Document:

EX-10.1

Exhibit 10.1

 

CREDIT AGREEMENT

Dated as of March 11, 2009

by and between

GLOBECOMM SYSTEMS INC.

and

CITIBANK, N.A.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	SECTION 1.01. Definitions
	 	 	1	 
	SECTION 1.02. Accounting Terms
	 	 	15	 
	 
	 	 	 	 
	ARTICLE II LOANS
	 	 	15	 
	SECTION 2.01. Revolving Credit Loans
	 	 	15	 
	SECTION 2.02. Revolving Credit Note
	 	 	16	 
	SECTION 2.03. Term Loans
	 	 	16	 
	SECTION 2.04. Term Loan Notes
	 	 	17	 
	SECTION 2.05. Letters of Credit
	 	 	17	 
	 
	 	 	 	 
	ARTICLE III INTEREST RATE; FEES AND PAYMENTS; USE OF PROCEEDS
	 	 	20	 
	SECTION 3.01. Interest Rate
	 	 	20	 
	SECTION 3.02. Use of Proceeds
	 	 	22	 
	SECTION 3.03. Prepayments
	 	 	22	 
	SECTION 3.04. Fees
	 	 	23	 
	SECTION 3.05. Inability to Determine Interest Rate
	 	 	23	 
	SECTION 3.06. Illegality
	 	 	24	 
	SECTION 3.07. Increased Costs
	 	 	24	 
	SECTION 3.08. Indemnity
	 	 	25	 
	SECTION 3.09. Taxes
	 	 	25	 
	SECTION 3.10. Payments
	 	 	26	 
	SECTION 3.11. Disbursement of Loans
	 	 	26	 
	SECTION 3.12. Manner of Payment
	 	 	26	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	26	 
	SECTION 4.01. Organization, Corporate Powers, etc. 
	 	 	26	 
	SECTION 4.02. Authorization of Borrowing, Enforceable Obligations
	 	 	27	 

ii

 

	 	 	 	 	 
	SECTION 4.03. Financial Condition
	 	 	27	 
	SECTION 4.04. Taxes
	 	 	28	 
	SECTION 4.05. Title to Properties
	 	 	28	 
	SECTION 4.06. Litigation
	 	 	28	 
	SECTION 4.07. Agreements
	 	 	28	 
	SECTION 4.08. Compliance with ERISA
	 	 	28	 
	SECTION 4.09. Federal Reserve Regulations; Use of Proceeds
	 	 	29	 
	SECTION 4.10. Approval
	 	 	29	 
	SECTION 4.11. Subsidiaries and Affiliates
	 	 	29	 
	SECTION 4.12. Hazardous Materials
	 	 	29	 
	SECTION 4.13. Investment Company Act
	 	 	30	 
	SECTION 4.14. No Default
	 	 	30	 
	SECTION 4.15. Material Contracts
	 	 	30	 
	SECTION 4.16. Permits and Licenses
	 	 	30	 
	SECTION 4.17. Compliance with Law
	 	 	30	 
	SECTION 4.18. Disclosure
	 	 	30	 
	SECTION 4.19. Security Documents
	 	 	30	 
	SECTION 4.20. Globecomm UK
	 	 	30	 
	 
	 	 	 	 
	ARTICLE V CONDITIONS OF LENDING
	 	 	31	 
	SECTION 5.01. Conditions To Initial Loans
	 	 	31	 
	SECTION 5.02. Conditions to Term Loans:
	 	 	32	 
	SECTION 5.03. Conditions to All Loans and Letters of Credit
	 	 	32	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	33	 
	SECTION 6.01. Corporate Existence, Properties, etc
	 	 	33	 
	SECTION 6.02. Payment of Indebtedness, Taxes, etc.
	 	 	34	 
	SECTION 6.03. Financial Statements, Reports, etc. Furnish to the Bank

	 	 	34	 
	SECTION 6.04. Access to Premises and Records
	 	 	35	 
	SECTION 6.05. Notice of Adverse Change
	 	 	36	 
	SECTION 6.06. Notice of Default
	 	 	36	 
	SECTION 6.07. Notice of Litigation
	 	 	36	 

iii

 

	 	 	 	 	 
	SECTION 6.08. ERISA
	 	 	36	 
	SECTION 6.09. Compliance with Applicable Laws
	 	 	36	 
	SECTION 6.10. Subsidiaries
	 	 	37	 
	SECTION 6.11. Default in Other Agreements
	 	 	37	 
	SECTION 6.12. Operating Accounts
	 	 	37	 
	SECTION 6.13. Environmental Laws
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	38	 
	SECTION 7.01. Liens
	 	 	38	 
	SECTION 7.02. Indebtedness
	 	 	39	 
	SECTION 7.03. Guaranties
	 	 	39	 
	SECTION 7.04. Sale of Assets
	 	 	40	 
	SECTION 7.05. Sale of Notes
	 	 	40	 
	SECTION 7.06. Loans and Investments
	 	 	40	 
	SECTION 7.07. Nature of Business
	 	 	40	 
	SECTION 7.08. Sale and Leaseback
	 	 	40	 
	SECTION 7.09. Federal Reserve Regulations
	 	 	40	 
	SECTION 7.10. Accounting Policies and Procedures
	 	 	40	 
	SECTION 7.11. Hazardous Materials
	 	 	40	 
	SECTION 7.12. Limitations on Fundamental Changes
	 	 	41	 
	SECTION 7.13. Financial Covenants
	 	 	41	 
	SECTION 7.14. Subordinated Debt
	 	 	41	 
	SECTION 7.15. Dividends
	 	 	41	 
	SECTION 7.16. Transactions with Affiliates
	 	 	42	 
	SECTION 7.17. Impairment of Security Interest
	 	 	42	 
	SECTION 7.18. Negative Pledge
	 	 	42	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT
	 	 	42	 
	SECTION 8.01. Events of Default
	 	 	42	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	44	 
	SECTION 9.01. Notices
	 	 	44	 
	SECTION 9.02. Survival of Agreement
	 	 	45	 

iv

 

	 	 	 	 	 
	SECTION 9.03. Expenses of the Bank
	 	 	46	 
	SECTION 9.04. No Waiver of Rights by the Bank
	 	 	46	 
	SECTION 9.05. Applicable Law
	 	 	46	 
	SECTION 9.06. Submission to Jurisdiction; Jury Waiver
	 	 	46	 
	SECTION 9.07. Extension of Maturity
	 	 	47	 
	SECTION 9.08. Modification of Agreement
	 	 	47	 
	SECTION 9.09. Severability
	 	 	47	 
	SECTION 9.10. Sale of Participations, Assignments
	 	 	47	 
	SECTION 9.11. Reinstatement; Certain Payments
	 	 	48	 
	SECTION 9.12. Right of Setoff
	 	 	48	 
	SECTION 9.13. Counterparts
	 	 	48	 
	SECTION 9.14. Headings
	 	 	48	 
	SECTION 9.15. Construction
	 	 	48	 
	SECTION 9.16. USA PATRIOT Act
	 	 	48	 
	SECTION 9.17. Termination
	 	 	48	 
	SECTION 9.18. Confidentiality
	 	 	48	 

v

 

SCHEDULES

	 	 	 	 	 
	Schedule I

	 	-
	 	Subsidiaries and Affiliates
	Schedule II

	 	-
	 	Liens
	Schedule III

	 	-
	 	Existing Indebtedness
	Schedule IV

	 	-
	 	Existing Guaranties
	Schedule V

	 	-
	 	Existing Letters of Credit
	Schedule VI

	 	-
	 	Litigation, etc.
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Revolving Credit Note
	Exhibit B

	 	-
	 	Form of Term Loan Note
	Exhibit C

	 	-
	 	Form of Guaranty
	Exhibit D

	 	-
	 	Form of Pledge Agreement [re: Non-Domestic Subsidiary]
	Exhibit E

	 	-
	 	Form of Security Agreement
	Exhibit F

	 	-
	 	Form of Opinion of Counsel

vi

 

     CREDIT AGREEMENT dated as of March 11, 2009, by and between GLOBECOMM SYSTEMS INC., a Delaware
corporation (the “Company”) and CITIBANK N.A., a national banking association (the “Bank”).

RECITALS

     WHEREAS, the Bank previously made a line of credit available to the Company pursuant to a Line
of Credit Letter dated December 31, 2007 (as amended, the “Prior Agreement”);

     WHEREAS, the Company has requested that the Prior Agreement be amended and restated as
hereinafter provided;

     WHEREAS, the Bank is willing to agree to such amendment and restatement and to extend credit
to the Company on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
Company and the Bank hereby agree that the Prior Agreement shall be, and hereby is, amended and
restated in its entirety and the Company and the Bank hereby further agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01. Definitions. As used herein, the following words and terms shall have
the following meanings:

     “Acquisition” means the acquisition of (i) a controlling equity interest in another Person
(including the purchase of an option, warrant or convertible or similar type security to acquire
such a controlling interest at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity interest or upon exercise of an option or warrant for, or conversion of
securities into, such equity interest, or (ii) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of business conducted by such
Person.

     “Affiliate” shall mean with respect to any Person, any corporation, partnership, limited
liability company, limited liability partnership, joint venture, trust or unincorporated
organization which, directly or indirectly, controls or is controlled by or is under common control
with such Person. For the purpose of this definition, “control” of a Person shall mean the power,
direct or indirect, to direct or cause the direction of the management or policies of such Person
whether through the ownership of voting securities by contract or otherwise; provided that, in any
event, any person who owns directly or indirectly 15% or more of the securities having ordinary
voting power for the election of directors or other governing body of a corporation or 10% or more
of the membership or other ownership interest of any Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or other Person.

 

     “Aggregate Letters of Credit Outstanding” shall mean on the date of determination thereof, the
sum of (a) the aggregate maximum amount which is available or available in the future to be drawn
under all outstanding Letters of Credit under this Agreement plus (b) the aggregate amount
of any payments made by the Bank under any Letter of Credit issued pursuant to this Agreement that
has not been reimbursed by the Company or the relevant Letter of Credit Party.

     “Aggregate Outstandings” shall mean, on the date of determination thereof, the sum of (i) the
Aggregate Letters of Credit Outstanding plus (ii) outstanding principal amount of the Revolving
Credit Loans plus (iii) the outstanding principal amount of the Term Loans.

     “Agreement” shall mean this Credit Agreement dated as of March 11, 2009, as it may hereafter
be amended, restated, supplemented or otherwise modified from time to time in accordance with the
terms hereof.

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

     “Alternate Base Rate Loans” shall mean Loans at such times as they are being made and/or
maintained at a rate of interest based on the Alternate Base Rate.

     “Applicable Margin” shall mean (a) with respect to a Libor Rate Loan, the percentage set forth
below under the heading “LIBOR Margin” opposite the applicable ratio, and (b) with respect to an
Alternate Base Rate Loan, the percentage set forth below under the heading “ABR Margin” opposite
the applicable ratio.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ABR	 	MARGIN	 	LIBOR	 	MARGIN
	 	 	Revolving	 	 	 	 	 	Revolving	 	 
	 	 	Credit Loans	 	Term Loans	 	Credit Loans	 	 
	 	 	(360 day	 	(360 day	 	(360 day	 	Term Loans
	Leverage Ratio	 	basis)	 	basis)	 	basis)	 	(360 day basis)
	Less than or equal to
0.25:1.00
	 	 	0.00	%	 	 	0.00	%	 	 	1.75	%	 	 	2.00	%
	Greater than 0.25:1.00 but
less than or equal to
0.50:1.00
	 	 	0.00	%	 	 	0.00	%	 	 	2.00	%	 	 	2.25	%
	Greater than 0.50:1.00 but
less than or equal to
0.75:1.00
	 	 	0.00	%	 	 	0.25	%	 	 	2.25	%	 	 	2.50	%
	Greater than 0.75:1.00
	 	 	0.25	%	 	 	0.50	%	 	 	2.50	%	 	 	2.75	%

2

 

Notwithstanding the foregoing, during the period commencing on the Closing Date and ending on the
date of reset of the Applicable Margin in accordance with this paragraph, the ABR Margin and the
LIBOR Margin shall be determined based upon a Leverage Ratio of 0.27:1.00. The Applicable Margin
will be set or reset with respect to each Loan on the date which is five (5) Business Days
following the date of receipt by the Administrative Agent of the financial statements referred to
in Section 6.03(a) and Section 6.03(b) together with a certificate of the Financial Officer of the
Company certifying the Leverage Ratio and setting forth the calculation thereof in detail;
provided, however, (a) the Applicable Margin will first be reset based on the financial statements
for the fiscal quarter ending March 31, 2009, and (b) if any such financial statement and
certificate are not received by the Administrative Agent within the time period required pursuant
to Section 6.03(a) or Section 6.03(b), as the case may be, the Applicable Margin will be set or
reset, unless the rate of interest specified in Section 3.01(c) is in effect, based on a Leverage
Ratio of greater than 0.75:1.00 from the date such financial statements and certificate were due
until the date which is five (5) Business Days following the receipt by the Administrative Agent of
such financial statements and certificate, and provided, further, that the Bank shall not in any
way be deemed to have waived any Default or Event of Default, including without limitation, an
Event of Default resulting from the failure of the Company to comply with Section 7.13 of this
Agreement, or any rights or remedies hereunder or under any other Loan Document in connection with
the foregoing proviso. During the occurrence and continuance of a Default or an Event of Default,
no downward adjustment, and only upward adjustments, shall be made to the Applicable Margin.

     “Borrowing Date” shall mean, with respect to any Loan, the date on which such Loan is
disbursed to the Company.

     “Business Day” shall mean any day that is not a Saturday, Sunday or legal holiday, on which
banks in New York City, New York are not required or authorized by law or other governmental action
to close; provided that, when used in connection with a Libor Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar deposits in the London
inter bank market.

     “Capital Lease” shall mean (i) any lease of property, real or personal, if the then present
value of the minimum rental commitment thereunder should, in accordance with Generally Accepted
Accounting Principles, be capitalized on the balance sheet of the lessee, and (ii) any other such
lease the obligations of which are required to be capitalized on the balance sheet of the lessee.

     “Change of Control” shall mean any event which results in (i) any Person, or two or more
Persons acting in concert, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of securities of the Company (or other securities convertible into such securities)
representing 50% or more of the combined voting power of all securities of the Company entitled to
vote in the election of directors; or (ii) the individuals who, as of the date hereof, constitute
the Board of Directors of the Company, together with those who first become directors subsequent to
such date, provided the recommendation, election or nomination for election to the Board of
Directors of such subsequent directors was approved by a vote of at least a majority of the
directors then still in office who were either directors as of the date hereof

3

 

or who recommendation, election or nomination for election was previously so approved, ceasing
for any reason to constitute a majority of the members of the Board of Directors of the Company.

     “Chief Financial Officer” shall mean the Chief Financial Officer of the Company.

     “Closing Date” shall mean March 11, 2009.

     “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to
time.

     “Commercial Letter of Credit” shall mean any commercial letter of credit issued for the
account of a Person for the purpose of providing the primary payment mechanism in connection with
the purchase of materials, goods, or services by such Person.

     “Commercial Letter of Credit Commitment” shall mean the obligation of the Bank to issue
Commercial Letters of Credit on the terms herein described in an aggregate amount up to
$20,000,000.

     “Commitments” shall mean, collectively, the Revolving Credit Commitment, the Standby Letter of
Credit Commitment, the Commercial Letter of Credit Commitment and the Term Loan Commitment.

     “Consolidated” shall mean, as applied to any financial or accounting term, such term
determined on a consolidated basis in accordance with Generally Accepted Accounting Principles for
the Company and its Subsidiaries.

     “Consolidated Capital Base” shall mean, on a Consolidated basis for the Company and its
Subsidiaries, the sum of (i) shareholders equity, as reflected on the Consolidated balance sheet of
the Company and its Subsidiaries plus (ii) Subordinated Debt minus the sum of (x)
intangible assets, (y) items recorded as “due from” shareholders, employees, or affiliates of the
Company, and (z) investments in affiliates other than the Guarantors, all as determined in
accordance with Generally Accepted Accounting Principles, applied on a consistent basis.

     “Consolidated Current Portion of Long Term Debt” shall mean for the Company and its
Subsidiaries on a Consolidated basis, current portion of long term debt as reflected on the
Consolidated balance sheet of the Company and its Subsidiaries as determined in accordance with
Generally Accepted Accounting Principles, applied on a consistent basis.

     “Consolidated Debt Service Coverage Ratio” shall mean, on any date of determination, the ratio
of (a) Consolidated EBITDA to (b) the sum of (i) the Consolidated Current Portion of Long Term Debt
plus (ii) Consolidated Interest Expense. All of the foregoing categories shall be determined on a
Consolidated basis for the Company and its Subsidiaries in accordance with Generally Accepted
Accounting Principles applied on a consistent basis and shall be calculated (without duplication)
with respect to the four fiscal quarters ending on or most recently ended prior to the date of
determination thereof.

4

 

     “Consolidated EBITDA” shall mean, on any date of determination, Consolidated Net Income
(whether income or loss) for such period, plus the sum, without duplication, of (a) Consolidated
Interest Expense, (b) depreciation and amortization expenses or charges, and (c) all income taxes
to any government or governmental instrumentality expensed on the Company’s and any Subsidiaries
books (whether paid or accrued), minus all extraordinary or unusual gains, in each case, determined
on a Consolidated basis for the Company and its Subsidiaries in accordance with Generally Accepted
Accounting Principles applied on a consistent basis. All of the foregoing categories shall be
calculated (without duplication) over the four fiscal quarters ending on or most recently ended
prior to the date of determination thereof.

     “Consolidated Interest Expense” shall mean the Consolidated interest expense of the Company
and its Subsidiaries, determined in accordance with Generally Accepted Accounting Principles,
applied on a consistent basis.

     “Consolidated Leverage Ratio” shall mean the ratio of Consolidated Unsubordinated Liabilities
to Consolidated Capital Base.

     “Consolidated Liquidity Ratio” shall mean the ratio of (a) the sum of (i) Consolidated
Unrestricted Cash plus (ii) Consolidated Net Accounts Receivables to (b) the sum of,
without duplication, (i) Consolidated Current Portion of Long Term Debt plus (ii) the
Aggregate Letters of Credit Outstanding, other than cash secured letters of credit, plus
(iii) Consolidated current liabilities, all as determined for the Company and its Subsidiaries on a
Consolidated basis in accordance with Generally Accepted Accounting Principles, applied on a
consistent basis.

     “Consolidated Net Accounts Receivable” shall mean, any and all rights to payment for goods
sold or leased or for services rendered, including accounts, contract rights, general intangibles
and any such right evidenced by chattel paper, instruments or documents, minus any reserves held by
the Company or any its Subsidiaries in connection with such accounts receivable (including reserves
for bad debts), all determined with respect to the Company and its Subsidiaries, on a Consolidated
basis in accordance with Generally Accepted Accounting Principles, applied on a consistent basis.

     “Consolidated Net Income” shall mean, for any period, the net income (or net loss) of the
Company and its Subsidiaries on a Consolidated basis for such period determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.

