Document:

Exhibit
10.1

May
16, 2007

John Batty

Address

Dear
John,

It is our pleasure to offer you the position of Chief
Financial Officer and Executive Vice President as a Section 16(b) Officer with
Affymetrix at an annual salary of $360,000 (bi-weekly $13,846.15) reporting
to Steve Fodor, Chief Executive Officer.

You will be eligible to participate in the Affymetrix
Annual Bonus Program with an award level targeted at 50% of annual base salary.
The actual bonus amount is determined each year by the Compensation Committee
of the Board of Directors based on corporate achievement — financial
performance and corporate goals — and your individual goal achievement. In your
first year of employment, this bonus will be pro-rated based on your
start date. For 2007 only, your minimum bonus will be the pro-rated amount of
your target bonus so long as you remain employed with Affymetrix on the day the
bonus is paid in February of 2008.

In addition, we will recommend to the Compensation
Committee of the Board of Directors of Affymetrix that you be granted two
equity awards. The first is a Stock Option Grant of 30,000 shares of common
stock of Affymetrix. These options will vest 25% per year over a four (4) year
period beginning on your start date, and will have an exercise price equal to
fair market value on the grant date. If you are involuntarily terminated
without Cause (as defined in the Company’s Amended and Restated 2000 Equity
Incentive Plan), you will have 12 months after termination to exercise these
options to the extent they are vested on your termination date, but in no event
may the options be exercised after the original expiration date of the option. This
is subject to you signing a general release of claims.

The second is a grant of 30,000 full-value restricted
shares of common stock of Affymetrix, of which 10,000 will vest on the first
anniversary of your start date, 10,000 will vest on the second anniversary of your
start date, and 5,000 will vest on each of the third and fourth anniversaries
of your start date, provided that you continue to be an employee of Affymetrix
on such dates. If you are involuntarily terminated without Cause (as defined in
the Company’s Amended and Restated 2000 Equity Incentive Plan) after the third
anniversary of your start date but prior to your final vesting date, the
remaining unvested portion of this restricted share

award will become vested. This is subject to you
signing a general release of claims. The terms of these grants will be governed
in all respects by the
terms of the applicable Affymetrix equity incentive plan and the equity
agreement that will be provided to you after commencement of your employment.

As a condition of employment, we will require that you
sign a copy of the company’s Confidentiality and Nondisclosure Agreement.

Federal Immigration Law requires that all employers
verify each individual’s eligibility to work in the United States, including
U.S. citizens. Your employment offer is contingent upon your providing satisfactory
proof of identity and authorization to work in the United States. Please bring
the appropriate original documentation on your first day of work. A list of
acceptable I-9 documentation is attached for your review.

Your employment is at will, and no special or implied
conditions of employment are established unless they are made in writing by the
CEO of Affymetrix.

This offer is contingent upon satisfactory completion
of reference check and background checks.

If you have any questions, please feel free to contact
me at (408) 731-5622. To indicate acceptance of
this offer, please return a signed copy of this letter to me by May 16, 2007, close
of business. You can fax the letter back to me at (408) 731-5855.

John, your skills, experience and high potential
are respected and valued by everyone with whom you met here at Affymetrix. We
look forward to having you accept this offer and join us in strengthening our Finance
Department and realize the promise of our technology to enhance the quality of
life.

Sincerely,

/s/
Lori Ciano

Lori
Ciano

Senior Vice President, Human Resources

Offer
Acceptance:

	
  /s/ John Batty

  	
   

  	
  05/16/2007

  
	
  John Batty

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  06/18/2007

  	
   

  	
   

  
	
  Start DateExhibit
10.1

 

 

 

CREDIT AGREEMENT

dated as of May 31, 2007,

by and among

TESSCO
TECHNOLOGIES INCORPORATED,

TESSCO SERVICE SOLUTIONS,
INC.,

TESSCO INCORPORATED,

TESSCO COMMUNICATIONS
INCORPORATED,

WIRELESS SOLUTIONS
INCORPORATED,

TESSCO BUSINESS SERVICES,
LLC,

TESSCO SUPPLY CHAIN
SERVICES, LLC

TESSCO PRODUCT SOLUTIONS,
LLC

TESSCO INTEGRATED
SOLUTIONS, LP

GW SERVICE SOLUTIONS,
INC.

as Borrowers,

the Lenders referred to herein,

and

SUNTRUST BANK,

as Administrative
Agent

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2

  	
   

  	
  General

  	
   

  	
  17

  
	
  SECTION 1.3

  	
   

  	
  Other Definitions and Provisions

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II REVOLVING CREDIT FACILITY

  	
   

  	
  17

  
	
  SECTION 2.1

  	
   

  	
  Loans

  	
   

  	
  17

  
	
  SECTION 2.2

  	
   

  	
  Borrowing Procedure

  	
   

  	
  18

  
	
  SECTION 2.3

  	
   

  	
  Funding Procedure

  	
   

  	
  19

  
	
  SECTION 2.4

  	
   

  	
  Repayment of Loans

  	
   

  	
  21

  
	
  SECTION 2.5

  	
   

  	
  Note

  	
   

  	
  21

  
	
  SECTION 2.6

  	
   

  	
  Termination of Credit Facility

  	
   

  	
  21

  
	
  SECTION 2.7

  	
   

  	
  Use of Proceeds

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III LETTER OF CREDIT FACILITY

  	
   

  	
  22

  
	
  SECTION 3.1

  	
   

  	
  L/C Commitment

  	
   

  	
  22

  
	
  SECTION 3.2

  	
   

  	
  Procedure for Issuance of Letters of Credit

  	
   

  	
  22

  
	
  SECTION 3.3

  	
   

  	
  Fees

  	
   

  	
  23

  
	
  SECTION 3.4

  	
   

  	
  L/C Participations

  	
   

  	
  23

  
	
  SECTION 3.5

  	
   

  	
  Reimbursement Obligation of the Borrowers

  	
   

  	
  24

  
	
  SECTION 3.6

  	
   

  	
  Obligations Absolute

  	
   

  	
  24

  
	
  SECTION 3.7

  	
   

  	
  Effect of Application

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV GENERAL LOAN PROVISIONS

  	
   

  	
  25

  
	
  SECTION 4.1

  	
   

  	
  Interest; Late Charges, Etc

  	
   

  	
  25

  
	
  SECTION 4.2

  	
   

  	
  Fees

  	
   

  	
  26

  
	
  SECTION 4.3

  	
   

  	
  Manner of Payment

  	
   

  	
  27

  
	
  SECTION 4.4

  	
   

  	
  Crediting of Payments and Proceeds

  	
   

  	
  27

  
	
  SECTION 4.5

  	
   

  	
  Adjustments

  	
   

  	
  28

  
	
  SECTION 4.6

  	
   

  	
  Nature of Obligations of Lenders Regarding Loans and
  Letters of Credit; Assumption by the Agent

  	
   

  	
  28

  
	
  SECTION 4.7

  	
   

  	
  Changed Circumstances

  	
   

  	
  28

  
	
  SECTION 4.8

  	
   

  	
  Capital Requirements

  	
   

  	
  30

  
	
  SECTION 4.9

  	
   

  	
  Taxes.

  	
   

  	
  30

  
	
  SECTION 4.10

  	
   

  	
  The Borrowers’ Representatives

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V CLOSING; CONDITIONS OF CLOSING AND
  BORROWING

  	
   

  	
  32

  
	
  SECTION 5.1

  	
   

  	
  Closing

  	
   

  	
  32

  
	
  SECTION 5.2

  	
   

  	
  Conditions to Closing and Initial Loan

  	
   

  	
  32

  
	
  SECTION 5.3

  	
   

  	
  Conditions to All Loans and Letters of Credit

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE
  BORROWERS

  	
   

  	
  35

  
	
  SECTION 6.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  35

  
	
  SECTION 6.2

  	
   

  	
  Survival of Representations and Warranties, Etc

  	
   

  	
  42

  

 

 

	
  ARTICLE VII FINANCIAL INFORMATION AND NOTICES

  	
   

  	
  42

  
	
  SECTION 7.1

  	
   

  	
  Financial Statements

  	
   

  	
  42

  
	
  SECTION 7.2

  	
   

  	
  Officer’s Compliance Certificate

  	
   

  	
  43

  
	
  SECTION 7.3

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  43

  
	
  SECTION 7.4

  	
   

  	
  Borrowing Base Certificates and Other Reports

  	
   

  	
  43

  
	
  SECTION 7.5

  	
   

  	
  Notice of Litigation and Other Matters

  	
   

  	
  43

  
	
  SECTION 7.6

  	
   

  	
  Accuracy of Information

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII AFFIRMATIVE COVENANTS

  	
   

  	
  44

  
	
  SECTION 8.1

  	
   

  	
  Preservation of Corporate Existence and Related
  Matters

  	
   

  	
  44

  
	
  SECTION 8.2

  	
   

  	
  Maintenance of Property

  	
   

  	
  45

  
	
  SECTION 8.3

  	
   

  	
  Insurance

  	
   

  	
  45

  
	
  SECTION 8.4

  	
   

  	
  Accounting Methods and Financial Records

  	
   

  	
  45

  
	
  SECTION 8.5

  	
   

  	
  Payment and Performance of Obligations

  	
   

  	
  45

  
	
  SECTION 8.6

  	
   

  	
  Compliance With Laws and Approvals

  	
   

  	
  45

  
	
  SECTION 8.7

  	
   

  	
  Environmental Laws

  	
   

  	
  45

  
	
  SECTION 8.8

  	
   

  	
  Compliance with ERISA

  	
   

  	
  46

  
	
  SECTION 8.9

  	
   

  	
  Compliance With Agreements

  	
   

  	
  46

  
	
  SECTION 8.10

  	
   

  	
  Conduct of Business

  	
   

  	
  46

  
	
  SECTION 8.11

  	
   

  	
  Visits and Inspections

  	
   

  	
  46

  
	
  SECTION 8.12

  	
   

  	
  Additional Subsidiaries

  	
   

  	
  47

  
	
  SECTION 8.13

  	
   

  	
  Further Assurances

  	
   

  	
  47

  
	
  SECTION 8.14

  	
   

  	
  Insurance

  	
   

  	
  47

  
	
  SECTION 8.15

  	
   

  	
  Bank Accounts

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX FINANCIAL COVENANTS

  	
   

  	
  47

  
	
  SECTION 9.1

  	
   

  	
  Minimum Tangible Net Worth

  	
   

  	
  48

  
	
  SECTION 9.2

  	
   

  	
  Minimum Cash Flow Coverage Ratio

  	
   

  	
  48

  
	
  SECTION 9.3

  	
   

  	
  Minimum Liabilities to Tangible Net Worth

  	
   

  	
  48

  
	
  SECTION 9.4

  	
   

  	
  Maximum Funded Debt/EBITDA

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X NEGATIVE COVENANTS

  	
   

  	
  49

  
	
  SECTION 10.1

  	
   

  	
  Limitations on Debt

  	
   

  	
  49

  
	
  SECTION 10.2

  	
   

  	
  Limitations on Guaranty Obligations

  	
   

  	
  50

  
	
  SECTION 10.3

  	
   

  	
  Limitations on Liens

  	
   

  	
  50

  
	
  SECTION 10.4

  	
   

  	
  Limitations on Loans, Investments and Acquisitions

  	
   

  	
  51

  
	
  SECTION 10.5

  	
   

  	
  Limitations on Mergers and Liquidation

  	
   

  	
  52

  
	
  SECTION 10.6

  	
   

  	
  Limitations on Sale of Assets

  	
   

  	
  52

  
	
  SECTION 10.7

  	
   

  	
  Limitations on Dividends and Distributions

  	
   

  	
  52

  
	
  SECTION 10.8

  	
   

  	
  Limitations on Exchange and Issuance of Capital
  Stock

  	
   

  	
  53

  
	
  SECTION 10.9

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  53

  
	
  SECTION 10.10

  	
   

  	
  Certain Accounting Changes

  	
   

  	
  53

  
	
  SECTION 10.11

  	
   

  	
  Amendments; Payments and Prepayments of Subordinated
  Debt

  	
   

  	
  53

  
	
  SECTION 10.12

  	
   

  	
  Restrictive Agreements

  	
   

  	
  53

  
	
  SECTION 10.13

  	
   

  	
  Capital Expenditures

  	
   

  	
  53

  

 

 ii
 

 

	
  ARTICLE
  XI DEFAULT AND REMEDIES

  	
   

  	
  54

  
	
  SECTION 11.1

  	
   

  	
  Events of Default

  	
   

  	
  54

  
	
  SECTION 11.2

  	
   

  	
  Remedies

  	
   

  	
  56

  
	
  SECTION 11.3

  	
   

  	
  Rights and Remedies Cumulative; Non-Waiver; etc

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII THE AGENT

  	
   

  	
  57

  
	
  SECTION 12.1

  	
   

  	
  Appointment

  	
   

  	
  58

  
	
  SECTION 12.2

  	
   

  	
  Delegation of Duties

  	
   

  	
  58

  
	
  SECTION 12.3

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  58

  
	
  SECTION 12.4

  	
   

  	
  Reliance by the Agent

  	
   

  	
  58

  
	
  SECTION 12.5

  	
   

  	
  Notice of Default

  	
   

  	
  59

  
	
  SECTION 12.6

  	
   

  	
  Non-Reliance on the Agent and Other Lenders

  	
   

  	
  59

  
	
  SECTION 12.7

  	
   

  	
  Indemnification

  	
   

  	
  59

  
	
  SECTION 12.8

  	
   

  	
  The Agent in Its Individual Capacity

  	
   

  	
  60

  
	
  SECTION 12.9

  	
   

  	
  Resignation of the Agent; Successor Agent

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
   

  	
  60

  
	
  SECTION 13.1

  	
   

  	
  Notices

  	
   

  	
  60

  
	
  SECTION 13.2

  	
   

  	
  Expenses; Indemnity

  	
   

  	
  62

  
	
  SECTION 13.3

  	
   

  	
  Set-off

  	
   

  	
  62

  
	
  SECTION 13.4

  	
   

  	
  Governing Law

  	
   

  	
  62

  
	
  SECTION 13.5

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
  62

  
	
  SECTION 13.6

  	
   

  	
  Binding Arbitration; Waiver of Jury Trial

  	
   

  	
  63

  
	
  SECTION 13.7

  	
   

  	
  Reversal of Payments

  	
   

  	
  64

  
	
  SECTION 13.8

  	
   

  	
  Injunctive Relief; Punitive Damages

  	
   

  	
  64

  
	
  SECTION 13.9

  	
   

  	
  Accounting Matters

  	
   

  	
  64

  
	
  SECTION 13.10

  	
   

  	
  Successors and Assigns; Participations

  	
   

  	
  65

  
	
  SECTION 13.11

  	
   

  	
  Amendments, Waivers and Consents

  	
   

  	
  67

  
	
  SECTION 13.12

  	
   

  	
  Performance of Duties

  	
   

  	
  68

  
	
  SECTION 13.13

  	
   

  	
  All Powers Coupled with Interest

  	
   

  	
  68

  
	
  SECTION 13.14

  	
   

  	
  Survival of Indemnities

  	
   

  	
  68

  
	
  SECTION 13.15

  	
   

  	
  Titles and Captions

  	
   

  	
  68

  
	
  SECTION 13.16

  	
   

  	
  Severability of Provisions

  	
   

  	
  68

  
	
  SECTION 13.17

  	
   

  	
  Counterparts

  	
   

  	
  69

  
	
  SECTION 13.18

  	
   

  	
  Term of Agreement

  	
   

  	
  69

  
	
  SECTION 13.19

  	
   

  	
  Inconsistencies with Other Documents; Independent
  Effect of Covenants

  	
   

  	
  69

  
	
  SECTION 13.20

  	
   

  	
  Joint and Several Liability, Etc

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIVGUARANTY

  	
   

  	
  70

  
	
  SECTION 14.1

  	
   

  	
  Borrowers’ Guaranty of the Obligations

  	
   

  	
  70

  

 

 

	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Form of Revolving Credit Note

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Form of Notice of Borrowing

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Form of Borrowing Base Certificate

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Form of Assignment and Acceptance

  

 

 iii
 

 

	
  SCHEDULE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  -

  	
   

  	
  Lenders and Commitments

  
	
  Schedule 1.1

  	
   

  	
  -

  	
   

  	
  Business Premises

  
	
  Schedule 6.1(a)

  	
   

  	
  -

  	
   

  	
  Jurisdictions of Organization and Qualification

  
	
  Schedule 6.1(b)

  	
   

  	
  -

  	
   

  	
  Subsidiaries and Capitalization

  
	
  Schedule 6.1(i)

  	
   

  	
  -

  	
   

  	
  ERISA Plans

  
	
  Schedule 6.1(m)

  	
   

  	
  -

  	
   

  	
  Labor and Collective Bargaining Agreements

  
	
  Schedule 6.1(s)

  	
   

  	
  -

  	
   

  	
  Debt and Guaranty Obligations

  
	
  Schedule 6.1(t)

  	
   

  	
  -

  	
   

  	
  Litigation

  
	
  Schedule 10.3

  	
   

  	
  -

  	
   

  	
  Existing Liens

  
	
  Schedule 10.4

  	
   

  	
  -

  	
   

  	
  Investments

  

 

 iv

CREDIT
AGREEMENT

CREDIT AGREEMENT, dated as of
the 31st day of May, 2007, by and among (a) TESSCO TECHNOLOGIES INCORPORATED, a
Delaware corporation (“TESSCO”), TESSCO SERVICE SOLUTIONS, INC., a
Delaware corporation, TESSCO INCORPORATED, a Delaware corporation, TESSCO
COMMUNICATIONS INCORPORATED, a Delaware corporation, WIRELESS SOLUTIONS
INCORPORATED, a Maryland corporation, TESSCO BUSINESS SERVICES, LLC, a Delaware
limited liability company, TESSCO SUPPLY
CHAIN SERVICES, LLC, a Delaware limited liability company, TESSCO PRODUCT
SOLUTIONS, LLC, a Delaware limited liability company, TESSCO INTEGRATED
SOLUTIONS, LP, a Delaware limited partnership, and GW SERVICE SOLUTIONS, INC.,
a Delaware corporation (the aforementioned entities, including TESSCO, being hereinafter called collectively the
“Borrowers”);  (b) the Lenders who
are or may become a party to this Agreement; and (c) SUNTRUST BANK, as
Administrative Agent.

STATEMENT OF PURPOSE

The Borrowers have requested,
and the Lenders have agreed, to extend certain credit facilities to the
Borrowers on the terms and conditions of this Agreement.

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, such parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1         Definitions.
 The following terms when used in this
Agreement shall have the meanings assigned to them below:

“Account
Debtor” means any Person who may become obligated to any Borrower under,
with respect to, or on account of, an Account.

“Accounts”
means all “accounts,” as such term is defined in the UCC, now owned or
hereafter acquired by any Borrower, including (a) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by chattel paper, or instruments), (including any such
obligations that may be characterized as an account or contract right under the
UCC), (b) all of each Borrower’s rights in, to and under all purchase orders or
receipts for goods or services, (c) all of each Borrower’s rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to any
Borrower for property sold, leased, licensed, assigned or otherwise disposed
of, for a policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be provided, for
the use or hire of a vessel under a charter or other contract, arising out of
the use of a credit card or charge card, or for services rendered or to

be rendered by
such Borrower or in connection with any other transaction (whether or not yet
earned by performance on the part of such Borrower), (e) all health care
insurance receivables and (f) all collateral security of any kind, given by any
Account Debtor or any other Person with respect to any of the foregoing.

“Affiliate” means, with
respect to any Person, any other Person which directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such first Person or any of its Subsidiaries.

“Agent” means SunTrust
Bank in its capacity as Administrative Agent hereunder, and any successor
thereto appointed pursuant to Section 12.9.

“Agent’s Office” means
the office of the Agent specified in or determined in accordance with the
provisions of

Section 13.1(c).

“Aggregate Commitment”
means the aggregate amount of the Lenders’ Commitments hereunder, as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof.  On the Closing Date,
the Aggregate Commitment shall be Fifty Million Dollars ($50,000,000).

“Agreement” means this Credit Agreement, as
amended, restated or otherwise modified in accordance with the provisions of
Section 13.11 hereof.

“Applicable Law” means
all applicable provisions of constitutions, laws, statutes, ordinances, rules,
treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators.

“Applicable Margin” has
the meaning assigned thereto in Section 4.1(c).

“Application” means an
application, in the form of the Issuing Lender’s then standard form of
application for a Letter of Credit or such other form as may be reasonably
specified by the Issuing Lender from time to time, requesting the Issuing
Lender to issue a Letter of Credit.

“Asset Disposition” means
the disposition of the assets of any Borrower or any Subsidiary, whether by
sale, lease, transfer or other disposition (including any such disposition
effected by way of merger or consolidation).

“Assignment and Acceptance”
has the meaning assigned thereto in Section 13.10.

“Available Commitment”
means, as to any Lender at any time, an amount equal to (a) such Lender’s
Commitment less (b) such Lender’s Extensions of Credit.

“Available Funds” means the gross balance of
collected funds in the Management Account, less instruments presented for
payment and installments of interest then due and payable hereunder.

 2
 

“Benefitted
Lender” has the meaning set forth in Section 4.5.

“Borrowing Base”
means, as of any date of determination an amount equal to the sum at such time
of:

(a)           80% of the book value of Eligible
Accounts; and

(b)           50% of the book value of Eligible
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market, in accordance with GAAP; provided that the amount advanced
against Eligible Inventory shall in no event exceed $15,000,000; minus

(c)            the Static Inventory Reserve and any
other reserves from time to time reasonably established by the Agent; provided
that such reserves shall be reasonable under the facts and circumstances then
applicable to the Borrowers and their Inventory and Accounts.

