dollar Equivalent amount of $1,500,000, or
more (except to the extent covered by insurance pursuant to which coverage is
not denied or excluded by the insurer and the applicable Loan Party or
Significant Subsidiary is in receipt of the insurance proceeds within one
hundred eighty (180) days of the entry of such judgment) shall be entered
against any Loan Party or any Significant Subsidiary or with respect to a
material portion of any of their respective assets, and the same is not released,
discharged, bonded against, or stayed pending appeal before the earlier of 30
days after the date it first arises or 5 days prior to the date on which such
asset is subject to being forfeited by the applicable Loan Party or applicable
Significant Subsidiary;

 

7.8.                              If there is a
default in (a) the Term B Debt Documents, or (b) one or more
agreements to which any Loan Party or any Significant Subsidiary is a party
with one or more third Persons relative to Indebtedness of any Loan Party or
any Significant Subsidiary (other than Indebtedness of a Foreign Subsidiary to
a US Loan Party) involving an aggregate Dollar Equivalent amount of  $5,000,000 or
more, and in the case of clauses (a) or (b), such default (i) occurs
at the final maturity of the obligations thereunder, or (ii) results in a
right by such third Person(s), irrespective of whether exercised, to accelerate
the maturity of the applicable Loan Party’s or any Significant Subsidiary’s
obligations thereunder;

 

7.9.                              If any warranty,
representation, statement, or Record made herein or in any other Loan Document
or delivered to Lender in connection with this Agreement or any other Loan
Document proves to be untrue in any material respect as of the date of issuance
or making or deemed making thereof;

 

7.10.                        If the obligation
of any Guarantor under any Guaranty is limited or terminated by operation of
Law or, except as expressly permitted under the Loan Documents, by such
Guarantor;

 

7.11.                        If the Security
Agreement or any other Loan Document that purports to create a Lien, shall, for
any reason, fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien on or
security interest in a material portion of the Collateral covered thereby, except
(a) as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement or (b) as a result of
Administrative Agent’s failure to maintain possession of stock certificates,
notes or other instruments delivered to it; or

 

7.12.                        Any material
provision of any Loan Document shall at any time for any reason be declared to
be null and void, or the validity or enforceability thereof shall be contested
by any Loan Party or any Subsidiary of a Loan Party, or a proceeding shall be 

 

93

 

commenced by any Loan Party or any Subsidiary of a Loan
Party, or by any Governmental Authority having jurisdiction over any Loan Party
or any Subsidiary of a Loan Party, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny that it has any
liability or obligation purported to be created under any Loan Document.

 

8.                                      THE LENDER GROUP’S RIGHTS AND REMEDIES.

 

8.1.                            Rights and Remedies.

 

Upon the occurrence, and
during the continuation, of an Event of Default, the Required Lenders (at their
election but without notice of their election and without demand) may authorize
and instruct the applicable Agent to do any one or more of the following on
behalf of the Lender Group (and the applicable Agent, acting upon the
instructions of the Required Lenders, shall do the same on behalf of the Lender
Group), all of which are authorized by Borrowers:

 

(a)                                  Declare all or any portion of the
Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable;

 

(b)                                 Cease advancing money or extending
credit to or for the benefit of Borrowers under this Agreement, under any of
the Loan Documents, or under any other agreement between Borrowers and the
Lender Group;

 

(c)                                  Terminate this Agreement and any of
the other Loan Documents as to any future liability or obligation of the Lender
Group, but without affecting any of the Agent’s Liens in the Collateral and
without affecting the Obligations; and

 

(d)                                 Exercise all other rights and
remedies available at Law or in equity or pursuant to any other Loan Document.

 

The foregoing to the
contrary notwithstanding, upon the occurrence of any Event of Default described
in Section 7.4 or Section 7.5 as to any Borrower, in
addition to the remedies set forth above, without any notice to Borrowers or
any other Person or any act by the Lender Group, the Commitments shall
automatically terminate and the Obligations then outstanding, together with all
accrued and unpaid interest thereon and all fees and all other amounts due
under this Agreement and the other Loan Documents, shall automatically and
immediately become due and payable, without presentment, demand, protest, or
notice of any kind, all of which are expressly waived by Borrowers.  The Administrative Agent agrees to endeavor
to notify Administrative Borrower of its or the Required Lenders’ election to
terminate the Commitments or its or the Required Lenders’ election to declare
all of the Obligations immediately due and payable; provided, that failure to
provide such notice shall not (i) affect the validity of any such action
taken by Administrative Agent and/or the Required Lenders, (ii) constitute
a breach by Administrative Agent or any Lender of its obligations hereunder or
under the other Loan Documents or (iii) expose Administrative Agent or any
Lender to any liability hereunder or under the other Loan Documents.

 

94

 

8.2.                            Remedies Cumulative.

 

The rights and remedies
of the Lender Group under this Agreement, the other Loan Documents, and all
other agreements shall be cumulative. 
The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right
or remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute
a waiver, election, or acquiescence by it.

 

9.                                      TAXES
AND EXPENSES.

 

If any Loan Party fails
to pay any monies (whether taxes, Statutory Lien Payments, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, the applicable Agent, in its
sole discretion and without prior notice to any Borrower, may do any or all of
the following:  (a) make payment of
the same or any part thereof, (b) set up such reserves against the US
Borrowing Base, the Foreign Borrowing Base or the Maximum Revolver Amount as
applicable Agent deems necessary in its Permitted Discretion to protect the
Lender Group from the exposure created by such failure, or (c) in the case
of the failure to comply with Section 5.7 hereof, obtain and
maintain insurance policies of the type described in Section 5.7
and take any action with respect to such policies as Administrative Agent deems
prudent in its Permitted Discretion.  Any
such amounts paid by any Agent shall constitute Lender Group Expenses and any
such payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement.  Agents need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.

 

10.                               WAIVERS;
INDEMNIFICATION.

 

10.1.                     Demand; Protest; etc.

 

Each Borrower waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of documents, instruments, chattel paper, and
guarantees at any time held by the Lender Group on which any such Borrower may
in any way be liable.

 

10.2.                     The Lender Group’s Liability for
Borrower Collateral.

 

Each Borrower hereby
agrees that:  (a) so long as Agents
comply with their obligations, if any, under the Code, the Lender Group shall
not in any way or manner be liable or responsible for:  (i) the safekeeping of the Borrower
Collateral, (ii) any loss or damage thereto occurring or arising in any
manner or fashion from any cause, (iii) any

 

95

 

diminution in the
value thereof, or (iv) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person, and (b) all risk of loss,
damage, or destruction of the Borrower Collateral shall be borne by Borrowers
except with respect to Borrower Collateral in the possession of Collateral
Agent or any Lender to the extent such loss, damage or destruction directly
results from Collateral Agent’s or such Lender’s own willful misconduct or
gross negligence (as finally determined by a court of competent jurisdiction).

 

10.3.                     Indemnification.

 

Each Borrower shall pay,
indemnify, defend, and hold the Agent-Related Persons, the Lender-Related
Persons, and each Participant (each, an “Indemnified Person”) harmless
(to the fullest extent permitted by law) from and against any and all claims,
demands, suits, actions, investigations, proceedings, and damages, and all
reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith or in connection with the enforcement
of this indemnification (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
(including any restructuring or workout with respect hereto) of this Agreement,
any of the other Loan Documents, or the transactions contemplated hereby or
thereby or the monitoring of Borrowers’ and their Subsidiaries’ compliance with
the terms of the Loan Documents, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the “Indemnified Liabilities”); provided, that
in no event shall Foreign Borrowers be liable with respect to Indemnified
Liabilities of US Loan Parties.  The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation
to any Indemnified Person under this Section 10.3 with respect to
any Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
such Indemnified Person.  This provision
shall survive the termination of this Agreement and the repayment of the
Obligations.  If any Indemnified Person
makes any payment to any other Indemnified Person with respect to an
Indemnified Liability as to which Borrowers were required to indemnify the
Indemnified Person receiving such payment, the Indemnified Person making such
payment is entitled to be indemnified and reimbursed by Borrowers with respect
thereto.  WITHOUT LIMITATION, THE
FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO
INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.

 

10.4.                     Currency Indemnity.

 

If, for the purposes of
obtaining or enforcing judgment in any court in any jurisdiction with respect
to this Agreement or any other Loan Document, it becomes necessary to convert
into the currency of such jurisdiction (the “Judgment Currency”) any

 

96

 

amount due under
this Agreement or under any other Loan Document in any currency other than the
Judgment Currency (the “Currency Due”) (or for the purposes of Section 2.4(a)(iii)),
then, to the extent permitted by law, conversion shall be made at the Currency
Exchange Rate on the Business Day before the day on which judgment is given (or
for the purposes of Section 2.4(a)(iii), on the Business Day on
which the payment was received by the applicable Agent).  In the event that there is a change in the
Currency Exchange Rate between the Business Day before the day on which the
judgment is given and the date of receipt by the applicable Agent of the amount
due, Borrowers shall to the extent permitted by law, on the date of receipt by
such Agent, pay such additional amounts, if any, or be entitled to receive
reimbursement of such amount, if any as may be necessary to ensure that the
amount received by such Agent on such date is the amount in the Judgment
Currency which (when converted at the Currency Exchange Rate on the date of
receipt by such Agent in accordance with normal banking procedures in the
relevant jurisdiction) is the amount then due under this Agreement or such
other Loan Document in the Currency Due. 
If the amount of the Currency Due (including any Currency Due for
purposes of Section 2.4) which the applicable Agent is so able to
purchase is less than the amount of the Currency Due (including any Currency
Due for purposes of Section 2.4) originally due to it, Borrowers
shall to the extent permitted by law jointly and severally indemnify and save
such Agent and Lenders harmless from and against loss or damage arising as a
result of such deficiency; provided, that in no event shall Foreign
Borrowers be liable with respect to any such deficiency arising out of the
Obligations of US Borrowers.  To the
extent permitted by law, this indemnity shall (i) constitute an obligation
separate and independent from the other obligations contained in this Agreement
and the other Loan Documents, (ii) give rise to a separate and independent
cause of action, (iii) apply irrespective of any indulgence granted by any
Agent or any Lender from time to time, (iv) survive the payment in full of
the Obligations and the termination of this Agreement, and (v) continue in
full force and effect notwithstanding any judgment or order for a liquidated
sum in respect of an amount due under this Agreement or any other Loan Document
or under any judgment or order.

 

11.                               NOTICES.

 

Unless otherwise provided
in this Agreement, all notices or demands by Borrowers or any Agent to the
others relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, electronic mail (at such email addresses
as Administrative Borrower or any Agent, as applicable, may designate to each
other in accordance herewith), or telefacsimile to Borrowers in care of
Administrative Borrower or to the applicable Agent, as the case may be, at its
address set forth below:

 

97

 

	
  If to Administrative Borrower:

  	
   

  	
  SITEL CORPORATION

  
	
   

  	
   

  	
  7277 World Communications Drive

  
	
   

  	
   

  	
  Omaha, Nebraska 68122

  
	
   

  	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  	
  Fax No.: (402) 963-2699

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  SITEL CORPORATION

  
	
   

  	
   

  	
  7277 World Communications Drive

  
	
   

  	
   

  	
  Omaha, Nebraska 68122

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Fax No.: (402) 963-2699

  
	
   

  	
   

  	
   

  
	
  If to Administrative Agent, European Administrative Agent, Collateral
  Agent or Fronting Lender:

  	
   

  	
  WELLS FARGO FOOTHILL, INC.

  
	
   

  	
   

  	
  2450 Colorado Avenue

  
	
   

  	
   

  	
  Suite 3000 West

  
	
   

  	
   

  	
  Santa Monica, California 90404

  
	
   

  	
   

  	
  Attn: Business Finance Manager

  
	
   

  	
   

  	
  Fax No.:

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  GOLDBERG, KOHN, BELL, BLACK, ROSENBLOOM &
  MORITZ, LTD.

  
	
   

  	
   

  	
  55 East Monroe Street, Suite 3700

  
	
   

  	
   

  	
  Chicago, Illinois 60603

  
	
   

  	
   

  	
  Attn: Keith G. Radner, Esq.

  
	
   

  	
   

  	
  Fax No.: (312) 332-2196

  
	
   

  	
   

  	
   

  
	
  If to Canadian Administrative Agent:

  	
   

  	
  WELLS FARGO FINANCIAL CORPORATION CANADA

  55 Standish Court, Suite 400

  Mississauga, Ontario L5R 4J4

  Attn: Nick Scarfo

  Fax No. 905-755-7106

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  WELLS FARGO FOOTHILL, INC.

  1000 Abernathy
  Road, Suite 1450

  Atlanta, Georgia 30328

  Attn: Business Finance Manager

  Fax No. (770) 508-1375

  

 

Agents and Borrowers may
change the address at which they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other party.  All

 

98

 

notices or demands
sent in accordance with this Section 11, other than notices by
Collateral Agent in connection with enforcement rights against the Borrower
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail.  Each Borrower
acknowledges and agrees that notices sent by the Lender Group in connection with
the exercise of enforcement rights against Borrower Collateral under the
provisions of the Code shall, to the extent permitted by law, be deemed sent
when deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.

 

12.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)                                  THE VALIDITY OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

 

(b)                                  THE PARTIES AGREE
THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT COLLATERAL AGENT’S OPTION, TO THE FULLEST EXTENT
PERMITTED BY LAW, IN THE COURTS OF ANY JURISDICTION WHERE COLLATERAL AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  BORROWERS AND EACH MEMBER OF THE
LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON  CONVENIENS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 12(b).

 

(c)                                  BORROWERS AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR

 

99

 

STATUTORY CLAIMS. 
BORROWERS AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

13.                               ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1.                     Assignments and Participations.

 

(a)                                  Any Lender may assign and delegate
to one or more assignees (each an “Assignee”) that are Eligible
Transferees all, or any ratable part of all, of the Obligations, the
Commitments and the other rights and obligations of such Lender hereunder and
under the other Loan Documents, in a minimum Dollar Equivalent amount of
$5,000,000 (except such minimum amount shall not apply to an assignment or
delegation by a Lender to any other Lender); provided, however,
that Borrowers and Agents may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses, and
related information with respect to the Assignee, have been given to
Administrative Borrower and Administrative Agent by such Lender and the
Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Administrative Agent an Assignment and Acceptance,
and (iii) the assigning Lender or Assignee has paid to Administrative
Agent for Administrative Agent’s separate account a processing fee in the
amount of $3,500.  Anything contained
herein to the contrary notwithstanding, the payment of any fees shall not be
required and the Assignee need not be an Eligible Transferee if such assignment
is in connection with any merger, consolidation, sale, transfer, or other
disposition of all or any substantial portion of the business or loan portfolio
of the assigning Lender.  Notwithstanding
the foregoing, no Lender shall assign or delegate all, or any ratable part of
all, of the Obligations, the Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents to any direct
competitor of Borrowers (provided, that a financial institution which is an
affiliate of a direct competitor of Borrowers shall not constitute a direct
competitor of Borrowers for this purpose).

 

(b)                                 From and after the date that
Administrative Agent notifies the assigning Lender (with a copy to
Administrative Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee (if required), (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents and the Intercreditor Agreement, and (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 10.3
hereof) and be released from any future obligations under this Agreement (and
in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement
and the other Loan

 

100

 

Documents
and the Intercreditor Agreement, such Lender shall cease to be a party hereto
and thereto), and such assignment shall effect a novation between Borrowers and
the Assignee; provided, however, that nothing contained herein
shall release any assigning Lender from obligations that survive the
termination of this Agreement, including such assigning Lender’s obligations
under Article 15 and Section 16.8 of this Agreement.

 

(c)                                  By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows:  (1) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and
without reliance upon Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (5) such Assignee appoints and
authorizes Administrative Agent to take such actions and to exercise such
powers under this Agreement, the other Loan Documents and the Intercreditor
Agreement as are delegated to Administrative Agent, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto, (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender, and (7) such
Assignee expressly assumes all rights and obligations of such assigning Lender
under the Intercreditor Agreement and agrees to be bound by the terms thereof.

 

(d)                                 Immediately upon Administrative Agent’s
receipt of the required processing fee payment and the fully executed
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising
therefrom.  The Commitments allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

 

(e)                                  Any Lender may at any time sell to
one or more commercial banks, financial institutions, or other Persons (a “Participant”)
participating interests in all or any portion of its Obligations, the
Commitments, and the other rights and interests of that Lender (the “Originating
Lender”) hereunder and under the other Loan Documents; provided, however,
that (i) the Originating Lender shall remain a “Lender” for all
purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a “Lender” hereunder or under the other

 

101

 

Loan
Documents and the Originating Lender’s obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely
responsible for the performance of such obligations, (iii) Borrowers,
Agents, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the
extent such amendment to, or consent or waiver with respect to this Agreement
or of any other Loan Document would (A) extend the final maturity date of
the Obligations hereunder in which such Participant is participating, (B) reduce
the interest rate applicable to the Obligations hereunder in which such
Participant is participating, (C) release all or substantially all of the
Collateral or guaranties (except to the extent expressly provided herein or in
any of the Loan Documents) supporting the Obligations hereunder in which such
Participant is participating, (D) postpone the payment of, or reduce the
amount of, the interest or fees payable to such Participant through such
Lender, or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums, and (v) all amounts payable by
Borrowers hereunder shall be determined as if such Lender had not sold such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed,
to the extent permitted by law, to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.  The rights
of any Participant only shall be derivative through the Originating Lender with
whom such Participant participates and no Participant shall have any rights
under this Agreement or the other Loan Documents or any direct rights as to the
other Lenders, Agents, Borrowers, the Collections of Loan Parties, the
Collateral, or otherwise in respect of the Obligations.  No Participant shall have the right to
participate directly in the making of decisions by the Lenders among
themselves.

 

(f)                                    In connection with any such
assignment or participation or proposed assignment or participation, a Lender
may, subject to the provisions of Section 16.8, disclose to such
proposed assignee or participant and its representatives all documents and
information which it now or hereafter may have relating to Borrowers and their
Subsidiaries and their respective businesses.

 

(g)                                 Any other provision in this
Agreement notwithstanding, any Lender may at any time create a security
interest in, or pledge, all or any portion of its rights under and interest in
this Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR § 203.24,
and such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under Applicable Law.

 

102

 

13.2.                     Successors.

 

This Agreement shall bind
and inure to the benefit of the respective successors and assigns of each of
the parties; provided, however, that Borrowers may not assign
this Agreement or any rights or duties hereunder without the Lenders’ prior
written consent and any prohibited assignment shall be absolutely void ab initio. 
No consent to assignment by the Lenders shall release any Borrower from
its Obligations.  A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 13.1 hereof and, except as
expressly required pursuant to Section 13.1 hereof, no consent or
approval by any Borrower is required in connection with any such assignment.

 

14.                               AMENDMENTS;
WAIVERS.

 

14.1.                     Amendments and Waivers.

 

No amendment or waiver of
any provision of this Agreement or any other Loan Document (other than Bank
Product Agreements and Letters of Credit), and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the applicable Agent at
the written request of the Required Lenders) and Administrative Borrower (on
behalf of all Borrowers) and then any such waiver or consent shall be
effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment,
or consent shall, unless in writing and signed by all of the Lenders affected
thereby and Administrative Borrower (on behalf of all Borrowers), do any of the
following:

 

(a)                                  increase or extend any Commitment of
any Lender,

 

(b)                                 postpone or delay any date fixed by
this Agreement or any other Loan Document for any payment of principal,
interest, fees, or other amounts due hereunder or under any other Loan
Document,

 

(c)                                  reduce the principal of, or the rate
of interest on, any loan or other extension of credit hereunder, or reduce any
fees or other amounts payable hereunder or under any other Loan Document,

 

(d)                                 change the Pro Rata Share that is
required to take any action hereunder,

 

(e)                                  amend or modify this Section or
any provision of this Agreement providing for consent or other action by all
Lenders,

 

(f)                                    other than as permitted by Section 15.12,
release Agent’s Lien in and to any of the Collateral,

 

(g)                                 change the definition of “Required
Lenders” or “Pro Rata Share”,

 

103

 

(h)                                 contractually subordinate any of the
Agent’s Liens other than to a Lien permitted pursuant to clause (f) of the
definition of “Permitted Lien”,

 

(i)                                     except as expressly permitted by the
Loan Documents, release any Borrower or any Guarantor from any obligation for
the payment of money,

 

(j)                                     change the definition of “US
Borrowing Base” or “Foreign Borrowing Base” or “Canadian
Borrowing Base” or “European Borrowing Base” or the definitions of “Eligible
Foreign Accounts”, “Eligible Transferee”, “Eligible US Accounts”,
“Eligible Unbilled US Accounts”, “Eligible Unbilled Foreign Accounts”,
“Maximum Revolver Amount”, “Maximum Canadian Revolver Amount”, “Maximum
European Revolver Amount”, “Maximum US Revolver Amount”, “Term
Loan A Amount”, or change, modify or waive  Section 2.1(b),
or
Section 2.4(b), or

 

(k)                                  amend any of the provisions of Section 15.

 

and, provided further,
however, that no amendment, waiver or consent shall, unless in writing
and signed by Administrative Agent, Canadian Administrative Agent, European
Administrative Agent, US Issuing Lender, Fronting Lender, Canadian Issuing
Lender, European Issuing Lender, US Swing Lender or Canadian Swing Lender, as
applicable, affect the rights or duties of Administrative Agent, Canadian
Administrative Agent, European Administrative Agent, US Issuing Lender,
Fronting Lender, Canadian Issuing Lender, European Issuing Lender, US Swing
Lender, European Swing Lender or Canadian Swing Lender, as applicable, under
this Agreement or any other Loan Document. 
The foregoing notwithstanding, any amendment, modification, waiver,
consent, termination, or release of, or with respect to, any provision of this
Agreement or any other Loan Document that relates only to the relationship of
the Lender Group among themselves, and that does not affect the rights or
obligations of Borrowers, shall not require consent by or the agreement of
Borrowers.

 

14.2.                     Replacement of Holdout Lender.

 

(a)                                  If any action to be taken by the
Lender Group or any Agent hereunder requires the unanimous consent,
authorization, or agreement of all Lenders, and a Lender (“Holdout Lender”)
fails to give its consent, authorization, or agreement, then Administrative
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Lenders (each, a “Replacement Lender”), and the Holdout Lender shall
have no right to refuse to be replaced hereunder.  Such notice to replace the Holdout Lender
shall specify an effective date for such replacement, which date shall not be
later than 15 Business Days after the date such notice is given.

 

(b)                                 Prior to the effective date of such
replacement, the Holdout Lender and each Replacement Lender shall execute and
deliver an Assignment and Acceptance, subject only to the Holdout Lender being
repaid its share of the outstanding Obligations (including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium

 

104

 

or
penalty of any kind whatsoever.  If the
Holdout Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance prior to the effective date of such replacement, the Holdout
Lender shall be deemed to have executed and delivered such Assignment and
Acceptance.  The replacement of any
Holdout Lender shall be made in accordance with the terms of Section 13.1.  Until such time as the Replacement Lenders
shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan
Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s
Pro Rata Share of Advances and to purchase a participation in each Letter of
Credit, in an amount equal to its Pro Rata Share of the Risk Participation
Liability of such Letter of Credit.

 

14.3.                     No Waivers; Cumulative Remedies.

 

No failure by any Agent
or any Lender to exercise any right, remedy, or option under this Agreement or
any other Loan Document, or delay by any Agent or any Lender in exercising the
same, will operate as a waiver thereof. 
No waiver by any Agent or any Lender will be effective unless it is in
writing, and then only to the extent specifically stated.  No waiver by any Agent or any Lender on any
occasion shall affect or diminish each Agent’s and each Lender’s rights thereafter
to require strict performance by Borrowers of any provision of this
Agreement.  Each Agent’s and each Lender’s
rights under this Agreement and the other Loan Documents will be cumulative and
not exclusive of any other right or remedy that any Agent or any Lender may
have.

 

15.                               AGENT;
THE LENDER GROUP.

 

15.1.                     Appointment
and Authorization of Agents.

 

Each Lender hereby
designates and appoints (i) WFF as its representative as Administrative
Agent, European Administrative Agent and Collateral Agent (in respect of, inter
alia, taking the Guarantees and a security interest in the Collateral for and
on behalf of the Lender Group) and (ii) WF Canada as its representative as
Canadian Administrative Agent under this Agreement and the other Loan Documents
and, subject to Section 14.1, each Lender hereby irrevocably
authorizes each Agent to execute and deliver each of the other Loan Documents
on its behalf and to take such other action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  Each
Agent agrees to act as such on the express conditions contained in this Section 15.  The provisions of this Section 15
(other than Section 15.9, Section 15.11, the first and
last sentences of Section 15.12(a), and Section 15.12(b))
are solely for the benefit of Agents, and the Lenders, and Borrowers and their
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein.  Any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document notwithstanding, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, nor shall any Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or

 

105

 

liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against any Agent; it being expressly understood and agreed that the use of the
word “Agent” is for convenience only, that WFF and WF Canada are merely
the representatives of the Lenders, and only have the contractual duties set
forth herein.  Except as expressly
otherwise provided in this Agreement, Agents shall have and may use their sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that each
Agent expressly is entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. 
Without limiting the generality of the foregoing, or of any other
provision of the Loan Documents that provides rights or powers to Agents,
Lenders agree that each Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its
customary business practices, ledgers and records reflecting the status of the
Obligations, the Collateral, the Collections of Loan Parties, and related
matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs
of claim, notices and other written agreements with respect to the Loan
Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and
distribute the Collections of Loan Parties as provided in the Loan Documents, (e) open
and maintain such bank accounts and cash management arrangements as such Agent
deems necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of Loan
Parties, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Borrowers, the Obligations, the
Collateral, the Collections of Loan Parties, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender
Group Expenses as such Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

 

15.2.                     Delegation of Duties.

 

Agents may execute any of
their duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys in fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

 

15.3.                     Liability of Agents.

 

None of the Agent Related
Persons shall (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by any Borrower or any Subsidiary or Affiliate of any Borrower, or any officer
or director thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by any Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness,

 

106

 

enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder.  No Agent
Related Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the books and records or properties of Borrowers or the books or records or
properties of any of Borrowers’ Subsidiaries or Affiliates.

 

15.4.                     Reliance by Agents.

 

Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
telefacsimile or other electronic method of transmission, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to Borrowers or counsel to any Lender), independent accountants and other
experts selected by any Agent.  Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless such Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until
such instructions are received, such Agent shall act, or refrain from acting,
as it deems advisable.  If any Agent so
requests, it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the requisite
Lenders and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.

 

15.5.                     Notice of Default or Event of
Default.

 

No Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to any Agent for the account of the
Lenders and, except with respect to Events of Default of which such Agent has
actual knowledge, unless such Agent shall have received written notice from a
Lender or Administrative Borrower referring to this Agreement, describing such
Default or Event of Default, and stating that such notice is a “notice of
default”.  Each Agent promptly will
notify the Lenders of its receipt of any such notice or of any Event of Default
of which such Agent has actual knowledge. 
If any Lender obtains actual knowledge of any Event of Default, such
Lender promptly shall notify the other Lenders and Agents of such Event of
Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to Section 15.4, the
applicable Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with Section 8; provided, however, that,
after the occurrence of a Default or an Event of Default, if an event occurs or
a circumstance exists that materially and imminently threatens the ability of
the Lender Group to realize upon any material part of the Collateral (such as
fraudulent removal, 

 

107

 

concealment, or abscondment thereof, destruction (other than to the
extent covered by insurance) or material waste thereof, or failure of Borrowers
after reasonable demand to maintain or reinstate adequate casualty insurance
coverage with respect thereto), such Agent may take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.

 

15.6.                     Credit Decision.

 

Each Lender acknowledges
that none of the Agent Related Persons has made any representation or warranty
to it, and that no act by any Agent hereinafter taken, including any review of
the affairs of Borrowers and their Subsidiaries or Affiliates, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender.  Each Lender represents to Agents
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrowers and any other Person party to a Loan Document, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to
Borrowers.  Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of Borrowers and any other Person party to a Loan
Document.  Except for notices, reports,
and other documents expressly herein required to be furnished to the Lenders by
any Agent, no Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrowers and any other Person party to a Loan Document that may come into the
possession of any of the Agent Related Persons.

 

15.7.                     Costs and Expenses; Indemnification.

 

Agents may incur and pay
Lender Group Expenses to the extent such Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrowers
are obligated to reimburse Agents or Lenders for such expenses pursuant to this
Agreement or otherwise.  Each Agent is
authorized and directed to deduct and retain sufficient amounts from the Collections
of Loan Parties received by such Agent to reimburse such Agent for such
out-of-pocket costs and expenses prior to the distribution of any amounts to
Lenders.  In the event any Agent is not
reimbursed for such costs and expenses from the Collections of Loan Parties
received by such Agent, each Lender hereby agrees that it is and shall be
obligated to pay to or reimburse such Agent for

 

108

 

the amount of such
Lender’s Pro Rata Share thereof.  Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent Related Persons (to the extent not reimbursed
by or on behalf of Borrowers and without limiting the obligation of Borrowers
to do so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall
be liable for the payment to any Agent Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder.  Without limitation of the foregoing,
each Lender shall reimburse each Agent upon demand for such Lender’s Pro Rata
Share of any costs or out of pocket expenses (including attorneys, accountants,
advisors, and consultants fees and expenses) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that such Agent
is not reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of the applicable Agent.

 

15.8.                     Agents in Individual Capacity.

 

WFF and WF Canada and
their respective Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in, and generally
engage in any kind of banking, trust, financial advisory, underwriting, or
other business with Borrowers and their Subsidiaries and Affiliates and any
other Person party to any Loan Documents as though WFF and WF Canada were not
Agents hereunder, and, in each case, without notice to or consent of the other
members of the Lender Group.  The other
members of the Lender Group acknowledge that, pursuant to such activities, WFF
or WF Canada or their respective Affiliates may receive information regarding
Borrowers or their Affiliates and any other Person party to any Loan Documents
that is subject to confidentiality obligations in favor of Borrowers or such
other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver
Administrative Agent will use its reasonable best efforts to obtain),
Administrative Agent shall not be under any obligation to provide such
information to them.  The terms “Lender”
and “Lenders” include WFF and WF Canada in their in its individual
capacity.

 

15.9.                     Successor Agent.

 

Any Agent may resign as
an Agent upon 45 days notice to the Lenders and the Administrative
Borrower.  If any Agent resigns under
this Agreement, the Required Lenders shall, so long as no Event of Default has
occurred and is continuing in consultation with Administrative Borrower,
appoint a successor Agent for the Lenders. 
If no successor Agent is appointed prior to the effective date of the
resignation of the resigning Agent, Administrative Agent may appoint, after
consulting with the Lenders and, if no Event of Default has occurred and is
continuing, Administrative Borrower, a successor Agent.  If any

 

109

 

Agent has
materially breached or failed to perform any material provision of this
Agreement or of Applicable Law, the Required Lenders so long as no Event of
Default has occurred and is continuing in consultation with Administrative
Borrower, may agree in writing to remove and replace such Agent with a
successor Agent from among the Lenders. 
In any such event, upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers,
and duties of the retiring Agent and the term “Agent” shall mean such
successor Agent and the retiring Agent’s appointment, powers, and duties as an
Agent shall be terminated.  After any
retiring Agent’s resignation hereunder as an Agent, the provisions of this Section 15
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement. 
If no successor Agent has accepted appointment as an Agent by the date
which is 45 days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.

 

15.10.              Lender in Individual Capacity.

 

Any Lender and its
respective Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with Borrowers and their Subsidiaries and Affiliates and any other
Person party to any Loan Documents as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Borrowers or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge
that, in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them.  With respect to the
Swing Loans, Swing Lenders shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of the applicable Agent.

 

15.11.              Withholding Taxes.

 

(a)                                  All payments made by any Borrower
hereunder or under any note or other Loan Document will be made free and clear
of, and without deduction or withholding for, any present or future Taxes
unless such deduction or withholding is required by Applicable Law.  If deduction or withholding for Taxes shall
at any time be required by law, each applicable Borrower agrees to pay the full
amount of such Taxes to the appropriate taxing authority and to pay to each
Lender entitled to receive payments from which such Taxes are deducted or
withheld such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement, any note, or Loan Document, including any
amount paid pursuant to this Section 15.11(a) after
withholding or deduction for or on account of such Taxes, will not be less than
the payment that would have been received in

 

110

 

the
absence of such Taxes; provided, however, that Borrowers shall not be required
to pay any such additional amounts to any Agent or any Lender (i) if such
Agent or Lender fails to comply with the other requirements of this Section 15.11,
(ii) if the obligation to pay such amounts results from such Agent’s or
such Lender’s own bad faith, willful misconduct, or gross negligence, or (iii) on
account of any Excluded Taxes and provided further that US Borrowers shall not
be required to pay any US withholding tax that is imposed on amounts payable to
a Lender that is attributable to such Lender’s failure to comply with Section 15.11.  Each Borrower will furnish to Administrative
Agent as promptly as possible after the date the payment of any Tax is due
pursuant to Applicable Law certified copies of tax receipts evidencing such
payment by any Borrower.  “Taxes”
shall mean, any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect
to payments hereunder or under any Note or other Loan Document and all
interest, penalties or similar liabilities with respect thereto, but excluding
Excluded Taxes.  “Excluded Taxes”
shall mean:

 

(i)                                     any
Taxes imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein measured by or based on the income, net income or
profits or net profits of Lender, and any sales or use, franchise or similar
(including branch profits) Taxes imposed on Lender, and

 

(ii)                                  any
Taxes imposed by reason of a Lender being or having been a resident or deemed
resident of, or incorporated in the jurisdiction imposing the Taxes or carrying
on or having carried on or deemed to have been carrying on a trade or business
or providing services therein or having or having had a fixed place of business
or permanent establishment therein, 
other than solely as a result of entering into, executing, delivering or
performing its obligations or receiving payments under or enforcing this
Agreement or any Loan Document.

 

Any Borrower shall have the right to dispute or
contest, at its sole expense, the validity of any assessment or reassessment of
Taxes in respect of which it is required to pay an additional amount to any
Agent or Lender.  The Agent or Lender in
respect of which such Taxes are assessed or reassessed shall assist and cooperate
with such Borrower, at such Borrower’s expense, in any such dispute or contest
as is reasonably requested by such Borrower.

 

(b)                                 If a Lender is eligible to claim an
exemption from, or reduction in the rate of, United States withholding tax,
such Lender agrees with and in favor of Administrative Agent and any Borrower,
to deliver to Administrative Agent:

 

(i)                                     if
such Lender is eligible to claim an exemption from United States withholding
tax pursuant to its portfolio interest exception, (A) a statement of the
Lender, signed under penalty of perjury, that it is not (I) a “bank”
as described in Section 881(c)(3)(A) of the IRC, (II) a 10%
shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of
the IRC), or (III) a controlled foreign corporation related to any
Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a
properly completed

 

111

 

and executed IRS Form W-8BEN, before receiving
its first payment under this Agreement and at any other time reasonably
requested by Administrative Agent or any Borrower;

 

(ii)                                  if
such Lender is eligible to claim an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed and
executed IRS Form W-8BEN before receiving its first payment under this
Agreement and at any other time reasonably requested by Administrative Agent or
any Borrower;

 

(iii)                               if
such Lender is eligible to claim that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively connected
with a United States trade or business of such Lender, two properly completed
and executed copies of IRS Form W-8ECI before receiving its first payment
under this Agreement and at any other time reasonably requested by
Administrative Agent or any Borrower; or

 

(iv)                              such
other form or forms, including IRS Form W-9, as may be required under the
IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax before
receiving its first payment under this Agreement and at any other time
reasonably requested by Administrative Agent or any Borrower.

 

Each Lender agrees
promptly to notify Administrative Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.

 

(c)                                  If a Lender is eligible to claim an
exemption from the withholding or deduction of Taxes from payments made to it
by a Borrower in a jurisdiction other than the United States, Lender agrees with
and in favor of Administrative Agent and Borrowers, to deliver to
Administrative Agent any such form or forms, as may be required under the laws
of such jurisdiction as a condition to exemption from, or reduction in the rate
of, such withholding Taxes, including without limitation, any backup
withholding Taxes before receiving its first payment under this Agreement and
at any other time reasonably requested by Administrative Agent or
Administrative Borrower.

 

Each Lender agrees
promptly to notify Administrative Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.

 

(d)                                 If any Lender claims exemption from,
or reduction in the rate of, applicable withholding Taxes and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of Borrowers to another Lender, such Lender agrees to notify
Administrative Agent and Administrative Borrower of the percentage amount in
which it is no longer the beneficial owner of Obligations of Borrowers to such
Lender.  To the extent of such percentage
amount, Administrative Agent and Borrowers will treat such Lender’s
documentation provided pursuant to Sections 15.11(b) or 15.11(c) as
no longer valid.  With respect to such
percentage amount, Lender may provide new documentation, pursuant to Sections
15.11(b) or 15.11(c), if applicable.

 

112

 

(e)                                  If any Lender is entitled to a
reduction in the rate of applicable withholding tax, the applicable Borrower or
the applicable Agent, as the case may be, may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding Tax
after taking into account such reduction. 
If the forms or other documentation required by subsection (b) or
(c) of this Section 15.11 are not delivered to Administrative
Agent, then the applicable Borrower or the applicable Agent, as the case may
be, may withhold from any interest payment to such Lender not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax.

 

(f)                                    If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that any
Borrower or any Agent, as the case may be, did not properly withhold tax from
amounts paid to or for the account of any Lender due to a failure on the part
of the Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify any Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agents and Borrowers harmless for all amounts paid, directly or indirectly, by
Agents and Borrowers, as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
any Agent and Borrowers under this Section 15.11, together with all
costs and expenses (including attorneys fees and expenses).  The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
any Agent.

 

(g)                                 Each Lender shall, at the request of
Administrative Agent or Administrative Borrower, use reasonable efforts to
comply timely with any certification, identification, information,
documentation or other reporting requirements if such compliance is required by
law, regulation, administrative practice or an applicable treaty as a precondition
to exemption from, or reduction in the rate of, deduction or withholding of any
Taxes for which any Borrower is required to pay additional amounts to or for
the account of such Lender pursuant to this Section 15.11; provided
that complying with such requirements would not be materially more onerous (in
form, in procedure or in substance of information disclosed) to such Lender
than complying with the comparable information or other reporting requirements
imposed under U.S. tax law, regulations and administrative practice.

 

(h)                                 If any Borrower is required to pay
additional amounts to or for the account of any Lender pursuant to this Section 15.11
as a result of a change of law occurring after the date hereof, then such
Lender agrees to designate a different lending office if such designation will
eliminate or materially reduce such additional payment which may thereafter
accrue and would not, in the good faith judgment of such Lender, otherwise be
disadvantageous to such Lender.

 

(i)                                     If any additional amount payable by
any Borrower is made to or for the account of any Lender pursuant to this Section 15.11
on account of Taxes then, if any Lender receives or is granted a refund of,
credit for or remission of such Taxes, such Lender shall reimburse to Borrowers
such amounts as such Lender, acting reasonably, shall determine to be
attributable to the relevant Taxes; provided, that (i) such Lender shall
not be obligated to

 

113

 

disclose
to Borrowers any information regarding its tax affairs and computations, and (ii) nothing
herein shall be construed so as to interfere with the right of such Lender to
arrange its tax affairs as it deems appropriate.

 

(j)                                     Lenders shall use their best efforts
to not sell, assign, or grant a participation in, or otherwise transfer all or
part of the Obligations of Borrowers to a Lender that is not eligible to claim
an exemption from United States withholding tax.

 

15.12.              Collateral Matters.

 

(a)                                  All Liens on Collateral (i) shall
be automatically released upon the termination of the Commitments and payment
and satisfaction in full by Borrowers of all Obligations, (ii) constituting
property (including the equity interests of a Subsidiary of Parent) being sold
or disposed of in a sale or disposition permitted under Section 6.4
of this Agreement or the other Loan Documents shall be automatically released
upon such sale or disposition, and in the event of a sale or other disposition
of all of the equity interests of a Subsidiary of Parent that is a Loan Party
permitted under this Agreement and the other Loan Documents, such Subsidiary
shall be automatically released of its obligations under the Loan Documents, (iii) constituting
property in which no Loan Party owned any interest at the time the Agent’s Lien
was granted nor at any time thereafter shall be automatically released, or (iv) constituting
property leased to a Borrower or its Subsidiaries under a lease that has
expired or is terminated in a transaction permitted under this Agreement shall
be automatically released.  The Lenders
hereby irrevocably authorize Collateral Agent to take such actions and execute
such documents that it deems necessary or appropriate, at its option and in its
sole discretion, to evidence the foregoing releases.  Except as provided above, Collateral Agent
will not execute and deliver a release of any Lien on any Collateral without
the prior written authorization of (y) if the release is of all or
substantially all of the Collateral, all of the Lenders, or (z) otherwise,
the Required Lenders.  Upon request by
Collateral Agent or Administrative Borrower at any time, the Lenders will
confirm in writing Collateral Agent’s authority to release any such Liens on
particular types or items of Collateral pursuant to this Section 15.12;
provided, however, that (1) Collateral Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Collateral Agent’s opinion, would expose Collateral Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
Borrowers in respect of) all interests retained by Borrowers, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.

 

(b)                                 Collateral Agent agrees, at the
request of the Administrative Borrower, to take such actions and execute such
documents that are reasonably requested by Administrative Borrower to evidence
the release of all Liens on Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property (including the equity interests of
a Subsidiary of Parent) being sold or disposed of if Administrative Borrower
certifies to Collateral Agent that the sale or disposition is permitted under Section 6.4
of this Agreement or the other Loan

 

114

 

Documents
and, in the event of a sale or other disposition of all of the equity interests
of a Subsidiary of Parent that is a Loan Party permitted under this Agreement
and the other Loan Documents, to evidence the release of such Subsidiary’s
obligations under the Loan Documents (and Lenders hereby agree Collateral Agent
may rely conclusively on any such certificate, without further inquiry), (iii) constituting
property in which no Loan Party owned any interest at the time the Agent’s Lien
was granted nor at any time thereafter, and (iv) constituting property
leased to a Borrower or its Subsidiaries under a lease that has expired or is
terminated in a transaction permitted under this Agreement.  Agents and Lenders agree that after the
payment in full of the Term Loan A and the Term B Debt and the receipt by
Collateral Agent of evidence, in form and substance reasonably satisfactory to
Collateral Agent, that all Liens securing the Term B Debt have been released
(or will be released contemporaneously), Collateral Agent shall take such
actions and execute such documents that are reasonably requested by
Administrative Borrower to evidence the release of all Agent’s Liens on the
Stock of Foreign Subsidiaries, Real Property of the US Borrowers and the assets
of the US Borrowers referred to in clauses (c), (e), (f), (g), (h), (i), (j),
and (k) of Section 2 of the US Security Agreement other than (i) General
Intangibles (as defined in the US Security Agreement) relating to Accounts, (ii) Stock
of US Loan Parties, (iii) all monetary obligations owed by a Borrower to
another Borrower in connection with any intercompany loans or advances and all
promissory notes and instruments evidencing any such monetary obligation, loan
or advance and (iv) letters of credit, letter of credit rights and
Supporting Obligations (as defined in the US Security Agreement) issued in
support of Accounts (and, following such release, such assets shall no longer
constitute “Collateral” for purposes of the Loan Documents).

 

(c)                                  Collateral Agent shall have no
obligation whatsoever to any of the Lenders to assure that the Collateral
exists or is owned by Borrowers or is cared for, protected, or insured or has
been encumbered, or that the Agent’s Liens 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 Collateral Agent
pursuant to any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission, or event related thereto,
subject to the terms and conditions contained herein, Collateral Agent may act
in any manner it may deem appropriate, in its sole discretion given Collateral
Agent’s own interest in the Collateral in its capacity as one of the Lenders
and that Collateral Agent shall have no other duty or liability whatsoever to
any Lender as to any of the foregoing, except as otherwise provided herein.

 

15.13.              Restrictions on Actions by Lenders;
Sharing of Payments.

 

(a)                                  Each of the Lenders agrees that it
shall not, without the express written consent of Administrative Agent, and
that it shall, to the extent it is lawfully entitled to do so, upon the written
request of Administrative Agent after the occurrence and during the continuance
of an Event of Default, set off against the Obligations, any amounts owing by
such Lender to Borrowers or any deposit accounts of Borrowers now or hereafter
maintained with such Lender.  Each of the
Lenders further agrees that it shall not, unless specifically

 

115

 

requested
to do so in writing by Administrative Agent after the occurrence and during the
continuance of an Event of Default, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.

 

(b)                                 If, at any time or times any Lender
shall receive (i) by payment, foreclosure, setoff, or otherwise, any
proceeds of Collateral or any payments with respect to the Obligations, except
for any such proceeds or payments received by such Lender from any Agent
pursuant to the terms of this Agreement, or (ii) payments from any Agent
in excess of such Lender’s ratable portion of all such distributions by Agents,
such Lender promptly shall (1) turn the same over to the applicable Agent,
in kind, and with such endorsements as may be required to negotiate the same to
such Agent, or in immediately available funds, as applicable, for the account of
all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without
recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received
shall be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that to the extent that such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to
such purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery of
the excess payment.

 

15.14.              Agency for Perfection.

 

Collateral Agent hereby
appoints each other Lender as its agent (and each Lender hereby accepts such
appointment) for the purpose of perfecting the Agent’s Liens in assets which,
in accordance with Article 8 or Article 9, as applicable, of the Code
and/or the PPSA, as applicable, can be perfected only by possession or
control.  Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify
Collateral Agent thereof, and, promptly upon Collateral Agent’s request
therefor shall deliver possession or control of such Collateral to Collateral
Agent or in accordance with Collateral Agent’s instructions.

 

15.15.              Payments by Agent to the Lenders.

 

All payments to be made
by an Agent to the Lenders shall be made by bank wire transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to the applicable Agent.  Concurrently with each such payment, the
applicable Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.

 

15.16.              Concerning the Collateral and
Related Loan Documents.

 

Each member of the Lender
Group authorizes and directs each Agent to enter into this Agreement, the other
Loan Documents and the Intercreditor Agreement. 
Each

 

116

 

member of the
Lender Group agrees that any action taken by any Agent in accordance with the
terms of this Agreement, the other Loan Documents and the Intercreditor
Agreement relating to the Collateral and the exercise by any Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.

 

15.17.              Field Audits and Examination
Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.

 

By becoming a party to
this Agreement, each Lender:

 

(a)                                  is deemed to have requested that
each Agent furnish such Lender, promptly after it becomes available, a copy of
each field audit or examination report (each a “Report” and
collectively, “Reports”) prepared by or at the request of such Agent,
and such Agent shall so furnish each Lender with such Reports,

 

(b)                                 expressly agrees and acknowledges
that no Agent (i) makes any representation or warranty as to the accuracy
of any Report, and (ii) shall not be liable for any information contained
in any Report,

 

(c)                                  expressly agrees and acknowledges
that the Reports are not comprehensive audits or examinations, that any Agent
or other party performing any audit or examination will inspect only specific
information regarding Borrowers and will rely significantly upon the books and
records of Borrowers and their Subsidiaries, as well as on representations of
Borrowers’ personnel,

 

(d)                                 agrees to keep all Reports and other
material, non-public information regarding Borrowers and their Subsidiaries and
their operations, assets, and existing and contemplated business plans and any
information relating to any agreement which any Borrower or any of its
Subsidiaries is a party (other than the Loan Documents) in a confidential
manner in accordance with Section 16.8, and

 

(e)                                  without limiting the generality of
any other indemnification provision contained in this Agreement, agrees:  (i) to hold any Agent and any such other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or fail to take or any conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to Borrowers,
or the indemnifying Lender’s participation in, or the indemnifying Lender’s
purchase of, a loan or loans of Borrowers; and (ii) to pay and protect,
and indemnify, defend and hold any Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys fees and costs)
incurred by any Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might obtain all or part of
any Report through the indemnifying Lender.

 

117

 

In addition to the
foregoing:  (x) any Lender may from
time to time request of Administrative Agent in writing that Administrative
Agent provide to such Lender a copy of any report or document provided by
Borrowers to Administrative Agent that has not been contemporaneously provided
by Borrowers to such Lender, and, upon receipt of such request, Administrative
Agent promptly shall provide a copy of same to such Lender, (y) to the extent
that Administrative Agent is entitled, under any provision of the Loan
Documents, to request additional reports or information from Borrowers, or any
Lender may, from time to time, reasonably request Administrative Agent to
exercise such right as specified in such Lender’s notice to Administrative
Agent, whereupon Administrative Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Administrative
Agent promptly shall provide a copy of same to such Lender, and (z) any
time that Administrative Agent renders to Administrative Borrower a statement
regarding a Loan Account, Administrative Agent shall send a copy of such statement
to each Lender.

 

15.18.              Several Obligations; No Liability.

 

Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of any Agent in its capacity as such, and not by
or in favor of the Lenders, any and all obligations on the part of any Agent
(if any) to make any credit available hereunder shall constitute the several
(and not joint) obligations of the respective Lenders on a ratable basis,
according to their respective Commitments, to make an amount of such credit not
to exceed, in principal amount, at any one time outstanding, the amount of
their respective Commitments.  Nothing
contained herein shall confer upon any Lender any interest in, or subject any
Lender to any liability for, or in respect of, the business, assets, profits,
losses, or liabilities of any other Lender. 
Each Lender shall be solely responsible for notifying its Participants
of any matters relating to the Loan Documents to the extent any such notice may
be required, and no Lender shall have any obligation, duty, or liability to any
Participant of any other Lender.  Except
as provided in Section 16.8, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to any
Borrower or any other Person for any failure by any other Lender to fulfill its
obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its
behalf hereunder or in connection with the financing contemplated herein.

 

15.19.              Bank Product Providers.

 

Each Bank Product
Provider shall be deemed a party hereto for purposes of any reference in a Loan
Document to the parties for whom Agents are acting; it being understood and
agreed that the rights and benefits of such Bank Product Provider under the
Loan Documents consist exclusively of such Bank Product Provider’s right to
share in payments and collections out of the Collateral as more fully set forth
herein.  In connection with any such
distribution of payments and collections, Agents shall be entitled to assume no
amounts are due to any Bank Product Provider unless such Bank Product Provider
has

 

118

 

notified such
Agent in writing of the amount of any such liability owed to it prior to such
distribution.

 

15.20.              Quebec Security.

 

For greater certainty,
and without limiting the powers of the Collateral Agent, or any other Person
acting as an agent or mandatary for the Collateral Agent hereunder or under any
other Loan Documents, the Borrowers hereby acknowledge that, for purposes of
holding any hypothecs and security granted by the Borrowers or their
Subsidiaries on property pursuant to the laws of the Province of Quebec to
secure obligations of the Borrowers or their Subsidiaries under any debenture
or bond issued by the Borrowers or their Subsidiaries, the Collateral Agent
shall be the holder of an irrevocable power of attorney (fondé de
pouvoir) (within the meaning of the Civil Code
of Quebec) for the Lender Group and the Bank Product Provider,
including without limitation, all present and future Lenders and any Affiliate of a
Lender that may from time to time enter into Hedge Agreements with the
Borrowers or their Subsidiaries, and in particular for all present and
future holders of any such debenture or bond. 
The Lender Group and the Bank Product Provider hereby : (i) irrevocably constitute, to the extent
necessary, the Collateral Agent as the holder of an irrevocable power of
attorney (fondé de pouvoir) (within the meaning of
Article 2692 of the Civil Code of Quebec)
in order to hold hypothecs and security granted by the Borrowers or their
Subsidiaries on property pursuant to the laws of the Province of Quebec to
secure the obligations of the Borrowers or their Subsidiaries under any
debenture or bond issued by the Borrowers or their Subsidiaries; and (ii)  appoint and agree
that the Canadian Administrative Agent or the Collateral Agent may act as the
bondholder and mandatary with respect to any debenture or bond that may be
issued by the Borrowers or their Subsidiaries and pledged in its favour from
time to time.

 

The said constitution of the Collateral Agent as the holder of such
irrevocable power of attorney (fondé de pouvoir)
and of the Canadian Administrative Agent or the Collateral Agent as bondholder
and mandatory shall be deemed to have been ratified and confirmed as follows:

 

(i)                                     by any Assignee, by the execution of an Assignment
and Acceptance; and

 

(ii)                                  by any Affiliate of a Lender that
enters into Hedge Agreements, by the execution of the Hedge Agreements.

 

Notwithstanding the
provisions of Section 32 of An Act respecting the
special powers of legal persons (Quebec), the Collateral Agent may
acquire and be the holder of any debenture or bond issued by the Borrowers or
their Subsidiaries (i.e. the fondé de pouvoir may acquire and
hold the first debenture or bond issued under any deed of hypothec by the
Borrowers or their Subsidiaries).  The Borrowers hereby acknowledge that such
debenture or bond constitutes a title of indebtedness, as such term is used in Article 2692
of the Civil Code of Quebec.

 

119

 

The Collateral Agent herein appointed as fondé de
pouvoir shall have the same rights, powers and immunities as the
Agents as stipulated herein, including under this Section 15, which
shall apply mutatis mutandis.  Without limitation, the provisions of Section 15.9
shall apply mutatis mutandis to the resignation and
appointment of a successor Collateral Agent acting as fondé de
pouvoir.