     “Consolidated Subordinated Indebtedness” shall mean the Consolidated Subordinated Indebtedness
of the Company and its Subsidiaries, determined in accordance with Generally Accepted Accounting
Principles, applied on a consistent basis.

     “Consolidated Total Liabilities” shall mean all of the liabilities of the Company and its
Subsidiaries, on a Consolidated basis, including all items which, in accordance with Generally
Accepted Accounting Principles would be included on the liability side of the balance sheet
determined in accordance with Generally Accepted Accounting Principles applied on a consistent
basis.

     “Consolidated Unrestricted Cash” shall mean all cash and cash equivalents of the Company and
its Subsidiaries, on a Consolidated basis, held at the Bank or any Affiliate of the

5

 

Bank which is not subject to any restriction on usage or subject to any Lien other than a Lien
in favor of the Bank or such Affiliate.

     “Consolidated Unsubordinated Liabilities” shall mean for the Company and its Subsidiaries,
Consolidated Total Liabilities less Consolidated Subordinated Indebtedness, all as
determined in accordance with Generally Accepted Accounting Principles.

     “Debt Issuance” means the incurrence, issuance or sale by the Company or any of its
Subsidiaries of any Indebtedness (including, without limitation, any debt securities, whether in a
public offering of such securities or otherwise), including, without limitation, any Subordinated
Debt, but excluding issuance of any Indebtedness permitted under Section 7.02(a) through
(e).

     “Default” shall mean any event or condition which upon notice, lapse of time, or both, would
constitute an Event of Default.

     “Dollar” and the symbol “$” shall mean lawful money of the United States of America.

     “Domestic Subsidiary” shall mean any Subsidiary of the Company or any Guarantor organized
under the laws of any state of the United States of America.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and
any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefore.

     “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which together
with the Company or any Guarantor would be deemed to be a member of the same “controlled group”
within the meaning of Section 414(b), (c), (m) and (o) of the Code.

     “Equity Issuance” means the issuance, sale or other disposition by the Company or any of its
Subsidiaries of any of its shares of capital stock of (or other ownership or profit interests in)
such Person, and any rights, warrants or options to purchase or acquire any shares of such equity
interest or any other security or instrument representing, convertible into or exchangeable for any
equity interests in the Company or any of its Subsidiaries.

     “Eurocurrency Reserve Requirement” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number one minus the
aggregate (without duplication) of the rates (expressed as a decimal) of reserve requirements in
effect on such day (including, without limitation, basic, supplemental, marginal and emergency
reserves, under any regulations of the Board of Governors of the Federal Reserve System or any
other governmental authority having jurisdiction with respect thereto) as from time to time in
effect, dealing with reserve requirements prescribed for eurocurrency funding (currently referred
to as “eurocurrency liabilities” in Regulation D) maintained by the Bank. For purposes hereof each
Libor Rate Loan shall be deemed to constitute a “eurocurrency liability” as defined in Regulation
D, and subject to the reserve requirements of “Regulation D,” without benefit of credit or
proration, exemptions or offsets which might otherwise be available to the Bank from time to time
under Regulation D.

6

 

     “Event of Default” shall mean any Event of Default set forth in Article VIII.

     “Executive Officer” shall mean any of the Chief Executive Office, the President, or the Chief
Financial Officer of the Company or any Guarantor, as applicable, and their respective successors,
if any, designated by the Board of Directors of the Company or such Guarantor.

     “Existing Letters of Credit” shall mean those certain Letters of Credit described on Schedule
V hereto.

     “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal
fund brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Bank from three Federal fund brokers of
recognized standing selected by the Bank.

     “First-Tier Subsidiary” shall mean, with respect to any Person, a Subsidiary of such Person
that is directly owned by such Person.

     “Fiscal Quarter” shall mean the fiscal quarter of the Company, which will be the fiscal
quarters ending as of March 31, September 30 and December 31 in each year.

     “Fiscal Year” shall mean the fiscal year of the Company, which will be the period commencing
July 1 of any calendar year and ending on June 30 of the following calendar year.

     “Globecomm Maryland” shall mean Globecomm Services Maryland LLC, a Delaware limited liability
company.

     “Governmental Authority” shall mean any nation or government, any state, province, city or
municipal entity or other political subdivision thereof, and any governmental, executive,
legislative, judicial, administrative or regulatory agency, department, authority, instrumentality,
commission, board or similar body, whether federal, state, provincial, territorial, local or
foreign.

     “Guarantors” shall mean, collectively, Globecomm Network Services Corporation, a Delaware
corporation, GSI Properties, Inc., a New York corporation, Globecomm Maryland, Turbo, Cachendo,
LLC, a Delaware limited liability company, and each Domestic Subsidiary which, from time to time,
is required to execute a Guaranty in accordance with Section 6.10.

     “Guaranty” shall mean the Guaranty of All Liability, substantially in the form attached hereto
as Exhibit C, to be executed and delivered on the Closing Date by each Guarantor, as such
Guaranty may be further amended to add any Domestic Subsidiary required to become a guarantor
thereunder pursuant to Section 6.10 hereof , as same may be amended, restated, supplemented or
modified, from time to time.

     “Hazardous Materials” includes, without limit, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related
materials defined in the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials

7

 

Transportation Act, as amended (49) U.S.C. Sections 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 9601, et
seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any
other federal, state or local environmental law, ordinance, rule or regulation.

     “Hedging Agreement” means any interest rate swap, collar, cap, floor or 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 Company or any Guarantor, and any confirming letter
executed pursuant to such agreement, all as amended, supplemented, restated or otherwise modified
from time to time.

     “Indebtedness” shall mean, without duplication, as to any Person (a) indebtedness for borrowed
money; (b) indebtedness for the deferred purchase price of property or services; (c) indebtedness
evidenced by bonds, debentures, notes or other similar instruments; (d) obligations and liabilities
secured by a Lien upon property owned by such Person, whether or not owing by such Person and even
though such Person has not assumed or become liable for the payment thereof; (e) obligations and
liabilities directly or indirectly guaranteed by such Person; (f) obligations or liabilities
created or arising under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person; (g) obligations of such Person as lessee
under Capital Leases; (h) net liabilities of such Person under Hedging Agreements and foreign
currency exchange agreements, as calculated on a basis reasonably satisfactory to the Bank and in
accordance with commercially accepted practice; (i) all obligations of such Person in respect of
bankers’ acceptances; (j) all obligations, contingent or otherwise of such Person as an account
party in respect of letters of credit; and (k) all liabilities which would be reflected on a
balance sheet of such Person, prepared in accordance with Generally Accepted Accounting Principles.

     “Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan, the first day of
each calendar month, commencing April 1, 2009, (b) as to any Libor Rate Loan, at the option of the
Bank, (i) the first day of each calendar month, commencing April 1, 2009, and on the last day of
the Interest Period applicable thereto or (ii) the last day of the Interest Period applicable
thereto, and (c) the date the Term Loan is otherwise paid in full or in part.

     “Interest Period” shall mean with (I) with respect to any Libor Rate Loan:

     (a) initially, the period commencing on the date such Libor Rate Loan is made and ending one,
two or three months thereafter, as selected by the Company in its notice of borrowing as provided
in Section 2.01(b), or in its notice of conversion as provided in Section 3.01(f); and

     (b) thereafter, each period commencing on the last day of the next preceding Interest Period
applicable to such Libor Rate Loan and ending one, two or three months thereafter, as selected by
the Company by irrevocable written notice to the Bank not later than 11:00 a.m. three Business Days
prior to the last day of the then current Interest Period with respect to such Libor Rate Loan;
provided, however, that all of the foregoing provisions relating to Interest Periods are subject to
the following:

     (i) if any Interest Period pertaining to a Libor Rate Loan would otherwise

8

 

end on a day which is not a Business Day, the Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest Period shall end on
the immediately preceding Business Day;

     (ii) if the Company shall fail to give notice as provided in clause (b) above, the
Company shall be deemed to have requested conversion of the affected Libor Rate Loan to an
Alternate Base Rate Loan on the last day of the then current Interest Period with respect
thereto;

     (iii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of a calendar month;

     (iv) no more than four (4) Interest Periods may exist at any one time; and

     (v) the Company shall select Interest Periods so as not to require a payment or
prepayment of any Libor Rate Loan during an Interest Period for such Libor Rate Loan.

     “Letter of Credit” shall mean any Commercial Letter of Credit or Standby Letter of Credit
issued by the Bank for the account of a Letter of Credit Party, or any of them, pursuant to the
terms of this Agreement.

     “Letter of Credit Party” shall mean the Company or any Guarantor.

     “Libor Rate Loan” shall mean Loans at such time as they are made and/or being maintained at a
rate of interest based upon Reserve Adjusted Libor.

     “Lien” shall mean any lien (statutory or otherwise), security interest, mortgage, deed of
trust, pledge, charge, conditional sale, title retention agreement, Capital Lease or other
encumbrance or similar right of others, or any agreement to give any of the foregoing.

     “Loan Documents” shall mean, collectively, this Agreement, the Notes, the Guaranty, Security
Documents, and each other agreement executed in connection with the transactions contemplated
hereby or thereby.

     “Loans” shall mean, collectively, the Revolving Credit Loans and the Term Loans.

     “Material Adverse Effect” shall mean a material adverse effect on (a) the business,
operations, properties or condition (financial or otherwise) of the Company or any Guarantor, or
(b) the ability of the Company or any Guarantor to perform any of their respective material
obligations under any Loan Document to which they are a party.

     “Material Contract” shall mean, with respect to any Person, each contract, instrument or
agreement to which such Person is a party which is not entered into in the ordinary course of such
Person’s business and which is material to the business, operations, properties or condition
(financial or otherwise) of such Person.

9

 

     “Non-Domestic Person” shall mean any Person which is not organized under the laws of any state
of the United States of America.

     “Non-Domestic Subsidiary” shall mean any Subsidiary of the Company or any Guarantor which is
not a Domestic Subsidiary.

     “Notes” shall mean, collectively, the Revolving Credit Note and the Term Loan Notes. “Note”
shall mean the Revolving Credit Note and each Term Loan Note individually.

     “Obligations” shall mean all obligations, liabilities and indebtedness of the Company to the
Bank, whether now existing or hereafter created, absolute or contingent, direct or indirect, due or
not, whether created directly or acquired by assignment or otherwise, arising under or in
connection with this Agreement and the other Loan Documents, including, without limitation, all
obligations, liabilities and indebtedness of the Company with respect to the principal of and
interest on the Loans, reimbursement of Letters of Credit, obligations under any Hedging Agreement
and foreign currency exchange agreements relating to the Indebtedness of the Company arising under
this Agreement, and the payment and performance of all other obligations, liabilities, and
indebtedness of the Company to the Bank hereunder (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of the United States
Bankruptcy Code, and interest that but for the filing of a petition in bankruptcy with respect to
the Company, would accrue on such obligations, whether or not a claim is allowed against the
Company for such interest in the related bankruptcy proceeding), under the Notes or with respect to
the Loans, including without limitation all fees, costs, expenses and indemnity obligations
hereunder. Notwithstanding anything to the contrary, the term Obligations when used in the
Guaranty and the Security Documents shall include each Letter of Credit Party’s reimbursement
obligations with respect to all Letters of Credit.

     “Officer’s Certificate” shall mean a certificate signed by an Executive Officer of the
Company.

     “Payment Office” shall mean the Bank’s office located at 730 Veterans Memorial Highway,
Hauppauge, New York 11788, Attention: Relationship Officer — Globecomm Systems Inc. or such other
office hereinafter designated by the Bank as its Payment Office.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section
4002 of ERISA, or any successor thereto.

     “Permitted Acquisition” shall mean any acquisition (whether by merger or otherwise) by the
Company or any Guarantor of more than 50% of the outstanding capital stock, membership interests,
partnership interests or other similar ownership interests of a Person which is engaged in a line
of business similar to the business (or reasonable extensions thereof) of the Company or such
Guarantor or the purchase of all or substantially all of the assets owned by such Person or the
purchase of a division, business unit or product line of a Person; provided (a) the Bank shall have
received, simultaneously with the closing of such Permitted Acquisition, those documents required
to be delivered pursuant to Section 6.10 hereof; (b) the Bank shall have received evidence
reasonably satisfactory to it that the shares or other interests in the Person, or the assets of
the Person, which is the subject of the Permitted Acquisition are, or will be promptly following
the closing of such Permitted Acquisition, free and clear of all Liens, except Permitted

10

 

Liens, including, without limitation, with respect to the acquisition of shares or other
equity interests, free of any restrictions on transfer other than restrictions applicable to the
sale of securities under federal and state securities laws and regulations generally; (c) the Bank
shall have received not less than five (5) Business Days preceding the closing of such Permitted
Acquisition, the documentation governing the proposed acquisition, including, without limitation,
the purchase agreement with respect thereto, together with such other additional documentation or
information with respect to the proposed acquisition as the Bank may reasonably require; (d) no
Default or Event of Default shall have occurred and be continuing immediately prior to or would
occur after giving effect to the Acquisition on a pro forma basis and the Bank
shall have received projections and pro forma financial statements showing that no Default or Event
of Default shall have occurred after giving effect to such acquisition; (e) the acquisition has
either (i) been approved by the Board of Directors or other governing body of the Person which is
the subject of the acquisition or (ii) been recommended for approval by the Board of Directors or
other governing body of such Person to the shareholders or other members of such Person and
subsequently approved by the shareholders or such members if shareholder or such member approval is
required under applicable law or the by-laws, certificate of incorporation or other governing
instruments of such Person; (f) prior to the closing of any such acquisition, the Company shall
have delivered evidence to the Bank that, on a pro forma basis, (i) the Company
will be in compliance with the financial condition covenants of Section 7.13 hereof upon completion
of such Acquisition; (g) evidence that the Person that is the subject of such Permitted Acquisition
does not have a negative EBITDA, as calculated on a rolling four-quarter basis, (h) the aggregate
purchase price (excluding consideration consisting of the Company’s common stock) paid in
connection with all Permitted Acquisitions during the term of this Agreement shall not exceed the
Term Loan Commitment; and (i) not more than two (2) Permitted Acquisitions may be consummated prior
to the Term Loan Commitment Expiration Date, of which only one (1) Permitted Acquisition may
involve the acquisition of ownership interests of a Non-Domestic Person or the purchase of all or
substantially all of the assets owned by such Non-Domestic Person.

     “Permitted Liens” shall mean those Liens described in Section 7.01 hereof.

     “Permitted Investments” shall mean (i) direct obligations of the United States of America or
any governmental agency thereof, provided that such obligations mature within one year from the
date of acquisition thereof; (ii) dollar denominated certificates of time deposit maturing within
one year issued by any commercial bank organized and existing under the laws of the United Sates or
any state thereof and having aggregate capital and surplus in excess of $1,000,000,000; (iii)
money market mutual funds having assets in excess of $2,500,000,000; or (iv) commercial paper rated
not less than P-1 or A-1 or their equivalent by Moody’s Investor Services, Inc. or Standard &
Poor’s Rating Group, respectively.

     “Person” shall mean any natural person, corporation, limited liability company, limited
liability partnership, business trust, joint venture, association, company, partnership or
Governmental Authority.

     “Plan” shall mean any multi-employer or single-employer plan defined in Section 4001 of ERISA,
which is maintained, or at any time during the five calendar years preceding the date of this
Agreement was maintained for employees of the Company, any Guarantor or an ERISA Affiliate.

11

 

     “Pledge Agreements” shall mean, collectively, those Pledge Agreements, substantially in the
form attached hereto as Exhibit D, which may be hereinafter executed and delivered by the
Company or a Guarantor with respect to any Non-Domestic Subsidiaries in accordance with Section
6.10 hereof, as same may hereafter be amended, restated, supplemented or otherwise modified, from
time to time.

     “Prime Rate” shall mean the rate per annum publicly announced by the Bank from time to time as
its prime rate in effect at its principal office, each change in the Prime Rate shall be effective
on the date such change is announced to become effective.

     “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System
as the same may be amended or supplemented from time to time.

     “Reportable Event” shall mean an event described in Section 4043(b) of ERISA with respect to a
Plan as to which the 30 day notice requirement has not been waived by the PBGC.

     “Reserve Adjusted Libor” shall mean with respect to the Interest Period pertaining to a Libor
Rate Loan, a rate per annum equal to the product (rounded upwards to the next higher 1/16 of one
percent) of (a) the annual rate of interest at which Dollar deposits of an amount equal to the
amount of the portion of the proposed Libor Rate Loan and for a period equal to the Interest Period
applicable thereto which appears on Telerate Page 3750 at approximately 11:00 A.M. (London time) on
the second Business Day prior to the commencement of such Interest Period, multiplied by (b) the
Eurocurrency Reserve Requirement.

     If the rate described in clause (a) above does not appear on the Telerate system on any
applicable interest determination date, then the rate described in clause (a) shall be determined
by reference to the rate for deposits in Dollars of an amount equal to the amount of the proposed
Libor Rate Loan for a period substantially equal to the Interest Period on the Reuters Page “LIBO”
(or such other page as may replace the LIBO Page on that service for the purpose of displaying such
rates), as of 11:00 a.m. (London Time) on the date that is three Business Days prior to the
beginning of such Interest Period.

     If both the Telerate and Reuters system are unavailable, then the rate described in clause (a)
for that date will be determined on the basis of the offered rates for deposits in U.S. dollars for
a period of time comparable to such applicable Interest Period which are offered by four major
banks selected by the Bank in the London interbank market at approximately 11:00 a.m. (London time)
on the day that is three Business Days preceding the first day of such Interest Period. The
principal London office of each of the four major banks will be requested to provide a quotation of
its U.S. dollar deposit offered rate. If at least two such quotations are provided, the rate
described in clause (a) for that date will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate described in clause (a) for that date will be
determined on the basis of the rates quoted for loans in U.S. dollars to leading European banks for
a period of time comparable to such Interest Period offered by major banks in New York, New York at
approximately 11:00 a.m. (New York, New York time) on the day that is three Business Days preceding
the first day of such Interest Period. In the event that the Bank is unable to obtain any such
quotation as provided above, it will be deemed that Reserve Adjusted Libor pursuant to a Libor Rate
Loan cannot be determined.

12

 

     “Revolving Credit Commitment” shall mean the obligation of the Bank to make Revolving Credit
Loans to the Company in an aggregate amount not to exceed $7,500,000.

     “Revolving Credit Commitment Period” shall mean the period from and including the Closing Date
to, but not including, the Revolving Credit Commitment Termination Date or such earlier date as the
Revolving Credit Commitment shall terminate as provided herein.

     “Revolving Credit Commitment Termination Date” shall mean the earlier of (a) the Term Loan
Commitment Expiration Date and (b) March 9, 2010.

     “Revolving Credit Loans” shall have the meaning set forth in Section 2.01 hereof.

     “Revolving Credit Note” shall have the meaning set forth in Section 2.02 hereof.