“Borrowing Date” means
the date upon which any Non-Cash Management Loan is to be made.

“Borrowers” has the
meaning given to such term in the Preamble hereto.

“Business Day” means (a)
for all purposes other than as set forth in clause (b) below, any day other
than a Saturday, Sunday or legal holiday on which banks in Charlotte, North
Carolina, Baltimore, Maryland and New York, New York are open for the conduct
of their commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any Loan bearing interest at a rate based upon the LIBOR Index, any day that is
a Business Day described in clause (a) and that is also a day for trading by
and between banks in Dollar deposits in the London interbank market.

“Business Premises” means
each business premises of any Borrower identified on Schedule 1.1 hereto
and each business premises of any Borrower acquired after the date hereof.

“Capital Asset” means,
with respect to the Borrowers and their Subsidiaries, any asset that should, in
accordance with GAAP, be classified and accounted for as a capital asset on a
Consolidated balance sheet of the Borrowers and their Subsidiaries.

“Capital Expenditures” means, with respect to
any Person, all expenditures (by the expenditure of cash or the incurrence of
indebtedness) by such Person during any measuring period for any fixed assets
or improvements or for replacements, substitutions or additions thereto, that
have a useful life of more than one (1) year and that are required to be
capitalized under GAAP.

“Capital Lease” means,
with respect to the Borrowers and their Subsidiaries, any lease of any property
that should, in accordance with GAAP, be classified and accounted for as a
capital lease on a Consolidated balance sheet of the Borrowers and their
Subsidiaries.

 3
 

“Cash Flow” means, as to any Person, such
Person’s net income after taxes and any dividends plus interest expense, plus
depreciation, amortization and other non-cash charges to income, less any
capital expenditures not financed, less any non-cash income.

“Cash Management Agreements” means,
collectively, all agreements between the Borrowers (or any of them) and
SunTrust Bank, related to cash management products and services or services
offered by SunTrust Bank related thereto.

“Cash Management Loan”
means a Loan made pursuant to Section 2.2(b) hereof.

“Change in Control” has
the meaning assigned thereto in Section 11.1(g).

“Closing Date” means the
date of this Agreement or such later Business Day upon which each condition
described in Section 5.2 shall be satisfied or waived in all respects in a
manner acceptable to the Agent and the Lenders, in their reasonable discretion.

“Code” means the Internal
Revenue Code of 1986, and the rules and regulations thereunder, each as
amended, supplemented or otherwise modified.

“Commitment” means, as to
any Lender, the obligation of such Lender to make Loans to and issue or
participate in Letters of Credit issued for the account of the Borrowers
hereunder in an aggregate principal or face amount at any time outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule 1
hereto, as the same may be reduced or modified at any time or from time to time
pursuant to the terms hereof.

“Commitment Percentage”
means, as to any Lender at any time, the ratio of (a) the amount of the
Commitment of such Lender to (b) the Aggregate Commitment of all of the Lenders.

“Consolidated” means, when used with reference
to financial statements or financial statement items of the Borrowers and their
Subsidiaries, such statements or items on a consolidated basis in accordance
with applicable principles of consolidation under GAAP.

“Contracts”
means all “contracts,” as such term is defined in the UCC, now owned or
hereafter acquired by any Borrower, in any event, including all contracts,
undertakings, or agreements (other than rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Borrower may now or hereafter
have any right, title or interest, including any agreement relating to the
terms of payment or the terms of performance of any Account.

“Credit Facility” means
the collective reference to the Revolving Credit Facility and the L/C Facility.

“Debt” means, with
respect to the Borrowers and their Subsidiaries at any date and without
duplication, the sum of the following calculated in accordance with GAAP:  (a) all liabilities, obligations and indebtedness
for borrowed money including but not limited to obligations evidenced by bonds,
debentures, notes or other similar instruments of any such Person, (b) all
obligations to pay the deferred purchase price of property or services of any
such Person, (c) all obligations of any such Person as lessee under Capital
Leases, (d) all Debt of any other Person secured by a Lien on any

 4
 

asset of any such Person, (e) all Guaranty Obligations
of any such Person, (f) all obligations, contingent or otherwise, of any such
Person relative to the face amount of letters of credit, whether or not drawn,
including without limitation any Reimbursement Obligation, and banker’s
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities of such Person  and (h) all obligations incurred by any such
Person pursuant to Hedging Agreements.

“Debt Service”
means, for any Person for any period, (a) interest expense for such
period, plus (b) current maturities of long term debt and payments due under
capital leases for such period.

“Default” means any of
the events specified in Section 11.1 which, with the passage of time, the
giving of notice or any other condition, would constitute an Event of Default.

“Dollars” or “$” means,
unless otherwise qualified, dollars in lawful currency of the United States.

“EBITDA” means the Borrowers’ combined earnings
before interest, taxes, depreciation, 
amortization, and other non-cash charges to income.

“EBITDAR” means
the Borrowers’ combined earnings before interest, taxes, depreciation,
amortization, rent, and other non-cash charges to income.

“Eligible
Account” means, as of any time, all Accounts of any Borrower which meet the
following criteria (and such additional criteria as may be added by the Lenders
in their reasonable discretion upon prior written notice to the Borrowers;
provided that such additional criteria are reasonable under the facts and
circumstances then applicable to the Borrowers and their Accounts) at the time
of creation and continue to meet such criteria at all times to the reasonable
satisfaction of the Lenders:

(a)           the Account arises
from the sale of goods or the performance of services by such Borrower in the
ordinary course of its business;

(b)           such Borrower’s right to receive
payment is  absolute and is not
contingent upon the fulfillment of any condition whatsoever;

(c)           the Account Debtor’s obligation to
pay the applicable invoice is not subject to such Borrower’s completion of
further performance under the applicable Contract and is not subject to the
equitable lien of a surety bond issuer. The Agent and the Lenders acknowledge
and agree that in the ordinary course of the Borrowers’ business, all or
substantially all of the  Account Debtors
have a right to return purchased inventory for a period of up to thirty (30)
days for repair or replacement and that the Borrowers provide warranties in respect
of Inventory sold and for which payment is otherwise due.  Accordingly, the Agent and the Lenders agree
that no Account shall be deemed ineligible solely because of this return or
replacement policy, or any

 5
 

warranty or other
return or replacement policy implemented in the ordinary course of the
Borrowers’ business;

(d)           no defense, counterclaim, setoff or
dispute is asserted and pending as to such Account; provided, however, that in
the event the same shall have been asserted and is pending and the Account
otherwise qualifies as an Eligible Account, the Account shall nevertheless be
an Eligible Account to the extent that the defense, counterclaim, setoff, or
dispute shall not have been asserted or is no longer pending;

(e)           the Account is a true and correct
statement of bona fide indebtedness incurred in the amount of the Account for
merchandise sold to or services rendered and accepted by the applicable Account
Debtor;

(f)            an invoice, consistent as to form
with sound business practices, has  been
sent or delivered to the applicable Account Debtor;

(g)           the Account is owned by such Borrower
and is not subject to any right, claim, security interest or other interest of
any other Person except for Permitted Liens (other than Permitted Liens set
forth in Section 10.3(d), (e), (h)(ii), (j), (k) or (l));

(h)           the Account does not arise from a
sale to any director, officer, other employee or Affiliate of any Borrower;

 (i)           the
Account Debtor is not located in a foreign country unless payment thereof is
assured by a letter of credit or insurance reasonably satisfactory to the
Lenders as to form, amount and issuer;

 (j)           the
Account does not arise with respect to goods that are delivered on a bill-and-hold,
cash-on-delivery basis or placed on consignment, guaranteed sale or
other terms by reason of which the payment by the Account Debtor is or may be
conditional;

(k)           the Account Debtor
has not failed to pay the Account within the earlier of 60 days following its
due date or 90 days following its original invoice date, and the Account is not
in default as a result of any matter other than failure to pay within such time
periods;

(l)            the Account is not
owed by an Account Debtor that suspends business, makes a general assignment
for the benefit of creditors or fails to pay its debts generally as they come due;

(m)          the Account is not
owed by an Account Debtor that is the subject of  a petition filed by or against the Account
Debtor under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors;

(n)           the Account is not
owed by an Account Debtor from whom 50% or more of the Dollar amount of all
Accounts owing are ineligible under the other criteria set forth herein;

 6
 

(o)           All of the representations or warranties
in the Loan Documents with respect to the Account are true in all material
respects as of the date made or deemed made;

(p)           the Account is not evidenced by a
judgment, Instrument or Chattel Paper; and

(q)           the Account is not payable in any
currency other than Dollars.

“Eligible Assignee”
means, with respect to any assignment of the rights, interest and obligations
of a Lender hereunder, a Person that is at the time of such assignment (a) a
commercial bank organized under the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
commercial bank organized under the laws of any other country that is a member
of the Organization of Economic Cooperation and Development, or a political
subdivision of any such country, having combined capital and surplus in excess
of $500,000,000, (c) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (d)
already a Lender hereunder (whether as an original party to this Agreement or
as the assignee of another Lender), (e) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (f) any other Person that has been
approved in writing as an Eligible Assignee by the Borrowers and the Agent.

“Eligible
Inventory” means, as of any time, all Inventory of any Borrower which meets
the following criteria (and such additional criteria as may be added by the
Lenders in their reasonable discretion upon prior written notice to the
Borrowers; provided that such additional criteria, and the addition thereof,
are reasonable under the facts and circumstances then applicable to the
Borrowers and their Inventory) at the time of creation and continues to meet
such criteria at all times to the reasonable satisfaction of the Lenders:

(a)           the Inventory is
owned by the Borrower free and clear of all Liens and rights of any other
Person (including the rights of a purchaser that has made progress payments and
the rights of a surety that has issued a bond to assure such Borrower’s
performance with respect to that Inventory) except for Permitted Liens (other
than Permitted Liens set forth in Section 10.3(d), (e), (h)(ii), (j), (k) or
(l));

(b)           the  Inventory is 
not placed on consignment or in transit;

(c)           the Inventory is not
covered by a negotiable document of title, unless such document is in the
possession of the applicable Borrower, free and clear of all Liens except for
Permitted Liens (other than  Permitted
Liens set forth in Section 10.3(d), (e), (h)(ii), (j), (k) or (l));

(d)           the Inventory is not
excess, obsolete, unsalable, shopworn, seconds, damaged or unfit for sale, as
determined by the Lenders in their reasonable discretion;

(e)           the Inventory does
not consist of display items or packing or shipping materials, manufacturing
supplies, or  work-in-process Inventory;

 7
 

(f)            the Inventory does
not consist of goods which have been returned by the buyer and which are not
salable in the ordinary course of the Borrowers’ business;

(g)           the Inventory is of
a type held for sale in the ordinary course of such Borrower’s business;

(h)           the representations
or warranties pertaining to the Inventory set forth in the Loan Documents are
true and accurate in all material respects when made or deemed made;

(i)            the Inventory does
not consist of Hazardous Materials (except for Hazardous Materials which are
handled, stored, processed, assembled and otherwise held in compliance with all
applicable Environmental Laws) or goods that can be transported or sold only
with licenses that are not generally available; and

 (j)           the Inventory is covered by casualty insurance reasonably
acceptable to the Lenders.

“Employee Benefit Plan” means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (a) is maintained for the employees
of the Borrowers or any ERISA Affiliate or (b) has at any time within the preceding
six years been maintained for the employees of the Borrowers or any current or
former ERISA Affiliate.

“Environmental Laws”
means any and all federal, state and local laws, statutes, ordinances, rules,
regulations, permits, licenses, approvals, interpretations and orders of courts
or Governmental Authorities, relating to the protection of human health or the
environment, including, but not limited to, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Materials.

“ERISA” means the
Employee Retirement Income Security Act of 1974, and the rules and regulations
thereunder, each as amended, supplemented or otherwise modified.

“ERISA Affiliate” means
any Person who together with the Borrowers is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.

“Eurodollar Reserve
Percentage” means, for any day, the percentage, if any, (expressed as a
decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Federal Reserve Board (or
any successor) for determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency reserves) in respect of
eurocurrency liabilities or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

“Event of Default” means
any of the events specified in Section 11.1, provided that any requirement for
passage of time, giving of notice, or any other condition, has been satisfied.

 8
 

“Excess Funds” means, at
any time, the amount by which the Available Funds exceed the Target Balance.

“Existing Facility” means
the revolving credit facility initially established by certain of the
Borrowers,  SunTrust Bank and Wachovia
Bank, National Association, as lenders, and others, pursuant to a Credit
Agreement dated as of September 25, 2003, as the same may from time to time
have been amended, restated, supplemented, or otherwise modified.

“Extensions of Credit”
means, as to any Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Loans made by the Lender then outstanding,
(b) the Lender’s Commitment Percentage of the L/C Obligations then outstanding
and (c) the Lender’s Commitment Percentage of the Unsettled Loans.

“FDIC” means the Federal
Deposit Insurance Corporation, or any successor thereto.

“Federal Funds Rate”
means, the rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) representing the daily effective federal funds rate as quoted by
the Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519)
or any successor or substitute publication selected by the Agent.  If, for any reason, such rate is not
available, then “Federal Funds Rate” shall mean a daily rate which is
determined, in the opinion of the Agent, to be the rate at which federal funds
are being offered for sale in the national federal funds market at 9:00 a.m.
(Baltimore time).  Rates for weekends or
holidays shall be the same as the rate for the immediately preceding Business
Day.

“Fiscal Year” means the
fiscal year of the Borrowers and their Subsidiaries of 52 or 53 weeks ending on
the Sunday following, on, or between March 26 and April 1 of each calendar
year.

“Funded
Debt” means the sum of (a) any indebtedness of the Borrowers and their
operating Subsidiaries to any person for borrowed moneys, which is shown on the
balance sheet of the Borrowers as a liability under GAAP, plus (b) if the HQ
Purchase Transaction is financed with off balance sheet financing, the
capitalized lessor’s cost or imputed principal balance financed by such
off-balance sheet financing.

“GAAP” means generally
accepted accounting principles, as recognized by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Borrowers and
their Subsidiaries throughout the period indicated and consistent with the
prior financial practice of the Borrowers and their Subsidiaries.

“Governmental Approvals”
means all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all Governmental Authorities.

“Governmental Authority”
means any nation, province, state or political subdivision thereof, and any
government or any Person exercising executive, legislative, regulatory or administrative

 9
 

functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.

“Guaranty Obligation”
means, with respect to the Borrowers and their Subsidiaries, without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of any
such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, or by agreement to keep well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement condition or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided, that the term Guaranty Obligation shall
not include endorsements for collection or deposit in the ordinary course of
business.

“Hazardous Materials”
means any substances or materials (a) which are or become defined as hazardous
wastes, hazardous substances, pollutants, contaminants, chemical substances or
mixtures or toxic substances under any Applicable Law, (b) which are toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority, (c) the presence of which
require investigation or remediation under any Applicable Law, (d) the
discharge or emission or release of which requires a permit or license under
any Applicable Law or other Governmental Approval, (e) which are deemed to
constitute a nuisance or a trespass or to pose a health or safety hazard to
persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.

“Hedging Agreement” means
any agreement with respect to an interest rate swap, collar, cap, floor or a forward
rate agreement or other agreement regarding the hedging of interest rate risk
exposure executed in connection with hedging the interest rate exposure of the
Borrowers, and any confirming letter executed pursuant to such hedging
agreement, all as amended, restated or otherwise modified.

“HQ Purchase Date”
has the meaning assigned thereto in Section
9.4.

“HQ Purchase Transaction” has the meaning assigned thereto in Section 9.4.

 “Interest Expense” means, for any
period, total interest expense (including, without limitation, interest expense
attributable to capital leases) determined on a Consolidated basis, without
duplication, for the Borrowers and their Subsidiaries in accordance with GAAP.

“Inventory”
means all “inventory,” as such term is defined in the UCC, now owned or
hereafter acquired by any Borrower, wherever located, and in any event
including inventory,

 10
 

merchandise, goods and
other personal property that are held by or on behalf of any Borrower for sale
or lease or are furnished or are to be furnished under a contract of service,
or that constitute raw materials, work in process, finished goods, returned
goods, or materials or supplies of any kind, nature or description used or
consumed or to be used or consumed in such Borrower’s business or in the
processing, production, packaging, promotion, delivery or shipping of the same,
including all supplies and embedded software.

“Issuing Lender” means
SunTrust Bank, in its capacity as issuer of any Letter of Credit, or any
successor thereto.

“L/C Commitment” means
Five Million Dollars ($5,000,000).

“L/C Facility” means the
letter of credit facility established pursuant to Article III hereof.

“L/C Obligations” means,
at any time, an amount equal to the sum of (a) the aggregate undrawn and
unexpired amount of the then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit which have not then been
reimbursed pursuant to Section 3.5.

“L/C Participants” means
the collective reference to all of the Lenders other than the Issuing Lender.

“Lender” means each
Person executing this Agreement as a Lender set forth on the signature pages
hereto and each Person that hereafter becomes a party to this Agreement as a
Lender pursuant to Section 13.10.

“Lending Office” means,
with respect to any Lender, the office of such Lender maintaining such Lender’s
Commitment Percentage of the Loans.

“Letters of Credit” has
the meaning assigned thereto in Section 3.1.

“LIBOR Index” means the one-month LIBOR
established by the British Bankers Association as of 11:00 a.m. (London time)
on the first Business Day of each month as published by an on-line information
service such as Bloomberg Financial Markets News Services or any comparable
reporting service selected by the Agent.

“Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset.

“Loan Documents” means,
collectively, this Agreement, the Note, the Applications, any Hedging Agreement
with any Lender which is now or hereafter permitted or required hereunder, and
each other document, instrument, certificate and agreement executed and
delivered by any Borrower, any Subsidiary or their counsel in connection with
this Agreement or otherwise referred to herein or contemplated hereby, all as
may be amended, restated or otherwise modified.

 11
 

“Loans” means any loan
made to the Borrowers pursuant to Section 2.1, and all such loans collectively
as the context requires.

“Management Account” means the Borrowers’ deposit
account number 1000041097725 at
SunTrust Bank.

“Material Adverse Effect”
means, with respect to the Borrowers, a material adverse effect on the
properties, business, prospects, operations or condition (financial or
otherwise) of the Borrowers, on a Consolidated basis, or on the ability of the
Borrowers, taken as a whole, to perform their obligations under the Loan
Documents.

“Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
any Borrower or any ERISA Affiliate is making, or is accruing an obligation to
make, contributions within the preceding six years.

 “Net Amount”
means, as of the date of any Report, the amount payable by or to each Lender
such that, after giving effect thereto, such Lender shall have funded the Loans
in an amount equal to its Commitment Percentage of the outstanding principal
amount thereof on such date.

“Net Casualty Proceeds”
means the gross proceeds from and casualty or condemnation proceeds remaining
after payment of all expenses (including attorneys’ fees) incurred in
connection with the collection of such gross proceeds and taxes payable in
connection therewith.

“Net Proceeds” means
gross proceeds (cash or non-cash) or other consideration paid to, or received
by, any Borrower from (a) any Asset Disposition (including, without limitation,
any issuance or assumption of Debt or the issuance of securities), net of
customary and reasonable settlement costs, fees, expenses and taxes payable in
connection with such Asset Disposition or (b) any sale, issuance, or other
offering of Debt or securities net of customary and reasonable costs, fees, and
expenses.

“Net Worth”
means, with respect to any Person as of any date of determination, the book
value of the assets of such Person, minus the sum of (a) reserves
applicable thereto, and (b) all of such Person’s liabilities on a Consolidated
basis (including accrued and deferred income taxes), all as determined in
accordance with GAAP.

“Non-Cash
Management Loan” means any Loan other than a Cash Management Loan made
pursuant to Section 2.2(b) hereof.

“Note” means the
Revolving Credit Note made by the Borrowers payable to the order of the Lenders
in care of the Agent, substantially in the form of Exhibit A hereto,
evidencing the Revolving Credit Facility, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part.

“Notice of Borrowing” has
the meaning assigned thereto in Section 2.3(a).

 12

“Obligations” means, in
each case, whether now in existence or hereafter arising: (a) the principal of
and interest on (including interest accruing after the filing of any bankruptcy
or similar petition) the Loans, (b) the L/C Obligations, (c) all payment and
other obligations owing by the Borrowers to any Lender or the Agent under any
Hedging Agreement with any Lender which is permitted or required hereunder, and
(d) all other fees and commissions (including reasonable attorney’s fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrowers to the Lenders or the
Agent, of every kind, nature and description, direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note, in each case under or
in respect of this Agreement, the Note, any Letter of Credit or any of the
other Loan Documents.

“Officer’s Compliance
Certificate” has the meaning assigned thereto in Section 7.2.

“Other Taxes” has the meaning assigned thereto
in Section 4.9(b).

“PBGC” means the Pension
Benefit Guaranty Corporation or any successor agency.

“Pension Plan” means any
Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code and which (a) is
maintained for employees of the Borrowers or any ERISA Affiliates or (b) has at
any time within the preceding six years been maintained for the employees of the
Borrowers or any of their current or former ERISA Affiliates.