 

16.                               GENERAL
PROVISIONS.

 

16.1.                     Intentionally Omitted.

 

16.2.                     Effectiveness.

 

This Agreement shall be
binding and deemed effective when executed by Borrowers, Agents, and each
Lender whose signature is provided for on the signature pages hereof.

 

16.3.                     Section Headings.

 

Headings and numbers have
been set forth herein for convenience only. 
Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.

 

16.4.                     Interpretation.

 

Neither this Agreement
nor any uncertainty or ambiguity herein shall be construed against the Lender
Group or Borrowers, whether under any rule of construction or
otherwise.  On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

16.5.                     Severability of Provisions.

 

Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

 

16.6.                     Counterparts; Electronic Execution.

 

This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one
and the same Agreement.  Delivery of an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Agreement. 
Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,

 

120

 

and
binding effect of this Agreement.  The
foregoing shall apply to each other Loan Document mutatis mutandis.

 

16.7.                     Revival and Reinstatement of
Obligations.

 

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

 

16.8.                     Confidentiality.

 

Agents and Lenders each
individually (and not jointly or jointly and severally) agree that (i) material,
non-public information regarding Borrowers and their Subsidiaries, their
operations, assets, and existing and contemplated business plans and (ii) any
information relating to any agreement which any Borrower or any of its
Subsidiaries is a party (other than the Loan Documents) shall be treated by
Agents and the Lenders in a confidential manner, and shall not be disclosed by
Agents and the Lenders to Persons who are not parties to this Agreement,
except:  (a) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group, (b) to Subsidiaries and Affiliates of any member of the
Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 16.8, (c) as may be
required by statute, decision, or judicial or administrative order, rule, or
regulation, (d) as may be agreed to in advance by Administrative Borrower
or its Subsidiaries or as requested or required by any Governmental Authority
pursuant to any subpoena or other legal process, (e) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agents or the Lenders), (f) in
connection with any assignment, prospective assignment, sale, prospective sale,
participation or prospective participations, or pledge or prospective pledge of
any Lender’s interest under this Agreement, provided that any such assignee,
prospective assignee, purchaser, prospective purchaser, participant,
prospective participant, pledgee, or prospective pledgee shall have agreed in
writing to receive such information hereunder subject to the terms of this
Section, and (g) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties
under this Agreement or the other Loan Documents.  The provisions of this Section 16.8
shall survive for 2 years after the payment in full of the Obligations.

 

121

 

16.9.                     Know Your Customer.

 

If:

 

(a)                                  the introduction of or any change in
(or in the interpretation, administration or application of) any Law or
regulation made after the date of this Agreement; or

 

(b)                                 any change in the status of any Borrower
or the composition or ownership of the shareholders or partners of any
Borrower, as the case may be, after the date of this Agreement; or

 

(c)                                  a proposed assignment or transfer by
the Agent or any Lender of any of their respective rights and/or obligations
under this Agreement to a third party prior to such assignment or transfer,

 

obliges the Agent
or any Lender (or, in the case of paragraph (c) above, any prospective new
Agent or new Lender) to comply with “know your customer” or similar identification
procedures in circumstances where the necessary information is not already
available to it, the Borrower concerned shall, promptly upon the request of
Agent or such Lender supply such documentation and other evidence as is
reasonably requested by the Agent (for itself or on behalf of any Lender) or
any Lender (for itself or, in the case of any event described in paragraph (c) above,
on behalf of any prospective new Lender) in order for the Agent, such Lender
or, in the case of the event described in paragraph (c) above, any
prospective new Lender to carry out and be satisfied with the results of all
necessary “know your customer” or other similar checks under all Applicable Law
and regulations pursuant to the transactions contemplated in the Loan Documents.

 

16.10.              Integration.

 

This Agreement, together
with the other Loan Documents, reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before the
date hereof.

 

16.11.              Parent as Administrative Agent for
Borrowers.

 

Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all
Borrowers (the “Administrative Borrower”) which appointment shall remain
in full force and effect unless and until Administrative Agent shall have
received prior written notice signed by each Borrower that such appointment has
been revoked and that another Borrower has been appointed Administrative
Borrower.  Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (i) to
provide Administrative Agent, Canadian Administrative Agent and European
Administrative Agent, as applicable, with all notices with respect to Advances
and Letters of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action
as the Administrative Borrower deems appropriate on its behalf to

 

122

 

obtain
Advances and Letters of Credit and to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement.  It is understood that the handling of the
Loan Accounts and Collateral of Borrowers in a combined fashion, as more fully
set forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. 
Each Borrower expects to derive benefit, directly or indirectly, from
the handling of the Loan Accounts and the Collateral in a combined fashion
since the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group. 
To induce the Lender Group to do so, and in consideration thereof, each
Borrower hereby jointly and severally agrees to indemnify each member of the
Lender Group and hold each member of the Lender Group harmless against any and
all liability, expense, loss or claim of damage or injury, made against the
Lender Group by any Borrower or by any third party whosoever, arising from or
incurred by reason of (a) the handling of the Loan Accounts and Collateral
of Borrowers as herein provided, (b) the Lender Group’s relying on any
instructions of the Administrative Borrower, or (c) any other action taken
by the Lender Group hereunder or under the other Loan Documents, except that
Borrowers will have no liability to the relevant Agent-Related Person or
Lender-Related Person under this Section 16.11 with respect to any
liability that has been finally determined by a court of competent jurisdiction
to have resulted solely from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be; provided,
that in no event shall Foreign Borrowers be liable with respect to any
liability hereunder of US Loan Parties.

 

[Signature pages to follow.]

 

123

 

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

 

 

	
   

  	
  SITEL CORPORATION

  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL ACTION FINANCIAL

  SERVICES, INC.

  a Georgia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SITEL HOME MORTGAGE CORP. 

  a Nebraska corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FINANCIAL
  INSURANCE SERVICES,

  INC. 

  a Nebraska corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SITEL INTERNATIONAL LLC

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

Credit Agreement Signature Page

 

 

	
   

  	
  SITEL UK LIMITED 
a corporation organized under the laws of

  England and Wales

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SITEL EUROPE LIMITED 
a corporation organized under the laws of

  England and Wales

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SITEL IRELAND LIMITED 
a corporation organized under the laws of

  Ireland

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SITEL TELESERVICES CANADA INC. 

  an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SITEL INSURANCE SERVICES

  CANADA INC. 

  an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

2

 

	
   

  	
  SITEL CUSTOMER CARE, INC. 

  an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SITEL GmbH
a limited liability company organized under

  the laws of Germany

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SRM INKASSO GMBH
a limited liability company organized under

  the laws of Germany

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

3

 

	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  a California
  corporation, as Administrative

  Agent, European Administrative Agent,

  Collateral Agent, Fronting Lender and as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FINANCIAL

  CORPORATION CANADA,

  a Nova Scotia
  unlimited liability company,

  as Canadian Administrative Agent and as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

4

 

SCHEDULE 1.1

 

As used in the Agreement,
the following terms shall have the following definitions:

 

“Account” means an
account (as that term is defined in the Code).

 

“Account Debtor”
means any Person who is obligated on an Account, chattel paper, or a general
intangible.

 

“ACH Transactions”
means any cash management or related services (including the Automated Clearing
House processing of electronic funds transfers through the direct Federal
Reserve Fedline system) provided by a Bank Product Provider for the account of
Loan Parties and Significant Subsidiaries.

 

“Additional German
Opinion Costs” means any costs or expenses incurred by any Agent in
connection with obtaining a German law legal opinion for the benefit of any Lender
that has requested such an opinion to the extent such Lender is not permitted
to rely on any German legal opinion (either directly or through a reliance
letter in form and substance reasonably satisfactory to such Lender) delivered
on the Closing Date to the same extent as the Lenders party to the Credit
Agreement on the Closing Date.

 

“Additional Permitted
Debt” means Indebtedness of any Loan Party or Significant Subsidiary to the
extent (i) that, after giving effect to the incurrence of such Indebtedness,
the Leverage Ratio, on a pro forma basis as of the last day of the then most
recently ended month for which financial statements have been delivered, is
equal to or less than 5.0:1.0, (ii) that, after giving effect to the
incurrence of such Indebtedness, Borrowers are in compliance with Section 6.17(a)(ii) (determined
as if no Covenant Suspension Event has occurred) on a pro forma basis, as of
the then most recent month end for which financial statements have been
delivered, (iii) such Indebtedness is incurred on customary, market terms
that have been negotiated on an arm’s-length basis with a Person other than an
Affiliate of any Borrower, (iv) such Indebtedness has terms or conditions
(other than pricing terms) that, taken as a whole, are not more burdensome or
restrictive to the Loan Parties than the Loan Documents, (v) no Event of
Default shall have occurred and be continuing or would result from the
incurrence of such Indebtedness, (vi) such Indebtedness is not secured by
Liens on Collateral and (vii) to the extent such Indebtedness is secured
by Liens on assets of any Borrower, such Indebtedness is subject to an
Intercreditor Agreement reasonably acceptable to Administrative Agent.

 

“Administrative Agent”
has the meaning specified therefor in the preamble to the Agreement.

 

“Administrative Agent’s
Account” means, with respect to Dollars, the applicable Deposit Account of
Administrative Agent identified on Schedule A-1 as the
Administrative Agent’s Dollar Deposit Account, with respect to Euro, the applicable
Deposit Account of Administrative Agent identified on Schedule A-1
as the Administrative Agent’s

 

 

Euro Deposit
Account and, with respect to Sterling, the applicable Deposit Account of
Administrative Agent identified on Schedule A-1 as the Administrative
Agent’s Sterling Deposit Account.

 

“Administrative
Borrower” has the meaning specified therefor in Section 16.11.

 

“Advances” means
the Canadian Advances, European Advances and the US Advances.

 

“Affiliate” means,
as applied to any Person, any other Person who controls, is controlled by, or
is under common control with, such Person. 
For purposes of this definition, “control” means the possession,
directly or indirectly through one or more intermediaries, of the power to
direct the management and policies of a Person, whether through the ownership
of Stock, by contract, or otherwise; provided, however, that, for
purposes of the definitions of Eligible Accounts, Eligible Unbilled Accounts,
Eligible US Accounts, Eligible Foreign Accounts, Eligible Unbilled Foreign
Accounts, Eligible Unbilled US Accounts and Section 6.13 hereof: (a) any
Person which owns directly or indirectly 10% or more of the Stock having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed an Affiliate of such Person, (b) each director (or comparable
manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed an Affiliate of such Person. 
Notwithstanding anything to the contrary in the foregoing sentence, for
the purpose of determining the Affiliates of any Account Debtor of the Parent
and its Subsidiaries as such term is used in the definitions of Eligible
Accounts, Eligible Unbilled Accounts, Eligible US Accounts, Eligible Foreign
Accounts, Eligible Unbilled Foreign Accounts, and Eligible Unbilled US
Accounts, “Affiliate” shall mean, as applied to such Account Debtor, any
other Person that would be part of a group of customers under common control or
customers that are affiliates of each other that would together with such
Account Debtor be considered a “single customer” for purposes of
paragraph (c)(vii) of Item 101 of Regulation S-K of the Exchange Act (or
any successor provision) and any other Person that, to the knowledge of the
Loan Parties, would otherwise constitute an Affiliate of such Account Debtor
pursuant to the foregoing sentence.

 

“Agents” means
Administrative Agent, Canadian Administrative Agent, European Administrative
Agent and Collateral Agent and “Agent” means any one of them.

 

“Agent-Related Persons”
means each Agent, together with its respective Affiliates, officers, directors,
employees, attorneys, and agents.

 

“Agent’s Account”
means a Canadian Administrative Agent’s Account, a European Administrative
Agent’s Account or the Administrative Agent’s Account, as applicable.

 

2

 

“Agent’s Liens” means the Liens granted by the Loan Parties to Collateral
Agent for the benefit of the Lender Group and the Bank Product Providers under
the Loan Documents.

 

“Agreement” means the
Credit Agreement to which this Schedule 1.1 is attached.

 

“Annual
Acquisition Limit” means, initially $5,000,000 and, if at any time after
the second anniversary of the date hereof, as of the then most recent
month end for which financial statements have been delivered to the
Administrative Agent pursuant to Section 5.3, the Leverage Ratio is less than 2.0:1.0 (“Limit Increase Event”),
$8,000,000; provided, that if, after a Limit Increase Event has
occurred, as of the then most recent month end for which financial
statements have been delivered to the Administrative Agent pursuant to Section 5.3, the Leverage Ratio is equal to or greater
than 2.0:1.0, the Annual Acquisition Limit shall reduce to $5,000,000 until the
occurrence of a subsequent Limit Increase Event.

 

“Applicable Currency”
means, with respect to any Obligation, the currency in which such Obligation is
denominated.

 

“Applicable Law”
means, in the context that refers to one or more Persons, those Laws that apply
to that Person or Persons or its or their business, undertaking, property or
securities.

 

“Applicable Prepayment
Premium” has the meaning specified therefor in the Fee Letter.

 

“Approved Offshore
Currency” means Sterling or Euro.

 

“Approved Offshore
Currency Rate” means, for each Interest Period for each Offshore Currency
Rate Loan, the rate per annum, (i) reported
by Bloomberg as established by the British Bankers Association on the date
following such establishment (rounded upwards, if necessary, to the next
1/100%), to be the rate at which deposits in the Approved Offshore Currency
(for delivery on the first day of the requested Interest Period) are offered to
major banks in the London interbank market 2 Business Days prior to the
commencement of the requested Interest Period, or (ii) if the Bloomberg
rate is unavailable, as determined by European Administrative Agent using a
commercially available source in accordance with its customary procedures, and
utilizing such electronic or other quotation sources as it considers
appropriate, for a term and in an amount comparable to the Interest Period and
the amount of the Offshore Currency Rate Loan requested (whether as an initial
Offshore Currency Rate Loan or as a continuation of an Offshore Currency Rate
Loan or as a conversion of a Base Rate Loan to an Offshore Currency Rate Loan)
by Administrative Borrower in accordance with this Agreement, which
determination shall be conclusive in the absence of manifest error.

 

“Approved Offshore
Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the Approved Offshore Currency Rate.

 

3

 

“Assignee” has the
meaning specified therefor in Section 13.1(a).

 

“Assignment and
Acceptance” means an Assignment and Acceptance Agreement substantially in
the form of Exhibit A-1.

 

“Authorized Person”
means any officer or employee of Administrative Borrower.

 

“Auditors’
Determination” has the meaning specified therefor in Section 2.15(j).

 

“Availability”
means, as of any date of determination, the aggregate amount that Borrowers are
entitled to borrow as Advances hereunder (after giving effect to the Dollar
Equivalent of the principal amount of all then outstanding Obligations (other
than Bank Product Obligations) and all sublimits and reserves then applicable
hereunder).

 

“Availability Reserve”
means an amount equal to (x) at any time prior to the repayment in full of
all Indebtedness under the Indenture, $30,000,000 and (y) at any time
after the repayment in full of all Indebtedness under the Indenture, $0.

 

“Bank Product”
means any financial accommodation extended to any Loan Party or any Significant
Subsidiary by a Bank Product Provider (other than pursuant to the Loan
Documents other than the Bank Product Agreements) including:  (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH
Transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) transactions under Hedge Agreements.

 

“Bank Product
Agreements” means those agreements entered into from time to time by any
Loan Party or any Significant Subsidiary with a Bank Product Provider in
connection with the obtaining of any of the Bank Products.

 

“Bank Product
Obligations” means all obligations, liabilities, contingent reimbursement
obligations, fees, and expenses owing by Loan Parties or the Significant
Subsidiaries to any Bank Product Provider pursuant to or evidenced by the Bank
Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that Loan Parties
or the Significant Subsidiaries are obligated to reimburse to any Agent or any
member of the Lender Group as a result of such Agent or such member of the
Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Loan Parties or the
Significant Subsidiaries.

 

“Bank Product Provider”
means Wells Fargo or any of its Affiliates.

 

“Bank Product Reserve”
means, as of any date of determination, the lesser of (a) $5,000,000 less
the amount of the Foreign Bank Product Reserve, if any, and (b) the amount
of reserves that Administrative Agent has established (based upon the Bank
Product

 

4

 

Providers’
reasonable determination of the credit exposure of US Loan Parties in respect
of Bank Products) in respect of Bank Products then provided or outstanding;
provided, that in order to qualify as Bank Product Reserves such reserves must
be established on or prior to the time that the Bank Product Provider first
provides the applicable Bank Product.

 

“Bankruptcy Code”
means (i) title 11 of the United States Code, (ii) the Bankruptcy and
Insolvency Act (Canada), (iii) the Companies’ Creditors Arrangement Act
(Canada), or (iv) any similar legislation in a
relevant jurisdiction, in each case as applicable and as in effect from time to
time.

 

“Base LIBOR Rate”
means the rate per annum (i) reported by Bloomberg as established by the
British Bankers Association on the date following such rate being established
(rounded upwards, if necessary, to the next 1/100%), to be the rate at which
Dollar deposits (for delivery on the first day of the requested Interest
Period) are offered to major banks in the London interbank market 2 Business
Days prior to the commencement of the requested Interest Period, or (ii) if
the Bloomberg rate is unavailable, as determined by Administrative Agent using
a commercially available source in accordance with its customary procedures,
and utilizing such electronic or other quotation sources as it considers appropriate,
for a term and in an amount comparable to the Interest Period and the amount of
the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a
continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a
LIBOR Rate Loan) by Administrative Borrower in accordance with this Agreement,
which determination shall be conclusive in the absence of manifest error.

 

“Base Rate” means,
as applicable, the US Base Rate or the Canadian Base Rate.

 

“Base Rate Loan”
means each portion of an Advance or the Term Loan A that bears interest at a
rate determined by reference to the Base Rate.

 

“Base Rate Margin”
means 0.25%; provided that, at any time that the outstanding principal
balance of the Term Loan A has been paid in full, the Base Rate Margin shall be
minus 0.50%.

 

“Base Rate Term Loan A
Margin” means 0.25%.

 

“Benefit Plan”
means a “defined benefit plan” (as defined in Section 3(35) of ERISA or a
benefit plan under Canadian Employee Benefits Legislation) for which Borrower
or any Subsidiary or ERISA Affiliate of Borrower has been an “employer” (as
defined in Section 3(5) of ERISA or has held equivalent status under
Canadian Employee Benefits Legislation) within the past six years.

 

“Board of Directors”
means, with respect to any Person, the board of directors (or comparable
managers) of such Person or any committee thereof duly authorized to act on
behalf of the board of directors (or comparable managers).

 

5

 

“Borrower” and “Borrowers”
have the respective meanings specified therefor in the preamble to the
Agreement.

 

“Borrowing” means
a borrowing hereunder consisting of Advances (or Term Loan A, as applicable)
made on the same day by the Lenders (or Administrative Agent, Canadian Administrative
Agent or European Administrative Agent on behalf thereof), or by a Swing Lender
in the case of a Swing Loan, or by Administrative Agent, Canadian
Administrative Agent or European Administrative Agent in the case of a
Protective Advance, in each case, to Administrative Borrower, Canadian
Administrative Borrower or European Administrative Borrower, as applicable.

 

“Business Day”
means any day that is not a Saturday, Sunday, or other day on which banks are
authorized or required to close in the states of New York or California or,
with respect to the obligations of a Foreign Borrower, are authorized or
required to close in Ireland, United Kingdom, Germany or Canada, as applicable,
provided that, (a) if a determination of a Business Day shall relate to a
LIBOR Rate Loan denominated in Dollars, the term “Business Day” also
shall exclude any day on which banks are closed for dealings in Dollar deposits
or Approved Offshore Currency deposits in the London interbank market, (b) if
a determination of a Business Day shall relate to a Loan or a Letter of Credit
denominated in Canadian Dollars, the term “Business Day” also shall
exclude any day on which banks are closed for dealings in Canadian Dollar
deposits in the London interbank market, and (c) if a determination of a
Business Day shall relate to a Loan or a Letter of Credit denominated in an
Approved Offshore Currency, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in deposits in the applicable
Approved Offshore Currency in the London interbank market.

 

“Canadian
Administrative Agent” has the meaning specified therefor in the preamble to
the Agreement.

 

“Canadian
Administrative Agent’s Account” means, with respect to Dollars, the Deposit
Account of Canadian Administrative Agent identified on Schedule A-2
as the Canadian Administrative Agent’s Dollar Deposit Account and, with respect
to Canadian Dollars, the Deposit Account of Canadian Administrative Agent
identified on Schedule A-2 as the Canadian Administrative Agent’s
Canadian Dollar Deposit Account.

 

“Canadian
Administrative Borrower” means SITEL Teleservices Canada Inc.

 

“Canadian Advances”
has the meaning specified therefor in Section 2.1(a).

 

“Canadian Availability”
means, as of any date of determination, the amount that Canadian Borrowers are
entitled to borrow as Canadian Advances hereunder (after giving effect to all then outstanding Canadian Revolver Usage and
all sublimits and reserves then applicable hereunder).

 

“Canadian Base Rate”
means, the rate of interest announced, from time to time, within Canadian
Imperial Bank of Commerce in Toronto, Canada as its “prime rate”,

 

6

 

with the
understanding that the “prime rate” is one of such bank’s base rates (not necessarily
the lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those Canadian Dollar loans making reference
thereto and is evidenced by the recording thereof after its announcement in
such internal publication or publications as such bank may designate.

 

“Canadian Borrowers”
means SITEL Teleservices Canada Inc., SITEL Insurance Services Canada Inc., and
SITEL Customer Care, Inc. and each other Subsidiary of Parent created or
organized under the laws of Canada or any province thereof that becomes a
Borrower hereunder pursuant to Section 5.15, and “Canadian
Borrower” means any one of them.

 

“Canadian Borrowing”
means a Borrowing hereunder consisting of Canadian Advances made on the same
day by the Lenders (or Canadian Administrative Agent on behalf thereof), or by
the Canadian Swing Lender in the case of a Canadian Swing Loan, or by Canadian
Administrative Agent in the case of a Protective Advance, in each case, to any
Canadian Borrower.

 

“Canadian Borrowing
Base” means, as of any date of determination, the Foreign Borrowing Base
less European Revolver Usage.

 

“Canadian Designated
Account” means, with respect to Dollars, the applicable Deposit Account of
Canadian Administrative Borrower identified on Schedule D-1 as the
Canadian Designated Account for Dollars and, with respect to Canadian Dollars,
the applicable Deposit Account of Canadian Administrative Borrower identified
on Schedule D-1 as the Canadian Designated Account for Canadian
Dollars or, in each case, such other account as Canadian Administrative
Borrower may specify by notice to Canadian Administrative Agent.

 

“Canadian Designated
Account Bank” has the meaning specified therefor in Schedule D-1
or such other bank as Canadian Administrative Borrower may specify by notice to
Canadian Administrative Agent.

 

“Canadian Dollar”
means the lawful currency of Canada.

 

“Canadian Employee
Benefits Legislation” means the Canadian Pension Plan Act (Canada), the
Canadian Income Tax Act, the Pension Benefits Standards Act 1985 (Canada), the
Employment Insurance Act (Canada), the Pension Benefits Act (Ontario), the
Health Insurance Act (Ontario), the Employment Standards Act 2000 (Ontario),
the Workplace Safety and Insurance Act 1997 (Ontario), the Occupational Health
and Safety Act (Ontario) and any federal, provincial or local counterparts or
equivalents, in each case, as applicable and as amended from time to time.

 

“Canadian Income Tax
Act” means the Income Tax Act (Canada), R.S.C. 1985 C.1 (5th Supp.), as
amended from time to time.

 

7

 

“Canadian Issuing
Lender” means Wells Fargo Financial Corporation Canada or any other Lender
that, at the request of Administrative Borrower and with the consent of
Canadian Administrative Agent, agrees, in such Lender’s sole discretion, to
become an Issuing Lender for the purpose of issuing Canadian L/Cs or Canadian
L/C Undertakings pursuant to Section 2.12.

 

“Canadian L/C” has
the meaning specified therefor in Section 2.12(b).

 

“Canadian L/C
Disbursement” means a payment made by the Canadian Issuing Lender pursuant
to a Canadian Letter of Credit.

 

“Canadian L/C
Undertaking” has the meaning specified therefor in Section 2.12(b)(i).

 

“Canadian Lender”
means a Lender that has an interest in the Canadian Revolver Commitment and/or
the Canadian Revolver Usage.

 

“Canadian Letter of
Credit” means a Canadian L/C or a Canadian L/C Undertaking, as the context
requires.

 

“Canadian Letter of
Credit Usage” means, as of any date of determination, the Dollar Equivalent
of the aggregate undrawn amount of all outstanding Canadian Letters of Credit.

 

“Canadian LIBOR Rate”
means, for each Interest Period for each Canadian LIBOR Rate Loan, the rate per
annum (i) reported by Bloomberg as established by the British Bankers
Association on the date following such establishment (rounded upwards, if
necessary, to the next 1/100%), to be the rate at which Canadian Dollar
deposits (for delivery on the first day of the requested Interest Period) are
offered to major banks in the London interbank market 2 Business Days prior to
the commencement of the requested Interest Period, or (ii) if the
Bloomberg rate is unavailable, as determined by Canadian Administrative Agent
using a commercially available source in accordance with its customary
procedures, and utilizing such electronic or other quotation sources as it
considers appropriate, for a term and in an amount comparable to the Interest
Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a
Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.

 

“Canadian Loan Account”
has the meaning specified therefor in Section 2.10.

 

“Canadian Protective
Advances” has the meaning specified therefor in Section 2.3(d)(ii).

 

“Canadian Revolver
Commitment” means, with respect to each Lender, its Canadian Revolver Commitment,
and, with respect to all Lenders, their Canadian Revolver Commitments, in each
case as such Dollar amounts are set forth beside such Lender’s name

 

8

 

under
the applicable heading on Schedule C-1 or in the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1.

 

“Canadian Revolver
Usage” means, as of any date of determination, the sum of (a) the
Dollar Equivalent of the principal amount of outstanding Canadian Advances, plus (b) the amount of the Canadian
Letter of Credit Usage, in each case as determined as of such date.

 

“Canadian Risk
Participation Liability” means, as to each Canadian Letter of Credit, all
reimbursement obligations of Canadian Borrowers to the Canadian Issuing Lender
with respect to a Canadian L/C Undertaking, consisting of (a) the amount
available to be drawn or which may become available to be drawn, (b) all
amounts that have been paid by the Canadian Issuing Lender to the Canadian
Underlying Issuer to the extent not reimbursed by Canadian Borrowers, whether
by the making of a Canadian Advance or otherwise, and (c) all accrued and
unpaid interest, fees, and expenses payable with respect thereto.

 

“Canadian Swing Lender”
means Wells Fargo Financial Corporation Canada or any other Lender that, at the
request of Administrative Borrower and with the consent of Canadian Administrative
Agent agrees, in such Lender’s sole discretion, to become the Canadian Swing
Lender under Section 2.3(b).

 

“Canadian Swing Loan”
has the meaning specified therefor in Section 2.3(b)(ii).

 

“Canadian Underlying
Issuer” means a third Person which is the beneficiary of a Canadian L/C
Undertaking and which has issued a letter of credit at the request of the
Canadian Issuing Lender for the benefit of one or more of the Canadian
Borrowers.

 

“Canadian Underlying
Letter of Credit” means a letter of credit that has been issued by a
Canadian Underlying Issuer.

 

“Capital Expenditures”
means, with respect to any Person for any period, the aggregate of (a) all
expenditures by such Person and its Subsidiaries during such period that are
capital expenditures as determined in accordance with GAAP, whether such
expenditures are paid in cash or financed but excluding expenditures in respect
of reinvestments of casualty proceeds and proceeds of asset dispositions and
Extraordinary Receipts permitted pursuant to Section 2.4(d) (in
all cases other than with respect to the definition of “Permitted Investments”,
excluding any such Capital Expenditures that have been funded by customers of
Parent and its Subsidiaries to the extent Parent and its Subsidiaries have
received cash in respect thereof from such customers), and (b) to the
extent not covered by clause (a) of this definition, any Investments made
in reliance on clause (r) of the definition of “Permitted Investments”.

 

9

 

“Capitalized Lease
Obligation” means that portion of the obligations under a Capital Lease
that is required to be capitalized in accordance with GAAP.

 

“Capital Lease”
means a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

 

“Cash Equivalents”
means (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within 1
year from the date of acquisition thereof, (b) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors
Service, Inc. (“Moody’s”), (c) commercial paper maturing no
more than 270 days from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody’s, (d) certificates of deposit, time deposits or bankers’
acceptances maturing within 1 year from the date of acquisition thereof issued
by any bank organized under the laws of the United States or any state thereof
or the District of Columbia having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in
clause (d) above, or (ii) any other bank organized under the laws of
the United States or any state thereof or the District of Columbia so long as
the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, (f) Investments
in money market funds substantially all of whose assets are invested in the
types of assets described in clauses (a) through (e) above and (g) in
the case of any Foreign Loan Party or any Significant Subsidiary, other
investments made in investments of a type analogous to the foregoing in
accordance with normal investment practices for cash management.

 

“Cash Management
Account” has the meaning specified therefor in Section 2.7(a).

 

“Cash Management
Agreements” means those certain cash management agreements, in form and
substance reasonably satisfactory to Collateral Agent, each of which is among
Administrative Borrower or one of its Subsidiaries, Collateral Agent, Term B
Agent (to the extent the Term B Debt is outstanding on the date of such Cash
Management Agreement and such Cash Management Agreement relates to a US Loan
Party’s Cash Management Account), and one of the Cash Management Banks.

 

“Cash Management Bank”
has the meaning specified therefor in Section 2.7(a).

 

“Cash Management
Reinstatement Event” means January 1 or July 1 of any fiscal year
after the occurrence of a Cash Management Triggering Event if on such date no
Event of Default exists and the Borrowers have maintained daily average Dollar
Equivalent

 

10

 

of
Excess Availability for the immediately preceding 60 consecutive day period of
at least $15,000,000.

 

“Cash Management
Triggering Event” means the occurrence of an Event of Default or the
failure of the Borrowers to maintain daily average Dollar Equivalent of Excess
Availability for a 30 consecutive day period of at least $15,000,000.

 

“Change of Control”
means that (a) any “person” or “group” (within the meaning of Sections 13(d) and
14(d) of the Exchange Act), other than Permitted Holders, becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of Stock representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of Parent, or (b) individuals who, at the beginning of any period of 24
consecutive months, constitute the Parent’s board of directors (together with
any new director whose election by the Parent’s board of directors or whose
nomination for election by the Parent’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason (other than death or
disability) to constitute a majority of the Parent’s board of directors then in
office or (c) any “person” or “group” (within the meaning of the Exchange
Act) other than the Permitted Holders shall own or control directly or
indirectly that percentage of the outstanding Stock of Parent necessary to
elect a majority of the board of directors (or similar governing body) of
Parent or (d) Parent or any Loan Party fails to own and control directly
or indirectly, 100% of the outstanding Stock of each of their respective
Subsidiaries that are Loan Parties or Significant Subsidiaries (other than
SITEL Insurance Services Canada Inc.) extant as of the Closing Date other than
nominee shares and director’s qualifying shares required by law, except in
connection with a transaction expressly permitted under Section 6.3,
the Pre-approved Asset Disposition Letter or, with respect to any Subsidiary
that is not a Loan Party, Section 6.4 or (e) Parent or any
Loan Party fails to own directly or indirectly, at least 49% of the outstanding
Stock of SITEL Insurance Services Canada Inc. and either have the option to
purchase the remaining Stock of SITEL Insurance Services Canada Inc. for
nominal consideration or own directly or indirectly the remaining Stock of
SITEL Insurance Services Canada Inc., except in connection with a transaction
expressly permitted under Section 6.3.

 

“Closing Date”
means the earlier of (x) the date of the making of the initial Advance (or
other extension of credit) hereunder and (y) the date that the conditions
in Section 3.1 are either satisfied or waived in accordance with
the terms thereof.

 

“Closing Date
Projections” means the Projections for fiscal year 2005 delivered on or
prior to the Closing Date.

 

“Code” means the
New York Uniform Commercial Code, as in effect from time to time.

 

“Collateral” means
the US Collateral and the Foreign Collateral.

 

11

 

“Collateral Access
Agreement” means a landlord waiver, bailee letter, or acknowledgement
agreement of any lessor, warehouseman, processor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in
Administrative Borrower’s or its Subsidiaries’ books and records, in each case,
in form and substance reasonably satisfactory to Collateral Agent.

 

“Collateral Agent”
has the meaning specified therefor in the preamble to the Agreement.

 

“Collections”
means all cash, checks, notes,
instruments, and other items of payment (including insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds).

 

“Commitment”
means, with respect to each Lender, its Revolver Commitment, its Term Loan A
Commitment, or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments, their Term Loan A Commitments, or
their Total Commitments, as the context requires, in each case as such Dollar
amounts are set forth beside such Lender’s name under the applicable heading on
Schedule C-1 or in the Assignment and Acceptance pursuant to which
such Lender became a Lender hereunder, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of Section 13.1.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit C-1
delivered by the chief financial officer, controller, treasurer or vice
president of finance of Parent to Administrative Agent.

 

“Control Agreement”
means a control agreement, in form and substance reasonably satisfactory to
Collateral Agent, executed and delivered by a Loan Party, Collateral Agent,
Term B Agent (to the extent the Term B Debt is outstanding on the date of such
Control Agreement), and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).

 

“Convertible Note
Offering” means an offering by Parent of convertible debt securities in an
aggregate initial principal amount not to exceed $70,000,000 that (i) has
a maturity date on or after February 19, 2011, (ii) does not require
any cash payments of principal or interest prior to February 19, 2011, (iii) has
terms or conditions that, taken as a whole, are not more burdensome or
restrictive to the Loan Parties than the Loan Documents and (iv) is
unsecured, and any refinancing thereof that meets the criteria set forth in
clauses (i) through (iv) of this definition.

 

“Covenant Event”
means the occurrence of any of the following events at any time after the
Covenant Suspension Date:

 

(i)                                     a Default or Event of Default shall have occurred and be
continuing; or

 

(ii)                                  (x) for
purposes of Sections 6.17(a) and 6.17(b)(ii)(A), the failure
of Borrowers to maintain average daily Dollar Equivalent of Excess Availability
for any Fiscal

 

12

 

Month of at least
$20,000,000 and (y) for purposes of Section 6.17(b)(ii)(B) for
the 30 day period ending on the day preceding the date on which the proposed
transaction or event is to be consummated or incurred, the failure of Borrowers
to maintain average daily Dollar Equivalent of Excess Availability of at least
$20,000,000.

 

“Covenant Suspension
Date” means the first date on which the Term Loan A
and the Term B Debt have been paid in full and the following conditions have
been satisfied:

 

(i)                                     no Default or Event of Default shall have occurred and be
continuing; and

 

(ii)                                  for the 30 day period ending on such date, the Borrowers
have maintained average daily Dollar Equivalent of Excess Availability of not
less than $20,000,000.

 

“Currency Due” has
the meaning specified therefor in Section 10.4.

 

“Currency Exchange
Rate” means, with respect to a currency, the rate quoted by the Reference
Bank as the spot rate for the purchase by the Reference Bank of such currency
with another currency at approximately 10:30 a.m. (New York time) on the
date two (2) Business Days prior to the date as of which the foreign
exchange computation is made.

 

“Daily Balance”
means, as of any date of determination and with respect to any Obligation, the
amount of such Obligation owed at the end of such day.

 

“Default” means an
event, condition, or default that, with the giving of notice, the passage of
time, or both, would, unless cured or waived, be an Event of Default.

 

“Defaulting Lender”
means any Lender that fails to make any Advance (or other extension of credit)
that it is required to make hereunder on the date that it is required to do so
hereunder or fails to pay any amount that it is required to pay pursuant to Section 2.17(c) on
the date that it is required to do so hereunder.

 

“Defaulting Lender
Rate” means (a) for the first 3 days from and after the date the
relevant payment is due, with respect to amounts denominated in Dollars, the US
Base Rate, with respect to amounts denominated in Canadian Dollars, the
Canadian Base Rate, and with respect to amounts denominated in an Approved
Offshore Currency, the applicable Approved Offshore Currency Rate with respect
to LIBOR Rate Loans with an Interest Period of one month’s duration and (b) thereafter,
with respect to amounts denominated in Dollars, the interest rate then
applicable to Advances that are Base Rate Loans denominated in Dollars
(inclusive of the Base Rate Margin applicable thereto), with respect to amounts
denominated in Canadian Dollars, the interest rate then applicable to Advances
that are Base Rate Loans denominated in Canadian Dollars (inclusive of the Base
Rate Margin applicable thereto) and, with respect to amounts denominated in an
Approved Offshore Currency, the interest rate then applicable to Advances that
are LIBOR Rate Loans denominated in such

 

13

 

Approved Offshore
Currency with an Interest Period of one month’s duration (inclusive of the
LIBOR Rate Margin applicable thereto).

 

“Deposit Account”
means any deposit account (as that term is defined in the Code).

 

“Disbursement Letter”
means an instructional letter executed and delivered by the Administrative
Borrower to the Administrative Agent, Canadian Administrative Agent and
European Administrative Agent regarding the extensions of credit to be made on
the Closing Date, the form and substance of which is reasonably satisfactory to
the Administrative Agent, Canadian Administrative Agent and European
Administrative Agent.

 

“Dollar Equivalent”
means, at any time, (a) as to any amount denominated in Dollars, the
amount thereof at such time, and (b) as to any amount denominated in a
currency other than Dollars, the equivalent amount in Dollars as determined by
Administrative Agent at such time on the basis of the Currency Exchange Rate
for the purchase of Dollars with such currency.

 

“Dollars” or “$”
means United States dollars.

 

“EBITDA” means, with respect to any fiscal period,
Parent’s and its Subsidiaries’ consolidated net income (or loss), minus to the extent not included in
determining net income (or loss) for such period, cash expenditures during such
period in respect of the acceleration of lease expense for facilities that have
been, or are intended to be, closed, minus,
to the extent included in the calculation of net income (or loss),
extraordinary gains and interest income, and plus,
to the extent deducted in determining net income (or loss), non-cash losses on
sales of assets outside of the ordinary course of business, write-downs or
non-cash losses on dispositions of fixed assets and intangible assets
(including goodwill write-downs as required under FAS pronouncement 142),
non-cash charges in respect of the acceleration of lease expense for facilities
that have been, or are intended to be, closed, interest expense, amortization
or write-off of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness, income tax
expense, depreciation and amortization expense, amortization of intangibles
(including, without limitation, goodwill) and organization costs, cash
restructuring and severance charges incurred and paid during the fiscal year
ending December 31, 2005 in an aggregate amount not to exceed $5,500,000
and reflected on the financial Projections for fiscal year 2005, delivered to
Administrative Agent and in form and substance satisfactory to Administrative
Agent, cash restructuring charges expensed during the fiscal year ending December 31,
2004 in an aggregate amount not to exceed $8,000,000, and any other non-cash charges (including, without
limitation, the amount of any non-cash deduction to consolidated net income (or
loss) as a result of any grant to members of management of any capital stock of
Parent), in each case, for such period as determined in accordance with GAAP.

 

“Eligible Accounts”
means Eligible Foreign Accounts and Eligible US Accounts.

 

14

 

“Eligible Foreign
Accounts” means those Accounts created by a Foreign Borrower in the
ordinary course of its business, that arise out of its sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Foreign Accounts made in the Loan Documents, and
that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, however, that such criteria
may be revised from time to time by Administrative Agent in Administrative
Agent’s Permitted Discretion to address the results of any audit performed by
Administrative Agent from time to time after the Closing Date.  In determining the amount to be included,
Eligible Foreign Accounts shall be calculated net of customer deposits and
unapplied cash.  Eligible Foreign
Accounts shall not include the following:

 

(a)                                  (i) Accounts with selling terms
of more than 90 days or (ii) with respect to Accounts with selling terms
of not more than 30 days, the Account Debtor has failed to pay within 90 days
of original invoice date or 60 days of the due date and, with respect to
Accounts with selling terms of more than 30 days, the Account Debtor has failed
to pay within 30 days of the due date,

 

(b)                                 Accounts
owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
owed by that Account Debtor (or its Affiliates) are deemed ineligible under
clause (a) above,

 

(c)                                  Accounts
with respect to which the Account Debtor is an Affiliate of any Foreign
Borrower or an employee or agent of any Foreign Borrower or any Affiliate of
any Foreign Borrower,

 

(d)                                 Accounts
arising in a transaction wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and
hold, or any other terms by reason of which the payment by the Account Debtor
may be conditional,

 

(e)                                  Accounts
that are not payable in Dollars, Canadian Dollars or
an Approved Offshore Currency,

 

(f)                                    Accounts
with respect to which the Account Debtor either (i) with respect to
Accounts of a Canadian Borrower, does not maintain its chief executive office,
or other office acceptable to Administrative Agent in its Permitted Discretion,
in the United States or Canada, with respect to Accounts of a UK Borrower, does
not maintain its chief executive office, or other office acceptable to
Administrative Agent in its Permitted Discretion, in the United Kingdom, with
respect to Accounts of an Irish Borrower, does not maintain its chief executive
office, or other office acceptable to Administrative Agent in its Permitted
Discretion, in Ireland or in the United Kingdom, or with respect to Accounts of
a German Borrower, does not maintain its chief executive office, or other
office acceptable to Administrative Agent in its Permitted Discretion, in
Germany, or (ii) is not organized under the laws of the United States,
Ireland, United Kingdom, Canada or Germany or any state or province or
political subdivision thereof or the District of Columbia, or (iii) is the
government of any country or sovereign state other than the United States, or
of any state,

 

15

 

province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, unless, in each
case (y) the Account is supported by an irrevocable letter of credit
satisfactory to Administrative Agent in its Permitted Discretion (as to form,
substance, and issuer or domestic confirming bank) that has been delivered to
Collateral Agent and is directly drawable by Collateral Agent, or (z) the
Account is covered by credit insurance in form, substance, and amount, and by
an insurer, satisfactory to Administrative Agent in its Permitted Discretion,

 

(g)                                 Accounts
with respect to which the Account Debtor is either (i) the United States
or any department, agency, or instrumentality of the United States (exclusive,
however, of Accounts with respect to which the applicable Borrower has
complied, to the reasonable satisfaction of Administrative Agent, with the
Assignment of Claims Act, 31 USC § 3727), or (ii) any state of the
United States,

 

(h)                                 Accounts
with respect to which the Account Debtor is also a creditor of any Borrower and
has or has asserted a right of setoff, or has disputed its obligation to pay
all or any portion of the Account, to the extent of such claim, right of
setoff, or dispute,

 

(i)                                     Accounts
with respect to an Account Debtor whose total obligations owing to Borrowers
exceed 10% (such percentage, as applied to a particular Account Debtor, being
subject to reduction by Administrative Agent in its Permitted Discretion if the
creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts
(except with respect to (x) General Motors Corporation and its Affiliates,
in which case the total obligations of such Account Debtor shall not exceed 30%
(such percentage being subject to reduction by Administrative Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor materially
deteriorates) of all Eligible Accounts and (y) the Specified Account
Debtors and any other Account
Debtor designated by Administrative Agent in its Permitted Discretion, in which
case the total obligations of such Account Debtor shall not exceed 15% (such
percentage being subject to reduction by Administrative Agent in its Permitted
Discretion if the creditworthiness of such Account Debtor materially
deteriorates) of all Eligible Accounts), to the extent of the obligations owing
by such Account Debtor in excess of such percentage; provided, however,
that, in each case, the amount of Eligible Accounts that are excluded because
they exceed the foregoing percentage shall be determined by Administrative
Agent based on all of the otherwise Eligible Accounts prior to giving effect to
any eliminations based upon the foregoing concentration limit,

 

(j)                                     Accounts
with respect to which the Account Debtor is subject to an Insolvency
Proceeding, to the knowledge of the Loan Parties is not Solvent, has gone out
of business, or as to which a Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,

 

(k)                                  Accounts
with respect to which the Account Debtor is located in a state or jurisdiction
(e.g., New Jersey, Minnesota, and West Virginia) that requires, as a condition
to access to the courts of such jurisdiction, that a creditor qualify to
transact business, file a business activities report or other report or form,
or take one or more other actions, unless the applicable Borrower has so
qualified, filed such reports or forms, or taken such actions (and,

 

16

 

in each case, paid
any required fees or other charges), except to the extent that the applicable
Borrower may qualify subsequently as a foreign entity authorized to transact
business in such state or jurisdiction and gain access to such courts, without
incurring any cost or penalty viewed by Administrative Agent to be significant
in amount, and such later qualification cures any access to such courts to
enforce payment of such Account,

 

(l)                                     Accounts,
the collection of which, Administrative Agent, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor’s financial condition,

 

(m)                               Accounts
that are not subject to a valid and perfected first priority Agent’s Lien,

 

(n)                                 Accounts
with respect to which (i) the goods giving rise to such Account have not
been shipped and billed to the Account Debtor, or (ii) the services giving
rise to such Account have not been performed and billed to the Account Debtor,
or

 

(o)                                 Accounts
that represent the right to receive progress payments or other advance billings
that are due prior to the completion of performance by the applicable Borrower
of the subject contract for goods or services.

 

“Eligible Transferee”
means (a) a commercial bank organized under the laws of the United States,
or any state thereof or the District of Columbia, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has a Dollar Equivalent amount of total assets in excess of $250,000,000,
provided that such bank is acting through a branch or agency located in the
United States, (c) a finance company, insurance company, or other
financial institution or fund that is engaged in making, purchasing, or
otherwise investing in commercial loans in the ordinary course of its business
and having (together with its Affiliates) a Dollar Equivalent amount of total
assets (including assets under management) in excess of $250,000,000, (d) any Lender or any Affiliate (other than
individuals) of any Lender, and (e) any other Person approved by
Administrative Agent.

 

“Eligible Unbilled
Accounts” means Eligible Unbilled Foreign Accounts and Eligible Unbilled US
Accounts.

 

“Eligible Unbilled
Foreign Accounts” means those Accounts created by a Foreign Borrower in the
ordinary course of its business, that arise out of its sale of goods or
rendition of services, that fail to constitute Eligible Foreign Accounts solely
as a result of (i) the goods giving rise to such Account not having been
billed to the Account Debtor, or (ii) the services giving rise to such
Account not having been billed to the Account Debtor.

 

“Eligible Unbilled US
Accounts” means those Accounts created by a US Borrower in the ordinary
course of its business, that arise out of its sale of goods or rendition of
services, that fail to constitute Eligible US Accounts solely as a result of (i) the
goods

 

17

 

giving
rise to such Account not having been billed to the Account Debtor, or (ii) the
services giving rise to such Account not having been billed to the Account
Debtor.

 

“Eligible US Accounts”
means those Accounts created by a US Borrower in the ordinary course of its
business, that arise out of its sale of goods or rendition of services, that
comply with each of the representations and warranties respecting Eligible US
Accounts made in the Loan Documents, and that are not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; provided,
however, that such criteria may be revised from time to time by
Administrative Agent in Administrative Agent’s Permitted Discretion to address
the results of any audit performed by Administrative Agent from time to time
after the Closing Date.  In determining
the amount to be included, Eligible US Accounts shall be calculated net of
customer deposits and unapplied cash. 
Eligible US Accounts shall not include the following:

 

(a)                                  (i) Accounts
with selling terms of more than 90 days or (ii) with respect to Accounts
with selling terms of not more than 30 days, the Account Debtor has failed to
pay within 90 days of original invoice date or 60 days of the due date and,
with respect to Accounts with selling terms of more than 30 days, the Account
Debtor has failed to pay within 30 days of the due date,

 

(b)                                 Accounts
owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
owed by that Account Debtor (or its Affiliates) are deemed ineligible under
clause (a) above,

 

(c)                                  Accounts
with respect to which the Account Debtor is an Affiliate of any US Borrower or
an employee or agent of any US Borrower or any Affiliate of any US Borrower,

 

(d)                                 Accounts
arising in a transaction wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and
hold, or any other terms by reason of which the payment by the Account Debtor
may be conditional,

 

(e)                                  Accounts
that are not payable in Dollars,

 

(f)                                    Accounts
with respect to which the Account Debtor either (i) does not maintain its
chief executive office, or other office acceptable to Administrative Agent in
its Permitted Discretion, in the United States, or (ii) is not organized
under the laws of the United States or any state thereof or the District of
Columbia, or (iii) is the government of any country or sovereign state
other than the United States, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless in each case (y) the
Account is supported by an irrevocable letter of credit satisfactory to
Administrative Agent in its Permitted Discretion (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Collateral Agent
and is directly drawable by Collateral Agent, or (z) the Account

 

18

 

is
covered by credit insurance in form, substance, and amount, and by an insurer,
satisfactory to Administrative Agent in its Permitted Discretion,

 

(g)                                 Accounts
with respect to which the Account Debtor is either (i) the United States
or any department, agency, or instrumentality of the United States (exclusive,
however, of Accounts with respect to which the applicable Borrower has
complied, to the reasonable satisfaction of Administrative Agent, with the
Assignment of Claims Act, 31 USC § 3727), or (ii) any state of the
United States,

 

(h)                                 Accounts
with respect to which the Account Debtor is a creditor of any Borrower and has
or has asserted a right of setoff, or has disputed its obligation to pay all or
any portion of the Account, to the extent of such claim, right of setoff, or
dispute,

 

(i)                                     Accounts
with respect to an Account Debtor whose total obligations owing to Borrowers
exceed 10% (such percentage, as applied to a particular Account Debtor, being
subject to reduction by Administrative Agent in its Permitted Discretion if the
creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts
(except with respect to (x) General Motors Corporation and its Affiliates,
in which case the total obligations of such Account Debtor shall not exceed 30%
(such percentage being subject to reduction by Administrative Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor materially
deteriorates) of all Eligible Accounts and (y) the Specified Account
Debtors and any other Account Debtor designated by Administrative Agent in its
Permitted Discretion, in which case the total obligations of such Account
Debtor shall not exceed 15% (such percentage being subject to reduction by
Administrative Agent in its Permitted Discretion if the creditworthiness of
such Account Debtor materially deteriorates) of all Eligible Accounts), to the
extent of the obligations owing by such Account Debtor in excess of such
percentage; provided, however, that, in each case, the amount of
Eligible Accounts that are excluded because they exceed the foregoing
percentage shall be determined by Administrative Agent based on all of the
otherwise Eligible Accounts prior to giving effect to any eliminations based
upon the foregoing concentration limit,

 

(j)                                     Accounts
with respect to which the Account Debtor is subject to an Insolvency
Proceeding, to the knowledge of the Loan Parties is not Solvent, has gone out
of business, or as to which a Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,

 

(k)                                  Accounts
with respect to which the Account Debtor is located in a state or jurisdiction
(e.g., New Jersey, Minnesota, and West Virginia) that requires, as a condition
to access to the courts of such jurisdiction, that a creditor qualify to
transact business, file a business activities report or other report or form,
or take one or more other actions, unless the applicable Borrower has so
qualified, filed such reports or forms, or taken such actions (and, in each
case, paid any required fees or other charges), except to the extent that the
applicable Borrower may qualify subsequently as a foreign entity authorized to
transact business in such state or jurisdiction and gain access to such courts,
without incurring any cost or penalty viewed by Administrative Agent to be
significant in amount, and such later qualification cures any access to such
courts to enforce payment of such Account,

 

19

 

(l)                                     Accounts,
the collection of which, Administrative Agent, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor’s financial condition,

 

(m)                               Accounts
that are not subject to a valid and perfected first priority Agent’s Lien,

 

(n)                                 Accounts
with respect to which (i) the goods giving rise to such Account have not
been shipped and billed to the Account Debtor, or (ii) the services giving
rise to such Account have not been performed and billed to the Account Debtor,
or

 

(o)                                 Accounts
that represent the right to receive progress payments or other advance billings
that are due prior to the completion of performance by the applicable Borrower
of the subject contract for goods or services.

 

“Environmental Actions”
means any complaint, summons, citation, notice, directive, order, claim,
litigation, third party investigation, judicial or administrative proceeding,
judgment, letter, or other communication from any Governmental Authority, or
any third party involving violations of Environmental Laws or releases of
Hazardous Materials (a) from any assets, properties, or businesses of any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest, (b) from adjoining properties or businesses onto any property of
any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest, or (c) from or onto any facilities which received Hazardous
Materials generated by any Borrower, any Subsidiary of a Borrower, or any of
their predecessors in interest.

 

“Environmental Law”
means any applicable federal, state, provincial, foreign or local statute, law,
rule, regulation, ordinance, code, binding and enforceable guideline, binding
and enforceable written policy or rule of common law now or hereafter in
effect and in each case as amended, or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, in each case, to the extent binding on any Borrower or any
Subsidiary of a Borrower, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time.

 

“Environmental
Liabilities” means all liabilities, monetary obligations, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts,
or consultants, and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
or Remedial Action required, by any Governmental Authority or any third party,
and which relate to any Environmental Action.

 

“Environmental Lien”
means any Lien in favor of any Governmental Authority for Environmental
Liabilities.

 

“Equipment” means
equipment (as that term is defined in the Code).