     “SBLC Rate” shall mean the percentage set forth below opposite the average daily balance of
cash and cash equivalents maintained in money market and certificates of deposit with the Bank
during the applicable fiscal quarter:

	 	 	 	 	 
	Amount of Cash and Cash Equivalents	 	SBLC Rate
	Less than $5,000,000
	 	 	1.75	%
	Greater than or equal to $5,000,000, but less than $35,000,000
	 	 	1.50	%
	Greater than or equal to $35,000,000
	 	 	1.25	%

     “Security Agreements” shall mean, collectively, the General Security Agreement, substantially
in the form attached hereto as Exhibit E, to be executed and delivered on the Closing Date
by the Company and each Guarantor and, thereafter, by each Person who may be required to execute
the same pursuant to Section 6.10 hereof, as same may be amended, restated, supplemented or
otherwise modified, from time to time.

     “Security Documents” shall mean the Security Agreements, the Pledge Agreements, and each other
collateral security document delivered to the Bank hereunder.

     “Solvent” shall mean with respect to the Company or a Guarantor, as applicable, as of the date
of determination thereof that (i) the amount of the “present fair saleable value” of the assets of
such Person (including goodwill) will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise,” as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing determinations of the insolvency of
debtors, (ii) the present fair saleable value of the assets of such Person (including goodwill)
will, as of such date, be greater than the amount that will be required on its debts as such debts
become absolute and matured, (iii) such Person will not have as of such date, an unreasonably small
amount of capital with which to conduct its business, and (iv) such Person will be able to pay its
debts as they mature.

     “Standby Letter of Credit” shall mean any letter of credit issued to support an obligation

13

 

of a Person and which may be drawn on only upon the failure of such Person to perform such
obligation or other contingency.

     “Standby Letter of Credit Commitment” shall mean the obligation of the Bank to issue Standby
Letters of Credit on the terms herein described in an aggregate amount up to $30,000,000.

     “Subordinated Debt” or “Subordinated Indebtedness” shall mean all debt which is subordinated
in right of payment to the prior indefeasible payment in full of the Obligations of the Company
and/or any Guarantor to the Bank, on terms reasonably satisfactory to and approved in writing by
the Bank.

     “Subsidiaries” shall mean with respect to any Person any corporation, association or other
business entity more than 50% of the voting stock or other ownership interest of which is at the
time owned or controlled, directly or indirectly, by such Person or one or more of its Subsidiaries
or a combination thereof.

     “Telerate Page 3750” shall mean the display designated as “Page 3750” on the Associated
Press-Dow Jones Telerate Service (or such other page as may replace Page 3750 on the Associated
Press-Dow Jones Telerate Service or such other service as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying British Bankers’ Association
interest settlement rates for Dollar deposits). Each Reserve Adjusted Libor rate based on the rate
displayed on Telerate Page 3750 shall be subject to corrections, if any, made in such rate and
displayed by the Associated Press-Dow Jones Telerate Service within one hour of the time when such
rate is first displayed by such service.

     “Term Loan” shall have the meaning set forth in Section 2.03.

     “Term Loan Commitment” shall mean the Bank’s obligation to make Term Loans on or prior to the
Term Loan Commitment Expiration Date in an amount not to exceed $25,000,000.

     “Term Loan Commitment Expiration Date” shall mean shall mean the earlier of (a) the Revolving
Credit Commitment Termination Date and (b) March 9, 2010.

     “Term Loan Maturity Date” shall mean, with respect to any Term Loan, a period not to exceed
five years from the applicable Borrowing Date as selected by the Company in its notice of
borrowing.

     “Term Loan Notes” shall have the meaning set forth in Section 2.04.

     “Total Credit Commitment” shall mean $50,000,000.

     “Turbo” shall mean Turbo Logic Associates, LLC, a Delaware limited liability company.

     “Type” shall mean as to any Loan its status as an Alternate Base Rate Loan or a Libor Rate
Loan.

14

 

     “Unfunded Current Liability” of any Plan shall mean the amount, if any, by which the present
value of the accrued benefits under the Plan as of the close of its most recent plan year exceeds
the fair market value of the assets allocable thereto, determined in accordance with Section 412 of
the Code.

     SECTION 1.02. Accounting Terms. Except as otherwise herein specifically provided,
each accounting term used herein shall have the meaning given to it under Generally Accepted
Accounting Principles. “Generally Accepted Accounting Principles” or “GAAP” shall mean those
generally accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through the Financial Accounting
Standards Board (“FASB”) or through other appropriate boards or committees thereof and which are
consistently applied for all periods so as to properly reflect the Consolidated financial
condition, and the Consolidated results of operations and cash flows of the Company and its
Subsidiaries except that any accounting principle or practice required to be changed by the FASB
(or other appropriate board or committee of the FASB) in order to continue as a generally accepted
accounting principle or practice may be so changed. Any dispute or disagreement between the
Company and the Bank relating to the determination of Generally Accepted Accounting Principles
shall, in the absence of manifest error, be conclusively resolved for all purposes hereof by the
written opinion with respect thereto, delivered to the Bank, of nationally recognized independent
certified public accountants selected by the Company and reasonably acceptable to the Bank for the
purpose of auditing the periodic Consolidated financial statements of the Company and its
Subsidiaries.

ARTICLE II

LOANS

     SECTION 2.01. Revolving Credit Loans. (a) Subject to the terms and conditions, and
relying upon the representations and warranties, set forth herein, the Bank agrees to make loans
(individually a “Revolving Credit Loan” and, collectively, the “Revolving Credit Loans”) to the
Company at any time or from time to time on or after the date hereof and until the Revolving Credit
Commitment Termination Date in an aggregate principal amount at any time outstanding not in excess
of the Revolving Credit Commitment, provided, however, that no Revolving Credit
Loan shall be made if, after giving effect to such Revolving Credit Loan, the Aggregate
Outstandings would exceed the Total Credit Commitment in effect at such time. During the Revolving
Credit Commitment Period, the Company may from time to time borrow, repay and reborrow hereunder on
or after the date hereof and prior to the Revolving Credit Commitment Termination Date, subject to
the terms, provisions and limitations set forth herein. The Revolving Credit Loans may be (i)
Libor Rate Loans, (ii) Alternate Base Rate Loans or (iii) a combination thereof.

          (b) The initial Revolving Credit Loan made by the Bank shall be made against delivery to the
Bank of the Revolving Credit Note, payable to the order of the Bank, as referred to in Section 2.02
hereof. The Bank will make available each requested Revolving Credit Loan to the Company by
crediting the proceeds thereof into an account of the Company at the Payment Office on the date and
in the amount set forth in the applicable notice of borrowing.

          (c) The Company shall give the Bank irrevocable written notice (or telephonic notice promptly
confirmed in writing) not later than 12:00 noon, New York, New York time, three Business Days prior
to the date of each proposed Libor Rate Loan under this Section 2.01

15

 

or prior to 12:00 noon New York, New York time on the date of each proposed Alternate Base
Rate Loan under this Section 2.01. Such notice shall be irrevocable and shall specify (i) the
amount and Type of the proposed borrowing, (ii) the proposed use of the loan proceeds, (iii) the
initial Interest Period if a Libor Rate Loan, and (iv) the proposed Borrowing Date. Except for
borrowings which utilize the full remaining amount of the Revolving Credit Commitment, each
borrowing of an Alternate Base Rate Loan shall be in an amount not less than $200,000 or, whole
multiples of $100,000 in excess thereof. Each borrowing of a Libor Rate Loan shall be in an amount
not less than $500,000 or whole multiples of $100,000 in excess thereof.

          (d) The Company shall have the right, upon not less than three Business Days’ prior written
notice to the Bank, to terminate the Revolving Credit Commitment or from time to time to
permanently reduce the amount of the Revolving Credit Commitment; provided, however, that no such
termination or reduction shall be permitted if, after giving effect thereto and to any prepayments
of the Revolving Credit Loans made on the effective date thereof, the aggregate principal amount of
the Revolving Credit Loans outstanding would exceed the Revolving Credit Commitment as then
reduced; provided, further, that any such termination or reduction requiring prepayment of any
Libor Rate Loan shall be made only on the last day of the Interest Period with respect thereto.
Any such reduction shall be in the amount of $500,000 or whole multiples of $100,000 in excess
thereof, and shall reduce permanently the amount of the Revolving Credit Commitment then in effect.

          (e) The Revolving Credit Commitment shall automatically terminate on the Revolving Credit
Commitment Termination Date. Upon such termination, the Company shall immediately repay in full
the principal amount of the Revolving Credit Loans then outstanding, together with all accrued
interest thereon and all other amounts due and payable hereunder.

     SECTION 2.02. Revolving Credit Note. The Revolving Credit Loans made by the Bank shall
be evidenced by the Revolving Credit Note, appropriately completed, duly executed and delivered on
behalf of the Company and payable to the order of the Bank in a principal amount equal to the
Revolving Credit Commitment. The date and amount of each Revolving Credit Loan, the Type and the
date and amount of each payment or prepayment of principal of each Revolving Credit Loan shall be
recorded on the grid schedule annexed to the Revolving Credit Note, and the Company authorizes the
Bank to make such recordation; provided, however, that the failure of the Bank to
set forth each such Revolving Credit Loan, payment and other information on such grid shall not in
any manner affect the obligation of the Company to repay each Revolving Credit Loan made by the
Bank in accordance with the terms of the Revolving Credit Note and this Agreement. The Revolving
Credit Note, the grid schedule and the books and records of the Bank shall constitute conclusive
evidence of the information so recorded absent manifest error. The aggregate unpaid amount of the
Revolving Credit Loans of the Bank at any time shall be the principal amount owing on the Revolving
Credit Note of the Company at such time.

     SECTION 2.03. Term Loans. (a) Subject to the terms and conditions set forth in this
Agreement, the Bank agrees to make up to two (2) loans (individually, a “Term Loan” and,
collectively, the “Term Loans”) to the Company at any time and from time to time during the Term
Loan Commitment Period, in an aggregate principal amount outstanding not to exceed the Term Loan
Commitment, provided, however, that no Term Loan shall be made if, after giving
effect to such Term Loan, the Aggregate Outstandings would exceed the Total Credit

16

 

Commitment in effect at such time, and provided, further, that any Term Loan
made to finance an Acquisition relating to the acquisition of ownership interests of a Non-Domestic
Person or the purchase of all or substantially all of the assets owned by such Non-Domestic Person
or the purchase of a division, business unit or product line of a Non-Domestic Person shall not
exceed $12,500,000. Each borrowing of a Term Loan shall be in a minimum principal amount of
$5,000,000. Availability under the Term Loan Commitment shall be reduced by an amount equal to the
aggregate outstanding principal amount of the Term Loans. The Term Loans may be (i) Libor Rate
Loans, (ii) Alternate Base Rate Loans or (iii) a combination thereof.

          (b) The Company shall give the Bank irrevocable written notice (or telephonic notice promptly
confirmed in writing) not later than 12:00 noon, New York, New York time, three Business Days prior
to the date of each proposed Libor Rate Loan under this Section 2.03 or prior to 12:00 noon New
York, New York time on the date of each proposed Alternate Base Rate Loan under this Section 2.03.
Such notice shall be irrevocable and shall specify (i) the amount and Type of the proposed
borrowing, (ii) the initial Interest Period if a Libor Rate Loan, (iii) the proposed Borrowing Date
and the (iv) the proposed Term Loan Maturity Date provided that such date shall not exceed five (5)
years from the Borrowing Date of such Term Loan.

     SECTION 2.04. Term Loan Notes. Each Term Loan to the Company shall be evidenced by a
promissory note of the Company (individually a “Term Loan Note” and, collectively, the
“Term Loan Notes”), substantially in the form attached hereto as Exhibit B, each
appropriately completed, duly executed and delivered on behalf of the Company and payable to the
order of the Bank in a principal amount equal to the amount of such Term Loan advanced on the
applicable Borrowing Date. Each Term Loan Note shall (a) be stated to mature on the applicable
Term Loan Maturity Date, (b) bear interest from the date thereof until paid in full on the unpaid
principal amount thereof from time to time outstanding as provided in Section 3.01 and (c) be
payable in such number of consecutive equal monthly installments so that the amount of such Term
Loan shall be full amortized by the applicable Term Loan Maturity Date and such installments shall
commence on the first day of the month following the Borrowing Date of such Term Loan and on the
first day of each month thereafter, provided that the outstanding principal amount of each Term
Loan shall be due and payable on the applicable Term Loan Maturity Date, together with interest
thereon as of such date. Each Term Loan shall bear interest from the date of funding thereof until
paid in full on the unpaid principal amount thereof from time to time outstanding at the applicable
interest rate per annum specified in Section 3.01. The date and amount of each Term Loan , the
Type and the date and amount of each payment or prepayment of principal of such Term Loan shall be
recorded on a schedule annexed to such Term Loan Note, and the Company authorizes the Bank to make
such recordation; provided, however, that the failure of the Bank to set forth
payments and other information in such grid shall not in any manner affect the obligation of the
Company to repay each Term Loan made by the Bank in accordance with the terms of this Agreement.
Each Term Loan Note, the grid schedule and the books and records of the Bank shall constitute
conclusive evidence of the information so recorded absent manifest error.

     SECTION 2.05. Letters of Credit.

          (a) Generally. Subject to the terms and conditions set forth in this Agreement, upon
the written request of a Letter of Credit Party in accordance herewith, the Bank shall issue, at
any time during the Revolving Credit Commitment Period for the account of such Letter of

17

 

Credit Party, (i) Commercial Letters of Credit, in an aggregate amount not to exceed the
Commercial Letter of Credit Commitment and (ii) Standby Letters of Credit, in an aggregate amount
not to exceed the Standby Letter of Credit Commitment. Notwithstanding the foregoing, no Letter of
Credit shall be issued or created if, after giving effect to the same, Aggregate Outstandings would
exceed the Total Credit Commitment. The Company agrees that it shall be jointly and severally
obligated with any other Letter of Credit Party for all Letters of Credit issued by the Bank
hereunder regardless of whether the Company is the named account party for such Letter of Credit.
Notwithstanding anything contained herein to the contrary, the Bank shall be under no obligation to
issue a Letter of Credit, if any order, judgment or decree of any court, arbitrator or governmental
authority shall purport by its terms to enjoin, restrict or restrain the Bank in any respect
relating to the issuance of such Letter of Credit or a similar letter of credit, or any law, rule,
regulation, policy, guideline or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Bank shall prohibit or direct the Bank in any
respect relating to the issuance of such Letter of Credit or similar letter of credit, or shall
impose upon the Bank with respect to any Letter of Credit any restrictions, any reserve or capital
requirement or any loss, cost or expense not reimbursed by the Company and/or the applicable Letter
of Credit Party to the Bank. Each request for issuance of a Letter of Credit shall be in writing
and shall be received by the Bank by no later than 12:00 p.m. on the day which is at least two
Business Days prior to the proposed date of issuance. Such issuance shall occur by no later than
5:00 p.m. on the proposed date of issuance (assuming proper prior notice as aforesaid). Subject to
the terms and conditions contained herein, the expiry dates, the type of Letter of Credit (i.e.,
Commercial Letter of Credit or Standby Letter of Credit), the purpose, the amounts and the
beneficiaries of the Letters of Credit will be as designated by the applicable Letter of Credit
Party. Each Letter of Credit issued by the Bank hereunder shall identify: (i) the dates of
issuance and expiry of such Letter of Credit, (ii) the amount of such Letter of Credit (which shall
be a sum certain, although partial drawings shall be permitted), (iii) the beneficiary and account
party of such Letter of Credit, and (iv) the drafts and other documents necessary to be presented
to the Bank upon drawing thereunder. The Company and each Letter of Credit Party agrees to
execute and deliver to the Bank such further documents and instruments in connection with any
Letter of Credit issued hereunder (including without limitation, applications therefore and the
Bank’s Master Letter of Credit Agreement) as the Bank in accordance with its customary practices
may reasonably request.

          (b) Expiration Date. Each Commercial Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the issuance of such
Commercial Letter of Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (ii) the Revolving Credit Commitment Termination Date. Each Standby
Letter of Credit shall expire not later than the close of business on the date four years after the
date of the issuance of such Standby Letter of Credit, provided that if the Letter of Credit Party
so requests in any Letter of Credit application, the Bank may, in its sole and absolute discretion,
agree to issue a Standby Letter of Credit that has an automatic extension provision, as may be
described in the Bank’s Master Letter of Credit Agreement, provided that such Standby Letter of
Credit must permit the Bank to prevent any such extension at least once in each twelve-month period
by giving notice to the beneficiary thereof not later that a day during such twelve-month period to
be agreed upon at the time such Standby Letter of Credit is issued. If this Agreement shall
terminate, whether upon the Revolving Credit Commitment Termination Date or by reason of the
occurrence and continuance of an Event of Default or otherwise, the Company shall either (x)
arrange for any new lender to indemnify the Bank for the

18

 

Aggregate Letters of Credit Oustanding in a manner and pursuant to such documents satisfactory
to the Bank in its sole discretion or (y) deposit in an account with the Bank an amount in cash
equal to the Aggregate Letters of Credit Outstanding as of such date plus any accrued and unpaid
interest thereon. Such deposit shall be held by the Bank as collateral for the payment and
performance of the obligations of the Company under this Agreement. The Bank shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such accounts.

          (c) Drawings Under Letters of Credit. The applicable Letter of Credit Party and the
Company hereby absolutely and unconditionally promise to pay to the Bank on the date of any drawing
under a Letter of Credit, in immediately available funds from its accounts, the amount of such
drawing under such Letter of Credit. If the Company and the applicable Letter of Credit Party so
request by a notice of borrowing delivered to the Bank not later than 12:00 noon (New York, New
York time) on the date of the drawing under a Letter of Credit in accordance with the terms hereof
and if each of the conditions precedent to the making of a Loan set forth in Article V of this
Agreement has been satisfied, on the Business Day on which a drawing under a Letter of Credit
occurs, the amount of such drawing, plus interest thereon, for which the Bank has not been
reimbursed by the Company and/or the relevant Letter of Credit Party, shall become a Revolving
Credit Loan bearing interest at the Alternate Base Rate made by the Bank to the Company on such
day.

          (d) Letter of Credit Obligations Absolute. (i) The obligations of the Company and the
relevant Letter of Credit Party to reimburse the Bank as provided hereunder in respect of drawings
or payments under Letters of Credit shall rank pari passu with the obligations of the
Company to repay the Loans hereunder, shall be absolute and unconditional under any and all
circumstances and shall be secured pro rata with the other Obligations pursuant to the
Security Documents in accordance with the provisions of the Security Documents. Without limiting
the generality of the foregoing, the obligation of the relevant Letter of Credit Party to reimburse
the Bank in respect of drawings under Letters of Credit shall not be subject to any defense based
on the non-application or misapplication by the beneficiary of the proceeds of any such payment or
the legality, validity, regularity or enforceability of the Letters of Credit or any related
document or any dispute between or among the Company and/or the relevant Letter of Credit Party, or
any of them, the beneficiary of any Letter of Credit or any financing institution or other party to
which any Letter of Credit may be transferred. The Bank may accept or pay any draft presented to
it under any Letter of Credit regardless of when drawn and whether or not negotiated, if such
draft, accompanying certificate or documents and any transmittal advice are presented or negotiated
on or before the expiry date of the Letter of Credit or any renewal or extension thereof then in
effect, and conforms to the terms and conditions of such Letter of Credit. Furthermore, neither
the Bank nor any of its correspondents shall be responsible, as to any document presented under a
Letter of Credit which appears to be regular on its face, and appears on its face to conform to the
terms of the Letter of Credit, for the validity or sufficiency of any signature or endorsement, for
delay in giving any notice or failure of any instrument to bear adequate reference to the Letter of
Credit, or for failure of any Person to note the amount of any draft on the reverse of the Letter
of Credit. The Bank shall have the right, in its sole discretion, to decline to accept any
documents and to decline making payment under any Letter of Credit if the documents presented are
not in strict compliance with the terms of such Letter of Credit.