“Permitted Acquisition” means the acquisition or purchase of, or
investment in, any Person, any operating division or unit of any Person, or the
capital stock or operational assets of any Person or the combination with any
Person by any Borrower or any Subsidiary (each individually, a “Subject
Transaction”) regardless of the structure of the Subject Transaction, provided
that either (1) such acquisition, purchase, investment, or combination is approved
by the Lenders in writing prior to consummation, or (2) such acquisition,
purchase, investment or combination meets the following criteria:

(a)           the aggregate purchase price of, investment in, acquisition expenditures
relating to (excluding customary and reasonable transaction costs) and assumed
liabilities in connection with all such Subject Transactions, in the aggregate,
shall not exceed at any time or in any circumstance $5,000,000,

(b)           such Subject Transaction shall not otherwise constitute, give rise to, or
occur during the continuance of  a
Default or an Event of Default,

(c)           the Borrowers shall have furnished financial projections in form and
content reasonably acceptable to the Lenders which give effect to such Subject
Transaction and which project that such Subject Transaction would not cause a
Default or Event of Default (provided that the Lenders agree that such
projections shall not constitute a guaranty of actual performance),

(d)           if and to the extent the Subject Transaction consists of the purchase or
acquisition of a Person which is to be a Subsidiary of a Borrower or merged
into a Subsidiary of a Borrower

 13
 

created for the express purpose of consummating the proposed acquisition,
the Borrower shall comply with the provisions of Section 8.12, and

(e)           if the Subject Transaction involves the merger or consolidation of a
Borrower with any other party, the applicable Borrower will be the surviving
entity in any such merger or consolidation.

“Permitted Asset Disposition” means any one of the following Asset
Dispositions; provided that no such Asset Disposition shall be permitted at any
time following the occurrence of a Default or an Event of Default or if and to
the extent any such Asset Disposition would give rise to a Default or an Event
of Default, unless otherwise agreed in writing by the Lenders:

(a)           an Asset Disposition for which the sum of (A) the Net Proceeds to be paid
to or received by the Borrower and/or any Subsidiary with respect to such Asset
Disposition, plus (B) the aggregate amount of all Net Proceeds paid to or
received by any or all of the Borrowers and/or any or all Subsidiaries, is less
than or equal to $1,000,000 during any Fiscal Year;

(b)           sales of Inventory in the ordinary course of business,

(c)           the licensing of patents, trademarks and/or copyrights, in the ordinary
course of business,

(d)           dispositions of worn, used, surplus or obsolete tangible property in the
ordinary course of business,

(e)           dispositions of assets (including Net Casualty Proceeds) to the extent
such assets are replaced with assets of similar kind and function, provided
that the replacement assets shall be purchased no later than ninety (90) days
following the Asset Disposition, the replacement assets shall be free and clear
of Liens other than Permitted Liens that are not Liens securing purchase money,
finance, or capital lease arrangements, and the Borrowers shall give the
Lenders at least ten (10) days prior written notice of such Asset Disposition,
except for an Asset Disposition which constitutes a casualty,

(f)            intercompany sales, leases or other
dispositions of assets among and between the Borrowers; and

(g)           the sale of any Capital Assets acquired by any Borrower or any Subsidiary
and the leaseback of such assets within thirty (30) days of acquisition, but
only as contemplated and required as part of an intended Capital Lease
transaction at the time of acquisition.

“Permitted Lien” means a
lien permitted by the provisions of Section 10.3.

“Person” means an
individual, corporation, limited liability company, partnership, association,
trust, business trust, joint venture, joint stock company, pool, syndicate,
sole proprietorship, unincorporated organization, Governmental Authority or any
other form of entity or group thereof.

 14
 

“Prime Rate” means, at
any time, the rate of interest per annum publicly announced from time to time
by SunTrust Bank as its prime rate.  Each
change in the Prime Rate shall be effective as of the opening of business on
the day such change in the Prime Rate occurs. 
The parties hereto acknowledge that the rate announced publicly by
SunTrust Bank as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other banks.

“Register” has the
meaning assigned thereto in Section 13.10(d).

“Reimbursement Obligation”
means the obligation of the Borrowers to reimburse the Issuing Lender pursuant
to Section 3.5 for amounts drawn under Letters of Credit.

“Report” has the meaning
set forth in Section 2.3.

“Required Lenders” means,
at any date, any combination of holders of at least seventy-one percent (71%)
of the aggregate Commitment Percentages.

“Responsible Officer”
means any of the following: the chief executive officer or chief financial
officer of any Borrower or any other officer of a Borrower reasonably
acceptable to the Agent.

“Revolving Credit Facility”
means the revolving credit facility established pursuant to Article II hereof.

“Scheduled Maturity Date”
has the meaning given to such term in Section 2.6.

“Settlement Date” has the
meaning given to such term in Section 2.3(b) hereof.

“Solvent” means, as to
the Borrowers and their Subsidiaries on a particular date, that any such Person
(a) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its
debts as they mature, (b) owns property having a value, both at fair valuation
and at present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe that
it will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.

“Static Inventory Reserve”
means, at any time, a reserve in the amount of 2.5% of the total book value of
the Borrowers’ Inventory.

“Subordinated Debt” means
the collective reference to Debt on Schedule 6.1(s) hereof designated as
Subordinated Debt and any other Debt of any Borrower or any Subsidiary
subordinated in right and time of payment to the Obligations on terms
satisfactory to the Required Lenders.

“Subsidiary” means as to any Person, any
corporation, partnership, limited liability company or other entity of which
more than fifty percent (50%) of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such corporation, partnership, limited
liability company or other

 15
 

entity
is at the time, directly or indirectly, owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency).  Unless otherwise qualified references to “Subsidiary”
or “Subsidiaries” herein shall refer to those of the Borrowers.

“SunTrust Bank” means SunTrust Bank and its
successors.

“Tangible Net Worth” means, with respect to any
Person at any date, the Net Worth of such Person at such date, excluding,
however, from the determination of the total assets at such date, (a)
all goodwill, capitalized organizational expenses, capitalized research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other intangible items,
(b) all unamortized debt discount and expense, (c) treasury stock, (d) any
write-up in the book value of any asset resulting from a revaluation thereof,
and (e) all loans or advances to officers, Affiliates, and related parties.

 “Target Balance” means $0.00.

“Taxes” has the meaning
assigned thereto in Section 4.9(a).

“Termination Date” means
the earliest of the dates referred to in Section 2.6.

“Termination Event”
means:  (a) a “Reportable Event”
described in Section 4043 of ERISA, or (b) the withdrawal of the Borrowers or
any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, or (c) the termination of
a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041
of ERISA, or (d) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e)
any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan, or (f) the partial or complete withdrawal of the Borrowers or
any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 of ERISA, or (h) any event
or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under
Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.

“Total Debt” means,
as of any date of determination with respect to the Borrowers and their
Subsidiaries on a Consolidated basis without duplication, the sum of all Debt
of the Borrowers and their Subsidiaries.

“Uniform Customs” means
the Uniform Customs and Practice for Documentary Credits (1994 Revision),
International Chamber of Commerce Publication No. 500.

 16
 

“UCC” means the Uniform
Commercial Code as in effect in the State of Maryland, as amended, restated or
otherwise modified.

“United States” means the
United States of America.

“Unsettled Loan” means
any Cash Management Loan for which settlement has not yet been made under
Section 2.3(b).

“Wachovia” means Wachovia
Bank, National Association, a national banking association, and its successors.

“Wholly-Owned” means,
with respect to a Subsidiary, that all of the shares of capital stock or other
ownership interests of such Subsidiary are, directly or indirectly, owned or
controlled by a Borrower and/or one or more of its Wholly-Owned Subsidiaries.

SECTION 1.2         General.  Unless
otherwise specified, a reference in this Agreement to a particular section,
subsection, Schedule or Exhibit is a reference to that section, subsection,
Schedule or Exhibit of this Agreement. 
Wherever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter.

SECTION 1.3         Other Definitions and Provisions.

(a)           Use of Capitalized Terms.  Unless
otherwise defined therein, all capitalized terms defined in this Agreement
shall have the defined meanings when used in this Agreement, the Note and the
other Loan Documents or any certificate, report or other document made or
delivered pursuant to this Agreement.

(b)           Miscellaneous.  The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

ARTICLE II

REVOLVING CREDIT
FACILITY

SECTION 2.1         Loans.  Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Loans to the Borrowers from
time to time from the Closing Date through the Termination Date as requested by
the Borrowers in accordance with the terms of Section 2.2; provided,
that (a) the aggregate principal amount of all outstanding Loans (after giving
effect to any amount requested) shall not exceed the lesser of the Aggregate
Commitment or the Borrowing Base, less the sum of all outstanding L/C
Obligations and (b) the principal amount of outstanding Loans from any Lender
to the Borrowers shall not at any time exceed such Lender’s Commitment less
the sum of such Lender’s Commitment Percentage of outstanding L/C Obligations
and the Lender’s Commitment Percentage of Unsettled Loans.  Subject to the terms

 17
 

and
conditions hereinafter set forth, each Loan by a Lender shall be in a principal
amount equal to such Lender’s Commitment Percentage of the aggregate principal
amount of Loans requested on such occasion. 
Subject to the terms and conditions hereof, the Borrowers may borrow,
repay and reborrow Loans hereunder until the Termination Date.

SECTION 2.2         Borrowing Procedure.

(a)           Except as hereinafter provided, all requests by the Borrowers for Loans
shall be made by notice in writing (a “Notice of Borrowing”) in the form
attached hereto as Exhibit B, accompanied by such information and
documents concerning, as applicable, the amount of the Loan and the applicable
Borrowing Date, the Borrowers’ financial condition, and/or other matters as the
Lenders may from time to time require. 
The Borrowers agree that they shall not request (a) any Loan that would
cause the outstanding principal balance of the Loans to exceed the lesser of
the Aggregate Commitment or the Borrowing Base, less the amount of any
outstanding L/C Obligations. If for any reason the sum of the outstanding Loans
shall nevertheless exceed the lesser of the Aggregate Commitment or the
Borrowing Base less the outstanding L/C Obligations, the Borrowers shall remain
liable for the entire amount outstanding, with interest, fees, and charges
thereon as provided herein, and the Borrowers shall immediately upon demand pay
to the Agent for the benefit of the Lenders the amount of such excess, with
interest thereon as provided herein.

(b)           (i)  In order to accommodate the
Borrowers’ desire to manage their cash by initiating borrowings and payments
under SunTrust Bank’s cash management program, borrowings and payments of Loans
may be requested and made as described in this Section 2.2(b). SunTrust Bank
will monitor the Management Account on each Business Day to determine the
amount of Excess Funds, if any, in the Management Account, and the Borrowers
authorize SunTrust Bank to transfer Excess Funds from the Management Account
and apply the same (or a portion thereof, as applicable) in payment of Loans
then outstanding and interest thereon.

(ii)  If SunTrust Bank
determines on any Business Day that the amount of Available Funds is, or would
upon presentment of instruments and obligations then currently held by SunTrust
Bank pending presentment be, less than the Target Balance, the Borrowers
authorize SunTrust Bank to make a Cash Management Loan in the amount necessary
to cause the Available Funds to equal at least the Target Balance, without the
necessity of any formal request therefor to be made by the Borrowers, and the proceeds
of such Cash Management Loan will be simultaneously deposited by SunTrust Bank
in the Management Account and simultaneously applied insofar as necessary to
satisfy instruments presented against the Borrowers’ account for payment
(including, without limitation, authorized electronic funds transfers), and to
satisfy due and unpaid Obligations of the Borrowers hereunder relating to the
payment of interest (without the necessity for the Borrowers to provide
direction to SunTrust Bank to make payment of such interest, which direction
shall be presumed unless and until the Lenders may be notified to the contrary
at any time by the Borrowers, and which payments shall, assuming sufficient
Available Funds following application of the above procedures, be automatic),
such that the balance in the Management Account will not actually go below the
Target Balance.

(iii) The Borrowers shall
pay to SunTrust Bank a periodic service charge for the services to be performed
by SunTrust Bank under the Cash Management Agreements, which

 18
 

charge shall be determined from time to time according
to the schedule of such charges which may be established from time to time by
SunTrust Bank pursuant to the Cash Management Agreements.  The Borrowers acknowledge that the services
to be performed by SunTrust Bank under the Cash Management Agreements are
provided as a service accommodation to the Borrowers and do not, and shall not,
constitute conditions to or considerations for the Obligations, and, therefore,
none of the Agent, SunTrust Bank, or any other Lender shall be liable to the
Borrowers and the Borrowers shall not be entitled to any reduction in interest
charged to the Borrowers on the Loans on account of any failure of SunTrust
Bank to cause any reduction to be made in the principal amount of Loans
outstanding; provided, however, that SunTrust Bank shall be responsible to the
Borrowers for any loss or liability that the Borrowers sustain as a result of
the gross negligence or willful misconduct of SunTrust Bank in the operation of
the program.  Nothing herein contained
shall be construed to limit, diminish, or in any way impair any security
interest, lien, or right of setoff of the Agent for the benefit of the Lenders,
or any Lender.  The Lenders acknowledge
and agree that the periodic service charge paid by the Borrowers to SunTrust
Bank under this Section 2.2 shall be for the account of SunTrust Bank only and
shall not be shared by the Lenders in accordance with their Commitment
Percentages or otherwise.

(iv)          At any time SunTrust Bank may terminate the operation of the cash
management program without prior notice to the Borrowers; provided, however,
that SunTrust Bank shall endeavor to give prior notice to the Borrowers of any
proposed termination. After termination of such program, the Borrowers may
request Loans only in accordance with the provisions of Section 2.2(a).

SECTION 2.3         Funding
Procedure.

(a)  Non-Cash Management Loans.  Upon receipt from
the Borrowers of a request for a Non-Cash Management Loan, Agent shall promptly
notify each Lender thereof by fax or other written notice.  Each Lender will make the amount of its
Commitment Percentage of each such Loan requested available to Agent, for the
account of the Borrowers, at the office of Agent located at 120 East Baltimore
Street, Baltimore, Maryland 21202 at 11:00 a.m., Baltimore time, on the
Borrowing Date requested by the Borrowers in funds immediately available to
Agent; provided, however, that each Lender’s Commitment Percentage of each Loan
shall be due no earlier than 11:00 a.m.,
Baltimore time, on the Business Day following the giving of notice to such
Lender concerning such Loan.

Unless the Agent and the
Borrowers shall have been notified in writing by any Lender prior to a
Borrowing Date that such Lender will not make the amount which would constitute
its Commitment Percentage of the Non-Cash Management Loan to be made on such
date available to Agent, Agent may assume that such Lender has made such amount
available to Agent on such Borrowing Date and Agent may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount.  If such amount is made available to Agent on
a date after such Borrowing Date, such Lender shall pay to Agent on demand an
amount equal to the product of (A) a fraction, the numerator of which is
the daily average Fed Funds Rate during such period and the denominator of
which is 365, times (B) the amount of such Lender’s Commitment
Percentage of such Loan, times (C) the number of days that elapse
from and including such Borrowing Date to the date on which such Lender’s
Commitment Percentage of such Loan shall

 19
 

have become immediately
available to Agent.  A certificate of
Agent submitted to any Lender with respect to any amounts owing under this
Subsection 2.3(a) shall be conclusive, absent manifest error.  If such Lender’s Commitment Percentage of
such Loan is not in fact made available to Agent by such Lender within three
Business Days of such Borrowing Date, Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to Loans
hereunder, on demand, from the Borrowers (without prejudice to the Borrowers’
rights against such Lender).  Nothing
herein shall be deemed to relieve any Lender from its obligation to fund its
Commitment Percentage of any Loans hereunder or to prejudice any rights that
the Borrowers may have against any Lender as a result of any default by such
Lender hereunder.  No Lender shall be
responsible for any default of another Lender
in respect of the other Lender’s obligation to fund Loans hereunder nor shall
the Commitment of any Lender hereunder be increased as a result of such default
of any other Lender.  Each Lender shall
be obligated to the extent provided herein regardless of the failure of any
other Lender to fulfill its obligations hereunder.

 (b)          Cash Management Loans.  On
the last Business Day of each week, or more frequently if Agent so
elects, Agent will give to each Lender a written report (“Report”) indicating
the aggregate principal amount of Cash Management Loans outstanding for each
day from and including the day of the last Report, the aggregate principal
amount of Cash Management Loans extended since the date of the last Report, the
amount of payments received by the Agent and/or SunTrust Bank from or on behalf
of the Borrowers since the date of the last Report and applied against Cash
Management Loans, the Net Amount and/or such other matters as may be
agreed upon by the Agent and the Lenders from time to time.  Each date upon which a Report is given is
hereinafter called a “Settlement Date.” 
Upon the giving of each Report, the Net Amount shall be paid by each
Lender to SunTrust Bank (or if SunTrust Bank is no longer the Agent, to the
Agent for transmission to SunTrust Bank) or by SunTrust Bank (or if SunTrust
Bank is no longer the Agent, by the Agent following its receipt thereof from
SunTrust Bank) to each Lender in immediately available funds, as
appropriate.  If any Lender shall fail to
pay to Agent the Net Amount on or before the Business Day following the receipt
of the Report with respect thereto, such Lender shall pay to SunTrust Bank (or
if SunTrust Bank is no longer the Agent, then to the Agent for transmission to
SunTrust Bank) on demand an amount equal to the product of (i) a
fraction, the numerator of which is the daily average Fed Funds Rate during
such period and the denominator of which is 365, times (ii) the Net
Amount, times  (iii) the number of
days that elapse from and including the Business Day following the giving of
the applicable Report to the date on which such Lender’s Net Amount shall have
become immediately available to the Agent. 
A certificate of Agent submitted to any Lender with respect to any
amounts owing under this Subsection 2.3(b) shall be conclusive, absent
manifest error.

Notwithstanding the foregoing provisions of this Subsection 2.3(b), in
no event shall a Lender be obligated to fund any Loan to the extent funding
such Lender’s portion of such Loan would cause that portion of the outstanding
amount of all Loans funded by such Lender plus the Lender’s Commitment
Percentage of all outstanding L/C Obligations to exceed such Lender’s
Commitment Amount.

 20
 

SECTION 2.4         Repayment of
Loans.

(a)           Repayment on Termination Date.  The
Borrowers shall repay the outstanding principal amount of all Loans in full on
the Termination Date, together with all accrued but unpaid interest thereon.

(b)           Mandatory Repayment of Excess Loans.  If at
any time the outstanding principal amount of all Loans exceeds the lesser of
the Aggregate Commitment or the Borrowing Base less the sum of all
outstanding L/C Obligations (the amount of such excess being here called a “Borrowing
Base Deficiency”), the Borrowers shall immediately repay to the Agent for the
account of the Lenders, an amount equal to such excess, with each such
repayment applied first to the principal amount of outstanding Loans,
and second to provide cash collateral for the outstanding balance of the L/C
Obligations; provided, however, that if such Borrowing Base
Deficiency results from the imposition by the Lenders of new criteria for the
determination of Eligible Accounts or Eligible Inventory or new reserves, as
provided in this Agreement, the Borrowers shall have a period of fifteen (15)
days from the date of such Borrowing Base Deficiency to make such payment.  Such cash collateral shall be applied in
accordance with Section 11.2(b).  Each
such repayment shall be accompanied by any amount required to be paid pursuant
to Section 4.9 hereof.

(c)           Optional Repayments.  The Borrowers may, at their option, prepay,
in whole or in part, the Loans at any time without penalty or premium;
provided, however, that the Agent may, in the Agent’s discretion, apply
each prepayment first to the payment of accrued and unpaid interest, fees and
other charges payable in connection with the Loans and then to the payment of
the principal balance of such Loans.

SECTION 2.5         Note.  The obligation of the Borrowers to
repay the Loans shall be evidenced by a single Revolving Credit Note executed
by the Borrowers payable to the order of the Lenders in care of the Agent.

SECTION 2.6         Termination
of Credit Facility.  The Credit
Facility shall terminate on the earliest of (a) the date of termination by the
Agent on behalf of the Lenders pursuant to Section 11.2(a), or (b) May 30, 2010
(the “Scheduled Maturity Date”), or (c) delivery of written notice of
termination by TESSCO; provided, however, that, at the request of
TESSCO, the Lenders may extend the Scheduled Maturity Date by twelve months at
any time by giving the Borrowers written notice of a new Scheduled Maturity
Date.  Without limiting the generality of
the preceding sentence, at the end of each twelve-month period after any
Scheduled Maturity Date, the Lenders will elect whether to extend the Scheduled
Maturity Date by twelve months. 
Notwithstanding the foregoing or any failure to notify the Borrowers of
a new Scheduled Maturity Date, any Loans made or Letters of Credit issued under
the Credit Facility after the Scheduled Maturity Date shall be governed by the
Loan Documents.  In the event that the
Credit Facility is terminated by delivery of written notice of termination by
TESSCO prior to the third anniversary of the Closing Date, the Borrowers shall
pay to the Lenders (for pro rata distribution) a termination fee equal to (a)
thirty (30) basis points (.3%) of the Aggregate Commitment if the Credit
Facility is terminated prior to the first anniversary of the Closing Date; (b)
twenty (20) basis points (.2%) of the Aggregate Commitment if the Credit
Facility is terminated on or after the first anniversary of the Closing Date
and before the second anniversary of the Closing Date, and (c) ten (10) basis
points (.1%) of the Aggregate Commitment if the Credit Facility is

 21
 

terminated on or
after the second anniversary of the Closing Date and before the third
anniversary of the Closing Date.

SECTION 2.7         Use
of Proceeds.  The Borrowers shall use
the proceeds of the Loans solely to refinance the Existing Facility and for
working capital, Capital Expenditures, and Permitted Acquisitions by the
Borrowers, including the payment of fees and expenses incurred in connection
with such transactions, and to purchase not more than $10,000,000 of issued and
outstanding stock after the date hereof.