 

20

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute thereto.

 

“ERISA Affiliate”
means (a) any Person subject to ERISA whose employees are treated as
employed by the same employer as the employees of a Borrower or a Subsidiary of
a Borrower under Section 414(b) of the IRC, (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of a Loan Party or a Significant Subsidiary under Section 414(c) of
the IRC, (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which a Loan Party or a Significant Subsidiary is a member
under Section 414(m) of the IRC, or (d) solely for purposes of Section 302
of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a
party to an arrangement with a Loan Party or a Significant Subsidiary and whose
employees are aggregated with the employees of a Loan Party or a Significant Subsidiary
under Section 414(o) of the IRC.

 

“Euro” or “€”
means the currency of participating member states of the European Union that
have adopted a single currency in accordance with the Treaty on European Union
of February 7, 1992.

 

“European
Administrative Agent” has the meaning specified therefor in the preamble to
the Agreement.

 

“European
Administrative Agent’s Account” means, with respect to Dollars, the
applicable Deposit Account of European Administrative Agent identified on Schedule A-3
as the European Administrative Agent’s Dollar Deposit Account, with respect to
Euro, the applicable Deposit Account of European Administrative Agent
identified on Schedule A-3 as the European Administrative Agent’s
Euro Deposit Account and, with respect to Sterling, the applicable Deposit
Account of European Administrative Agent identified on Schedule A-3
as the European Administrative Agent’s Sterling Deposit Account.

 

“European
Administrative Borrower” means SITEL Europe Limited.

 

“European Advances”
has the meaning specified therefor in Section 2.1(a).

 

“European Availability”
means, as of any date of determination, the amount that European Borrowers are
entitled to borrow as European Advances hereunder (after giving effect to all then outstanding European Revolver Usage and
all sublimits and reserves then applicable hereunder).

 

“European Borrowers”
means SITEL UK Limited, SITEL Europe Limited, SITEL Ireland Limited, SITEL
GmbH, and SRM Inkasso GmbH and each other Subsidiary of Parent created or
organized under the laws of any jurisdiction other than the United States or
any state thereof or the District of Columbia or Canada or any province thereof
that becomes a Borrower hereunder pursuant to Section 5.15, and “European
Borrower” means any one of them.

 

21

 

“European Borrowing”
means a Borrowing hereunder consisting of European Advances made on the same
day by the Lenders (or Fronting Lender or European Administrative Agent on
behalf thereof), or by the European Swing Lender in the case of a European
Swing Loan, or by European Administrative Agent in the case of a Protective
Advance, in each case, to any European Borrower.

 

“European Borrowing
Base” means, as of any date of determination, the Foreign Borrowing Base
less Canadian Revolver Usage.

 

“European Designated
Account” means, with respect to Dollars, the applicable Deposit Account of
European Administrative Borrower identified on Schedule D-1 as the
European Designated Account for Dollars, with respect to Euro, the applicable
Deposit Account of European Administrative Borrower identified on Schedule D-1
as the European Designated Account for Euro and, with respect to Sterling, the
applicable Deposit Account of European Administrative Borrower identified on Schedule D-1
as the European Designated Account for Sterling or, in each case, such other
account as European Administrative Borrower may specify by notice to European
Administrative Agent.

 

“European Designated
Account Bank” has the meaning specified therefor in Schedule D-1
or such other bank as European Administrative Borrower may specify by notice to
European Administrative Agent.

 

“European Issuing
Lender” means WFF or any other Lender that, at the request of
Administrative Borrower and with the consent of European Administrative Agent,
agrees, in such Lender’s sole discretion, to become an Issuing Lender for the
purpose of issuing European L/Cs or European L/C Undertakings pursuant to Section 2.12.

 

“European L/C” has
the meaning specified therefor in Section 2.12(c).

 

“European L/C
Disbursement” means a payment made by the European Issuing Lender pursuant
to a European Letter of Credit.

 

“European L/C
Undertaking” has the meaning specified therefor in Section 2.12(c)(i).

 

“European Lender”
means a Lender that has an interest in the European Revolver Commitment and/or
the European Revolver Usage.

 

“European Letter of
Credit” means a European L/C or a European L/C Undertaking, as the context
requires.

 

“European Letter of
Credit Usage” means, as of any date of determination, the Dollar Equivalent
of the aggregate undrawn amount of all outstanding European Letters of Credit.

 

“European Loan Account”
has the meaning specified therefor in Section 2.10.

 

22

 

“European Protective
Advances” has the meaning specified therefor in Section 2.3(d)(iii).

 

“European Revolver
Commitment” means, with respect to each Lender, its European Revolver
Commitment, and, with respect to all Lenders, their European Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 or in
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1.

 

“European Revolver
Usage” means, as of any date of determination, the sum of (a) the
Dollar Equivalent of the principal amount of outstanding European Advances, plus (b) the amount of the European
Letter of Credit Usage, in each case as determined as of such date.

 

“European Risk
Participation Liability” means, as to each European Letter of Credit, all
reimbursement obligations of European Borrowers to the European Issuing Lender
with respect to a European L/C Undertaking, consisting of (a) the amount
available to be drawn or which may become available to be drawn, (b) all
amounts that have been paid by the European Issuing Lender to the European
Underlying Issuer to the extent not reimbursed by European Borrowers, whether
by the making of a European Advance or otherwise, and (c) all accrued and
unpaid interest, fees, and expenses payable with respect thereto.

 

“European Swing Lender”
means WFF or any other Lender that, at the request of Administrative Borrower
and with the consent of European Administrative Agent agrees, in such Lender’s
sole discretion, to become the European Swing Lender under Section 2.3(b).

 

“European Swing Loan”
has the meaning specified therefor in Section 2.3(b)(iii).

 

“European Underlying
Issuer” means a third Person which is the beneficiary of a European L/C
Undertaking and which has issued a letter of credit at the request of the
European Issuing Lender for the benefit of one or more of the European
Borrowers.

 

“European Underlying
Letter of Credit” means a letter of credit that has been issued by a
European Underlying Issuer.

 

“Event of Default”
has the meaning specified therefor in Section 7.

 

“Excess Availability”
means, as of any date of determination, the amount equal to Availability plus
Qualified Cash minus the
aggregate amount, if any, of all trade payables of Borrowers aged in excess of
90 days after such payables were created or aged in excess of their historical
levels with respect thereto and all book overdrafts of Borrowers in excess of
their historical practices with respect thereto, in each case as determined by
Administrative Agent in its Permitted Discretion.

 

23

 

“Excess Cash Flow”
means, for any period, the remainder of (without duplication) (a)  EBITDA for such period, minus (b) the
sum, without duplication, of (i) scheduled repayments of principal of Term
Loan A and other Indebtedness for borrowed money of Parent and its Subsidiaries
(to the extent such Indebtedness is permitted to be incurred, and such payments
are permitted to be made, under this Agreement) made in cash during such
period, plus (ii) voluntary
prepayments of Indebtedness, but only to the extent such Indebtedness cannot be
reborrowed, plus (iii) cash payments (not financed with the proceeds
of Indebtedness (other than Advances)) made in such period with respect to
Capital Expenditures to the extent permitted to be made under this Agreement, plus (iv) all
federal, state, local and foreign income taxes paid in cash by Parent and its
Subsidiaries, during such period, plus
(v) all Interest Expense paid in cash by Parent and its Subsidiaries
during such period to the extent permitted to be paid under this Agreement plus (vi) mandatory prepayments of
the Term Loan A pursuant to Section 2.4(c)(v) and mandatory
prepayments of the Term B Debt, plus (vii) any
non-cash items (including losses, charges, expenses, write-downs or write-offs
or in respect of amortization or depreciation) included in the calculation of
EBITDA, plus (viii) to the extent not
otherwise deducted in calculating Excess Cash Flow, cash restructuring and
severance charges incurred and paid during the fiscal year ending December 31,
2005 in an aggregate amount not to exceed $5,500,000, plus (ix) all
other cash payments made during such period on account of fees, costs and
expenses that were capitalized or otherwise were not deducted in calculating
Excess Cash Flow for such period, plus
(x) cash consideration paid during such period to make acquisitions of all
or substantially all of the assets and/or business of a Person or all of the
Stock of a Person that are permitted to be made under this Agreement.

 

“Excluded Deposit
Accounts” means (i) Deposit Account no. 1-508-9055-9589 maintained
with US Bank National Association to the extent such account is pledged to US
Bank National Association to secure letters of credit issued for the account of
a US Borrower and the aggregate Dollar Equivalent amount in such Deposit
Account does not exceed $900,000 and (ii) Deposit Accounts of any Borrower
solely to the extent all funds in such Deposit Accounts consist of amounts held
in trust by such Borrower for or in escrow for or on behalf of customers of
such Borrower.

 

“Existing Foreign
Guarantors” means SITEL Asia Pacific Investments PTE Limited, SITEL
Customer Care Philippines, Inc., SITEL (BVI) International, Inc., and
Systems Integrated Telemarketing Netherlands B.V., and each other Subsidiary of
Parent created or organized under the laws of any jurisdiction other than the
United States, Ireland, United Kingdom, Germany or Canada or any state or
province thereof or the District of Columbia that becomes a Guarantor hereunder
as of the date hereof.

 

“Existing Lender”
means Fleet Capital Corporation.

 

“Extraordinary
Receipts” means any cash Collections received by any US Loan Party not in
the ordinary course of business (and not consisting of proceeds described in Section 2.4(c)(ii) or Section 2.4(c)(iv) hereof),
including the following (solely to the extent any of the following is not in
the ordinary course of business): (a) foreign, United States, state or
local tax refunds (excluding value added tax payments received from a

 

24

 

Governmental
Authority that will be netted against future value added tax payments to such
Governmental Authority), (b) pension plan reversions, (c) proceeds of
insurance (including proceeds of key man life insurance policies) other than
such proceeds to the extent that the amounts so received are applied by a Loan
Party for the purpose of satisfying the condition giving rise to the insurance
claim, (d) proceeds of judgments, proceeds of settlements, or other
consideration of any kind in connection with any cause of action, (e) condemnation
awards (and payments in lieu thereof), (f) indemnity payments, and (g) any
purchase price adjustment received in connection with any purchase agreement);
provided, that, individual, unrelated Collections in a Dollar Equivalent amount
of less than or equal to $5,000 shall be deemed not to constitute Extraordinary
Receipts for purposes of this Agreement.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as in effect from time to time.

 

“Fiscal Month”
means a calendar month.

 

“Fee Letter” means
that certain fee letter between Borrowers and Administrative Agent, in form and
substance satisfactory to Administrative Agent.

 

“Fixed Charges”
means with respect to Parent and its Subsidiaries for any period, the sum,
without duplication, of (a) Interest Expense (net of interest income) paid
in cash during such period, (b) scheduled principal payments required to
be paid during such period in respect of Indebtedness, and (c) all
federal, state, and local income taxes paid during such period.

 

“Fixed Charge Coverage
Ratio” means, with respect to Parent and its Subsidiaries for any period,
the ratio of (i) EBITDA for such period minus
Capital Expenditures made (to the extent not already incurred in a prior
period) or incurred during such period, to (ii) Fixed Charges for such period.

 

“Foreign Advances”
means Canadian Advances and European Advances.

 

“Foreign Bank Product
Reserve” means, as of any date of determination, the lesser of (a) $5,000,000
less the amount of the Bank Product Reserve, if any, and (b) the amount of
reserves that Administrative Agent has established (based upon the Bank Product
Providers’ reasonable determination of the credit exposure of Foreign Borrowers’
and Foreign Subsidiaries in respect of Bank Products) in respect of Bank
Products then provided or outstanding to Foreign Loan Parties; provided, that
in order to qualify as Foreign Bank Product Reserves such reserves must be
established on or prior to the time that the Bank Product Provider first
provides the applicable Bank Product.

 

“Foreign Borrowers”
means European Borrowers and Canadian Borrowers, and “Foreign Borrower”
means any one of them.

 

“Foreign Borrowing”
means a Borrowing hereunder consisting of European Advances and Canadian
Advances made on the same day by the Lenders (or Fronting Lender, Canadian
Administrative Agent or European Administrative Agent on behalf

 

25

 

thereof), or by
the Canadian Swing Lender in the case of a Canadian Swing Loan, or by the
European Swing Lender in the case of a European Swing Loan, or by Canadian
Administrative Agent or European Administrative Agent in the case of a
Protective Advance, in each case, to any European Borrower or Canadian
Borrower.

 

“Foreign Borrowing
Base” means, as of any date of determination, the result of:

 

(a)                                  (i)                                     (x) 85%
of the amount of the Dollar Equivalent of Eligible Foreign Accounts, plus (y) the lesser of (A) 85%
of the amount of the Dollar Equivalent of Eligible Unbilled Foreign Accounts
and (B) $30,000,000, less (z) the
amount, if any, of the Foreign Dilution Reserve, less

 

(ii)                                  the
sum of (A) the Foreign Bank Product Reserve, and (B) the aggregate
amount of reserves, if any, established by Administrative Agent under Section 2.1(b) with
respect to Foreign Borrowers, plus

 

(b)                                 (i)                                     (x) 85%
of the amount of Eligible US Accounts, plus
(y) the lesser of (A) 85% of the amount of Eligible Unbilled US
Accounts and (B) $30,000,000, less (z) the
amount, if any, of the US Dilution Reserve, less

 

(ii)                                  the sum of (A) the Bank Product Reserve, and (B) without
duplication of clause (a)(ii)(B) above, the aggregate amount of reserves,
if any, established by Administrative Agent under Section 2.1(b), less

 

(c)                                  US
Revolver Usage,

 

provided, however, that the sum of clauses (a)(i)(y)
and (b)(i)(y) above shall not exceed $30,000,000.

 

“Foreign Borrowing
Base Certificate” means a certificate substantially in the form of Exhibit B-1(B) or
any other form acceptable to Administrative Agent.

 

“Foreign Collateral”
means all assets and interests in assets and proceeds thereof now owned or
hereafter acquired by any Foreign Borrower in or upon which a Lien is granted
by such Foreign Borrower under any of the Loan Documents.

 

“Foreign Dilution”
means, as of any date of determination, a percentage, based upon the experience
of the immediately prior 12 Fiscal Months, that is the result of dividing the
Dollar Equivalent amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Foreign Borrowers’ Accounts during such period, by (b) Foreign Borrowers’
gross billings with respect to Accounts during such period.

 

“Foreign Dilution
Reserve” means, as of any date of determination, an amount sufficient to
reduce the advance rate against Eligible Foreign Accounts by 1 percentage point
for each percentage point by which Foreign Dilution is in excess of 5%.

 

26

 

“Foreign Guarantors”
means Existing Foreign Guarantors and any other Subsidiary (other than a
Foreign Borrower or an Immaterial Subsidiary) of a Borrower organized under the
laws of any jurisdiction within Ireland, United Kingdom, Germany or Canada that
becomes a Guarantor after the date hereof, and “Foreign Guarantor” means
any one of them.

 

“Foreign Loan Parties”
means the Foreign Borrowers and Foreign Guarantors, and “Foreign Loan Party”
means any one of them.

 

“Foreign Obligations”
means (a) all loans, Foreign Advances, debts, principal, interest
(including any interest that accrues after the commencement of an Insolvency
Proceeding regardless of whether allowed or allowable in whole or in part as a
claim in any such Insolvency Proceeding), contingent reimbursement obligations
with respect to outstanding Canadian Letters of Credit, contingent
reimbursement obligations with respect to outstanding European Letters of
Credit, premiums, liabilities (including all amounts charged to the Canadian
Loan Account and European Loan Account pursuant hereto), obligations (including
indemnification obligations), fees (including the fees provided for in the Fee
Letter), charges, costs, Lender Group Expenses (including any fees or expenses
that accrue after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), lease payments, guaranties, covenants, and duties of any kind and
description owing by Foreign Borrowers to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, and including all interest not paid
when due and all Lender Group Expenses that Foreign Borrowers are required to
pay or reimburse by the Loan Documents, by law, or otherwise, and (b) all
Bank Product Obligations owing by the Foreign Borrowers.  Any reference in the Agreement or in the Loan
Documents to the Foreign Obligations shall include all or any portion thereof
and any extensions, modifications, renewals, or alterations thereof, both prior
and subsequent to any Insolvency Proceeding.

 

“Foreign Revolver
Usage” means, as of any date of determination, the sum of (a) the
Dollar Equivalent of the principal amount of outstanding European Advances, plus (b) the Dollar Equivalent of the
principal amount of outstanding Canadian Advances, plus (c) the amount of the European Letter of Credit
Usage, plus (d) the amount
of the Canadian Letter of Credit Usage, in each case as determined as of such
date.

 

“Foreign Subsidiaries”
means the Foreign Borrowers, the Foreign Guarantors and each other Subsidiary
of Administrative Borrower not created or organized under the laws of the
United States or any state thereof or the District of Columbia, and “Foreign
Subsidiary” means any one of them.

 

“Fraudulent Conveyance”
has the meaning specified therefor in Section 2.15(i).

 

27

 

“Fronted Loans”
means that portion of the Advances which is funded by the Fronting Lender and
has not been funded by another Lender.

 

“Fronting Lender”
has the meaning set forth in the preamble to the Agreement.

 

“Fronting Loan Event”
means in the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation or
application thereof, shall at any time after the date hereof, in the reasonable
opinion of Fronting Lender, make it unlawful or impractical for Fronting Lender
to fund or maintain Fronted Loans or to continue such funding or maintaining.

 

“Funding Date”
means any date on which a Borrowing occurs.

 

“Funding Losses”
has the meaning specified therefor in Section 2.13(b)(ii).

 

“GAAP” means
generally accepted accounting principles as in effect from time to time in the
United States, consistently applied.

 

“German Borrowers”
means SITEL GmbH and SRM Inkasso GmbH and each other Subsidiary of Parent
created or organized under the laws of Germany or any state or province thereof
that becomes a Borrower hereunder pursuant to Section 5.15, and “German
Borrower” means any one of them.

 

“Governing Documents”
means, with respect to any Person, the certificate or articles of
incorporation, by-laws, unanimous shareholder agreement or unanimous
shareholder declaration, if any, or other organizational documents of such
Person, and all amendments thereto.

 

“Governmental
Authority” means any federal (including the federal governments of Canada,
Germany, Spain and the United Kingdom), the government of the Republic of
Ireland, state, provincial, local, or other governmental or administrative
body, instrumentality, board, department, or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body.

 

“Guarantors” means
each US Guarantor and each Foreign Guarantor, and “Guarantor” means any
one of them.

 

“Guaranty” means a
US Guaranty or a general continuing guaranty executed and delivered by each
Guarantor in favor of Collateral Agent for the benefit of the Lender Group and
the Bank Product Providers, in form and substance satisfactory to Collateral
Agent.

 

“Hazardous Materials”
means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any Applicable Laws or regulations as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or
any other formulation intended to define, list, or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or “EP

 

28

 

toxicity”, (b) oil,
petroleum, or petroleum derived substances, natural gas, natural gas liquids,
synthetic gas, drilling fluids, produced waters, and other wastes associated
with the exploration, development, or production of crude oil, natural gas, or
geothermal resources, (c) any flammable substances or explosives or any
radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement”
means any and all agreements, or documents now existing or hereafter entered
into by Administrative Borrower or any of its Subsidiaries that provide for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging Administrative Borrower’s or any of
its Subsidiaries’ exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.

 

“Holdout Lender”
has the meaning specified therefor in Section 14.2(a).

 

“Immaterial Subsidiary”
means a Person that is (i) a Subsidiary of Parent, and (ii) listed on
Schedule I-1 attached hereto, or otherwise designated in a written notice
by Administrative Borrower as an “Immaterial Subsidiary” for the purposes of
the Agreement; provided, that, any such Subsidiary shall not continue to
constitute a “Immaterial Subsidiary” for more than thirty (30) days after such
Subsidiary was formed or acquired unless approved as an Immaterial Subsidiary
by Administrative Agent in its Permitted Discretion.

 

“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 other similar instruments and all reimbursement or other
obligations of such Person in respect of letters of credit, bankers
acceptances, or other similar financial products, (c) all obligations of
such Person as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business, payable in
accordance with customary trade practices and not outstanding for more than 90
days after the date such payable was created), (f) all obligations of such
Person owing under Hedge Agreements, and (g) any obligation of such Person
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any
obligation of any other Person that constitutes Indebtedness under any of
clauses (a) through (f) above. 
For purposes of this definition (x) the amount of the obligations
of a Person under a Hedge Agreement at any date shall be equal to the amount
payable by such Person to the relevant counterparties on such date (net of any
amounts payable to such Person by such counterparties) and (y) the amount
of any guarantee obligation of a Person shall (subject to any limitation set
forth therein) be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined

 

29

 

by
such Person in good faith.  For purposes
of Section 6.1, (i) reimbursement obligations of a US Borrower
in respect of standby letters of credit shall not constitute Indebtedness to
the extent such letters of credit support Indebtedness of another US Borrower
that is otherwise permitted under Section 6.1, (ii) reimbursement
obligations of a US Guarantor in respect of standby letters of credit shall not
constitute Indebtedness to the extent such letters of credit support
Indebtedness of another US Loan Party that is otherwise permitted under Section 6.1,
(iii) reimbursement obligations of a Foreign Borrower in respect of
standby letters of credit shall not constitute Indebtedness to the extent such
letters of credit support Indebtedness of a US Loan Party or another Foreign
Borrower that is otherwise permitted under Section 6.1, (iv) reimbursement
obligations of a Foreign Guarantor in respect of standby letters of credit
shall not constitute Indebtedness to the extent such letters of credit support
Indebtedness of another Loan Party that is otherwise permitted under Section 6.1
and (v) reimbursement obligations of a Significant Subsidiary in respect
of standby letters of credit shall not constitute Indebtedness to the extent
such letters of credit support Indebtedness of Parent or any other Subsidiary
of Parent that is otherwise permitted under Section 6.1.  For purposes of Section 6.17,
reimbursement obligations in respect of standby letters of credit shall not
constitute Indebtedness to the extent such letters of credit support
Indebtedness of Parent or any Subsidiary of Parent.

 

“Indemnified
Liabilities” has the meaning specified therefor in Section 10.3.

 

“Indemnified Person”
has the meaning specified therefor in Section 10.3.

 

“Indenture” means
the Indenture dated as of March 10, 1998 among the Parent, the subsidiary
guarantors named therein and Manufacturers & Traders Trust Company,
successor to Allfirst Bank, formerly The First National Bank of Maryland, as
Trustee, in respect of the Parent’s Series A and Series B 9 1/4%
Senior Subordinated Notes due 2006, as amended, supplemented or otherwise
modified.

 

“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of
the Bankruptcy Code, England’s Insolvency Act of 1986, Ireland’s Companies Acts
of 1963 to 2003 or under any other state or federal or non-US jurisdiction
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intercompany
Subordination Agreement” means a subordination agreement executed and
delivered by Loan Parties and Collateral Agent, the form and substance of which
is satisfactory to Collateral Agent.

 

“Intercreditor
Agreement” means the Lien Intercreditor Agreement of even date herewith
among Term B Agent, and Collateral Agent, and acknowledged by the US Borrowers,
as amended, supplemented, restated or otherwise modified from time to time.

 

30

 

“Interest Expense”
means, for any period, the aggregate of the interest expense of Parent and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.

 

“Interest Period”
means, with respect to each LIBOR Rate Loan other than Approved Offshore Rate
Loans, a period commencing on the date of the making of such LIBOR Rate Loan
(or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan
to a LIBOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter and, with
respect to each Approved Offshore Rate Loan, a period commencing on the date of
the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or
the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1 or 2
Weeks or 1, 2, 3, or 6  months
thereafter; provided, however, that (a) if any Interest
Period would end on a day that is not a Business Day, such Interest Period
shall be extended (subject to clauses (c)-(e) below) to the next
succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (d) with respect to an Interest Period that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period), the Interest Period shall end on the last Business Day
of the calendar month that is 1 or 2 Weeks or 1, 2, 3, or 6 months after the
date on which the Interest Period began, as applicable, and (e) Borrowers
(or Administrative Borrower on behalf thereof) may not elect an Interest Period
which will end after the Maturity Date.

 

“Inventory” means
inventory (as that term is defined in the Code).

 

“Investment”
means, with respect to any Person, any investment by such Person in any other
Person (including Affiliates) in the form of loans, guarantees, advances, or
capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course
of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.

 

“IRC” means the
Internal Revenue Code of 1986, as in effect from time to time.

 

“Irish Borrowers”
means SITEL Ireland Limited and each other Subsidiary of Parent created or
organized under the laws of the Republic of Ireland or any state or province
thereof that becomes a Borrower hereunder pursuant to Section 5.15,
and “Irish Borrower” means any one of them.

 

31

 

“Issuing Lenders”
means the US Issuing Lender, the Canadian Issuing Lender and the European
Issuing Lender.

 

“Judgment Currency”
has the meaning specified therefor in Section 10.4.

 

“Law (or Laws)”
means, in respect of the United States, Canada and any other country, all
published laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws,
judicial or arbitral or administrative or ministerial or departmental or
regulatory judgments, orders, decisions, rulings or awards, including general principles
of common and civil law, and conditions or any grant of approval, permission,
authority or license of any court, Governmental Authority, statutory body or
self-regulatory authority.

 

“Lender” and “Lenders”
have the respective meanings set forth in the preamble to the Agreement, and
shall include any other Person made a party to the Agreement in accordance with
the provisions of Section 13.1.

 

“Lender Group”
means, individually and collectively, each of the Lenders (including the
Fronting Lender and the Issuing Lenders) and Agents.

 

“Lender Group Expenses”
means all (a) costs or expenses (including taxes, and insurance premiums)
required to be paid by a Borrower or its Subsidiaries under any of the Loan
Documents that are paid, advanced, or incurred by any one or more members of
the Lender Group, (b) fees or charges paid or incurred by any Agent in
connection with the Lender Group’s transactions contemplated by the Loan
Documents with Borrowers or their Subsidiaries, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, judgment, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles to the extent Liens on motor vehicles are required
to be perfected under the Loan Documents), filing, recording, publication,
appraisal (including periodic collateral appraisals or business valuations) to
the extent of the fees and charges (and up to the amount of any limitation)
contained in the Agreement and, in the event any real estate is pledged as
Collateral, real estate surveys, real estate title policies and endorsements,
and environmental audits, (c) costs and expenses incurred by any Agent in the
disbursement of funds to Borrowers or other members of the Lender Group (by
wire transfer or otherwise), (d) charges paid or incurred by any Agent
resulting from the dishonor of checks, (e) reasonable costs and expenses
paid or incurred by the Lender Group to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) audit fees and expenses of any Agent
related to any inspections or audits to the extent of the fees and charges (and
up to the amount of any limitation) contained in this Agreement, (g) reasonable
costs and expenses of third party claims or any other suit paid or incurred by
any one or more members of the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with any Borrower or any
Subsidiary of a Borrower, (h) each Agent’s reasonable costs and expenses
(including reasonable attorneys

 

32

 

fees) incurred in
advising, structuring, drafting, reviewing, administering, syndicating
(including, without limitation, any Additional German Opinion Costs), or
amending the Loan Documents, (i) any foreign exchange costs incurred by
Agents or Lenders resulting from converting currencies to the extent necessary
and in accordance with this Agreement, and (j) each Agent’s and each
Lender’s reasonable costs and expenses (including attorneys, accountants,
consultants, and other advisors fees and expenses) incurred in terminating,
enforcing (including reasonable attorneys, accountants, consultants, and other
advisors fees and expenses incurred in connection with a “workout,” a “restructuring,”
or an Insolvency Proceeding concerning any Borrower or any Subsidiary of a
Borrower or in exercising rights or remedies under the Loan Documents), or
defending the Loan Documents, irrespective of whether suit is brought, or in
taking any Remedial Action concerning the Collateral.

 

“Lender-Related Person”
means, with respect to any Lender, such Lender, together with such Lender’s
Affiliates, officers, directors, employees, attorneys, and agents.

 

“Letter of Credit
Usage” means, as of any date of determination, the sum of the Canadian
Letter of Credit Usage, the European Letter of Credit Usage and the US Letter
of Credit Usage, as determined as of such date.

 

“Letters of Credit”
means Canadian Letters of Credit, European Letters of Credit and US Letters of
Credit, as applicable.

 

“Leverage Ratio”
means, as of any date, the ratio of (a) the sum of the Revolver Usage
(other than Letter of Credit Usage cash collateralized in an amount up to 105%
of such Letter of Credit Usage), the outstanding principal balance of the Term
Loan A and Term B Debt and the aggregate principal amount of all other
Indebtedness (other than cash collateralized letters of credit) of Parent and
its Subsidiaries outstanding as of such date in the amount that would be
reflected as debt on a balance sheet prepared as of such date on a consolidated
basis in accordance with GAAP to (b) EBITDA for the 12 month period ended
as of such date.

 

“LIBOR Deadline”
has the meaning specified therefor in Section 2.13(b)(i).

 

“LIBOR Notice”
means a written notice substantially in the form of Exhibit L-1.

 

“LIBOR Option” has
the meaning specified therefor in Section 2.13(a).

 

“LIBOR Rate” means,
as applicable, the US LIBOR Rate, the Canadian LIBOR Rate or the Approved
Offshore Currency Rate.

 

“LIBOR Rate Loan”
means each portion of an Advance or the Term Loan A that bears interest at a
rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin”
means 2.75%; provided that, at any time that the outstanding principal
balance of the Term Loan A has been paid in full, the LIBOR Rate Margin shall
be 2.00%.

 

33

 

“LIBOR Rate Term Loan
A Margin” means 2.75%.

 

“Lien” means any
interest in an asset securing an obligation owed to, or a claim by, any Person
other than the owner of the asset, irrespective of whether (a) such
interest is based on the common law, civil law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent
upon the occurrence of some future event or events or the existence of some
future circumstance or circumstances. 
Without limiting the generality of the foregoing, the term “Lien” includes
the lien, hypothec or security interest arising from a mortgage, deed of trust,
encumbrance, notice of Lien, levy or assessment, pledge, hypothecation,
assignment, deposit arrangement, security agreement, conditional sale or trust
receipt, or from a lease, consignment, or bailment for security purposes and
also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.

 

“Loan Account” has
the meaning specified therefor in Section 2.10.

 

“Loan Documents”
means the Agreement, the Bank Product Agreements, the Cash Management
Agreements, the Control Agreements, the Fee Letter, the Pre-approved Asset
Disposition Letter, the Guaranties, the Intercompany Subordination Agreement,
the Letters of Credit, the Mortgages, if any, the Security Agreements, the
Disbursement Letter, the Officers’ Certificate, any note or notes executed by a
Borrower or any Guarantor in connection with the Agreement and payable to a
member of the Lender Group and any other agreement entered into, now or in the
future, by any Borrower and the Lender Group in connection with the Agreement.

 

“Loan Parties”
means the US Loan Parties and the Foreign Loan Parties, and “Loan Party”
means any one of them.

 

“Material Adverse
Change” means (a) a material adverse change in the business,
operations, results of operations, assets, liabilities or financial condition
of Borrowers and their Subsidiaries, taken as a whole, (b) a material
adverse change in the business, operations, results of operations, assets,
liabilities or financial condition of US Loan Parties, taken as a whole, (c) a
material impairment of a Borrower’s or any of its Subsidiaries’ ability to
perform its material obligations under the Loan Documents to which it is a
party or of the Lender Group’s ability to enforce the Obligations or realize
upon a material portion of the Collateral, or (d) a material impairment of
the enforceability or priority of the Agent’s Liens with respect to a material
portion of the Collateral as a result of an action or failure to act on the
part of a Borrower or a Subsidiary of a Borrower.

 

“Maturity Date”
has the meaning specified therefor in Section 3.3.

 

“Maximum Canadian
Revolver Amount” means the least of (x) $10,000,000,
(y) $30,000,000 less the European Revolver Usage and (z) $90,000,000
less the sum of the Availability Reserve, US Revolver Usage and European
Revolver Usage.

 

“Maximum European
Revolver Amount” means the lesser of (x) $30,000,000 less the Canadian
Revolver Usage and (y) $90,000,000 less the sum of the Availability
Reserve, US Revolver Usage and Canadian Revolver Usage.

 

34

 

“Maximum Non-Loan
Party Percentage” means (x) if the Leverage Ratio for the 4 fiscal quarters ending on the last
day of the then most recently ended fiscal quarter for which financial
statements have been delivered is greater than 2.00:1.00, 10% and (y) if
the Leverage Ratio for the 4 fiscal
quarters ending on the last day of the then most recently ended fiscal
quarter for which financial statements have been delivered is equal to or less
than 2.00:1.00, 12.5%.

 

“Maximum Revolver
Amount” means $90,000,000.

 

“Maximum US Revolver
Amount” means $90,000,000 less the sum of the Availability Reserve and the
Foreign Revolver Usage.

 

“Mortgages” means,
individually and collectively, one or more mortgages, deeds of trust, or deeds
to secure debt, executed and delivered by a US Borrower in favor of Collateral Agent
for the benefit of the Lender Group and the Bank Product Providers, in form and
substance reasonably satisfactory to Collateral Agent, that encumber the Real
Property Collateral.

 

“Net Assets” has
the meaning specified therefor in Section 2.15(j).

 

“Net Cash Proceeds”
means, (i) with respect to any sale or disposition by any Person of
property or assets, the amount of cash Collections received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person, but only as
and when received, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (1) Indebtedness owing under this Agreement or the other Loan
Documents and (2) Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such disposition, (B) reasonable
fees and expenses related thereto incurred by such Person in connection
therewith, (C) taxes paid or payable to any taxing authorities by such
Person in connection therewith and (D) in the case of the asset sale
described in the Pre-approved Asset Disposition Letter, reserves established by
such Person and reasonably acceptable to Administrative Agent to fund
contingent liabilities reasonably estimated to be payable in connection
therewith solely to the extent such contingent liabilities are funded within 90
days of the consummation of such asset sale and (ii) with respect to the
issuance or incurrence of any Indebtedness by any Person, or the sale or
issuance by any Person of its Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred compensation) by or on behalf of
such Person, but only as and when received, in connection therewith, after
deducting therefrom only (A) reasonable fees and expenses related thereto
incurred by such Person in connection therewith, (B)  taxes paid or
payable by such Person in connection therewith and (C) income taxes to be
paid in connection therewith (after taking into account any tax credits or
deductions and any tax

 

35

 

sharing
arrangements); in each case of clause (i) and (ii) to the extent, but
only to the extent, that the amounts so deducted are (1) actually paid or
are payable or, in the case of the asset sale described in the Pre-Approved
Asset Disposition Letter, accrued as a liability, to a Person that, except in
the case of reasonable out-of-pocket expenses, is not an Affiliate of such
Person or any of its Subsidiaries and (2) properly attributable to such
transaction or to the asset that is the subject thereof.

 

“Non-Loan Party
Subsidiaries” means the Subsidiaries of Parent identified on Schedule N-1
and Subsidiaries of the Parent formed or acquired after the Closing Date,
designated in a written notice by Administrative Borrower as a “Non-Loan Party
Subsidiary” for purposes of this Agreement, in each case that (i) have not
been designated as Loan Parties or Significant Subsidiaries by Administrative
Borrower in accordance with Section 6.16 or otherwise and (ii) are
not created or organized under the laws of the United States, Ireland, United
Kingdom, Germany or Canada or any state or province thereof or the District of
Columbia, and “Non-Loan Party Subsidiary” means any one of them; provided,
that, any such Subsidiary shall not continue to constitute a “Non-Loan Party Subsidiary”
for more than thirty (30) days after such Subsidiary was formed or acquired
unless approved by Administrative Agent in its Permitted Discretion.

 

“Non-Offshore Currency
Lender” means a Lender (other than the Fronting Lender) which has given
notice to the Administrative Agent and the Fronting Lender that such Lender can
not fund Offshore Currency Rate Loans (except as provided in Section 2.17).

 

“Obligations”
means (a) all loans (including the Term Loan A), Advances, debts,
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), contingent
reimbursement obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to the Borrowers’ Loan
Accounts pursuant hereto), obligations (including indemnification obligations),
fees (including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
lease payments, guaranties, covenants, and duties of any kind and description
owing by the applicable Borrowers to the Lender Group pursuant to or evidenced
by the Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all Lender Group Expenses that Borrowers are required to pay or reimburse by
the Loan Documents, by law, or otherwise, and (b) all Bank Product
Obligations.  Any reference in the
Agreement or in the Loan Documents to the Obligations shall include all or any
portion thereof and any extensions, modifications, renewals, or alterations
thereof, both prior and subsequent to any Insolvency Proceeding.

 

“Officers’ Certificate”
means the representations and warranties of officers form submitted by
Administrative Agent to Parent, together with the Borrowers’ and

 

36

 

Guarantors’
completed responses to the inquiries set forth therein, the form and substance
of such responses to be reasonably satisfactory to Administrative Agent.

 

“Originating Lender”
has the meaning specified therefor in Section 13.1(e).

 

“Offshore Currency
Rate Loan” means each portion of an Advance that is denominated in an
Approved Offshore Currency.

 

“Overadvance” has
the meaning specified therefor in Section 2.5.

 

“Parent” has the
meaning specified therefor in the preamble to the Agreement.

 

“Patriot Act”
means Laws relating to terrorism or money laundering, including Executive Order
No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the
Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
by OFAC.

 

“Participant” has
the meaning specified therefor in Section 13.1(e).

 

“Permitted Acquisition”
means an acquisition of the assets and/or business of a Person by a Borrower or
the acquisition of all of the Stock of a Person (such Person, the “Target”)
by a Borrower in which (a) (i) the business and assets acquired by a US
Borrower are located in the United States, the business and assets acquired by
a Foreign Borrower are located in Canada, UK, Germany or Ireland and or the
business and assets of the Target are located in the United States, Canada, UK,
Germany or Ireland and (ii) such business is, and such assets are for use
in, the same business engaged in by Borrowers as of the Closing Date or a
business reasonably related, complementary or incidental thereto or a
reasonable extension thereof, (b) immediately before and after giving
effect to such asset acquisition or Stock acquisition and the making of any
Advances in connection therewith, no Default or Event of Default exists (and,
with respect to the financial covenants included in Section 6.17,
Administrative Agent has been provided with calculations showing compliance
with such financial covenants on a pro forma basis as of the most recent month
end for which financial statements have been delivered, after giving effect to
such asset or Stock acquisition), (c) the Dollar Equivalent of the
aggregate consideration to be paid by the Borrowers (including any liabilities
assumed by Borrower and the liabilities retained by the Target) in connection
with such asset or Stock acquisition, together with the consideration paid in
connection with all other asset or Stock acquisitions completed by Borrowers
during the consecutive 12-month period ending on the date of such asset or
Stock acquisition, does not exceed the Annual Acquisition Limit, (d) the
Dollar Equivalent of the aggregate consideration to be paid by Borrowers
(including any liabilities assumed by Borrowers and any liabilities retained by
the Target) in connection with such asset or Stock acquisition, together with
the consideration paid in connection with all of the asset or Stock
acquisitions completed by Borrowers during the period commencing on the Closing
Date and ending on the date of such asset or Stock acquisition, does not exceed
$20,000,000, (e) the acquisition is consensual and has been approved by
the respective board of directors of the parties to such acquisition (including
in the case of a Stock acquisition, the board of directors of the Target), (f) at
the time of and

 

37

 

immediately after
giving effect to such asset or Stock acquisition and the making of any Advances
in connection therewith, the Dollar Equivalent of Excess Availability is not
less than $25,000,000, (g) at least 30 days prior to such acquisition,
Administrative Agent shall have received a description of such acquisition and
such due diligence as is customarily required by Administrative Agent, and
projections for the succeeding three-year period, which projections shall be in
form and substance satisfactory to Administrative Agent and shall take into
account the proposed Permitted Acquisition, (h) at least 5 days prior to
the consummation of such asset or Stock acquisition, Administrative Agent has
received complete executed or conformed copies of the material documentation to
be executed in connection with such acquisition, (i) consents have been
obtained in favor of Agents and Lenders to the collateral assignment of rights
and indemnities under the material acquisition documents, and (j) to the
extent required pursuant to the provisions of Section 5.15,
Collateral Agent shall have received a perfected, first-priority Lien in the
assets so acquired (except for Permitted Liens) and in the case of a Stock
acquisition, Collateral Agent shall have received a perfected, first-priority
Lien (except for Permitted Liens) in all of the assets of the Target and the
Target shall have, at Administrative Agent’s election, either executed and
delivered a joinder to this Agreement or a Guaranty of all of the Obligations.

 

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

 

“Permitted
Dispositions” means (a) sales or other dispositions of Equipment or
fixtures that is surplus, substantially worn, damaged, uneconomic or obsolete
in the ordinary course of business, (b) sales of Inventory to buyers in
the ordinary course of business, (c) the use or disposition of money or
Cash Equivalents in a manner that is not prohibited by the terms of the Agreement
or the other Loan Documents, (d) the licensing, on a non-exclusive basis,
of patents, trademarks, copyrights, and other intellectual property rights in
the ordinary course of business, (e) dispositions of assets of a Loan
Party or a Significant Subsidiary in the aggregate Dollar Equivalent amount not
to exceed $1,000,000 in any fiscal year of Borrowers so long as the
consideration received therefor is at least fair market value (as determined in
the good faith judgment of the applicable Loan Party or Significant
Subsidiary), (f) any leases or subleases to other Persons that are not
Affiliates of any Borrower not materially interfering with the conduct of the
business of the Borrowers taken as a whole, (g) transactions between and
among US Borrowers and transactions between and among US Guarantors, (h) any
sale and leaseback transaction which (i) involves the financing of a
tangible fixed asset not owned by any Borrower or Significant Subsidiary as of
the Closing Date, (ii) is consummated on customary, market terms that have
been negotiated on an arm’s-length basis with a Person other than an Affiliate
of any Borrower, (iii) to the extent the applicable lease constitutes
Indebtedness, constitutes Permitted Purchase Money Indebtedness, (iv) involves
Capital Expenditures that are permitted to be made under Section 6.17(b) and
(v) is consummated at a time when no Default or Event of Default exists or
would be caused by the consummation of such transaction, (i) transactions
between and among Foreign Borrowers, transactions between and among Foreign
Guarantors and dispositions by any Foreign Loan Party to any US Borrower,
(j) transactions between and

 

38

 

among Significant
Subsidiaries and dispositions by Significant Subsidiaries to any Borrower or
any Subsidiary of any Borrower, (k) (x) the asset sale described in, and
subject to the terms of, the Pre-approved Asset Disposition Letter and (y) the
transactions described in, and subject to the terms of, the Pre-approved
Restructurings Letter, (l) any disposition or series of related
dispositions in respect of Equipment where the Dollar Equivalent of the Net
Cash Proceeds received are less than or equal to $5,000 so long as the
consideration received therefor is at least fair market value (as determined in
the good faith judgment of the applicable Loan Party or Significant
Subsidiary), (m) any other dispositions in the aggregate Dollar Equivalent
amount not to exceed $500,000 so long as the consideration received therefor is
at least fair market value (as determined in the good faith judgment of the
applicable Loan Party or Significant Subsidiary) and at least 75% of the total
consideration received is in cash, (n) dispositions of fixed assets of a
Loan Party or a Significant Subsidiary to other Subsidiaries of Parent so long
as the Dollar Equivalent amount of the aggregate fair market value of all fixed
assets disposed of in reliance on this clause (n) does not exceed $2,000,000,
and (o) the sale of all or a substantial portion of the assets of Financial
Insurance Services, Inc. or the sale of all of the issued and outstanding
capital stock of Financial Insurance Services, Inc. (including by merger)
so long as no Default or Event of Default exists or would be caused by the
consummation of such transaction.

 

“Permitted Holder”
means State of Wisconsin Investment Board, James Lynch, Ida Eggens Kruithof,
Private Equity Investors IV, L.P., Rohit Desai, JANA Partners and Heartland
Advisors, Inc.

 

“Permitted Investments”
means:

 

(a)                                  Investments
in cash and Cash Equivalents, including Excluded Deposit Accounts,

 

(b)                                 Investments in negotiable
instruments for collection,

 

(c)                                  advances made in connection with purchases
of goods or services in the ordinary course of business,

 

(d)                                 (i) advances made to employees
and officers in the ordinary course of business for salary, relocation and
other similar expenses the Dollar Equivalent amount of which do not exceed
$750,000 in the aggregate at any one time outstanding and (ii) Investments
in respect of the cash value of split premium insurance policies in effect on
the Closing Date (and renewals thereof), so long as the Dollar Equivalent
amount of premiums payable in respect of such policies does not exceed $80,000
in any fiscal year,

 

(e)                                  Investments received in settlement
of amounts due to a Loan Party or a Significant Subsidiary effected in the
ordinary course of business or owing to a Loan Party or a Significant
Subsidiary as a result of Insolvency Proceedings involving an Account Debtor or
upon the foreclosure or enforcement of any Lien in favor of a Borrower or any
Subsidiary of a Borrower,

 

39

 

(f)                                    Investments by a Loan Party or a
Significant Subsidiary, to the extent existing on the Closing Date and listed
on Schedule 6.12; provided, that no US Loan Party shall write-off,
forgive, otherwise reduce or accept payment with respect to the unpaid
principal amount of any intercompany loan owed by a Foreign Subsidiary without
the prior written consent of Administrative Agent except Permitted Repayments,

 

(g)                                 Investments in respect of
intercompany loans made by Foreign Subsidiaries (other than SITEL Iberica
Teleservices, S.A.) to other Foreign Subsidiaries; provided, that (x) the
aggregate Dollar Equivalent principal amount of such intercompany loans made in
reliance on this clause (g) (other than (i) intercompany loans made
with proceeds of Investments made by SITEL Iberica Teleservices, S.A. pursuant
to clause (l) of this definition and (ii) intercompany loans made by a
Foreign Subsidiary with the proceeds of intercompany loans made by another
Foreign Subsidiary pursuant to this clause (g) to the extent the
applicable cash proceeds of such intercompany loans are sent directly by the
Foreign Subsidiary funding the initial intercompany loan to the Foreign
Subsidiary that is the ultimate recipient of such series of intercompany loans)
does not exceed $2,500,000 at any one time outstanding and (y) such
intercompany loans are unsecured,

 

(h)                                 Investments in respect of
intercompany loans made by US Loan Parties to Foreign Subsidiaries; provided,
that (i) (A) to the extent the proceeds of such intercompany loans
are used to finance Capital Expenditures incurred in connection with the
repair, restoration or acquisition of revenue generating assets, the aggregate
Dollar Equivalent principal amount of such intercompany loans (x) made to
Foreign Subsidiaries organized under the laws of any single jurisdiction made
in reliance on this clause (h) shall not exceed $7,500,000 in any fiscal
year (net of repayments of intercompany loans made in such fiscal year by
Foreign Subsidiaries organized under the laws of such jurisdiction to Loan
Parties) or (y) made to all Foreign Subsidiaries in reliance on this
clause (h) shall not exceed $50,000,000 during the term of this Agreement,
(B) to the extent the proceeds of such intercompany loans are used to
finance start up or expansion costs of a Foreign Subsidiary other than as
described in clause (i)(A) above, the aggregate Dollar Equivalent
principal amount of such intercompany loans made to Foreign Subsidiaries in
reliance on this clause (h) shall not exceed $2,500,000 in any fiscal year
and (C) to the extent the proceeds of such intercompany loans are used for
purposes other than as described in clause (i)(A) or (i)(B) above,
the aggregate Dollar Equivalent principal amount of such intercompany loans
made to Foreign Subsidiaries in reliance on this clause (h) shall not
exceed $7,500,000 at any one time outstanding, (ii) the aggregate principal amount of such intercompany loans
made in reliance on clause (h)(i)(A) in any fiscal year shall not exceed
75% of the Capital Expenditure limit set forth in Section 6.17(b) with
respect to such fiscal year, (iii) such intercompany loans are evidenced
by promissory notes, in form and substance acceptable to Collateral Agent,
which promissory notes have been pledged to Collateral Agent, (iv) no US
Loan Party shall write-off, forgive, otherwise reduce or accept payment with
respect to the unpaid principal amount of any such intercompany loan without
the prior written consent of Administrative Agent except Permitted Repayments, (v) to
the extent the aggregate Dollar Equivalent principal amount of such
intercompany loans made to Foreign Subsidiaries organized under the laws of any
single jurisdiction made in reliance on this clause (h)

 

40

 

exceeds
$1,000,000 at any one time outstanding, Administrative Borrower shall notify
Administrative Agent of the existence of such intercompany loans and within 45
days of the request of Administrative Agent (or such later period reasonably
acceptable to Administrative Agent), such intercompany loans shall be secured
by the assets of such Foreign Subsidiary pursuant to documentation in form and
substance reasonably satisfactory to Administrative Agent except to the extent
it is not possible under Applicable Law through the use of efforts and
expenditures that are not unduly onerous to the Borrowers in relation to the
benefits afforded to the Administrative Agent and the Lenders thereby, as
reasonably determined by the Administrative Agent, to obtain valid and
enforceable Liens on the assets of such Foreign Subsidiary, and (vi) the
aggregate Dollar Equivalent principal amount of such intercompany loans made in
any fiscal year to Foreign Subsidiaries organized under the laws of (A) jurisdictions
in which it is not possible to obtain valid and enforceable Liens on such
assets of a Foreign Subsidiary under Applicable Law through the use of efforts
and expenditures that are not unduly onerous to the Borrowers in relation to
the benefits afforded to the Administrative Agent and the Lenders thereby, as
reasonably determined by the Administrative Agent, and (B) jurisdictions
in which intercompany loans made to Foreign Subsidiaries organized under the
laws of any such jurisdiction made in reliance on this clause (h) exceed
$1,000,000 at any one time outstanding and Administrative Agent does not
request that such intercompany loans be secured by the assets of such Foreign
Subsidiaries in reliance on this clause (h), shall not exceed $10,000,000,

 

(i)                                     Investments consisting of other
intercompany loans and advances made in compliance with Section 6.1
(other than clause (j) thereof) of the Agreement,

 

(j)                                     Investments by any US Borrower in
another US Borrower and Investments by any US Guarantor in another US Loan
Party,

 

(k)                                  Permitted Acquisitions,

 

(l)                                     Investments by SITEL Iberica
Teleservices, S.A. in Foreign Subsidiaries,

 

(m)                               Investments in Hedge Agreements
permitted by Section 6.1,

 

(n)                                 Investments by Loan Parties and
Significant Subsidiaries in Subsidiaries of Parent arising in connection with
the issuance of equity in satisfaction of intercompany loans owed to such Loan
Parties or Significant Subsidiaries so long as (i) the aggregate Dollar
Equivalent of such intercompany loans that are so satisfied plus the Dollar
Equivalent of intercompany loans converted to equity pursuant to a Permitted
Repayment does not exceed $5,000,000 in any fiscal year or $10,000,000 during
the term of this Agreement and (ii) at the time of such issuance no
Default or Event of Default exists or would be caused by such issuance,

 

(o)                                 non-cash consideration received by any Loan
Party or Significant Subsidiary pursuant to a Permitted Disposition,

 

41

 

(p)                                 guarantees of Indebtedness permitted under Section 6.1
and guarantees of ordinary course obligations of Subsidiaries of Parent not
constituting Indebtedness,

 

(q)                                 transactions permitted by Sections 6.3
and 6.10,

 

(r)                                    Investments in joint ventures (and
solely for purposes thereof, in any intermediate holding company) to the extent
the proceeds of such Investments are used to finance Capital Expenditures
incurred in connection with the repair, restoration or acquisition of revenue
generating assets and associated working capital in an aggregate Dollar
Equivalent amount not to exceed the lesser of (x) $15,000,000 in any
fiscal year; provided, that, in no event shall the aggregate Dollar Equivalent
amount of Investments made in reliance on this clause (r) that are used to
finance working capital exceed $2,000,000 in any fiscal year, and (y) the
then remaining amount of Capital Expenditures permitted to be made under Section 6.17(b) in
such fiscal year,

 

(s)                                  Investments in Foreign Subsidiaries
solely to the extent such Investments (i) are necessary for such Foreign
Subsidiary to be in compliance with minimum capitalization requirements under
Applicable Law or are necessary for such Foreign Subsidiary to be in compliance
with minimum capitalization requirements established by the applicable tax
authorities as a condition to such Foreign Subsidiary deducting interest
expense on intercompany loans, or (ii) are necessary to permit such
Foreign Subsidiary to make Investments in another Foreign Subsidiary for such
other Foreign Subsidiary to be in compliance with minimum capitalization
requirements under Applicable Law or are necessary for such other Foreign
Subsidiary to be in compliance with minimum capitalization requirements
established by the applicable tax authorities as a condition to such other
Foreign Subsidiary deducting interest expense on intercompany loans; provided,
that the aggregate Dollar Equivalent amount of such Investments made in
reliance on this clause (s) do not exceed $5,000,000 during the term of this
Agreement (it being understood, that for purposes of determining the aggregate
amount of Investments made in reliance on this clause (s), an Investment made to
a Foreign Subsidiary in reliance on clause (ii) of this clause (s) that is
used to make an Investment in reliance on clause (i) of this clause (s)
shall be treated as a single Investment); and

 

(t)                                    other Investments which do not exceed
$2,500,000 in the aggregate Dollar Equivalent amount during any fiscal year of
Parent.