               (ii) Any action, inaction or omission on the part of the Bank or any of its correspondents
under or in connection with any Letter of Credit or the related

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instruments, documents or property, if in good faith and in conformity with such laws,
regulations or commercially reasonable customs as are applicable, shall be binding upon the Company
and the other Letter of Credit Parties and shall not place the Bank or any of its correspondents
under any liability to the Company or any other Letter of Credit Party, or any of them, in the
absence of (i) gross negligence or willful misconduct by the Bank or its correspondents or (ii) the
failure by the Bank to pay under a Letter of Credit after presentation of a draft and documents
strictly complying with such Letter of Credit unless the Bank is prohibited from making such
payment pursuant to a court order. The Bank’s rights, powers, privileges and immunities specified
in or arising under this Agreement are in addition to any heretofore or at any time hereafter
otherwise created or arising, whether by statute or rule of law or contract. All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided hereunder, be governed by
the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce, Publication No. 500, and any subsequent revisions thereof.

          (e) Existing Letters of Credit. The Company and the Bank agrees that, from and after
the Closing Date, subject to the satisfaction of the conditions precedent to the initial Loans
hereunder as set forth in Article V hereof, the Existing Letters of Credit shall be Letters of
Credit for all purposes under this Agreement.

          (f) Letters of Credit Issued for Guarantors. Notwithstanding that a Letter of Credit
issued or outstanding hereunder is in support of any obligations of, or is for the account of, a
Letter of Credit Party other than the Company, the Company shall be obligated to reimburse the Bank
hereunder for any and all drawings under such Letter of Credit. The Company hereby acknowledges
that the issuance of Letters of Credit for the account of any other Letter of Credit Party inures
to the benefit of the Company, and that the Company’s business derives substantial benefits from
the businesses of such other Letter of Credit Parties.

ARTICLE III

INTEREST RATE; FEES AND PAYMENTS; USE OF PROCEEDS

     SECTION 3.01. Interest Rate.

          (a) Each Alternate Base Rate Loan shall bear interest for the period from the date thereof on
the unpaid principal amount thereof at a fluctuating rate per annum equal to the Alternate Base
Rate plus the Applicable Margin.

          (b) Each Libor Rate Loan shall bear interest for the Interest Period applicable thereto on the
unpaid principal amount thereof at a rate per annum equal to the Reserve Adjusted Libor determined
for each Interest Period thereof in accordance with the terms hereof plus the Applicable Margin.

          (c) Upon the occurrence and during the continuance of an Event of Default the outstanding
principal amount of the Loans (excluding any defaulted payment of principal accruing interest in
accordance with clause (d) below), shall, at the option of the Bank, bear interest payable on
demand at a rate of interest 2% per annum in excess of the interest rate otherwise then in effect
or, if no rate is in effect, 2% per annum in excess of the Alternate Base Rate.

20

 

          (d) If the Company shall default in the payment of the principal of or interest on any portion
of the Loans or any other amount becoming due hereunder, interest, fees, expenses or otherwise, the
Company shall pay interest on such defaulted amount accruing from the date of such default (without
reference to any period of grace) up to and including the date of actual payment (after as well as
before judgment) at a rate of 2% per annum in excess of the rate otherwise in effect or, if no rate
is in effect, 2% per annum in excess of the Alternate Base Rate.

          (e) The Company may elect from time to time to convert all or a portion of an outstanding Loan
from a Libor Rate Loan to a Alternate Base Rate Loan, by giving the Bank at least three Business
Day’s prior irrevocable written notice of such election, provided that any such conversion of Libor
Rate Loans shall only be made on the last day of an Interest Period with respect thereto. The
Company may elect from time to time to convert the outstanding Loan from an Alternate Base Rate
Loan to a Libor Rate Loan by giving the Bank irrevocable written notice of such election not later
than 11:00 a.m. (New York, New York time), three Business Days prior to the date of the proposed
conversion, with respect to a Libor Rate Loan. All or any part of outstanding Alternate Base Rate
Loans may be converted as provided herein, provided that each conversion shall be in a principal
amount of $500,000 or whole multiples of $500,000 in excess thereof, with respect to Revolving
Credit Loans, or $1,000,000 or whole multiples of $1,000,000 in excess thereof, with respect to
Term Loans, and further provided that no Default or Event of Default shall have occurred and be
continuing. Any conversion to or from any Libor Rate Loans hereunder shall be in such amounts and
be made pursuant to such elections so that, after giving effect thereto, the aggregate principal
amount of all Libor Rate Loans which are (x) Revolving Credit Loan, having the same Interest Period
shall not be less than $500,000 and (y) Term Loans, having the same Interest Period shall not be
less than $1,000,000.

          (f) Any Libor Rate Loan in a minimum principal amount of $500,000, with respect to a Revolving
Credit Loan, or $1,000,000, with respect to a Term Loan, may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the Company with the notice
provisions contained in the definition of Interest Period; provided, that no Libor Rate Loan may be
continued as such when any Default or Event of Default has occurred and is continuing, but shall be
automatically converted to an Alternate Base Rate Loan on the last day of the Interest Period in
effect when the Bank is notified, or otherwise has actual knowledge, of such Default or Event of
Default.

          (g) If the Company shall fail to select the duration of any Interest Period for any Libor Rate
Loan in accordance with the definition of “Interest Period” set forth in Section 1.01, the Company
shall be deemed to have selected an Interest Period of one month.

          (h) No Loan may be funded as a Libor Rate Loan, or converted to or continued as a Libor Rate
Loan, with an Interest Period that extends beyond the Term Loan Maturity Date, with respect to a
Term Loan or the Revolving Credit Commitment Termination Date, with respect to the Revolving Loans.

          (i) Anything in this Agreement or in any Note to the contrary notwithstanding, the obligation
of the Company to make payments of interest shall be subject to the limitation that payments of
interest shall not be required to be paid to the Bank to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to the Bank limiting the rates of
interest that may be charged or collected by the Bank. In each such event payments of interest
required to be paid to the Bank shall be calculated at the highest rate

21

 

permitted by applicable law until such time as the rates of interest required hereunder may
lawfully be charged and collected by the Bank. If the provisions of this Agreement or any Note
would at any time otherwise require payment by the Company to the Bank of any amount of interest in
excess of the maximum amount then permitted by applicable law, the interest payments to the Bank
shall be reduced to the extent necessary so that the Bank shall not receive interest in excess of
such maximum amount. To the extent that, pursuant to the foregoing sentence, the Bank shall
receive interest payments hereunder or under any Note in an amount less than the amount otherwise
provided herein or in any Note, such deficit (hereinafter called the “Interest Deficit”) will
accumulate and will be carried forward (without interest) until the termination of this Agreement.
Interest otherwise payable to the Bank hereunder and under any Note for any subsequent period shall
be increased by such maximum amount of the Interest Deficit that may be so added without causing
the Bank to receive interest in excess of the maximum amount then permitted by applicable law.

          (j) Interest on each Loan shall be payable in arrears on each Interest Payment Date and shall
be calculated on the basis year of 360 days and shall be payable for the actual days elapsed. Any
rate of interest on the Loans or other Obligations which is computed on the basis of the Alternate
Base Rate shall change when and as the Alternate Base Rate changes in accordance with the
definition thereof. Each determination by the Bank of an interest rate or fee hereunder shall,
absent manifest error, be conclusive and binding for all purposes.

     SECTION 3.02. Use of Proceeds. The proceeds of the Revolving Credit Loans shall be
solely used to finance the working capital needs and general corporate purposes of the Company in
the ordinary course of business. The proceeds of the Term Loans shall be used by the Company to
finance up to ninety percent (90%) of the purchase price to be paid by the Company in connection
with a Permitted Acquisition. Letters of Credit shall be issued by the Bank for the account of the
applicable Letter of Credit Party and shall be issued for purposes in connection with, and in the
ordinary course of, the business of such Letter of Credit Party consistent with historical purposes
of such Letter of Credit Party prior to the date hereof.

     SECTION 3.03. Prepayments.

          (a) Voluntary. The Company may at any time and from time to time prepay the then
outstanding portion of a Term Loan, in whole or in part, without premium or penalty, except as
provided in Section 3.08 hereof, upon written notice to the Bank (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time, three Business Days before
the date of prepayment with respect to prepayments of Libor Rate Loans, or 11:00 a.m. New York, New
York time on the proposed date of prepayment with respect to Alternate Base Rate Loans. Each
notice shall be irrevocable and shall specify the date and amount of prepayment and whether such
prepayment is of Libor Rate Loans or Alternate Base Rate Loans or a combination thereof, and if a
combination thereof, the amount of prepayment allocable to each. If such notice is given, the
Company shall make such prepayment, and the amount specified in such notice shall be due and
payable, on the date specified therein. Each partial prepayment pursuant to this Section 3.03
hereof shall be in a principal amount of (i) $1,000,000 or whole multiples of $1,000,000 in excess
thereof with respect to Libor Rate Loans and (ii) $1,000,000 or whole multiples of $1,000,000 in
excess thereof with respect to Alternate Base Rate Loans. All prepayments shall be accompanied by
accrued interest on the principal amount being prepaid to the date of prepayment.

22

 

          (b) Mandatory. The Company shall apply the net cash proceeds (after costs and
expenses) realized by the Company upon any Debt Issuance or Equity Issuance to prepay the
outstanding Term Loans hereunder. Such net proceeds shall be paid to the Bank promptly upon the
closing of any such Debt Issuance or Equity Issuance and will be applied by the Bank to the
remaining installments of the outstanding Term Loans in the inverse order of maturity. Such
prepayments shall be applied first to the Term Loan having the latest maturity date until paid in
full, and thereafter to the remaining Term Loans in inverse order of their respective maturity
dates.

       All prepayments shall be applied, first to Alternate Base Rate Loans outstanding and second,
to Libor Rate Loans outstanding, in such order as the Bank shall determine in its sole and absolute
discretion. All prepayments shall be accompanied by accrued interest on the principal amount being
prepaid to the date of prepayment. All partial prepayments of the Term Loans shall be applied to
the remaining installments of principal in inverse order of maturity.

     SECTION 3.04. Fees.

          (a) The Company agrees to pay to the Bank a non-refundable upfront fee of $62,500, which fee
shall be payable on the Closing Date.

          (b) The Company shall pay to the Bank a commission with respect to each Standby Letter of
Credit equal to the product of (i) the applicable SBLC Rate on the date of issuance multiplied by
(ii) the face amount of such  Standby Letter of Credit, which commission shall be payable as
follows: twenty five percent (25%) of the aggregate commission shall be payable on the issuance of
such Standby Letter of Credit and twenty five percent (25%) of the aggregate commission shall be
payable on the first day of following three quarterly periods thereafter. The Company shall pay to
the Bank, with respect to each Commercial Letter of Credit 0.25% of the stated amount of such
Commercial Letter of Credit upon its issuance and 0.25% of the amount drawn under such Letter of
Credit or, in the event of termination or expiration, available to be drawn under such Commercial
Letter of Credit. In addition, the Company shall pay to the Bank, on demand, all customary fees
charged by the Bank with respect to the issuance, processing and administration of Letters of
Credit (including, without limitation, amendments, renewals or extensions of letters of credit),
all subject to such standard minimums now or hereinafter in effect.

          (c) Simultaneously with the funding of a Term Loan, the Company agrees to pay to the Bank a
nonrefundable structuring fee equal to one-quarter of one percent (0.25%) of the amount of such
Term Loan.

     SECTION 3.05. Inability to Determine Interest Rate. In the event that the Bank shall
have determined (which determination shall be conclusive and binding upon the Company) that, by
reason of circumstances affecting the London interbank market, adequate and reasonable means do not
exist for ascertaining the Reserve Adjusted Libor applicable pursuant to Section 3.01(b) for any
requested Interest Period with respect to (a) the making of a Libor Rate Loan, (b) a Libor Rate
Loan that will result from the requested conversion of an Alternate Base Rate Loan to a Libor Rate
Loan or a Libor Rate Loan of one type into a Libor Rate Loan of another type, or (c) the
continuation of a Libor Rate Loan beyond the expiration of the then current Interest Period with
respect thereto, the Bank shall forthwith give notice by telephone of such

23

 

determination, promptly confirmed in writing, to the Company of such determination. Until the
Bank notifies the Company that the circumstances giving rise to the suspension described herein no
longer exist (which notification shall be given promptly by the Bank either verbally or in writing
and, if verbally, promptly confirmed in writing,), the Company shall not have the right to request
or continue a Libor Rate Loan or to convert an Alternate Base Rate Loan to a Libor Rate Loan.

     SECTION 3.06. Illegality. Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the interpretation or
application thereof shall make it unlawful for the Bank to make or maintain Libor Rate Loans as
contemplated by this Agreement, the Bank shall forthwith give notice by telephone of such
circumstances, promptly confirmed in writing, and (a) the commitment of the Bank to make and to
allow conversion to or continuations of Libor Rate Loans shall forthwith be cancelled for the
duration of such illegality and (b) the Loans then outstanding as Libor Rate Loans, if any, shall
be converted automatically to Alternate Base Rate Loans on the next succeeding last day of each
Interest Period applicable to such Libor Rate Loans or within such earlier period as may be
required by law. The Company shall pay to the Bank, upon demand, any additional amounts required
to be paid pursuant to Section 3.08 hereof.

     SECTION 3.07. Increased Costs.

     (a) In the event that any introduction of or change in, on or after the date hereof, any
applicable law, regulation, treaty, order, directive or in the interpretation or application
thereof (including, without limitation, any request, guideline or policy, whether or not having the
force of law, of or from any central bank or other governmental authority, agency or
instrumentality and including, without limitation, Regulation D), by any authority charged with the
administration or interpretation thereof shall occur, which:

     (i) shall subject the Bank to any tax of any kind whatsoever with respect to this
Agreement, any Note, any Loan, or change the basis of taxation of payments to the Bank of
principal, interest, fees or any other amount payable hereunder (other than any tax that is
measured with respect to the overall net income of the Bank or lending office of the Bank
and that is imposed by the United States of America, or any political subdivision or taxing
authority thereof or therein, or by any jurisdiction in which the Bank’s lending office is
located, or by any jurisdiction in which the Bank is organized, has its principal office or
is managed and controlled); or

     (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement (whether or not having the force of law) against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of the Bank; or

     (iii) shall impose on the Bank any other condition, or change therein directly relating
to this Agreement, any Note or any Loan; and the result of any of the foregoing is to
increase the cost to the Bank of making, renewing or maintaining or participating in
advances or extensions of credit hereunder or to reduce any amount receivable hereunder, in
each case by an amount which the Bank deems material, then, in

24

 

any such case, the Company shall pay the Bank, upon demand, such additional amount or
amounts as will reimburse the Bank for such increased costs or reduction.

     (b) If the Bank shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, 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 the Bank (or any lending office
of the Bank) or the Bank’s holding company, with any request or directive regarding capital
adequacy (whether or not having the force of the law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return on the Bank’s
capital or on the capital of the Bank’s holding company as a consequence of its obligations
hereunder to a level below that which the Bank could have achieved but for such adoption, change or
compliance (taking into consideration the Bank’s policies and the policies of the Bank’s holding
company with respect to capital adequacy) by an amount deemed by the Bank to be material, then from
time to time, the Company shall pay to the Bank, the additional amount or amounts as will reimburse
the Bank or the Bank’s holding company for such reduction directly relating to this Agreement, any
Note or any Loan. The Bank’s determination of such amounts, upon presentation thereof to the
Company, shall be conclusive and binding on the Company absent manifest error.

     (c) A certificate of the Bank setting forth the basis and calculation of any such
determination, and the amount or amounts payable pursuant to Sections 3.07(a) and 3.07(b) above,
shall be conclusive absent manifest error. The Company shall pay the Bank the amount shown as due
on any such certificate within 10 days after receipt thereof.

     SECTION 3.08. Indemnity. The Company agrees to indemnify the Bank and to hold the
Bank harmless from any loss, cost or expense which the Bank may sustain or incur, including,
without limitation, interest or fees payable by the Bank to lenders of funds obtained by it in
order to maintain Libor Rate Loans hereunder, as a consequence of (a) default by the Company in
payment of the principal amount of or interest on any Libor Rate Loan, (b) default by the Company
to accept or make a borrowing of a Libor Rate Loan or a conversion into or continuation of a Libor
Rate Loan after the Company has requested such borrowing, conversion or continuation, (c) default
by the Company in making any prepayment of any Libor Rate Loan after the Company gives a notice in
accordance with Section 3.03 of this Agreement and/or (d) the making of any payment or prepayment
(whether mandatory or optional) of a Libor Rate Loan or the making of any conversion of a Libor
Rate Loan to an Alternate Base Rate Loan on a day which is not the last day of the applicable
Interest Period with respect thereto. A certificate of the Bank setting forth the basis, the
calculation of any such determination and such amounts shall be conclusive absent manifest error.
The Company shall pay the Bank the amount shown as due on any certificate within ten days after
receipt thereof.

     SECTION 3.09. Taxes. Except as required by law, all payments made by the Company
under this Agreement shall be made free and clear of, and without reduction for or on account of,
any present or future taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding income and franchise taxes imposed on the Bank by (i) the United States of America or any
political subdivision or taxing authority thereof or therein, (ii) the jurisdiction under the laws
of which the Bank is organized or in which it has its principal

25

 

office or is managed and controlled or any political subdivision or taxing authority thereof
or therein, or (iii) any jurisdiction in which the Bank’s lending office is located or any
political subdivision or taxing authority thereof or therein (such non-excluded taxes being called
“Taxes”). If any Taxes are required to be withheld from any amounts payable to the Bank
hereunder, or under any Note, the amount so payable to the Bank shall be increased to the extent
necessary to yield to the Bank (after payment of all Taxes and free and clear of all liability in
respect of such Taxes) interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any Taxes are payable by the Company,
as promptly as possible thereafter, the Company shall send to the Bank, as the case may be, a
certified copy of an original official receipt showing payment thereof. If the Company fails to
pay Taxes when due to the appropriate taxing authority or fails to remit to the Bank the required
receipts or other required documentary evidence, the Company shall indemnify the Bank for any
incremental taxes, interest or penalties that may become payable by the Bank as a result of any
such failure together with any actual expenses payable by the Bank in connection therewith.

     SECTION 3.10. Payments. All payments (including prepayments) to be made by the
Company on account of principal, interest, fees and reimbursement obligations shall be made without
set-off or counterclaim and shall be made to the Bank, at the Payment Office of the Bank in Dollars
in immediately available funds not later than 12:00 noon, New York, New York time, on the date on
which they are payable. The Bank may, in its sole discretion, directly charge principal and
interest payments due in respect of the Loans to the Company’s accounts at the Payment Office or
other office of the Bank. Except as otherwise provided in the definition of “Interest Period”, if
any payment hereunder becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such extension.