ARTICLE III

LETTER OF CREDIT
FACILITY

SECTION 3.1         L/C
Commitment.  Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the agreements of the
other Lenders set forth in Section 3.4(a), agrees to issue commercial or
standby letters of credit (“Letters of Credit”) for the account of the
Borrowers on any Business Day from the Closing Date through but not including
the Termination Date in such form as may be approved from time to time by the
Lenders; provided, that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (a) the
L/C Obligations would exceed the L/C Commitment or (b) the Available Commitment
of any Lender would be less than zero. 
Each Letter of Credit shall (i) be denominated in Dollars, (ii) be a
commercial or standby letter of credit issued to support obligations of any
Borrower, contingent or otherwise, incurred in the ordinary course of business,
(iii) expire on a date satisfactory to the Issuing Lender, which date shall be
no later than the earlier of  (1) the
Termination Date or (2) one year after the issuance of such Letter of Credit
and (iv) be subject to the Uniform Customs and, to the extent not inconsistent
therewith, the laws of the State of Maryland. 
The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if (a) such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law, or (b) if any Lender notifies the Issuing Lender, within two
(2) Business Days after receipt of the Application therefor, of such Lender’s
objection to the issuance of the Letter of Credit.  References herein to “issue” and derivations
thereof with respect to Letters of Credit shall also include extensions or modifications
of any existing Letters of Credit, unless the context otherwise requires.

SECTION 3.2         Procedure for Issuance
of Letters of Credit.  The Borrowers
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Lenders an Application therefor, completed to the
satisfaction of the Issuing Lender and the other Lenders, and such other
certificates, documents and other papers and information as the Issuing Lender
or the other Lenders may request.  Upon
receipt of any Application, the Issuing Lender shall process such Application
and the certificates, documents and other papers and information delivered to
it in connection therewith in accordance with its customary procedures and
shall, subject to Section 3.1 and Article V hereof, promptly issue the Letter
of Credit requested thereby (but in no event shall the Issuing Lender be
required to issue any Letter of Credit earlier than three (3) Business Days
after its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise
may be agreed by the Issuing Lender

 22
 

and
the Borrowers.  The Issuing Lender shall
promptly furnish to the Borrowers and the other Lenders a copy of such Letter
of Credit and the final Application.

SECTION 3.3         Fees.  With respect to any Letter of Credit, the
Borrowers shall pay to the Agent, for the account of the Issuing Lender,  the Issuing Lender’s standard fees in
connection with letters of credit, as in effect from time to time. With respect
to each standby Letter of Credit, the Borrowers shall pay to the Agent, for the
account of the L/C Participants, a fee equal to 1.5% per annum of the face amount
of the standby Letter of Credit for the period of time the Letter of Credit
will be outstanding.

SECTION 3.4         L/C Participations.

(a)           The Issuing Lender irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender,
on the terms and conditions hereinafter stated, for such L/C Participant’s own
account and risk an undivided interest equal to such L/C Participant’s
Commitment Percentage in the Issuing Lender’s obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder.  Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrowers in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender’s address for notices specified herein an amount equal to
such L/C Participant’s Commitment Percentage of the amount of such draft, or
any part thereof, which is not so reimbursed.

(b)           Upon becoming aware of any amount required to be
paid by any L/C Participant to the Issuing Lender pursuant to
Section 3.4(a) in respect of any unreimbursed portion of any payment made
by the Issuing Lender under any Letter of Credit, the Issuing Lender shall
notify each L/C Participant of the amount and due date of such required payment
and each such L/C Participant shall pay to the Issuing Lender the amount
specified on the applicable due date.  If
any such amount is paid to the Issuing Lender after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand, in
addition to such amount, the product of (i) such amount, times (ii) the
daily average Federal Funds Rate as determined by the Agent during the period
from and including the date such payment is due to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360.  A certificate of the Issuing Lender with
respect to any amounts owing under this Section 3.4(b) shall be conclusive in
the absence of manifest error.  With
respect to payment to the Issuing Lender of the unreimbursed amounts described
in this Section 3.4(b), if the L/C Participants receive notice that any such
payment is due (A) prior to 1:00 p.m. (Baltimore time) on any Business Day,
such payment shall be due that Business Day, and (B) after 1:00 p.m. (Baltimore
time) on any Business Day, such payment shall be due on the following Business
Day.

(c)           At any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its Commitment Percentage of such payment in accordance with this Section 3.4,
if the Issuing Lender receives any payment related to such Letter of

 23
 

Credit (whether directly from the Borrowers or
otherwise, or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro  rata share
thereof; provided, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.

SECTION 3.5         Reimbursement
Obligation of the Borrowers.  The
Borrowers agree to reimburse the Issuing Lender on each date on which the
Issuing Lender notifies the Borrowers in writing of the date and amount of a
draft paid under any Letter of Credit for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses, if any, reasonably
incurred by the Issuing Lender in connection with such payment.  Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States and in immediately available funds.  Interest shall be payable on any and all
amounts remaining unpaid by the Borrowers under this Article III from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding Loans which were then overdue. 
If the Borrowers fail to timely reimburse the Issuing Lender on the date
the Borrowers receive the notice referred to in this Section 3.5, the Borrowers
shall be deemed to have timely given a Notice of Borrowing hereunder to the
Agent requesting the Lenders to make a Loan on such date in an amount equal to
the amount of such drawing and, regardless of whether the conditions precedent
specified in Article V have been satisfied, the Lenders shall be authorized to
make a Loan in such amount, the proceeds of which shall be applied to reimburse
the Issuing Lender for the amount of the related drawing and costs and
expenses.

SECTION 3.6         Obligations Absolute.  The Borrowers’ obligations under this Article
III (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment that the Borrowers may have or
have had against the Issuing Lender or any beneficiary of a Letter of
Credit.  The Borrowers also agree with
the Issuing Lender that the Issuing Lender shall not be responsible for, and
the Borrowers’ Reimbursement Obligation under Section 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrowers
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of a Borrower
against any beneficiary of such Letter of Credit or any such transferee.  The Issuing Lender shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions caused by the Issuing Lender’s
gross negligence or willful misconduct. 
The Borrowers agree that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts
or documents, if done in the absence of gross negligence or willful misconduct
and in accordance with the standards of care specified in the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of
Maryland, shall be binding on the Borrowers and shall not result in any
liability of the Issuing Lender to the Borrowers.  The responsibility of the Issuing Lender to
the Borrowers in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit,

 24
 

be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.

SECTION 3.7         Effect of Application.  To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.

ARTICLE IV

GENERAL LOAN PROVISIONS

SECTION 4.1         Interest; Late
Charges, Etc.

(a)           Subject to the provisions of Subsection 4.1(d) hereof, the
aggregate amount of all Loans shall bear interest at a floating and fluctuating per annum rate of interest equal to the
applicable LIBOR Index plus the Applicable Margin.

(b)           Accrued interest on the
Loans shall be payable monthly on the first (1st) day of each month
commencing on July 1, 2007.

(c)           The Applicable Margin provided for in Section
4.1(a) with respect to the Loans shall for each fiscal quarter be determined by
reference to the Borrowers’ ratio of Funded Debt to EBITDA as of the end of the
fiscal quarter immediately preceding the delivery of the applicable Officer’s
Compliance Certificate as follows:

	
  Funded Debt to EBITDA

  	
   

  	
  Applicable Margin

  	
   

  
	
  Greater than or
  equal to 3.5 to 1.0

  	
   

  	
  2.75

  	
  %

  
	
  Greater than or
  equal to 3.0 to 1.0 , but less than 3.5 to 1.0

  	
   

  	
  2.50

  	
  %

  
	
  Greater than or
  equal to 2.5 to 1.0 but less than 3.0 to 1.0

  	
   

  	
  2.15

  	
  %

  
	
  Greater than or
  equal to 2.0 to 1.0 but less than 2.5 to 1.0

  	
   

  	
  1.85

  	
  %

  
	
  Greater than or
  equal to 1.5 to 1.0 but less than 2.0 to 1.0

  	
   

  	
  1.65

  	
  %

  
	
  Less than 1.50 to 1.0

  	
   

  	
  1.25

  	
  %

  

 

Adjustments,
if any, in the Applicable Margin shall be made by the Agent on the tenth (10th)
Business Day after receipt by the Agent of quarterly financial statements for
the Borrowers and their Subsidiaries and the accompanying Officer’s Compliance
Certificate setting forth the ratio of Funded Debt to EBITDA of the Borrowers
and their Subsidiaries as of the most recent fiscal quarter end.  Subject to Section 4.1(d), in the event the
Borrowers fail to deliver such financial statements and

 25
 

certificate
within the time required by Section 7.2 hereof, the Applicable Margin shall be
the highest Applicable Margin set forth above until the delivery of such
financial statements and certificate.

(d)           Default
Rate.  Subject to Section 11.3, upon
the occurrence and during the continuance of an Event of Default, all
outstanding Loans shall bear interest at a rate per annum three percent (3%) in
excess of the rate then applicable to Loans. 
Interest shall continue to accrue on the Note after the filing by or
against any or all of the Borrowers of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.

(e)           Interest Payment and Computation.  All
interest rates, fees and commissions provided hereunder shall be computed on
the basis of a 360-day year and assessed for the actual number of days
elapsed.  The interest rate
payable hereunder shall be adjusted monthly upon any change in the LIBOR Index,
or daily upon any change in the Prime Rate, as applicable.

(f)            Maximum Rate.  In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder or
under the Note charged or collected pursuant to the terms of this Agreement or
pursuant to the Note exceed the highest rate permissible under any Applicable
Law which a court of competent jurisdiction shall, in a final determination,
deem applicable hereto.  In the event
that such a court determines that the Lenders have charged or received interest
hereunder in excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law and the Lenders shall at the Agent’s option (i) promptly refund
to the Borrowers any interest received by the Lenders in excess of the maximum
lawful rate or (ii) shall apply such excess to the principal balance of the
Obligations.  It is the intent hereof
that the Borrowers not pay or contract to pay, and that neither the Agent nor
any Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrowers under
Applicable Law.

SECTION 4.2         Fees.

(a)         Origination Fee.  On the Closing Date, the Borrowers
shall pay to the Lenders an origination fee of $50,000, $35,000 of which shall
be paid to SunTrust Bank, and $15,000 of which shall be paid to Wachovia Bank.

(b)         Unused Availability
Fee.  At the end of each fiscal
quarter of the Borrowers, and on the Termination Date, the Borrowers shall pay
to the Agent, in arrears, for the ratable benefit of the Lenders, a facility
fee equal to twelve and one-half (12.5) basis points (.125%) of the first $10,000,000
of the daily unused portion of the Credit Facility for the previous quarter,
and twenty-five (25) basis points (.25%) of the remaining average daily unused
portion of the Credit Facility for the previous quarter. For purposes of the
calculation of this fee, outstanding L/C obligations will be treated as
outstanding Loans.

(c)         [Intentionally Omitted].

 26

(d)           Administrative Agent’s Fee.  The Borrower shall pay to the Agent
commencing on the date hereof, and on the same day of each year hereafter, an
annual administrative fee in the amount of $25,000 per year.

(e)           Extension
Fee.  In connection with each extension
of the Scheduled Maturity Date, the Borrowers shall pay to the Lenders an
extension fee equal to .125% of the maximum amount of the Credit Facility.

(f)            Late Charge.  The Borrowers shall pay a late charge equal
to five percent (5%) of any payment of principal and/or interest that is more
than fifteen (15) days late.

SECTION 4.3         Manner of Payment.  Each payment by the Borrowers on account of
the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or the Note shall be made not later than 1:00 p.m. (Baltimore,
Maryland time) on the date specified for payment under this Agreement to the
Agent at the Agent’s Office for the account of the Lenders (other than as set
forth below) pro  rata in accordance with their respective
Commitment Percentages (except as specified below), in Dollars, in immediately
available funds and without any set-off, counterclaim or deduction
whatsoever.  Any payment received after
such time but before 2:00 p.m. (Baltimore time) on such day shall be deemed a
payment on such date for the purposes of Section 11.1, but for all other
purposes shall be deemed to have been made on the next succeeding Business Day.  Any payment received after 2:00 p.m.
(Baltimore, Maryland time) shall be deemed to have been made on the next
succeeding Business Day for all purposes. 
Upon receipt by the Agent of each such payment, the Agent shall
distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender’s Commitment
Percentage (except as specified below) and shall wire advice of the amount of
such credit to each Lender.  Each payment
to the Agent of the Issuing Lender’s fees or L/C Participants’ commissions
shall be made in like manner, but for the account of the Issuing Lender or the
L/C Participants, as the case may be. 
Each payment to the Agent of Agent’s fees or expenses shall be made for
the account of the Agent and any amount payable to any Lender under any Section
of this Agreement relating to payments due to the Lenders shall be paid to the
Agent for the account of the applicable Lender. 
If any payment under this Agreement or the Note shall be specified to be
made upon a day which is not a Business Day, it shall be made on the next
succeeding day which is a Business Day and such extension of time shall in such
case be included in computing any interest if payable along with such payment.

Anything in the foregoing to the
contrary notwithstanding, the portion of any interest payment remitted to any
Lender with respect to any Cash Management Loan shall be equal only to interest
on the amount advanced by such Lender, at the applicable rate, from the date
such Lender advances its Percentage Commitment of such Loan.

SECTION 4.4         Crediting of Payments and  Proceeds. 
In the event that the Borrowers shall fail to pay any of the Obligations
when due and the Obligations shall have been accelerated pursuant to Section
11.2, all payments received by the Lenders upon the Note and the other
Obligations and all net proceeds from the enforcement of the Obligations shall
be applied first to all expenses then due and payable by the Borrowers
hereunder, then to all indemnity

 27
 

obligations
then due and payable by the Borrowers hereunder, then to all Agent’s and
Issuing Lender’s fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on any Unsettled Loans to SunTrust Bank, then to the principal amount of any
Unsettled Loans outstanding, then to accrued and unpaid interest on the
remainder of the Loans and the Reimbursement Obligation (pro  rata
in accordance with all such amounts due), then to the principal amount of the
remaining Loans and the Reimbursement Obligation (pro  rata in
accordance with all such amounts due) and then to the cash collateral account
described in Section 11.2(b) hereof to the extent of any L/C Obligations then
outstanding, in that order.

SECTION 4.5         Adjustments.  If any Lender (a “Benefitted Lender”) shall
at any time receive any payment of all or part of the Obligations owing to it,
or interest thereon, or if any Lender shall at any time receive any collateral
in respect to the Obligations owing to it (whether voluntarily or
involuntarily, by set-off or otherwise) in a greater proportion than any such
payment to and collateral received by any other Lender, if any, in respect of
the Obligations owing to such other Lender, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders such portion
of each such other Lender’s Extensions of Credit, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders; provided,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned to the extent of such recovery, but
without interest.  The Borrowers agree
that each Lender so purchasing a portion of another Lender’s Extensions of
Credit may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.

SECTION 4.6         Nature of Obligations of Lenders
Regarding Loans and Letters of Credit; Assumption by the Agent.  The obligations of the Lenders under this
Agreement to make the Loans and issue or participate in Letters of Credit are
several and are not joint or joint and several.   The failure of any Lender to make available
its Commitment Percentage of any Loan requested by the Borrowers shall not
relieve it or any other Lender of its obligation, if any, hereunder to make its
Commitment Percentage of such Loan available on the Borrowing Date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the Borrowing Date.

SECTION 4.7         Changed Circumstances.

(a)           Circumstances
Affecting LIBOR Index Availability.  If
at any time the Agent determines that the LIBOR Index cannot be adequately
and reasonably determined, which determination shall be conclusive and binding
upon the Borrowers, the Agent shall immediately give notice thereof to the
Borrowers.  Thereafter, the interest rate
applicable to the Loans shall be converted to the Prime Rate. The interest rate
applicable to the Credit Facility shall remain at such converted  rate until the Agent shall notify the
Borrowers that the circumstances giving rise to such condition no longer exist.

 28
 

(b)           Laws
Affecting LIBOR Index Availability. 
If, after the date hereof, the introduction of, or any change in, any
Applicable Law or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
of their respective Lending Offices) with any request or directive (whether or
not having the force of law) of any such Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make or
maintain any Loan bearing interest at a rate based upon the LIBOR Index, such
Lender shall promptly give written notice thereof to the Agent and the Agent
shall promptly give notice to the Borrowers and the other Lenders.  Thereafter, until the Agent notifies the
Borrowers that such circumstances no longer exist, the interest rate
applicable to the Loans shall be converted to the sum of the Prime Rate plus
the Applicable Margin.

(c)           Increased
Costs.  If, after the date hereof,
the introduction of, or any change in, any Applicable Law, or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective
Lending Offices) with any request or directive (whether or not having the force
of law) of such Authority, central bank or comparable agency:

(i)          shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to
the Note, any Letter of Credit or Application or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective Lending
Offices) of the principal of or interest on the Note, Letter of Credit or
Application or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income of any of the
Lenders or any of their respective Lending Offices imposed by the jurisdiction
in which such Lender is organized or is or should be qualified to do business
or such Lending Office is located); or

(ii)         shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit, insurance or capital or
similar requirement against assets of, deposits with or for the account of, or
credit extended by any of the Lenders (or any of their respective Lending
Offices) or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting the Note;

and
the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any Loan at a rate of interest based upon the LIBOR
Index or issuing or participating in Letters of Credit or to reduce the yield
or amount of any sum received or receivable by any of the Lenders under this
Agreement or under the Note in respect of a Loan or Letter of Credit or
Application, then such Lender shall promptly notify the Agent, and the Agent
shall promptly notify the Borrowers in writing of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Agent, the
Borrowers shall pay to such Lender such additional amount or amounts as will
compensate such Lender or Lenders for such increased cost or reduction.  The Agent will promptly notify the Borrowers
of any event of which it has knowledge which will entitle such Lender to
compensation pursuant to this Section 4.7(c); provided, that the Agent
shall incur no liability

 29
 

whatsoever
to the Lenders or the Borrowers in the event it fails to do so.  The amount of such compensation shall be
determined, in the applicable Lender’s reasonable discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the Loans in
the London interbank market and using any reasonable attribution or averaging
methods that such Lender deems appropriate and practical.  A certificate of such Lender setting forth
the basis for determining such amount or amounts necessary to compensate such
Lender shall be forwarded to the Borrowers by the Agent ten (10) Business Days
prior to the date upon which the Borrowers are required to make any payment set
forth in the certificate and shall be conclusively presumed to be correct save
for manifest error.

SECTION 4.8         Capital Requirements.  If either (a) the introduction of, or any
change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by,
any Lender or any corporation controlling such Lender as a consequence of, or
with reference to the Commitments and other commitments of this type, below the
rate which the Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within ten (10) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction.  A certificate as to such amounts submitted to
the Borrowers and the Agent by such Lender shall, in the absence of manifest
error, be presumed to be correct and binding for all purposes.

SECTION 4.9         Taxes.

(a)           Payments
Free and Clear.  Any and all payments
by the Borrowers hereunder or under the Note or the Letters of Credit shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholding, and all liabilities
with respect thereto excluding, (i) in the case of each Lender and the Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Agent (as the case may be) is organized or is or should be
qualified to do business or any political subdivision thereof and (ii) in the
case of each Lender, income and franchise taxes imposed by the jurisdiction of
such Lender’s Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”).  If the Borrowers shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under the
Note or any Letter of Credit to any Lender or the Agent, (A) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.9) such Lender or the Agent (as the case may be) receives an
amount equal to the amount such party would have received had no such
deductions been made, (B) the Borrowers shall make such deductions, (C)
the Borrowers shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (D) the
Borrowers shall deliver to the Agent evidence of such payment to the relevant
taxing authority or other authority in the manner provided in Section 4.9(d).

 30
 

(b)           Stamp
and Other Taxes.  In addition, the
Borrowers shall pay any present or future stamp, registration, recordation or
documentary taxes or any other similar fees or charges or excise or property
taxes, levies of the United States or any state or political subdivision
thereof or any applicable foreign jurisdiction which arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement, the Loans, the Letters of Credit, the other
Loan Documents, or the perfection of any rights or security interest in respect
thereto (hereinafter referred to as “Other Taxes”).

(c)           Indemnity.  The Borrowers shall indemnify each Lender and
the Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 4.9) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  Such
indemnification shall be made within thirty (30) days from the date such Lender
or the Agent (as the case may be) makes written demand therefor.

(d)           Evidence
of Payment.  Within thirty (30) days
after the date of any payment of Taxes or Other Taxes, the Borrowers shall
furnish to the Agent, at its address referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence
of payment satisfactory to the Agent.

(e)           Delivery
of Tax Forms.  Each Lender organized
under the laws of a jurisdiction other than the United States or any state
thereof shall deliver to the Borrowers, with a copy to the Agent, on the
Closing Date or concurrently with the delivery of the relevant Assignment and
Acceptance, as applicable, (i) two United States Internal Revenue Service Forms
4224 or Forms 1001, as applicable (or successor forms) properly completed and
certifying in each case that such Lender is entitled to a complete exemption
from withholding or deduction for or on account of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding taxes.  Each
such Lender further agrees to deliver to the Borrowers, with a copy to the
Agent, a Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms
or manner of certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrowers, certifying in the case of a Form 1001 or 4224 that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes (unless in any such case
an event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or the exemption to which such
forms relate unavailable and such Lender notifies the Borrowers and the Agent
that it is not entitled to receive payments without deduction or withholding of
United States federal income taxes) and, in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.

(f)            Survival.  Without prejudice to the survival of any
other agreement of the Borrowers hereunder, the agreements and obligations of
the Borrowers contained in this Section 4.9 shall survive the payment in full
of the Obligations and the termination of the Commitments.