 

“Permitted Liens”
means (a) Liens held by Collateral Agent to secure the Obligations, (b) Liens
for unpaid taxes, assessments, or other governmental charges or levies that
either (i) are not yet delinquent, or (ii) do not have priority over
the Agent’s Liens and the underlying taxes, assessments, or charges or levies
are the subject of Permitted Protests, (c) judgment Liens that do not
constitute an Event of Default under Section 7.7 of the Agreement, (d) Liens
set forth on Schedule P-1, (e) the interests of lessors under
operating leases, (f) purchase money Liens or the interests of lessors
under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches only to
the asset purchased, acquired, constructed or improved and the proceeds
thereof, (g) Liens arising by operation of law in favor of warehousemen,
landlords,

 

42

 

carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of Loan Parties’ or Significant Subsidiaries’ business and not in connection
with the borrowing of money, and which Liens either (i) are for sums not
yet delinquent, or (ii) are the subject of Permitted Protests, (h) Liens
on amounts deposited in connection with obtaining worker’s compensation or
other unemployment insurance, (i) Liens on amounts deposited in the
ordinary course of business in connection with bids, tenders, sales contracts,
leases and other contractual obligations, statutory obligations, regulatory
obligations, work in progress advances and other similar obligations not
incurred in connection with the borrowing of money, (j) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (k) with respect to any
real property, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, and zoning and other land use
restrictions, leases and other title exceptions that do not materially
interfere with or impair the use or operation thereof, (l) customary
netting and setoff rights, banker’s liens and the like in favor of financial
institutions, (m) Liens on the assets of the US Loan Parties securing the
Term B Debt, (n) Liens incurred in connection with a sale and leaseback
transaction that is permitted under Section 6.4, so long as any
such Lien covers only the assets that are the subject of such sale and
leaseback transaction, (o) any license, lease or sublease to a third party
not interfering in any material respect with the business of the US Borrowers,
taken as a whole, or the Borrowers, taken as a whole, (p) Liens on fixed
assets securing acquired Indebtedness permitted by Section 6.1 in
connection with an acquisition permitted by Section 6.12 or
pursuant to an investment permitted hereby so long as such Lien covers only the
assets purchased or acquired and the proceeds thereof and secures only such
acquired Indebtedness, (q) other Liens on fixed assets, cash and Cash
Equivalents securing obligations in an aggregate amount not exceeding
$2,000,000, (r) Liens on cash and Cash Equivalents securing obligations
owing under Hedge Agreements permitted by this Agreement, (s) Liens on
assets (other than Collateral) of Loan Parties and Significant Subsidiaries
securing the Additional Permitted Debt, (t) Liens on the assets of the
Significant Subsidiaries securing Indebtedness permitted under Sections 6.1(l),
(u) Liens on the assets of Foreign Subsidiaries securing intercompany loans due
to any US Loan Party that have been pledged to Collateral Agent and (v) Liens
that are replacements of Permitted Liens to the extent that the original
Indebtedness is refinanced, renewed, or extended under Section 6.1(d) and
so long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness.

 

“Permitted Protest”
means the right of Administrative Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes,
assessments, charges or levies (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment, provided that (a) a
reserve with respect to such obligation is established on a Borrower’s or any
of its Subsidiaries’ books and records in such amount as is required under
GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Administrative Borrower or any of its Subsidiaries, as
applicable, in good faith, and (c) Administrative Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent’s Liens.

 

43

 

“Permitted Purchase
Money Indebtedness” means, as of any date of determination, Purchase Money
Indebtedness (i) at any time on or prior to December 31, 2005, in an
aggregate Dollar Equivalent principal amount outstanding at any one time not in
excess of $15,000,000, (ii) at any time after December 31, 2005 and
on or prior to December 31, 2006, in an aggregate Dollar Equivalent
principal amount outstanding at any one time not in excess of $20,000,000, and (iii) at
any time after December 31, 2006, in an aggregate Dollar Equivalent
principal amount outstanding at any one time not in excess of $25,000,000.

 

“Permitted Repayments”
means (A) payments on intercompany loans made by US Loan Parties to
Foreign Subsidiaries to the extent such payments are used to make the mandatory
prepayments due under Section 2.4(c)(i), (B) payments on
intercompany loans made by US Loan Parties to Foreign Subsidiaries to the
extent the Dollar Equivalent amount of all payments on such intercompany loans
made in reliance on this clause (B) does not exceed $2,500,000 in any
fiscal year and (C) the conversion of intercompany loans made by US Loan
Parties to Foreign Subsidiaries to equity in the applicable Foreign Subsidiary
to the extent the aggregate Dollar Equivalent amount of such intercompany loans
converted to equity does not exceed $5,000,000 in any fiscal year or
$10,000,000 during the term of this Agreement.

 

“Person” means
natural persons, corporations, limited liability companies, limited partnerships,
general partnerships, limited liability partnerships, joint ventures, trusts,
land trusts, business trusts, or other organizations, irrespective of whether
they are legal entities, and governments and agencies and political
subdivisions thereof.

 

“PPSA” means the
Personal Property Security Act of the applicable Canadian province or provinces
in respect of Canadian Borrowers, and in the Province of Quebec, means the
applicable provisions of the Civil Code of Quebec.

 

“Pre-approved Asset
Disposition Letter” means the letter of even date herewith among
Administrative Borrower, Lenders and Administrative Agent pursuant to which
Administrative Agent and Lenders have consented to a specific asset sale
pursuant to the terms of such letter.

 

“Pre-approved
Restructurings Letter” means the letter of even date herewith among
Administrative Borrower, Lenders, Term B Agent and Administrative Agent
pursuant to which Administrative Agent, Term B Agent and Lenders have consented
to certain proposed restructurings pursuant to the terms of such letter.

 

“Projections”
means Parent’s consolidated forecasted (a) balance sheets, (b) profit
and loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Parent’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share”
means, as of any date of determination:

 

44

 

(a)                                  with
respect to a Lender’s obligation to make US Advances and right to receive
payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the US Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender’s US
Revolver Commitment, by (z) the aggregate US Revolver Commitments of all
Lenders, and (ii) from and after the time that the US Revolver Commitments
have been terminated or reduced to zero, the percentage obtained by dividing
(y) the Dollar Equivalent of the aggregate outstanding principal amount of
such Lender’s US Advances by (z) the Dollar Equivalent of the aggregate
outstanding principal amount of all US Advances,

 

(b)                                 with
respect to a Lender’s obligation to make Canadian Advances and right to receive
payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the Canadian Revolver Commitments being terminated
or reduced to zero, the percentage obtained by dividing (y) such Lender’s
Canadian Revolver Commitment, by (z) the aggregate Canadian Revolver
Commitments of all Lenders, and (ii) from and after the time that the
Canadian Revolver Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the Dollar Equivalent of the aggregate
outstanding principal amount of such Lender’s Canadian Advances by (z) the
Dollar Equivalent of the aggregate outstanding principal amount of all Canadian
Advances,

 

(c)                                  with
respect to a Lender’s obligation to make European Advances and right to receive
payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the European Revolver Commitments being terminated
or reduced to zero, the percentage obtained by dividing (y) such Lender’s
European Revolver Commitment, by (z) the aggregate European Revolver
Commitments of all Lenders, and (ii) from and after the time that the
European Revolver Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the Dollar Equivalent of the aggregate
outstanding principal amount of such Lender’s European Advances by (z) the
Dollar Equivalent of the aggregate outstanding principal amount of all European
Advances,

 

(d)                                 with
respect to a Lender’s obligation to participate in US Letters of Credit, to
reimburse the US Issuing Lender, and right to receive payments of fees with
respect thereto, (i) prior to the US Revolver Commitments being terminated
or reduced to zero, the percentage obtained by dividing (y) such Lender’s
US Revolver Commitment, by (z) the aggregate US Revolver Commitments of
all Lenders, and (ii) from and after the time that the US Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the Dollar Equivalent of the aggregate outstanding principal
amount of such Lender’s US Advances by (z) the Dollar Equivalent of the
aggregate outstanding principal amount of all US Advances,

 

(e)                                  with
respect to a Lender’s obligation to participate in Canadian Letters of Credit,
to reimburse the Canadian Issuing Lender, and right to receive payments of fees
with respect thereto, (i) prior to the Canadian Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing
(y) such Lender’s Canadian Revolver Commitment, by (z) the aggregate
Canadian Revolver Commitments of all Lenders, and (ii) from and after the
time that the Canadian Revolver Commitments have been terminated

 

45

 

or reduced to
zero, the percentage obtained by dividing (y) the Dollar Equivalent of the
aggregate outstanding principal amount of such Lender’s Canadian Advances by
(z) the Dollar Equivalent of the aggregate outstanding principal amount of
all Canadian Advances,

 

(f)                                    with
respect to a Lender’s obligation to participate in European Letters of Credit,
to reimburse the European Issuing Lender, and right to receive payments of fees
with respect thereto, (i) prior to the European Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing
(y) such Lender’s European Revolver Commitment, by (z) the aggregate
European Revolver Commitments of all Lenders, and (ii) from and after the
time that the European Revolver Commitments have been terminated or reduced to
zero, the percentage obtained by dividing (y) the Dollar Equivalent of the
aggregate outstanding principal amount of such Lender’s European Advances by
(z) the Dollar Equivalent of the aggregate outstanding principal amount of
all European Advances,

 

(g)                                 with
respect to a Lender’s obligation to make the Term Loan A and right to receive
payments of interest, fees, and principal with respect thereto, (i) prior
to the making of the Term Loan A, the percentage obtained by dividing
(y) such Lender’s Term Loan A Commitment, by (z) the aggregate amount
of all Lenders’ Term Loan A Commitments, and (ii) from and after the
making of the Term Loan A, the percentage obtained by dividing (y) the
principal amount of such Lender’s portion of the Term Loan A by (z) the
principal amount of the Term Loan A, and

 

(h)                                 with
respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 15.7), the
percentage obtained by dividing (i) such Lender’s Revolver Commitment plus
the outstanding principal amount of such Lender’s portion of the Term Loan A
(or, prior to the making of the Term Loan A, such Lender’s Term Loan A
Commitment), by (ii) the aggregate amount of Revolver Commitments of all
Lenders plus the outstanding principal amount of the Term Loan A (or, prior to
the making of the Term Loan A, the aggregate amount of all Lenders’ Term Loan A
Commitments); provided, however, that in the event the Revolver
Commitments have been terminated or reduced to zero, Pro Rata Share under this
clause shall be the percentage obtained by dividing (A) the Dollar
Equivalent of the outstanding principal amount of such Lender’s Advances plus
such Lender’s ratable portion of the Risk Participation Liability with respect
to outstanding Letters of Credit plus the outstanding principal amount of such
Lender’s portion of the Term Loan A (or, prior to the making of the Term Loan
A, such Lender’s Term Loan A Commitment), by (B) the Dollar Equivalent of
the outstanding principal amount of all Advances plus the aggregate amount of
the Risk Participation Liability with respect to outstanding Letters of Credit
plus the outstanding principal amount of the Term Loan A (or, prior to the
making of the Term Loan A, the aggregate amount of all Lenders’ Term Loan A
Commitments).

 

“Protective Advances”
means US Protective Advances, Canadian Protective Advances or European
Protective Advances, as applicable.

 

“Purchase Money
Indebtedness” means Indebtedness (other than the Obligations, but including
Capitalized Lease Obligations), incurred at the time of, or within

 

46

 

45 days prior to
or after, the acquisition, construction or improvement of any fixed assets for
the purpose of financing all or any part of the acquisition, construction or
improvement cost thereof or any refinancings thereof.

 

“Qualified Cash”
means, as of any date of determination, the amount of unrestricted cash and
Cash Equivalents of Borrowers that is in Deposit Accounts or in Securities
Accounts, or any combination thereof, and which such Deposit Account or
Securities Account is the subject of a Control Agreement and is maintained by a
branch office of a bank or securities intermediary located within the United
States.

 

“Real Property”
means the parcels of owned real property identified on Schedule R-1
and any other parcels of owned real property hereafter acquired by any US
Borrower and the improvements thereto.

 

“Real Property
Collateral” means any Real Property hereafter acquired by a US Borrower
which is required pursuant to Section 5.15 to be subject to a
Mortgage.

 

“Record” means
information that is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in perceivable form.

 

“Reference Bank”
means Wells Fargo, or such other bank as Administrative Agent may from time to
time designate.

 

“Remedial Action”
means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in
the indoor or outdoor environment, (b) prevent or minimize a release or
threatened release of Hazardous Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment, (c) restore or reclaim natural resources or the environment, (d) perform
any pre-remedial studies, investigations, or post-remedial operation and
maintenance activities, or (e) conduct any other actions with respect to
Hazardous Materials authorized by Environmental Laws.

 

“Replacement Lender”
has the meaning specified therefor in Section 14.2(a).

 

“Report” has the
meaning specified therefor in Section 15.17.

 

“Required Availability”
means that the Dollar Equivalent of Excess Availability exceeds $10,000,000.

 

“Required Lenders”
means at any time, Lenders whose Pro Rata Shares of (a) the Revolver
Commitment (or, if the Revolver Commitment has been terminated or reduced to
zero, the then outstanding Revolver Usage) and (b) the outstanding
principal amount of the Term Loan A (or, prior to the making of the Term
Loan A, the aggregate amount of all Lenders’ Term Loan A Commitments),
aggregate at least 50.1%.

 

“Reserve Percentage”
means, on any day, for any Lender, the maximum percentage prescribed by the
Board of Governors of the Federal Reserve System (or any

 

47

 

successor
Governmental Authority) for determining the reserve requirements (including any
basic, supplemental, marginal, or emergency reserves) that are in effect on
such date with respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities”) of that Lender, but so long as such Lender is not required or
directed under applicable regulations to maintain such reserves, the Reserve
Percentage shall be zero.

 

“Revolver Commitment”
means, with respect to each Lender, its US Revolver Commitment, its Canadian
Revolver Commitment or European Revolver Commitment, as the context requires,
and, with respect to all Lenders, their US Revolver Commitments, Canadian
Revolver Commitments or European Revolver Commitments, as the context requires,
in each case as such Dollar amounts are set forth beside such Lender’s name
under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1.

 

“Revolver Usage”
means, as of any date of determination, the sum of (a) the Dollar
Equivalent of the principal amount of outstanding Advances, plus (b) the amount of the Letter of
Credit Usage, in each case as determined as of such date.

 

“Risk Participation
Liability” means, as to each Letter of Credit, all reimbursement
obligations of Borrowers to an Issuing Lender with respect to a Canadian L/C
Undertaking, a European L/C Undertaking or a US L/C Undertaking, consisting of (a) the
amount available to be drawn or which may become available to be drawn, (b) all
amounts that have been paid by an Issuing Lender to an Underlying Issuer to the
extent not reimbursed by Borrowers, whether by the making of an Advance or
otherwise, and (c) all accrued and unpaid interest, fees, and expenses
payable with respect thereto.

 

“SEC” means the
United States Securities and Exchange Commission and any successor thereto.

 

“Securities Account”
means a “securities account” (as that term is defined in the Code).

 

“Security Agreement”
means the US Security Agreement and each other security agreement (including,
without limitation, pledge agreements), in form and substance satisfactory to
Collateral Agent, executed and delivered by each Borrower to Collateral Agent.

 

“Settlement” has
the meaning specified therefor in Section 2.3(e)(i).

 

“Settlement Date”
has the meaning specified therefor in Section 2.3(e)(i).

 

“Significant
Subsidiary” means SITEL Iberica Teleservices, S.A. and each other
Subsidiary of Parent that is not a Loan Party, an Immaterial Subsidiary or a
Non-Loan Party Subsidiary.  The
Significant Subsidiaries on the Closing Date are identified on Schedule S-1.

 

48

 

“Solvent” means,
with respect to any Person on a particular date, that, at fair valuations, the
sum of such Person’s assets is greater than all of such Person’s debts or, with
respect to a Canadian Borrower, is not an “insolvent person” (as such term is
defined in the Bankruptcy and Insolvency Act (Canada) or a “debtor company” (as
defined in the Companies Creditors Arrangement Act (Canada)).

 

“Specified Account
Debtors” means the Account Debtors identified in that certain letter of
even date herewith among Administrative Borrower, Lenders, and Administrative
Agent pursuant to which Administrative Agent and Lenders have consented to the
designation of such Account Debtors as Specified Account Debtors.

 

“Statutory Lien
Payments” has the meaning set forth in Section 4.20.

 

“Sterling” means
the lawful currency of the United Kingdom.

 

“Stock” means all
shares, options, warrants, interests, participations, share capital or other
equivalents (regardless of how designated) of or in a Person, 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 SEC under the Exchange Act).

 

“Subsidiary” of a
Person means a corporation, partnership, limited liability company, or other
entity in which that Person directly or indirectly owns or controls the shares
of Stock having ordinary voting power to elect a majority of the board of directors
(or appoint other comparable managers) of such corporation, partnership,
limited liability company, or other entity.

 

“Swing Lenders”
means US Swing Lender, European Swing Lender and Canadian Swing Lender.

 

“Swing Loan” means
a US Swing Loan, European Swing Loan or a Canadian Swing Loan.

 

“Target” has the
meaning given to it in the definition of “Permitted Acquisition.”

 

“Taxes” has the
meaning specified therefor in Section 15.11.

 

“Term B Agent”
means Ableco Finance LLC, as agent for the lenders under the Term B Debt
Documents (and its successors and assigns).

 

“Term B Credit
Agreement” means that certain Credit Agreement dated as of the date hereof
among Parent and each of Parent’s Subsidiaries identified on the signature pages thereto
and that from time to time become parties thereto, as borrowers, the lenders party thereto as
lenders, and Term B Agent, as amended, modified, supplemented, restated,
or renewed in accordance with the terms thereof and the terms of this
Agreement.

 

49

 

“Term B Debt”
means the Indebtedness of US Loan Parties in a maximum principal amount of
$35,000,000 plus protective advances (and capitalized interest, fees, costs and
other amounts) incurred pursuant to the terms of the Term B Debt Documents.

 

“Term B Debt Documents”
means the Term B Credit Agreement and the other “Loan Documents” as such term
is defined in the Term B Credit Agreement, in each case, as amended, amended
and restated, supplemented, or modified in accordance with the terms hereof.

 

“Term Loan A”
has the meaning set forth in Section 2.2(a).

 

“Term Loan A Amount” means $20,000,000.

 

“Term Loan A
Commitment” means, with respect to each Lender, its Term Loan A Commitment,
and, with respect to all Lenders, their Term Loan A Commitments, in each case
as such Dollar amounts are set forth beside such Lender’s name under the
applicable heading on Schedule C-1 or in the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1.

 

“Total Commitment”
means, with respect to each Lender, its Total Commitment, and, with respect to
all Lenders, their Total Commitments, in each case as such Dollar amounts are
set forth beside such Lender’s name under the applicable heading on Schedule C-1
attached hereto or on the signature page of the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section 13.1.

 

“UK Borrowers”
means SITEL UK Limited and SITEL Europe Limited and each other Subsidiary of
Parent created or organized under the laws of United Kingdom or any state or
province thereof that becomes a Borrower hereunder pursuant to Section 5.15,
and “UK Borrower” means any one of them.

 

“Underlying Issuer”
means a US Underlying Issuer, a Canadian Underlying Issuer or a European
Underlying Issuer, as the case may be.

 

“Underlying Letter of
Credit” means a US Underlying Letter of Credit, a Canadian Underlying
Letter of Credit or a European Underlying Letter of Credit, as the case may be.

 

“United States”
means the United States of America.

 

“US Advances” has
the meaning specified therefor in Section 2.1(a).

 

“US Availability”
means, as of any date of determination, the amount that US Borrowers are
entitled to borrow as US Advances hereunder (after giving effect
to all then outstanding US Revolver Usage and all sublimits and reserves then
applicable hereunder).

 

50

 

“US Base Rate”
means, the rate of interest publicly announced by the US Base Rate Bank in New
York, New York as its reference rate, base rate or prime rate.  The reference rate, base rate or prime rate
is determined from time to time by the US Base Rate Bank as a means of pricing
some loans to its borrowers and neither is tied to any external rate of
interest or index nor necessarily reflects the lowest rate of interest actually
charged by the US Base Rate Bank to any particular class or category of
customers.  Each change in the US Base
Rate shall be effective from and including the date such change is publicly
announced as being effective.

 

“US Base Rate Bank”
means JPMorgan Chase Bank, N.A., its successors or any other commercial bank
designated by the Agent to the Administrative Borrower from time to time.

 

“US Borrowers”
means Parent, National Action Financial Services, Inc., a Georgia
corporation, SITEL Home Mortgage Corp., a Nebraska corporation, Financial
Insurance Services, Inc., a Nebraska corporation, SITEL International LLC,
a Delaware limited liability company, and each other Subsidiary of Parent
created or organized under the laws of the United States or any state thereof
or the District of Columbia that becomes a Borrower hereunder after the date
hereof pursuant to Section 5.15, and “US Borrower” means any
one of them.

 

“US Borrowing”
means a Borrowing hereunder consisting of US Advances made on the same day by
the Lenders (or the Fronting Lender or Administrative Agent on behalf thereof),
or by the US Swing Lender in the case of a US Swing Loan, or by Administrative
Agent in the case of a Protective Advance, in each case, to any US Borrower.

 

“US Borrowing Base”
means, as of any date of determination, the result of:

 

(a)                                  (x) 85%
of the amount of Eligible US Accounts, plus
(y) the lesser of (A) 85% of the amount of Eligible Unbilled US
Accounts and (B) $30,000,000 less the Foreign Revolver Usage outstanding
with respect to clauses (a)(i)(y) and (b)(i)(y) of the
definition of “Foreign Borrowing Base”, less
(z) the amount, if any, of the US Dilution Reserve, less

 

(b)                                 the sum of (i) the Bank Product Reserve, and (ii) the
aggregate amount of reserves, if any, established by Administrative Agent under
Section 2.1(b) with respect to US Borrowers, less

 

(c)                                  Foreign
Revolver Usage less the amount of clause (a) of the definition of “Foreign
Borrowing Base”; provided, that, such amount shall be deemed to be $0 if the
amount of clause (a) of the definition of “Foreign Borrowing Base” is
equal to or greater than the Foreign Revolver Usage.

 

“US Borrowing Base
Certificate” means a certificate substantially in the form of Exhibit B-1(A) or
any other form acceptable to Administrative Agent.

 

51

 

“US Collateral”
means all assets and interests in assets and proceeds thereof now owned or
hereafter acquired by US Loan Parties in or upon which a Lien is granted by
such US Loan Party under any of the Loan Documents.

 

“US Designated Account”
means, with respect to Dollars, the applicable Deposit Account of
Administrative Borrower identified on Schedule D-1 as the US
Designated Account for Dollars, with respect to Euro, the applicable Deposit
Account of Administrative Borrower identified on Schedule D-1 as
the US Designated Account for Euro and, with respect to Sterling, the
applicable Deposit Account of Administrative Borrower identified on Schedule D-1
as the US Designated Account for Sterling or, in each case, such other account
as Administrative Borrower may specify by notice to Administrative Agent.

 

“US Designated Account
Bank” has the meaning specified therefor in Schedule D-1 or such
other bank as Administrative Borrower may specify by notice to Administrative
Agent.

 

“US Dilution”
means, as of any date of determination, a percentage, based upon the experience
of the immediately prior 12 Fiscal Months, that is the result of dividing the
Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to US Borrowers’
Accounts during such period, by (b) US Borrowers’ gross billings with
respect to Accounts during such period.

 

“US Dilution Reserve”
means, as of any date of determination, an amount sufficient to reduce the
advance rate against Eligible US Accounts by 1 percentage point for each
percentage point by which US Dilution is in excess of 5%.

 

“US Excess
Availability” means, as of any date of determination, the amount equal to
US Availability plus Qualified Cash minus
the aggregate amount, if any, of all trade payables of US Borrowers aged in
excess of 90 days after such payables were created or aged in excess of their historical
levels with respect thereto and all book overdrafts of US Borrowers in excess
of their historical practices with respect thereto, in each case as determined
in good faith by Administrative Agent in its Permitted Discretion.

 

“US Guarantors”
means each Subsidiary of each Borrower (other than SITEL Mexico Holdings LLC, a
Nebraska limited liability company, SITMEX-USA, LLC, a Delaware limited
liability company, US Borrowers
and Immaterial Subsidiaries) created or organized under the laws of the United
States or any state thereof or the District of Columbia that becomes a US
Guarantor hereunder after the date hereof, and “US Guarantor” means any
one of them.

 

“US Guaranty”
means a general continuing guaranty executed and delivered by each US Guarantor
in favor of Administrative Agent for the benefit of the Lender Group and the
Bank Product Providers.

 

“US Issuing Lender”
means WFF or any other Lender that, at the request of Administrative Borrower
and with the consent of Administrative Agent, agrees, in such

 

52

 

Lender’s sole
discretion, to become an Issuing Lender for the purpose of issuing US L/Cs or
US L/C Undertakings pursuant to Section 2.12.

 

“US L/C” has the
meaning specified therefor in Section 2.12(a).

 

“US L/C Disbursement”
means a payment made by the US Issuing Lender pursuant to a US Letter of
Credit.

 

“US L/C Undertaking”
has the meaning specified therefor in Section 2.12(a).

 

“US Lender” means
a Lender that has an interest in the US Revolver Commitment, the Term Loan A and/or the US Revolver Usage.

 

“US Letter of Credit”
means a US L/C or a US L/C Undertaking, as the context requires.

 

“US Letter of Credit
Usage” means, as of any date of determination, the Dollar Equivalent of the
aggregate undrawn amount of all outstanding US Letters of Credit.

 

“US LIBOR Rate”
means, for each Interest Period for each LIBOR Rate Loan, the rate per annum
determined by Administrative Agent (rounded upwards, if necessary, to the next
1/100%) equal to (a) the Base LIBOR Rate for such Interest Period, divided
by (b) 100% minus the
Reserve Percentage.  The US LIBOR Rate
shall be adjusted on and as of the effective day of any change in the Reserve
Percentage.

 

“US Loan Account”
has the meaning specified therefor in Section 2.10.

 

“US Loan Parties”
means the US Borrowers and US Guarantors, and “US Loan Party” means any
one of them.

 

“US Obligations”
means (a) all loans (including the Term Loan A), US Advances, debts,
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), contingent
reimbursement obligations with respect to outstanding US Letters of Credit, premiums,
liabilities (including all amounts charged to US Loan Account pursuant hereto),
obligations (including indemnification obligations), fees (including the fees
provided for in the Fee Letter), charges, costs, Lender Group Expenses
(including any fees or expenses that accrue after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or
in part as a claim in any such Insolvency Proceeding), lease payments,
guaranties, covenants, and duties of any kind and description owing by US
Borrowers to the Lender Group pursuant to or evidenced by the Loan Documents
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all Lender
Group Expenses that US Borrowers are required to pay or reimburse by the Loan
Documents, by law, or otherwise, and (b) all Bank Product Obligations
other than Bank Product Obligations owing by Foreign Borrowers.  Any reference in the Agreement or in the

 

53

 

Loan Documents to
the Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.

 

“US Protective
Advances” has the meaning specified therefor in Section 2.3(d)(i).

 

“US Revolver
Commitment” means, with respect to each Lender, its US Revolver Commitment,
and, with respect to all Lenders, their US Revolver Commitments, in each case
as such amounts are set forth beside such Lender’s name under the applicable
heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section 13.1.

 

“US Revolver Usage”
means, as of any date of determination, the sum of (a) the Dollar
Equivalent of the principal amount of outstanding US Advances, plus (b) the amount of the US Letter
of Credit Usage, in each case as determined as of such date.

 

“US Risk Participation
Liability” means, as to each US Letter of Credit, all reimbursement
obligations of US Borrowers to the US Issuing Lender with respect to a US L/C
Undertaking, consisting of (a) the amount available to be drawn or which
may become available to be drawn, (b) all amounts that have been paid by
the US Issuing Lender to the US Underlying Issuer to the extent not reimbursed
by US Borrowers, whether by the making of a US Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.

 

“US Security Agreement”
means the security agreement, substantially in the form of Exhibit U-1
hereto, executed and delivered by each US Borrower to Collateral Agent.

 

“US Swing Lender”
means WFF or any other Lender that, at the request of Administrative Borrower
and with the consent of Administrative Agent agrees, in such Lender’s sole
discretion, to become the US Swing Lender under Section 2.3(b).

 

“US Swing Loan”
has the meaning specified therefor in Section 2.3(b).

 

“US Underlying Issuer”
means a third Person which is the beneficiary of a US L/C Undertaking and which
has issued a letter of credit at the request of the US Issuing Lender for the
benefit of one or more US Borrowers.

 

“US Underlying Letter
of Credit” means a letter of credit that has been issued by a US Underlying
Issuer.

 

“Voidable Transfer”
has the meaning specified therefor in Section 16.7.

 

“Wells Fargo”
means Wells Fargo Bank, National Association, a national banking association.

 

54

 

“Week” means a
period of five consecutive Business Days.

 

“WF Canada” means
Wells Fargo Financial Corporation Canada, a Nova Scotia unlimited liability
company.

 

“WFF” means Wells
Fargo Foothill, Inc., a California corporation.

 

55Exhibit 10.2

 

[EXECUTION COPY]

 

 

CREDIT

 

AGREEMENT

 

by and among

 

 

SITEL CORPORATION

 

 

and

 

EACH OF ITS SUBSIDIARIES THAT
ARE SIGNATORIES HERETO

 

 

as Borrowers,

 

 

THE LENDERS THAT ARE
SIGNATORIES HERETO

 

as the Lenders,

 

and

 

ABLECO FINANCE LLC

 

as the Arranger, Administrative Agent 

and Collateral Agent

 

 

Dated as of August 19,
2005

 

 

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINITIONS AND CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Definitions

  	
   

  
	
   

  	
  1.2.

  	
  Accounting Terms

  	
   

  
	
   

  	
  1.3.

  	
  Code

  	
   

  
	
   

  	
  1.4.

  	
  Construction

  	
   

  
	
   

  	
  1.5.

  	
  Schedules and Exhibits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  LOAN AND TERMS OF PAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Term Loan B

  	
   

  
	
   

  	
  2.2.

  	
  Borrowing Procedures

  	
   

  
	
   

  	
  2.3.

  	
  Protective Advances

  	
   

  
	
   

  	
  2.4.

  	
  Payments

  	
   

  
	
   

  	
  2.5.

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  2.6.

  	
  Interest Rates: Rates,
  Payments, and Calculations

  	
   

  
	
   

  	
  2.7.

  	
  Cash Management

  	
   

  
	
   

  	
  2.8.

  	
  Crediting Payments;
  Clearance Charge

  	
   

  
	
   

  	
  2.9.

  	
  Designated Account

  	
   

  
	
   

  	
  2.10.

  	
  Maintenance of Loan Accounts;
  Statements of Obligations

  	
   

  
	
   

  	
  2.11.

  	
  Fees

  	
   

  
	
   

  	
  2.12.

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  2.13.

  	
  LIBOR Option

  	
   

  
	
   

  	
  2.14.

  	
  Capital Requirements

  	
   

  
	
   

  	
  2.15.

  	
  Joint and Several Liability
  of Borrowers

  	
   

  
	
   

  	
  2.16.

  	
  Registration of Notes

  	
   

  
	
   

  	
  2.17.

  	
  Securitization

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CONDITIONS; TERM OF AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Conditions Precedent to
  Effectiveness

  	
   

  
	
   

  	
  3.2.

  	
  Conditions Precedent to
  Extension of Term Loan B

  	
   

  
	
   

  	
  3.3.

  	
  Term

  	
   

  
	
   

  	
  3.4.

  	
  Effect of Termination

  	
   

  
	
   

  	
  3.5.

  	
  Early Termination by
  Borrowers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  No Encumbrances

  	
   

  
	
   

  	
  4.2.

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  4.3.

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  4.4.

  	
  Equipment

  	
   

  
	
   

  	
  4.5.

  	
  Location of Inventory and Equipment

  	
   

  
	
   

  	
  4.6.

  	
  Inventory Records

  	
   

  
	
   

  	
  4.7.

  	
  State of Incorporation;
  Location of Chief Executive Office; Organizational Identification Number;
  Commercial Tort Claims

  	
   

  

 

ii

 

	
   

  	
  4.8.

  	
  Due Organization and
  Qualification; Subsidiaries

  	
   

  
	
   

  	
  4.9.

  	
  Due Authorization; No
  Conflict

  	
   

  
	
   

  	
  4.10.

  	
  Litigation

  	
   

  
	
   

  	
  4.11.

  	
  No Material Adverse Change

  	
   

  
	
   

  	
  4.12.

  	
  Fraudulent Transfer

  	
   

  
	
   

  	
  4.13.

  	
  Employee Benefits. None of
  Loan Parties, WFF Foreign Loan Parties, the Significant Subsidiaries, or any
  of their ERISA Affiliates maintains or contributes to any Benefit Plan

  	
   

  
	
   

  	
  4.14.

  	
  Environmental Condition

  	
   

  
	
   

  	
  4.15.

  	
  Intellectual Property

  	
   

  
	
   

  	
  4.16.

  	
  Leases

  	
   

  
	
   

  	
  4.17.

  	
  Deposit Accounts and Securities
  Accounts

  	
   

  
	
   

  	
  4.18.

  	
  Complete Disclosure

  	
   

  
	
   

  	
  4.19.

  	
  Indebtedness

  	
   

  
	
   

  	
  4.20.

  	
  WFF Loan Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Accounting System

  	
   

  
	
   

  	
  5.2.

  	
  Collateral Reporting

  	
   

  
	
   

  	
  5.3.

  	
  Financial Statements,
  Reports, Certificates

  	
   

  
	
   

  	
  5.4.

  	
  Inspection

  	
   

  
	
   

  	
  5.5.

  	
  Maintenance of Properties

  	
   

  
	
   

  	
  5.6.

  	
  Taxes

  	
   

  
	
   

  	
  5.7.

  	
  Insurance

  	
   

  
	
   

  	
  5.8.

  	
  Location of Inventory and
  Equipment

  	
   

  
	
   

  	
  5.9.

  	
  Compliance with Laws

  	
   

  
	
   

  	
  5.10.

  	
  Leases

  	
   

  
	
   

  	
  5.11.

  	
  Existence

  	
   

  
	
   

  	
  5.12.

  	
  Environmental

  	
   

  
	
   

  	
  5.13.

  	
  Disclosure Updates

  	
   

  
	
   

  	
  5.14.

  	
  Control Agreements

  	
   

  
	
   

  	
  5.15.

  	
  Formation
  of Subsidiaries; Further Assurances

  	
   

  
	
   

  	
  5.16.

  	
  WFF Loan
  Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Indebtedness

  	
   

  
	
   

  	
  6.2.

  	
  Liens

  	
   

  
	
   

  	
  6.3.

  	
  Restrictions
  on Fundamental Changes

  	
   

  
	
   

  	
  6.4.

  	
  Disposal of Assets

  	
   

  
	
   

  	
  6.5.

  	
  Change Name

  	
   

  
	
   

  	
  6.6.

  	
  Nature of Business

  	
   

  
	
   

  	
  6.7.

  	
  Prepayments
  and Amendments

  	
   

  
	
   

  	
  6.8.

  	
  Change of Control

  	
   

  
	
   

  	
  6.9.

  	
  [Intentionally
  Omitted]

  	
   

  

 

iii

 

	
   

  	
  6.10.

  	
  Distributions

  	
   

  
	
   

  	
  6.11.

  	
  Accounting Methods

  	
   

  
	
   

  	
  6.12.

  	
  Investments

  	
   

  
	
   

  	
  6.13.

  	
  Transactions
  with Affiliates

  	
   

  
	
   

  	
  6.14.

  	
  Use of Proceeds

  	
   

  
	
   

  	
  6.15.

  	
  SITEL
  Mexico Holdings LLC and SITMEX-USA, LLC

  	
   

  
	
   

  	
  6.16.

  	
  Non-Loan
  Party Subsidiaries; Immaterial Subsidiaries

  	
   

  
	
   

  	
  6.17.

  	
  Financial Covenants

  	
   

  
	
   

  	
  6.18.

  	
  Negative
  Covenant Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  THE LENDER
  GROUP’S RIGHTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Rights and Remedies

  	
   

  
	
   

  	
  8.2.

  	
  Remedies Cumulative

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TAXES AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  WAIVERS;
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Demand; Protest; etc.

  	
   

  
	
   

  	
  10.2.

  	
  The Lender
  Group’s Liability for Collateral

  	
   

  
	
   

  	
  10.3.

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  CHOICE OF
  LAW AND VENUE; JURY TRIAL WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS; SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  13.1.

  	
  Assignments
  and Participations

  	
   

  
	
   

  	
  13.2.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  AMENDMENTS; WAIVERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1.

  	
  Amendments and
  Waivers

  	
   

  
	
   

  	
  14.2.

  	
  Replacement
  of Holdout Lender

  	
   

  
	
   

  	
  14.3.

  	
  No Waivers;
  Cumulative Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  AGENT; THE LENDER
  GROUP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  15.1.

  	
  Appointment
  and Authorization of Agent

  	
   

  
	
   

  	
  15.2.

  	
  Delegation of
  Duties

  	
   

  
	
   

  	
  15.3.

  	
  Liability of Agent

  	
   

  
	
   

  	
  15.4.

  	
  Reliance by Agent

  	
   

  
	
   

  	
  15.5.

  	
  Notice of
  Default or Event of Default

  	
   

  
	
   

  	
  15.6.

  	
  Credit Decision

  	
   

  
	
   

  	
  15.7.

  	
  Costs and
  Expenses; Indemnification

  	
   

  
	
   

  	
  15.8.

  	
  Agent in
  Individual Capacity

  	
   

  
	
   

  	
  15.9.

  	
  Successor Agent

  	
   

  
	
   

  	
  15.10.

  	
  Lender in
  Individual Capacity

  	
   

  

 

iv

 

	
   

  	
  15.11.

  	
  Withholding Taxes

  	
   

  
	
   

  	
  15.12.

  	
  Collateral Matters

  	
   

  
	
   

  	
  15.13.

  	
  Restrictions
  on Actions by Lenders; Sharing of Payments

  	
   

  
	
   

  	
  15.14.

  	
  Agency for
  Perfection

  	
   

  
	
   

  	
  15.15.

  	
  Payments by
  Agent to the Lenders

  	
   

  
	
   

  	
  15.16.

  	
  Concerning
  the Collateral and Related Loan Documents

  	
   

  
	
   

  	
  15.17.

  	
  Field
  Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
  Other Reports and Information

  	
   

  
	
   

  	
  15.18.

  	
  Several
  Obligations; No Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  16.1.

  	
  Intentionally Omitted

  	
   

  
	
   

  	
  16.2.

  	
  Effectiveness

  	
   

  
	
   

  	
  16.3.

  	
  Section Headings

  	
   

  
	
   

  	
  16.4.

  	
  Interpretation

  	
   

  
	
   

  	
  16.5.

  	
  Severability
  of Provisions

  	
   

  
	
   

  	
  16.6.

  	
  Counterparts;
  Electronic Execution

  	
   

  
	
   

  	
  16.7.

  	
  Revival and
  Reinstatement of Obligations

  	
   

  
	
   

  	
  16.8.

  	
  Confidentiality

  	
   

  
	
   

  	
  16.9.

  	
  Integration

  	
   

  
	
   

  	
  16.10.

  	
  Parent as
  Administrative Agent for Borrowers

  	
   

  

 

v

 

EXHIBITS AND SCHEDULES

 

	
  Exhibit A-1

  	
   

  	
  Form of
  Assignment and Acceptance

  	
   

  
	
  Exhibit C-1

  	
   

  	
  Form of
  Compliance Certificate

  	
   

  
	
  Exhibit L-1

  	
   

  	
  Form of
  LIBOR Notice

  	
   

  
	
  Exhibit U-1

  	
   

  	
  Form of
  Security Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule A-1

  	
   

  	
  Agent’s
  Account

  	
   

  
	
  Schedule C-1

  	
   

  	
  Commitments

  	
   

  
	
  Schedule D-1

  	
   

  	
  Designated
  Account

  	
   

  
	
  Schedule I-1

  	
   

  	
  Immaterial
  Subsidiaries

  	
   

  
	
  Schedule N-1

  	
   

  	
  Non-Loan
  Party Subsidiaries

  	
   

  
	
  Schedule P-1

  	
   

  	
  Permitted
  Liens

  	
   

  
	
  Schedule R-1

  	
   

  	
  Real
  Property

  	
   

  
	
  Schedule S-1

  	
   

  	
  Significant
  Subsidiaries

  	
   

  
	
  Schedule 1.1

  	
   

  	
  Definitions

  	
   

  
	
  Schedule 2.7(a)

  	
   

  	
  Cash
  Management Banks

  	
   

  
	
  Schedule 3.1

  	
   

  	
  Conditions
  Precedent

  	
   

  
	
  Schedule 4.5

  	
   

  	
  Locations
  of Inventory and Equipment

  	
   

  
	
  Schedule 4.7(a)

  	
   

  	
  States
  of Organization

  	
   

  
	
  Schedule 4.7(b)

  	
   

  	
  Chief
  Executive Offices

  	
   

  
	
  Schedule 4.7(c)

  	
   

  	
  Organizational
  Identification Numbers

  	
   

  
	
  Schedule 4.7(d)

  	
   

  	
  Commercial
  Tort Claims

  	
   

  
	
  Schedule 4.8(b)

  	
   

  	
  Capitalization
  of Borrowers

  	
   

  
	
  Schedule 4.8(c)

  	
   

  	
  Capitalization
  of Borrowers’ Subsidiaries

  	
   

  
	
  Schedule 4.10

  	
   

  	
  Litigation

  	
   

  
	
  Schedule 4.14

  	
   

  	
  Environmental
  Matters

  	
   

  
	
  Schedule 4.15

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Schedule 4.17

  	
   

  	
  Deposit
  Accounts and Securities Accounts

  	
   

  
	
  Schedule 4.19

  	
   

  	
  Permitted
  Indebtedness

  	
   

  
	
  Schedule 5.2

  	
   

  	
  Collateral
  Reporting

  	
   

  
	
  Schedule 5.3

  	
   

  	
  Financial
  Statements, Reports, Certificates

  	
   

  
	
  Schedule 6.12

  	
   

  	
  Investments

  	
   

  
	
  Schedule 6.13

  	
   

  	
  Transactions
  with Affiliates

  	
   

  

 

 

CREDIT
AGREEMENT

 

THIS
CREDIT AGREEMENT (this “Agreement”), is entered into
as of August 19, 2005 by and among the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
permitted assigns, are referred to hereinafter each individually as a “Lender”
and collectively as the “Lenders”), and ABLECO FINANCE LLC, a Delaware limited liability company, as
the arranger, administrative agent for the Lenders and collateral agent for the
Lender Group (in such capacities, together with its successors and assigns in
such capacities, the “Agent”), and SITEL
CORPORATION, a Minnesota corporation (“Parent”), and each of
Parent’s Subsidiaries identified on the signature pages hereof and that
from time to time become parties to this Agreement (such Subsidiaries, together
with Parent, are referred to hereinafter each individually as a “Borrower”,
and collectively, as the “Borrowers”).

 

The parties agree as
follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1.                            Definitions.

 

Capitalized terms used in
this Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2.                            Accounting Terms.

 

All accounting terms not
specifically defined herein shall be construed in accordance with GAAP;
provided, that if at any time any change in GAAP or the application thereof
would affect the computation of any financial ratio or financial requirement
set forth in any Loan Document and the Administrative Borrower notifies the
Agent that the Administrative Borrower requests an amendment of such provision
to eliminate the effect of such change occurring after the date hereof in GAAP
or the application thereof (or if the Agent notifies the Administrative
Borrower that the Required Lenders request an amendment of any provision for
such purpose), regardless of whether such notice is given before or after such
change, the Agent, the Lenders and Borrowers shall negotiate in good faith to
amend such provision to preserve the original intent thereof in light of such
change (subject to the approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP as
in effect and as applied prior to such change therein and (ii) Borrowers
shall provide to the Agent and the Lenders financial statements and other
documents required under this Agreement which include a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP or the application thereof.  When used herein, the term “financial
statements” shall include the notes and schedules thereto.  Whenever the term “Borrowers” or the term “Parent”
is used in respect of a financial covenant or a related definition, it shall be
understood to mean Parent and its Subsidiaries on a consolidated basis unless
the context clearly requires otherwise.

 

 

1.3.                            Code.

 

Any terms used in this
Agreement that are defined in the Code shall be construed and defined as set
forth in the Code unless otherwise defined herein, provided, however,
that to the extent that the Code is used to define any term herein and such
term is defined differently in different Articles of the Code, the definition
of such term contained in Article 9 of the Code shall govern.

 

1.4.                            Construction.

 

Unless the context of
this Agreement or any other Loan Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.”  The
words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement or any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular provision of
this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and
exhibit references herein are to this Agreement unless otherwise
specified.  Any reference in this
Agreement or in the other Loan Documents to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  Any reference herein to the satisfaction or
payment or repayment in full of the Obligations shall mean the payment or
repayment in full in cash (or collateralization in accordance with the terms
hereof) of all Obligations other than contingent indemnification
Obligations.  Any reference herein to any
Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein
or in the other Loan Documents shall be satisfied by the transmission of a Record
and any Record transmitted shall constitute a representation and warranty as to
the accuracy and completeness of the information contained therein.

 

1.5.                            Schedules and Exhibits.

 

All of the schedules and
exhibits attached to this Agreement shall be deemed incorporated herein by
reference.

 

2.                                      LOAN AND TERMS OF PAYMENT.

 

2.1.                            Term Loan B.

 

(a)          Subject to the terms and conditions of Section 3.2
of this Agreement and the prior or contemporaneous funding of the WFF Term Loan
A, within 35 days following the Closing Date each Lender agrees (severally, not
jointly or jointly and severally) to make

 

2

 

in one
draw term loans (collectively, the “Term Loan B”) to Borrowers in an
amount equal to such Lender’s Pro Rata Share of the Term Loan B Amount.

 

Except as provided in Section 2.4(c) hereof
and except in connection with the repayment of all of the Obligations and the
termination of this Agreement, the Borrowers may, at any time and from time to
time, upon at least 5 Business Days’ prior written notice to Agent, prepay the
principal amount of the Term Loan B in whole or in part (each an “Optional
Prepayment”); provided that (i) any
such partial prepayment shall be in an amount equal to $5,000,000 or a higher
integral multiple of $1,000,000 and (ii) prior to the Optional Prepayment
of all of the Term Loan B, the Administrative Borrower shall furnish evidence
to the Agent, in form and substance reasonably satisfactory to the Agent, that
such Optional Prepayment is not prohibited under the WFF Credit Agreement.  The outstanding unpaid principal balance and
all accrued and unpaid interest under the Term Loan B shall be due and payable
on the date of termination of this Agreement, whether by its terms, by
prepayment, or by acceleration.  All
amounts outstanding under the Term Loan B shall constitute Obligations.

 

(b)         Once any portion of the Term Loan B has been paid or
prepaid, it may not be reborrowed.

 

(c)          Amounts borrowed pursuant to this Section 2.2
shall be denominated in Dollars.

 

2.2.                            Borrowing Procedures.

 

(a)          Procedure for Borrowing.  The Borrowing of the Term Loan B shall be made by an
irrevocable written request by an Authorized Person delivered to Agent.  Unless Administrative Borrower elects such
Borrowing to be a LIBOR Rate Loan pursuant to Section 2.13(b), such notice
must be received by Agent no later than 1:00 p.m. (New York time) on the
Business Day prior to the requested Funding Date specifying the requested
Funding Date, which shall be a Business Day; provided, however,
that if Administrative Borrower requests that such Borrowing be a LIBOR Rate
Loan, such notice must be received by Agent no later than 2:00 p.m. (New
York time) at least 3 Business Days prior to the requested Funding Date.  At Agent’s election, in lieu of delivering
the above-described written request, any Authorized Person may give Agent
telephonic notice of such request by the required time.  In such circumstances, Borrowers agree that
any such telephonic notice will be confirmed in writing within 24 hours of the
giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request.

 

(b)         Making of Loans.

 

(i)                                     Promptly
after receipt of a request for the Borrowing pursuant to Section 2.2(a),
Agent shall notify the Lenders, not later than 4:00 p.m. (New York time)
on the Business Day immediately preceding the Funding Date by telecopy,
telephone or other similar form of transmission, of the requested Borrowing
(provided, that notice of a

 

3

 

requested LIBOR Rate Loan shall be provided as set
forth in Section 2.13(b)). 
Each Lender shall make the amount of such Lender’s Pro Rata Share of the
requested Borrowing available to the Agent in immediately available funds to
the Agent’s Account, not later than 1:00 p.m. (New York time) on the
Funding Date applicable thereto.  After
Agent’s receipt of the proceeds of the Term Loan B, Agent shall promptly make
the proceeds thereof available to the Administrative Borrower, for the benefit
of the Borrowers, on the Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to the Designated Account; provided,
however, that Agent shall not request any Lender to make, and no Lender
shall have the obligation to make, the Term Loan B if Agent shall have actual
knowledge that one or more of the applicable conditions set forth in Section 3.1
or 3.2 are required to, but will not, be satisfied on the Funding Date
unless such condition has been waived.

 

(ii)                                  Unless
Agent receives notice from a Lender prior to 12:00 noon (New York time) on the
date of the Borrowing that such Lender will not make available as and when
required hereunder to Agent for the account of the Borrowers the amount of that
Lender’s Pro Rata Share of the Term Loan B, Agent may assume that each Lender
has made or will make such amount available to Agent in immediately available
funds on the Funding Date and the Agent may (but shall not be required), in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount.  If and to the
extent any Lender shall not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances has made available
to Borrowers such amount, that Lender shall on the Business Day following the
Funding Date make such amount available to the Agent, together with interest at
the Defaulting Lender Rate for each day during such period.  A notice submitted by Agent to any Lender
with respect to amounts owing under this subsection shall be conclusive
absent manifest error.  If such amount is
so made available, such payment to Agent shall constitute such Lender’s portion
of the Term Loan B on the date of Borrowing for all purposes of this
Agreement.  If such amount is not made
available to Agent on the Business Day following the Funding Date, Agent will
notify Administrative Borrower of such failure to fund and, upon demand by Agent,
Borrowers shall pay such amount to Agent for Agent’s account, together with
interest thereon for each day elapsed since the date of the Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Term
Loan B.  The failure of any Lender to make
its portion of the Term Loan B on the Funding Date will not relieve any other
Lender of any obligation hereunder to make its portion of the Term Loan B on
the Funding Date, but no Lender shall be responsible for the failure of any
other Lender to make the portion of the Term Loan B to be made by such Lender
on the Funding Date.

 

2.3.                            Protective Advances.

 

(a)          Agent hereby is authorized by Borrowers and the
Lenders, from time to time in Agent’s sole discretion, after the occurrence and
during the continuance of a Default or an Event of Default, to make advances to
Borrowers on behalf of the Lenders that Agent, in its Permitted Discretion,
deems necessary or desirable (1) to preserve or protect the Collateral, or
any portion thereof, (2) to enhance the likelihood of repayment of the

 

4

 

Obligations,
or (3) to pay any other amount chargeable to Borrowers pursuant to the
terms of this Agreement, including Lender Group Expenses and the costs, fees,
and expenses described in Section 10 (any of the advances described
in this Section 2.3(a) shall be referred to as “Protective
Advances”).

 

(b)         All payments on the Protective Advances shall be
payable to Agent solely for its own account. 
The Protective Advances shall be repayable on demand, secured by the
Agent’s Liens, constitute Obligations and bear interest at the rate applicable
from time to time to Base Rate Loans. 
The provisions of this Section 2.3 are for the exclusive
benefit of the Agent and the Lenders and are not intended to benefit any
Borrower in any way.

 

(c)          Lenders’ Failure to Perform.  The Term Loan B shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make the Term Loan B (or other extension of credit) hereunder,
nor shall any Commitment of any Lender be increased or decreased as a result of
any failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.

 

2.4.                            Payments.

 

(a)          Payments by Borrowers.  Except as otherwise expressly provided herein, all
payments by Borrowers shall be made to the Agent’s Account for the account of
the Lender Group and shall be made in immediately available funds, no later
than 2:00 p.m. (New York time) on the date specified herein.  Any payment received by the Agent later than
2:00 p.m. (New York time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day. 
If any payment hereunder becomes due and payable on a day other than a
Business Day, except to the extent the amount thereof is charged to the Loan
Account pursuant to the terms of this Agreement on or as of such due date, the
due date of such payment shall be extended to the next succeeding Business Day.

 

(b)         Apportionment and Application.

 

(i)                                     Except
as otherwise provided in the Loan Documents, aggregate principal and interest
payments shall be apportioned ratably among the Lenders (according to the
unpaid principal balance of the Obligations to which such payments relate held
by each Lender) and payments of fees and expenses (other than fees or expenses
that are for the Agent’s separate account, after giving effect to any
agreements between the Agent and individual Lenders) shall be apportioned
ratably among the Lenders.  Except as
otherwise specifically provided in paragraph (b)(iii) below or Section 2.4(c) or
(d), all proceeds of Collateral and payments by any Loan Party received by
Agent shall be applied, subject to the Intercreditor Agreement, in the order of
payment set forth below.