     SECTION 3.11. Disbursement of Loans. The Bank shall make the Loans available to the
Company at the Payment Office by crediting the account of the Company with such amount and in like
funds.

     SECTION 3.12. Manner of Payment. The Bank may (but shall not be obligated to) debit
any deposit account of the Company with the Bank for the amount of any such payment. The Bank may
in its sole discretion directly charge one or more of the Company’s accounts at the Payment Office
or other office of the Bank for all interest and principal payments due in respect of the Loans and
all fees payable hereunder. Except as otherwise provided in the definition of “Interest Period”,
if any payment hereunder becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such extension.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     In order to induce the Bank to enter into this Agreement and to make the Loans herein provided
for, the Company represents and warrants to the Bank that:

     SECTION 4.01. Organization, Corporate Powers, etc. The Company and each

26

 

Guarantor (i) is a corporation duly incorporated, or a limited liability company duly formed,
validly existing and in good standing under the laws of the state of its incorporation or
formation, (ii) has the power and authority to own properties and to carry on its business as now
being conducted, (iii) is duly qualified to do business in every jurisdiction wherein the conduct
of its business or the ownership of its properties are such as to require such qualification, (iv)
has the power to execute and perform each of the Loan Documents to which it is a party, (v) with
respect to the Company, has the power to borrow hereunder and to execute and deliver the Notes, and
(vi) is in compliance with all applicable federal, state and local laws, rules and regulations
except where the failure to be in compliance could not reasonably be expected to have a Material
Adverse Effect.

     SECTION 4.02. Authorization of Borrowing, Enforceable Obligations. The execution,
delivery and performance by the Company of this Agreement, and the other Loan Documents to which it
is a party, the borrowings by the Company hereunder, and the execution, delivery and performance of
each Guarantor of the Loan Documents to which such Guarantor is a party, (a) have been duly
authorized by all requisite corporate or limited liability company action, (b) will not violate or
require any consent under (i) any provision of law applicable to the Company or any Guarantor, any
governmental rule or regulation, or the Certificate of Incorporation, By-laws, or other
organizational documents, as applicable, of the Company or any Guarantor or (ii) any order of any
court or other agency of government binding on the Company or any Guarantor or any indenture,
agreement or other instrument to which the Company or any Guarantor is a party, or by which the
Company or any Guarantor or any of its property is bound, and (c) will not be in conflict with,
result in a breach of or constitute (with due notice and/or lapse of time) a default under, any
such indenture, agreement or other instrument, or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of the property or assets of the Company or
any Guarantor other than as contemplated by this Agreement or the other Loan Documents. This
Agreement and each other Loan Document to which the Company and each Guarantor is a party,
constitutes a legal, valid and binding obligation of the Company and each Guarantor as the case may
be, enforceable against the Company and each Guarantor, as the case may be, in accordance with its
terms.

     SECTION 4.03. Financial Condition. The Company has heretofore furnished to the Bank
(a) the audited Consolidated balance sheet of Company and its Subsidiaries and the related audited
statements of income, retained earnings and cash flow of Company and its Subsidiaries prepared by
Ernst & Young, LLP, certified accountants, for the fiscal year ended June 30, 2008 and (b) the
unaudited Consolidated balance sheet of the Company and its Subsidiaries and the related unaudited
statements of income, retain earning and cash flow of the Company and its Subsidiaries for the
six-month period ended December 31, 2008 (collectively, the “financial statements”). The financial
statements were prepared in conformity with Generally Accepted Accounting Principles and, to the
Company’s knowledge, fairly present the financial position and results of operations of the Company
and its Subsidiaries as of the date of such financial statements and for the periods to which they
relate and, since the date of such financial statements, no material adverse change in the
business, operations or assets or condition (financial or otherwise) of the Company and its
Subsidiaries has occurred. The Company shall deliver to the Bank a certificate by the Chief
Financial Officer of the Company to that effect on the Closing Date. There are no obligations or
liabilities, contingent or otherwise, of the Company and its Subsidiaries which are not reflected
on such statements other than obligations incurred in the ordinary course of the Company’s business
since the date of such financial

27

 

statements or specifically disclosed elsewhere in this Agreement or any schedule hereto,
subject, however, to normal year-end adjustments with respect to the unaudited financial statements
referred to above.

     SECTION 4.04. Taxes. The Company and each Guarantor has filed or caused to be filed
all federal, state and local tax returns which are required to be filed, and has paid or has caused
to be paid all taxes as shown on said returns or on any assessment received by them, to the extent
that such taxes have become due, except taxes which are being contested in good faith and which are
reserved against in accordance with Generally Accepted Accounting Principles.

     SECTION 4.05. Title to Properties. The Company and each Guarantor has good and
marketable title to their respective properties and assets, except for such properties and assets
as have been disposed of since the date of such financial statements as no longer used or useful in
the conduct of their respective business or as have been disposed of in the ordinary course of
business, and all such properties and assets are free and clear of all Liens, except as permitted
by Section 7.01.

     SECTION 4.06. Litigation.

          (a) There are no actions, suits or proceedings (whether or not purportedly on behalf of the
Company or any Guarantor) pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Guarantor at law or in equity or before or by any Governmental
Authority, which involve any of the transactions contemplated herein or which, if adversely
determined against the Company or such Guarantor, could reasonably be expected to result in a
Material Adverse Effect.

          (b) Neither the Company nor any Guarantor is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any Governmental Authority, other than as set forth on
Schedule VI hereto.

     SECTION 4.07. Agreements. Neither the Company nor any Guarantor is a party to any
agreement or instrument or subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree or regulation which could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Guarantor is in default in any manner which could have
a Material Adverse Effect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is a party.

     SECTION 4.08. Compliance with ERISA. Each Plan is in compliance with ERISA; no Plan
is insolvent or in reorganization, no Plan has an Unfunded Current Liability, and no Plan has an
accumulated or waived funding deficiency or permitted decreases in its funding standard account
within the meaning of Section 412 of the Code; neither the Company nor any ERISA Affiliate nor any
Guarantor has incurred any material liability to or on account of a Plan pursuant to Section 515,
4062, 4063, 4064, 4201 or 4204 of ERISA or expects to incur any liability under any of the
foregoing sections on account of the termination of participation in or contributions to any such
Plan, no proceedings have been instituted to terminate any Plan, no condition exists which presents
a risk to the Company or any Guarantor of incurring a liability to or on account of a Plan pursuant
to the foregoing provisions of ERISA and the Code; no lien imposed under the Code or ERISA on the
assets of the Company or any Guarantor exists or is

28

 

likely to arise on account of any Plan; and the Company, and each Guarantor may terminate
contributions to any other employee benefit plans maintained by them without incurring any material
liability to any person interested therein.

     SECTION 4.09. Federal Reserve Regulations; Use of Proceeds.

          (a) Neither the Company nor any Guarantor is engaged principally in, nor has as one of its
important activities, the business of extending credit for the purpose of purchasing or carrying
any “margin stock” (within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States, as amended to the date hereof). If requested by the Bank, the
Company will, and will cause each Guarantor to, furnish to the Bank such a statement on Federal
Reserve Form U-1.

          (b) No part of the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or to carry margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock, or to refund
indebtedness originally incurred for such purposes, or (ii) for any purpose which violates or is
inconsistent with the provisions of the Regulations T, U, or X of the Board of Governors of The
Federal Reserve System.

          (c) The proceeds of the Loans shall be used solely for the purposes permitted under Section
3.02.

     SECTION 4.10. Approvals. No registration with or consent or approval of, or other
action by, any Governmental Authority or any other Person is required in connection with the
execution, delivery and performance of this Agreement by the Company or any Guarantor, or with the
execution and delivery of other Loan Documents to which it is a party or, with respect to the
Company, the borrowings hereunder.

     SECTION 4.11. Subsidiaries and Affiliates. Attached hereto as Schedule I is a
correct and complete list of the Company’s Subsidiaries and Affiliates showing as to each
Subsidiary and Affiliate, its name, the jurisdiction of its incorporation or formation, its
shareholders or other owners of an interest in each Subsidiary and the number of outstanding shares
or other ownership interest owned by each shareholder or other owner of an interest. Lyman
Maryland Properties, LLC, a Utah limited liability company, was dissolved on or about February 25,
2008.

     SECTION 4.12. Hazardous Materials. Except as set forth in environmental reports
provided to the Bank, the Company and each Guarantor are each in compliance with all federal, state
or local laws, ordinances, rules or regulations governing Hazardous Materials and (a) neither the
Company nor any Guarantor has used Hazardous Materials on, from, or affecting any property now
owned or occupied by the Company or any Guarantor in any manner which violates federal, state or
local laws, ordinances, rules or regulations governing the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of Hazardous Materials; and (b) to the
best knowledge of the Company and each Guarantor, no prior owner of any such property or any
tenant, subtenant, prior tenant or prior subtenant has used Hazardous Materials on, from, or
affecting such property in any manner which violates federal, state or local laws, ordinances,
rules or regulations governing the use, storage, treatment,

29

 

transportation, manufacture, refinement, handling, production or disposal of Hazardous
Materials, except where failure to so comply could not reasonably be expected to have a Material
Adverse Effect.

     SECTION 4.13. Investment Company Act. Neither the Company nor any Guarantor is an
“investment company”, or a company “controlled” by an “investment company”, within the meaning of
the Investment Company Act of 1940, as amended.

     SECTION 4.14. No Default. No event has occurred and is continuing and no condition
exists which constitutes a Default or an Event of Default.

     SECTION 4.15. Material Contracts. Each Material Contract of the Company and each
Guarantor (i) is in full force and effect and is binding upon and enforceable against the Company
or each Guarantor, as the case may be, and, to the knowledge of the Company, all other parties
thereto in accordance with its terms, and (ii) there exists no default under any Material Contract
by the Company or any Guarantor or, to the knowledge of the Company, by any other party thereto
which has not been fully cured or waived.

     SECTION 4.16. Permits and Licenses. Each of the Company and each Guarantor has all
obtained all material licenses, permits, franchises, or other governmental authorizations necessary
to the ownership of its property or to the conduct of its activities, and shall obtain all such
licenses, permits, franchises, or other governmental authorizations as may be required in the
future to the extent that the failure to obtain them would materially and adversely affect the
ability of the Company or any Guarantor to conduct its activities as currently conducted, or in the
future may be conducted, or the condition (financial or otherwise) of the Company or any Guarantor.

     SECTION 4.17. Compliance with Law. The Company and each Guarantor are each in
compliance with all laws, rules, regulations, orders and decrees which are applicable to the
Company or any Guarantor, or to any of their respective properties, which the failure to comply
with could reasonably be expected to have a Material Adverse Effect.

     SECTION 4.18. Disclosure. No representation or warranty of the Company or any
Guarantor contained in this Agreement, any other Loan Document, or any other document, certificate
or written statement furnished to the Bank by or on behalf of the Company or any Guarantor for use
in connection with the transactions contemplated by this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which they were made.

     SECTION 4.19. Security Documents. To the best of its knowledge, each Security
Document executed by the Company and the Guarantor shall constitute a valid and continuing lien on
and security interest in the collateral referred to in such Security Document in favor of the Bank
prior to all other Liens, claims and right of all other Persons, other than Permitted Liens, and
shall be enforceable as such against all other Persons.

     SECTION 4.20. Globecomm UK and Lyman Maryland Properties. Globecomm Systems Europe
Ltd., a United Kingdom corporation, and Lyman Maryland Properties, LLC, a

30

 

Utah limited liability company, have each been dissolved and are no longer in existence.

ARTICLE V

CONDITIONS OF LENDING

     SECTION 5.01. Conditions To Initial Loans. The obligation of the Bank to make the
Loans hereunder is subject to the following conditions precedent:

          (a) Revolving Credit Note. On or prior to the Closing Date, the Bank shall have
received the Revolving Credit Note duly executed by the Company.

          (b) Other Loan Documents. On or prior to the Closing Date, the Bank shall have
received (i) the Guaranties duly executed by each of the Guarantors, and (ii) the Security
Documents, each duly executed by the Company and each Guarantor, as applicable, along with
financing statements on form UCC-1 describing the collateral covered by the Security Agreement.

          (c) Supporting Documents. The Bank shall have received on or prior to the Closing
Date (a) a certificate of the Secretary or an Assistant Secretary of the Company and of each
Guarantor dated the Closing Date and certifying (i) that attached thereto is a true and complete
copy (including any amendments thereto) of the Certificate of Incorporation and the By-laws or the
Articles of Organization and the Operating Agreement, as applicable, of the Company or such
Guarantor; (ii) that attached thereto is a true and complete copy of resolutions adopted by the
Board of Directors of the Company and each Guarantor, authorizing the execution, delivery and
performance of this Agreement and of each Loan Document to be delivered on the Closing Date to
which it is a party and, with respect to the Company, the borrowings hereunder; and (iii) the
incumbency and specimen signature of each officer of the Company and each Guarantor executing each
Loan Document to which the Company or a Guarantor is a party and any certificates or instruments
furnished pursuant hereto or thereto, and a certification by another officer of the Company and
each Guarantor as to the incumbency and signature of the Secretary or Assistant Secretary of the
Company and each Guarantor; and (b) such other documents as the Bank may reasonably request.

          (d) Opinion of Counsel. On the Closing Date, the Bank shall have received a written
opinion of counsel for the Company and the Guarantors dated the Closing Date and addressed to the
Bank substantially in the form of Exhibit F attached hereto.

          (e) No Material Adverse Changes. There shall not have occurred in the sole opinion of
the Bank reasonably applied, any material adverse change in the business, operations, performance,
properties or condition, financial or otherwise, of the Company or any Guarantor since December 31,
2008.

          (f) Fees. The Company shall have paid all costs and expenses incurred by the Bank in
connection with the negotiation, preparation and execution of the Loan Documents (including,
without limitation, the expenses and reasonable fees of counsel).

          (g) Assets Free from Liens. Prior to the Closing Date, the Bank shall have received
UCC-1 financing statement, tax and judgment lien searches evidencing that the

31

 

Company’s and each Guarantor’s accounts receivable, inventory, equipment and all other assets
of the Company and each Guarantor are free and clear of all Liens except Permitted Liens.

          (h) Insurance. The Bank shall receive, on or prior to the Closing Date, certificates
of insurance covering the personal property and the business of the Company and the Guarantors
(including with respect to general liability and products liability insurance), which certificates
shall designate the Bank as a loss payee and additional insured, in form and substance reasonably
satisfactory to the Bank together with copies of the related insurance policies with proper
endorsements to reflect the Bank’s interests.

          (i) Due Diligence. The Bank shall have results satisfactory to it of its due
diligence checkings with respect the Company, the Guarantors, including, without limitation,
litigation checkings, customer checkings, bank checkings, judgment, tax and bankruptcy searches, in
all jurisdictions deemed necessary by the Bank and its counsel.

          (j) Completion of Proceedings. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the transactions contemplated by
the Loan Documents shall be reasonably satisfactory in form and substance to the Bank and its
counsel.

          (k) Other Information, Documentation. The Bank shall receive such other consents,
approvals and further information and documentation as it may reasonably require, including, but
not limited, to any information or documentation relating to compliance by the Company and each
Guarantor with the requirements of all federal, state and local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment, transportation, refinement,
handling, production or disposal of Hazardous Materials.

     SECTION 5.02. Conditions to Term Loans The obligation of the Bank to make any Term
Loan hereunder is subject to the conditions precedent set forth in Sections 5.01 and 5.03 of this
Article V and the following conditions precedent:

          (a) Term Loan Note. The Company shall deliver to the Bank a duly executed Term Loan
Note appropriately completed in an amount equal to the aggregate principal amount of the Term Loan
to be funded on a Borrowing Date.

          (b) Acquisition Documents. The Bank shall have received the information and documents
required to be delivered to the Bank as described in the definition of Permitted Acquisition.

     SECTION 5.03. Conditions to All Loans and Letters of Credit. The obligation of the
Bank to make each Loan hereunder and the obligation of the Bank to issue, amend, renew or extend
any Letter of Credit, including, without limitation, the initial Loan and Existing Letters of
Credit, are subject to the conditions precedent set forth in Section 5.01 and, to the extent
applicable, the conditions in Sections 5.02, and the following conditions precedent:

          (a) Representations and Warranties. The representations and warranties by the Company
and each Guarantor pursuant to this Agreement and the Loan Documents to which

32

 

each is a party shall be true and correct in all material respects on and as of the Borrowing
Date or the date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, with the same effect as though such representations and warranties had been made on and
as of such date and an Executive Officer shall deliver a certificate to the Bank with respect
thereto.

          (b) No Default. The Company and each Corporate Guarantor shall be in compliance with
all the terms and provisions set forth herein or in any other Loan Document on their part to be
observed or performed, and no Default or Event of Default, shall have occurred and be continuing on
the Borrowing Date or on the date of issuance, amendment, renewal or extension of a Letter of
Credit or will result after giving effect to the Loan requested or the requested issuance,
amendment, renewal or extension of a Letter of Credit.

          (c) Availability. After giving effect to any requested Revolving Credit Loan or
Letter of Credit, the Aggregate Outstandings shall not exceed the Total Credit Commitment.

          (d) Notice of Borrowing. The Bank shall have received a notice of borrowing duly
executed by an Executive Officer of the Company with respect to the requested Loan or issuance,
amendment, renewal or extension of the requested Letter of Credit.

          (e) Additional Documentation. With respect to the issuance, amendment, renewal or
extension of any Letter of Credit, the Bank shall have received the documents and instruments
requested by the Bank in accordance with the last sentence of Section 2.05(a).

ARTICLE VI

AFFIRMATIVE COVENANTS

     The Company covenants and agrees with the Bank that so long as any Loan remains in effect or
any of the principal of or interest on any Note or any other Obligations hereunder shall be unpaid
it will, and will cause each Guarantor to:

     SECTION 6.01. Corporate Existence, Properties, etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence, rights and
franchises and comply with all laws applicable to it; at all times maintain, preserve and protect
all franchises and trade names and preserve all of its property used or useful in the conduct of
its business and keep the same in good repair, working order and condition (ordinary wear and tear
excepted), and from time to time make, or cause to be made, all needful and proper repairs,
renewals, replacements, betterments and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all times; at all times keep
its insurable properties adequately insured and maintain (i) insurance to such extent and against
such risks, including fire, as is customary with companies in the same or similar businesses, (ii)
workmen’s compensation insurance in the amount required by applicable law, and (iii) public
liability insurance, which shall include product liability insurance, in the amount customary with
companies in the same or similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, (iv) such other assistance as may be required by law or may be
reasonably required by the Bank. Each such policy of insurance of the Company and its Subsidiaries
shall name the Bank as a loss payee, additional insured and mortgagee, as the case may be, and
shall provide for at least thirty (30) days’ prior written notice to the Bank of any modification
or cancellation of such policies. The Company shall provide to

33

 

the Bank promptly upon receipt thereof evidence of the annual renewal of each such policy.