 31
 

SECTION 4.10       The
Borrowers’ Representatives.  Each of
the Borrowers hereby represents and warrants to the Agent and the Lenders that
each of them will derive benefits, directly and indirectly, from the proceeds
of each Loan and Letter of Credit, both in its separate capacity and as a
member of the integrated group to which each of the Borrowers belong, since the
successful operation of the integrated group is dependent upon the continued
successful performance of the functions of the integrated group as a
whole.  For administrative convenience,
TESSCO is hereby irrevocably appointed by each of the Borrowers as agent for
each of the Borrowers for the purpose of requesting Loans and Letters of Credit
hereunder from the Agent and the Lenders, receiving the proceeds of Loans and
disbursing the proceeds of Loans among the Borrowers.  In its capacity as such agent, TESSCO shall
have the power and authority through its authorized officer or officers to (i)
endorse any check for the proceeds of any Loan for and on behalf of each of the
Borrowers and in the name of each of the Borrowers, and (ii) instruct the Agent
or the Lenders to credit the proceeds of any Loan directly to a banking account
of any of the Borrowers which shall evidence the making of such Loan and shall
constitute the acknowledgement by each of the Borrowers of the receipt of the
proceeds of such Loan.  By reason of the
foregoing, the Agent and each Lender is hereby irrevocably authorized by each
of the Borrowers to make Loans to the Borrowers and issue Letters of Credit for
the account of the Borrowers pursuant to this Agreement upon the request of any
one of the persons who is authorized to do so under the provisions of any
applicable corporate resolutions of TESSCO. 
Neither the Agent nor any Lender assumes any responsibility or liability
for any errors, mistakes and/or discrepancies in any oral, telephonic, written
or other transmissions of any instructions, orders, requests and confirmations
between the Agent or any Lender and any one or more of the Borrowers in
connection with any Loan, Letter of Credit or other transaction pursuant to the
provisions of this Agreement, except for acts of gross negligence and/or
willful misconduct.

ARTICLE V

CLOSING;
CONDITIONS OF CLOSING AND BORROWING

SECTION 5.1         Closing. The closing shall take place at the
offices of Ober, Kaler, Grimes & Shriver, a professional corporation at a
date and time upon which the parties hereto shall mutually agree.

SECTION 5.2         Conditions to Closing and Initial Loan.  The obligation of the Lenders to close this
Agreement and to make the initial Loan or issue the initial Letter of Credit is
subject to the satisfaction or waiver of each of the following conditions:

(a)           Executed
Loan Documents.  This Agreement, the
Note, and the other Loan Documents shall have been duly authorized, executed
and delivered to the Agent by the parties thereto, shall be in full force and
effect and no default shall exist thereunder, and the Borrowers shall have
delivered original counterparts of each Loan Document (except the Note) to the
Lenders.

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(b)           Closing
Certificates; etc.

(i)          Officer’s Certificate
of the Borrowers.  The Lenders shall
have received a certificate from a Responsible Officer of each of the
Borrowers, in form and substance reasonably satisfactory to the Lenders, to the
effect that all representations and warranties of such Borrower contained in
this Agreement and the other Loan Documents are true, correct and complete in
all material respects; that such Borrower is not in violation of any of the
covenants contained in this Agreement and the other Loan Documents; that, after
giving effect to the transactions contemplated by this Agreement, no Default or
Event of Default has occurred and is continuing; and that such Borrower has
satisfied each of the closing conditions.

(ii)         Certificate
of Secretary of the Borrowers.  The
Lenders shall have received a certificate of the secretary or assistant
secretary of each of the Borrowers certifying as to the incumbency and
genuineness of the signature of each officer of such Borrower executing Loan
Documents to which it is a party and certifying that attached thereto is a
true, correct and complete copy of (A) the articles of incorporation (or
articles of organization in the case of a limited liability company Borrower)
of such Borrower and all amendments thereto, certified as of a recent date by
the appropriate Governmental Authority in its jurisdiction of incorporation or
organization, (B) the bylaws of such Borrower as in effect on the date of such
certifications, (C) resolutions duly adopted by the Board of Directors (or
Board of Managers, as applicable) of such Borrower authorizing the borrowings
contemplated hereunder and the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 5.2(b)(iii).

(iii)        Certificates
of Good Standing.  To the extent
requested by the Lenders, the Lenders shall have received long-form
certificates as of a recent date of the good standing of each of the Borrowers
under the laws of its jurisdiction of organization and each other jurisdiction
where any of the Borrowers is qualified to do business and a certificate of the
relevant taxing authorities of such jurisdictions certifying that such Person
has filed required tax returns and owes no delinquent taxes.

(iv)       Opinions
of Counsel.  The Lenders shall have
received favorable opinions of counsel to the Borrowers addressed to the
Lenders with respect to the Borrowers, the Loan Documents and such other
matters as the Lenders shall reasonably request.

(v)        Tax
Forms.  The Lenders shall have
received copies of the United States Internal Revenue Service forms required by
Section 4.9(e) hereof.

(c)           Lien Searches;
Insurance, Etc.

(i)          Lien Search. The Lenders shall have received the
results of a Lien search (including a search as to judgments, pending
litigation and tax matters) made against each of the Borrowers under the UCC
(or applicable judicial docket) as in effect in any state
in which any of its assets are located, indicating among other things that its
assets are free and clear of any Lien except for Permitted Liens.

(ii)         Hazard
and Liability Insurance.  The Lenders
shall have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year

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of each, and, if requested by
the Lenders, copies (certified by a Responsible Officer) of all insurance
policies in the form required by this Agreement and otherwise in form and
substance reasonably satisfactory to the Lenders in all respects.

(d)           Consents;
Defaults.

(i)          Governmental
and Third Party Approvals.  The
Borrowers shall have obtained all necessary approvals, authorizations and consents
of any Person and of all Governmental Authorities and courts having
jurisdiction with respect to the transactions contemplated by this Agreement
and the other Loan Documents.

(ii)         No
Injunction, Etc.  No action,
proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect of, or which
is related to or arises out of this Agreement or the other Loan Documents or
the consummation of the transactions contemplated hereby or thereby, or which,
in the Lenders’ sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement and such other Loan Documents.

(iii)        No
Event of Default.  No Default or
Event of Default shall have occurred and be continuing.

(e)           Financial
Matters.

(i)          Financial
Statements.  The Lenders shall have
received the audited Consolidated and consolidating financial statements of the
Borrowers and their Subsidiaries for the most recent fiscal year, and the
unaudited Consolidated and consolidating financial statements of the Borrowers
and their Subsidiaries for the most recent fiscal quarter, all in form and
substance reasonably satisfactory to the Lenders.

(ii)         Payment
at Closing.  The Borrowers shall have
paid the fees set forth or referenced in Section 4.2 and any other accrued and
unpaid fees or commissions due hereunder (including, without limitation,
reasonable legal fees and expenses) to the Agent and the Lenders, and to any
other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges
in connection with the execution, delivery, recording, filing and registration
of any of the Loan Documents.

(f)            Miscellaneous.

(i)          Notice
of Borrowing.  If applicable, the
Agent shall have received a Notice of Borrowing from the Borrowers in
accordance with Section 2.2(a).

(ii)         Proceedings
and Documents.  All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to the Lenders.  The
Lenders shall have received copies of all other instruments and other evidence
as the Lenders may reasonably request, in

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form and substance reasonably
satisfactory to the Lenders, with respect to the transactions contemplated by
this Agreement and the taking of all actions in connection therewith.

(iii)        Existing
Facility.  The Existing Facility
shall be repaid in full and terminated.

(iv)       Due
Diligence and Other Documents.  The
Borrowers shall have delivered to the Agent such other documents, certificates
and opinions as the Lenders may reasonably request.

SECTION 5.3         Conditions to All Loans and Letters
of Credit.  The obligation of the
Lenders to make any Loan or Letter of Credit is subject to the satisfaction of
the following conditions precedent on the relevant borrowing or issue date, as
applicable:

(a)           Continuation
of Representations and Warranties. 
The representations and warranties contained in Article VI shall be true
and correct on and as of such borrowing or issuance date with the same effect
as if made on and as of such date; except for any representation and warranty
made as of an earlier date, which representation and warranty shall remain true
and correct as of such earlier date.  The
Borrowers shall have the right from time to time, with the consent of the
Lenders, to modify or supplement any of the Schedules (including the provision
of new Schedules) referred to in this Agreement, and following any such
modification or supplement with the consent of the Lenders, the representations
in this Agreement shall be deemed to refer to such Schedules as so modified or
supplemented; provided, that the Borrowers shall be deemed to have represented
at the time of delivery of any such modification or supplement that such
modifications or supplements do not relate to circumstances which individually
or in the aggregate have resulted in a Material Adverse Change or which would
result in a Default or an Event of Default.

(b)           No
Existing Default.  No Default or
Event of Default shall have occurred and be continuing hereunder (i) on the
Borrowing Date with respect to such Loan or after giving effect to the Loan to
be made on such date or (ii) on the issue date with respect to such Letter of
Credit or after giving effect to such Letter of Credit on such date.

(c)           Officer’s Compliance Certificate; Additional Documents.  The Agent shall have received the current
Officer’s Compliance Certificate and each additional document, instrument,
legal opinion or other item of information reasonably requested by it.

ARTICLE VI

REPRESENTATIONS
AND WARRANTIES OF THE BORROWERS

SECTION 6.1         Representations and Warranties.  To induce the Agent and the Lenders to enter
into this Agreement and to induce the Lenders to make Loans and issue Letters
of Credit, the Borrowers hereby represent and warrant to the Agent and the
Lenders both before and after giving effect to the transactions contemplated
hereunder that:

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(a)           Organization;
Power; Qualification.  Each of the
Borrowers is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization and where
failure to be so qualified would have a material adverse effect on such
Borrower.  The jurisdictions in which the
Borrowers are organized and qualified to do business as of the Closing Date are
described on Schedule 6.1(a).

(b)           Ownership.  Each Subsidiary of the Borrowers as of the
Closing Date is listed on Schedule 6.1(b).   As of the Closing Date, the capitalization
of the Borrowers and their Subsidiaries consists of the number of shares,
authorized, issued and outstanding, of such classes and series, with or without
par value, described on Schedule 6.1(b). 
All outstanding shares have been duly authorized and validly issued and
are fully paid and nonassessable.  The
shareholders of the Subsidiaries of the Borrowers and the number of shares
owned by each as of the Closing Date are described on Schedule 6.1(b).  As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrowers or their Subsidiaries, except for
TESSCO Technologies Incorporated, which is publicly traded, and except as
described on Schedule 6.1(b).  The
only  Subsidiaries of the Borrowers which
are not Borrowers under this Agreement are dormant, have no material assets and
will not have any material assets in the future.

(c)           Authorization
of Agreement, Loan Documents and Borrowing. Each of the Borrowers and their
Subsidiaries has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is a party
in accordance with their respective terms. 
This Agreement and each of the other Loan Documents have been duly
executed and delivered by the duly authorized officers of the Borrowers and
each of their Subsidiaries party thereto, and each such document constitutes
the legal, valid and binding obligation of the Borrowers or their Subsidiary
party thereto, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies.

(d)           Compliance
of Agreement, Loan Documents and Borrowing with Laws, Etc.  The execution, delivery and performance by
the Borrowers and their Subsidiaries of the Loan Documents to which each such
Person is a party, in accordance with their respective terms, the borrowings
hereunder and the transactions contemplated hereby do not and will not, by the
passage of time, the giving of notice or otherwise, (i) require any
Governmental Approval which has not been obtained or violate any Applicable Law
relating to the Borrowers, (ii) conflict with, result in a breach of or
constitute a default under the articles of incorporation, bylaws or other
organizational documents of any of the Borrowers or a material default under
any indenture, agreement or other instrument to which such Person is a party or
by which any of its properties may be bound or any Governmental Approval
relating to such Person which would have a material adverse effect on any
Borrower, or (iii) result in or require the creation or imposition of any Lien
upon or with respect to

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any property now owned or hereafter acquired by such
Person (other than Liens, if any) arising under the Loan Documents.

(e)           Compliance
with Law; Governmental Approvals. 
Each of the Borrowers (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental
Approval applicable to it and in compliance with all other Applicable Laws
relating to it or any of its respective properties, the noncompliance with
which would have a material adverse effect on such Borrower.

(f)            Tax
Returns and Payments.  Each of the
Borrowers and its Subsidiaries has duly filed or caused to be filed all
federal, state, local and other tax returns required by Applicable Law to be
filed, and has paid, or made adequate provision for the payment of, all
federal, state, local and other taxes, assessments and governmental charges or
levies upon it and its property, income, profits and assets which are due and
payable pursuant to and as provided for under such returns (unless such taxes,
assessments, and governmental charges or levies are currently being contested
by the Borrowers in good faith and by appropriate proceedings, and adequate
reserves have been set aside therefor). 
No Governmental Authority has asserted any Lien (other than Permitted
Liens) or other claim against any of the Borrowers or any Subsidiary thereof
with respect to unpaid taxes which has not been discharged or resolved.  The charges, accruals and reserves on the
books of the Borrowers and any of their Subsidiaries in respect of federal,
state, local and other taxes for all Fiscal Years and portions thereof since
the organization of the Borrowers and any of their Subsidiaries are in the
judgment of the Borrowers adequate, and the Borrowers do not anticipate any
additional taxes or assessments for any of such years.

(g)           Intellectual
Property Matters.  Each of the
Borrowers and their Subsidiaries owns or possesses rights to use all
franchises, licenses, copyrights, copyright applications, patents, patent
rights or licenses, patent applications, trademarks, trademark rights, trade
names, trade name rights, copyrights and rights with respect to the foregoing,
in all cases in which the failure to own or possess such rights would have a
Material Adverse Effect.  No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such rights, and neither the Borrowers nor
any Subsidiary thereof is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations.

(h)           Environmental
Matters. To the best of the Borrowers’ knowledge and belief and except as
disclosed to the Lenders in writing:

(i)          The
properties owned, leased or operated by the Borrowers and their Subsidiaries
now or in the past do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws;

(ii)         The
Borrowers, each Subsidiary and such properties and all operations conducted in
connection therewith are in compliance, and have been in compliance, with

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all applicable Environmental
Laws the noncompliance with which would have a Material Adverse Effect, and
there is no contamination at, under or about such properties or such operations
which could interfere with the continued operation of such properties or impair
the fair saleable value thereof;

(iii)        Neither
any Borrower nor any Subsidiary thereof has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters, Hazardous Materials, or compliance with Environmental
Laws, nor does any Borrower or any Subsidiary thereof have knowledge or reason
to believe that any such notice will be received or is being threatened;

(iv)       Hazardous
Materials have not been transported or disposed of to or from the properties
owned, leased or operated by the Borrowers and their Subsidiaries in violation
of, or in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of,
or in a manner that would give rise to a material liability under, any
applicable Environmental Laws;

(v)        No
judicial proceedings or governmental or administrative action is pending, or,
to the knowledge of any Borrower, threatened, under any Environmental Law to
which any Borrower or any Subsidiary thereof is or will be named as a party,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to any
Borrower, any Subsidiary or such properties or operations; and

(vi)       There
has been no release, or to the best of any Borrower’s knowledge, threat of
release, of Hazardous Materials at or from properties owned, leased or
operated by any Borrower or any Subsidiary, now or in the past, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws, which would have a
Material Adverse Effect.

(i)            ERISA.

(i)          As
of the Closing Date, neither any Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit Plans other
than those identified on Schedule 6.1(i);

(ii)         each
Borrower and each ERISA Affiliates is in material compliance with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except
for any required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired.  Each Employee Benefit Plan that is intended
to be qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified as to form, and each trust related
to such plan has been determined to be exempt under Section 501(a) of the
Code.  No liability has been incurred by
any Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any Multiemployer Plan;

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(iii)        No Pension
Plan has been terminated, nor has any accumulated funding deficiency (as
defined in Section 412 of the Code) been incurred (without regard to any waiver
granted under Section 412 of the Code), nor has any funding waiver from the
Internal Revenue Service been received or requested with respect to any Pension
Plan, nor has any Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by Section 412 of
the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the
due dates of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

(iv)       Neither
any Borrower nor any ERISA Affiliate has: 
(A) engaged in a nonexempt prohibited transaction described in Section
406 of the ERISA or Section 4975 of the Code, (B) incurred any liability to the
PBGC which remains outstanding other than the payment of premiums and there are
no premium payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make a
required installment or other required payment under Section 412 of the Code, in
each case, if such transaction, liability, non-payment or failure would result
in a material adverse effect upon any of the Borrowers;

(v)        No
Termination Event has occurred or is reasonably expected to occur; and

(vi)       No
proceeding, claim, lawsuit and/or investigation is existing or, to the best
knowledge of the Borrowers after due inquiry, threatened concerning or
involving any (A) employee welfare benefit plan (as defined in Section 3(1) of
ERISA) currently maintained or contributed to by any Borrower or any ERISA
Affiliate, (B) Pension Plan or (C) Multiemployer Plan.

(j)            Margin
Stock.  Neither any Borrower nor any
Subsidiary thereof is engaged principally or as one of its activities in the
business of extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” (as each such term is defined or used in Regulation U of the Board of
Governors of the Federal Reserve System). 
No part of the proceeds of any of the Loans or Letters of Credit will be
used for purchasing or carrying margin stock or for any purpose which violates,
or which would be inconsistent with, the provisions of Regulation T, U or X of
such Board of Governors.

(k)           Government
Regulation.  Neither any Borrower nor
any Subsidiary thereof is an “investment company” or a company “controlled” by
an “investment company” (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither any Borrower nor any Subsidiary
thereof is, or after giving effect to any Loan or Letter of Credit will be, subject
to regulation under the Public Utility Holding Company Act of 1935 or the
Interstate Commerce Act, each as amended, or any other Applicable Law which
limits its ability to incur or consummate the transactions contemplated hereby.

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(l)            Employee
Relations. Each of the Borrowers and its Subsidiaries has a stable work
force in place and is not, as of the Closing Date, party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 6.1(l).  The Borrowers know of no pending, threatened
or contemplated strikes, work stoppage or other collective labor disputes
involving their employees or those of their Subsidiaries.

(m)          Burdensome
Provisions.  Neither any Borrower nor
any Subsidiary thereof is a party to any indenture, agreement, lease or other
instrument, or subject to any corporate or partnership restriction,
Governmental Approval or Applicable Law which is so unusual or burdensome as in
the foreseeable future could be reasonably expected to have a Material Adverse
Effect.  The Borrowers and their
Subsidiaries do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.

(n)           Financial
Statements.  The (i) Consolidated and
consolidating balance sheets of the Borrowers and their Subsidiaries and the
related statements of income and retained earnings and cash flows for the
Borrowers’ most recent Fiscal Year then ended and (ii) unaudited Consolidated
and consolidating balance sheet of the Borrowers and their Subsidiaries for the
Borrowers’ most recent fiscal quartner and related unaudited interim statements
of revenue and retained earnings, copies of which have been furnished to the
Lenders, are complete and correct and fairly present the assets, liabilities
and financial position of the Borrowers and their Subsidiaries as at such
dates, and the results of the operations and changes of financial position for
the periods then ended.  All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP. 
The Borrowers and their Subsidiaries have no Debt, obligation or other
unusual forward or long-term commitment which is not fairly reflected in the
foregoing financial statements or in the notes thereto.

(o)           No
Material Adverse Change.  Since the
date of the most recent audited financial statements delivered to the Lenders,
there has been no material adverse change in the properties, business,
operations, prospects, or condition (financial or otherwise) of the Borrowers
and their Subsidiaries and no event has occurred or condition arisen that could
reasonably be expected to have a Material Adverse Effect.

(p)           Solvency.  As of the Closing Date and after giving
effect to each Loan and Letter of Credit made hereunder, the Borrowers, on a
consolidated basis, will be Solvent.

(q)           Titles
to Properties.  Each of the Borrowers
and their Subsidiaries has such title to the real property owned by it as is
necessary or desirable to the conduct of its business and valid and legal title
to all of its personal property and assets, including, but not limited to,
those reflected on the balance sheets of the Borrowers and their Subsidiaries
described in Section 6.1(n), except those which have been disposed of by the
Borrowers or their Subsidiaries subsequent to such date, which dispositions
have been in the ordinary course of business or as otherwise expressly
permitted hereunder, and except for minor imperfections in title which do not
significantly detract from the use thereof.

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(r)            Liens.  None of the properties and assets of any
Borrower or any Subsidiary thereof is subject to any Lien, except Permitted
Liens.  No financing statement under the
Uniform Commercial Code of any state which names any Borrower or any Subsidiary
thereof or any of their respective trade names or divisions as debtor and which
has not been terminated, has been filed in any state or other jurisdiction upon
the authority of any Borrower or in respect of any security interest granted by
any Borrower, and neither any Borrower nor any Subsidiary thereof has signed
any such financing statement or any security agreement authorizing any secured
party thereunder to file any such financing statement, except to perfect
Permitted Liens.

(s)           Debt
and Guaranty Obligations.  Schedule
6.1(s) is a complete and correct listing of all Debt and Guaranty
Obligations of the Borrowers and their Subsidiaries as of the Closing Date in
excess of $500,000.  The Borrowers and
their Subsidiaries have performed and are in compliance with all of the terms
of such Debt and Guaranty Obligations and all instruments and agreements
relating thereto, and no default or event of default, or event or condition
which with notice or lapse of time or both would constitute such a default or
event of default on the part of the Borrowers or their Subsidiaries exists with
respect to any such Debt or Guaranty Obligation.

(t)            Litigation.  Except for matters existing on the Closing
Date and set forth on Schedule 6.1(t), there are no actions, suits or
proceedings pending nor, to the knowledge of any Borrower, threatened against
or in any other way relating adversely to or affecting any Borrower or any
Subsidiary thereof or any of their respective properties in any court or before
any arbitrator of any kind or before or by any Governmental Authority which
would have a Material Adverse Effect.