 

5

 

Except
as set forth above and subject to the terms of the Intercreditor Agreement, all
proceeds of Collateral owned by any Loan Party and payments by any Loan Party
shall be applied in the following order of payment:

 

(1)                                  first,
ratably to pay any Lender Group Expenses payable by the Loan Parties then due
to Agent or any of the Lenders under the Loan Documents, until paid in full,

 

(2)                                  second,
ratably to pay any fees or premiums payable by Loan Parties then due to Agent
(for its separate account, after giving effect to any agreements between Agent
and individual Lenders) or any of the Lenders under the Loan Documents until
paid in full,

 

(3)                                  third,
to pay interest due in respect of all Protective Advances until paid in full,

 

(4)                                  fourth,  ratably to pay interest due in respect of the
Term Loan B until paid in full,

 

(5)                                  fifth,
to pay the principal of all Protective Advances until paid in full,

 

(6)                                  sixth,
ratably to pay all principal amounts then due and payable (other than as a
result of an acceleration thereof) with respect to the Term Loan B until paid
in full,

 

(7)                                  seventh,
if an Event of Default has occurred and
is continuing, to pay the outstanding principal balance of Term Loan B until
Term Loan B is paid in full,

 

(8)                                  eighth,
if an Event of Default has occurred and is continuing, to pay any other
Obligations, and

 

(9)                                  ninth,
to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under Applicable Law.

 

(ii)                                  The
Agent promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be
entitled to receive.

 

(iii)                               In
each instance, so long as no Event of Default has occurred and is continuing,
the order of payment provisions of this Section 2.4(b) shall
not apply to any payment made by any Loan Party to Agent and specified by such
Loan Party to be for the payment of specific Obligations then due and payable
(or prepayable) under any provision of this Agreement.

 

6

 

(iv)                              For purposes of the foregoing, “paid in full”
means payment of all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, whether or not any of the foregoing would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.

 

(v)                                 In
the event of a direct conflict between the priority provisions of this Section 2.4
and other provisions contained in any other Loan Document, it is the intention
of the parties hereto that such priority provisions in such documents shall be
read together and construed, to the fullest extent possible, to be in concert
with each other.  In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.4 shall control and govern.

 

(c)          Mandatory Prepayments.

 

(i)                                     Within
5 days after delivery to Agent of the audited annual financial statements
pursuant to Section 5.3 with respect to any fiscal year, commencing
with the delivery to Agent of the financial statements for the fiscal year
ended December 31, 2005 or, if such financial statements are not delivered
to Agent on or prior to the date such statements are required to be delivered
pursuant to Section 5.3, 5 days after the date such statements are
required to be delivered to Agent pursuant to Section 5.3,
Borrowers shall (unless the obligation to make such payment of the Term Loan B
is waived in writing by the Required Lenders, or the obligation to make such
payment of the WFF Term Loan A is waived under the WFF Credit Agreement, in
each case, prior to the date on which such payment is required to be made)
prepay the outstanding principal of the WFF Term Loan A and the Term Loan B in
an aggregate amount equal to 50% of the Excess Cash Flow of Administrative
Borrower and its Subsidiaries for such fiscal year (or with respect to the
fiscal year ended December 31, 2005, for the period commencing on August 1,
2005 and ending on the last day of such fiscal year), such prepayment to be
applied to the outstanding WFF Term Loan A and Term Loan B in accordance with
clause (d)(i) below.

 

(ii)                                  Within
three Business Days following the consummation of any voluntary or involuntary
sale or disposition by any Loan Party of property or assets (other than sales
or dispositions described in clauses (b), (c), (d), (f), (g), (i), (j), (k),
(l), or (n) of the definition of “Permitted Dispositions”), Borrowers shall
(unless the obligation to make such payment of the Obligations is waived in
writing by the Required Lenders, or the obligation to make such payment of the
WFF Obligations is waived under the WFF Credit Agreement, in each case, prior
to the date on which such payment is required to be made) prepay the
outstanding principal of the Obligations and the WFF Obligations in accordance
with clause (d)(ii) below in an aggregate amount equal to 100% of the
Net Cash Proceeds received by such Person in connection with such sale or
disposition but only to the extent that the Dollar Equivalent of the aggregate
amount of Net Cash Proceeds received by the Loan Parties (and not applied as a
prepayment of the Obligations or the WFF Obligations) for all such sales or
dispositions shall exceed $1,000,000 in any fiscal year.  Nothing

 

7

 

contained in this subclause (ii) shall permit any
Loan Party to sell or otherwise dispose of any property or assets other than in
accordance with Section 6.4.

 

(iii)                               Within
three Business Days following the receipt by any Loan Party of any Extraordinary
Receipts, Borrowers shall (unless the obligation to make such payment of the
Obligations is waived in writing by the Required Lenders, or the obligation to
make such payment of the WFF Obligations is waived under the WFF Credit
Agreement, in each case, prior to the date on which such payment is required to
be made) prepay the outstanding principal of the Obligations and WFF
Obligations in accordance with clause (d)(ii) below in an aggregate amount
equal to 100% of such Extraordinary Receipts, net of any amounts payable by
such Person as a result of such event and of any taxes, fees payable to Persons
that are not Affiliates of any Loan Party or reasonable expenses incurred in
collecting such Extraordinary Receipts, but only to the extent that the Dollar Equivalent
of the aggregate amount of such net Extraordinary Receipts received by the Loan
Parties (and not applied as a prepayment of the principal of the Obligations or
the WFF Obligations) for any single or related series of Extraordinary Receipts
shall exceed $75,000 or for all such Extraordinary Receipts shall exceed
$750,000 in any fiscal year.

 

(iv)                              Within
three Business Days following the sale, issuance or incurrence by any Loan
Party of any Stock or Indebtedness (other than (i) Indebtedness permitted
under Section 6.1, (ii) Stock issued by any Loan Party on or
before the Closing Date, (iii) Stock issued pursuant to a stock or option
plan to any officer, independent contractor in a manner consistent with
historical practices, employee or director of Administrative Borrower or any of
its Subsidiaries, (iv) Stock issued upon exercise of any Stock referred to
in clause (iii), and (v) Stock issued to any Loan Party or WFF Foreign
Loan Party), Borrowers shall (unless the obligation to make such payment of the
Obligations is waived in writing by the Required Lenders, or the obligation to
make such payment of the WFF Obligations is waived under the WFF Credit
Agreement, in each case, prior to the date on which such payment is required to
be made) prepay the outstanding principal of the Obligations and the WFF
Obligations in accordance with clause (d)(iii) in an aggregate amount
equal to (A) 50% of the Net Cash Proceeds received by such Loan Party in
connection with such sale, issuance, or incurrence until the aggregate amount
of Net Cash Proceeds received by Loan Parties in connection with all such
sales, issuances, and incurrences after the Closing Date is greater than
$5,000,000 and (B) 100% of the Net Cash Proceeds received by such Loan
Party in connection with such sale, issuance, or incurrence after the aggregate
amount of Net Cash Proceeds received by Loan Parties in connection with all
such sales, issuances, and incurrences after the Closing Date is greater than
$5,000,000.

 

(v)                                 In
the event (A) the sum of the WFF Revolver Usage (after giving effect to
any repayment or prepayment of the WFF Advances made on or prior to the
applicable date of determination but excluding the WFF Letter of Credit Usage
cash collateralized in an amount up to 105% of such WFF Letter of Credit Usage)
and the outstanding principal balance of the WFF Term Loan A and the Term Loan
B at any time exceeds 2.75 times the amount of EBITDA for the most recently
ended 12 month period or (B) the sum of the WFF Revolver Usage (after
giving effect to any repayment or prepayment

 

8

 

of the WFF Advances made on or prior to the applicable
date of determination but excluding the WFF Letter of Credit Usage cash
collateralized in an amount up to 105% of such WFF Letter of Credit Usage), the
outstanding principal balance of the WFF Term Loan A and the Term Loan B and
the aggregate principal amount of all other Indebtedness (other than cash
collateralized letters of credit) of Parent and its Subsidiaries outstanding as
of such date in the amount that would be reflected as debt on a balance sheet
prepared as of such date on a consolidated basis in accordance with GAAP at any
time exceeds 3.0 times the amount of EBITDA for the most recently ended 12
month period, then Borrowers (unless the obligation to make such payment of the
Obligations is waived in writing by the Required Lenders, or the obligation to
make such payment of the WFF Obligations is waived under the WFF Credit
Agreement, in each case, prior to the date on which such payment is required to
be made) shall prepay the outstanding Obligations and WFF Obligations in
accordance with clause (d)(iv) below in an aggregate amount equal to the
greater of the excess resulting from Clause (A) above or the excess
resulting from Clause (B) above.

 

(d)         Application of Payments.

 

(i)                                     Each
prepayment pursuant to subclause (c)(i) above (Excess Cash Flow) shall first,
unless the prepayment requirement shall have been waived thereunder, be paid to
the Senior Administrative Agent for application to the outstanding principal
amount of WFF Term Loan A, until paid in full, and second, be
applied to the outstanding principal amount of the Term Loan B, until paid in
full; provided, that if an Event of Default shall have occurred and be
continuing, any payment to be paid to Agent for application to the outstanding
principal amount of the Term Loan B shall, at Agent’s option, be applied in the
manner set forth in Section 2.4(b)(i).

 

(ii)                                  Each
prepayment pursuant to subclauses (c)(ii) above (Sales and Dispositions)
and (c)(iii) above (Extraordinary Receipts), shall be applied as follows:

 

(1)                                  if
the proceeds are from any sale or disposition of any Accounts of a Loan Party
or otherwise constitute proceeds of Accounts of a Loan Party, such proceeds
shall be applied, first, to the outstanding principal amount of the WFF
US Advances, until paid in full, second, to cash collateralize the WFF
US Letters of Credit in an amount equal to 105% at the then extant WFF US
Letter of Credit Usage, until cash collateralized in full, third, to the
outstanding principal amount of WFF Term Loan A, until paid in full,
unless, in the cases of clauses first, second and third,
the prepayment requirement shall have been waived under the WFF Loan Documents,
and fourth, to the outstanding principal amount of the Term Loan B,
until paid in full; provided, that, none of such proceeds shall be applied to
cash collateralize the WFF US Letters of Credit pursuant to clause second
above to the extent WFF US Availability, after giving effect to such sale or
disposition, would be greater than $0 notwithstanding the failure to cash
collateralize such WFF US Letters of Credit.

 

9

 

(2)                                  subject
to clause (3) below, if the proceeds are from the sale or disposition of
any other assets of a Loan Party not described in clause (1) above or any
insurance policy or condemnation award of a Loan Party, such proceeds shall be,
first, unless the prepayment requirement shall have been waived under
the WFF Loan Documents, paid to the Senior Administrative Agent for application
to the outstanding principal amount of WFF Term Loan A, until paid in
full, and second, applied to the outstanding principal amount of the
Term Loan B, until paid in full.  
Notwithstanding the foregoing, except during the continuance of an Event
of Default, such proceeds shall not be required to be so applied to the extent
that such proceeds are used to replace, repair, or restore the properties or
assets in respect of which such proceeds were paid or are used to acquire
equipment or other tangible fixed assets to be used in the business of the Loan
Parties if (i) the amount of proceeds received in respect of such sales,
dispositions, insurance policies, condemnation awards, or Extraordinary
Receipts, that are used to replace, repair, or restore the properties or assets
in respect of which such proceeds were paid or are used to acquire equipment or
other tangible fixed assets are less than $2,000,000 in the aggregate during
any 12 consecutive month period, (ii) Administrative Borrower delivers a
certificate to Agent within 10 days after such sale or loss, destruction, or
taking or Extraordinary Receipts event, stating that such proceeds shall be
used to replace, repair, or restore such properties or assets or will be used
to acquire equipment or other tangible fixed assets to be used in the business
of the Loan Parties within a period specified in such certificate not to exceed
the earlier of (x) 180 days after the receipt of such proceeds, and
(y) the Maturity Date (which certificate shall set forth estimates of the
proceeds to be so expended), and (iii) such proceeds are immediately
deposited in a Deposit Account subject to a Control Agreement in favor of Agent
or Senior Administrative Agent.  If all
or any portion of such proceeds not so applied to the prepayment of the
Obligations or the WFF Obligations in accordance with this clause (2) are
not used in accordance with the preceding sentence within the period specified
in the relevant certificate furnished pursuant hereto, such remaining portion
shall be applied to the Obligations and the WFF Obligations in accordance with
this clause (2) on the last day of such specified period; and

 

(3)                                  if
the proceeds are from a sale or disposition of all or substantially all of the
assets or Stock of any Person or any insurance, which sale, disposition, or
proceeds of insurance includes both Accounts and other assets of a Loan Party,
such proceeds shall be applied as follows: 
(x) an amount equal to the net book value of such

 

10

 

Accounts of Loan Parties (determined at the time of
such sale or disposition or event resulting in such insurance proceeds) shall
be applied first, to the outstanding principal amount of the WFF US
Advances, until paid in full, second, to cash collateralize the WFF US
Letters of Credit in an amount equal to 105% at the then extant WFF US Letter
of Credit Usage, until collateralized in full, third, to the outstanding
principal balance of WFF Term Loan A, until paid in full, unless, in the
cases of clauses first, second and third, the prepayment
requirement shall have been waived under the WFF Loan Documents, and fourth,
to the outstanding principal amount of the Term Loan B, until paid in full;
provided, that, none of such proceeds shall be applied to cash collateralize
the WFF US Letters of Credit pursuant to clause second above to the
extent WFF US Availability, after giving effect to such sale, disposition or
casualty, would be greater than $0 notwithstanding the failure to cash
collateralize such WFF US Letters of Credit, and (y) the remaining
proceeds shall be first, unless such prepayment requirement shall have
been waived under the WFF Loan Documents, paid to the Senior Administrative
Agent for application to the outstanding principal amount of WFF Term
Loan A, until paid in full and second, applied to the outstanding
principal amount of the Term Loan B, until paid in full; and

 

(4)                                  subject
to clauses (1), (2) and (3) above, any other prepayment pursuant to
subclauses (c)(ii) and (iii) above shall, be, first, unless
such prepayment requirement shall have been waived under the WFF Loan
Documents, paid to the Senior Administrative Agent for application to the outstanding
principal amount of WFF Term Loan A, until paid in full, and second,
applied to the outstanding principal amount of the Term Loan B, until paid in
full; and

 

(5)                                  if
an Event of Default shall have occurred and be continuing, any payment to the
outstanding principal amount of the Term Loan B shall, at Agent’s option, be
applied in the manner set forth in Section 2.4(b)(i).

 

(iii)                               Each
prepayment pursuant to subclause (c)(iv) above (Issuance of Stock or
incurrence of Indebtedness) shall be first, unless such prepayment
requirement shall have been waived under the WFF Loan Documents, paid to the
Senior Administrative Agent for application to the outstanding principal amount
of WFF Term Loan A, until paid in full, and second, applied to the
outstanding principal amount of the Term Loan B, until paid in full; provided,
that if an Event of Default shall have occurred and be continuing, any payment
to the outstanding principal amount of the Term Loan B shall, at Agent’s
option, be applied in the manner set forth in Section 2.4(b)(i).

 

11

 

(iv)                              Each
prepayment pursuant to subclause (c)(v) (Leverage) above shall be applied,
first, to outstanding principal amount of the WFF US Advances, second,
to cash collateralize the WFF US Letters of Credit in an amount equal to 105%
at the then extant WFF US Letter of Credit Usage, until cash collateralized in
full, third, to the outstanding principal balance of WFF Term
Loan A, until paid in full, unless, in the cases of clauses first, second
and third, the prepayment requirement shall have been waived under the
WFF Loan Documents, and fourth, to the outstanding principal amount of
the Term Loan B, until paid in full; provided, that if an Event of
Default shall have occurred and be continuing, any payment to the outstanding
principal amount of the Term Loan B shall, at Agent’s option, be applied in the
manner set forth in Section 2.4(b)(i).  With respect to any prepayment required under
Section 2.4(c)(v), the Borrowers shall cause the Senior
Administrative Agent to establish and maintain a reserve against the WFF US
Borrowing Base and the WFF Maximum Revolver Amount in an amount equal to such
prepayment applied to the principal amount of the WFF Advances (the “Leverage
Reserve”).  The Borrowers shall cause
the Senior Administrative Agent to maintain the Leverage Reserve until such
time as no Event of Default exists under the WFF Credit Agreement and (A) the
sum of the WFF Revolver Usage (excluding the WFF Letter of Credit Usage cash
collateralized in an amount up to 105% of such WFF Letter of Credit Usage) and
the outstanding principal balance of WFF Term Loan A and the Term Loan B and
the Leverage Reserve is less than 2.75 times the amount of EBITDA for the most
recently ended 12 month period and (B) the sum of the WFF Revolver Usage
(excluding the WFF Letter of Credit Usage cash collateralized in an amount up
to 105% of such WFF Letter of Credit Usage), the outstanding principal balance
of the WFF Term Loan A, the Term Loan B, the Leverage Reserve and the aggregate
principal amount of all other Indebtedness (other than cash collateralized
letters of credit)  of Parent and its
Subsidiaries outstanding as of such date in the amount that would be reflected
as debt on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP is less than 3.0 times the amount of EBITDA for the most
recently ended 12 month period.

 

(v)                                 Notwithstanding
anything to the contrary contained in this Section 2.4(d), if the
Dollar Equivalent of WFF Excess Availability would be less than or equal to
$25,000,000 (or, at any time after the WFF Term Loan A has been repaid in full,
$20,000,000) immediately after giving effect to any prepayment that is required
to be applied to the Obligations pursuant to any provision of this Section 2.4(d),
no such prepayment shall be applied to the Obligations, (x) so long as the
Senior Administrative Agent applies such amounts to the payment of the WFF US
Advances and, concurrently with such payment of the WFF US Advances, a
corresponding reserve is established and maintained against the WFF US
Borrowing Base and the WFF Maximum US Revolver Amount in an amount equal to the
amount that would have otherwise been required to be applied by Borrowers to
the Obligations, and (y) the amount that was applied to the WFF US Advances
pursuant to subclause (x) shall be applied to the outstanding principal
amount of the Term Loan B, and the corresponding reserve against the WFF US
Borrowing Base and the WFF Maximum US Revolver Amount shall be released, once
either (A) the Dollar Equivalent of WFF Excess Availability would be
greater than $25,000,000 (or, at any time after the WFF Term Loan A

 

12

 

has been repaid in full, $20,000,000) immediately
after giving effect to such prepayment of the Term Loan B so long as no Event
of Default under the WFF Credit Agreement then exists, (B) the Senior
Administrative Agent fails to establish and maintain such reserve against the
WFF US Borrowing Base and the WFF Maximum Revolver Amount or (C) the
Senior Administrative Agent releases such reserve against the WFF US Borrowing
Base and the WFF Maximum Revolver Amount without the Agent’s consent.

 

2.5.                            [Intentionally Omitted]

 

2.6.                            Interest Rates:  Rates, Payments, and Calculations.

 

(a)          Interest Rates.  Except as provided in clause (b) below, all
Obligations whether or not charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is a portion of the Term Loan B that is a LIBOR Rate
Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, (ii) if
the relevant Obligation is a portion of the Term Loan B that is a Base Rate
Loan, at a per annum rate equal to the Base Rate plus the Base Rate Margin, and
(iii) otherwise, with respect to other amounts corresponding to principal,
at a per annum rate equal to the Base Rate plus the Base Rate Margin.

 

The foregoing
notwithstanding, at no time shall any portion of the Obligations bear interest
on the Daily Balance thereof at a per annum rate less than 9.5%.  To the extent that interest accrued hereunder
at the rate set forth herein would be less than the foregoing minimum daily
rate, the interest rate chargeable hereunder for such day automatically shall
be deemed increased to the minimum rate.

 

(b)         Default Rate.  Upon the occurrence and during the continuation of an
Event of Default, at the election of Agent or the Required Lenders, all
Obligations whether or not charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to 200 basis points above the per annum rate otherwise applicable
hereunder.

 

(c)          Payment.  Except as provided to the contrary in Section 2.11
or Section 2.13(a), interest and all fees payable hereunder shall
be due and payable, in arrears, on the first Business Day of each month at any
time that Obligations are outstanding. 
Borrowers hereby authorize Agent, from time to time, without prior
notice to Borrowers, to charge all interest and fees (when due and payable),
all Lender Group Expenses (as and when incurred), all fees and costs provided
for in Section 2.11 (as and when accrued or incurred), and all
other payments as and when due and payable under any Loan Document to the Loan
Account, which amounts thereafter shall constitute Obligations hereunder and
shall accrue interest at the rate then applicable to such Obligations
hereunder.  To the extent permitted by
law, any interest with respect to Obligations that is not paid when due shall
be compounded by being charged to the Borrowers’ Loan Account and shall
thereafter constitute Obligations hereunder and shall accrue interest at the
rate then applicable to such Obligations hereunder.

 

13

 

(d)         Computation.  All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed.  In the event the
Base Rate is changed from time to time hereafter, the rates of interest
hereunder based upon the Base Rate automatically and immediately shall be
increased or decreased by an amount equal to such change in the Base Rate.

 

(e)          Intent to Limit Charges to Maximum
Lawful Rate.  In no event shall the interest rate
or rates payable under this Agreement, plus any fees, charges, costs and
payments construed to be equivalent to interest and any other amounts paid in
connection herewith, exceed the highest rate permissible under any Law that a
court of competent jurisdiction shall, in a final determination, deem
applicable.  Borrowers and the Lender
Group, in executing and delivering this Agreement, intend legally to agree upon
the rate or rates of interest and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of payment exceeds
the maximum allowable under Applicable Law, then, ipso facto, as of the date of this Agreement, Borrowers are
and shall be liable only for the payment of such maximum as allowed by Law, and
payment received from Borrowers in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations
to the extent of such excess.

 

2.7.                            Cash Management.

 

(a)          Borrowers shall (i) establish and maintain cash
management services of a type and on terms reasonably satisfactory to Agent at
one or more of the banks set forth on Schedule 2.7(a) as amended
or modified from time to time pursuant to clause (c) below (each a “Cash
Management Bank”), and shall request in writing and otherwise take such
reasonable steps to ensure that all of their Account Debtors forward payment of
the amounts owed by them directly to such Cash Management Banks, and (ii) deposit
or cause to be deposited promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all of their Collections from
Account Debtors (including those sent directly by their Account Debtors to
Borrowers) into a bank account (a “Cash Management Account”) at one of
the Cash Management Banks.

 

(b)         Each Cash Management Bank shall establish and maintain
Cash Management Agreements, in form and substance reasonably acceptable to
Agent.  Unless the Agent otherwise
agrees, each such Cash Management Agreement shall provide, among other things,
that, subject to the terms of the Cash Management Agreements, (i) at any
time after notice from Agent and prior to the rescinding of such notice, the
Cash Management Bank will comply with any instructions originated by Agent
directing the disposition of the funds in such Cash Management Account without
further consent by Borrowers, (ii) the Cash Management Bank has no rights
of setoff or recoupment or any other claim against the applicable Cash
Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) at any time
after notice from Agent and prior to the rescinding of such notice, it will
forward by daily sweep all amounts in the

 

14

 

applicable
Cash Management Account to the applicable Agent’s Account.  Agent agrees that at any time prior to the
occurrence of a Cash Management Triggering Event and at any time after the
occurrence of a subsequent Cash Management Reinstatement Event (to the extent
no subsequent Cash Management Triggering Event has occurred), Agent shall,
subject to the terms of the Cash Management Agreements, instruct the Cash
Management Banks to direct the funds in the Cash Management Accounts to such
Deposit Accounts of Borrowers as Agent is directed by Administrative Borrower.  After the occurrence of a Cash Management
Reinstatement Event, Agent further agrees to promptly notify (to the extent
Agent’s notice is required pursuant to the relevant Cash Management Agreement)
each Cash Management Bank of the occurrence of such Cash Management
Reinstatement Event and that such Cash Management Bank may resume directing the
funds in the Cash Management Accounts to such Deposit Accounts of Borrowers as
directed by Administrative Borrower.

 

(c)          So long as no Event of Default has occurred and is
continuing, Administrative Borrower may amend Schedule 2.7(a) to
add or replace a Cash Management Bank or Cash Management Account; provided,
however, that (i) such prospective Cash Management Bank shall be
reasonably satisfactory to Agent, and (ii) prior to the time of the
opening of such Cash Management Account, the applicable Borrower and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement.  Subject to the
terms of the Cash Management Agreements, Borrowers shall close any of their
Cash Management Accounts (and establish replacement cash management accounts in
accordance with the foregoing sentence) promptly and in any event within 60
days of notice from Agent (or such longer period as Administrative Borrower and
Agent may agree) that the creditworthiness of any Cash Management Bank is no
longer acceptable in Agent’s reasonable judgment, or as promptly as practicable
and in any event within 90 days of notice from Agent (or such longer period as
Administrative Borrower and Agent may agree) that the operating performance,
funds transfer, or availability procedures or performance of the Cash
Management Bank with respect to Cash Management Accounts or Agent’s liability
under any Cash Management Agreement with such Cash Management Bank is no longer
acceptable in Agent’s reasonable judgment.

 

(d)         The Cash Management Accounts shall be cash collateral
accounts subject to Control Agreements.

 

2.8.                            Crediting Payments; Clearance Charge.

 

The receipt of any
payment item by Agent (whether from transfers to Agent by the Cash Management
Banks pursuant to the Cash Management Agreements or otherwise) shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent’s Account or unless and
until such payment item is honored when presented for payment.  Should any payment item not be honored when
presented for payment, then the Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly.  Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by Agent only if it
is received into Agent’s Account on a Business Day on or before 2:00 p.m.
(New York

 

15

 

time).  If any payment item is received into Agent’s
Account on a non-Business Day or after 2:00 p.m. (New York time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.

 

2.9.                            Designated Account.

 

Agent is authorized to
make the Term Loan B based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person or, without instructions, if pursuant
to Section 2.6(c). 
Administrative Borrower agrees to establish and maintain the Designated
Account with the Designated Account Bank for the purpose of receiving the
proceeds of the Term Loan B hereunder.

 

2.10.                     Maintenance of Loan Accounts;
Statements of Obligations.

 

Agent shall maintain an
account on its books in the name of Borrowers (the “Loan Account”) on
which Borrowers will be charged with the Term Loan B and any Protective
Advances made by Agent to Borrowers or for Borrowers’ account, and with all
other payment Obligations hereunder or under the other Loan Documents,
including, accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.8,
the Loan Account will be credited with all payments received by Agent from
Borrowers or for Borrowers’ account, including all amounts received in the
Agent’s Account from any Cash Management Bank of any Borrower.  Agent shall render statements regarding the
Loan Account to Administrative Borrower, including principal, interest, fees,
and including an itemization of all charges and expenses constituting Lender
Group Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.

 

2.11.                     Fees.

 

Borrowers shall pay to
the Agent, as and when due and payable under the terms of the Fee Letter, the
fees set forth in the Fee Letter.

 

2.12.                     [Intentionally Omitted].

 

2.13.                     LIBOR Option.

 

(a)          Interest and Interest Payment
Dates.  In lieu of having interest charged
at the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Term Loan B be charged
at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be payable
on the earliest of (i) the last day of the Interest Period applicable
thereto, (provided, however, that, subject to the following
clauses (ii) and (iii), in the case of any Interest Period greater than
one (1) month in duration, interest shall be payable at one (1) month
intervals after the

 

16

 

commencement
of the applicable Interest Period and on the last day of such Interest Period),
(ii) the occurrence of an Event of Default in consequence of which the Required
Lenders or Agent on behalf thereof have elected to accelerate the maturity of
all or any portion of the Obligations, or (iii) termination of this
Agreement pursuant to the terms hereof. 
On the last day of each applicable Interest Period, unless Administrative
Borrower properly has exercised the LIBOR Option with respect thereto, the
interest rate applicable to such LIBOR Rate Loan automatically shall convert to
the rate of interest then applicable to Base Rate Loans hereunder.  At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to
request that the Term Loan B bear interest at a rate based upon the LIBOR Rate
and Agent shall have the right to convert the interest rate on all outstanding
LIBOR Rate Loans to the rate then applicable to Base Rate Loans hereunder.

 

(b)         LIBOR Election.

 

(i)                                     Administrative
Borrower may, at any time and from time to time, so long as no Event of Default
has occurred and is continuing, elect to exercise the LIBOR Option by notifying
the Agent prior to 2:00 p.m. (New York time) at least 3 Business Days
prior to the commencement of the proposed Interest Period (the “LIBOR
Deadline”).  Notice of Administrative
Borrower’s election of the LIBOR Option for a permitted portion of the Term
Loan B and an Interest Period pursuant to this Section shall be made by
delivery to the Agent of a LIBOR Notice received by the Agent before the LIBOR
Deadline, or by telephonic notice received by the Agent before the LIBOR
Deadline (to be confirmed by delivery to the Agent of a LIBOR Notice received
by the Agent prior to 5:00 p.m. (New York time) on the same day).  Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each of the Lenders.

 

(ii)                                  Each
LIBOR Notice shall be irrevocable and binding on Borrowers.  In connection with each LIBOR Rate Loan,
Borrowers shall jointly and severally indemnify, defend, and hold the Agent and
the Lenders harmless against any loss, cost, or expense incurred by the Agent
or any Lender as a result of (a) the payment of any principal of any LIBOR
Rate Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any
LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (c) the failure to borrow (other than solely as a result of
the failure of Agent or a Lender to make the Term Loan B required to be made
pursuant to the terms hereof), convert, continue or prepay any LIBOR Rate Loan
on the date specified in any LIBOR Notice delivered pursuant hereto (such
losses, costs, and expenses, collectively, “Funding Losses”).  Funding Losses shall, with respect to the
Agent or any Lender, be deemed to equal the amount determined by the Agent or
such Lender to be the excess, if any, of (i) the amount of interest that
would have accrued on the principal amount of such LIBOR Rate Loan had such
event not occurred, at the LIBOR Rate that would have been applicable thereto,
for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest
that would accrue on such principal amount for such period at the interest rate
which the Agent or such Lender would be offered were it to be offered, at the

 

17

 

commencement of such period, Dollar deposits of a
comparable amount and period in the London interbank market.  A certificate of the Agent or a Lender
delivered to Administrative Borrower setting forth any amount or amounts that
the Agent or such Lender is entitled to receive pursuant to this Section 2.13
shall be conclusive absent manifest error.

 

(iii)                               Borrowers
shall have not more than four (4) LIBOR Rate Loans in effect at any given
time.  With respect to LIBOR Rate Loans,
Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of a principal
amount of at least $1,000,000 and integral multiples of a principal amount of
$500,000 in excess thereof.

 

(c)          Prepayments.  Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that in the event that LIBOR Rate Loans are prepaid on any date
that is not the last day of the Interest Period applicable thereto, including
as a result of any automatic prepayment through the required application by the
Agent of proceeds of Loan Parties’ Collections in accordance with Section 2.4(b) or
for any other reason, including early termination of the term of this Agreement
or acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold the Agent and the
Lenders and their Participants harmless against any and all Funding Losses in
accordance with clause (b)(ii) above.

 

(d)         Special Provisions Applicable to
LIBOR Rate.

 

(i)                                     The
applicable LIBOR Rate may be adjusted by the Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs
to such Lender of maintaining or obtaining any eurodollar deposits or increased
costs, in each case, due to changes in Applicable Law occurring subsequent to
the commencement of the then applicable Interest Period, including changes in
tax laws (except for (A) changes of general applicability in corporate
income tax laws or changes in tax laws with respect to franchise taxes imposed
in lieu of income taxes and (B) changes in tax laws with respect to any
Taxes required to be withheld or deducted by Borrowers, which shall be
addressed in Section 15.11) and changes in the reserve requirements
imposed by the Board of Governors of the Federal Reserve System (or any
successor), excluding the Reserve Percentage, which additional or increased
costs would increase the cost of funding loans bearing interest at the
applicable LIBOR Rate.  In any such
event, the affected Lender shall give Administrative Borrower and the Agent
notice of such a determination and adjustment and the Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, Administrative Borrower may, by notice to such
affected Lender (y) require such Lender to furnish to Administrative Borrower
a statement setting forth the basis for adjusting such LIBOR Rate and the
method for determining the amount of such adjustment, or (z) repay the
LIBOR Rate Loans with respect to which such adjustment is made (together with
any amounts due under clause (b)(ii) above).  Notwithstanding anything to the contrary
herein, no such adjustment of the applicable LIBOR Rate shall be effective in
respect of any additional or increased costs incurred prior to the
Administrative Borrower’s receipt of the notice referred to below, if the event
giving rise to such additional or increased

 

18

 

costs occurred more than 180 days before the relevant
Lender’s notice of such event and the related adjustment is received by the
Administrative Borrower.

 

(ii)                                  In
the event that any change in market conditions or any law, regulation, treaty,
or directive, or any change therein or in the interpretation or application
thereof, shall at any time after the date hereof, in the reasonable opinion of
any Lender, make it unlawful or impractical for such Lender to fund or maintain
LIBOR Rate Loans or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall give notice of such
changed circumstances to the Agent and Administrative Borrower and the Agent
promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate
Loans of such Lender thereafter shall accrue interest at the rate then
applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.  Each
Lender agrees to use reasonable efforts to designate a different Lending Office
if such designation will avoid the need for such notice of changed
circumstances and would not, in the good faith judgment of such Lender,
otherwise be disadvantageous to such Lender.

 

(e)          No Requirement of Matched
Funding.  Anything to the contrary contained
herein notwithstanding, neither the Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the
applicable LIBOR Rate.  The provisions of
this Section shall apply as if each Lender or its Participants had match
funded any Obligation as to which interest is accruing at the applicable LIBOR
Rate by acquiring eurodollar deposits for each Interest Period in the amount of
the LIBOR Rate Loans.

 

2.14.                     Capital Requirements.

 

If, after the date
hereof, any Lender determines that (i) the adoption of or change in any
law, rule, regulation or guideline regarding capital requirements for banks or
bank holding companies, or any change in the interpretation or application
thereof by any Governmental Authority charged with the administration thereof,
or (ii) compliance by such Lender or its parent bank holding company with
any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing
the return on such Lender’s or such holding company’s capital as a consequence
of such Lender’s Commitments hereunder to a level below that which such Lender
or such holding company could have achieved but for such adoption, change, or compliance
(taking into consideration such Lender’s or such holding company’s then
existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify Administrative Borrower and the Agent
thereof.  Following receipt of such
notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined,
payable within 90 days after presentation by such Lender

 

19

 

of a statement in
the amount and setting forth in reasonable detail such Lender’s calculation
thereof and the assumptions upon which such calculation was based (which
statement shall be deemed true and correct absent manifest error).  In determining such amount, such Lender may
use any reasonable averaging and attribution methods.  Notwithstanding anything to the contrary in
this Section 2.14, no Borrower will be required to compensate any Lender
pursuant to this Section 2.14 for any reduction incurred more than 180
days before such Lender notified Administrative Borrower of the change in law
(or other circumstance) giving rise to such reduction and of its claim to compensation
therefore.

 

2.15.                     Joint and Several Liability of
Borrowers.

 

(a)          Each Borrower is accepting joint and several liability
with respect to the Obligations hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by the Lender
Group under this Agreement, for the mutual benefit, directly and indirectly, of
each Borrower and in consideration of the undertakings of the other Borrowers
to accept joint and several liability for the Obligations. Each Borrower hereby
further irrevocably and unconditionally guaranties as and for its own debt,
until final payment in full thereof has been made, (a) the payment of the
Obligations, when and as the same shall become due and payable, whether at
maturity, pursuant to a mandatory prepayment requirement, by acceleration, or
otherwise; it being the intent of each Borrower that the guaranty set forth
herein shall be a guaranty of payment and not a guaranty of collection; and (b) the
punctual and faithful performance, keeping, observance, and fulfillment by each
Borrower of all of the agreements, conditions, covenants, and obligations of
such Borrower contained in this Agreement and under each of the other Loan
Documents.

 

(b)         Each Borrower, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it
being the intention of the parties hereto that all the Obligations shall be the
joint and several obligations of each Borrower without preferences or
distinction among them.

 

(c)          If and to the extent that any Borrower shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrowers will make such payment with respect to, or
perform, such Obligation.

 

(d)         The Obligations of each Borrower under the provisions
of this Section 2.15 constitute the absolute and unconditional,
full recourse Obligations of each Borrower enforceable against each Borrower to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstances
whatsoever.

 

(e)          Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any advances,

 

20

 

notice
of the occurrence of any Default, Event of Default, or of any demand for any
payment under this Agreement, notice of any action at any time taken or omitted
by the Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by Applicable Law, all demands, notices and other formalities of
every kind in connection with this Agreement (except as otherwise provided in
this Agreement).  Each Borrower hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Agent or Lenders at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any
Borrower.  Without limiting the
generality of the foregoing, each Borrower assents to any other action or delay
in acting or failure to act on the part of Agent or any Lender with respect to
the failure by any Borrower to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with Applicable Laws or
regulations thereunder, which might, but for the provisions of this Section 2.15
afford grounds for terminating, discharging or relieving any Borrower, in whole
or in part, from any of its Obligations under this Section 2.15, it
being the intention of each Borrower that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.15
shall not be discharged except by performance and then only to the extent of
such performance.  The Obligations of
each Borrower under this Section 2.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or Agent or any Lender; it being understood that other Persons may also become
liable for the Obligations in connection with mergers, consolidations or other
corporate reorganizations.

 

(f)            Each Borrower represents and warrants to Agent and
Lenders that such Borrower is currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Obligations.  Each Borrower further represents and warrants
to Agent and Lenders that such Borrower has read and understands the terms and
conditions of the Loan Documents.  Each
Borrower hereby covenants that such Borrower will continue to keep informed of
Borrowers’ financial condition, the financial condition of guarantors, if any,
and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.

 

(g)         The provisions of this Section 2.15 are
made for the benefit of Agent, Lenders and their respective successors and
assigns, and may be enforced by it or them from time to time against any or all
Borrowers as often as occasion therefor may arise and without requirement on
the part of any Agent, Lender, successor or assign first to marshal any of its

 

21

 

or their
claims or to exercise any of its or their rights against any Borrower or to
exhaust any remedies available to it or them against any Borrower or to resort
to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. 
The provisions of this Section 2.15 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise fully
satisfied.  If at any time, any payment,
or any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by Agent or any Lender upon the
insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the
provisions of this Section 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.

 

(h)         Until such time as all of the Obligations have been
finally paid in full:  (i) each
Borrower hereby waives and postpones any right of subrogation such Borrower has
or may have as against any other Borrower with respect to the Obligations; (ii) each
Borrower hereby waives and postpones any right to proceed against any other
Borrower, now or hereafter, for contribution, indemnity, reimbursement, or any
other suretyship rights and claims (irrespective of whether direct or indirect,
liquidated or contingent), with respect to the Obligations; and (iii) each
Borrower also hereby waives and postpones any right to proceed or to seek
recourse against or with respect to any property or asset of any other Borrower
with respect to the Obligations.

 

(i)             Notwithstanding anything to the contrary set forth in
this Agreement, it is the intent of the parties hereto that the liability
incurred by each Borrower in respect of the Obligations of the other Borrowers
(and any Lien granted by each Borrower to secure such Obligations), not
constitute a fraudulent conveyance under Section 548 of the Bankruptcy
Code or a fraudulent conveyance or fraudulent transfer under the provisions of
any Applicable Law of any state, province or other governmental unit (“Fraudulent
Conveyance”). Consequently, each Borrower, Agent and each Lender hereby agrees
that if a court of competent jurisdiction determines that the incurrence of
liability by any Borrower in respect of the Obligations of any other Borrower
(or any Liens granted by such Borrower to secure such Obligations) would, but
for the application of this sentence, constitute a Fraudulent Conveyance, such
liability (and such Liens) shall be valid and enforceable only to the maximum
extent that would not cause the same to constitute a Fraudulent Conveyance, and
this Agreement and the other Loan Documents shall automatically be deemed to
have been amended accordingly.

 

2.16.                     Registration of Notes. 
Agent, on behalf of the Borrowers, agrees to record each
Term Loan B (each, a “Registered Loan”) on the Register referred to in
Section 13.1(g).  Each Term Loan
B recorded on the Register may not be evidenced by promissory notes other than
Registered Notes (as defined below). 
Upon the registration of each Term Loan B, each Borrower agrees, at the
request of any Lender, to execute and deliver to such Lender a promissory note,
in conformity with the terms of this Agreement, in registered form to evidence
such Registered Loan, in form and substance reasonably satisfactory to such
Lender, and registered as provided in Section 13.1(g) (a “Registered
Note”), payable to the order of such Lender and otherwise duly
completed.  Once recorded on the
Register, each Term Loan B may not be removed from the Register so long as it
or they remain outstanding,

 

22

 

and a Registered Note may not be exchanged for a promissory
note that is not a Registered Note.

 

2.17.                     Securitization. 
Each Borrower hereby acknowledges that each Lender and each
of its Affiliates and Related Funds may sell or securitize the Term Loan B (a “Securitization”)
through the pledge of the Term Loan B as collateral security for loans to such
Lender or its Affiliates or Related Funds or through the sale of the Term Loan
B or the issuance of direct or indirect interests in the Term Loan B, which
loans to such Lender or its Affiliates or Related Funds or direct or indirect
interests will be rated by Moody’s, S&P or one or more other rating
agencies (the “Rating Agencies”). 
Each Borrower agrees to cooperate with such Lenders and their Affiliates
and Related Funds to effect the Securitization by (a) executing such
additional documents, as reasonably requested by such Lenders in order to
effect the Securitization, provided that (i) any such additional
documentation does not impose additional costs or liabilities on Borrowers, and
(ii) any such additional documentation does not adversely affect the
rights, or increase the obligations, of such Borrower under the Loan Documents
or change or affect in a manner adverse to such Borrower the financial terms of
the Term Loan B or add more restrictive covenants or defaults, (b) providing
such written information as may be reasonably requested by such Lenders in
connection with the rating of the Term Loan B or the Securitization, and (c) providing
in connection with any rating of the Term Loan B a certificate (i) agreeing
to indemnify such Lenders and any of their Affiliates and Related Funds, any of
the Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the “Securitization
Parties”) for any losses, claims, damages or liabilities (the “Securitization
Liabilities”) to which such Lenders or any of their Affiliates or Related
Funds, or such Securitization Parties, may become subject insofar as the
Securitization Liabilities arise out of or are based upon a breach of the
representation and warranty contained in Section 4.18, and (ii) agreeing
to reimburse such Lenders and their Affiliates and Related Funds, and such
Securitization Parties, for any legal or other expenses reasonably incurred by
such Persons in connection with defending the Securitization Liabilities.

 

3.                                      CONDITIONS; TERM OF AGREEMENT.

 

3.1.                            Conditions Precedent to
Effectiveness.

 

This Agreement shall
become effective upon the fulfillment, to the satisfaction of Agent and each
Lender, of each of the conditions precedent set forth on Schedule 3.1.

 

3.2.                            Conditions Precedent to Extension of
Term Loan B.

 

The obligation of the
Lender Group (or any member thereof) to make the Term Loan B hereunder (or to
extend any other credit hereunder) shall be subject to the following additional
conditions precedent:

 

23

 

(a)          the representations and warranties contained in this
Agreement or in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);

 

(b)         no Default or Event of Default shall have occurred and
be continuing on the date of such extension of credit, nor shall either result
from the making thereof;

 

(c)          no injunction, writ, restraining order, or other order
of any nature restricting or prohibiting, directly or indirectly, the extending
of such credit shall have been issued and remain in force by any Governmental
Authority against any Borrower, the Agent, any Lender, or any of their Affiliates;

 

(d)         no Material Adverse Change shall have occurred since
the date of the latest financial statements submitted to the Agent on or before
the Closing Date; and

 

(e)          each Loan Party, WFF Foreign Loan Party and each
Significant Subsidiary shall be in compliance with the Funding Date Covenants
set forth in Section 6.18 immediately after giving effect to the Term Loan
B and the discharge of the obligations under the Indenture.

 

3.3.                            Term.

 

This Agreement shall
continue in full force and effect for a term ending on August 19, 2010
(the “Maturity Date”).  The
foregoing notwithstanding, the Lender Group, upon the election of the Required
Lenders, shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.

 

3.4.                            Effect of Termination.

 

On the date of
termination of this Agreement, all Obligations immediately shall become due and
payable without notice or demand.  No
termination of this Agreement, however, shall relieve or discharge Loan Parties
of their duties, Obligations, or covenants hereunder or under any other Loan
Document and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been paid in full. 
When this Agreement has been terminated and all of the Obligations have
been paid in full, Agent will, at Borrowers’ sole expense, return to Borrowers
any possessory Collateral held in its possession, execute and deliver any
termination statements, lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other similar discharge or
release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Agent’s Liens and all notices of security
interests and liens previously filed by Agent with respect to the Obligations.

 

24

 

3.5.                            Early Termination by Borrowers.

 

Borrowers have the
option, at any time upon 15 days (or such lesser period as agreed by the Agent)
prior written notice by Administrative Borrower to Agent, to terminate this
Agreement by paying to the Agent, in cash, the Obligations in full.  If Administrative Borrower has sent a notice
of termination pursuant to the provisions of this Section, then the Borrowers
shall be obligated to repay the Obligations, in full on the date set forth as
the date of termination of this Agreement in such notice.

 

4.                                      REPRESENTATIONS AND WARRANTIES.

 

In order to induce the
Lender Group to enter into this Agreement, each Borrower makes the following
representations and warranties to the Lender Group which shall be true,
correct, and complete, in all material respects, as of the date hereof, and
shall be true, correct, and complete, in all material respects, as of the
Closing Date, and at and as of the date of the making of the Term Loan B, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

4.1.                            No Encumbrances.

 

Each Loan Party, each WFF
Foreign Loan Party and each Significant Subsidiary has good title to, or a
valid leasehold interest in, its material personal property assets and good and
marketable title to, or a valid leasehold interest in, its material Real
Property, in each case, free and clear of Liens except for Permitted Liens.

 

4.2.                            [Intentionally Omitted].

 

4.3.                            [Intentionally Omitted].

 

4.4.                            Equipment.

 

Each material item of
Equipment of Loan Parties, WFF Foreign Loan Parties and the Significant
Subsidiaries is used or held for use in their business and is in good working
order, ordinary wear and tear and damage by casualty excepted.

 

4.5.                            Location of Inventory and Equipment.

 

The Inventory and
Equipment (other than vehicles or Equipment out for repair) of Loan Parties,
WFF Foreign Loan Parties and the Significant Subsidiaries are located only at,
or in-transit between, the locations identified on Schedule 4.5 (as
such Schedule may be updated pursuant to Section 5.8(a)) or
locations (i) not in existence on the Closing Date and not then required
to be disclosed pursuant to Section 5.8(a), or (ii) at which
there are not more than 100 seats and at which the aggregate book value of all
assets at such location does not exceed $750,000.

 

25

 

4.6.                            Inventory Records.

 

Each Loan Party, WFF
Foreign Loan Party and Significant Subsidiary keeps records that are correct
and accurate in all material respects itemizing and describing the type,
quality, and quantity of its Inventory and the book value thereof.

 

4.7.                            State of Incorporation; Location of
Chief Executive Office; Organizational Identification Number; Commercial Tort
Claims.

 

(a)          The jurisdiction of organization or continuance of
each Loan Party, each WFF Foreign Loan Party and each Significant Subsidiary is
set forth on Schedule 4.7(a) except to the extent such
jurisdiction of organization or continuance has changed pursuant to a
transaction permitted by Section 6.3(a) or (b).

 

(b)         As of the Closing Date, the chief executive office of
each Loan Party, each WFF Foreign Loan Party and each Significant Subsidiary is
located at the address indicated on Schedule 4.7(b).

 

(c)          Each Loan Party’s, each WFF Foreign Loan Party’s and
each Significant Subsidiary’s organizational identification number, if any (or,
in the case of the WFF Canadian Borrowers, the business number assigned by
Canada Revenue Agency (Canada), if any) is identified on Schedule 4.7(c) (as
such schedule may be updated by notice to Agent).

 

(d)         As of the Closing Date, Loan Parties do not, to their
knowledge, hold any commercial tort claims involving a claim of more than
$500,000, except as set forth on Schedule 4.7(d).

 

4.8.                            Due Organization and Qualification;
Subsidiaries.

 

(a)          Each Borrower is duly organized and existing and, if
applicable, in good standing under the laws of the jurisdiction of its
organization and qualified to do business in any state, province or territory
where the failure to be so qualified reasonably could be expected to result in
a Material Adverse Change.

 

(b)         Set forth on Schedule 4.8(b), is a
complete and accurate description as of the Closing Date of the authorized
capital Stock of each Borrower, by class, and, as of the Closing Date, a
description of the number of shares of each Borrower (other than the Parent) of
each such class that are issued and outstanding.  Other than as described on Schedule 4.8(b),
as of the Closing Date, there are no subscriptions, options, warrants, or calls
relating to any shares of each Borrower’s (other than Parent’s) capital Stock,
including any right of conversion or exchange under any outstanding security or
other instrument.  Other than as
described on Schedule 4.8(b), no Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.

 

26

 

(c)          Set forth on Schedule 4.8(c), is a
complete and accurate list of each Borrower’s direct and indirect Subsidiaries
as of the Closing Date, showing: (i) the jurisdiction of their
organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the
percentage of the outstanding shares of each such class owned directly or
indirectly by the applicable Borrower. 
All of the outstanding capital Stock of each such Subsidiary has been
validly issued and, if applicable, is fully paid and non-assessable.

 

(d)         Except as set forth on Schedule 4.8(c), as
of the Closing Date, there are no subscriptions, options, warrants, or calls
relating to any shares of any Borrower’s Subsidiaries’ capital Stock, including
any right of conversion or exchange under any outstanding security or other
instrument.  No Borrower or any of its
respective Subsidiaries is subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire (i) any shares of any
Borrower’s Subsidiaries’ capital Stock or (ii) any security convertible
into or exchangeable for any such capital Stock.

 

4.9.                            Due Authorization; No Conflict.

 

(a)          As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the other Loan Documents to
which it is a party have been duly authorized by all necessary action on the
part of such Borrower.

 

(b)         As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the other Loan Documents to
which it is a party do not and will not (i) violate any provision of
federal, state, or local law or regulation applicable to such Borrower, the
Governing Documents of such Borrower, or any order, judgment, or decree of any
court or other Governmental Authority binding on such Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of such Borrower
(other than a conflict with, or breach of, the WFF Loan Documents arising
during the continuance of an Event of Default solely as a result of Senior
Administrative Agent electing pursuant to Section 2.4(d) of
the WFF Credit Agreement that any payment to be otherwise paid to the Agent in
accordance with Section 2.4(d) of the WFF Credit Agreement for
application to the outstanding principal amount of the Term Loan B shall be
applied in the manner set forth in Section 2.4(b)(i)(A) of the
WFF Credit Agreement), (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets
of such Borrower, other than Permitted Liens, or (iv) require any approval
of any of such Borrower’s interestholders or any approval or consent of any
Person under any material contractual obligation of such Borrower, other than
consents or approvals that have been obtained and that are still in force and
effect.

 

(c)          Other than the filing of financing statements and
intellectual property security agreements and any filings and registrations
required to be made to perfect Agent’s Liens in investment property, and
continuations thereof, and the recordation of the Mortgages, the execution,
delivery, and performance by each Borrower of this Agreement

 

27

 

and the
other Loan Documents to which such Borrower is a party do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any Governmental Authority, other than consents or approvals
that have been obtained and that are still in force and effect.

 

(d)         As to each Borrower, this Agreement and the other Loan
Documents to which such Borrower is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Borrower will be the
legally valid and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally.

 

(e)          [Intentionally
Omitted]

 

(f)            The execution, delivery, and performance by each
Guarantor of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Guarantor.

 

(g)         The execution, delivery, and performance by each
Guarantor of the Loan Documents to which it is a party do not and will not (i) violate
any provision of federal, state, or local law or regulation applicable to such
Guarantor, the Governing Documents of such Guarantor, or any order, judgment,
or decree of any court or other Governmental Authority binding on such
Guarantor, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation of such Guarantor (other than a conflict with, or breach of, the WFF
Loan Documents arising during the continuance of an Event of Default solely as
a result of Senior Administrative Agent electing pursuant to Section 2.4(d) of
the WFF Credit Agreement that any payment to be otherwise paid to the Agent in
accordance with Section 2.4(d) of the WFF Credit Agreement for
application to the outstanding principal amount of the Term Loan B shall be
applied in the manner set forth in Section 2.4(b)(i)(A) of the
WFF Credit Agreement), (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets
of such Guarantor, other than Permitted Liens, or (iv) require any
approval of such Guarantor’s interestholders or any approval or consent of any
Person under any material contractual obligation of such Guarantor, other than
consents or approvals that have been obtained and that are still in force and
effect.