     SECTION 6.02. Payment of Indebtedness, Taxes, etc.

          (a) Pay all indebtedness and obligations, now existing or hereafter arising, as and when due
and payable, except where (i) the validity, amount, or timing thereof is being contested in good
faith and by appropriate proceedings, which proceedings shall include good faith negotiations, (ii)
the Company or such Guarantor has set aside on its books adequate reserves with respect thereto in
accordance with Generally Accepted Accounting Principles, and (iii) the failure to make such
payment pending such contest could not reasonably be expected to have a Material Adverse Effect;
provided that the Company and each Guarantor will pay or cause to be paid all such
indebtedness and obligations upon the commencement of proceedings to foreclose any lien which has
attached as security therefore.

          (b) Pay and discharge or cause to be paid and discharged promptly all taxes, assessments and
government charges or levies imposed upon it or upon its income and profits, or upon any of its
property, real, personal or mixed, or upon any part thereof, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or otherwise which, if
unpaid, might become a lien or charge upon such properties or any part thereof; provided,
however, that neither the Company nor any Guarantor shall be required to pay and discharge
or cause to be paid and discharged any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings, and the Company or
such Guarantor, as the case may be, shall have set aside on its books adequate reserves determined
in accordance with Generally Accepted Accounting Principles with respect to any such tax,
assessment, charge, levy or claim so contested; and further, provided that, subject
to the foregoing provisos, the Company and each Guarantor will pay or cause to be paid all such
taxes, assessments, charges, levies or claims upon the commencement of proceedings to foreclose any
lien which has attached as security therefore.

     SECTION 6.03. Financial Statements, Reports, etc. Furnish to the Bank:

          (a) as soon as available and in any event within seventy five (75) days of the end of the
fiscal year of the Company, the audited consolidated financial statements of the Company and its
Subsidiaries which shall include the consolidated balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year, together with the consolidated statement of income and statement
of cash flows for the Company and its Subsidiaries for such fiscal year and as of the end of and
for the prior fiscal year, all prepared in accordance with Generally Accepted Accounting Principles
and accompanied by an opinion thereon of Ernst & Young, LLP or other nationally recognized
independent certified public accountants reasonably acceptable to the Bank (the “Auditor”) which
opinion shall not include a going concern explanatory paragraph, or a qualification or exception as
to the scope of the audit,

          (b) as soon as available and in any event within sixty (60) days after the end of each of the
first, second and third fiscal quarters of the Company, the unaudited consolidated financial
statements of the Company and its Subsidiaries, which shall include the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of the end of each such quarter, together with
the consolidated statement of income and statement of cash flows of the Company and its
Subsidiaries for each such quarter and for the period commencing at the end of

34

 

the previous fiscal year and ending with the end of such quarter, all in reasonable detail
stating in comparative form the respective figures for the corresponding date and period in the
previous fiscal year, all prepared by or under the supervision of the Chief Financial Officer of
the Company in accordance with Generally Accepted Accounting Principles;

          (c) a certificate prepared and signed by the Auditor with each delivery required by clause (a)
and a certificate prepared and signed by the Chief Financial Officer with each delivery required by
clause (a) and (b), stating whether the Auditor or Chief Financial Officer, as the case may be,
shall have obtained knowledge of any Default or Event of Default, together with a certificate of
the Chief Financial Officer of the Company demonstrating that as of the last day of the relevant
fiscal year or quarter, as applicable, the Company was in compliance with the financial condition
covenants set forth in Section 7.13 hereof;

          (d) on or prior to the twenty-fifth (25th) day of each fiscal quarter of the Company a
detailed schedule describing all accounts receivable and accounts payable of the Company and its
Subsidiaries certified by the Chief Financial Officer of the Company and current as of the last
Business Day of the preceding month, all in form satisfactory to the Bank;

          (e) promptly after filing thereof, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all regular, periodic and special financial
information, proxy materials, reports and other information which the Company or any Guarantor
shall file with the Securities and Exchange Commission;

          (f) promptly after submission to any government or regulatory agency, all documents and
information furnished to such government or regulatory agency other than such documents and
information prepared in the normal course of business and which could not reasonably be expected to
result in a Material Adverse Effect;

          (g) promptly, from time to time, such other information regarding the operations, business
affairs and condition, financial or otherwise, of the Company or any Guarantor as the Bank may
reasonably request; and

          (h) The Bank acknowledges and agrees that the Company may satisfy the requirements of clauses
(a) and (b) above by delivering to the Bank copies of the Company’s annual and quarterly reports on
Forms 10K and 10Q, respectively.

     SECTION 6.04. Access to Premises and Records. Maintain financial records in
accordance with Generally Accepted Accounting Principles and permit representatives of the Bank to
have access during normal business hours to the premises of the Company (and upon reasonable
advance notice so long as no Default or Event of Default has occurred and is then continuing) and
each Guarantor upon request, and to examine and make excerpts from the minute books, books of
accounts, reports and other records and to discuss the affairs, finances and accounts of the
Company and the Guarantors with their respective principal officers or with their respective
independent accountants and to conduct such field audits (including, without limitation, field
audits of the Company’s and each Guarantor’s accounts receivable and their respective books and
records and inspection, examination and verification of the collateral for the Loans) at the
Company’s expense, as such representatives reasonably deem necessary, provided, the Company
shall bear the cost of not more than one (1) such audit in any calendar

35

 

year unless an Event of Default has occurred, in which case, the Company shall also bear the
cost of an audit, if any, performed by the Bank in connection with such Event of Default.

     SECTION 6.05. Notice of Adverse Change. Promptly notify the Bank in writing of (a)
any change in the business or the operations which, in the good faith judgment of such officer,
could reasonably be expected to have a Material Adverse Effect disclosing the nature thereof, and
(b) any information which indicates that any financial statements which are the subject of any
representation contained in this Agreement, or which are furnished to the Bank pursuant to this
Agreement, fail, in any material respect, to present fairly the financial condition and results of
operations purported to be presented therein, disclosing the nature thereof.

     SECTION 6.06. Notice of Default. Promptly notify the Bank of any Default or Event of
Default which shall have occurred, which notice shall include a written statement as to such
occurrence, specifying the nature thereof and the action which is proposed to be taken with respect
thereto.

     SECTION 6.07. Notice of Litigation. Give the Bank prompt written notice of any
action, suit or proceeding at law or in equity or by or before any governmental instrumentality or
other agency which, if adversely determined against the Company or any Guarantor on the basis of
the allegations and information set forth in the complaint or other notice of such action, suit or
proceeding, or in the amendments thereof, if any, could reasonably be expected to have a Material
Adverse Effect.

     SECTION 6.08. ERISA. Promptly deliver to the Bank a certificate by the Chief
Financial Officer setting forth details as to such occurrence and such action, if any, which the
Company, such Guarantor or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the Company, such Guarantor, ERISA
Affiliate, the PBGC, a Plan participant or the Plan Administrator, with respect thereto: that a
Reportable Event has occurred, that an accumulated funding deficiency has been incurred or an
application may be or has been made to the Secretary of the Treasury for a waiver or modification
of the minimum funding standard (including any required installment payments) or an extension of
any amortization period under Section 412 of the Code with respect to a Plan, that a Plan has been
or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA, that
a Plan has an Unfunded Current Liability giving rise to a lien under ERISA, that proceedings may
be or have been instituted to terminate a Plan, that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan, or that the Company, any
Guarantor or any ERISA Affiliate will or may incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4201 or 4204 of ERISA. The Company will deliver to the Bank a complete copy of
the annual report (Form 5500) of each Plan required to be filed with the Internal Revenue Service.
In addition to any certificates or notices delivered to the Bank pursuant to the first sentence
hereof, copies of annual reports and any other notices received by the Company or any Guarantor
required to be delivered to the Bank hereunder shall be delivered to the Bank no later than 10 days
after the later of the date such report or notice has been filed with the Internal Revenue Service
or the PBGC, given to Plan participants or received by the Company or a Guarantor.

     SECTION 6.09. Compliance with Applicable Laws. Comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority.

36

 

     SECTION 6.10. SubsidiariesSECTION 6.11. . Give the Bank prompt written notice of the
creation, establishment or acquisition, in any manner, of any Subsidiary not existing as a
Subsidiary on the Closing Date. The Company or a Guarantor, as appropriate, (a) shall execute a
Pledge Agreement (or such other agreement as shall be required by the Bank), as applicable, with
respect to 65% of the capital stock or other ownership interest of each First-Tier Subsidiary of
such Person which is or becomes a Non-Domestic Subsidiary, (b) shall cause each Subsidiary of such
Person which is a Domestic Subsidiary to execute a joinder agreement with respect to the Guaranty
and the Security Agreement, pursuant to which such Subsidiary becomes a “Guarantor” and “Grantor”
under the Guaranty and the Security Agreement, respectively, (c) shall deliver an opinion of
counsel, simultaneously with the delivery of (i) any Pledge Agreement executed pursuant to clause
(a) above, that such Pledge Agreement is valid and enforceable in the jurisdiction of formation of
such Non-Domestic Subsidiary, provided that if such opinion, in connection with the delivery of any
Pledge Agreement executed pursuant to clause (a) above cannot be provided, the Company, such
Guarantor or such Non-Domestic Subsidiary, as appropriate, shall execute any additional documents
that may be required in order to perfect the lien granted by such Pledge Agreement in such
jurisdiction and to enable such counsel to deliver an acceptable opinion with respect thereto and
(ii) the joinder agreement executed pursuant to clause (b) above, an Opinion of Counsel,
substantially in the form of Exhibit F hereto, with respect to such new Domestic
Subsidiary; in the case of both (a), (b) and (c) within ten (10) Business Days after the creation,
establishment or acquisition of such Domestic Subsidiary or Non-Domestic Subsidiary and in
connection therewith shall deliver or cause to be delivered such proof of corporate action,
incumbency of officers and other documents as are consistent with those delivered as to each
Domestic Subsidiary or Non-Domestic Subsidiary pursuant to Section 5.01 hereof on the Closing Date,
or as the Bank may request, each in form and substance satisfactory to the Bank, provided that the
Company and the Bank agree that the Company shall deliver to the Bank, within thirty (30) days of
the Closing Date, those documents and agreements described herein which are to be provided with
respect to B.V. Mach 6 B.V., a wholly-owned Non-Domestic Subsidiary of the Company.

     SECTION 6.11. Default in Other AgreementsSECTION 1.01. . Promptly notify the Bank of
any default in the performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which the Company or any Guarantor is a
party which could reasonably be expected to have a Material Adverse Effect.

     SECTION 6.12. Operating Accounts. Maintain its primary operating account at the Bank.

     SECTION 6.13. Environmental Laws.

          (a) Comply with and ensure compliance by all tenants and subtenants of their respective
properties with the requirements of all federal, state and local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect, provide to the Bank all
documentation in connection with such compliance that the Bank may reasonably request, and defend,
indemnify, and hold harmless the Bank, its employees, agents, officers, and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or
expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or
in any way related to, (i) the presence, disposal, release, or

37

 

threatened release of any Hazardous Materials on any property owned or occupied by the Company
or any Guarantor; (ii) any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials; (iii) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous Materials, and/or
(iv) any violation of laws, orders, regulations, requirements, or demands of government
authorities, or any policies or requirements of the Bank of which the Company has been notified,
which are based upon or in any way related to such Hazardous Materials including, without
limitation, reasonable attorney fees and consultant fees, investigation and laboratory fees, court
costs, and litigation expenses, except to the extent that any of the foregoing results from the
gross negligence or willful misconduct of the party seeking indemnification.

     (b) Execute and cause each Guarantor to execute any and all documentation with respect to
environmental matters as the Bank may reasonably request and such documentation shall be in form
and substance reasonably satisfactory to the Bank.

     SECTION 6.14. Landlord Waiver. Use its best efforts to deliver to the Bank, within ten (10)
Business Days from the Closing Date, a landlord waiver with respect to its premises located at 63
Oser Avenue, Hauppauge, New York, in a form reasonably satisfactory to the Bank.

ARTICLE VII

NEGATIVE COVENANTS

     The Company covenants and agrees with the Bank that so long as any Loan remains in effect or
any of the principal of or interest on any Note or any other Obligations hereunder shall be unpaid,
they will not, and will not cause or permit any Guarantor, directly or indirectly, to:

     SECTION 7.01. Liens. Incur, create, assume or suffer to exist any Lien on any of their
respective assets now or hereafter owned, other than:

          (a) Liens existing on the date hereof as set forth on Schedule II attached hereto but
not any renewals or extensions thereof;

          (b) deposits under workmen’s compensation, unemployment insurance and social security laws;

          (c) Liens for taxes, assessments, fees or other governmental charges or the claims of material
men, mechanics, carriers, warehousemen, landlords and other similar persons, the payment of which
is not overdue or is being contested in good faith by appropriate proceedings (provided that the
Company or such Guarantor has set aside on its books adequate reserves with respect thereto in
accordance with GAAP (if any are so required), consistently applied, and the failure to make
payment pending such contest could not reasonably be expected to result in a Material Adverse
Effect;

          (d) purchase money Liens for fixed or capital assets; provided, in each case, (x) no Default
or Event of Default shall have occurred and be continuing or shall occur as a result of the grant
of the proposed Lien, and (y) such purchase money Lien does not exceed 100% of the purchase price
and encumbers only the property being acquired;

38

 

          (e) Liens granted to the Bank and any of its Affiliates, including renewals and extensions
thereof; and

          (f) any attachment, judgment or similar Lien arising in connection with any court or
governmental proceeding, provided that the execution or other enforcement of such Lien is
effectively stayed within thirty (30) days and the claims secured thereby are being contested in
good faith by appropriate proceedings.

     SECTION 7.02. Indebtedness. Incur, create, assume or suffer to exist or otherwise
become liable with respect to any Indebtedness, other than:

          (a) Indebtedness incurred prior to the date hereof as described in Schedule III
attached hereto but not including any renewals or extensions thereof;

          (b) Indebtedness to the Bank and any of its Affiliates, including renewals and extensions
thereof;

          (c) Indebtedness for trade payables incurred in the ordinary course of business provided such
payables shall be paid or discharged when due;

          (d) taxes, assessments or other governmental charges or levies not yet delinquent or which are
being contested in good faith by appropriate proceedings; provided, however, that adequate reserves
with respect thereto are maintained on the books of the Company or any Guarantor in accordance with
Generally Accepted Accounting Principles;

          (e) Indebtedness secured by purchase money liens as permitted under Section 7.01(d); and

          (f) Subordinated Debt, to the extent permitted by Section 7.14 hereof.

     SECTION 7.03. Guaranties. Guarantee, endorse, become surety for, or otherwise in any
way become or be responsible for the Indebtedness or obligations of any Person, whether by
agreement to maintain working capital or equity capital or otherwise maintain the net worth or
solvency of any Person or by agreement to purchase the Indebtedness of any other Person, or
agreement for the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any other Person or
otherwise, or enter into or be a party to any contract for the purchase of merchandise, materials,
supplies or other property if such contract provides that payment for such merchandise, materials,
supplies or other property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:

          (a) guaranties executed prior to the date hereof as described on Schedule IV attached
hereto but not including any renewals or extension thereof;

          (b) endorsements of negotiable instruments for collection or deposit in the ordinary course of
business; and

39

 

          (c) guaranties of any Indebtedness under this Agreement or any other Indebtedness owing to the
Bank or any of its Affiliates, including renewals and extensions thereof.

     SECTION 7.04. Sale of Assets. Sell, assign, lease, transfer or otherwise dispose of
any of their now owned or hereafter acquired respective properties and assets, whether or not
pursuant to an order of a federal agency or commission, except for (i) the sale, assignment, lease,
transfer or other disposition of inventory, each in the ordinary course of business, and (ii) the
sale or other disposition of properties or assets no longer used or useful in the conduct of their
respective businesses.

     SECTION 7.05. Sale of Notes. Sell, transfer, discount or otherwise dispose of notes,
accounts receivable or other obligations owing to the Company or any Guarantor, with or without
recourse, except for collection in the ordinary course of business.

     SECTION 7.06. Loans and Investments. Make or commit to make any advance, loan,
extension of credit, or capital contribution to or purchase or hold beneficially any stock or other
securities, or evidence of Indebtedness of, purchase or acquire all or a substantial part of the
assets of, make or permit to exist any interest whatsoever in, any other Person, provided (i) the
Company or any Guarantor may consummate a Permitted Acquisition and may invest in Permitted
Investments, (ii) the Company may make investments, loans and advances to the Guarantors and (iii)
a Guarantor may make investments, loans and advances to the Company or another Guarantor.

     SECTION 7.07. Nature of Business. Change or alter the nature of its business, in any
material respect, from the nature of the business engaged in by it on the date hereof.

     SECTION 7.08. Sale and Leaseback. Enter into any arrangement, directly or indirectly,
with any Person whereby it shall sell or transfer any property, whether real or personal, used or
useful in its business, whether now owned or hereafter acquired, if at the time of such sale or
disposition it intends to lease or otherwise acquire the right to use or possess (except by
purchase) such property or like property for a substantially similar purpose.

     SECTION 7.09. Federal Reserve Regulations. Permit any Loan or the proceeds of any
Loan to be used for any purpose which violates or is inconsistent with the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.

     SECTION 7.10. Accounting Policies and Procedures; Tax Status. Permit any change in
the accounting policies and procedures the Company or any Guarantor, including a change in fiscal
year, without the prior written consent of the Bank; provided, however, that any policy or
procedure required to be changed by the FASB (or other board or committee of the FASB in order to
comply with Generally Accepted Accounting Principles) may be so changed.

     SECTION 7.11. Hazardous Materials. Cause or permit any of its properties or assets to
be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer,
produce or process Hazardous Materials, except in material compliance with all applicable federal,
state and local laws or regulations, or cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company, any Guarantor or any tenant or subtenant, a
release of Hazardous Materials in violation of applicable law or regulation onto such property

40

 

or asset or onto any other property, in a manner that could reasonably be expected to lead to
the imposition on the Company, such Guarantor or such property or asset of any liability or lien of
any nature whatsoever under any Environmental Law.

     SECTION 7.12. Limitations on Fundamental Changes. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now or hereafter acquired) to any Person, or
acquire all or substantially all of the assets or the business of any Person or liquidate, wind up
or dissolve or suffer any liquidation or dissolution, provided that, (a) the Company may consummate
a Permitted Acquisition and (b) so long as no Event of Default has occurred and is then continuing
and the Company has provided prior written notice to the Bank, any Subsidiary of the Company may
merge with (i) the Company, provided that the Company shall be the continuing or surviving
Person, or (ii) any one or more other Subsidiaries of the Company, provided that a Guarantor may
only merge with and into another Guarantor.

     SECTION 7.13. Financial Covenants.

          (a) Minimum Debt Service Coverage Ratio. Permit the Consolidated Debt Service
Coverage Ratio to be less than 1.50:1.00, determined quarterly with respect to the most recently
concluded four fiscal quarters for which financial statements have been delivered pursuant to
Article VI hereof.