(u)           Absence
of Defaults.  No event has occurred
or is continuing which constitutes a Default or an Event of Default, or which
constitutes, or which with the passage of time or giving of notice or both
would constitute, a default or event of default by any Borrower or any
Subsidiary thereof under any contract or judgment, decree or order to which any
Borrower or any Subsidiary is a party or by which any Borrower or any
Subsidiary or any of their respective properties may be bound or which would
require any Borrower or any Subsidiary to make any payment thereunder prior to
the scheduled maturity date therefor which would have a Material Adverse
Effect.

(v)           Accuracy
and Completeness of Information.  All
written information, reports and other papers and data produced by or on behalf
of any Borrower or any Subsidiary thereof and furnished to the Lenders were, at
the time the same were so furnished, complete and correct in all material
respects to the extent necessary to give the recipient a true and accurate
knowledge of the subject matter.  To the
knowledge of the Borrowers, no document furnished or written statement made to
the Agent or any Lender by any Borrower or any Subsidiary thereof in connection
with the negotiation, preparation or execution of this Agreement or any of the
Loan Documents contains or will contain any untrue statement of a fact material
to the creditworthiness of the Borrowers or their Subsidiaries or omits or will
omit to state a fact necessary in order to make the statements contained
therein not misleading.  No Borrower is
aware of any facts which it has not disclosed in writing to the Agent having a
Material Adverse Effect, or insofar as any Borrower can now foresee, could
reasonably be expected to have a Material Adverse Effect.

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SECTION 6.2         Survival of Representations and Warranties, Etc.  All representations and warranties set forth
in this Article VI and all representations and warranties contained in any
certificate, or any of the Loan Documents (including but not limited to any
such representation or warranty made in or in connection with any amendment
thereto) shall constitute representations and warranties made under this
Agreement.  All representations and
warranties made under this Agreement shall be made or deemed to be made at and
as of the Closing Date, shall survive the Closing Date and shall not be waived
by the execution and delivery of this Agreement, any investigation made by or
on behalf of the Lenders or any borrowing hereunder.

ARTICLE VII

FINANCIAL
INFORMATION AND NOTICES

Until all the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 13.11 hereof, the Borrowers
will furnish or cause to be furnished to the Lenders at their respective
addresses as set forth on Schedule 1, or such other office as may be
designated by a Lender from time to time:

SECTION 7.1         Financial
Statements.

(a)           Monthly
Financial Statements.  As soon as
practicable and in any event within forty-five (45) days after the end of each
month in each Fiscal Year, an unaudited Consolidated and consolidating balance
sheet of the Borrowers and their Subsidiaries as of the close of such month and
unaudited Consolidated and consolidating statements of income, retained
earnings and cash flows and statements of shareholder equity and changes in
financial position for the month then ended and that portion of the Fiscal Year
then ended, including the notes thereto, prepared by  or under the direction of the chief financial
officer of the Borrowers,  containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
period, subject to normal year end adjustments.

(b)           Quarterly
Financial Statements.  As soon as
practicable and in any event within forty-five (45) days after the end of each
quarter in each Fiscal Year, an unaudited Consolidated and consolidating
balance sheet of the Borrowers and their Subsidiaries as of the close of such
fiscal quarter and unaudited Consolidated and consolidating statements of
income, retained earnings and cash flows and statements of shareholder equity
and changes in financial position for the fiscal quarter then ended and that
portion of the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by the Borrowers in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by the
chief financial officer of the Borrowers to present fairly in all material
respects the financial condition of the Borrowers and their Subsidiaries as of
their respective dates and the results of operations of the Borrowers and their
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments.

 42

(c)           Annual Financial
Statements.  As soon as practicable
and in any event within one hundred twenty (120) days after the end of each
Fiscal Year, an audited Consolidated and consolidating balance sheet of the
Borrowers and their Subsidiaries as of the close of such Fiscal Year and
audited Consolidated and consolidating balance sheets, statements of
shareholder equity, statements of income, retained earnings and cash flows, and
statements of changes in financial position for the Fiscal Year then ended, including
the notes thereto, all in reasonable detail setting forth in comparative form
the corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm acceptable to the Lenders in
accordance with GAAP and, if applicable, containing disclosure of the effect on
the financial position or results of operation of any change in the application
of accounting principles and practices during the year, and accompanied by a
report thereon by such certified public accountants that is not qualified with
respect to scope limitations imposed by the Borrowers or any of their
Subsidiaries or with respect to accounting principles followed by the Borrowers
or any of their Subsidiaries not in accordance with GAAP.

SECTION 7.2         Officer’s Compliance Certificate.  As soon as practicable, and in any event
within forty-five (45) days after the end of each fiscal quarter in each Fiscal
Year, and at such other times as the Lenders shall reasonably request, a
certificate of the chief financial officer or the treasurer of the Borrowers:
(a) stating that no Event of Default exists under the Loan Documents, or if an
Event of Default exists, specifying the Event of Default, (b) calculating the
Borrowers’ ratio of Funded Debt to EBITDA for the previous Fiscal Quarter, and
(c) demonstrating the calculation of the Borrowers’ compliance with the other
financial covenants set forth herein, all of which shall be in form and
substance reasonably satisfactory to the Lenders in all respects.

SECTION 7.3         [Intentionally
Omitted]

SECTION 7.4         Borrowing
Base Certificates and Other Reports.

(a)           As soon as available,
but in no event more than fifteen (15) days after the end of each month, and at
such other times as the Lenders shall reasonably request in order to verify
eligibility for a proposed Loan, a Borrowing Base Certificate in the form of Exhibit
C hereto, accompanied by accounts receivable aging reports, accounts
payable aging reports, and inventory reports in form and substance reasonably
satisfactory to the Lenders in all respects, and

(b)           Such other information
regarding the operations, business affairs and financial condition of the
Borrowers or any of their Subsidiaries as any Lender may reasonably request and
which the Borrowers can legally provide.

SECTION 7.5         Notice of Litigation and Other
Matters.  Prompt (but in no event
later than ten (10) days after an officer of the Borrowers obtains knowledge
thereof) telephonic and written notice of:

(a)           the commencement of all
proceedings and investigations by or before any Governmental Authority and all
actions and proceedings in any court or before any arbitrator against 

 43
 

or involving any Borrower or any Subsidiary thereof or
any of their respective properties, assets or businesses and involving claims of
$1,000,000 or more;

(b)           any notice of any
violation received by any Borrower or any Subsidiary thereof from any
Governmental Authority including, without limitation, any notice of violation
of Environmental Laws which in any such case would have a Material Adverse
Effect;

(c)           any labor controversy
that has resulted in, or threatens to result in, a strike or other work action
against any Borrower or any Subsidiary thereof which would have a Material
Adverse Effect;

(d)           any attachment,
judgment, lien, levy or order exceeding $1,000,000 that has been assessed
against any  Borrower or any Subsidiary
thereof;

(e)           any Default or Event of
Default; and

(f)            (i) any unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of the Code
(along with a copy thereof), (ii) all notices received by any Borrower or any
ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (iii) all notices received by
any Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor
concerning the imposition or amount of withdrawal liability pursuant to Section
4202 of ERISA and (iv) any Borrower obtaining knowledge or reason to know that
any Borrower or any ERISA Affiliate has filed or intends to file a notice of
intent to terminate any Pension Plan under a distress termination within the
meaning of Section 4041(c) of ERISA 
which would have a Material Adverse Effect.

SECTION 7.6         Accuracy of Information.  All written information, reports, statements
and other papers and data furnished by or on behalf of any Borrower to the
Agent or any Lender (other than financial forecasts) whether pursuant to this
Article VII or any other provision of this Agreement, or any of the other Loan
Documents, shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Agent or any
Lender complete, true and accurate knowledge of the subject matter based on the
Borrowers’ knowledge thereof.

ARTICLE VIII

AFFIRMATIVE
COVENANTS

Until all of the Obligations
have been paid and satisfied in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 13.11, each of
the Borrowers will:

SECTION 8.1         Preservation of Corporate Existence
and Related Matters.  Except as
permitted by Section 10.5, preserve and maintain its separate corporate
existence and all rights, 

 44
 

franchises,
licenses and privileges necessary to the conduct of its business, and qualify
and remain qualified as a foreign corporation or limited liability company, as
applicable, and authorized to do business in each jurisdiction where the nature
and scope of its activities require it to so qualify under Applicable Law and
where the failure to be so qualified would have a material adverse effect on
such Borrower.

SECTION 8.2         Maintenance of Property.  To the extent within the control of the
Borrowers, protect and preserve all properties useful in and material to its
business, including copyrights, patents, trade names and trademarks; maintain
in good working order and condition all buildings, equipment and other tangible
real and personal property useful and material to its business; and from time
to time make or cause to be made all renewals, replacements and additions to
such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.

SECTION 8.3         Insurance.  Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required hereby, and on the Closing Date and from
time to time thereafter deliver to the Agent upon its reasonable request a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.

SECTION 8.4         Accounting Methods and Financial
Records.  Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.

SECTION 8.5         Payment and Performance of
Obligations.  Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property (unless such taxes,
assessments and governmental charges or levies are being contested by the
Borrowers in good faith and by appropriate proceedings and adequate reserves
have been set aside therefor), and (b) all other indebtedness, obligations and liabilities
in accordance with customary trade practices, except where failure to do so
will not have a material adverse effect on such Borrower.

SECTION 8.6         Compliance With Laws and Approvals.  Observe and remain in compliance with all
Applicable Laws and maintain in full force and effect all Governmental
Approvals, in each case applicable to the conduct of its business, except where
the failure to so comply or the failure to so maintain will not have a material
adverse effect on such Borrower.

SECTION 8.7         Environmental Laws.  In addition to and without limiting the
generality of Section 8.6, (a) comply with, and ensure such compliance by
all tenants and subtenants with, all applicable Environmental Laws and obtain
and comply with and maintain, and ensure that all tenants and subtenants obtain
and comply with and maintain, any and all 

 45
 

licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, except where  failure
to obtain, comply or maintain, or failure to cause such tenants to obtain,
comply or maintain, will not have a material adverse effect on such Borrower,
(b) conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, and (c) defend, indemnify and hold
harmless the Agent and the Lenders, and their respective parents, Subsidiaries,
Affiliates, employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the presence of Hazardous Materials,
or the violation of, noncompliance with or liability under any Environmental
Laws applicable to the operations of the Borrowers or such Subsidiary, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney’s and consultant’s fees,
investigation and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing directly result from
the gross negligence or willful misconduct of the party seeking indemnification
therefor.

SECTION 8.8         Compliance with ERISA.  In addition to and without limiting the
generality of Section 8.6, (a) comply in all material respects with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans, (b) not
take any action or fail to take action the result of which could be a material
liability to the PBGC or to a Multiemployer Plan, (c) not participate in any
prohibited transaction that could result in any civil penalty under ERISA or
tax under the Code, that in each case would have a material adverse effect on
any Borrower, (d) operate each Employee Benefit Plan in such a manner that will
not incur any tax liability under Section 4980B of the Code or any liability to
any qualified beneficiary as defined in Section 4980B of the Code that in each
case would have  material adverse effect
on any Borrower, and (e) furnish to the Lenders upon any Lender’s request such
additional information about any Employee Benefit Plan as may be reasonably
requested by any Lender.

SECTION 8.9         Compliance With Agreements.  Comply in all material respects with each
term, condition and provision of all leases, agreements and other instruments
entered into in the conduct of its business the noncompliance with which would
have a Material Adverse Effect.

SECTION 8.10       Conduct of Business.  Engage only in businesses in substantially
the same fields as the businesses conducted on the Closing Date and in lines of
business reasonably related thereto.

SECTION 8.11       Visits and Inspections.  Permit representatives of the Agent or any
Lender, from time to time, to visit and inspect its properties; inspect, audit
and make extracts from its books, records and files, including, but not limited
to, management letters prepared by independent accountants; and discuss with
its principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects;
provided, however, that prior to an Event of Default, the Lenders shall conduct
an audit not more than once every Fiscal Year during normal business hours and
after giving reasonable prior 

 46
 

notice.
Borrowers will reimburse the Agent or the Lenders for the cost of one audit per
year, or, in the case of an Event of Default, as many audits as the Agent or
Lenders shall deem necessary or appropriate.

SECTION 8.12       Additional Subsidiaries.  Within ten (10) days after any new Subsidiary
of any Borrower, which is created or acquired after the Closing Date, engages
in any business operations, cause to be executed and delivered to the Agent (a)
a duly executed Assignment and Assumption Agreement, in form and substance
satisfactory to the Agent and the Lenders pursuant to which such new Subsidiary
shall become jointly and severally liable for the obligations of the Borrowers
hereunder, (b) favorable legal opinions addressed to the Lenders in form and
substance reasonably satisfactory thereto with respect to such Assignment and
Assumption Agreement, and (c) such other searches, documents and closing
certificates as may be requested by the Agent.

SECTION 8.13       Further Assurances.  Make, execute and deliver all such additional
and further acts, things, deeds and instruments as the Agent or any Lender may
reasonably require to document and consummate the transactions contemplated
hereby and to vest completely in and insure the Agent and the Lenders their
respective rights under this Agreement, the Note, the Letters of Credit and the
other Loan Documents.

SECTION 8.14       Insurance.  Maintain with financially sound, well rated
and reputable insurance companies insurance in such amounts and covering such
risks as is consistent with sound business practice, and in any event as is
ordinarily and customarily carried by companies similarly situated and in the
same or similar businesses as such Borrower. 
Each Borrower will pay, when due, all premiums on such insurance and
will furnish to the Lenders, upon request, evidence of payment of such premiums
and other information as to the insurance carried by such Borrower.  Such insurance shall include, without
limitation, (a) comprehensive fire and extended coverage insurance (including
vandalism and malicious mischief) on the physical assets and properties of such
Borrower against such risks, with such loss deductible amounts and in such
amounts not less than those which may be reasonably satisfactory to the Lenders
but in all events conforming to prudent business practices and in such minimum
amounts that such Borrower will not be deemed a co-insurer under
applicable insurance laws, regulations, policies and practices, (b) public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by any 
Borrower, and  (c) worker’s
compensation insurance.

SECTION 8.15       Bank
Accounts.  Maintain the Management
Account as the Borrowers’ primary disbursement account at SunTrust Bank

 47
 

ARTICLE IX

FINANCIAL
COVENANTS

Until all of the Obligations
have been paid and satisfied in full and the Commitments terminated, unless
consent has been obtained in the manner set forth in Section 13.11 hereof, the
Borrowers and their Subsidiaries on a Consolidated basis will:

SECTION 9.1         Minimum
Tangible Net Worth.  From and
including June 30, 2007, through the Scheduled Maturity Date, as measured at
the end of each of the Borrowers’ fiscal quarters, maintain a combined Tangible
Net Worth of not less than $43,000,000; provided, however, that the Minimum
Tangible Net Worth requirement shall increase, annually upon receipt of
year-end financial statements, by fifty percent (50%) of the Borrowers’
combined net income after applicable taxes.

SECTION 9.2         Minimum
Cash Flow Coverage to Debt Service Ratio. From the Closing Date through the
Scheduled Maturity Date, maintain a ratio of Cash Flow to Debt Service, as
measured at the end of each of the Borrowers’ fiscal quarters on a trailing
four-quarter basis, of no less than 1.75:1.00.

SECTION 9.3         [Intentionally
Omitted].

SECTION 9.4         Maximum
Funded Debt/EBITDA. From the Closing Date through the Scheduled Maturity
Date, maintain a ratio of  (a) Funded
Debt, as measured at the end of each of the Borrowers’ fiscal quarters, to (b)
EBITDA, as measured at the end of each of the Borrowers’ fiscal quarters on a
trailing four-quarter basis, of no more than 3.00:1:00; provided, however, if
TESSCO (or any affiliate) purchases a new headquarters building (the “HQ
Purchase Transaction”), this Section 9.4 shall cease to be applicable and
Section 9.5 shall become applicable.  The
date on which TESSCO consummates the purchase of a new headquarters building is
referred to in herein as the “HQ Purchase Date”.

SECTION 9.5         Maximum
Funded Debt/EBITDA or EBITDAR. From the HQ Purchase Date through the
Scheduled Maturity Date, if the HQ Purchase Transaction is financed with off
balance sheet financing, maintain a ratio of (a) Funded Debt, as measured at
the end of each of the Borrowers’ fiscal quarters, to (b) EBITDAR, as measured
at the end of each of the Borrowers’ fiscal quarters on a trailing four-quarter
basis, of no more than 4.25:1:0, or if the HQ Purchase Transaction is financed
with on balance sheet financing, maintain a ratio of (y) Funded Debt, as
measured at the end of each of the Borrowers’ fiscal quarters, to (b) EBITDA,
as measured at the end of each of the Borrowers’ fiscal quarters on a trailing
four-quarter basis, of no more than 4.25:1:0.

 48
 

ARTICLE X

NEGATIVE COVENANTS

Until
all of the Obligations have been paid and satisfied in full and the Commitments
terminated, each Borrower agrees that it shall not and shall not permit any of
its Subsidiaries to:

SECTION 10.1       Limitations on Debt.  Without the Lenders’ prior written consent,
which consent shall not be unreasonably withheld, create, incur, assume or
suffer to exist any Debt except:

(a)           the Obligations;

(b)           Debt existing on the
Closing Date and not otherwise permitted under this Section 10.1, as set forth
on Schedule 6.1(s), and the renewal and refinancing (but not the
increase in the aggregate principal amount thereof) thereof;

(c)           current trade debt
incurred in the ordinary course of business;

(d)           payable purchase money Debt of the Borrowers and their
Subsidiaries (and renewals or replacement, without increase, of such purchase
money Debt) in an aggregate amount not to exceed $5,000,000;

(e)           Without duplication,
Debt secured by Permitted Liens;

(f)            Subordinated Debt;

(g)           Unsecured letters of
credit, bankers’ acceptances and/or (i) secured Hedging Agreements between any
Borrower and any Lender or any affiliate of any Lender and/or (ii) unsecured
Hedging Agreements between any Borrower and any other financial institution,
providing for the transfer or mitigation of foreign exchange risks or interest
rate risks either generally or under specific contingencies;

(h)           Capital Leases not
to exceed $5,000,000 in the aggregate;

(i)            Intercompany Debt
by and among any or all of the Borrowers; and

(l)            Debt
permitted under the provisions of Sections 10.2 and 10.4 of this Agreement.

provided, that no agreement or instrument with respect to Debt permitted to be incurred by this Section
10.1 shall restrict, limit or otherwise encumber (by covenant or otherwise) the
ability of any Subsidiary of any Borrower to make any payment to any Borrower
or any  Subsidiary (in the form of
dividends, intercompany advances or otherwise) for the purpose of enabling the
Borrowers to pay the Obligations.

 49
 

SECTION 10.2       Limitations on Guaranty Obligations.  Create, incur, assume or suffer to exist any
Guaranty Obligations except (a) Guaranty Obligations in favor of the Agent for
the benefit of the Agent and the Lenders, and (b) Debt consisting of Guaranty
Obligations guaranteeing Debt of another Borrower that is otherwise expressly
permitted by Section 10.1.

SECTION 10.3       Limitations on Liens.  Without the Lenders’ prior written consent,
which consent shall not be unreasonably withheld, create, incur, assume or
suffer to exist, any Lien on or with respect to any of its assets or properties
(including without limitation shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except
any of the following liens (“Permitted Liens”):

(a)           Liens for taxes,
assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA or Environmental Laws) not
yet due or as to which the period of grace (not to exceed thirty (30) days), if
any, related thereto has not expired or which are being contested in good faith
and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP;

(b)           the claims of
materialmen, mechanics, carriers, warehousemen, or processors for labor,
materials, supplies or rentals incurred in the ordinary course of business
which are not overdue for a period of more than thirty (30) days or which are
bonded over or covered by insurance;

(c)           Liens constituting
encumbrances in the nature of zoning restrictions, easements and rights or
restrictions of record on the use of real property which in the aggregate are
not substantial in amount and which do not, in any case, detract from the value
of such property or impair the use thereof in the ordinary conduct of business;

(d)           Liens not otherwise
permitted by this Section 10.3 and in existence on the Closing Date and
described on Schedule 10.3(d);

(e)           Liens securing Debt
permitted under Section 10.1(d); provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of the related asset,
(ii) such Liens do not at any time encumber any property other than the
property financed by such Debt, (iii) the amount of Debt secured thereby is not
increased, and (iv) the principal amount of Debt secured by any such Lien shall
at no time exceed one hundred percent (100%) of the original purchase price of
such property at the time it was acquired;

(f)            deposits or pledges to secure
obligations under workers’ compensation, social security or similar laws, or
under unemployment insurance in the ordinary course of business;

(g)           judgment Liens to the extent the
entry of such judgment does not constitute an Event of Default under the terms
of this Agreement;

(h)           deposits, liens or pledges to secure
payments of (i) unemployment and other insurance, old-age pensions or other
social security obligations, or (ii) the performance of 

 50
 

bids, tenders,
leases, contracts, public or statutory obligations, surety, stay or appeal
bonds, or other similar obligations arising in the ordinary course of business;
provided that liens permitted under this Section 10.3(h)(ii) shall not exceed
$1,000,000 in the aggregate at any one time;

(i)            statutory landlord’s Liens under
leases to which any Borrower or any Subsidiary is a party;

(j)            Liens securing Debt permitted by the
provisions of Section 10.1(d), or Liens securing debt permitted by the
provisions of Section 10.1(b), which liens are described in Schedule 6.1(s);

(k)           Liens securing obligations under
Capital Leases to the extent such Capital Leases are permitted by the
provisions of this Agreement; and

(l)            any Lien arising under any retention
of title arrangements entered into in the ordinary course of business and not
entered into primarily for the purpose of securing borrowings.