 

(h)         Other than the filing of financing statements and
intellectual property security agreements and any filings and registrations
required to be made to perfect Agent’s Liens in investment property, and
continuations thereof, the execution, delivery, and performance by each
Guarantor of the Loan Documents to which such Guarantor is a party do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, other than consents or
approvals that have been obtained and that are still in force and effect.

 

28

 

(i)             The Loan Documents to which each Guarantor is a party,
and all other documents contemplated hereby and thereby, when executed and
delivered by such Guarantor will be the legally valid and binding obligations
of such Guarantor, enforceable against such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally.

 

4.10.                     Litigation.

 

Other than those matters
disclosed on Schedule 4.10, and other than matters that reasonably
could not be expected to result in a Material Adverse Change, there are no
actions, suits, or proceedings pending or, to the best knowledge of each
Borrower, threatened against any Loan Party, any WFF Foreign Loan Party or any
Significant Subsidiary.

 

4.11.                     No Material Adverse Change.

 

All financial statements
relating to Borrowers and their Subsidiaries that have been delivered by
Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly
in all material respects, Borrowers’ and their Subsidiaries’ financial
condition as of the date thereof and results of operations for the period then
ended.  There has not been a Material
Adverse Change since the date of the latest financial statements submitted to
Agent on or before the Closing Date.

 

4.12.                     Fraudulent Transfer.

 

(a)          Each Borrower is Solvent.

 

(b)         No transfer of property is being made by any Loan
Party and no obligation is being incurred by any Loan Party in connection with
the transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future creditors
of such Loan Party.

 

4.13.                     Employee Benefits. 
None of Loan Parties, WFF Foreign Loan Parties, the
Significant Subsidiaries, or any of their ERISA Affiliates maintains or
contributes to any Benefit Plan.

 

4.14.                     Environmental Condition.

 

Except as could not
reasonably be expected to result in a Material Adverse Change or as set forth
on Schedule 4.14, (a) to Borrowers’ knowledge, none of Loan
Parties’, WFF Foreign Loan Parties’ or the Significant Subsidiaries’ properties
or assets has ever been used by Loan Parties, WFF Foreign Loan Parties, the
Significant Subsidiaries, or by previous owners or operators in the disposal
of, or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such use, production, storage, handling, treatment, release or
transport was in violation, in any material respect, of any applicable
Environmental Law,

 

29

 

(b) to
Borrowers’ knowledge, none of Loan Parties’ nor WFF Foreign Loan Parties’ nor
the Significant Subsidiaries’ properties or assets has been designated or
identified in any manner pursuant to any environmental protection statute as a
Hazardous Materials disposal site, (c) none of Loan Parties nor WFF
Foreign Loan Parties nor the Significant Subsidiaries have received notice that
a Lien arising under any Environmental Law has attached to any revenues or to
any Real Property owned or operated by Loan Parties, WFF Foreign Loan Parties
or the Significant Subsidiaries, and (d) none of Loan Parties nor WFF
Foreign Loan Parties nor the Significant Subsidiaries have received a summons,
citation, notice, or directive from the United States Environmental Protection
Agency or any other federal or state governmental agency concerning any action
or omission by any Loan Party, any WFF Foreign Loan Party or any Significant
Subsidiary resulting in the releasing or disposing of Hazardous Materials into
the environment.

 

4.15.                     Intellectual Property.

 

Each Loan Party owns, or
holds licenses in, all trademarks, trade names, copyrights, patents, patent
rights, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 4.15 (as
updated from time to time) is a true, correct, and complete listing of all
material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which any Loan Party is the owner
or is an exclusive licensee.

 

4.16.                     Leases.

 

Loan Parties, WFF Foreign
Loan Parties and the Significant Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are
parties or under which they are operating and all of such material leases are
valid and subsisting and no material default by Loan Parties, WFF Foreign Loan
Parties and the Significant Subsidiaries exists under any of them.

 

4.17.                     Deposit Accounts and Securities
Accounts.

 

Set forth on Schedule 4.17
is a listing of all of Loan Parties’ Deposit Accounts and Securities Accounts
as of the Closing Date, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.

 

4.18.                     Complete Disclosure.

 

All factual information
(taken as a whole) furnished by or on behalf of Borrowers or their Subsidiaries
in writing to Agent or any Lender (including all information contained in the
Schedules hereto or in the other Loan Documents, as updated from time to time
in accordance with the terms of the Loan Documents) for purposes of or in
connection with this Agreement, the other Loan Documents, or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or

 

30

 

on behalf of
Borrowers or their Subsidiaries in writing to Agent or any Lender will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any fact
necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided; provided, that any projections and forecasts shall be
subject to the next sentence.  On the
Closing Date, the Closing Date Projections represent, and as of the date on
which any other Projections are delivered to Agent, such additional Projections
represent, Borrowers’ good faith estimate of their and their Subsidiaries’
future performance for the periods covered thereby (it being understood that
such projections and forecasts are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Borrowers and that
no assurance can be given that such projections or forecasts will be realized).

 

4.19.                     Indebtedness.

 

Set forth on Schedule 4.19
is a true and complete list of all Indebtedness (other than Indebtedness
permitted under Section 6.1 (other than clause (b) thereof)) of each
Loan Party, each WFF Foreign Loan Party and each Significant Subsidiary
outstanding immediately prior to the Closing Date that is to remain outstanding
after the Closing Date and such Schedule accurately reflects the aggregate
principal amount of such Indebtedness and describes the maturity date thereof
as of the Closing Date.

 

4.20.                     WFF Loan Documents. 
Borrowers have delivered to Agent true and correct copies
of the WFF Loan Documents.  The
transactions contemplated by the WFF Loan Documents will be, contemporaneously
with the Closing Date, consummated in accordance with their respective
terms.  All of the representations and
warranties of the Borrowers, WFF Foreign Borrowers, Guarantors and WFF
Guarantors in the WFF Loan Documents are true and correct in all material
respects.

 

5.                                      AFFIRMATIVE COVENANTS.

 

Each Borrower covenants
and agrees that, until the payment in full of the Obligations, Borrowers shall
and shall cause each other Loan Party, each WFF Foreign Loan Party and each
Significant Subsidiary to do all of the following:

 

5.1.                            Accounting System.

 

Maintain a system of
accounting that enables Borrowers to produce financial statements in accordance
with GAAP and maintain records pertaining to the Collateral that contain
information as from time to time reasonably may be requested by Agent.  Borrowers also shall keep a reporting system
that shows all additions, sales, claims, returns, and allowances with respect
to their sales (it being understood that Borrowers’ reporting system as in
effect on the Closing Date shall be deemed to satisfy the requirements of this
sentence).

 

31

 

5.2.                            Collateral Reporting.

 

Provide Agent (and if so
requested by Agent, with copies for each Lender) with each of the reports set
forth on Schedule 5.2 at the times specified therein.  In addition, each Borrower agrees to
cooperate fully with Agent to facilitate and implement a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth on Schedule 5.2, it being understood that the
system of electronic reporting used by Borrowers on the Closing Date is
acceptable to Agent.

 

5.3.                            Financial Statements, Reports,
Certificates.

 

Deliver to Agent, with
copies for each Lender, each of the financial statements, reports, or other
items set forth on Schedule 5.3 at the time specified therein.  In addition, Parent agrees that no Loan Party
will have a fiscal year different from that of Parent.  Parent and Borrowers agree to cooperate with
Agent to allow Agent to consult with its independent certified public
accountants if Agent reasonably requests the right to do so and that, in such
connection, its independent certified public accountants are authorized to
communicate with Agent and to release to Agent whatever financial information
concerning the Loan Parties, the WFF Foreign Loan Parties and the Significant
Subsidiaries that Agent reasonably may request.

 

5.4.                            Inspection.

 

Permit Agent and, if an
Event of Default shall have occurred and be continuing, any Lender, and each of
their duly authorized representatives or agents to visit any of its properties
and inspect any of its assets or books and records, to examine and make copies
of its books and records, and to discuss its affairs, finances, and accounts
with, and to be advised as to the same by, its officers, employees handling
financial matters and managerial employees at such reasonable times and
intervals during normal business hours as Agent or any such Lender may
designate and, so long as no Default or Event of Default exists, with
reasonable prior notice to Administrative Borrower.

 

5.5.                            Maintenance of Properties.

 

Maintain and preserve all
of their properties which are necessary or useful in the proper conduct of
their business in good working order and condition, ordinary wear, tear, and
casualty excepted, in each case except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change.  Comply at all times with the provisions of
all material leases to which it is a party as lessee, so as to prevent any loss
or forfeiture thereof or thereunder except to the extent the subject of a
Permitted Protest or except where the failure to do so could not reasonably be
expected to result in a Material Adverse Change.

 

32

 

5.6.                            Taxes.

 

Cause all assessments and
taxes, whether real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against Borrowers, the other Loan Parties, the WFF Foreign
Loan Parties, the Significant Subsidiaries, or any of their respective assets
to be paid in full, before delinquency or before the expiration of any
extension period, except to the extent that (a) the validity of such
assessment or tax shall be the subject of a Permitted Protest or (b) the
aggregate amount of all such unpaid past due (taking into account any
extensions) taxes that are not the subject of a Permitted Protest (other than
with respect to taxes due to any taxing authority in the United States or any
state thereof or the District of Columbia) does not exceed, at any one time,
$100,000.  Borrowers will and will cause
the other Loan Parties, the WFF Foreign Loan Parties and the Significant
Subsidiaries to make timely payment or deposit of all withholding taxes, social
security and unemployment taxes required of them by Applicable Laws, including
those laws concerning F.I.C.A., F.U.T.A and state disability, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest, and will, upon request, furnish Agent with proof reasonably
satisfactory to Agent indicating that the applicable Borrower, Loan Party, WFF
Foreign Loan Party or Significant Subsidiary has made such payments or
deposits.

 

5.7.                            Insurance.

 

(a)          At Borrowers’ or WFF Foreign Borrowers’ expense,
maintain insurance respecting their and their Subsidiaries’ assets wherever
located, covering loss or damage by fire, theft, explosion, and all other
hazards and risks as ordinarily are insured against by other Persons engaged in
the same or similar businesses; provided, that no Borrower or WFF Foreign
Borrower shall be required to maintain insurance with respect to leased real
property if the landlord thereof maintains such insurance.  Borrowers also shall maintain business
interruption, and public liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation.  All such policies of insurance shall be in
such amounts and with such insurance companies (or with respect to health
insurance and workers compensation insurance, self insurance programs) as are
reasonably satisfactory to Agent. 
Borrowers shall deliver copies of all such policies to Agent with an
endorsement naming the Agent as the sole (other than the Senior Collateral
Agent) loss payee (under a satisfactory lender’s loss payable endorsement) or
additional insured, as appropriate.  Each
policy of insurance or endorsement shall contain a clause requiring the insurer
to give not less than 30 days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever, or otherwise acceptable
to the Agent.

 

(b)         Administrative Borrower shall give Agent prompt notice
of any property or casualty loss in a Dollar Equivalent amount exceeding
$500,000 covered by such insurance.  So
long as no Event of Default has occurred and is continuing, Borrowers or WFF
Foreign Borrowers shall have the exclusive right to adjust any losses payable
under any such insurance policies which are in a Dollar Equivalent amount less
than $1,000,000.  Following the
occurrence and during the continuation of an Event of Default, or in the case
of any losses payable under such insurance in a Dollar Equivalent amount
exceeding $1,000,000,

 

33

 

Agent
shall have the exclusive right, subject to the terms of the Intercreditor
Agreement, to adjust any losses payable under any such insurance policies,
without any liability to Borrowers whatsoever in respect of such
adjustments.  Any monies received as
payment for any loss under any insurance policy of a Borrower mentioned above
(other than liability insurance policies) or as payment of any award or compensation
for condemnation or taking by eminent domain, shall be paid over to Agent,
subject to the terms of the Intercreditor Agreement, to be applied to the
prepayment of the Obligations in accordance with Section 2.4 or to be
disbursed to Administrative Borrower for application to the cost of repairs,
replacements, restorations or acquisitions in accordance with Section 2.4.

 

5.8.                            Location of Inventory and Equipment.

 

(a)          Keep Loan Parties’ Inventory and Equipment (other than
vehicles and Equipment out for repair and items in transit) only at the locations
identified on Schedule 4.5 or locations (i) not in existence
on the Closing Date and not then required to be disclosed pursuant to the
following proviso, or (ii) at which there are not more than 100 seats and
at which the aggregate book value of all assets at such location does not
exceed $750,000; provided, however, that Administrative Borrower
may amend Schedule 4.5 (it being understood that the Administrative
Borrower shall, to the extent necessary, update such schedule as part of
the quarterly Compliance Certificate for the second fiscal quarter of each
fiscal year, as part of the annual Compliance Certificate and upon the request
of Agent), so long as any such new location of a Borrower is within the
continental United States and any such new location of a WFF Foreign Borrower
is within the continental United States, Ireland, United Kingdom, Germany or
Canada, and so long as, with respect to any such location at which a Borrower’s
books and records are located, at the time of such written notification, the
applicable Borrower uses commercially reasonable efforts to obtain a Collateral
Access Agreement with respect thereto.

 

(b)         Keep Loan Parties’, WFF Foreign Loan Parties’ and
Significant Subsidiaries’ chief executive offices only at the locations
identified on Schedule 4.7(b); provided, however,
that Administrative Borrower may change any Loan Party’s, any WFF Foreign Loan
Party’s or any Significant Subsidiary’s chief executive office and notify Agent
of such change of a Loan Party’s, a WFF Foreign Loan Party’s or such
Significant Subsidiary’s chief executive office (i) 30 days prior to the
date on which such chief executive office is relocated to the extent any
Borrower’s books and records are located at such office or (ii) otherwise
as part of the quarterly Compliance Certificate for the second fiscal quarter
of each fiscal year, as part of the annual Compliance Certificate and upon the
request of Agent, in each case so long as any such new location of a Loan Party
is within the continental United States and any such new location of a WFF
Foreign Loan Party is within the continental United States, Ireland, United
Kingdom, Germany or Canada, and so long as, with respect to any such location
at which a Borrower’s books and records are located, at the time of such
written notification, the applicable Borrower uses commercially reasonable
efforts to obtain a Collateral Access Agreement with respect thereto.

 

34

 

5.9.                            Compliance with Laws.

 

Comply with the
requirements of all Applicable Laws, rules, regulations, and orders of any
Governmental Authority, other than Laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change.

 

5.10.                     Leases.

 

Pay when due all rents
and other amounts payable under any material leases to which any Loan Party,
any WFF Foreign Loan Party or any Significant Subsidiary is a party or by which
any Loan Party’s, any WFF Foreign Loan Party’s or any Significant Subsidiary’s
properties and assets are bound, unless such payments are the subject of a
Permitted Protest or failure to make such payments could not reasonably be
expected to result in a Material Adverse Change.

 

5.11.                     Existence.

 

At all times preserve and
keep in full force and effect each Loan Party’s, each WFF Foreign Loan Party’s
and each Significant Subsidiary’s (a) valid existence and, if applicable,
good standing in its jurisdiction of organization and (b) qualifications
to do business as a foreign entity in each jurisdiction in which it is required
to be so qualified and any rights and franchises material to their businesses
except to the extent (i) permitted under Section 6.3 or 6.4 or (ii) failure
to maintain such qualifications, rights or franchises could not reasonably be
expected to result in a Material Adverse Change.

 

5.12.                     Environmental.

 

(a)          Except as could not
reasonably be expected to result in a Material Adverse Change, keep any
property either owned or operated by any Borrower or any Subsidiary of a
Borrower free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply with Environmental Laws except to the
extent non-compliance could not reasonably be expected to result in a Material
Adverse Change and provide to Agent documentation of such compliance which
Agent reasonably requests, (c) promptly upon obtaining knowledge thereof
notify Agent of any release of a Hazardous Material in any reportable quantity
from or onto property owned or operated by any Borrower or any Subsidiary of a
Borrower that could reasonably be expected to result in a Material Adverse
Change and take any Remedial Actions required to come into compliance with
applicable Environmental Law (except to the extent such noncompliance could not
reasonably be expected to result in a Material Adverse Change), and (d) promptly,
but in any event within 10 days of its receipt thereof, provide Agent with
written notice of any of the following:  (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of any Borrower or any Subsidiary of a Borrower, (ii) commencement
of any Environmental Action or notice that an Environmental Action will be
filed against any Borrower or any Subsidiary of a Borrower, and (iii) notice
of

 

35

 

a
violation, citation, or other administrative order relating to Environmental
Laws or Environmental Liabilities which reasonably could be expected to result
in a Material Adverse Change.

 

5.13.                     Disclosure Updates.

 

Promptly and in no event
later than 10 Business Days after obtaining knowledge thereof, notify Agent if
any written information, exhibit, or report furnished on its behalf to the
Lender Group contained, at the time it was furnished, when taken together with
all other information, exhibits or reports previously furnished, any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in any material respect in
light of the circumstances in which made. 
The foregoing to the contrary notwithstanding, any notification pursuant
to the foregoing provision will not cure or remedy the effect of the prior
untrue statement of a material fact or omission of any material fact nor shall
any such notification have the affect of amending or modifying this Agreement
or any of the Schedules hereto.

 

5.14.                     Control
Agreements.

 

Take all reasonable steps
in order for Agent to obtain control in accordance with Sections 8-106, 9-104,
and 9-106 of the Code with respect to (subject to the proviso contained in Section 6.12)
all of the Borrowers’ Securities Accounts and Deposit Accounts, in each case to
the extent required by the Security Agreement. 
Provide written notice to Agent of any electronic chattel paper,
investment property, and letter of credit rights of any Loan Party and, upon
the request of Agent, take all reasonable steps in order for Agent to obtain
control in accordance with Sections 8-106, 9-105, 9-106, and 9-107 of the Code
with respect thereto, in each case to the extent required by the Security
Agreement.  Notwithstanding anything in
this Agreement or in any Control Agreement or any other Loan Document to the
contrary, Agent agrees that unless and until an Event of Default has occurred
and is continuing and subject to the terms of the Intercreditor Agreement,
Agent shall not give the applicable bank or securities intermediary notice
instructing the bank or securities intermediary to cease honoring the
applicable Loan Party’s instructions.

 

5.15.                     Formation of Subsidiaries; Further
Assurances.

 

(a)          At the time that any Borrower or any Guarantor forms
any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary
after the Closing Date, other than a Non-Loan Party Subsidiary or an Immaterial
Subsidiary, or any Borrower or any Guarantor designates any Non-Loan Party
Subsidiary or any Immaterial Subsidiary to be a Loan Party after the Closing
Date, such Borrower or such Guarantor shall (i) cause such new Subsidiary
(or such newly designated Loan Party) created or organized under the laws of
the United States or any state thereof or the District of Columbia to provide
to Agent a joinder to this Agreement and a Security Agreement, together with
such other security documents (including, if requested by Agent, Mortgages with
respect to any Real Property of any such new Borrower), as well as appropriate
financing statements (and with respect to all property

 

36

 

subject
to a Mortgage, fixture filings), all in form and substance satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
to Permitted Liens) in and to substantially all of the assets of such newly
formed or acquired Subsidiary), (ii) provide to Agent a pledge agreement
and appropriate certificates and powers or financing statements, hypothecating
all of the direct or beneficial ownership interest in such new Subsidiary (or
such newly designated Loan Party) created or organized under the laws of the
United States or any state thereof or the District of Columbia owned by such
Borrower or Guarantor, in form and substance reasonably satisfactory to Agent; provided
that if any WFF Obligations shall be then outstanding, such Person shall,
subject to the terms of the Intercreditor Agreement, deliver the original certificates
and powers to the Senior Collateral Agent, currently with a copy of the same to
the Agent, (iii) upon the request of Agent, provide to Agent a pledge
agreement and appropriate certificates and powers or financing statements,
hypothecating, 65% of all of the total outstanding voting Stock in such new
Subsidiary (or such newly designated Loan Party) created or organized under the
laws of any jurisdiction other than the United States or any state thereof or
the District of Columbia owned directly by such Borrower or Guarantor, in form
and substance reasonably satisfactory to Agent, to secure the Obligations; provided,
that (x) any such pledge with respect to the Stock of a Subsidiary created or
organized under the laws of United Kingdom or Canada or any state or province
thereof shall be substantially in the form of the pledge provided under the
laws of such jurisdiction on the Closing Date, (y) the Agent shall not require
any legal opinion with respect to any pledge with respect to the Stock of a
Subsidiary created or organized under any jurisdiction other than Ireland,
United Kingdom, Germany or Canada or any state or province thereof and (z) if
any WFF Obligations shall be then outstanding, such Person shall, subject to
the terms of the Intercreditor Agreement, deliver the original certificates and
powers to the Senior Collateral Agent, currently with a copy of the same to the
Agent, and (iv) provide to Agent all other documentation, including
(subject to the proviso in clause (iii) above) one or more opinions of
counsel satisfactory to Agent, which in its opinion is appropriate with respect
to the execution and delivery of the applicable documentation referred to above
(including policies of title insurance or other documentation with respect to
all property subject to a Mortgage).  Any
document, agreement, or instrument executed or issued pursuant to this Section 5.15(a) shall
be a Loan Document.

 

(b)         Upon the request of Agent, each Loan Party shall (i) provide
to Agent a pledge agreement and appropriate certificates and powers or
financing statements, hypothecating 65% of all of the direct or beneficial
ownership interest of such Loan Party in each Non-Loan Party Subsidiary, in
form and substance satisfactory to Agent, to secure the Obligations; provided
that, if any WFF Obligations shall be then outstanding, such Person shall,
subject to the terms of the Intercreditor Agreement, deliver the original
certificates and powers to the Senior Collateral Agent, currently with a copy
of the same to the Agent, and (ii) provide to Agent all other
documentation (excluding opinions of counsel) satisfactory to Agent, which in
its opinion is necessary and appropriate with respect to the pledges referred
to above.  Any document, agreement, or
instrument executed or issued pursuant to this Section 5.15(b) shall
be a Loan Document.

 

37

 

5.16.                     WFF Loan Documents. 
Promptly provide Agent with true and complete copies of any
and all material documents and other material information delivered by or to
any Loan Party pursuant to the terms of the WFF Loan Documents, except any such
documents or other information otherwise required to be delivered hereunder.

 

6.                                      NEGATIVE COVENANTS.

 

Each Borrower covenants
and agrees that, until the payment in full of the Obligations,
Borrowers will not and will not permit any other Loan Party, any WFF Foreign
Loan Party or any Significant Subsidiary to do any of the following:

 

6.1.                            Indebtedness.

 

Create, incur, assume,
suffer to exist, or otherwise become or remain, directly or indirectly, liable
with respect to, any Indebtedness, except:

 

(a)          Indebtedness evidenced by this Agreement and the other
Loan Documents;

 

(b)         Indebtedness set forth on Schedule 4.19;

 

(c)          Permitted Purchase Money Indebtedness;

 

(d)         refinancings, renewals, or extensions of Indebtedness
originally permitted under clause (b) of this Section 6.1 (and
continuance or renewal of any Permitted Liens associated therewith) so long as:
(i) such refinancings, renewals, or extensions do not result in an
increase in the principal amount of (except for increases related to the costs
of such issuances that do not exceed 1.5% of the original principal amount), or
interest rate with respect to, the Indebtedness so refinanced, renewed, or extended
or add one or more Loan Parties as liable with respect thereto if such
additional Loan Parties were not liable with respect to the original
Indebtedness, (ii) such refinancings, renewals, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions, that,
taken as a whole, are materially more burdensome or restrictive to the
applicable Borrowers, and (iii) if the Indebtedness that is refinanced, renewed,
or extended was subordinated in right of payment to the Obligations, then the
terms and conditions of the refinancing, renewal, or extension Indebtedness
must include subordination terms and conditions that are at least as favorable
to the Lender Group as those that were applicable to the refinanced, renewed,
or extended Indebtedness;

 

(e)          endorsement of instruments or other payment
items for deposit;

 

(f)            Indebtedness comprising Permitted Investments;

 

(g)         (i) guaranties of any
Indebtedness permitted under this Section 6.1 solely to the extent
such Loan Party, such WFF Foreign Loan Party or such Significant Subsidiary
would be permitted to incur such Indebtedness under this Section 6.1
as a primary obligor

 

38

 

(other
than pursuant to this clause (g)) and (ii) other guarantees issued by Loan
Parties, WFF Foreign Loan Parties and Significant Subsidiaries of Purchase
Money Indebtedness incurred by any Subsidiary of Parent in connection with the
acquisition of such Subsidiary in an aggregate Dollar Equivalent amount not to
exceed $1,000,000 at any one time outstanding;

 

(h)         (i) Indebtedness under Hedge Agreements entered
into for business and not speculative purposes incurred in order to protect
against (A) price fluctuations with respect to materials used in or
services provided for the business of a Borrower or a WFF Foreign Borrower, (B) fluctuations
in interest rates or (C) fluctuations in foreign exchange rates and (ii) Indebtedness
of Loan Parties or WFF Foreign Loan Parties that are not Borrowers or WFF
Foreign Borrowers and Significant Subsidiaries under Hedge Agreements entered
into for business and not speculative purposes incurred in order to protect
against (A) price fluctuations with respect to materials used in or
services provided for the business of a Loan Party, WFF Foreign Loan Party or
Significant Subsidiary, (B) fluctuations in interest rates or (C) fluctuations
in foreign exchange rates;

 

(i)             Indebtedness in respect of (i) intercompany loans
among Borrowers, (ii) intercompany loans among WFF Foreign Borrowers made
with the proceeds of WFF Foreign Advances and (iii) intercompany loans
made by a Foreign Subsidiary to a Borrower; provided, that (x) such
intercompany loans are evidenced by promissory notes, in form and substance
acceptable to Agent, and, in the case of notes evidencing Indebtedness owed to
a Loan Party, which promissory notes have been pledged to Senior Collateral
Agent and (y) such intercompany loans are unsecured;

 

(j)             Indebtedness of Loan Parties and their respective
Subsidiaries in respect of intercompany loans permitted under clauses (g) and
(h) of the definition of Permitted Investments;

 

(k)          Indebtedness in an aggregate Dollar Equivalent amount
not to exceed $5,000,000 for all Loan Parties, WFF Foreign Loan Parties and
Significant Subsidiaries at any one time outstanding arising from the honoring
by a bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business so long as such
Indebtedness is extinguished within 10 Business Days of the incurrence thereof;

 

(l)             Indebtedness of SITEL Iberica Teleservices, S.A. in an
aggregate Dollar Equivalent principal amount not to exceed $20,000,000 at any
time outstanding;

 

(m)       the WFF Indebtedness;

 

(n)         [intentionally omitted];

 

(o)         at any time prior to the incurrence of the WFF Term
Loan A and the Term Loan B, Indebtedness under the Indenture; and

 

39

 

(p)         additional Indebtedness of the Loan Parties,
WFF Foreign Loan Parties and Significant Subsidiaries (other than SITEL Iberica
Teleservices, S.A.) not incurred in reliance on clauses (a) through (o)
above in an aggregate Dollar Equivalent principal amount that does not exceed
$5,000,000 at any one time outstanding.

 

6.2.                            Liens.

 

Create, incur, assume, or
suffer to exist, directly or indirectly, any Lien on or with respect to any of
its assets, of any kind, whether now owned or hereafter acquired, or any income
or profits therefrom, except for Permitted Liens.

 

6.3.                            Restrictions on Fundamental Changes.

 

(a)          Enter into any amalgamation, merger, consolidation,
reorganization, or recapitalization, or reclassify its Stock, except that, if
at the time thereof and immediately after giving effect thereto no Event of
Default shall have occurred and be continuing, (1) any Subsidiary of a
Borrower may be amalgamated, merged or consolidated with or into any Loan
Party, any WFF Foreign Loan Party or any Significant Subsidiary (provided that in any such amalgamation,
merger or consolidation involving (w) a Borrower, a Borrower shall be the
continuing or surviving entity, (x) a Loan Party but not a Borrower, a Loan
Party shall be the continuing or surviving entity, (y) a WFF Foreign Borrower
but not a Loan Party, a WFF Foreign Borrower shall be the continuing or
surviving entity and (z) a WFF Foreign Loan Party but not a Loan Party or a WFF
Foreign Borrower, a WFF Foreign Loan Party shall be the continuing or surviving
entity) and (2) the transactions described in the Pre-approved
Restructurings Letter shall be permitted,

 

(b)         Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), except that, if at the time thereof and
immediately after giving effect thereto no Event of Default shall have occurred
and be continuing, (1) a Significant Subsidiary may liquidate, wind-up or
dissolve with and into a Subsidiary of a Borrower or a WFF Foreign Borrower if
the Administrative Borrower determines in good faith that such transaction is
in the best interests of the Administrative Borrower, and such transaction is
not materially disadvantageous to the Lenders; provided that, a
Significant Subsidiary that is a Domestic Subsidiary may only liquidate,
wind-up or dissolve with and into another Domestic Subsidiary and (2) the
transactions described in the Pre-approved Restructurings Letter shall be
permitted,

 

(c)          Except as permitted under Section 6.4,
convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets, or

 

(d)         Suspend or go out of a substantial portion of its or
their business except (1) to the extent such suspension or going out of
business could not reasonably be expected to result in a Material Adverse
Change and (2) the transactions described in the Pre-approved
Restructurings Letter shall be permitted.

 

40

 

6.4.                            Disposal of Assets.

 

Other than as permitted
under Section 6.3 and Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of any of the assets of any
Loan Party, any WFF Foreign Loan Party or any Significant Subsidiary.

 

6.5.                            Change Name.

 

Except in connection with
a transaction permitted pursuant to Section 6.3, change any Loan
Party’s, any WFF Foreign Loan Party’s or any Significant Subsidiary’s name,
organizational identification number, state of organization, or organizational
identity; provided, however, that a Loan Party, a WFF Foreign
Loan Party or a Significant Subsidiary may change its name or organizational
identification number upon at least 15 Business Days prior written notice by
Administrative Borrower to Agent of such change and so long as, at the time of
such written notification, such Loan Party, such WFF Foreign Loan Party or such
Significant Subsidiary provides any financing statements necessary to perfect
and continue perfected the Agent’s Liens.

 

6.6.                            Nature of Business.

 

Make any material change
in the principal nature of the business of the Loan Parties, the WFF Foreign
Loan Parties and the Significant Subsidiaries, taken as a whole.

 

6.7.                            Prepayments and Amendments.

 

Except in connection with
a refinancing permitted by Sections 6.1 (c), (d), or (n),

 

(a)          optionally prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness of any Loan Party, WFF Foreign Loan Party or
Significant Subsidiary (other than (i) the Obligations in accordance with
this Agreement, (ii) the WFF Obligations in accordance with the WFF Credit
Agreement or (iii) intercompany loans owed to Borrowers, intercompany
loans among WFF Foreign Borrowers, intercompany loans among Guarantors,
intercompany loans among WFF Foreign Guarantors, intercompany loans among
Foreign Subsidiaries that are not Loan Parties or WFF Foreign Loan Parties,
intercompany loans owed by any Guarantor to a Borrower, intercompany loans owed
by any Foreign Subsidiary to a Borrower or WFF Foreign Borrower or intercompany
loans owed by any Foreign Subsidiary to a Loan Party or WFF Foreign Loan
Party), unless (x) with respect to Indebtedness other than the intercompany
Indebtedness subordinated pursuant to the terms of the Intercompany
Subordination Agreement, such Indebtedness has not been contractually
subordinated to the Obligations in right of payment, (y) no Event of Default
shall have occurred and be continuing or would result from such prepayment,
redemption, defeasement, purchase or acquisition and (z) daily average Dollar
Equivalent of WFF Excess Availability for the immediately preceding 30
consecutive day period is at least $15,000,000 and, immediately prior to such
prepayment, redemption, defeasement, purchase or acquisition and

 

41

 

immediately
after giving effect to such prepayment, redemption, defeasement, purchase or
acquisition, the Dollar Equivalent of WFF Excess Availability is at least
$15,000,000; provided, that any Loan Party, WFF Foreign Loan Party or
Significant Subsidiary may make optional prepayments of intercompany
Indebtedness by set off (and not in cash) against obligations owed to such Loan
Party, WFF Foreign Loan Party or Significant Subsidiary by another Borrower or
Subsidiary of a Borrower so long as no Event of Default shall have occurred and
be continuing or would result from such set off; provided, however,
that no Foreign Subsidiary may make any optional prepayment of intercompany
Indebtedness owed by such Foreign Subsidiary to a Loan Party by set off to the
extent such prepayment is prohibited in the definition of “Permitted Investment”,

 

(b)         [intentionally omitted],

 

(c)          make any payment on account of
Indebtedness that has been contractually subordinated in right of payment if
such payment is not permitted at such time under the subordination terms and
conditions, or

 

(d)         directly or indirectly, amend, modify, alter, or
change any of the terms or conditions of (i) any of the WFF Loan Documents
to the extent that the Intercreditor
Agreement prohibits the holders of the WFF Indebtedness from so amending,
modifying or supplementing the same or (ii) any
agreement, instrument, document, indenture, or other writing evidencing or
concerning Indebtedness permitted under Section 6.1(b) in a
manner that is materially adverse to the Lenders.

 

6.8.                            Change of Control.

 

Cause, permit, or suffer,
directly or indirectly, any Change of Control.

 

6.9.                            [Intentionally Omitted].

 

6.10.                     Distributions.

 

Make any distribution or
declare or pay any dividends (in cash or other property) on, or purchase,
acquire, redeem, or retire, any of any Borrower’s Stock, of any class, (any of
the foregoing, a “Restricted Payment”), whether now or hereafter
outstanding; provided that the following shall be permitted: (a) Restricted
Payments by a WFF Foreign Borrower to another Borrower or WFF Foreign Borrower
(including, solely for purposes thereof, Restricted Payments to any
intermediate holding company) or by a Borrower to another Borrower, (b) Restricted
Payments paid solely in common Stock, and (c) Restricted Payments in
amounts necessary to permit a Borrower to repurchase Stock of such Borrower
from employees of such Borrower or another Borrower upon the termination of
their employment, so long as no Default or Event of Default exists at the time
of or would be caused by the making of such Restricted Payment and so long as
the aggregate Dollar Equivalent amount of all such Restricted Payments for all
Borrowers made pursuant to this clause (c) does not exceed $2,000,000
during any fiscal year of Borrowers.

 

42

 

6.11.                     Accounting Methods.

 

Modify or change their
fiscal year or their method of accounting (other than as may be required to
conform to GAAP) or enter into, modify, or terminate any agreement currently
existing, or at any time hereafter entered into, with any third party
accounting firm or service bureau for the preparation or storage of Borrowers’
or their Subsidiaries’ accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding Borrowers’ and
their Subsidiaries’ financial condition.

 

6.12.                     Investments.

 

Except for Permitted
Investments, directly or indirectly, make or acquire any Investment; provided,
however, that Borrowers shall not have Permitted Investments (other than
in the Deposit Accounts and Securities Accounts subject to Control Agreements
and Excluded Deposit Accounts) in Deposit Accounts or Securities Accounts in an
aggregate Dollar Equivalent amount in excess of $500,000 at any one time unless
the applicable Borrower and the applicable securities intermediary or bank have
entered into Control Agreements governing such Permitted Investments in order
to perfect (and further establish) the Agent’s Liens in such Permitted
Investments.  Subject to the foregoing
proviso, Borrowers shall not establish or maintain any Deposit Account or
Securities Account unless Agent shall have received a Control Agreement in respect
of such Deposit Account or Securities Account.

 

6.13.                     Transactions with Affiliates.

 

Directly or indirectly
enter into or permit to exist any transaction with any
Affiliate of any Borrower except:

 

(a)          transactions that (i) are upon fair and
reasonable terms, (ii) if they involve one or more payments by any
Borrower or any of its Subsidiaries which are in a Dollar Equivalent amount in
excess of $250,000 for any single transaction or series of transactions, are
fully disclosed to Agent, and (iii) are no less favorable to Borrowers or
their respective Subsidiaries, as applicable, than would be obtained in an arm’s
length transaction with a non-Affiliate;

 

(b)         intercompany loans among Loan Parties, WFF Foreign
Loan Parties and their Subsidiaries permitted under Section 6.1,
investments permitted under Section 6.12 or any transaction
expressly permitted under Sections 6.2, 6.3, 6.4 or 6.10;

 

(c)          transactions among Loan Parties and WFF Foreign
Loan Parties and transactions among Significant Subsidiaries;

 

(d)         reasonable director’s fees for any director;

 

(e)          indemnification arrangements for directors,
officers, employees or consultants;

 

43

 

(f)            any arrangements as in effect as of the date of this
Agreement and described on Schedule 6.13 hereto or any transaction
contemplated thereby (including pursuant to an amendment thereto or any
replacement agreement thereto so long as any amendment or replacement agreement
is not more disadvantageous to the Agent and Lenders in any material respect
than the original agreement on the date of this Agreement);

 

(g)         transactions in the ordinary course of business
between and among Loan Parties, WFF Foreign Loan Parties and Subsidiaries of
Parent in connection with subcontractor arrangements and guarantees of ordinary
course obligations of Subsidiaries of Parent not constituting Indebtedness; and

 

(h)         management fees payable to Borrowers and
management fees payable by any Foreign Subsidiary to any WFF Foreign Borrower
organized in the United Kingdom.

 

6.14.                     Use of Proceeds.

 

Use the proceeds of the
Term Loan B for any purpose other than, together with the proceeds of the WFF
Term Loan A and WFF Advances with respect to clause (i), (i) to repay in
full the outstanding principal, accrued interest, and accrued fees and expenses
evidenced by the Indenture and (ii) to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, the other Loan Documents,
and the transactions contemplated hereby and thereby.

 

6.15.                     SITEL Mexico Holdings LLC and
SITMEX-USA, LLC.

 

Permit SITEL Mexico
Holdings LLC, a Nebraska limited liability company or SITMEX-USA, LLC, a
Delaware limited liability company, to engage in any business, other than
acting as a holding company and transactions incidental thereto, the making of Investments
in Persons that are not Loan Parties or WFF Foreign Loan Parties, the
performance of ministerial activities and the payment of taxes and
administrative fees and expenses; provided, that the transactions
described in the Pre-approved Restructurings Letter shall be permitted to the
extent such transactions are consummated on the terms set forth in the
Pre-approved Restructurings Letter.

 

6.16.                     Non-Loan Party Subsidiaries;
Immaterial Subsidiaries.

 

(a)          Permit (i) any Liens (other than Agent’s Liens
and Liens in favor of Senior Collateral Agent, if any) on the capital stock of
any Non-Loan Party Subsidiary, (ii) the Non-Loan Party Subsidiaries to (A) incur
any Indebtedness (other than intercompany loans permitted under Section 6.12)
in an aggregate amount at any time outstanding in excess of $7,000,000 less any
outstanding Indebtedness incurred in reliance on clause (p) of Section 6.1,
or (B) incur any Liens other than Liens that would constitute Permitted
Liens if all such Subsidiaries were deemed to be Significant Subsidiaries or (iii) (A) the
aggregate revenue of all Non-Loan Party Subsidiaries for any fiscal quarter to
exceed the Maximum Non-Loan Party Percentage of the aggregate revenue of
Administrative Borrower and its Subsidiaries

 

44

 

for such
fiscal quarter or (B) the revenue of all Non-Loan Party Subsidiaries
organized under the laws of any single jurisdiction for any fiscal quarter to
exceed 2.5% of the aggregate revenue of Administrative Borrower and its
Subsidiaries for such fiscal quarter; provided, that, any failure of Borrowers
to comply with this clause (iii) shall not constitute a breach of this
Agreement if, on or prior to the earlier of (x) 10 days of such failure
becoming known to an officer of Administrative Borrower and (y) the date of
Administrative Borrower’s filing of its quarterly report on form 10-Q for any
fiscal quarter, Administrative Borrower designates in a written notice certain
Non-Loan Party Subsidiaries to be Loan Parties, WFF Foreign Loan Parties or
Significant Subsidiaries such that, after giving effect to such designation, on
a pro forma basis, Borrowers shall be in compliance with this clause (iii), so
long as immediately after giving effect thereto no Default or Event of Default
shall have occurred and be continuing.

 

(b)         Permit any Immaterial Subsidiary to (i) engage in
any type of business activity or (ii) own assets with a fair market value
in excess of $250,000.

 

6.17.                     Financial Covenants.

 

(a)          Fail to maintain or achieve:

 

(i)                                     Minimum EBITDA. 
EBITDA, measured on a month-end basis, of at least the
required amount set forth in the following table for the applicable period set
forth opposite thereto:

 

	
  Applicable Period

  	
   

  	
  Applicable Amount

  	
   

  
	
  For the 12 month periods ending August 31, 2005
  and September 30, 2005

  	
   

  	
  $

  	
  44,000,000

  	
   

  
	
  For the 12 month period ending each month thereafter

  	
   

  	
  $

  	
  45,000,000

  	
   

  

 

(ii)                                  Fixed Charge Coverage Ratio.  A Fixed Charge Coverage Ratio,
measured on a month-end basis, of at least the required ratio set forth in the
following table for the applicable period set forth opposite thereto:

 

	
  Applicable Ratio

  	
   

  	
  Applicable Period

  	
   

  
	
  1.0:1.0

  	
   

  	
  For the 12 month periods

  ending August 31, 2005 and September 30, 2005

  	
   

  
	
  1.1:1.0

  	
   

  	
  For the 12 month period

  ending each month thereafter

  	
   

  

 

45

 

(iii)                               Leverage Ratio. 
A Leverage Ratio, measured on a quarter-end basis, of not
more than the ratio set forth in the following table for the applicable period
set forth opposite thereto:

 

	
  Applicable Ratio

  	
   

  	
  Applicable Period

  	
   

  
	
  2.75:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending September 30, 2005 and December 31, 2005

  	
   

  
	
  2.50:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending March 31, 2006

  	
   

  
	
  2.25:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending June 30, 2006

  	
   

  
	
  2.00:1.0

  	
   

  	
  For the 4 fiscal quarters

  ending each fiscal quarter thereafter

  	
   

  

 

(b)         Capital Expenditures.  Make or permit any Subsidiary of Parent to make,
Capital Expenditures in any fiscal year, that would
cause the aggregate amount of all Capital Expenditures made by the Parent and
its Subsidiaries to exceed the amount set forth in the following table for the
applicable period:

 

	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  2005

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  42,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  44,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  46,000,000

  	
   

  
	
  each Fiscal Year thereafter

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

46

 

(c)          WFF US Excess Availability.  Fail to maintain at any time WFF US Excess
Availability equal to or in excess of $7,500,000.

 

6.18.                     Negative Covenant Application. 
At any time prior to the Lender Group (or any member
thereof) making the Term Loan B hereunder, (i) Section 6.1, (ii) clauses
(a), (b) and (c) of Section 6.3, (iii) Section 6.4,
(iv) Section 6.7, (v) Section 6.10, (vi) Section 6.12,
(vii) Section 6.13, (viii) Section 6.15 and (ix) Section 6.16
(collectively, the “Funding Date Covenants”), shall not apply to the
extent such provisions would apply to transactions by and between the Parent
and its Subsidiaries or by and among the Subsidiaries of the Parent.  Upon the making of the Term Loan B and the
application of the proceeds thereof and thereafter, each Loan Party, each WFF
Foreign Loan Party and each Significant Subsidiary shall be subject to, and
each Borrower hereby agrees to comply with and to cause each other Loan Party,
WFF Foreign Loan Party and Significant Subsidiary to comply with, the Funding
Date Covenants.  

 

7.                                      EVENTS OF DEFAULT.

 

Any one or more of the
following events shall constitute an event of default (each, an “Event of
Default”) under this Agreement:

 

7.1.                              If any Loan Party
fails to pay when due and payable, or when declared due and payable, (a) all
or any portion of the Obligations consisting of interest, fees, or charges due
the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other
than any portion thereof constituting principal) constituting Obligations
(including any portion thereof that accrues after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or
in part as a claim in any such Insolvency Proceeding), and such failure
continues for a period of 3 Business Days, or (b) all or any portion of
the principal of the Obligations;

 

7.2.                              If any Loan Party
or WFF Foreign Loan Party (after giving effect to Section 6.18)

 

(a)          fails to perform or observe any covenant or other
agreement contained in any of Sections 2.7, 5.2, 5.3, 5.4,
5.7, 5.11, 5.13, 5.14, and 6.1 through 6.17
of this Agreement;

 

(b)         fails to perform or observe any covenant or other
agreement contained in any of Sections 5.5, 5.6, 5.8, 5.9,
5.10 and 5.15 of this Agreement and such failure continues for a
period of 10 days after the earlier of (i) the date on which such failure
shall first become known to any officer of any Loan Party or (ii) written
notice thereof is given to Administrative Borrower by Agent; or

 

(c)          fails to perform or observe any covenant or other
agreement contained in this Agreement, or in any of the other Loan Documents
(giving effect to any grace periods, cure periods, or required notices, if any,
provided for therein), in each case, other than any

 

47

 

such
covenant or agreement that is the subject of another provision of this Section 7
(in which event such other provision of this Section 7 shall
govern), and such failure continues for a period of 20 days after the earlier
of (i) the date on which such failure shall first become known to any
officer of any Loan Party or (ii) written notice thereof is given to
Administrative Borrower by Agent;

 

7.3.                              If any material
portion of Loan Parties’ assets, taken as a whole, or WFF Foreign Loan Parties’
assets, taken as a whole, is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or, in connection with a claim of any third Person,
comes into the possession of such third Person and the same is not discharged
before the earlier of 30 days after the date it first arises or 5 days prior to
the date on which such property or asset is subject to forfeiture by such Loan
Party;

 

7.4.                              If an Insolvency
Proceeding is commenced by any Loan Party or any Subsidiary of a Loan Party;

 

7.5.                              If an Insolvency
Proceeding is commenced against any Loan Party or any Subsidiary of a Loan
Party (other than Immaterial Subsidiaries), and any of the following events occur:  (a) the applicable Loan Party or
Subsidiary consents to the institution of such Insolvency Proceeding against
it, (b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof; (d) an
interim trustee (or if applicable, a trustee, an administrator, administrative
or other receiver or similar officer) is appointed to take possession of all or
any substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, any Loan Party or any Subsidiary of
a Borrower, or (e) an order for relief shall have been issued or entered
therein;

 

7.6.                              If any Loan
Party, WFF Foreign Loan Party or any Significant Subsidiary is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;

 

7.7.                              If one or more
judgments involving an aggregate Dollar Equivalent amount of $1,500,000, or
more (except to the extent covered by insurance pursuant to which coverage is
not denied or excluded by the insurer and the applicable Loan Party, WFF
Foreign Loan Party or Significant Subsidiary is in receipt of the insurance proceeds
within one hundred eighty (180) days of the entry of such judgment) shall be
entered against any Loan Party, any WFF Foreign Loan Party or any Significant
Subsidiary or with respect to a material portion of any of their respective
assets, and the same is not released, discharged, bonded against, or stayed
pending appeal before the earlier of 30 days after the date it first arises or
5 days prior to the date on which such asset is subject to being forfeited by
the applicable Loan Party, applicable WFF Foreign Loan Party or applicable
Significant Subsidiary;

 

48

 

7.8.                              If there is a
default in (a) the WFF Loan Documents, or (b) one or more agreements
to which any Loan Party, any WFF Foreign Loan Party or any Significant
Subsidiary is a party with one or more third Persons relative to Indebtedness
of any Loan Party, any WFF Foreign Loan Party or any Significant Subsidiary
(other than Indebtedness of a Foreign Subsidiary to a Loan Party) involving an
aggregate Dollar Equivalent amount of  $5,000,000 or more, and in the case
of clauses (a) or (b), such default (i) occurs at the final maturity
of the obligations thereunder, or (ii) results in a right by such third
Person(s), irrespective of whether exercised, to accelerate the maturity of the
applicable Loan Party’s, any WFF Foreign Loan Party’s or any Significant
Subsidiary’s obligations thereunder;

 

7.9.                              If any warranty,
representation, statement, or Record made herein or in any other Loan Document
or delivered to Lender in connection with this Agreement or any other Loan
Document proves to be untrue in any material respect as of the date of issuance
or making or deemed making thereof;

 

7.10.                        If the obligation
of any Guarantor under any Guaranty is limited or terminated by operation of
Law or, except as expressly permitted under the Loan Documents, by such
Guarantor;

 

7.11.                        If the Security
Agreement or any other Loan Document that purports to create a Lien, shall, for
any reason, fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien on or
security interest in a material portion of the Collateral covered thereby,
except (a) as a result of a disposition of the applicable Collateral in a transaction
permitted under this Agreement or (b) as a result of Agent’s failure to
maintain possession of stock certificates, notes or other instruments delivered
to it; or

 

7.12.                        Any material
provision of any Loan Document shall at any time for any reason be declared to
be null and void, or the validity or enforceability thereof shall be contested
by any Loan Party or any Subsidiary of a Loan Party, or a proceeding shall be
commenced by any Loan Party or any Subsidiary of a Loan Party, or by any
Governmental Authority having jurisdiction over any Loan Party or any
Subsidiary of a Loan Party, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny that it has any
liability or obligation purported to be created under any Loan Document.

 

8.                                      THE LENDER GROUP’S RIGHTS AND
REMEDIES.

 

8.1.                            Rights and Remedies.

 

Upon the occurrence, and
during the continuation, of an Event of Default, the Required Lenders (at their
election but without notice of their election and without demand) may authorize
and instruct the Agent to do any one or more of the following on behalf of the
Lender Group (and Agent, acting upon the instructions of the Required Lenders,
shall do the same on behalf of the Lender Group), all of which are authorized by
Borrowers:

 

49

 

(a)          Declare all or any portion of the Obligations, whether
evidenced by this Agreement, by any of the other Loan Documents, or otherwise,
immediately due and payable;

 

(b)         Cease advancing money or extending credit to or for
the benefit of Borrowers under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrowers and the Lender Group;

 

(c)          Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent’s Liens in the Collateral and without
affecting the Obligations; and

 

(d)         Exercise all other rights and remedies available at
Law or in equity or pursuant to any other Loan Document.

 

The foregoing to the
contrary notwithstanding, upon the occurrence of any Event of Default described
in Section 7.4 or Section 7.5 as to any Borrower, in
addition to the remedies set forth above, without any notice to Borrowers or
any other Person or any act by the Lender Group,  the Obligations then outstanding, together
with all accrued and unpaid interest thereon and all fees and all other amounts
due under this Agreement and the other Loan Documents, shall automatically and
immediately become due and payable, without presentment, demand, protest, or
notice of any kind, all of which are expressly waived by Borrowers. The Agent
agrees to endeavor to notify Administrative Borrower of its or the Required
Lenders’ election to declare all of the Obligations immediately due and
payable; provided, that failure to provide such notice shall not (i) affect
the validity of any such action taken by Agent and/or the Required Lenders, (ii) constitute
a breach by Agent or any Lender of its obligations hereunder or under the other
Loan Documents or (iii) expose Agent or any Lender to any liability
hereunder or under the other Loan Documents.

 

8.2.                            Remedies Cumulative.

 

The rights and remedies
of the Lender Group under this Agreement, the other Loan Documents, and all
other agreements shall be cumulative. 
The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right
or remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute
a waiver, election, or acquiescence by it.

 

9.                                      TAXES AND EXPENSES.

 

If any Loan Party fails
to pay any monies (whether taxes, assessments, insurance premiums, or, in the
case of leased properties or assets, rents or other amounts payable under such
leases) due to third Persons, or fails to make any deposits or furnish any
required proof of payment or deposit, all as required under the terms of this
Agreement, then,

 

50

 

the Agent, in its
sole discretion and without prior notice to any Borrower, may do any or all of
the following:  (a) make payment of
the same or any part thereof, or (b) in the case of the failure to comply
with Section 5.7 hereof, obtain and maintain insurance policies of
the type described in Section 5.7 and, subject to the terms of the
Intercreditor Agreement, 
take any action with respect to such policies as Agent deems
prudent in its Permitted Discretion.  Any
such amounts paid by Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement.  Agent need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.

 

10.                               WAIVERS; INDEMNIFICATION.

 

10.1.                     Demand; Protest; etc.

 

Each Borrower waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of documents, instruments, chattel paper, and
guarantees at any time held by the Lender Group on which any such Borrower may
in any way be liable.

 

10.2.                     The Lender Group’s Liability for
Collateral.

 

Each Borrower hereby
agrees that:  (a) so long as Agent
complies with its obligations, if any, under the Code, the Lender Group shall
not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any
loss or damage thereto occurring or arising in any manner or fashion from any
cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other
Person, and (b) all risk of loss, damage, or destruction of the Collateral
shall be borne by Borrowers except with respect to Collateral in the possession
of Agent or any Lender to the extent such loss, damage or destruction directly
results from Agent’s or such Lender’s own willful misconduct or gross negligence
(as finally determined by a court of competent jurisdiction).