          (b) Minimum Consolidated Liquidity Ratio. Permit the Consolidated Liquidity Ratio to
be less than 1.00:1.00, at any time.

          (c) Minimum Consolidated Capital Base. Permit the Consolidated Capital Base of the
Company and its Subsidiaries to be less than an amount equal to (i) $100,000,000 plus (ii)
75% of the Consolidated Net Income of the Company and its Subsidiaries plus (iii) 75% of
the net proceeds received from any Subordinated Debt or any Equity Issuance, all for the period
commencing January 1, 2009 and ending on the date of calculation.

          (d) Maximum Consolidated Leverage Ratio: Permit the Consolidated Leverage Ratio to be
more than 1.00:1.00, at any time.

          (e) Consolidated Unrestricted Cash. Maintain in deposit accounts with the Bank or any
Affiliate of the Bank, Consolidated Unrestricted Cash in an amount less than the sum of
$15,000,000.

     SECTION 7.14. Subordinated Debt. Directly or indirectly prepay, defease, purchase,
redeem, or otherwise acquire any Subordinated Debt, without the prior written consent of the Bank.

     SECTION 7.15. Dividends. Declare any dividend on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of stock of the Company or any
Guarantor, whether now or hereafter outstanding, other than non-cash dividends, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash, securities or
property or in obligations of the Company or any Guarantor or in any combination thereof, or

41

 

permit any Affiliate to make any payment on account of, or purchase or otherwise acquire, any
shares of any class of the stock of the Company or any Guarantor from any Person.

     SECTION 7.16. Transactions with Affiliates. Enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering of any service,
with any Affiliate, except in the ordinary course of and pursuant to the reasonable requirements of
the Company’s or any of the Guarantor’s business and upon fair and reasonable terms no less
favorable to the Company or such Guarantor than they would obtain in a comparable arms-length
transaction with a Person not an Affiliate.

     SECTION 7.17. Impairment of Security Interest. Take or omit to take any action which
might or would have the result of effecting or impairing the security interest in any property
subject to a security interest in favor of the Bank and neither the Company nor any Guarantor shall
grant to any person any interest whatsoever in any property subject to a security interest in favor
of the Bank.

     SECTION 7.18. Negative Pledge. Permit any lien, mortgage, security interest or
encumbrance to exist upon any of the Company’s or any Guarantor’s real property, including, without
limitation, their respective real property located in Hauppauge, New York and Laurel, Maryland.

ARTICLE VIII

EVENTS OF DEFAULT

     SECTION 8.01. Events of Default. In the case of the happening of any of the following
events (each an “Event of Default”):

          (a) failure by the Company to pay:

          (i) the principal of any Loan or any reimbursement obligations with respect to a
drawing under any Letter of Credit as and when due and payable; or

          (ii) interest on any Loan and any fees or other amounts payable under this Agreement
and any other Loan Document, as and when due and payable, and such failure to pay shall
continue for two (2) Business Days;

          (b) default shall be made in the due observance or performance of any covenant, condition or
agreement of the Company or any Guarantor to be performed

          (i) pursuant to Article 6 of this Agreement (other than Section 6.03, Section 6.04,
Section 6.06, Section 6.10 and Section 6.13 hereof) and, in the case of this sub clause (i)
only, such default shall continue unremedied for a period of ten (10) consecutive days or

          (ii) pursuant to any other provision of this Agreement or any other Loan Document that
is not specifically addressed in Sections 8.01(a), (b)(i), (c) or (d) hereof;

          (c) any representation or warranty made or deemed made in this Agreement or

42

 

any other Loan Document shall prove to be false or misleading in any material respect when
made or given or when deemed made or given pursuant to the terms hereof;

          (d) any report, certificate, financial statement or other instrument furnished in connection
with this Agreement or any other Loan Document or the borrowings hereunder, shall prove to be false
or misleading in any material respect when made or given or when deemed made or given pursuant to
the terms hereof;

          (e) (i) default in the performance or compliance in respect of any agreement or condition
relating to (x) any other Indebtedness of the Company or any Guarantor in excess of $150,000 (other
than as described in clause (y) below), individually or in the aggregate, if the effect of such
default is to accelerate the maturity of such Indebtedness or to permit the holder or obligee
thereof (or a trustee on behalf of such holder or obligee) to cause such Indebtedness to become due
prior to the stated maturity thereof or (y) any Indebtedness of the Company or any Guarantor owing
to the Bank or any Bank Affiliate (other than the Notes) or (ii) any Indebtedness in excess of
$150,000, individually or in the aggregate, shall not be paid when due (beyond any applicable grace
period and subject to Section 6.02 hereof);

          (f) the Company or any Guarantor shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code or any other federal or state
bankruptcy, insolvency or similar law, (ii) consent to the institution of, or fail to controvert in
a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the employment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any Guarantor or for a substantial part of its property; (iv) file an
answer admitting the material allegations of a petition filed against it in such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) take corporate action for the purpose
of effecting any of the foregoing, (vii) become unable or admit in writing its inability or fail
generally to pay its debts as they become due or (viii) take corporate action for the purpose of
effecting any of the foregoing;

          (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (i) relief in respect of the Company or any Guarantor or
of a substantial part of their respective property, under Title 11 of the United States Code or any
other federal or state bankruptcy insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any Guarantor or for a
substantial part of their property, or (iii) the winding-up or liquidation of the Company or any
Guarantor and such proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall continue unstayed and in effect for 60
days;

          (h) One or more orders, judgments or decrees for the payment of money in excess of $150,000 in
the aggregate shall be rendered against the Company or any Guarantor and the same shall not have
been paid in accordance with such judgment, order or decree and either (i) an enforcement
proceeding shall have been commenced by any creditor upon such judgment, order or decree, or (ii)
there shall have been a period of thirty (30) days during which a stay of enforcement of such
judgment order or decree, by reason of pending appeal or otherwise, was not in effect;

43

 

          (i) any Plan shall fail to maintain the minimum funding standard required for any Plan year or
part thereof or a waiver of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code, any Plan is, shall have been terminated or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
Reportable Event shall have occurred with respect to a Plan or the Company, any Guarantor, or any
ERISA Affiliate shall have incurred a liability to or on account of a Plan under Section 515, 4062,
4063, 4063, 4201 or 4204 of ERISA, and there shall result from any such event or events the
imposition of a lien upon the assets of the Company or any Guarantor, the granting of a security
interest, or a liability to the PBGC or a Plan or a trustee appointed under ERISA or a penalty
under Section 4971 of the Code;

          (j) any provision of any Loan Document shall for any reason cease to be in full force and
effect in accordance with its terms or the Company, or any Guarantor shall so assert in writing or
any of the Liens purported to be granted pursuant to any Security Document shall fail or cease for
any reason to be legal, valid and enforceable liens on the collateral purported to be covered
thereby or shall fail or cease to have the priority purported to be created thereby;

          (k) a Change of Control shall occur; or

          (l) the Company or any Guarantor shall default in the punctual payment of any sum payable with
respect to, or in the observance or performance of any of the terms and conditions of, any
agreement between such Person and the Bank or any of its Affiliates (other than with respect to
this Agreement and any other Loan Document) beyond any applicable grace period referred to therein
or subject to the express waiver thereof by the Bank;

then, at any time thereafter during the continuance of any such event, the Bank may, without notice
to the Company or any Guarantor, (i) terminate the Commitments and the Loans and declare the Notes,
both as to principal and interest, to be forthwith due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the Notes to the contrary notwithstanding; provided, however, that if
an event specified in Section 8.01(f) and (g) shall have occurred, the Loans shall automatically
terminate and the Notes shall be immediately due and payable; and (ii) exercise any or all of the
rights and remedies afforded to the Bank by the Uniform Commercial Code or otherwise possessed by
the Bank. With respect to all Letters of Credit that shall not have expired or presentment for
honor shall not have occurred, the Company shall provide the Bank with Cash Collateral in an amount
equal to the aggregate undrawn amount of such Letters of Credit. Such Cash Collateral shall be
used to reimburse the Bank for drawings under Letters of Credit for which the Bank has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Company at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other Obligations, with any amount remaining after such
satisfactions to be returned to the Company or paid to such other party as may legally be entitled
to the same.

ARTICLE IX

MISCELLANEOUS

     SECTION 9.01. Notices. Any notice shall be in writing and shall be conclusively
deemed to have been received by a party hereto and to be effective on the day on which

44

 

delivered to such party at the address set forth below, or, in the case of telecopy notice,
when acknowledged as received, or if sent by registered or certified mail, on the third Business
Day after the day on which mailed in the United States, addressed to such party at said address:

          (a)      if to the Bank, at

Citibank, N.A.

730 Veterans Memorial Highway

Hauppauge, New York 11788

Attention: Relationship Officer –Globecomm Systems Inc.

Telecopy: (631) 265-4888

With copies to:

Farrell Fritz, P.C.

1320 RexCorp Plaza

Uniondale, New York 11556-1320

Attention: Robert C. Creighton

Telecopy: (516) 227-0777

          (b)      if to the Company, at

Globecomm Systems Inc.

45 Oser Avenue

Hauppauge, New York 11788

Attention: Chief Financial Officer

Telecopy: (631) 951-3241

With copies to:

Goldman & Associates, LLP

666 Old Country Road

Garden City, New York 11530

Attention: Ronald G. Goldman, Esq. 

Telecopy: (516) 228-8349

- and -

	 	(c)	 	as to each such party at such other address as such party shall
have designated to the other in a written notice complying as to delivery with
the provisions of this Section 9.01.

     SECTION 9.02. Survival of Agreement. All covenants, agreements, representations and
warranties made herein and in the other Loan Documents and in the certificates delivered pursuant
hereto or thereto shall survive the making by the Bank of the Loans herein contemplated and the
execution and delivery to the Bank of the Notes evidencing the Loans and shall continue in full
force and effect so long as any Note is outstanding and unpaid. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to

45

 

include the successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the Company and the Guarantors which are contained in this Agreement shall bind
and inure to the benefit of the respective successors and assigns of the Bank. The Company may not
assign or transfer any of its interest under this Agreement, the Notes or any other Loan Document
without the prior written consent of the Bank.

     SECTION 9.03. Expenses of the Bank. The Company agrees (i) to indemnify, defend and
hold harmless the Bank and its officers, directors, employees, agents, advisors and affiliates
(each, an “indemnified person”) from and against any and all losses, claims, damages, liabilities
or judgments to which any such indemnified person may be subject and arising out of or in
connection with the Loan Documents, the financings contemplated hereby, the use of any proceeds of
such financings or any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any of such indemnified persons is a party
thereto, and to reimburse each of such indemnified persons upon demand for any expenses, including
reasonable legal fees, incurred in connection with the investigation or defending any of the
foregoing; provided that the foregoing indemnity will not, as to any indemnified person, apply to
losses, claims, damages, liabilities, judgments or related expenses to the extent arising from the
willful misconduct or gross negligence of such indemnified person; and (ii) to reimburse the Bank
from time to time, upon demand, all out-of-pocket expenses (including reasonable expenses of its
due diligence investigation, along with disbursements and reasonable fees of counsel and the
allocated costs of internal counsel) incurred in connection with the financings contemplated under
this Agreement, the preparation, execution and delivery of this Agreement and the other Loan
Documents, any amendments and waivers hereof or thereof, the security arrangements contemplated
thereby and the enforcement thereof. The provisions of this Section 9.03 shall survive termination
of this Agreement.

     SECTION 9.04. No Waiver of Rights by the Bank. Neither any failure nor any delay on
the part of the Bank in exercising any right, power or privilege hereunder or under the Notes or
any other Loan Document shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any other right, power or privilege.

     SECTION 9.05. Applicable Law. THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.

     SECTION 9.06. Submission to Jurisdiction; Jury Waiver. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK, COUNTY OF NEW
YORK, COUNTY OF NASSAU AND COUNTY OF SUFFOLK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT
AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY
SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS

46

 

IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT REFERRED TO HEREIN OR THEREIN WHERE THE SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN
OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AGREES NOT TO (i) SEEK
AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY
OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT AND
(ii) ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING UNLESS SUCH COUNTERCLAIM
CONSTITUTES A COMPULSORY OR MANDATORY COUNTERCLAIM UNDER APPLICABLE RULES OF CIVIL PROCEDURE. THE
COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE
ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
EACH PARTY HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT.

     SECTION 9.07. Extension of Maturity. Except as otherwise expressly provided herein,
whenever a payment to be made hereunder shall fall due and payable on any day other than a Business
Day, such payment may be made on the next succeeding Business Day, and such extension of time shall
be included in computing interest.

     SECTION 9.08. Modification of Agreement. No modification, amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, nor consent to any departure by
the Company or any Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Bank and the Company or such Guarantor, as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Company in any case shall entitle the Company to any other or
further notice or demand in the same, similar or other circumstance unless required by the terms of
this Agreement.

     SECTION 9.09. Severability. In case any one or more of the provisions contained in
this Agreement, any Note or in any other Loan Document should be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.

     SECTION 9.10. Sale of Participations, Assignments. The Bank reserves the right to
sell participations in or to sell and assign its rights, duties or obligations with respect to the
Loans to such banks, lending institutions or other parties as it may choose and without the consent
of the Company, provided that the Bank shall notify the Company promptly following such
participation or assignment. The Bank may furnish any information concerning the Company or any
Guarantor in its possession from time to time to any assignee or participant (or proposed assignee
or participant), provided that the Bank shall notify any such assignee or participant (or proposed
assignee or participant) in connection with any contemplated participation in, or assignment of,
the Loans, that such information may be confidential and that such transferee or participant shall
treat such information as such and otherwise comply with Section 9.18 below.

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     SECTION 9.11. Reinstatement; Certain Payments. If claim is ever made upon the Bank
for repayment or recovery of any amount or amounts received by the Bank in payment or on account of
any of the Obligations under this Agreement, the Bank shall give prompt notice of such claim to the
Company, and if the Bank repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over the Bank or any of its property,
or (ii) any settlement or compromise of any such claim effected by the Bank with any such claimant,
then and in such event the Company agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Company notwithstanding the cancellation of any Note or other
instrument evidencing the Obligations under this Agreement or the termination of this Agreement,
and the Company shall be and remain liable to the Bank hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been received by the Bank.

     SECTION 9.12. Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Bank and each other Affiliate of the Bank are each hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Bank to or for the credit or the account of the Company
against any and all the Obligations. The rights of the Bank under this Section 9.12 are in
addition to other rights and remedies (including, without limitation, other rights of setoff) which
the Bank may have.

     SECTION 9.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, taken together, shall
constitute one and the same instrument.

     SECTION 9.14. Headings. Section headings used herein are for convenience of reference
only and are not to affect the construction of or be taken into consideration in interpreting this
Agreement.

     SECTION 9.15. Construction. This Agreement is the result of negotiations between, and
has been reviewed by, the Company and the Bank and their respective counsel. Accordingly, this
Agreement shall be deemed to be the product of each party hereto, and no ambiguity shall be
construed in favor of or against either the Company or the Bank.

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

     SECTION 9.17. TerminationSECTION 9.18. . The obligations of the Company hereunder
shall terminate and be released upon the indefeasible payment in full of the Obligations, provided
that the provisions of Sections 3.07, 3.08, 3.09, 9.03 and 9.11 shall survive and remain in full
force and effect regardless of the repayment of the Loans or the termination of this Agreement or
any provision hereof.

     SECTION 9.18. Confidentiality. The Bank agrees to keep confidential all non-public
information, materials and documents furnished by the Company, the Guarantors and their respective
Subsidiaries to the Bank pursuant to this Agreement, provided that, in the case of

48

 

information received from the Company, a Guarantor or any Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential (the “Confidential
Information”). Notwithstanding the foregoing, the Bank shall be permitted to disclose Confidential
Information (a) to its Affiliates and to such of its and its Affiliate’s officers, directors,
employees, agents, representatives and professional advisors in any of the transactions
contemplated by, or the administration of, this Agreement; (b) to the extent required by applicable
laws and regulations or by any subpoena or similar legal process, or requested by any governmental
agency or authority; (c) to the extent such Confidential Information (i) becomes publicly available
other than as a result of a breach of this Section 9.18 by the disclosing party, or (ii) becomes
available to the Bank on a non-confidential basis from a source other than the Company, the
Guarantor or their respective Subsidiaries which to the Bank’s knowledge is not prohibited from
disclosing such Confidential Information to the Bank by a contractual or other legal obligation;
(d) to the extent the Company, the Guarantors or any of their respective Subsidiaries shall have
consented to such disclosure in writing; (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, or (f) to any
prospective transferee or participant in connection with any contemplated transfer of this
Agreement and the Notes or any interest therein provided such transferee or participant agrees to
treat the Confidential Information in a manner consistent with this Section 9.18. Nothing herein
shall prohibit the disclosure of Confidential Information in connection with any litigation or
where such disclosure is pursuant to applicable laws, regulations, court order or similar legal
process; provided, however, in the event that the Bank is requested or required by law to disclose
any of the Confidential Information, the Bank shall provide the Company with written notice, unless
notice is prohibited by law, of any such request or requirement so that the Company may seek a
protective order or other appropriate remedy; provided that no such notification shall be required
in respect of any disclosure to regulatory authorities having jurisdiction over such party.

[signature page follows]

49

 

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

	 	 	 	 	 
	 	 	GLOBECOMM SYSTEMS INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Andrew C. Melfi 
	 

	 	 	 	 
	 

	 	Name:
	 	Andrew C. Melfi
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	CITIBANK, N.A.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Stuart N. Berman 
	 
	 	 	 	 
	 

	 	Name:
	 	Stuart N. Berman
	 

	 	Title:
	 	Vice President

50

 

SCHEDULES TO THE CREDIT AGREEMENT

Schedule I (Subsidiaries and Affiliates)

 

Globecomm Network Services Corp., Delaware corporation, 100% owned by Globecomm Systems Inc.

GSI Properties Corp., New York corporation, 100% owned by Globecomm Systems Inc.

Globecomm Services Maryland LLC, Delaware limited liability company, 100% owned by Globecomm
Systems Inc.

Turbo Logic Associates LLC, Delaware limited liability company, 100% owned by Globecomm
Services Maryland LLC

Cachendo LLC, Delaware limited liability company, 100% owned by Globecomm Systems Inc.

B.V. Mach 6, a Netherlands B.V., 100% owned by Globecomm Systems Inc.

 
Schedule II (Liens existing on the date hereof)
 

     Other than for liens to Citibank, none

 Schedule III (Indebtedness incurred prior to the date hereof)

     Other than for indebtedness to Citibank, none

 Schedule IV (guaranties executed prior to the date hereof)

     Other than for guaranties to Citibank, none

 Schedule V (Existing Letters of Credit)

     (see excel spreadsheet attached)

Schedule VI (defaults with respect to any judgment, writ, injunction, decree, rule or
regulation of any Governmental Authority)

     None.EX-10.16

Exhibit 10.16

Execution Copy

EMPLOYMENT AGREEMENT

     AGREEMENT, dated as of the 28th day of March, 2006 (the “Effective Date”), and amended and
restated as of the 17th day of December, 2008, by and between Loral Space & Communications Inc., a
Delaware corporation (the “Company”), Michael B. Targoff (the “Executive”) and those subsidiaries
of the Company signatory hereto solely for purposes of Section 14(m) hereof.