SECTION 10.4       Limitations
on Loans, Investments and Acquisitions.  
Purchase, own, invest in or otherwise acquire, directly or indirectly,
any capital stock, interests in any partnership or joint venture (including
without limitation the creation or capitalization of any Subsidiary), evidence
of Debt or other obligation or security, substantially all or a portion of the
business or assets of any other Person or any other investment or interest
whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment
in cash or by delivery of property in, any Person except:

(a)           Permitted Acquisitions;

(b)           replacements of assets that are the subject of Permitted Asset
Dispositions;

(c)           investments not otherwise permitted by this Section 10.4
in Subsidiaries existing on the Closing Date (provided that the Borrowers’
aggregate investment in non-Borrower Subsidiaries shall in no event exceed the
aggregate investment in such Non-Borrower Subsidiaries on the date hereof), and
the other existing loans, advances and investments not otherwise permitted by
this Section 10.4 described on Schedule 10.4;

(d)           investments in
(i) marketable direct obligations issued or unconditionally guaranteed by
the United States or any agency thereof maturing within 120 days from the date
of acquisition thereof, (ii) commercial paper maturing no more than 120
days from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor’s Ratings Services, a division
of The McGraw-Hill Companies, Inc., or Moody’s Investors Service, Inc.,
(iii) certificates of deposit maturing no more than 120 days from the date
of creation thereof issued by commercial banks incorporated under the laws of
the United States, each having combined capital, surplus and undivided profits
of not less than $500,000,000 and having a rating of “A” or better by a
nationally recognized rating agency; provided, that the aggregate amount
invested in such certificates of deposit shall not at any time exceed
$5,000,000 for any one such certificate of deposit 

 51
 

and $10,000,000 for any one such bank, or (iv) time
deposits maturing no more than 30 days from the date of creation thereof with
commercial banks or savings banks or savings and loan associations each having
membership either in the FDIC or the deposits of which are insured by the FDIC
and in amounts not exceeding the maximum amounts of insurance thereunder;

(e)           investments by any Borrower
or any Subsidiary in the form of acquisitions of all or substantially all of
the business or a line of business (whether by the acquisition of capital
stock, assets or any combination thereof) of any other Person if such
acquisition has been previously approved in writing by the Lenders (except to
the extent consent is not required pursuant to the terms hereof) and the
Borrowers comply with the provisions of Section 8.12.

(f)            the receipt of Debt by any Borrower
or any Subsidiary which represents payment to such Borrower or Subsidiary, as
the case may be, of a portion of the purchase price payable in connection with
a Permitted Asset Disposition;

(g)           the receipt of securities in
connection with the settlement of claims against any customer, supplier or vendor
or as a result of the bankruptcy of any such customer, supplier or vendor;

(h)           any advance to an officer or employee
of any Borrower or any Subsidiary for travel or other business expenses in the
ordinary course of business, provided that the aggregate amount of all such
advances by all of the Borrowers and its Subsidiaries (taken as a whole)
outstanding at any time shall not exceed $100,000;

(i)            trade credit extended to customers
in the ordinary course of business; and

(j)            ordinary
course working capital advances and loans to and from any Borrower to any other
Borrower.

SECTION 10.5       Limitations on Mergers and Liquidation.  Merge, consolidate or enter into any similar
combination with any other Person or liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution), except that (a) the Borrowers may
engage in Permitted Acquisitions and Permitted Asset Dispositions, (b) any Borrower may merge into or consolidate with any other Borrower,
and (c) any Subsidiary may merge into or consolidate with any Borrower, so long
as (i) the Borrower is the surviving entity and (ii) such merger or
consolidation does not render the surviving entity insolvent.

SECTION 10.6       Limitations on Sale of Assets.  Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including,
without limitation, the sale of any receivables and leasehold interests and any
sale-leaseback or similar transaction), whether now owned or hereafter acquired
except Permitted Asset Dispositions.

SECTION 10.7       Limitations on Dividends and
Distributions.  Declare or pay any
dividends upon any of its capital stock; purchase, redeem, retire or otherwise
acquire, directly or indirectly, any shares of its capital stock, or make any
distribution of cash, property or assets among the holders of shares of its
capital stock, or make any change in its capital structure; provided
that (a) any Subsidiary (including any Subsidiary that is also a Borrower) may
pay cash 

 52
 

dividends
to any of the Borrowers, and (b) the Borrowers may purchase up to $10,000,000
of their issued and outstanding stock in the aggregate after the date hereof.

SECTION 10.8       Limitations on Exchange and Issuance
of Capital Stock.  Except in
connection with any Permitted Acquisition, issue, sell or otherwise dispose of
any class or series of capital stock that, by its terms or by the terms of any
security into which it is convertible or exchangeable, is, or upon the
happening of an event or passage of time would be, (a) convertible or exchangeable
into Debt or (b) required to be redeemed or repurchased, including at the
option of the holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due.

SECTION 10.9       Transactions with Affiliates.
Except as expressly permitted pursuant to Section 10.4, directly or
indirectly  (a) make any loan or advance
to, or purchase or assume the Note or other obligation to or from, any of its
officers, directors, shareholders or other Affiliates, or to or from any member
of the immediate family of any of its officers, directors, shareholders or
other Affiliates, or, other than on an arm’s length basis, subcontract any
operations to any of its Affiliates or (b) enter into, or be a party to, any
other transaction with any of its Affiliates, except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are fully
disclosed to and approved in writing by the Required Lenders prior to the
consummation thereof and are no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not its Affiliate. The
foregoing provisions shall not restrict (a) any employment agreement or related
compensation arrangement entered into by any Borrower or Subsidiary, or any
reasonable travel or business expense reimbursement or advance made by any
Borrower or subsidiary, in each case, on an arm’s length basis in the ordinary
course of business consistent with past or reasonable business practices, (b)
the payment of dividends and distributions to the extent otherwise permitted by
this Agreement, and (c) intercompany investments and loans between and among
Borrowers as and to the extent permitted by this Agreement.

SECTION 10.10     Certain Accounting Changes.  Change its Fiscal Year end, or make any
change in its accounting treatment and reporting practices except as required
by GAAP.

SECTION 10.11     Amendments; Payments and Prepayments of
Subordinated Debt.  Amend or modify
(or permit the modification or amendment of) any of the terms or provisions of
any Subordinated Debt, or cancel or forgive, make any voluntary or optional
payment or prepayment on, or redeem or acquire for value (including without
limitation by way of depositing with any trustee with respect thereto money or
securities before due for the purpose of paying when due) any Subordinated
Debt.

SECTION 10.12     Restrictive Agreements. Enter into
any Debt which contains any negative pledge on assets or any covenants more
restrictive than the provisions of Articles VIII, IX and X hereof, or which
restricts, limits or otherwise encumbers its ability to incur Liens on or with
respect to any of its assets or properties other than the assets or properties
securing such Debt.

SECTION 10.13     Capital Expenditures. Spend,
in the aggregate, more than (a) $10,000,000 in Capital Expenditures during the
fiscal year ending March 31, 2008, or (b) 

 53
 

$8,000,000
in Capital Expenditures in any fiscal year thereafter. The Agent and the
Lenders agree that the foregoing limitation shall not include or in any way
restrict Capital Expenditures made or to be made by the Borrower relating to
the use of insurance proceeds to repair, replace or rebuild any assets or
facilities damaged or destroyed as a result of any prior or future casualty.

ARTICLE XI

DEFAULT AND REMEDIES

SECTION 11.1       Events of Default.  Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:

(a)           Default in Payment
of Principal and Interest on Loans and Reimbursement Obligations.  The Borrowers shall default in any payment of
principal of or interest on, any Loan, Note or Reimbursement Obligation when
and as due (whether at maturity, by reason of acceleration or otherwise);
provided, however, that the Borrowers shall not be deemed to be in default
hereunder if a failure to make an interest payment results from the failure of
the Lenders to make a Loan when the Borrowers are otherwise entitled to a Loan
hereunder, or from the failure of any Lender to make automatic payments of
interest pursuant to the procedures described or contemplated by Section
2.2(b)(ii) hereof.

(b)           Other Payment
Default.  The Borrowers shall default
in the payment when and as due (whether at maturity, by reason of acceleration
or otherwise) of (a) any fee payable hereunder or under any Hedging Agreement,
as and when the same becomes due and payable, or (b) the payment of any other
Obligation within ten (10) days after demand therefor.

(c)           Misrepresentation.  Any representation or warranty made or deemed
to be made by any of the Borrowers or any of their Subsidiaries under this
Agreement, any Loan Document or any amendment hereto or thereto, shall at any
time prove to have been incorrect or misleading in any material respect when
made or deemed made; provided, however, that in the event the Agent or the
Lenders determine that a Borrower has made a misrepresentation constituting an
Event of Default, the Agent shall notify the Borrowers, and the Borrowers shall
be permitted two (2) Business Days after the receipt of such notice to
demonstrate to the Agent and the Lenders in writing that the representation was
not a misrepresentation. Thereafter, if the Agent and the Lenders are satisfied
that such representation was not a misrepresentation, then such representation
shall no longer be the basis for an Event of Default hereunder.

(d)           Default in
Performance of Certain Covenants. 
The Borrowers shall default in the performance or observance of any
covenant or agreement contained in Sections 7.1, 7.2 or 7.4(a) or Articles IX
or X of this Agreement, and, in the case of any covenant contained in Sections
7.1, 7.2, or 7.4(a), such default shall remain uncured for a period of five (5)
Business Days after written notice thereof to the Borrower.

 54
 

(e)           Default in
Performance of Other Covenants and Conditions.  The Borrowers or any Subsidiary thereof shall
default in the performance or observance of any term, covenant, condition or
agreement contained in this Agreement (other than as specifically provided for
otherwise in this Section 11.1) or any other Loan Document and such default
shall continue for a period of thirty (30) days after written notice thereof
has been given to the Borrowers by the Agent.

(f)            Debt Cross-Default.  Any Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Note or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $2,000,000, beyond the period of grace, if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the  Note or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $2,000,000 or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Debt (or a trustee or agent on behalf
of such holder or holders) to cause, with the giving of notice if required, any
such Debt to become due prior to its stated maturity (any applicable grace
period having expired).

(g)           Other Cross Defaults.  Any Borrower shall default in the payment
when due, or in the performance or observance of any obligation or condition of
any contract or judgment, decree or order to which any Borrower or any
Subsidiary is a party or by which any Borrower or any Subsidiary or any of
their respective properties may be bound or which would require any Borrower or
any Subsidiary to make any payment thereunder prior to the scheduled maturity
date therefor, which would have a Material Adverse Effect.

(h)           Change in Control.  (i) Any
person or group of persons (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) other than TESSCO shall obtain
ownership or control in one or more series of transactions of more than
forty-nine percent (49%) of the common stock of any of the other Borrowers or
more than forty-nine percent (49%) of the voting power entitled to vote in the
election of members of the board of directors of any other Borrower, or (ii)
any person or group of persons (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended), not including Robert B. Barnhill,
Jr., or interests controlled by him, shall obtain ownership or control in one
or more series of transactions of more than forty-nine percent (49%) of the
voting power entitled to vote in the election of members of the board of
directors of TESSCO (any such event described in subparts (i) and (ii) of this
Section 9.1(h) being hereinafter called a “Change in Control”).

(i)            Voluntary
Bankruptcy Proceeding.  Any Borrower
or any Subsidiary thereof shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking
to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for adjustment
of debts, (iii) consent to or fail to contest in a timely and appropriate
manner any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (iv) apply for or consent to, or fail to contest
in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign, (v) admit in writing its
inability to pay its debts as they become due, (vi) make a general 

 55
 

assignment for the benefit of creditors, or (vii) take
any corporate action for the purpose of authorizing any of the foregoing.

(j)            Involuntary
Bankruptcy Proceeding.  A case or
other proceeding shall be commenced against any Borrower or any Subsidiary
thereof in any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like for any Borrower or any Subsidiary
thereof or for all or any substantial part of their respective assets, domestic
or foreign, and such case or proceeding shall continue without dismissal or
stay for a period of sixty (60) consecutive days, or an order granting the
relief requested in such case or proceeding (including, but not limited to, an
order for relief under such federal bankruptcy laws) shall be entered.

(k)           Failure of
Agreements.  Any material provision
of this Agreement or of any other Loan Document shall for any reason cease to
be valid and binding on any Borrower or other party thereto or any such Person
shall so state in writing.

(l)            Termination Event.  Any of the following events occurs, and a
Material Adverse Effect results therefrom: 
(i) any Borrower or any ERISA Affiliate fails to make full payment when
due of all amounts which, under the provisions of any Pension Plan or Section
412 of the Code, any Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency occurs or exists,
whether or not waived, with respect to any Pension Plan, (iii) a Termination
Event or (iv) any Borrower or any ERISA Affiliate as employers under one or
more Multiemployer Plans makes a complete or partial withdrawal from any such
Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies
such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments.

(m)          Judgment.  A judgment or order for the payment of money
which causes the aggregate amount of all such judgments to exceed $1,000,000 in
any Fiscal Year shall be entered against any Borrower or any of its Subsidiaries
by any court and such judgment or order shall continue without discharge or
stay for a period of thirty (30) days.

SECTION 11.2       Remedies.  Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Agent may, or upon the request of
the Required Lenders, the Agent shall, by written notice to the Borrowers:

(a)           Acceleration;
Termination of Facilities.  Declare
the principal of and interest on the Loans, the Note and the Reimbursement
Obligations at the time outstanding, and all other amounts owed to the Lenders
and to the Agent under this Agreement or any of the other Loan Documents (other
than any Hedging Agreement) (including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) and all other
Obligations (other than obligations owing under any Hedging Agreement), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary 

 56
 

notwithstanding, and terminate the Credit Facility and
any right of the Borrowers to request borrowings or Letters of Credit
thereunder; provided, that upon the occurrence of an Event of Default
specified in Section 11.1(i) or (j), the Credit Facility shall be automatically
terminated and all Obligations (other than obligations owing under any Hedging
Agreement) shall automatically become due and payable.

(b)           Letters of Credit.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to the preceding paragraph, require the Borrowers at
such time to deposit in a cash collateral account opened by the Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit.  Amounts held in such cash
collateral account shall be applied by the Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay the other Obligations. 
After all such Letters of Credit shall have expired or been fully drawn
upon, the Reimbursement Obligation shall have been satisfied and all other
Obligations shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrowers.

(c)           Rights of Collection.  Exercise on behalf of the Lenders all of the
Lenders’ or the Agent’s other rights and remedies under this Agreement, the
other Loan Documents and Applicable Law, in order to satisfy all of the
Borrowers’ Obligations.

SECTION 11.3       Rights and Remedies Cumulative;
Non-Waiver; etc. The enumeration of the rights and remedies of the Agent
and the Lenders set forth in this Agreement is not intended to be exhaustive
and the exercise by the Agent and the Lenders of any right or remedy shall not
preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise.  No
delay or failure to take action on the part of the Agent or any Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege or shall be construed to be a waiver of any Event of
Default.  No course of dealing between
the Borrowers, the Agent and the Lenders or their respective agents or
employees shall be effective to change, modify or discharge any provision of
this Agreement or any of the other Loan Documents or to constitute a waiver of
any Event of Default.

ARTICLE XII

THE AGENT

SECTION 12.1       Appointment.  Each of the Lenders hereby irrevocably
designates and appoints SunTrust Bank as Administrative Agent of such Lender
under this Agreement and the other Loan Documents for the term hereof and each
such Lender irrevocably authorizes SunTrust Bank as Agent for such Lender to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and such other
Loan 

 57
 

Documents,
together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein
and therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or the other Loan Documents or otherwise
exist against the Agent.  Any reference
to the Agent in this Article XII shall be deemed to refer to the Agent solely
in its capacity as Agent and not in its capacity as a Lender.

SECTION 12.2       Delegation of Duties.  The Agent may execute any of its respective
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by the Agent with reasonable care.

SECTION 12.3       Exculpatory Provisions.  Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or the other Loan
Documents (except for actions occasioned solely by its or such Person’s own
gross negligence or willful misconduct), or (b) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by the Borrowers or any of their Subsidiaries or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or the other Loan
Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of the Borrowers or any of their Subsidiaries to perform their
obligations hereunder or thereunder.  The
Agent shall not 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 to inspect the properties, books or
records of the Borrowers or any of their Subsidiaries.

SECTION 12.4       Reliance by the Agent.  The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order 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, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Agent.  The Agent may deem and treat the payee of the
Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 13.10 hereof.  The Agent shall be fully justified in failing
or refusing to take any action under this Agreement and the other Loan
Documents unless it shall first receive such advice or concurrence of the
Required Lenders (or, when expressly required hereby or by any other Loan
Document, all the Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action except for its own gross negligence or willful misconduct.  The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this 

 58
 

Agreement
and the Note in accordance with a request of the Required Lenders (or, when
expressly required hereby, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Note.

SECTION 12.5       Notice of Default.  The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the Agent receives such a
notice, it shall promptly give notice thereof to the Lenders.  The Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided that unless and until the Agent shall have
received such direction, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the
Lenders, except to the extent that other provisions of this Agreement
expressly require that any such action be taken or not be taken only with the
consent and authorization or the request of the Lenders or Required Lenders, as
applicable.

SECTION 12.6       Non-Reliance on the Agent and Other
Lenders.  Each Lender expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrowers or any
of their Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. 
Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrowers and their Subsidiaries
and made its own decision to make its Loans and issue or participate in Letters
of Credit hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Agent 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and their Subsidiaries.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder or by the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrowers or any of their Subsidiaries which may come
into the possession of the Agent or any of its respective officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.

SECTION 12.7       Indemnification.  The Lenders agree to indemnify the Agent in
its capacity as such and (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so) ratably according to
the respective amounts of their Commitment Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever 

 59
 

which
may at any time (including, without limitation, at any time following the
payment of the  Note or any Reimbursement
Obligation) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent’s bad faith, gross
negligence or willful misconduct.  The
agreements in this Section 12.7 shall survive the payment of the Note, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.

SECTION 12.8       The Agent in Its Individual Capacity.  The Agent and its respective Subsidiaries and
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrowers as though the Agent were not an Agent
hereunder.  With respect to any Loans
made by it and with respect to any Letter of Credit issued by it or
participated in by it, the Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders”
shall include the Agent in its individual capacity.

SECTION 12.9       Resignation of the Agent; Successor
Agent.  Subject to the appointment
and acceptance of a successor as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrowers.  Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent, reasonably
acceptable to the Borrowers, which successor shall have minimum capital and
surplus of $500,000,000.  If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the Agent’s giving of
notice of resignation, then the Agent may, on behalf of the Lenders, appoint a
successor Agent, reasonably acceptable to the Borrowers, which successor shall
have minimum capital and surplus of $500,000,000.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder.  After any
retiring Agent’s resignation hereunder as Agent, the provisions of this Section
12.9 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 Agent.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.1       Notices.

(a)           Method of
Communication.  Except as otherwise
provided in this Agreement, all notices and communications hereunder shall be
in writing, or by telephone subsequently confirmed in writing.  Any notice shall be effective if delivered by
hand delivery or sent via telecopy, 

 60
 

recognized overnight courier service or certified mail,
return receipt requested, and shall be presumed to be received by a party
hereto (i) on the date of delivery if delivered by hand or sent by telecopy,
(ii) on the next Business Day if sent by recognized overnight courier service
and (iii) on the third Business Day following the date sent by certified mail,
return receipt requested.  A telephonic
notice to the Agent as understood by the Agent will be deemed to be the
controlling and proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.

(b)           Addresses for
Notices.  Notices to any party shall
be sent to it at the following addresses, or any other address as to which all
the other parties are notified in writing.

	
   

  	
  If to the Borrowers:

  	
   

  	
  c/o TESSCO Technologies Incorporated

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  11126 McCormick Road

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Hunt Valley, Maryland 21031-4302

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention: David Young

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial
  Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telephone No.: 410-229-1000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telecopy No.: 410-229-1656

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With copies to:

  	
   

  	
  Ballard Spahr Andrews & Ingersoll, LLP

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  300 East Lombard Street

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Baltimore, Maryland 21202

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention: Douglas M. Fox, Esquire

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telephone No.: 410-528-5600

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telecopy No.: 410-528-5650

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to SunTrust Bank as Agent:

  	
   

  	
  SunTrust Bank

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  120 East Baltimore Street

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Baltimore, MD 21202

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention: Gregory Farno, Senior Vice President

  
	
   

  	
   

  	
   

  	
  Telephone No.: 410-986-1673

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telecopy No.: 410-986-1927

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With copies to:

  	
   

  	
  Ober, Kaler Grimes & Shriver,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  A Professional Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  120 East Baltimore Street

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Baltimore, Maryland 21202

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention: Darlene R. Davis, Esquire

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telephone No.: 410-347-1306

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telecopy No.: 410-547-0699

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to any Lender:

  	
   

  	
  To the Address set forth on Schedule 1 hereto

  

 

(c)           Agent’s Office.  The Agent hereby designates its office located
at the address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrowers and Lenders, as
the Agent’s Office referred to herein, to which payments due are to be made and
at which Loans will be disbursed and Letters of Credit issued.