 

10.3.                     Indemnification.

 

Each Borrower shall pay,
indemnify, defend, and hold the Agent-Related Persons, the Lender-Related
Persons, and each Participant (each, an “Indemnified Person”) harmless
(to the fullest extent permitted by law) from and against any and all claims,
demands, suits, actions, investigations, proceedings, and damages, and all
reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith or in connection with the enforcement
of this indemnification (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
(including

 

51

 

any restructuring
or workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of
Borrowers’ and their Subsidiaries’ compliance with the terms of the Loan
Documents, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of
the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively,
the “Indemnified Liabilities”). 
The foregoing to the contrary notwithstanding, Borrowers shall have no
obligation to any Indemnified Person under this Section 10.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. 
This provision shall survive the termination of this Agreement and the
repayment of the Obligations.  If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto.  WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY
OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF
ANY OTHER PERSON.

 

11.                               NOTICES.

 

Unless otherwise provided
in this Agreement, all notices or demands by Borrowers or Agent to the others
relating to this Agreement or any other Loan Document shall be in writing and
(except for financial statements and other informational documents which may be
sent by first-class mail, postage prepaid) shall be personally delivered or
sent by registered or certified mail (postage prepaid, return receipt
requested), overnight courier, electronic mail (at such email addresses as
Administrative Borrower or Agent, as applicable, may designate to each other in
accordance herewith), or telefacsimile to Borrowers in care of Administrative
Borrower or to the Agent, as the case may be, at its address set forth below:

 

	
  If to Administrative Borrower:

  	
  SITEL CORPORATION

  
	
   

  	
  7277 World Communications Drive

  
	
   

  	
  Omaha, Nebraska  68122

  
	
   

  	
  Attn:  Chief Financial Officer

  
	
   

  	
  Fax No.:  (402) 963-2699

  
	
   

  	
   

  
	
  with copies to:

  	
  SITEL CORPORATION

  
	
   

  	
  7277 World Communications Drive

  
	
   

  	
  Omaha, Nebraska  68122

  
	
   

  	
  Attn:  General Counsel

  
	
   

  	
  Fax No.:  (402) 963-2699

  

 

52

 

	
  If to Agent:

  	
  ABLECO FINANCE LLC

  
	
   

  	
  299 Park Avenue

  
	
   

  	
  22nd Floor

  
	
   

  	
  New York, New York 10171

  
	
   

  	
  Attn: Mr. Eric F. Miller

  
	
   

  	
  Fax No.:  212-891-1541

  
	
   

  	
   

  
	
  with copies to:

  	
  SCHULTE
  ROTH & ZABEL LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:  Eliot L. Relles, Esq.

  
	
   

  	
  Fax No.:  212-593-5955

  

 

53

 

Agent and Borrowers may
change the address at which they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other party.  All notices or demands sent in accordance
with this Section 11, other than notices by Agent in connection
with enforcement rights against the Collateral under the provisions of the
Code, shall be deemed received on the earlier of the date of actual receipt or
3 Business Days after the deposit thereof in the mail.  Each Borrower acknowledges and agrees that
notices sent by the Lender Group in connection with the exercise of enforcement
rights against Collateral under the provisions of the Code shall, to the extent
permitted by law, be deemed sent when deposited in the mail or personally
delivered, or, where permitted by law, transmitted by telefacsimile or any
other method set forth above.

 

12.                               CHOICE OF LAW AND VENUE; JURY TRIAL
WAIVER.

 

(a)          THE VALIDITY OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

 

(b)          THE PARTIES AGREE
THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, TO THE FULLEST EXTENT PERMITTED BY LAW, IN THE COURTS OF ANY
JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. 
BORROWERS AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM  NON  CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c)          BORROWERS AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF

 

54

 

THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. 
BORROWERS AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

13.                               ASSIGNMENTS AND PARTICIPATIONS;
SUCCESSORS.

 

13.1.                     Assignments and Participations.

 

(a)          Any Lender may, with the written consent of the Agent,
assign and delegate to one or more assignees (each an “Assignee”) all,
or any ratable part of all, of the Term Loan B, the Commitments and the other
rights and obligations of such Lender hereunder, in a minimum amount of
$2,000,000 or a lesser amount if (i) such assignment and delegation is of
all of the Term Loan B and other rights and obligations of such Lender
hereunder or (ii) such assignment is to another Lender; provided,
that the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance, an Assignment and Acceptance, together with any
promissory note subject to such assignment and such parties shall deliver to
the Agent, for the benefit of the Agent, a processing and recordation fee of
$3,500 (except the payment of such fee shall not be required in connection with
an assignment by a Lender to an Affiliate of such Lender or a Related
Fund).  Notwithstanding the foregoing, no
Lender shall assign or delegate all, or any ratable part of all, of the Term
Loan B, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents to any direct competitor of the
Borrowers (provided that a financial institution which is an affiliate of a
direct competitor of Borrowers shall not constitute a direct competitor of
Borrowers for this purpose).  Further,
notwithstanding the foregoing, no Lender shall assign or delegate all, or any
ratable part of all, of the Term Loan B, the Commitments and the other rights
and obligations of such Lender hereunder and under the other Loan Documents to
any person that is subject to United States withholding tax at a rate in excess
of the rate that the assigning or selling Lender was subject to at the time of
the assignment or sale.

 

(b)         From and after the date
that Agent notifies the assignor Lender that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents and the Intercreditor Agreement,
and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan Documents
and the Intercreditor

 

55

 

Agreement
(and in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).

 

(c)          By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows:  (1) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the
other Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto, (2) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrowers or any other Loan Party or the performance or
observance by Borrowers or any other Loan Party of any of their obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (3) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance, (4) such
Assignee will, independently and without reliance upon Agent, such assigning
Lender or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents, (5) such Assignee appoints and authorizes Agent to take such
actions as agent on its behalf and to exercise such powers under this
Agreement, the other Loan Documents and the Intercreditor Agreement as are
delegated to Agent, by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto, (6) such Assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender, and (7) such Assignee expressly assumes all
rights and obligations of such assigning Lender under the Intercreditor
Agreement and agrees to be bound by the terms thereof.

 

(d)         In exchange for promissory notes previously delivered
by the Borrowers to the assigning Lender (if any), the Borrowers shall execute
and deliver to the Agent, new promissory notes evidencing such Assignee’s
assigned Term Loan B and, if the assignor Lender has retained a portion of its
Term Loan B, appropriate replacement promissory notes in the principal amount
of the Term Loan B retained by the assigning Lender.  Immediately upon each Assignee’s making its
processing fee payment under the Assignment and Acceptance, this Agreement
shall be deemed to be amended to the extent, but only to the extent, necessary
to reflect the addition of the Assignee and the resulting adjustment of the
Term Loan B arising therefrom.

 

(e)          Any Lender may at any time sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of
the Loan Parties (a “Participant”) participating interests in all or any
portion of its Obligations, the Commitments, and the other interests of that
Lender (the “Originating Lender”) hereunder and under the other Loan

 

56

 

Documents;
provided, however, that (i) the Originating Lender shall
remain a “Lender” for all purposes of this Agreement and the other Loan Documents
and the Participant receiving the participating interest in the Obligations and
the other rights and interests of the Originating Lender hereunder shall not
constitute a “Lender” hereunder or under the other Loan Documents and
the Originating Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Originating Lender shall remain solely responsible for
the performance of such obligations, (iii) Borrowers and Agent shall
continue to deal solely and directly with the Originating Lender in connection
with the Originating Lender’s rights and obligations under this Agreement and
the other Loan Documents and (iv) no Lender shall transfer or grant any
participating interest under which the Participant has the right to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document (except for any such amendment, consent or waiver that
reduces or postpones any amounts payable in which such Participant is
participating (other than any amendment, consent or waiver to Section 2.4(c))
or releases all or substantially all of the Collateral), and all amounts
payable by Loan Parties hereunder (including, without limitation, amounts
payable under Section 2.14 and Section 15.11) shall be
determined as if such Lender had not sold such participation, except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed, to the extent permitted by law,
to have the right of set off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement.  The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, the Collections of Loan Parties, the Collateral, or
otherwise in respect of the Obligations. 
No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.

 

(f)            Notwithstanding any other provision in this Agreement,
any Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
lender or lenders providing financing to such Lender or any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR § 203.14, and such lenders and such Federal
Reserve Bank may enforce such pledge or security interest in any manner permitted
under applicable law; provided, however, that such Lender shall
remain a “Lender” under this Agreement and shall continue to be bound by all
the terms and conditions set forth in this Agreement and the other Loan
Documents.

 

(g)         Agent shall, acting solely for this purposes as a
non-fiduciary agent of Borrowers,  maintain, or cause to be maintained, a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register (the “Register”) for the recordation of the names and addresses
of the Lenders and the principal amount of the Term Loan B and stated interest
thereon (the “Registered Loan”) owing to each Lender from time to
time.  The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and

 

57

 

the Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection
by any Borrower and any Lender at any reasonable time and from time to time
upon reasonable prior notice.

 

(h)         In the event that a Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the “Participant
Register”).  A Registered Loan (and
the Registered Note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant
Register (and each Registered Note shall expressly so provide).  Any participation of such Registered Loan
(and the Registered Note, if any, evidencing the same) may be effected only by
the registration of such participation on the Participant Register.

 

13.2.                     Successors.

 

This Agreement shall bind
and inure to the benefit of the respective successors and assigns of each of
the parties; provided, however, that Borrowers may not assign
this Agreement or any rights or duties hereunder without the Lenders’ prior
written consent and any prohibited assignment shall be absolutely void ab initio. 
No consent to assignment by the Lenders shall release any Borrower from
its Obligations.  A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 13.1 hereof and, except as
expressly required pursuant to Section 13.1 hereof, no consent or
approval by any Borrower is required in connection with any such assignment.

 

14.                               AMENDMENTS; WAIVERS.

 

14.1.                     Amendments and Waivers.

 

No amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrowers therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by the Agent at
the written request of the Required Lenders) and Administrative Borrower (on
behalf of all Borrowers) and then any such waiver or consent shall be
effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment,
or consent shall, unless in writing and signed by all of the Lenders affected
thereby and Administrative Borrower (on behalf of all Borrowers), do any of the
following:

 

(a)          increase or extend the Commitment of any
Lender,

 

(b)         postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due hereunder or under any other Loan Document,

 

58

 

(c)          reduce the principal of, or the rate of
interest on, any loan or other extension of credit hereunder, or reduce any
fees or other amounts payable hereunder or under any other Loan Document,

 

(d)         change the Pro Rata Share that is required
to take any action hereunder,

 

(e)          amend or modify this Section or any
provision of this Agreement providing for consent or other action by all
Lenders,

 

(f)            other than as permitted by Section 15.12,
release Agent’s Lien in and to any of the Collateral,

 

(g)         change the definition of “Required Lenders”
or “Pro Rata Share”,

 

(h)         contractually subordinate any of the Agent’s
Liens other than to a Lien permitted pursuant to clause (f) or clause (m)
of the definition of “Permitted Lien”,

 

(i)             except as expressly permitted by the Loan Documents,
release any Borrower or any Guarantor from any obligation for the payment of
money,

 

(j)             change the definition of Term Loan B
Amount, or change, modify or waive  Section 2.4(b),

 

(k)          amend any of the provisions of Section 15.

 

and,
provided further, however, that no amendment, waiver or consent
shall, unless in writing and signed by Agent affect the rights or duties of
Agent under this Agreement or any other Loan Document.  The foregoing notwithstanding, any amendment,
modification, waiver, consent, termination, or release of, or with respect to,
any provision of this Agreement or any other Loan Document that relates only to
the relationship of the Lender Group among themselves, and that does not affect
the rights or obligations of Borrowers, shall not require consent by or the
agreement of Borrowers.

 

14.2.                     Replacement of Holdout Lender.

 

(a)          If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders, and a Lender (“Holdout Lender”) fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a “Replacement Lender”),
and the Holdout Lender shall have no right to refuse to be replaced
hereunder.  Such notice to replace the
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.

 

(b)         Prior to the effective date of such replacement, the
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance, subject

 

59

 

only to the Holdout Lender being repaid
its share of the outstanding Obligations without any premium or penalty of any
kind whatsoever.  If the Holdout Lender
shall refuse or fail to execute and deliver any such Assignment and Acceptance
prior to the effective date of such replacement, the Holdout Lender shall be
deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Holdout Lender shall
be made in accordance with the terms of Section 13.1.  Until such time as the Replacement Lender
shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan
Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s
Pro Rata Share of the Term Loan B.

 

14.3.                     No Waivers; Cumulative Remedies.

 

No failure by Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof.  No
waiver by Agent or any Lender will be effective unless it is in writing, and
then only to the extent specifically stated. 
No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent’s and each Lender’s rights thereafter to require strict
performance by Borrowers of any provision of this Agreement.  Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

 

15.                               AGENT; THE LENDER GROUP.

 

15.1.                     Appointment and Authorization of
Agent.

 

Each Lender hereby
designates and appoints Ableco as its representative as administrative agent
and collateral agent (in respect of, inter alia, taking Guarantees and a
security interest in the Collateral for and on behalf of the Lender Group)
under this Agreement and the other Loan Documents and, subject to Section 14.1,
each Lender hereby irrevocably authorizes Agent to execute and deliver each of
the other Loan Documents on its behalf and to take such other action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
Agent by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Agent agrees to act as such on the express
conditions contained in this Section 15.  The provisions of this Section 15
(other than Section 15.9, Section 15.11, the first and
last sentences of Section 15.12(a), and Section 15.12(b))
are solely for the benefit of Agent, and the Lenders, and Borrowers and their
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein.  Any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and

 

60

 

agreed
that the use of the word “Agent” is for convenience only, that Ableco is merely
the representative of the Lenders, and only has the contractual duties set
forth herein.  Except as expressly
otherwise provided in this Agreement, Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents.  Without
limiting the generality of the foregoing, or of any other provision of the Loan
Documents that provides rights or powers to Agent, Lenders agree that Agent
shall have the right to exercise the following powers as long as this Agreement
remains in effect:  (a) maintain, in
accordance with its customary business practices, ledgers and records
reflecting the status of the Obligations, the Collateral, the Collections of
Loan Parties, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, (c) make Protective Advances as
provided in the Loan Documents, (d) exclusively receive, apply, and
distribute the Collections of Loan Parties as provided in the Loan Documents, (e) open
and maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of Loan
Parties, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Borrowers, the Obligations, the
Collateral, the Collections of Loan Parties, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender
Group Expenses as Agent may deem necessary or appropriate for the performance
and fulfillment of its functions and powers pursuant to the Loan Documents.

 

15.2.                     Delegation of Duties.

 

Agent may execute any of
its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys in fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

 

15.3.                     Liability of Agent.

 

None of the Agent Related
Persons shall (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by any Borrower or any Subsidiary or Affiliate of any Borrower, or any officer
or director thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any

 

61

 

failure
of any Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder.  No
Agent Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the books and records or properties of Borrowers or the books or
records or properties of any of Borrowers’ Subsidiaries or Affiliates.

 

15.4.                     Reliance by Agent.

 

Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, telefacsimile or
other electronic method of transmission, telex or telephone message, statement
or other document or conversation believed by it to be genuine and correct and
to have been signed, sent, or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to Borrowers or counsel
to any Lender), independent accountants and other experts selected by
Agent.  Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless Agent shall first receive such advice or concurrence of the
Lenders as it deems appropriate and until such instructions are received, Agent
shall act, or refrain from acting, as it deems advisable.  If Agent so requests, it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. 
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.

 

15.5.                     Notice of Default or Event of
Default.

 

Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders
and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a “notice of default”.  Agent promptly will notify the Lenders of its
receipt of any such notice or of any Event of Default of which Agent has actual
knowledge.  If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. 
Each Lender shall be solely responsible for giving any notices to its
Participants, if any.  Subject to Section 15.4,
the Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Required Lenders in accordance with Section 8; provided, however, that,
after the occurrence of a Default or an Event of Default, if an event occurs or
a circumstance exists that materially and imminently threatens the ability of
the Lender Group to realize upon any material part of the Collateral (such as
fraudulent removal, concealment, or abscondment thereof, destruction (other
than to the extent covered by insurance) or material waste thereof, or failure
of

 

62

 

Borrowers after reasonable demand to maintain or reinstate adequate
casualty insurance coverage with respect thereto), Agent may take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.

 

15.6.                     Credit Decision.

 

Each Lender acknowledges
that none of the Agent Related Persons has made any representation or warranty
to it, and that no act by Agent hereinafter taken, including any review of the
affairs of Borrowers and their Subsidiaries or Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender.  Each Lender represents to Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrowers and any other Person party to a Loan Document, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to
Borrowers.  Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of Borrowers and any other Person party to a Loan
Document.  Except for notices, reports,
and other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrowers and any other Person party to a Loan Document that may come into the
possession of any of the Agent Related Persons.

 

15.7.                     Costs and Expenses; Indemnification.

 

Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrowers
are obligated to reimburse Agent or Lenders for such expenses pursuant to this
Agreement or otherwise.  Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Loan Parties received by Agent to reimburse Agent for such
out-of-pocket costs and expenses prior to the distribution of any amounts to
Lenders.  In the event Agent is not
reimbursed for such costs and expenses from the Collections of Loan Parties
received by Agent, each Lender hereby agrees that it is and shall be obligated
to pay to or reimburse Agent for the amount of such Lender’s Pro Rata Share
thereof.  Whether or not the transactions
contemplated hereby are consummated, the

 

63

 

Lenders shall
indemnify upon demand the Agent Related Persons (to the extent not reimbursed
by or on behalf of Borrowers and without limiting the obligation of Borrowers
to do so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall
be liable for the payment to Agent Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct.  Without limitation
of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s
Pro Rata Share of any costs or out of pocket expenses (including attorneys,
accountants, advisors, and consultants fees and expenses) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of the Agent.

 

15.8.                     Agent in Individual Capacity.

 

Ableco and its respective
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in, and generally engage in any
kind of banking, trust, financial advisory, underwriting, or other business
with Borrowers and their Subsidiaries and Affiliates and any other Person party
to any Loan Documents as though Ableco were not Agent hereunder, and, in each
case, without notice to or consent of the other members of the Lender
Group.  The other members of the Lender
Group acknowledge that, pursuant to such activities, Ableco or its Affiliates
and Related Funds may receive information regarding Borrowers or their
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain),  Agent shall not be
under any obligation to provide such information to them.  The terms “Lender” and “Lenders” include
Ableco in its individual capacity.

 

15.9.                     Successor Agent.

 

Agent may resign as Agent
upon 45 days notice to the Lenders and the Administrative Borrower.  If Agent resigns under this Agreement, the
Required Lenders shall, so long as no Event of Default has occurred and is
continuing in consultation with Administrative Borrower, appoint a successor
Agent for the Lenders.  If no successor
Agent is appointed prior to the effective date of the resignation of the
resigning Agent, Agent may appoint, after consulting with the Lenders and, if
no Event of Default has occurred and is continuing, Administrative Borrower, a
successor Agent.  If Agent has materially
breached or failed to perform any material provision of this Agreement or of
Applicable Law, the Required Lenders so long as no Event of Default has
occurred and is continuing in consultation with Administrative Borrower, may
agree in writing to remove and replace

 

64

 

Agent
with a successor Agent from among the Lenders.  In any such event, upon the acceptance of its
appointment as successor Agent hereunder, such successor Agent shall succeed to
all the rights, powers, and duties of the retiring Agent and the term “Agent”
shall mean such successor Agent and the retiring Agent’s appointment, powers,
and duties as an Agent shall be terminated. 
After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.  If no successor Agent has
accepted appointment as Agent by the date which is 45 days following a retiring
Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.

 

15.10.              Lender in Individual Capacity.

 

Any Lender and its
respective Affiliates and Related Funds may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with Borrowers and their Subsidiaries and
Affiliates and any other Person party to any Loan Documents as though such
Lender were not a Lender hereunder without notice to or consent of the other
members of the Lender Group.  The other
members of the Lender Group acknowledge that, pursuant to such activities, such
Lender and its respective Affiliates and Related Funds may receive information
regarding Borrowers or their Affiliates and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrowers
or such other Person and that prohibit the disclosure of such information to
the Lenders, and the Lenders acknowledge that, in such circumstances (and in
the absence of a waiver of such confidentiality obligations, which waiver such
Lender will use its reasonable best efforts to obtain), such Lender shall not
be under any obligation to provide such information to them.

 

15.11.              Withholding Taxes.

 

(a)          All payments made by any Borrower hereunder or under
any note or other Loan Document will be made free and clear of, and without
deduction or withholding for, any present or future Taxes unless such deduction
or withholding is required by Applicable Law. 
Subject to the limitations contained in clauses (ii) and (iii) of
the proviso in Section 15.11(c), if deduction or withholding for
Taxes shall at any time be required by law, each applicable Borrower agrees to
pay the full amount of such Taxes to the appropriate taxing authority and to
pay to each Lender entitled to receive payments from which such Taxes are
deducted or withheld such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement, any note, or Loan Document,
including any amount paid pursuant to this Section 15.11(a) after
withholding or deduction for or on account of such Taxes, will not be less than
the payment that would have been received in the absence of such Taxes.  Each Borrower will furnish to Agent as
promptly as possible after the date the payment of any Tax is due pursuant to
Applicable Law certified copies of tax receipts evidencing such payment by any
Borrower.  “Taxes” shall mean, any taxes,
levies, imposts,

 

65

 

duties, fees, assessments or other charges
of whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
payments hereunder or under any promissory note or other Loan Document and all
interest, penalties or similar liabilities with respect thereto, but excluding
Excluded Taxes.  “Excluded Taxes” shall
mean:

 

(i)                                     any
Tax imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein imposed on the net income of a Lender (including
branch profit Taxes), and

 

(ii)                                  any Taxes imposed by reason of any present or former
connection between such Lender and the jurisdiction imposing such taxes, other
than solely as a result of entering into or receiving payments under this
Agreement or any transaction contemplated hereby.

 

(b)         In addition, each Borrower agrees to pay to the
relevant Governmental Authority in accordance with applicable law any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (“Other Taxes”).  Each Borrower shall deliver to the Agent
certified copies of tax receipts evidencing payment of Other Taxes promptly
after such payment.

 

(c)          Each Borrower hereby jointly and severally indemnifies
and agrees to hold Agent and each Lender harmless from and against all Taxes
and Other Taxes (including, without limitation, Taxes and Other Taxes imposed
on any amounts payable under this Section 15.11) paid by such Person,
whether or not such Taxes or Other Taxes were correctly or legally
asserted.  Such indemnification shall be
paid within 10 Business Days from the date on which the Agent or any Lender makes
written demand therefor specifying in reasonable detail the nature and amount
of such Taxes or Other Taxes; provided, however, that a Borrower shall not be
obligated to make payments pursuant to this Section 15.11(c)  (i) in
respect of penalties and interest that accrue more than sixty (60) days from
the date on which such Lender knew of the imposition of Taxes or Other Taxes by
the relevant taxing or Governmental Authority related to a payment hereunder
and for which the Lender has failed to provide written demand therefor, (ii) if
Agent or such Lender fails to comply with the requirements of Section 15.11(d) herein
or (iii) to the extent that such tax was in effect at the time such Lender
became a party to this Agreement, except to the extent that such Lender’s
assignor (if any) was entitled, at the time of the assignment, to receive
additional amounts from a Borrower with respect to Taxes pursuant to this Section 15.11(c).

 

(d)         Each Lender that is organized under the laws of a
jurisdiction outside the United States (a “Non-U.S. Lender”) shall deliver to
the Agent two properly completed and duly executed copies of either U.S.
Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or any subsequent
versions thereof or successors thereto, in each case claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax with respect
to

 

66

 

payments of interest hereunder.  In addition, in the case of a Non-U.S. Lender
claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the IRC, such Non-U.S. Lender hereby represents that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the
IRC, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the IRC) of any Borrower and is not a controlled foreign corporation related to
any Borrower (within the meaning of Section 864(d)(4) of the IRC),
and such Non-U.S. Lender agrees that it shall promptly notify the Agent in the
event any such representation is no longer accurate.  Each Lender that is organized in the United
States or a political subdivision thereof and is not eligible to be treated as
an exempt recipient based on the indicator described in Treasury Regulation Section 1.6049-4(c)(1)(ii)(A)(1) (any
such Lender, a “U.S. Lender”) agrees that it will deliver to the Agent two
properly completed and duly executed copies of the United States Internal
Revenue Service Form W-9 stating that such U.S. Lender is entitled to an
exemption from United States backup withholding tax. Such forms shall be
delivered by each U.S. Lender and each Non-U.S. Lender on or before the date it
becomes a party to this Agreement and on or before the date, if any, such U.S.
Lender or Non-U.S. Lender changes its applicable lending office by designating
a different lending office (a “New Lending Office”).  In addition, each U.S. Lender and each
Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Agent. 
Notwithstanding any other provision of this Section 15.11, a
U.S. Lender or Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 15.11(d) that such U.S. Lender or
Non-U.S. Lender is not legally able to deliver.

 

(e)          If any Lender claims exemption from, or reduction in
the rate of, applicable withholding Taxes and such Lender sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to another Lender, such Lender agrees to notify Agent
and Administrative Borrower of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender.  To the extent of such percentage amount,
Agent and Borrowers will treat such Lender’s documentation provided pursuant to
Section 15.11(d) as no longer valid.  With respect to such percentage amount,
Lender may provide new documentation, pursuant to Section 15.11(d).

 

(f)            If any Lender is entitled to a reduction in the rate
of applicable withholding Tax, the Agent may withhold from any interest payment
to such Lender an amount equivalent to the applicable withholding Tax after
taking into account such reduction.  If
the forms or other documentation required by subsection (d) of this Section 15.11
are not delivered to Agent, then the Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation an
amount equivalent to the applicable withholding tax.

 

(g)         If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold Tax from amounts paid to or for the account of any Lender due to a
failure on the part of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Agent of a change in circumstances which rendered the exemption from,

 

67

 

or
reduction of, withholding tax ineffective, or for any other reason
) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent, as Tax or otherwise, including
penalties and interest, and including any Taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section 15.11, together
with all costs and expenses (including attorneys fees and expenses).  The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
the Agent.

 

(h)         If any Borrower is required to pay additional amounts
or an indemnity payment to or for the account of any Lender pursuant to this Section 15.11
as a result of a change of law occurring after the date hereof, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file or provide to Agent any certificate or document
reasonably requested in writing by the Agent to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such indemnity payment or additional
amount that may thereafter accrue, would not require such Lender to disclose
any information such Lender deems confidential and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender;
provided that the mere existence of fees, charges, costs or expenses that such
Borrower has offered and agreed to pay on behalf of the Lender shall not be
deemed to be disadvantageous to the Lender.

 

(i)             If any additional amount payable by any Borrower is
made to or for the account of any Lender pursuant to this Section 15.11
on account of Taxes then, if any Lender receives a refund of such Taxes, such
Lender shall reimburse to Borrowers such refund, net of all out-of-pocket expenses
of such Lender that are related to such refund; provided, that (i) such
Lender shall not be obligated to disclose to Borrowers any information
regarding its tax affairs and computations, and (ii) nothing herein shall
be construed so as to interfere with the right of such Lender to arrange its
tax affairs as it deems appropriate.

 

(j)             Each Lender hereby indemnifies and agrees to hold
Borrowers and the Agent harmless from and against any United States withholding
tax that would not have been imposed but for the failure of any Assignee of
such Lender to comply with clause (d) above where such Assignee is a
Non-U.S. Lender.

 

15.12.              Collateral Matters.

 

(a)          All Liens on Collateral (i) shall be
automatically released upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations, (ii) constituting
property (including the equity interest of a Subsidiary of Parent) being sold
or disposed of in a sale or disposition permitted under Section 6.4
of this Agreement or the other Loan Documents shall be automatically released
upon such sale or disposition, and in the event of a sale or other disposition
of all of the equity interests of a Subsidiary of Parent that is a Loan Party
permitted under this Agreement and the other Loan Documents, such Subsidiary
shall be automatically released of its obligations under the Loan Documents, (iii) constituting
property in which no Loan Party owned any interest at the time

 

68

 

the Agent’s Lien was granted nor at any
time thereafter shall be automatically released, or (iv) constituting
property leased to a Borrower or its Subsidiaries under a lease that has
expired or is terminated in a transaction permitted under this Agreement shall
be automatically released.  The Lenders
hereby irrevocably authorize Agent to take such actions and execute such
documents that it deems necessary or appropriate, at its option and in its sole
discretion, to evidence the foregoing releases. 
Except as provided above, Agent will not execute and deliver a release
of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all
of the Lenders, or (z) otherwise, the Required Lenders.  Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 15.12; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such
release on terms that, in Agent’s opinion, would expose Agent to liability or
create any obligation or entail any consequence other than the release of such
Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly being released) upon (or obligations of
Borrowers in respect of) all interests retained by Borrowers, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.

 

(b)         Agent agrees, at the request of the Administrative
Borrower, to take such actions and execute such documents that are reasonably
requested by Administrative Borrower to evidence the release of all Liens on
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations, (ii) constituting
property (including the equity interests of a Subsidiary of the Parent) being
sold or disposed of if Administrative Borrower certifies to Agent that the sale
or disposition is permitted under Section 6.4 of this Agreement or
the other Loan Documents and in the event of a sale or other disposition of all
of the equity interests of a Subsidiary of the Parent that is a Loan Party
permitted under this Agreement and the other Loan Documents, to evidence the
release of such Subsidiary’s obligations under the Loan Documents (and Lenders
hereby agree Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting property in which no Loan Party owned
any interest at the time the Agent’s Lien was granted nor at any time
thereafter, and (iv) constituting property leased to a Borrower or its
Subsidiaries under a lease that has expired or is terminated in a transaction
permitted under this Agreement.

 

(c)          Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by Borrowers or is
cared for, protected, or insured or has been encumbered, or that the Agent’s
Liens 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 Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the Collateral,
or any act, omission, or event related thereto, subject to the terms and
conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole

 

69

 

discretion given Agent’s own interest in the
Collateral in its capacity as one of the Lenders and that Agent shall have no
other duty or liability whatsoever to any Lender as to any of the foregoing,
except as otherwise provided herein.

 

15.13.              Restrictions on Actions by Lenders;
Sharing of Payments.

 

(a)          Each of the Lenders agrees that it shall not, without
the express written consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the written request of Agent after the
occurrence and during the continuance of an Event of Default, set off against
the Obligations, any amounts owing by such Lender to Borrowers or any deposit
accounts of Borrowers now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it
shall not, unless specifically requested to do so in writing by Agent after the
occurrence and during the continuance of an Event of Default, take or cause to
be taken any action, including, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.

 

(b)         If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender’s ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received
shall be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that to the extent that such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to
such purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery of
the excess payment.

 

15.14.              Agency for Perfection.

 

Agent hereby appoints
each other Lender as its agent (and each Lender hereby accepts such
appointment) for the purpose of perfecting the Agent’s Liens in assets which,
in accordance with Article 8 or Article 9, as applicable, of the Code
can be perfected only by possession or control. 
Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

 

70

 

15.15.              Payments by Agent to the Lenders.

 

All payments to be made
by Agent to the Lenders shall be made by bank wire transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to the Agent.  Concurrently with each such payment, the
Agent shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.

 

15.16.              Concerning the Collateral and
Related Loan Documents.

 

Each member of the Lender
Group authorizes and directs Agent to enter into this Agreement, the other Loan
Documents and the Intercreditor Agreement. 
Each member of the Lender Group agrees that any action taken by Agent in
accordance with the terms of this Agreement, the other Loan Documents and the
Intercreditor Agreement relating to the Collateral and the exercise by Agent of
its powers set forth therein or herein, together with such other powers that
are reasonably incidental thereto, shall be binding upon all of the Lenders.

 

15.17.              Field Audits and Examination
Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.

 

By becoming a party to
this Agreement, each Lender:

 

(a)          is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a “Report” and collectively, “Reports”)
prepared by or at the request of Agent, and Agent shall so furnish each Lender
with such Reports,

 

(b)         expressly agrees and acknowledges that Agent
does not (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall not be liable for any information contained in any
Report,

 

(c)          expressly agrees and acknowledges that the Reports are
not comprehensive audits or examinations, that Agent or other party performing
any audit or examination will inspect only specific information regarding
Borrowers and will rely significantly upon the books and records of Borrowers
and their Subsidiaries, as well as on representations of Borrowers’ personnel,

 

(d)         agrees to keep all Reports and other material,
non-public information regarding Borrowers and their Subsidiaries and their
operations, assets, and existing and contemplated business plans and any
information relating to any agreement which any Borrower or any of its
Subsidiaries is a party (other than the Loan Documents) in a confidential
manner in accordance with Section 16.8, and

 

(e)          without limiting the generality of any
other indemnification provision contained in this Agreement, agrees:  (i) to hold Agent and any such other
Lender preparing

 

71

 

a Report
harmless from any action the indemnifying Lender may take or fail to take or
any conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying Lender
has made or may make to Borrowers, or the indemnifying Lender’s participation
in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers; and
(ii) to pay and protect, and indemnify, defend and hold Agent and any such
other Lender preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including, attorneys
fees and costs) incurred by Agent and any such other Lender preparing a Report
as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.

 

In addition to the
foregoing:  (x) any Lender may from time
to time request of Agent in writing that Agent provide to such Lender a copy of
any report or document provided by Borrowers to Agent that has not been
contemporaneously provided by Borrowers to such Lender, and, upon receipt of
such request, Agent promptly shall provide a copy of same to such Lender,
(y) to the extent that Agent is entitled, under any provision of the Loan
Documents, to request additional reports or information from Borrowers, or any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Administrative Borrower the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from
Administrative Borrower, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to Administrative Borrower a
statement regarding a Loan Account, Agent shall send a copy of such statement
to each Lender.

 

15.18.              Several Obligations; No Liability.

 

Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of Agent in its capacity as such, and not by or in
favor of the Lenders, any and all obligations on the part of Agent (if any) to
make any credit available hereunder shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to
their respective Commitments, to make an amount of such credit not to exceed,
in principal amount, at any one time outstanding, the amount of their
respective Commitments.  Nothing contained
herein shall confer upon any Lender any interest in, or subject any Lender to
any liability for, or in respect of, the business, assets, profits, losses, or
liabilities of any other Lender.  Each
Lender shall be solely responsible for notifying its Participants of any
matters relating to the Loan Documents to the extent any such notice may be
required, and no Lender shall have any obligation, duty, or liability to any
Participant of any other Lender.  Except
as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to any
Borrower or any other Person for any failure by any other Lender to fulfill its
obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its
behalf hereunder or in connection with the financing contemplated herein.

 

72

 

16.                               GENERAL PROVISIONS.

 

16.1.                     Intentionally Omitted.

 

16.2.                     Effectiveness.

 

This Agreement shall be
binding and deemed effective when executed by Borrowers, Agent, and each Lender
whose signature is provided for on the signature pages hereof.

 

16.3.                     Section Headings.

 

Headings and numbers have
been set forth herein for convenience only. 
Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.

 

16.4.                     Interpretation.

 

Neither this Agreement
nor any uncertainty or ambiguity herein shall be construed against the Lender
Group or Borrowers, whether under any rule of construction or
otherwise.  On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

16.5.                     Severability of Provisions.

 

Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

 

16.6.                     Counterparts; Electronic Execution.

 

This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one
and the same Agreement.  Delivery of an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Agreement. 
Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Agreement. 
The foregoing shall apply to each other Loan Document mutatis mutandis.

 

73

 

16.7.                     Revival and Reinstatement of
Obligations.

 

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

 

16.8.                     Confidentiality.

 

Agent and Lenders each
individually (and not jointly or jointly and severally) agree that (i) material,
non-public information regarding Borrowers and their Subsidiaries, their
operations, assets, and existing and contemplated business plans and (ii) any
information relating to any agreement which any Borrower or any of its
Subsidiaries is a party (other than the Loan Documents) shall be treated by
Agent and the Lenders in a confidential manner, and shall not be disclosed by
Agent and the Lenders to Persons who are not parties to this Agreement,
except:  (a) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group, (b) to Subsidiaries, Affiliates and Related Funds of any
member of the Lender Group, provided that any such Subsidiary,  Affiliate or Related Fund shall have agreed
to receive such information hereunder subject to the terms of this Section 16.8,
(c) as may be required by statute, decision, or judicial or administrative
order, rule, or regulation, (d) as may be agreed to in advance by
Administrative Borrower or its Subsidiaries or as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process, (e) as
to any such information that is or becomes generally available to the public
(other than as a result of prohibited disclosure by Agent or the Lenders), (f) in
connection with any assignment, prospective assignment, sale, prospective sale,
participation or prospective participations, or pledge or prospective pledge of
any Lender’s interest under this Agreement, provided that any such assignee,
prospective assignee, purchaser, prospective purchaser, participant,
prospective participant, pledgee, or prospective pledgee shall have agreed in
writing to receive such information hereunder subject to the terms of this
Section, and (g) in connection with any litigation or other adversary proceeding
involving parties hereto which such litigation or adversary proceeding involves
claims related to the rights or duties of such parties under this Agreement or
the other Loan Documents.  The provisions
of this Section 16.8 shall survive for 2 years after the payment in
full of the Obligations.

 

74

 

16.9.                     Integration.

 

This Agreement, together
with the other Loan Documents, reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before the
date hereof.

 

16.10.              Parent as Administrative Agent for
Borrowers.

 

Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all
Borrowers (the “Administrative Borrower”) which appointment shall remain in
full force and effect unless and until Agent shall have received prior written
notice signed by each Borrower that such appointment has been revoked and that
another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (i) to provide Agent with all
notices and instructions under this Agreement and (ii) to take such action
as the Administrative Borrower deems appropriate on its behalf to exercise such
other powers as are reasonably incidental thereto to carry out the purposes of
this Agreement.  It is understood that
the handling of the Loan Account and Collateral of Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
Borrowers in order to utilize the collective borrowing powers of Borrowers in
the most efficient and economical manner and at their request, and that Lender
Group shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit,
directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated
group.  To induce the Lender Group to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of
the Loan Account and Collateral of Borrowers as herein provided, (b) the
Lender Group’s relying on any instructions of the Administrative Borrower, or (c) any
other action taken by the Lender Group hereunder or under the other Loan
Documents, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this Section 16.10
with respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as
the case may be.

 

[Signature pages to follow.]

 

75

 

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

 

	
   

  	
  SITEL CORPORATION 

  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  NATIONAL ACTION FINANCIAL

  SERVICES, INC.

  a Georgia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SITEL HOME MORTGAGE CORP., 

  a Nebraska corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  FINANCIAL INSURANCE SERVICES,

  INC., 

  a Nebraska corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SITEL INTERNATIONAL LLC, 

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

Credit Agreement Signature Page

 

 

	
   

  	
  ABLECO FINANCE LLC, 

  a Delaware limited
  liabilily company, as

  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

2

 

SCHEDULE 1.1

 

As used in the Agreement,
the following terms shall have the following definitions:

 

“Account” means an
account (as that term is defined in the Code).

 

“Account Debtor”
means any Person who is obligated on an Account, chattel paper, or a general
intangible.

 

“Administrative
Borrower” has the meaning specified therefor in Section 16.10.

 

“Affiliate” means,
as applied to any Person, any other Person who controls, is controlled by, or
is under common control with, such Person. 
For purposes of this definition, “control” means the possession,
directly or indirectly through one or more intermediaries, of the power to
direct the management and policies of a Person, whether through the ownership
of Stock, by contract, or otherwise; provided, however, that, for
purposes of Section 6.13 hereof: (a) any Person which owns
directly or indirectly 10% or more of the Stock having ordinary voting power
for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed an Affiliate of such Person.

 

“Agent” has the
meaning specified therefor in the preamble to the Agreement.

 

“Agent-Related Persons”
means Agent, together with its respective Affiliates, officers, directors,
employees, attorneys, and agents.

 

“Agent’s Account”
means the Deposit Account of Agent identified on Schedule A-1.

 

“Agent’s Liens”
means the Liens granted by the Loan Parties to Agent for the benefit of the
Lender Group under the Loan Documents.

 

“Agreement” means
the Credit Agreement to which this Schedule 1.1 is attached.

 

“Annual Acquisition
Limit” means, initially $5,000,000 and, if at any time after the second
anniversary of the date hereof, as of the then most recent month end for which
financial statements have been delivered to the Agent pursuant to Section 5.3,
the Leverage Ratio is less than 2.0:1.0 (“Limit Increase Event”),
$8,000,000; provided, that if, after a Limit Increase Event has
occurred, as of the then most recent month end for which financial statements
have been delivered to the Agent pursuant to Section 5.3, the
Leverage

 

 

Ratio is equal to
or greater than 2.0:1.0, the Annual Acquisition Limit shall reduce to
$5,000,000 until the occurrence of a subsequent Limit Increase Event.

 

“Applicable Law”
means, in the context that refers to one or more Persons, those Laws that apply
to that Person or Persons or its or their business, undertaking, property or
securities.

 

“Applicable Prepayment
Premium” has the meaning specified therefor in the Fee Letter.

 

“Assignee” has the
meaning specified therefor in Section 13.1(a).

 

“Assignment and
Acceptance” means an Assignment and Acceptance Agreement substantially in
the form of Exhibit A-1 or such other form acceptable to Agent.

 

“Authorized Person”
means any officer or employee of Administrative Borrower.

 

“Bankruptcy Code”
means title 11 of the United States Code or any similar legislation in a
relevant jurisdiction, in each case as applicable and as in effect from time to
time.

 

“Base LIBOR Rate”
means the rate per annum (i) reported by Bloomberg as established by the
British Bankers Association on the date following such rate being established
(rounded upwards, if necessary, to the next 1/100%), to be the rate at which
Dollar deposits (for delivery on the first day of the requested Interest
Period) are offered to major banks in the London interbank market 2 Business
Days prior to the commencement of the requested Interest Period, or (ii) if
the Bloomberg rate is unavailable, as determined by Agent using a commercially
available source in accordance with its customary procedures, and utilizing
such electronic or other quotation sources as it considers appropriate, for a
term and in an amount comparable to the Interest Period and the amount of the
LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a
continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a
LIBOR Rate Loan) by Administrative Borrower in accordance with this Agreement,
which determination shall be conclusive in the absence of manifest error.

 

“Base Rate” means
the rate of interest publicly announced by the Base Rate Bank in New York, New
York from time to time as its reference rate, base rate or prime rate.  The reference rate, base rate or prime rate
is determined from time to time by the Base Rate Bank as a means of pricing
some loans to its borrowers and neither is tied to any external rate of
interest or index nor necessarily reflects the lowest rate of interest actually
charged by the Base Rate Bank to any particular class or category of
customers.  Each change in the Base Rate
shall be effective from and including the date such change is publicly
announced as being effective.

 

2

 

“Base Rate Bank”
means JPMorgan Chase Bank, N.A., its successors or any other commercial bank
designated by the Agent to the Administrative Borrower from time to time.

 

“Base Rate Loan”
means each portion of the Term Loan B that bears interest at a rate determined
by reference to the Base Rate.

 

“Base Rate Margin”
means 3.50%.

 

“Benefit Plan”
means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for
which Borrower or any Subsidiary or ERISA Affiliate of Borrower has been an “employer”
(as defined in Section 3(5) of ERISA) within the past six years.

 

“Board of Directors”
means, with respect to any Person, the board of directors (or comparable
managers) of such Person or any committee thereof duly authorized to act on
behalf of the board of directors (or comparable managers).

 

“Borrower” and “Borrowers”
have the respective meanings specified therefor in the preamble to the
Agreement.

 

“Borrowing” means
a borrowing hereunder consisting of the Term Loan B made on the same day by the
Lenders (or Agent on behalf thereof) to Administrative Borrower.

 

“Business Day”
means any day that is not a Saturday, Sunday, or other day on which banks are
authorized or required to close in the states of New York or California, provided
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term “Business Day” also shall exclude any day on which banks are closed
for dealings in Dollar deposits in the London interbank market.

 

“BVI Pledge Agreement”
means the Pledge Agreement of even date herewith by SITEL International LLC and
Agent with respect to the Stock of SITEL (BVI) International, Inc.

 

“Canadian Pledge
Agreement” means the Pledge Agreement of even date herewith by SITEL
International LLC and Agent with respect to the Stock of SITEL Teleservices
Canada Inc.

 

“Capital Expenditures”
means, with respect to any Person for any period, the aggregate of (a) all
expenditures by such Person and its Subsidiaries during such period that are
capital expenditures as determined in accordance with GAAP, whether such
expenditures are paid in cash or financed but excluding expenditures in respect
of reinvestments of casualty proceeds and proceeds of asset dispositions and
Extraordinary Receipts permitted pursuant to Section 2.4(d) (in
all cases other than with respect to the definition of “Permitted Investments”,
excluding any such Capital Expenditures that have been funded by customers of
Parent and its Subsidiaries to the extent Parent and its Subsidiaries have
received cash in

 

3

 

respect thereof
from such customers), and (b) to the extent not covered by clause (a) of
this definition, any Investments made in reliance on clause (r) of the
definition of “Permitted Investments”.

 

“Capitalized Lease
Obligation” means that portion of the obligations under a Capital Lease
that is required to be capitalized in accordance with GAAP.

 

“Capital Lease”
means a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

 

“Cash Equivalents”
means (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within 1
year from the date of acquisition thereof, (b) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors
Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than
270 days from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates
of deposit, time deposits or bankers’ acceptances maturing within 1 year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States or any state thereof or the District of Columbia having at
the date of acquisition thereof combined capital and surplus of not less than
$250,000,000, (e) Deposit Accounts maintained with (i) any bank that
satisfies the criteria described in clause (d) above, or (ii) any
other bank organized under the laws of the United States or any state thereof
or the District of Columbia so long as the amount maintained with any such
other bank is less than or equal to $100,000 and is insured by the Federal
Deposit Insurance Corporation, (f) Investments in money market funds
substantially all of whose assets are invested in the types of assets described
in clauses (a) through (e) above and (g) in the case of any WFF
Foreign Loan Party or any Significant Subsidiary, other investments made in
investments of a type analogous to the foregoing in accordance with normal
investment practices for cash management.

 

“Cash Management
Account” has the meaning specified therefor in Section 2.7(a).

 

“Cash Management
Agreements” means those certain cash management agreements, in form and
substance reasonably satisfactory to Agent, each of which is among
Administrative Borrower or one of its Subsidiaries, Agent, Senior
Administrative Agent, and one of the Cash Management Banks.

 

“Cash Management Bank”
has the meaning specified therefor in Section 2.7(a).

 

4

 

“Cash Management
Reinstatement Event” means January 1 or July 1 of any fiscal year
after the occurrence of a Cash Management Triggering Event if on such date no
Event of Default exists and the Borrowers have maintained daily average Dollar
Equivalent of WFF Excess Availability for the immediately preceding 60 consecutive
day period of at least $15,000,000.

 

“Cash Management
Triggering Event” means the occurrence of an Event of Default or the
failure of the Borrowers to maintain daily average Dollar Equivalent of WFF
Excess Availability for a 30 consecutive day period of at least $15,000,000.

 

“Change of Control”
means that (a) any “person” or “group” (within the meaning of Sections 13(d) and
14(d) of the Exchange Act), other than Permitted Holders, becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of Stock representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of Parent, or (b) individuals who, at the beginning of any period of 24
consecutive months, constitute the Parent’s board of directors (together with
any new director whose election by the Parent’s board of directors or whose
nomination for election by the Parent’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason (other than death or
disability) to constitute a majority of the Parent’s board of directors then in
office or (c) any “person” or “group” (within the meaning of the Exchange
Act) other than the Permitted Holders shall own or control directly or
indirectly that percentage of the outstanding Stock of Parent necessary to
elect a majority of the board of directors (or similar governing body) of
Parent or (d) Parent or any Loan Party fails to own and control directly
or indirectly, 100% of the outstanding Stock of each of their respective
Subsidiaries that are Loan Parties, WFF Foreign Loan Parties or Significant
Subsidiaries (other than SITEL Insurance Services Canada Inc.) extant as of the
Closing Date other than nominee shares and director’s qualifying shares
required by law, except in connection with a transaction expressly permitted
under Section 6.3, or, with respect to any Subsidiary that is not a
Loan Party, Section 6.4 or (e) the Parent, any Loan Party or
any WFF Foreign Loan Party fails to own directly or indirectly, at least 49% of
the outstanding Stock of SITEL Insurance Services Canada Inc. and either have
the option to purchase the remaining Stock of SITEL Insurance Services Canada
Inc. for nominal consideration or own directly or indirectly the remaining
Stock of SITEL Insurance Services Canada Inc., except in connection with a
transaction expressly permitted under Section 6.3.

 

“Closing Date”
means the earlier of (x) the date of the making of the Term Loan B hereunder or
(y) the date on which Agent sends Administrative Borrower a written notice that
each of the conditions precedent set forth in Section 3.1 either
have been satisfied or have been waived.

 

“Closing Date
Projections” means the Projections for fiscal year 2005 delivered on or
prior to the Closing Date.

 

5

 

“Code” means the
New York Uniform Commercial Code, as in effect from time to time.

 

“Collateral” means
all assets and interests in assets and proceeds thereof now owned or hereafter
acquired by Loan Parties in or upon which a Lien is granted by such Loan Party
under any of the Loan Documents.

 

“Collateral Access
Agreement” means a landlord waiver, bailee letter, or acknowledgement
agreement of any lessor, warehouseman, processor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in Administrative
Borrower’s or its Subsidiaries’ books and records, in each case, in form and
substance reasonably satisfactory to Agent.

 

“Collections”
means all cash, checks, notes,
instruments, and other items of payment (including insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds).

 

“Commitment”
means, with respect to each Lender, its Commitment, and, with respect to all
Lenders, their Commitments, in each case as such Dollar amounts are set forth
beside such Lender’s name under the applicable heading on Schedule C-1
or in the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit C-1
delivered by the chief financial officer, controller, treasurer or vice
president of finance of Parent to Agent.

 

“Control Agreement”
means a control agreement, in form and substance reasonably satisfactory to
Agent, executed and delivered by a Loan Party, Agent, Senior Administrative
Agent and the applicable securities intermediary (with respect to a Securities
Account) or bank (with respect to a Deposit Account).

 

“Currency Exchange
Rate” means, with respect to a currency, the rate quoted by the Reference
Bank as the spot rate for the purchase by the Reference Bank of such currency
with another currency at approximately 10:30 a.m. (New York time) on the
date two (2) Business Days prior to the date as of which the foreign
exchange computation is made.

 

“Daily Balance”
means, as of any date of determination and with respect to any Obligation, the
amount of such Obligation owed at the end of such day.

 

“Default” means an
event, condition, or default that, with the giving of notice, the passage of
time, or both, would, unless cured or waived, be an Event of Default.

 

6

 

“Defaulting Lender
Rate” means (a) for the first 3 days from and after the date the
relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to the portions of the Term Loan B that are Base Rate
Loans (inclusive of the Base Rate Margin applicable thereto).

 

“Deposit Account”
means any deposit account (as that term is defined in the Code).

 

“Designated Account”
means the Deposit Account of Administrative Borrower identified on Schedule D-1,
or such other account as the Administrative Borrower may specify by notice to
Agent.

 

“Designated Account
Bank” has the meaning specified therefor in Schedule D-1 or
such other bank as Administrative Borrower may specify by notice to Agent.

 

“Dollar Equivalent”
means, at any time, (a) as to any amount denominated in Dollars, the
amount thereof at such time, and (b) as to any amount denominated in a
currency other than Dollars, the equivalent amount in Dollars as determined by
Agent at such time on the basis of the Currency Exchange Rate for the purchase
of Dollars with such currency.

 

“Dollars” or “$”
means United States dollars.

 

“Domestic Subsidiaries”
means each Subsidiary of Administrative Borrower created or organized under the
laws of the United States or any state thereof or the District of Columbia, and
“Domestic Subsidiary” means any one of them.

 

“EBITDA” means, with respect to any fiscal period,
Parent’s and its Subsidiaries’ consolidated net income (or loss), minus to the extent not included in
determining net income (or loss) for such period, cash expenditures during such
period in respect of the acceleration of lease expense for facilities that have
been, or are intended to be, closed, minus,
to the extent included in the calculation of net income (or loss),
extraordinary gains and interest income, and plus,
to the extent deducted in determining net income (or loss), non-cash losses on
sales of assets outside of the ordinary course of business, write-downs or
non-cash losses on dispositions of fixed assets and intangible assets
(including goodwill write-downs as required under FAS pronouncement 142),
non-cash charges in respect of the acceleration of lease expense for facilities
that have been, or are intended to be, closed, interest expense, amortization
or write-off of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness, income tax
expense, depreciation and amortization expense, amortization of intangibles
(including, without limitation, goodwill) and organization costs, cash
restructuring and severance charges incurred and paid during the fiscal year
ending December 31, 2005 in an aggregate amount not to exceed $5,500,000
and reflected on the financial Projections for fiscal year 2005, delivered to
Agent and in form and substance satisfactory to Agent, cash restructuring
charges expensed during the fiscal year ending December 31, 2004 in an
aggregate amount not to exceed $8,000,000, and any other non-cash charges
(including, without limitation, the

 

7

 

amount of any
non-cash deduction to consolidated net income (or loss) as a result of any
grant to members of management of any capital stock of Parent), in each case,
for such period as determined in accordance with GAAP.