 61

SECTION 13.2       Expenses; Indemnity.  The Borrowers will (a) pay reasonably
incurred all out-of-pocket expenses of the Agent and the Lenders in connection
with (i) the preparation, execution and delivery of this Agreement and each
other Loan Document, whenever the same shall be executed and delivered,
including without limitation all out-of-pocket syndication and due diligence
expenses and reasonable fees and disbursements of counsel for the Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or
consent by the Agent or the Lenders relating to this Agreement or any other
Loan Document, including without limitation reasonable fees and disbursements
of counsel for the Agent, (b) pay all reasonable out-of-pocket expenses of the
Agent and each Lender actually incurred in connection with the administration
and enforcement of any rights and remedies of the Agent and the Lenders under
the Credit Facility, including consulting with appraisers, accountants,
engineers, attorneys and other Persons concerning the nature, scope or value of
any right or remedy of the Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless the Agent and the Lenders,
and their respective parents, Subsidiaries, Affiliates, employees, agents,
officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim, investigation, litigation or other
proceeding (whether or not the Agent or any Lender is a party thereto) and the
prosecution and defense thereof, arising out of or in any way connected with
this Agreement, any other Loan Document or the Loans, including without
limitation reasonable attorney’s and consultant’s fees, except to the extent
that any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.

SECTION 13.3       Set-off.  In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the
continuance thereof, the Lenders and any assignee or participant of a Lender in
accordance with Section 13.10 are hereby authorized by the Borrowers at any
time or from time to time, without notice to the Borrowers or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, time or demand,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Lenders, or any such assignee or participant to or for the
credit or the account of the Borrowers against and on account of the
Obligations irrespective of whether (a) the Lenders shall have made any demand
under this Agreement or any of the other Loan Documents or (b) the Agent shall
have declared any or all of the Obligations to be due and payable as permitted
by Section 11.2 and although such Obligations shall be contingent or unmatured.

SECTION 13.4       Governing Law.  This Agreement, the Note and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in  accordance
with the laws of the State of Maryland, without reference to the conflicts or
choice of law principles thereof.

SECTION 13.5       Consent to Jurisdiction.  The Borrowers hereby irrevocably consent to
the personal jurisdiction of the state and federal courts located in the State
of Maryland, in any 

 62
 

action,
claim or other proceeding arising out of any dispute in connection with this
Agreement, the  Note and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. 
Each Borrower hereby irrevocably consents to the service of a summons
and complaint and other process in any action, claim or proceeding brought by
the Agent or any Lender in connection with this Agreement, the Note or the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 13.1.  Nothing in this Section 13.5 shall affect the
right of the Agent or any Lender to serve legal process in any other manner permitted
by Applicable Law or affect the right of the Agent or any Lender to bring any
action or proceeding against any Borrower or its properties in the courts of
any other jurisdictions.

SECTION 13.6       Binding Arbitration; Waiver of Jury
Trial.

(a)           Binding
Arbitration.  Upon demand of any
party, whether made before or after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or relating to the
Note or any other Loan Document (“Disputes”), between or among parties to the
Note or any other Loan Document shall be resolved by binding arbitration as
provided herein.  Institution of a
judicial proceeding by a party does not waive the right of that party to demand
arbitration hereunder.  Disputes may
include, without limitation, tort claims, counterclaims, claims brought as
class actions, claims arising from Loan Documents executed in the future,
disputes as to whether a matter is subject to arbitration, or claims concerning any aspect of the past,
present or future relationships arising out of or connected with the Loan
Documents.  Arbitration shall be
conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association and
Title 9 of the U.S. Code.  All
arbitration hearings shall be conducted in Baltimore, Maryland.  The expedited procedures set forth in Rule
51, et  seq. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000.  All
applicable statutes of limitation shall apply to any Dispute.  A judgment upon the award may be entered in
any court having jurisdiction. 
Notwithstanding anything foregoing to the contrary, any arbitration proceeding
demanded hereunder shall begin within ninety (90) days after such demand
thereof and shall be concluded within one-hundred and twenty (120) days after
such demand.  These time limitations may
not be extended unless a party hereto shows cause for extension and then such
extension shall not exceed a total of sixty (60) days.  The panel from which all arbitrators are
selected shall be comprised of licensed attorneys.  The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general jurisdiction,
state or federal, of the state where the hearing will be conducted.  The parties hereto do not waive any
applicable Federal or state substantive law except as provided herein.  Notwithstanding the foregoing, this paragraph
shall not apply to any Hedging Agreement that is a Loan Document.

(b)           Jury
Trial. THE AGENT, EACH LENDER AND THE BORROWERS
HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

 63
 

(c)           Preservation
of Certain Remedies.  Notwithstanding
the preceding binding arbitration provisions, the parties hereto and the other
Loan Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone, in conjunction with or during a
Dispute.  Each such Person shall have and
hereby reserves the right to proceed in any court of proper jurisdiction or by
self help to exercise or prosecute the following remedies:  (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale granted in
the Loan Documents or under applicable law or by judicial foreclosure and sale,
(ii) all rights of self help including peaceful occupation of property and
collection of rents, set off, and peaceful possession of property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment.  Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.

SECTION 13.7       Reversal of Payments.  To the extent that any Borrower makes a
payment or payments to the Agent for the ratable benefit of the Lenders which
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment repaid,
the Obligations or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been received by
the Agent.

SECTION 13.8       Injunctive
Relief; Punitive Damages.

(a)           Each  Borrower recognizes that, if any Borrower
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to
the Lenders. Therefore, each Borrower agrees that the Lenders, at the Lenders’
option, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.

(b)           The
Agent, each Lender and each Borrower (on behalf of itself and its Subsidiaries)
hereby agree that no such Person shall have a remedy of punitive or exemplary
damages against any other party to a Loan Document and each such Person hereby
waives any right or claim to punitive or exemplary damages that they may now
have or may arise in the future in connection with any Dispute, whether such
Dispute is resolved through arbitration or judicially.

(c)           The
parties agree that they shall not have a remedy of punitive or exemplary
damages against any other party in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.

SECTION 13.9       Accounting Matters.  All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by the Borrowers or
any Subsidiary thereof to determine compliance with any covenant contained
herein, shall, except as otherwise expressly 

 64
 

contemplated
hereby or unless there is an express written direction by the Agent to the
contrary agreed to by the Borrowers, be performed in accordance with GAAP as in
effect on the Closing Date.  In the event
that changes in GAAP shall be mandated by the Financial Accounting Standards
Board, or any similar accounting body of comparable standing, or shall be
recommended by the Borrowers’ certified public accountants, to the extent that
such changes would modify such accounting terms or the interpretation or
computation thereof, such changes shall be followed in defining such accounting
terms only from and after the date the Borrowers and the Lenders shall have
amended this Agreement to the extent necessary to reflect any such changes in
the financial covenants and other terms and conditions of this Agreement.

SECTION 13.10     Successors
and Assigns; Participations.

(a)           Benefit
of Agreement.  This Agreement shall
be binding upon and inure to the benefit of the Borrowers, the Agent and the
Lenders, all future holders of the Note, and their respective successors and
assigns, except that the Borrowers shall not assign or transfer any of their
rights or obligations under this Agreement without the prior written consent of
each Lender.

(b)           Assignment
by Lenders.  Each Lender may, with
the consent of the Borrowers (so long as no Default or Event of Default has
occurred and is continuing), which consent shall not be unreasonably withheld,
and with the consent of the Agent and each of the other Lenders, assign to one
or more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement; provided that:

(i)          each
such assignment shall be of a constant, and not a varying, percentage of all of
the assigning Lender’s rights and obligations under this Agreement;

(ii)         if
less than all of the assigning Lender’s Commitment is to be assigned, the
Commitment so assigned shall not be less than $5,000,000;

(iii)        the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance in the
form of Exhibit D attached hereto (an “Assignment and Acceptance”);

(iv)       such
assignment shall not, without the consent of the Borrowers, require the
Borrowers to file a registration statement with the Securities and Exchange
Commission or apply to or qualify the Loans under the blue sky laws of any
state; and

(v)        the
assigning Lender shall pay to the Agent an assignment fee of $3,000 upon the
execution by such Lender of the Assignment and Acceptance; provided that
no such fee shall be payable upon any assignment by a Lender to an Affiliate
thereof.

Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof, (A)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereby 

 65
 

and
(B) the Lender thereunder shall, to the extent provided in such assignment, be
released from its obligations under this Agreement.

(c)           Rights
and Duties Upon Assignment.  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 set forth in such Assignment and Acceptance.

(d)           Register.  The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the “Register”).  The entries in the Register shall be
conclusive, in the absence of manifest error, and 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 or any Lender at any reasonable time and from time
to time upon reasonable prior notice.

(e)           Procedure.  Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with the written consent to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form
of Exhibit D:

(i)          accept
such Assignment and Acceptance;

(ii)         record
the information contained therein in the Register;

(iii)        give
prompt written notice thereof to the Lenders and the Borrowers; and

(iv)       promptly
deliver a copy of such Assignment and Acceptance to the Borrowers.

(f)            Participations.  Each Lender may sell participations to one or
more banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Extensions of Credit); provided that:

(i)          each
such participation shall be in an amount not less than $5,000,000;

(ii)         such
Lender’s obligations under this Agreement (including, without limitation, its
Commitment) shall remain unchanged;

(iii)        such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;

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(iv)       such Lender
shall remain the “Lender” for all purposes of this Agreement;

(v)        the
Borrowers, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement;

(vi)       such
Lender shall not give such participant the right to approve any waivers,
amendments or other modifications to this Agreement or any other Loan Document
other than waivers, amendments or modifications which would reduce the
principal of or the interest rate on any Loan or Reimbursement Obligation,
extend the term or increase the amount of the Commitment, reduce the amount of
any fees to which such participant is entitled, or extend any scheduled payment
date for principal of any Loan; and

(vii)      any
such disposition shall not, without the consent of the Borrowers, require the
Borrowers to file a registration statement with the Securities and Exchange
Commission or apply to or qualify the Loans under the blue sky laws of any
state.

(g)           Disclosure of Information; Confidentiality.  The
Agent and the Lenders shall hold all non-public information with respect to the
Borrowers obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided,
that the Agent may disclose information relating to this Agreement (and not the
Borrowers’ business generally) to Gold Sheets and other similar bank
trade publications, such information to consist of deal terms and other
information customarily found in such publications and provided  further,
that the Agent and the Lenders may disclose any such information to the extent
such disclosure is required by law or requested by any regulatory
authority.  Any Lender may, in connection
with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 13.10, disclose to the assignee,
participant, proposed assignee or proposed participant, any information
relating to the Borrowers furnished to such Lender by or on behalf of the
Borrowers; provided, that prior to any such disclosure, each such
assignee, proposed assignee, participant or proposed participant shall agree
with the Borrowers or such Lender for the express benefit of the Borrowers to
preserve the confidentiality of any confidential information relating to the
Borrowers received from such Lender.

(h)           Certain
Pledges or Assignments.  Nothing
herein shall prohibit any Lender from pledging or assigning the Note to any
Federal Reserve Bank in accordance with Applicable Law.

SECTION 13.11     Amendments, Waivers and Consents.  Except as set forth below, any term,
covenant, agreement or condition of this Agreement or any of the other Loan
Documents may be amended or waived by the Lenders, and any consent given by the
Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Agent with the consent of the
Required Lenders) and delivered to the Agent and, in the case of an amendment,
signed by the Borrowers; provided, that no amendment, waiver or consent
shall (a) increase the amount or extend the time of the obligation of the
Lenders to make Loans or issue or participate in Letters of Credit (including
without limitation pursuant to Section 2.7), (b) extend 

 67
 

the
originally scheduled time or times of payment of the principal of any Loan or
Reimbursement Obligation or the time or times of payment of interest on any
Loan or Reimbursement Obligation, (c) reduce the rate of interest or fees
payable on any Loan or Reimbursement Obligation, (d) reduce the principal
amount of any Loan or Reimbursement Obligation, (e) permit any subordination of
the principal or interest on any Loan or Reimbursement Obligation, (f) permit
any assignment (other than as specifically permitted or contemplated in this
Agreement) of any of the Borrowers’ rights and obligations hereunder, or (g)
amend the provisions of this Section 13.11 or the definition of Required
Lenders, without the prior written consent of each Lender.  In addition, no amendment, waiver or consent
of or to the provisions of (a) Article XII shall be made without the written
consent of the Agent and (b) Article III shall be made without the written
consent of the Issuing Lender.

No course of dealing between the any Lender and the
Borrowers shall be effective to amend, modify, change any provision of this
Agreement or the other Loan Documents. 
The Lenders shall have the right at all times to enforce the provisions
of this Agreement and the other Loan Documents in strict accordance with the
provisions hereof and thereof, notwithstanding any conduct or custom on the
part of the Lenders in refraining from doing so at any time or times.  The failure of the Lenders at any time or
times to enforce their rights under such provisions, strictly in accordance
with the same, shall not be construed as having created a custom in any way or
manner contrary to this Agreement or the other Loan Documents or as having, in
any way or manner, modified or waived the same. 
This Agreement and the other Loan Documents may not be modified or
amended except by an agreement in writing signed by the Lender and the
Borrowers.

SECTION 13.12     Performance of Duties.  The Borrowers’ obligations under this
Agreement and each of the Loan Documents shall be performed by the Borrowers at
their sole cost and expense.

SECTION 13.13     All Powers Coupled with Interest.  All powers of attorney and other
authorizations granted to the Lenders, the Agent and any Persons designated by
the Agent or any Lender pursuant to any provisions of this Agreement or any of
the other Loan Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Obligations remain unpaid or unsatisfied or
the Credit Facility has not been terminated.

SECTION 13.14     Survival of Indemnities.  Notwithstanding any termination of this
Agreement, the indemnities to which the Agent and the Lenders are entitled
under the provisions of this Article XIII and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising after such
termination as well as before.

SECTION 13.15     Titles and Captions.  Titles and captions of Articles, Sections and
subsections in this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.

SECTION 13.16     Severability of Provisions.  Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall,
as to such 

 68
 

jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining
provisions hereof or thereof or affecting the validity or enforceability of
such provision in any other jurisdiction.

SECTION 13.17     Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which when
taken together shall constitute one and the same agreement.

SECTION 13.18     Term of Agreement.  This Agreement shall remain in effect from
the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full.  No termination of this Agreement shall affect
the rights and obligations of the parties hereto arising prior to such termination.

SECTION 13.19     Inconsistencies
with Other Documents; Independent Effect of Covenants.

(a)           In the event there is a conflict or
inconsistency between this Agreement and any other Loan Document, the terms of
this Agreement shall control.

(b)           Each
Borrower expressly acknowledges and agrees that each covenant contained in
Articles VIII, IX, or X hereof shall be given independent effect.  Accordingly, the Borrowers shall not engage
in any transaction or other act otherwise permitted under any covenant contained
in Articles VIII, IX, or X if, before or after giving effect to such
transaction or act, the Borrowers shall or would be in breach of any other
covenant contained in Articles VIII, IX, or X.

SECTION 13.20     Joint
and Several Liability, Etc.  The
Borrowers shall be jointly and severally liable for the payment and performance
of the Obligations.  The Agent and the
Lenders may, without notice to or consent of any of the Borrowers and with or
without consideration, release, discharge, compromise or settle with, waive,
grant indulgences to, proceed against or otherwise deal with, any of the
Borrowers without in any way affecting, limiting, modifying, discharging or
releasing any of the obligations and liabilities under this Agreement or any
other Loan Documents of the other Borrowers. 
Each of the Borrowers consents and agrees that (a) the Agent shall be
under no obligation to marshall any assets in favor of such Borrower or against
or in payment of any or all of the obligations and liabilities of such Borrower
under this Agreement or any of the other Loan Documents, (b) any rights such
Borrower may have against the other Borrowers for contribution, exoneration
from payment or otherwise, in respect of any amounts paid by such Borrower
pursuant to any of the Loan Documents or which continue to be owing pursuant to
any of the Loan Documents, shall be postponed until the Obligations have been
indefeasibly paid in full and no commitments therefor are outstanding and (c)
the Agent or the Lenders, as applicable, may enforce and collect the
obligations and liabilities of such Borrower hereunder or under the other Loan
Documents irrespective of any attempt, pursuit, enforcement or exhaustion of
any rights and remedies the Agent or the Lenders may at any time have to
collect the obligations and liabilities hereunder or under the other Loan
Documents of the other Borrowers.

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ARTICLE XIV

GUARANTY

SECTION 14.1       Borrowers’
Guaranty of the Obligations.  Each
Borrower acknowledges that it is jointly and severally liable for all of the
Obligations and, as a result hereby, unconditionally guarantees the full and
prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all Obligations of
every kind and nature of the other Borrowers to the Lenders or the Agent under
the Loan Documents, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, joint or several, now or hereafter existing,
or due or to become due, and howsoever owned, held or acquired.  Each Borrower agrees that if this guaranty,
or any liens securing this guaranty, would, but for the application of this
sentence, be unenforceable under applicable law, this guaranty and each such
lien shall be valid and enforceable to the maximum extent that would not cause this
guaranty or such lien to be unenforceable under applicable law, and this
guaranty and such lien shall automatically be deemed to have been amended
accordingly at all relevant times.

Each
Borrower hereby agrees that its obligations under this guaranty shall be
unconditional, irrespective of (a) the validity or enforceability of the
Obligations or any part thereof, or of any promissory note or other document
evidencing all or any part of the Obligations, (b) the absence of any
attempt to collect the Obligations from any Borrower or other action to enforce
the same, (c) the waiver or consent by the Agent or any Lender with
respect to any provision of any agreement, instrument or document evidencing or
securing all or any part of the Obligations, or any other agreement, instrument
or document now or hereafter executed by any Borrower and delivered to the
Agent or the Lenders, (d) the failure by the Agent or the Lenders to take
any steps to perfect and maintain a security interest in, or to preserve its rights
to, any collateral now or hereafter given for the Obligations, (e) the
Lenders’ election, in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code, (f) any
borrowing or grant of a security interest by any Borrower as
debtor-in-possession under Section 364 of the Bankruptcy Code,
(g) the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of the Agent’s or the Lenders’ claim(s) for repayment of the
Obligations, or (h) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of any Borrower.

Each
Borrower hereby waives, to the fullest extent permitted by applicable law,
diligence, presentment, demand of payment, filing of claims with a court in the
event of receivership or bankruptcy of any Borrower, protest or notice with
respect to the Obligations (other than notices required to be given pursuant to
the terms of this Agreement or any of the other Loan Documents), and all
demands whatsoever, and covenants that this guaranty will not be discharged,
except by complete and irrevocable payment and performance of the Obligations
(other than contingent and unasserted indemnification obligations).  No notice to any Borrower or any other party
(other than notices required to be given pursuant to the terms of this
Agreement or any of the other Loan Documents) shall be required for the Agent
or the Lenders to make demand 

 70
 

hereunder.  Such demand shall constitute a mature and
liquidated claim against any Borrower. 
Upon the occurrence and continuance of any Event of Default, the Agent
and the Lenders may, in their sole discretion, proceed directly and at once,
without notice, against any one or more of the Borrowers to collect and recover
the full amount of any portion of the Obligations, without first proceeding
against the other Borrowers, any other person, firm, corporation, or any
security or collateral for the Obligations. 
To the extent not expressly provided for herein, the Agent and the Lenders
shall have the exclusive right to determine the application of all payments
made and credits, if any, given by or from any Borrower, any other person, firm
or corporation, or any security or collateral for the Obligations, on account
of the Obligations.

At
any time after and during the continuance of an Event of Default, the Agent and
the Lenders may, in their sole discretion, without notice to any Borrower and
regardless of the acceptance of any collateral for the payment hereof,
appropriate and apply toward payment of the Obligations (i) any
indebtedness due or to become due from such Borrower and (ii) any moneys,
credits or other property belonging to such Borrower at any time held by or
coming into the possession of the Agent, any Lender or any of their Affiliates,
whether for deposit or otherwise.  The
Agent and the Lenders agree promptly to notify the Borrowers in writing after
any such set-off and application made by such Person.

[SIGNATURES ON NEXT PAGE]

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

	
  WITNESS:

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO TECHNOLOGIES INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO SERVICE SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO COMMUNICATIONS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRELESS SOLUTIONS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  

 

 72
 

 

	
  

  	
   

  	
  TESSCO BUSINESS SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRELESS SOLUTIONS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO SUPPLY CHAIN SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO PRODUCT SOLUTIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO INTEGRATED SOLUTIONS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  TESSCO Product Solutions, LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
   

  	
      By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
      Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
      President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GW SERVICE SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Robert B.
  Barnhill, Jr.

  	
   

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
  President

  
									

 

 73
 

 

	
  

  	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Timothy A.
  Knabe

  	
   

  
	
   

  	
   

  	
  Timothy A. Knabe

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Gregory
  Farno

  	
   

  
	
   

  	
   

  	
  Gregory Farno

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/ Gregory
  Farno

  	
   

  
	
   

  	
   

  	
  Gregory Farno

  
	
   

  	
   

  	
  Senior Vice President

  

 

 74

Schedule 1

(Lenders and Commitments)

	
  LENDER

  	
   

  	
  COMMITMENT

  PERCENTAGE

  	
   

  	
  COMMITMENT

  	
   

  
	
  SunTrust
  Bank 

  120 East Baltimore Street 

  Baltimore, Maryland 21202 

  Attn: Gregory Farno, Sr. Vice President 

  Telephone No. 410-986-1673 

  Telecopy No. 410-986-1927

  	
   

  	
  70

  	
  %

  	
  $

  	
  35,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National
  Association 

  7 St. Paul Street, 2nd Floor 

  Baltimore, Maryland 21202 

  Attn: Lucy C. Campbell, Vice President 

  Telephone No.: 410-332-5242 

  Telecopy No. 410-539-0136

  	
   

  	
  30

  	
  %

  	
  $

  	
  15,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]