 

“Environmental Actions”
means any complaint, summons, citation, notice, directive, order, claim,
litigation, third party investigation, judicial or administrative proceeding,
judgment, letter, or other communication from any Governmental Authority, or
any third party involving violations of Environmental Laws or releases of
Hazardous Materials (a) from any assets, properties, or businesses of any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest, (b) from adjoining properties or businesses onto any property of
any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest, or (c) from or onto any facilities which received Hazardous
Materials generated by any Borrower, any Subsidiary of a Borrower, or any of
their predecessors in interest.

 

“Environmental Law”
means any applicable federal, state, provincial, foreign or local statute, law,
rule, regulation, ordinance, code, binding and enforceable guideline, binding
and enforceable written policy or rule of common law now or hereafter in
effect and in each case as amended, or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, in each case, to the extent binding on any Borrower or any
Subsidiary of a Borrower, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time.

 

“Environmental
Liabilities” means all liabilities, monetary obligations, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts,
or consultants, and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
or Remedial Action required, by any Governmental Authority or any third party,
and which relate to any Environmental Action.

 

“Environmental Lien”
means any Lien in favor of any Governmental Authority for Environmental Liabilities.

 

“Equipment” means
equipment (as that term is defined in the Code).

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute thereto.

 

“ERISA Affiliate”
means (a) any Person subject to ERISA whose employees are treated as
employed by the same employer as the employees of a Borrower or a Subsidiary of
a Borrower under Section 414(b) of the IRC, (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of a Loan Party, a WFF Foreign Loan Party or a
Significant Subsidiary under Section 414(c) of the IRC, (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any

 

8

 

organization
subject to ERISA that is a member of an affiliated service group of which a
Loan Party, a WFF Foreign Loan Party or a Significant Subsidiary is a member
under Section 414(m) of the IRC, or (d) solely for purposes of Section 302
of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a
party to an arrangement with a Loan Party, a WFF Foreign Loan Party or a
Significant Subsidiary and whose employees are aggregated with the employees of
a Loan Party, a WFF Foreign Loan Party or a Significant Subsidiary under Section 414(o)
of the IRC.

 

“Event of Default”
has the meaning specified therefor in Section 7.

 

“Excess Cash Flow”
means, for any period, the remainder of (without duplication) (a) EBITDA for such period, minus (b) the
sum, without duplication, of (i) scheduled repayments of principal of WFF
Term Loan A and other Indebtedness for borrowed money of Parent and its
Subsidiaries (to the extent such Indebtedness is permitted to be incurred, and
such payments are permitted to be made, under this Agreement) made in cash
during such period, plus (ii) voluntary prepayments of Indebtedness, but only
to the extent such Indebtedness cannot be reborrowed, plus (iii) cash
payments (not financed with the proceeds of Indebtedness (other than WFF
Advances)) made in such period with respect to Capital Expenditures to the
extent permitted to be made under this Agreement, plus (iv) all federal,
state, local and foreign income taxes paid in cash by Parent and its
Subsidiaries, during such period, plus
(v) all Interest Expense paid in cash by Parent and its Subsidiaries
during such period to the extent permitted to be paid under this Agreement, plus (vi) mandatory prepayments of
the WFF Term Loan A pursuant to Section 2.4(c)(v) and mandatory
prepayments of the Term Loan B, plus (vii) any
non-cash items (including losses, charges, expenses, write-downs or write-offs
or in respect of amortization or depreciation) included in the calculation of
EBITDA, plus (viii) to the extent not
otherwise deducted in calculating Excess Cash Flow, cash restructuring and
severance charges incurred and paid during the fiscal year ending December 31,
2005 in an aggregate amount not to exceed $5,500,000, plus (ix) all
other cash payments made during such period on account of fees, costs and
expenses that were capitalized or otherwise were not deducted in calculating
Excess Cash Flow for such period, plus (x) cash
consideration paid during such period to make acquisitions of all or
substantially all of the assets and/or business of a Person or all of the Stock
of a Person that are permitted to be made under this Agreement.

 

“Excluded Deposit
Accounts” means (i) Deposit Account no.1-508-9055-9589 maintained with
US Bank National Association to the extent such account is pledged to US Bank
National Association to secure letters of credit issued for the account of a
Borrower and the aggregate Dollar Equivalent amount in such Deposit Account
does not exceed $900,000 and (ii) Deposit Accounts of any Borrower solely
to the extent all funds in such Deposit Accounts consist of amounts held in
trust by such Borrower for or in escrow for or on behalf of customers of such
Borrower.

 

“Existing Lender”
means Fleet Capital Corporation.

 

9

 

“Extraordinary Receipts”
means any cash Collections received by any Loan Party not in the ordinary
course of business (and not consisting of proceeds described in Section 2.4(c)(ii) or
Section 2.4(c)(iv) hereof), including the following (solely to
the extent any of the following is not in the ordinary course of business): (a) foreign,
United States, state or local tax refunds (excluding value added tax payments
received from a Governmental Authority that will be netted against future value
added tax payments to such Governmental Authority), (b) pension plan
reversions, (c) proceeds of insurance (including proceeds of key man life
insurance policies) other than such proceeds to the extent that the amounts so
received are applied by a Loan Party for the purpose of satisfying the
condition giving rise to the insurance claim, (d) proceeds of judgments,
proceeds of settlements, or other consideration of any kind in connection with
any cause of action, (e) condemnation awards (and payments in lieu
thereof), (f) indemnity payments, and (g) any purchase price
adjustment received in connection with any purchase agreement); provided, that,
individual, unrelated Collections in a Dollar Equivalent amount of less than or
equal to $5,000 shall be deemed not to constitute Extraordinary Receipts for
purposes of this Agreement.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as in effect from time to time.

 

“Fiscal Month”
means a calendar month.

 

“Fee Letter” means
that certain fee letter between Borrowers and Agent, in form and substance
satisfactory to Agent.

 

“Fixed Charges”
means with respect to Parent and its Subsidiaries for any period, the sum,
without duplication, of (a) Interest Expense (net of interest income) paid
in cash during such period, (b) scheduled principal payments required to
be paid during such period in respect of Indebtedness, and (c) all
federal, state, and local income taxes paid during such period.

 

“Fixed Charge Coverage
Ratio” means, with respect to Parent and its Subsidiaries for any period,
the ratio of (i) EBITDA for such period minus
Capital Expenditures made (to the extent not already incurred in a prior
period) or incurred during such period, to (ii) Fixed Charges for such
period.

 

“Foreign Pledge
Agreements” means (i) the UK Pledge Agreement, (ii) the Canadian
Pledge Agreement, (iii) the BVI Pledge Agreement, (iv) the
Philippines Pledge Agreement, (v) the Singapore Pledge Agreement and (vi) the
Spanish Pledge Agreement.

 

“Foreign Subsidiaries”
means each Subsidiary of Administrative Borrower not created or organized under
the laws of the United States or any state thereof or the District of Columbia,
and “Foreign Subsidiary” means any one of them.

 

“Fraudulent Conveyance”
has the meaning specified therefor in Section 2.15(i).

 

10

 

“Funding Date”
means the date on which a Borrowing occurs.

 

“Funding Date
Covenants” has the meaning specified therefor in Section 6.18.

 

“Funding Losses”
has the meaning specified therefor in Section 2.13(b)(ii).

 

“GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States, consistently applied.

 

“Governing Documents”
means, with respect to any Person, the certificate or articles of
incorporation, by-laws, unanimous shareholder agreement or unanimous
shareholder declaration, if any, or other organizational documents of such
Person, and all amendments thereto.

 

“Governmental
Authority” means any federal, state, provincial, local, or other
governmental or administrative body, instrumentality, board, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.

 

“Guarantors” means
each Subsidiary of each Borrower (other than SITEL Mexico Holdings LLC, a
Nebraska limited liability company, SITMEX-USA, LLC, a Delaware limited
liability company, Borrowers and Immaterial Subsidiaries) created or organized
under the laws of the United States or any state thereof or the District of
Columbia that becomes a Guarantor hereunder after the date hereof, and “Guarantor”
means any one of them.

 

“Guaranty” means a
general continuing guaranty executed and delivered by each Guarantor in favor
of Agent for the benefit of the Lender Group, in form and substance satisfactory
to the Agent.

 

“Hazardous Materials”
means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any Applicable Laws or regulations as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or
any other formulation intended to define, list, or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil,
petroleum, or petroleum derived substances, natural gas, natural gas liquids,
synthetic gas, drilling fluids, produced waters, and other wastes associated
with the exploration, development, or production of crude oil, natural gas, or
geothermal resources, (c) any flammable substances or explosives or any
radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement”
means any and all agreements, or documents now existing or hereafter entered
into by Administrative Borrower or any of its Subsidiaries that provide for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any

 

11

 

combination of, or
option with respect to, these or similar transactions, for the purpose of
hedging Administrative Borrower’s or any of its Subsidiaries’ exposure to
fluctuations in interest or exchange rates, loan, credit exchange, security or
currency valuations or commodity prices.

 

“Holdout Lender”
has the meaning specified therefor in Section 14.2(a).

 

“Immaterial Subsidiary”
means a Person that is (i) a Subsidiary of Parent, and (ii)  listed
on Schedule I-1 attached hereto or otherwise designated in a
written notice by Administrative Borrower as an “Immaterial Subsidiary” for the
purposes of the Agreement; provided, that any such Subsidiary shall not
continue to constitute an “Immaterial Subsidiary” for more than thirty (30)
days after such Subsidiary was formed or acquired unless approved as an
Immaterial Subsidiary by Agent in its Permitted Discretion.

 

“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 other similar instruments and all reimbursement or other
obligations of such Person in respect of letters of credit, bankers
acceptances, or other similar financial products, (c) all obligations of
such Person as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business, payable in
accordance with customary trade practices and not outstanding for more than 90
days after the date such payable was created), (f) all obligations of such
Person owing under Hedge Agreements, and (g) any obligation of such Person
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any
obligation of any other Person that constitutes Indebtedness under any of
clauses (a) through (f) above. 
For purposes of this definition (x) the amount of the obligations of a
Person under a Hedge Agreement at any date shall be equal to the amount payable
by such Person to the relevant counterparties on such date (net of any amounts
payable to such Person by such counterparties) and (y) the amount of any
guarantee obligation of a Person shall (subject to any limitation set forth
therein) be deemed to be an amount equal to the stated or determinable amount
of the related primary obligation, or portion thereof, in respect of which such
guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith.  For purposes of Section 6.1,
(i) reimbursement obligations of a Borrower in respect of standby letters
of credit shall not constitute Indebtedness to the extent such letters of
credit support Indebtedness of another Borrower that is otherwise permitted
under Section 6.1, (ii) reimbursement obligations of a
Guarantor in respect of standby letters of credit shall not constitute
Indebtedness to the extent such letters of credit support Indebtedness of
another Loan Party that is otherwise permitted under Section 6.1, (iii) reimbursement
obligations of a WFF Foreign Borrower in respect of standby letters of credit
shall not constitute Indebtedness to the extent such letters of credit support
Indebtedness of a Loan Party or another WFF Foreign Borrower that is otherwise
permitted under Section 6.1, (iv) reimbursement obligations of
a WFF Foreign Guarantor in respect of standby letters of

 

12

 

credit shall not
constitute Indebtedness to the extent such letters of credit support
Indebtedness of another Loan Party or WFF Foreign Loan Party that is otherwise
permitted under Section 6.1 and (v) reimbursement obligations
of a Significant Subsidiary in respect of standby letters of credit shall not
constitute Indebtedness to the extent such letters of credit support
Indebtedness of Parent or any other Subsidiary of Parent that is otherwise
permitted under Section 6.1. 
For purposes of Section 6.17, reimbursement obligations in
respect of standby letters of credit shall not constitute Indebtedness to the
extent such letters of credit support Indebtedness of Parent or any Subsidiary
of Parent.

 

“Indemnified
Liabilities” has the meaning specified therefor in Section 10.3.

 

“Indemnified Person”
has the meaning specified therefor in Section 10.3.

 

“Indenture” means
the Indenture dated as of March 10, 1998 among the Parent, the subsidiary
guarantors named therein and Manufacturers & Traders Trust Company,
successor to Allfirst Bank, formerly The First National Bank of Maryland, as
Trustee, in respect of the Parent’s Series A and Series B 9 1/4%
Senior Subordinated Notes due 2006, as amended, supplemented or otherwise
modified.

 

“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of
the Bankruptcy Code or under any other state or federal bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.

 

“Intercompany
Subordination Agreement” means a subordination agreement executed and
delivered by Loan Parties and Agent, the form and substance of which is
satisfactory to Agent.

 

“Intercreditor
Agreement” means the Lien Intercreditor Agreement of even date herewith
among Senior Collateral Agent, and Agent, and acknowledged by the Borrowers, as
amended, supplemented, restated or otherwise modified from time to time.

 

“Interest Expense”
means, for any period, the aggregate of the interest expense of Parent and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.

 

“Interest Period”
means, with respect to each LIBOR Rate Loan, a period commencing on the date of
the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or
the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, 3, or
6 months thereafter; provided, however, that (a) if any
Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended (subject to clauses (c)-(e) below) to the next
succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to,

 

13

 

but excluding, the
day on which any Interest Period expires, (c) any Interest Period that
would end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (d) with respect to an Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
the Interest Period shall end on the last Business Day of the calendar month
that is 1, 2, 3, or 6 months after the date on which the Interest Period began
and (e) Borrowers (or Administrative Borrower on behalf thereof) may not
elect an Interest Period which will end after the Maturity Date.

 

“Inventory” means
inventory (as that term is defined in the Code).

 

“Investment”
means, with respect to any Person, any investment by such Person in any other
Person (including Affiliates) in the form of loans, guarantees, advances, or
capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course
of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.

 

“IRC” means the
Internal Revenue Code of 1986, as in effect from time to time.

 

“Law (or Laws)”
means, in respect of the United States, all published laws, statutes, codes,
ordinances, decrees, rules, regulations, by-laws, judicial or arbitral or
administrative or ministerial or departmental or regulatory judgments, orders,
decisions, rulings or awards, including general principles of common and civil
law, and conditions or any grant of approval, permission, authority or license
of any court, Governmental Authority, statutory body or self-regulatory
authority.

 

“Lender” and “Lenders”
have the respective meanings set forth in the preamble to the Agreement, and
shall include any other Person made a party to the Agreement in accordance with
the provisions of Section 13.1.

 

“Lender Group”
means, individually and collectively, each of the Lenders and Agent.

 

“Lender Group Expenses”
means all (a) costs or expenses (including taxes, and insurance premiums)
required to be paid by a Borrower or its Subsidiaries under any of the Loan
Documents that are paid, advanced, or incurred by any one or more members of
the Lender Group, (b) fees or charges paid or incurred by Agent in
connection with the Lender Group’s transactions contemplated by the Loan
Documents with Borrowers or their

 

14

 

Subsidiaries,
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
judgment, and UCC searches and including searches with the patent and trademark
office, the copyright office, or the department of motor vehicles to the extent
Liens on motor vehicles are required to be perfected under the Loan Documents),
filing, recording, publication, appraisal (including periodic collateral
appraisals or business valuations) to the extent of the fees and charges (and
up to the amount of any limitation) contained in the Agreement and, in the
event any real estate is pledged as Collateral, real estate surveys, real
estate title policies and endorsements, and environmental audits, (c) costs
and expenses incurred by Agent in the disbursement of funds to Borrowers or
other members of the Lender Group (by wire transfer or otherwise), (d) charges
paid or incurred by Agent resulting from the dishonor of checks, (e) reasonable
costs and expenses paid or incurred by the Lender Group to correct any default
or enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses
of Agent related to any inspections or audits to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable
costs and expenses of third party claims or any other suit paid or incurred by
any one or more members of the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with any Borrower or any
Subsidiary of a Borrower, (h) Agent’s reasonable costs and expenses
(including reasonable attorneys fees) incurred in advising, structuring,
drafting, reviewing, administering, syndicating, or amending the Loan
Documents, and (i) Agent’s and each Lender’s reasonable costs and expenses
(including attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including reasonable attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning any Borrower or any Subsidiary of a Borrower or in exercising rights
or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral.

 

“Lender-Related Person”
means, with respect to any Lender, such Lender, together with such Lender’s
Affiliates, officers, directors, employees, attorneys, and agents.

 

“Leverage Ratio”
means, as of any date, the ratio of (a) the sum of the WFF Revolver Usage
(other than WFF Letter of Credit Usage cash collateralized in an amount up to
105% of such WFF Letter of Credit Usage), the outstanding principal balance of
the WFF Term Loan A and the Term Loan B and the aggregate principal amount of
all other Indebtedness (other than cash collateralized letters of credit) of
Parent and its Subsidiaries outstanding as of such date in the amount that
would be reflected as debt on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP to (b) EBITDA for the 12 month
period ended as of such date.

 

“LIBOR Deadline”
has the meaning specified therefor in Section 2.13(b)(i).

 

15

 

“LIBOR Notice”
means a written notice substantially in the form of Exhibit L-1.

 

“LIBOR Option” has
the meaning specified therefor in Section 2.13(a).

 

“LIBOR Rate”
means, for each Interest Period for each LIBOR Rate Loan, the rate per annum
determined by Agent (rounded upwards, if necessary, to the next 1/100%) equal
to (a) the Base LIBOR Rate for such Interest Period, divided by (b) 100%
minus the Reserve
Percentage.  The LIBOR Rate shall be
adjusted on and as of the effective day of any change in the Reserve
Percentage.

 

“LIBOR Rate Loan”
means each portion of the Term Loan B that bears interest at a rate determined
by reference to the LIBOR Rate.

 

“LIBOR Rate Margin”
means 6.50%.

 

“Lien” means any
interest in an asset securing an obligation owed to, or a claim by, any Person
other than the owner of the asset, irrespective of whether (a) such
interest is based on the common law, civil law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent
upon the occurrence of some future event or events or the existence of some
future circumstance or circumstances. 
Without limiting the generality of the foregoing, the term “Lien”
includes the lien or security interest arising from a mortgage, deed of trust,
encumbrance, notice of Lien, levy or assessment, pledge, hypothecation,
assignment, deposit arrangement, security agreement, conditional sale or trust
receipt, or from a lease, consignment, or bailment for security purposes and
also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.

 

“Loan Account” has
the meaning specified therefor in Section 2.10.

 

“Loan Documents”
means the Agreement, the Cash Management Agreements, the Control Agreements,
the Fee Letter, any Guaranty, the Intercompany Subordination Agreement, the Mortgages,
if any, the Security Agreement, the Officers’ Certificate, any note or notes
executed by a Borrower or any Guarantor in connection with the Agreement and
payable to a member of the Lender Group, the Foreign Pledge Agreements and any
other agreement entered into, now or in the future, by any Borrower and the
Lender Group in connection with the Agreement.

 

“Loan Parties”
means the Borrowers and Guarantors, and “Loan Party” means any one of
them.

 

“Material Adverse
Change” means (a) a material adverse change in the business,
operations, results of operations, assets, liabilities or financial condition
of Borrowers and their Subsidiaries, taken as a whole, (b) a material
adverse change in the business, operations, results of operations, assets,
liabilities or financial condition of Loan

 

16

 

Parties, taken as
a whole, (c) a material impairment of a Borrower’s or any of its
Subsidiaries’ ability to perform its material obligations under the Loan
Documents to which it is a party or of the Lender Group’s ability to enforce
the Obligations or realize upon a material portion of the Collateral, or (d) a
material impairment of the enforceability or priority of the Agent’s Liens with
respect to a material portion of the Collateral as a result of an action or
failure to act on the part of a Borrower or a Subsidiary of a Borrower.

 

“Maturity Date”
has the meaning specified therefor in Section 3.3.

 

“Maximum Non-Loan
Party Percentage” means (i) if the Leverage Ratio for the four (4) fiscal
quarters ending on the last day of the then most recently ended fiscal quarter
for which financial statements have been delivered is greater than 2.00:1.00,
10% and (ii) if the Leverage Ratio for the four (4) fiscal quarters
ending on the last day of the then most recently ended fiscal quarter for which
financial statements have been delivered is equal to or less than 2.00:1.00,
12.5%.

 

“Mortgages” means,
individually and collectively, one or more mortgages, deeds of trust, or deeds
to secure debt, executed and delivered by a Borrower in favor of Agent for the
benefit of the Lender Group, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral.

 

“Net Cash Proceeds”
means, (i) with respect to any sale or disposition by any Person of
property or assets, the amount of cash Collections received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person, but only as
and when received, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (1) Indebtedness owing under this Agreement or the other Loan
Documents and (2) Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such disposition, (B) reasonable
fees and expenses related thereto incurred by such Person in connection
therewith, and (C) taxes paid or payable to any taxing authorities by such
Person in connection therewith and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Person, or the sale or issuance by any
Person of its Stock, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred compensation) by or on behalf of such
Person, but only as and when received, in connection therewith, after deducting
therefrom only (A) reasonable fees and expenses related thereto incurred
by such Person in connection therewith, (B)  taxes paid or payable by such
Person in connection therewith and (C) income taxes to be paid in
connection therewith (after taking into account any tax credits or deductions
and any tax sharing arrangements); in each case of clause (i) and (ii) to
the extent, but only to the extent, that the amounts so deducted are (1) actually
paid or are payable to a Person that, except in the case of reasonable
out-of-pocket expenses, is not an Affiliate of such Person or any of its
Subsidiaries and (2) properly attributable to such transaction or to the
asset that is the subject thereof.

 

17

 

“Non-Loan Party
Subsidiaries” means the Subsidiaries of Parent identified on Schedule N-1
and Subsidiaries of the Parent formed or acquired after the Closing Date,
designated in a written notice by Administrative Borrower as a “Non-Loan Party
Subsidiary” for purposes of this Agreement, in each case that (i) have not
been designated as Loan Parties, WFF Foreign Loan Parties or Significant
Subsidiaries by Administrative Borrower in accordance with Section 6.16
or otherwise and (ii) are not created or organized under the laws of the
United States, Ireland, United Kingdom, Germany or Canada or any state or
province thereof or the District of Columbia, and “Non-Loan Party Subsidiary”
means any one of them; provided, that, any such Subsidiary shall not
continue to constitute a “Non-Loan Party Subsidiary” for more than thirty (30)
days after such Subsidiary was formed or acquired unless approved by the Agent
in its Permitted Discretion.

 

“Obligations”
means all loans (including the Term Loan B), debts, principal, interest
(including any interest that accrues after the commencement of an Insolvency
Proceeding regardless of whether allowed or allowable in whole or in part as a
claim in any such Insolvency Proceeding), premiums, liabilities (including all
amounts charged to the Borrowers’ Loan Account pursuant hereto), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), charges, costs, Lender Group Expenses (including any fees
or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in
any such Insolvency Proceeding), lease payments, guaranties, covenants, and
duties of any kind and description owing by the Borrowers to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, and including all interest
not paid when due and all Lender Group Expenses that Borrowers are required to
pay or reimburse by the Loan Documents, by law, or otherwise.  Any reference in the Agreement or in the Loan
Documents to the Obligations shall include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

 

“Officers’ Certificate”
means the representations and warranties of officers form submitted by Agent to
Parent, together with the Borrowers’ and Guarantors’ completed responses to the
inquiries set forth therein, the form and substance of such responses to be
reasonably satisfactory to Agent.

 

“Originating Lender”
has the meaning specified therefor in Section 13.1(e).

 

“Parent” has the
meaning specified therefor in the preamble to the Agreement.

 

“Participant” has
the meaning specified therefor in Section 13.1(e).

 

“Permitted Acquisition”
means an acquisition of the assets and/or business of a Person by a Borrower or
a WFF Foreign Borrower or the acquisition of all of the Stock of a Person (such
Person, the “Target”) by a Borrower or a WFF Foreign Borrower in which (a) (i) the
business and assets acquired by a Borrower are located in the United States,
the

 

18

 

business and assets
acquired by a WFF Foreign Borrower are located in Canada, UK, Germany or
Ireland and or the business and assets of the Target are located in the United
States, Canada, UK, Germany or Ireland and (ii) such business is, and such
assets are for use in, the same business engaged in by Borrowers or the WFF
Foreign Borrowers as of the Closing Date or a business reasonably related,
complementary or incidental thereto or a reasonable extension thereof, (b) immediately
before and after giving effect to such asset acquisition or Stock acquisition
and the making of any WFF Advances in connection therewith, no Default or Event
of Default exists (and, with respect to the financial covenants included in Section 6.17,
Agent has been provided with calculations showing compliance with such
financial covenants on a pro forma basis as of the most recent month end for
which financial statements have been delivered, after giving effect to such
asset or Stock acquisition), (c) the Dollar Equivalent of the aggregate
consideration to be paid by the Borrowers or WFF Foreign Borrowers (including
any liabilities assumed by Borrowers or WFF Foreign Borrowers and the
liabilities retained by the Target) in connection with such asset or Stock
acquisition, together with the consideration paid in connection with all other
asset or Stock acquisitions completed by Borrowers or WFF Foreign Borrowers
during the consecutive 12-month period ending on the date of such asset or
Stock acquisition, does not exceed the Annual Acquisition Limit, (d) the
Dollar Equivalent of the aggregate consideration to be paid by Borrowers or WFF
Foreign Borrowers (including any liabilities assumed by Borrowers or WFF
Foreign Borrowers and any liabilities retained by the Target) in connection
with such asset or Stock acquisition, together with the consideration paid in
connection with all of the asset or Stock acquisitions completed by Borrowers
or WFF Foreign Borrowers during the period commencing on the Closing Date and
ending on the date of such asset or Stock acquisition, does not exceed
$20,000,000, (e) the acquisition is consensual and has been approved by
the respective board of directors of the parties to such acquisition (including
in the case of a Stock acquisition, the board of directors of the Target), (f) at
the time of and immediately after giving effect to such asset or Stock
acquisition and the making of any WFF Advances in connection therewith, the
Dollar Equivalent of WFF Excess Availability is not less than $25,000,000, (g) at
least 30 days prior to such acquisition, Agent shall have received a
description of such acquisition and such due diligence as is customarily
required by Agent, and projections for the succeeding three-year period, which
projections shall be in form and substance satisfactory to Agent and shall take
into account the proposed Permitted Acquisition, (h) at least 5 days prior
to the consummation of such asset or Stock acquisition, Agent has received
complete executed or conformed copies of the material documentation to be
executed in connection with such acquisition, (i) consents have been
obtained in favor of Agent and Lenders to the collateral assignment of rights
and indemnities under the material acquisition documents, and (j) to the
extent required pursuant to the provisions of Section 5.15, Agent
shall have received a perfected, first-priority Lien in the assets so acquired
(except for Permitted Liens) and in the case of a Stock acquisition, Agent
shall have received a perfected, first-priority Lien (except for Permitted
Liens) in all of the assets of the Target and the Target shall have, at Agent’s
election, either executed and delivered a joinder to this Agreement or a
Guaranty of all of the Obligations.

 

19

 

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

 

“Permitted
Dispositions” means (a) sales or other dispositions of Equipment or
fixtures that is surplus, substantially worn, damaged, uneconomic or obsolete
in the ordinary course of business, (b) sales of Inventory to buyers in
the ordinary course of business, (c) the use or disposition of money or
Cash Equivalents in a manner that is not prohibited by the terms of the
Agreement or the other Loan Documents, (d) the licensing, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business, (e) dispositions of
assets of a Loan Party, a WFF Foreign Loan Party or a Significant Subsidiary in
the aggregate Dollar Equivalent amount not to exceed $1,000,000 in any fiscal
year of Borrowers so long as the consideration received therefor is at least
fair market value (as determined in the good faith judgment of the applicable
Loan Party, WFF Foreign Loan Party or Significant Subsidiary), (f) any
leases or subleases to other Persons that are not Affiliates of any Borrower
not materially interfering with the conduct of the business of the Borrowers
taken as a whole, (g) transactions between and among Borrowers and
transactions between and among Guarantors, (h) any sale and leaseback
transaction which (i) involves the financing of a tangible fixed asset not
owned by any Borrower, any WFF Foreign Borrower or Significant Subsidiary as of
the Closing Date, (ii) is consummated on customary, market terms that have
been negotiated on an arm’s-length basis with a Person other than an Affiliate
of any Borrower, (iii) to the extent the applicable lease constitutes
Indebtedness, constitutes Permitted Purchase Money Indebtedness, (iv) involves
Capital Expenditures that are permitted to be made under Section 6.17(b) and
(v) is consummated at a time when no Default or Event of Default exists or
would be caused by the consummation of such transaction, (i) transactions
between and among WFF Foreign Borrowers, transactions between and among WFF
Foreign Guarantors and dispositions by any WFF Foreign Loan Party to any
Borrower, (j) transactions between and among Significant Subsidiaries and
dispositions by Significant Subsidiaries to any Borrower or WFF Foreign
Borrower or any Subsidiary of any Borrower or WFF Foreign Borrower, (k) the
transactions described in, and subject to the terms of, the Pre-approved
Restructurings Letter, (l) any disposition or series of related dispositions in
respect of Equipment where the Dollar Equivalent of the Net Cash Proceeds
received are less than or equal to $5,000 so long as the consideration received
therefor is at least fair market value (as determined in the good faith
judgment of the applicable Loan Party, WFF Foreign Loan Party or Significant
Subsidiary), (m) any other dispositions in the aggregate Dollar Equivalent
amount not to exceed $500,000 so long as the consideration received therefor is
at least fair market value (as determined in the good faith judgment of the
applicable Loan Party, WFF Foreign Loan Party or Significant Subsidiary) and at
least 75% of the total consideration received is in cash, (n) dispositions of
fixed assets of a Loan Party, a WFF Foreign Loan Party or a Significant
Subsidiary to other Subsidiaries of Parent so long as the Dollar Equivalent
amount of the aggregate fair market value of all fixed assets disposed of in
reliance on this clause (n) does not exceed $2,000,000 and (o) the sale of all
or a substantial portion of the assets of Financial Insurance Services, Inc.
or the sale of all of the issued and outstanding capital stock of

 

20

 

Financial
Insurance Services, Inc. (including by merger) so long as no Default or
Event of Default exists or would be caused by the consummation of such
transaction.

 

“Permitted Holder”
means State of Wisconsin Investment Board, James Lynch, Ida Eggens Kruithof,
Private Equity Investors IV, L.P., Rohit Desai, JANA Partners and Heartland
Advisors, Inc.

 

“Permitted Investments”
means:

 

(a)          Investments in cash and Cash Equivalents, including
Excluded Deposit Accounts,

 

(b)         Investments in negotiable instruments for collection,

 

(c)          advances made in connection with purchases of goods or
services in the ordinary course of business,

 

(d)         (i) advances made to employees and officers in
the ordinary course of business for salary, relocation and other similar
expenses the Dollar Equivalent amount of which do not exceed $750,000 in the
aggregate at any one time outstanding and (ii) Investments in respect of
the cash value of split premium insurance policies in effect on the Closing
Date (and renewals thereof), so long as the Dollar Equivalent amount of
premiums payable in respect of such policies does not exceed $80,000 in any
fiscal year,

 

(e)          Investments received in settlement of amounts due to a
Loan Party, a WFF Foreign Loan Party or a Significant Subsidiary effected in
the ordinary course of business or owing to a Loan Party, a WFF Foreign Loan
Party or a Significant Subsidiary as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of a Borrower or any WFF Foreign Borrower or any Subsidiary of a
Borrower or any WFF Foreign Borrower,

 

(f)            Investments by a Loan Party, a WFF Foreign Loan Party
or a Significant Subsidiary, to the extent existing on the Closing Date and
listed on Schedule 6.12; provided, that no Loan Party shall write-off,
forgive, otherwise reduce or accept payment with respect to the unpaid
principal amount of any intercompany loan owed by a Foreign Subsidiary without
the prior written consent of the Agent except Permitted Repayments,

 

(g)         Investments in respect of intercompany loans made by
Foreign Subsidiaries (other than SITEL Iberica Teleservices, S.A.) to other
Foreign Subsidiaries; provided, that (x) the aggregate Dollar Equivalent
principal amount of such intercompany loans made in reliance on this clause (g) (other
than (i) intercompany loans made with proceeds of Investments made by
SITEL Iberica Teleservices, S.A. pursuant to clause (l) of this definition and (ii) intercompany
loans made by a Foreign Subsidiary with the proceeds of intercompany loans made
by another Foreign Subsidiary pursuant to this clause (g) to the extent
the applicable cash proceeds of such intercompany loans are sent directly by
the Foreign Subsidiary funding the initial intercompany loan to the Foreign
Subsidiary that is the

 

21

 

ultimate
recipient of such series of intercompany loans) does not exceed $2,500,000 at
any one time outstanding and (y) such intercompany loans are unsecured,

 

(h)         Investments in respect of intercompany loans made by
Loan Parties to Foreign Subsidiaries; provided, that (i) (A) to the
extent the proceeds of such intercompany loans are used to finance Capital
Expenditures incurred in connection with the repair, restoration or acquisition
of revenue generating assets, the aggregate Dollar Equivalent principal amount
of such intercompany loans (x) made to Foreign Subsidiaries organized under the
laws of any single jurisdiction made in reliance on this clause (h) shall
not exceed $7,500,000 in any fiscal year (net of repayments of intercompany
loans made in such fiscal year by Foreign Subsidiaries organized under the laws
of such jurisdiction to Loan Parties) or (y) made to all Foreign Subsidiaries
in reliance on this clause (h) shall not exceed $50,000,000 during the
term of this Agreement, (B) to
the extent the proceeds of such intercompany loans are used to finance start up
or expansion costs of a Foreign Subsidiary other than as described in clause
(i)(A) above, the aggregate Dollar Equivalent principal amount of such
intercompany loans made to Foreign Subsidiaries in reliance on this clause (h) shall
not exceed $2,500,000 in any fiscal year, and (C) to the extent the
proceeds of such intercompany loans are used for purposes other than as
described in clauses (i)(A) or (i)(B) above, the aggregate Dollar
Equivalent principal amount of such intercompany loans made to the Foreign
Subsidiaries in reliance on this clause (h) shall not exceed $7,500,000 at
any one time outstanding, (ii) the aggregate principal amount of such
intercompany loans made in reliance on clause (h)(i)(A) in any fiscal year
shall not exceed 75% of the Capital Expenditure limit set forth in Section 6.17(b) with
respect to such fiscal year, (iii) such intercompany loans are evidenced
by promissory notes, in form and substance acceptable to Agent, which
promissory notes have been pledged to Senior Collateral Agent, (iv) no
Loan Party shall write-off, forgive, otherwise reduce or accept payment with
respect to the unpaid principal amount of any such intercompany loan without
the prior written consent of the Agent except Permitted Repayments, (v) to
the extent the aggregate Dollar Equivalent principal amount of such
intercompany loans made to Foreign Subsidiaries organized under the laws of any
single jurisdiction made in reliance on this clause (h) exceeds $1,000,000
at any one time outstanding, Administrative Borrower shall notify Agent of the
existence of such intercompany loans and within forty-five (45) days of the
request of Agent (or such later period reasonably acceptable to Agent), such
intercompany loans shall be secured by the assets of such Foreign Subsidiary
pursuant to documentation in form and substance reasonably satisfactory to
Agent except to the extent it is not possible under Applicable Law through the
use of efforts and expenditures that are not unduly onerous to the Borrowers in
relation to the benefits afforded to the Agent and the Lenders thereby, as
reasonably determined by the Agent, to obtain valid and enforceable Liens on
the assets of such Foreign Subsidiary, and (vi) the aggregate Dollar
Equivalent principal amount of such intercompany loans made in any fiscal year
to Foreign Subsidiaries organized under the laws of (A) jurisdictions in
which it is not possible to obtain valid and enforceable Liens on such assets
of a Foreign Subsidiary under Applicable Law through the use of efforts and
expenditures that are not unduly onerous to the Borrowers in relation to the
benefits afforded to the Agent and the Lenders thereby, as reasonably
determined by the Agent, and (B) jurisdictions in

 

22

 

which
intercompany loans made to Foreign Subsidiaries organized under the laws of any
such jurisdiction made in reliance on this clause (h) exceeds $1,000,000
at any one time outstanding and Agent does not request that such intercompany
loans be secured by the assets of such Foreign Subsidiaries in reliance on this
clause (h) shall not exceed $10,000,000,

 

(i)             Investments consisting of other intercompany loans and
advances made in compliance with Section 6.1 (other than clause (j)
thereof) of the Agreement,

 

(j)             Investments by any Borrower in another Borrower and
Investments by any Guarantor in another Loan Party,

 

(k)          Permitted Acquisitions,

 

(l)             Investments by SITEL Iberica Teleservices, S.A. in
Foreign Subsidiaries,

 

(m)       Investments in Hedge Agreements permitted by Section 6.1,

 

(n)         Investments by Loan Parties, WFF Foreign Loan Parties
and Significant Subsidiaries in Subsidiaries of Parent arising in connection
with the issuance of equity in satisfaction of intercompany loans owed to such
Loan Parties, WFF Foreign Loan Parties or Significant Subsidiaries so long as (i) the
aggregate Dollar Equivalent of such intercompany loans that are so satisfied
plus the Dollar Equivalent of intercompany loans converted to equity pursuant
to a Permitted Repayment does not exceed $5,000,000 in any fiscal year or
$10,000,000 during the term of this Agreement and (ii) at the time of such
issuance no Default or Event of Default exists or would be caused by such
issuance,

 

(o)         non-cash consideration received by any Loan Party, WFF
Foreign Loan Party or Significant Subsidiary pursuant to a Permitted
Disposition,

 

(p)         guarantees of Indebtedness permitted under Section 6.1
and guarantees of ordinary course obligations of Subsidiaries of Parent not
constituting Indebtedness,

 

(q)         transactions permitted by Section 6.3 and Section 6.10,

 

(r)            Investments in joint ventures (and solely for purposes
thereof, in any intermediate holding company) to the extent the proceeds of
such Investments are used to finance Capital Expenditures incurred in
connection with the repair, restoration or acquisition of revenue generating
assets and associated working capital in an aggregate Dollar Equivalent amount
not to exceed the lesser of (x) $15,000,000 in any fiscal year; provided
that, in no event shall the aggregate Dollar Equivalent amount of Investments
made in reliance on this clause (r) that are used to finance working capital
exceed $2,000,000 in any fiscal year, and (y) the remaining amount of Capital
Expenditures permitted to be made under Section 6.17(b) in
such fiscal year,

 

23

 

(s)          Investments in Foreign Subsidiaries solely to the
extent such Investments (i) are necessary for such Foreign Subsidiary to
be in compliance with minimum capitalization requirements under Applicable Law
or are necessary for such Foreign Subsidiary to be in compliance with minimum
capitalization requirements established by the applicable tax authorities as a
condition to such Foreign Subsidiary deducting interest expense on intercompany
loans, or (ii) are necessary to permit such Foreign Subsidiary to make
Investments in another Foreign Subsidiary for such other Foreign Subsidiary to
be in compliance with minimum capitalization requirements under Applicable Law
or are necessary for such other Foreign Subsidiary to be in compliance with
minimum capitalization requirements established by the applicable tax
authorities as a condition to such other Foreign Subsidiary deducting interest
expense on intercompany loans; provided, that the aggregate Dollar
Equivalent amount of such Investments made in reliance on this clause (s) do
not exceed $5,000,000 during the term of this Agreement (it being understood,
that for purposes of determining the aggregate amount of Investments made in
reliance on this clause (s), an Investment made to a Foreign Subsidiary in
reliance on clause (ii) of this clause (s) that is used to make an
Investment in reliance on clause (i) of this clause (s) shall be treated
as a single Investment); and

 

(t)            other Investments which do not exceed $2,500,000 in
the aggregate Dollar Equivalent amount during any fiscal year of Parent.

 

“Permitted Liens”
means (a) Liens held by Agent to secure the Obligations, (b) Liens
for unpaid taxes, assessments, or other governmental charges or levies that
either (i) are not yet delinquent, or (ii) do not have priority over
the Agent’s Liens and the underlying taxes, assessments, or charges or levies
are the subject of Permitted Protests, (c) judgment Liens that do not
constitute an Event of Default under Section 7.7 of the Agreement, (d) Liens
set forth on Schedule P-1, (e) the interests of lessors under
operating leases, (f) purchase money Liens or the interests of lessors
under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches only to
the asset purchased, acquired, constructed or improved and the proceeds
thereof, (g) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred
in the ordinary course of Loan Parties’, WFF Foreign Loan Parties’ or
Significant Subsidiaries’ business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests, (h) Liens on amounts deposited in
connection with obtaining worker’s compensation or other unemployment
insurance, (i) Liens on amounts deposited in the ordinary course of
business in connection with bids, tenders, sales contracts, leases and other
contractual obligations, statutory obligations, regulatory obligations, work in
progress advances and other similar obligations not incurred in connection with
the borrowing of money, (j) Liens on amounts deposited as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (k) with respect to any real property, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, and zoning and
other land use restrictions, leases and other title exceptions that do not
materially interfere with or impair the use or

 

24

 

operation thereof,
(l) customary netting and setoff rights, banker’s liens and the like in favor
of financial institutions, (m) Liens held by Senior Collateral Agent securing
the WFF Obligations, (n) Liens incurred in connection with a sale and leaseback
transaction that is permitted under Section 6.4, so long as any
such Lien covers only the assets that are the subject of such sale and
leaseback transaction, (o) any license, lease or sublease to a third party not interfering
in any material respect with the business of the Borrowers, taken as a whole,
(p) Liens on fixed assets securing acquired Indebtedness permitted by Section 6.1
in connection with an acquisition permitted by Section 6.12 or
pursuant to an investment permitted hereby so long as such Lien covers only the
assets purchased or acquired and the proceeds thereof and secures only such
acquired Indebtedness, (q) other Liens on fixed assets, cash and Cash
Equivalents securing obligations in an aggregate amount not exceeding
$2,000,000, (r) Liens on cash and Cash Equivalents securing obligations owing
under Hedge Agreements permitted by this Agreement, (s) Liens on the assets of
the Significant Subsidiaries securing Indebtedness permitted under Sections
6.1(l), (t) Liens on the assets of Foreign Subsidiaries securing
intercompany loans due to any Loan Party that have been pledged to Agent, and
(u) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is refinanced, renewed, or extended under Section 6.1(d) and
so long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness.

 

“Permitted Protest”
means the right of Administrative Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes,
assessments, charges or levies (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment, provided that (a) a
reserve with respect to such obligation is established on a Borrower’s or any
of its Subsidiaries’ books and records in such amount as is required under
GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Administrative Borrower or any of its Subsidiaries, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of the Agent’s Liens.

 

“Permitted Purchase
Money Indebtedness” means, as of any date of determination, Purchase Money
Indebtedness (i) at any time on or prior to December 31, 2005, in an
aggregate Dollar Equivalent principal amount outstanding at any one time not in
excess of $15,000,000, (ii) at any time after December 31, 2005 and
on or prior to December 31, 2006, in an aggregate Dollar Equivalent
principal amount outstanding at any one time not in excess of $20,000,000, and (iii) at
any time after December 31, 2006, in an aggregate Dollar Equivalent
principal amount outstanding at any one time not in excess of $25,000,000.

 

“Permitted Repayments”
means (A) payments on intercompany loans made by Loan Parties to Foreign
Subsidiaries to the extent such payments are used to make the mandatory
prepayments due under Section 2.4(c)(i), (B) payments on
intercompany loans made by Loan Parties to Foreign Subsidiaries to the extent
the Dollar Equivalent amount of all payments on such intercompany loans made in
reliance on this clause (B) does not exceed $2,500,000 in any fiscal year
and (C) the conversion of intercompany loans made by Loan

 

25

 

Parties to Foreign
Subsidiaries to equity in the applicable Foreign Subsidiary to the extent the
aggregate Dollar Equivalent amount of such intercompany loans converted to
equity does not exceed $5,000,000 in any fiscal year or $10,000,000 during the
term of this Agreement.

 

“Person” means
natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint
ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

 

“Philippines Pledge
Agreement” means the Junior Pledge Agreement of even date herewith by and
between SITEL International LLC in favor of the Agent with respect to the Stock
of SITEL Customer Care Philippines, Inc.

 

“PPSA” means the
Personal Property Security Act of the applicable Canadian province or provinces
in respect of WFF Canadian Borrowers, and in the Province of Quebec, means the
applicable provisions of the Civil Code of Quebec.

 

“Pre-approved
Restructurings Letter” means the letter of even date herewith among
Administrative Borrower, Lenders, Agent and Senior Administrative Agent
pursuant to which Agent, Senior Administrative Agent and Lenders have consented
to certain proposed restructurings pursuant to the terms of such letter.

 

“Projections”
means Parent’s consolidated forecasted (a) balance sheets, (b) profit
and loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Parent’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share”
means, as of any date of determination,                                   with respect to a
Lender’s obligation to make the Term Loan B and right to receive payments of
interest, fees, and principal with respect thereto, (i) prior to the
making of the Term Loan B, the percentage obtained by dividing (y) such
Lender’s Commitment, by (z) the aggregate amount of all Lenders’
Commitments, and (ii) from and after the making of the Term Loan B, the
percentage obtained by dividing (y) the principal amount of such Lender’s
portion of the Term Loan B by (z) the principal amount of the Term Loan B.

 

“Protective Advances”
has the meaning specified in Section 2.3(a).

 

“Purchase Money
Indebtedness” means Indebtedness (other than the Obligations, but including
Capitalized Lease Obligations), incurred at the time of, or within 45 days
prior to or after, the acquisition, construction or improvement of any fixed
assets for the purpose of financing all or any part of the acquisition,
construction or improvement cost thereof or any refinancings thereof.

 

“Real Property”
means the parcels of owned real property identified on Schedule R-1
and any other parcels of owned real property hereafter acquired by any Borrower
and the improvements thereto.

 

26

 

“Real Property
Collateral” means any Real Property hereafter acquired by a Borrower which
is required pursuant to Section 5.15 to be subject to a Mortgage.

 

“Record” means
information that is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in perceivable form.

 

“Reference Bank”
means Wells Fargo, or such other bank as Agent may from time to time designate.

 

“Related Fund”
means, with respect to any Person, an Affiliate of such Person, or a fund or
account managed by such Person or an Affiliate of such Person.

 

“Remedial Action”
means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in
the indoor or outdoor environment, (b) prevent or minimize a release or
threatened release of Hazardous Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment, (c) restore or reclaim natural resources or the environment, (d) perform
any pre-remedial studies, investigations, or post-remedial operation and
maintenance activities, or (e) conduct any other actions with respect to
Hazardous Materials authorized by Environmental Laws.

 

“Replacement Lender”
has the meaning specified therefor in Section 14.2(a).

 

“Report” has the
meaning specified therefor in Section 15.17.

 

“Required Lenders”
means at any time, Lenders whose Pro Rata Shares aggregate at least 50.1%.

 

“Reserve Percentage”
means, on any day, for any Lender, the maximum percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor Governmental
Authority) for determining the reserve requirements (including any basic,
supplemental, marginal, or emergency reserves) that are in effect on such date
with respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities”) of that Lender, but so long as such Lender is not required or
directed under applicable regulations to maintain such reserves, the Reserve
Percentage shall be zero.

 

“SEC” means the
United States Securities and Exchange Commission and any successor thereto.

 

“Securities Account”
means a “securities account” (as that term is defined in the Code).

 

“Security Agreement”
means the security agreement, substantially in the form of Exhibit U-1
hereto, executed and delivered by each Borrower to Agent and each other
security agreement (including, without limitation, pledge agreements), in form
and substance satisfactory to Agent, executed and delivered by each Borrower to
Agent.

 

27

 

“Senior Administrative
Agent” means WFF (and its successors and assigns).

 

“Senior Collateral
Agent” means WFF (and its successors and assigns).

 

“Singapore Pledge
Agreement” means the Deed of Charge of even date herewith between SITEL
International LLC and Agent with respect to the Stock of SITEL Asia Pacific
Investments Pte Limited.

 

“Significant
Subsidiary” means SITEL Iberica Teleservices, S.A. and each other
Subsidiary of Parent that is not a Loan Party, a WFF Foreign Loan Party, an
Immaterial Subsidiary or a Non-Loan Party Subsidiary.  The Significant Subsidiaries on the Closing
Date are identified on Schedule S-1.

 

“Solvent” means,
with respect to any Person on a particular date, that, at fair valuations, the
sum of such Person’s assets is greater than all of such Person’s debts.

 

“Spanish Pledge
Agreement” means the Pledge on Shares of even date herewith among SITEL
International LLC, Senior Collateral Agent and Agent with respect to the Stock
of SITEL Iberica Teleservices S.A.

 

“Stock” means all
shares, options, warrants, interests, participations, share capital or other
equivalents (regardless of how designated) of or in a Person, 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 SEC under the Exchange Act).

 

“Subsidiary” of a
Person means a corporation, partnership, limited liability company, or other
entity in which that Person directly or indirectly owns or controls the shares
of Stock having ordinary voting power to elect a majority of the board of
directors (or appoint other comparable managers) of such corporation, partnership,
limited liability company, or other entity.

 

“Target” has the
meaning given to it in the definition of “Permitted Acquisition.”

 

“Taxes” has the
meaning specified therefor in Section 15.11.

 

“Term Loan B” has
the meaning specified therefor in Section 2.1(a).

 

“Term Loan B Amount”
means $35,000,000.

 

“UK Pledge Agreement”
means the Charge of Shares in SITEL Europe Limited of even date herewith
between SITEL International LLC and Agent.

 

“United States”
means the United States of America.

 

28

 

“Voidable Transfer”
has the meaning specified therefor in Section 16.7.

 

“Wells Fargo”
means Wells Fargo Bank, National Association, a national banking association.

 

“Week” means a
period of five consecutive Business Days.

 

“WF Canada” means
Wells Fargo Financial Corporation Canada, a Nova Scotia unlimited liability
company.

 

“WFF” means Wells
Fargo Foothill, Inc., a California corporation.

 

“WFF Advances”
means “Advances” as such term is defined in the WFF Credit Agreement.

 

“WFF Canadian
Borrowers” means “Canadian Borrowers” as such term is defined in the WFF
Credit Agreement.

 

“WFF
Credit Agreement” means that certain Credit Agreement dated as of even date
herewith by and among Parent, Borrowers, WFF Foreign Borrowers, WFF, WF Canada
and the lenders from time to time party thereto, as such is amended, modified,
supplemented, restated, refinanced, renewed or replaced from time to time in
accordance with the terms thereof and the terms of this Agreement and the
Intercreditor Agreement.

 

“WFF Excess
Availability” means “Excess Availability” as such term is defined in the
WFF Credit Agreement.

 

“WFF Foreign Advances”
means “Foreign Advances” as such term is defined in the WFF Credit Agreement.

 

“WFF Foreign Borrowers”
means “Foreign Borrowers” as such term is defined in the WFF Credit Agreement.

 

“WFF Foreign Borrowing
Base Certificate” means “Foreign Borrowing Base Certificate” as such term
is defined in the WFF Credit Agreement.

 

“WFF Foreign
Guarantors” means “Foreign Guarantors” as such term is defined in the WFF
Credit Agreement.

 

“WFF Foreign Loan
Parties” means “Foreign Loan Parties” as such term is defined in the WFF
Credit Agreement.

 

“WFF
Indebtedness” means the Indebtedness incurred by the Loan Parties and WFF
Foreign Loan Parties under the WFF Loan Documents in an aggregate amount not to
exceed the amount of the Maximum W/C Debt (as such term is defined in the
Intercreditor Agreement).

 

29

 

“WFF
Letter of Credit” means “Letter of Credit” as such term is defined in the
WFF Credit Agreement.

 

“WFF
Letter of Credit Usage” means “Letter of Credit Usage” as such term is
defined in the WFF Credit Agreement.

 

“WFF
Loan Documents” means the “Loan Documents” as such term is defined in the
WFF Credit Agreement, as such documents are amended, modified, supplemented, or
restated from time to time in accordance with the terms of this Agreement and
the Intercreditor Agreement.

 

“WFF
Maximum Revolver Amount” means the “Maximum Revolver Amount” as such term
is defined in the WFF Credit Agreement.

 

“WFF Maximum US
Revolver Amount” means
the “Maximum US Revolver Amount” as such term is defined in the WFF Credit
Agreement.

 

“WFF
Obligations” means the “Obligations” as such term is defined in the WFF
Credit Agreement.

 

“WFF
Revolver Usage” means “Revolver Usage” as such term is defined in the WFF
Credit Agreement.

 

“WFF
Term Loan A” means the Term Loan A as such term is defined in the WFF
Credit Agreement.

 

“WFF US Advances”  means “US Advances” as such term is defined in the WFF Credit Agreement.

 

“WFF
US Availability” means “US Availability” as such term is defined in the WFF
Credit Agreement.

 

“WFF US Borrowing Base”
means “US Borrowing Base” as such term is defined in the WFF Credit Agreement.

 

“WFF US Borrowing Base
Certificate” means “US Borrowing Base Certificate” as such term is defined
in the WFF Credit Agreement.

 

“WFF
US Excess Availability” means “US Excess Availability” as such term is
defined in the WFF Credit Agreement.

 

“WFF US Letters of
Credit” means “US
Letters of Credit” as such term is defined in the WFF Credit Agreement.

 

“WFF US Letter of
Credit Usage” means “US
Letter of Credit Usage” as such term is defined in the WFF Credit Agreement.

 

30

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