     WHEREAS, the Company had initially entered into an employment agreement with the Executive,
effective March 28, 2006 (the “2006 Agreement”); and

     WHEREAS, certain amendments to the 2006 Agreement are required under Internal Revenue Code
(“Code”) § 409A and permitted under Section 13(n) of the 2006 Agreement; and

     WHEREAS, the Company and the Executive wish to make those changes required by Code § 409A and
to preserve, to the maximum lawful extent, all the economic benefits to the Executive intended by
the 2006 Agreement; and

     WHEREAS, this Agreement shall supersede the 2006 Agreement.

     WHEREAS, the Company desires to be assured that all proprietary and confidential information
of the Company will be preserved for the exclusive benefit of the Company.

     NOW, THEREFORE, in consideration of the Executive’s continued employment and the mutual
covenants herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive agree as follows:

     Section 1. Employment and Position. The Company hereby employs the Executive as its
Chief Executive Officer and Vice Chairman of the Board of Directors (the “Board”), and the
Executive hereby accepts such employment under and subject to the terms and conditions hereinafter
set forth.

     Section 2. Term. The term of employment under this Agreement shall begin as of March
1, 2006, and, unless sooner terminated as provided in Section 6, shall conclude on December 31,
2010 (the “Term”).

     Section 3. Duties. The Executive shall perform services in a managerial capacity in a
manner consistent with the Executive’s position as Chief Executive Officer and Vice Chairman of the
Board, subject to the general supervision of the Board. The Executive shall have all of the
duties, responsibilities and authority commensurate with his position. The Executive hereby agrees
to devote substantially all his business time to performance of such duties and to the promotion
and forwarding of the business and

 

 

affairs of the Company for the Term; provided, however, that Executive shall be permitted to
engage, or continue participation, in (a) charitable, civic, educational, professional, community
or industry affairs, (b) managing the Executive’s and his family’s personal investments, (c)
corporate directorships and other business activities described in Schedule I attached
hereto with regard to public companies, and as heretofore disclosed to the Board with regard to
private companies, including any replacements for any such private companies heretofore disclosed
to the Board that does not materially change the time commitment or violate Section 10 hereof and
(d) such other activities as may hereafter be specifically approved in writing, which in each case
and in the aggregate do not materially interfere with the performance of his obligations hereunder;
provided, further, however, that Executive may not engage in any such activities that would result
in the Executive being in Competition (as defined in Section 10(d) below).

     Section 4. Compensation.

     (a) Salary. In consideration of the services rendered by the Executive under this
Agreement, the Company shall pay the Executive a base salary (the “Base Salary”) at the rate of
$950,000 per calendar year. The Base Salary shall be paid in such installments and at such times
as the Company pays its salaried executives and shall be subject to all necessary withholding
taxes, FICA contributions and similar deductions. The Board shall review annually the Base Salary
payable to Executive hereunder and may, in its sole discretion, increase but not decrease, the
Executive’s salary rate. Any such increased salary shall be and become the “Base Salary” for
purposes of this Agreement.

     (b) Annual Bonus. The Company shall maintain an annual Management Incentive Bonus
program (“MIB Program”) for certain executives, and Executive shall be a participant in the MIB
Program and shall be entitled to an annual bonus to the extent payable under such program (“Annual
Bonus”). The Executive’s target annual bonus opportunity under the MIB Program shall be not less
than 125% of the Executive’s Base Salary (the “Target Annual Bonus”). With respect to the Annual
Bonus for the 2006 fiscal year or any subsequent fiscal year, the Board shall, in its discretion,
establish the terms and conditions of the MIB Program and may amend the MIB Program (other than by
reducing the Target Annual Bonus percentage set forth above) accordingly. The Annual Bonus shall
be paid on or before March 15 of the year following the year to which the Annual Bonus relates.

     (c) Equity Grants. In connection with Executive’s service as Vice Chairman of the
Board commencing on November 21, 2005, the Company, pursuant to an Option Agreement dated December
21, 2005 (the “Initial Option Agreement”), on December 21, 2005, granted to Executive (the “Initial
Option Grant”) an option to purchase 106,952 shares of its common stock at an exercise prices of
$28.441 per share under the Company’s 2005 Stock Incentive Plan (the “Stock Option Plan”). The
Board has amended and restated the Stock Option Plan to increase the number of shares of the
Company’s common stock, par value per share $0.01 (the “Common Stock”), available

2

 

for grant thereunder to a number adequate to cover the Option (as defined below) and will,
prior to the submission of the amended and restated Stock Option Plan to stockholders for approval,
further amend and restate the Plan to provide for an additional number or shares adequate to cover
the 2008 Equity Award (as defined below), based on the Company’s best estimate at the time of
amendment and restatement of the number of shares necessary for the 2008 Equity Award, and shall
reserve adequate shares, subject to such best estimate, under the Stock Option Plan for such awards
and the Company agrees to submit the Stock Option Plan as amended to the Company’s stockholders at
the next annual meeting of stockholders and seek stockholder approval (the “Approvals”). In
addition to the Initial Option Grant, in connection with the execution of this Agreement, the
Company grants to the Executive an option to purchase 825,000 shares of common stock of the
Company, with a per-share exercise price equal to the fair market value of one share of the
Company’s common stock at the date of grant (the “Option”), such grant to be subject to obtaining
the Approvals. To the extent the Approvals are not obtained, the Option shall be void. The Option
shall have such other terms and conditions as set forth in the Option Agreement attached hereto as
Exhibit A (the “Second Option Agreement” and, together with the Initial Option Agreement, the
“Option Agreements”). The Option is intended to count as an option award for both 2006 and 2007,
in lieu of any regular annual option award that the Executive would otherwise be entitled to in
2006 and 2007, and has been structured as such with one-half of the Option vesting over three years
commencing on the date of Grant and one-half of the Option vesting over three years commencing on
the first anniversary of the date of grant. In addition, if the Executive has earned a Target
Annual Bonus for both 2006 and 2007, the Company shall grant to the Executive in 2008 an additional
option to purchase shares of common stock of the Company, or other equity award under the Stock
Option Plan, in either case having a comparable economic value equal to one-half (1/2) of the value
of the Option (based on a Black-Scholes valuation of such Option) (the “2008 Equity Award”) and, to
the extent the 2008 Equity Award is a stock option, with terms similar to the Second Option
Agreement; provided, however, that the 2008 Equity Award shall, whether an Option
or other equity award, vest in four annual installments with twenty-five percent (25%) of the award
vesting on the date of grant, an additional twenty-five percent (25%) of the award vesting on the
first anniversary of the date of grant, an additional twenty-five percent (25%) of the award
vesting on the second anniversary of the date of grant and the remaining twenty-five percent (25%)
of the award vesting on the third anniversary of the date of grant (consistent with the provisions
of the Second Option Agreement (and Section 7(h) hereof) relating to termination of employment and
accelerated vesting and exercise periods); and further provided, however,
that the 2008 Equity Award shall not be made subject to stockholder approval. The grant of the
2008 Equity Award shall also be subject to obtaining the Approvals. The Executive shall be
eligible for participation in the Stock Option Plan during the Term to the same extent as other
senior executives of the Company, taking into account that the Option is intended to count as the
regular option award for both 2006 and 2007 and the 2008 Equity Award is intended to count as an
the regular equity award for 2008. The Company may make such other discretionary equity awards to
the Executive as it deems appropriate. Notwithstanding anything herein to the contrary, (i) the
Option shall not become exercisable prior to the date the Company

3

 

obtains the Approvals and the 2008 Equity Award shall not become exercisable prior to the
Approvals.

     Section 5. Benefits. In addition to the compensation detailed in Section 4 of this
Agreement, the Executive shall be entitled to the following additional benefits:

     (a) Paid Vacation. The Executive shall be entitled to 20 days paid vacation per
calendar year in accordance with the Company’s vacation policy in effect from time to time, such
vacation shall extend for such periods and shall be taken at such intervals as shall be appropriate
and consistent with the proper performance of the Executive’s duties hereunder.

     (b) Welfare Plans. During the Term, the Executive and/or the Executive’s family, as
the case may be, shall be eligible for participation in and shall receive all benefits under
welfare benefit plans, programs, practices and policies provided generally by the Company to
similarly situated executives of the Company (including, without limitation, any medical,
prescription, dental, disability, salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs that may be provided by the Company from time to
time). Such benefits shall be paid to the Executive in accordance with the written terms of the
applicable plan, policy or program. Such plans, programs, practices and policies are subject to
change from time to time by the Company.

     (c) Other Benefit Plans. During the Term, the Executive shall be entitled to
participate in all equity, savings, retirement and pension plans (including the Company’s
Supplemental Executive Retirement Plan (“SERP”)), programs, practices and policies applicable
generally to similarly situated executives of the Company as determined by the Board from time to
time. Such benefits shall be paid to the Executive in accordance with the written terms of such
other benefit plans, programs, practices and policies. Such plans, programs, practices and
policies are subject to change from time to time by the Company.

     (d) Perquisites and Other Benefits. During the Term, the Executive shall be entitled
to such additional perquisites and fringe benefits appertaining to his position in accordance with
any practice established by the Board. During the Term, Executive shall be entitled to receive all
benefits under any individual welfare benefit arrangements (including life insurance coverage) or
other benefit arrangements currently in effect for other senior executives of the Company in a
manner consistent with past practice, and such arrangements are listed on Schedule I
attached hereto. Such perquisites and fringe benefits shall be paid to the Executive in accordance
with the written terms of the applicable arrangement.

     (e) Reimbursement of Expenses. Subject to the terms set forth in Section 11 below,
including, but not limited to, Section 11(e), the Company shall reimburse the Executive for all
reasonable expenses actually incurred by the Executive directly in

4

 

connection with the business affairs of the Company and the performance of his duties
hereunder, upon presentation of proper receipts or other proof of expenditure and subject to such
reasonable guidelines or limitations provided by the Company from time to time. The Executive
shall comply with such reasonable limitations and reporting requirements with respect to such
expenses as the Board may establish from time to time.

     (f) Indemnification. In addition to the terms of any officers’ liability insurance
carried by the Company, the Executive (and his heirs, executors and administrators) shall be
indemnified by the Company and its successors and assigns pursuant to a separate Indemnification
Agreement attached hereto as Exhibit B, which has heretofore been executed. The Executive shall be
an insured person under or otherwise covered by directors and officers liability insurance in an
amount consistent with past practice. The obligations of the Company pursuant to this Section
shall survive the expiration of the Term or Executive’s voluntary or involuntary termination or
resignation for Good Reason.

     Section 6. Termination of Employment. The Executive’s employment may end earlier than
the end of the Term as follows:

     (a) Death. The employment of the Executive shall automatically terminate upon the
death of the Executive.

     (b) Disability. In the event of any physical or mental disability of the Executive
rendering the Executive substantially unable to perform his duties hereunder for a period of at
least one hundred eighty (180) days out of any three hundred sixty-five (365)-day period and the
further determination that the disability is permanent with regard to the Executive’s ability to
return to work in his full capacity, the Executive’s employment shall be terminated on account of
the Executive’s disability upon written notice from the Company; provided, however,
that upon the occurrence of the Executive’s incapacity due to physical or mental disability that,
based on the facts and circumstances, would indicate that a separation from service has occurred
within the meaning of Treasury Regulation Section 1.409A-1(h), the Executive’s employment shall be
terminated immediately on account of disability pursuant to this Section 6(b) without any further
action on the part of the Executive or the Company. In the event of any dispute as to the
Executive’s disability, the determination binding on both parties shall be made by a physician or
physicians mutually agreed upon in good faith by the Board and the Executive or his representative.

     (c) By the Company For Cause. The employment of the Executive may be terminated by
the Company for Cause (as defined below) at any time effective upon written notice to the
Executive; provided, however, that if such termination is based upon any event set forth in clause
(ii), (iii), (iv), or (v) below, Executive shall be given not less than ten (10) days prior written
notice by the Board of the intention to terminate him for Cause, such notice to state in detail the
particular act or acts or failure or failures to act that constitute the grounds on which the
proposed termination for Cause is based, and

5

 

Executive shall have ten (10) days after the date that such written notice has been given to
Executive in which to address the full Board and present arguments on his own behalf, with or
without legal representation at the Executive’s election, regarding any such alleged act or failure
to act. If a majority of the members of the full Board make a determination that Cause exists, the
termination shall be effective on the date immediately following the expiration of the ten (10) day
notice period. Otherwise, Cause shall not be determined to exist. For purposes hereof, the term
“Cause” shall mean that one or more of the following has occurred:

     (i) the Executive shall have been after the Effective Date convicted of, or shall have
pleaded guilty or nolo contendere to, any felony;

     (ii) the Executive shall have materially breached any provision of Section 10 hereof;

     (iii) the Executive shall have committed any fraud, embezzlement, misappropriation of
funds, or breach of fiduciary duty against the Company, in each case of a material nature;

     (iv) the Executive shall have engaged in any willful misconduct with regard to the
Company resulting in or reasonably likely to result in a material loss to the Company or
substantial damage to its reputation; or

     (v) the Executive shall have willfully breached in any material respect any material
provision of the Company’s Code of Conduct, which breach would generally result in the
termination of a senior executive of the Company and, to the extent any such breach is
curable, the Executive shall have failed to cure such breach within ten (10) days after
written notice of the alleged breach is provided to the Executive.

     (d) By the Company without Cause. The Company may terminate the Executive’s
employment at any time without Cause effective upon written notice to the Executive.

     (e) By the Executive Voluntarily. The Executive may terminate his employment at any
time effective upon at least thirty (30) days prior written notice to the Company.

     (f) By the Executive for Good Reason. The Executive may terminate his employment for
Good Reason by providing the Company thirty (30) days’ written notice setting forth in reasonable
specificity the event that constitutes Good Reason, within sixty (60) days of the occurrence of
such event. During such thirty (30) day notice period, the Company shall have a cure right (if
curable), and, if not cured within such period, Executive’s termination will be effective upon the
expiration of such cure period. For this purpose, unless agreed to by the Executive, the term
“Good Reason” shall mean:

6

 

     (i) the assignment to the Executive of any duties inconsistent in any substantial
respect with the Executive’s position, authority or responsibilities or any duties which
are illegal or unethical;

     (ii) any reduction or diminution in the Executive’s then titles or positions
(including removal or failure to be re-elected to the Board or as Vice Chairman), or a
material reduction or diminution in the Executive’s then authorities, duties or
responsibilities or reporting requirements with the Company; provided, however, that the
sale of all or substantially all of the assets or stock of Loral Holdings Corporation or
Space Systems/Loral, Inc. (each, a “Subsidiary”) shall not, by itself, constitute Good
Reason;

     (iii) a reduction in Base Salary, the Target Annual Bonus or any of the benefits
described in Section 5 of this Agreement to the extent not permitted under Section 5;

     (iv) the relocation by the Company of the Executive’s primary place of employment with
the Company to a location outside of New York County, New York;

     (v) other material breach of this Agreement by the Company;

     (vi) the failure of the Company to obtain the assumption in writing delivered to the
Executive of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company; or

     (vii) the failure of the Company to grant the 2008 Equity Award, unless such failure
is due to the failure to obtain the Approvals.

     Section 7. Death and Employment Termination Payments and Benefits.

     (a) Voluntary Termination, Termination For Cause. Upon any termination of employment
during the Term either (i) by the Executive without Good Reason under Section 6(e), or (ii) by the
Company for Cause as provided in Section 6(c), all payments, Base Salary and other benefits
hereunder shall cease at the effective date of termination. Notwithstanding the foregoing, the
Executive shall be entitled to receive from the Company (i) Base Salary earned or accrued through
the date the Executive’s employment is terminated payable in accordance with the Company’s general
payroll policies, (ii) reimbursement for any and all monies advanced in connection with the
Executive’s employment for reasonable business expenses incurred by the Executive through the date
the Executive’s employment is terminated in accordance with the Company’s reimbursement policies as
provided above, (iii) all other payments and benefits to which the Executive may be entitled under
the terms (including time, form and manner of payment) of any applicable compensation arrangement
or benefit plan or program of the Company, including any earned and accrued, but unused vacation
pay and benefits under and in accordance with the terms and provisions of the SERP, but excluding
any

7

 

entitlement to severance under any Company severance policy generally applicable to the
Company’s salaried employees, and (iv) excluding any accrued and unpaid Annual Bonus for the
immediately preceding year (collectively, the “Accrued Benefits”).

     (b) Death. In the event of the Executive’s death during the Term, the Company shall
have no further obligations to the Executive or his beneficiaries other than to pay to the
Executive’s designated beneficiary or, if no beneficiary has been designated by the Executive, to
his estate (i) all Accrued Benefits paid in the time, form and manner set forth in Section 7(a),
plus (ii) any Base Salary through the end of the calendar month in which the Executive’s death
occurred, payable in accordance with the Company’s general payroll policies, plus (iii) any accrued
and unpaid Annual Bonus for the immediately preceding year payable at the time the Company pays its
executives such bonus in accordance with its general payroll policies but in no event later than
March 15th of the year following the year to which such bonus relates, and (iv) an
amount equal to that portion of the Annual Bonus, which but for the Executive’s death would have
been earned by the Executive during the year of his death, pro-rated based on a formula, the
denominator of which shall be 365 and the numerator of which shall be the number of days during the
year of his death during which the Executive was employed by the Company on an active status,
payable at the times the Company pays its executives such bonus in accordance with its general
payroll policies but in no event later than March 15th of the year following the year to
which such bonus relates (the Accrued Benefits and the payment of the amounts set forth in clauses
(iii) and (iv) of this Section 7(b) are collectively referred to as the “Enhanced Accrued
Benefits”). In addition, any unvested stock options under the Stock Option Plan and any deferred
compensation under the Initial Option Agreement that would have become vested on the next date of
vesting applicable thereto shall become vested and shall remain exercisable or be paid as provided
under the terms of the applicable plan or agreement as to a portion thereof based on a formula, the
denominator of which shall be 365 and the numerator of which shall be the number of days during the
year of his death during which the Executive was employed by the Company on an active status. The
Executive’s medical, prescription and dental coverage shall continue for the benefit of the
Executive’s family through the end of the Term upon the same terms and conditions applicable
generally to active employees and their families; provided, however, that the
Company portion of the monthly insurance premiums provided pursuant to the immediately preceding
sentence shall be taxable income to the Executive in the year in which such coverage is provided.

     (c) Termination without Cause or for Good Reason. In the event that the Executive’s
employment is terminated during the Term by the Company without Cause or by the Executive for Good
Reason, the Executive shall be entitled to receive as his exclusive right and remedy in respect of
such termination, (i) all Enhanced Accrued Benefits (except that for purposes of this Section 7(c),
the term “death” in Section 7(b)(iv) above shall be replaced with the term “termination”), paid in
accordance with the time, form and manner of payment set forth in Section 7(b), and (ii) a lump sum
severance payment equal to two (2) times the sum of (A) the Executive’s Base Salary in effect on
the date of termination and (B) the Annual Bonus for the immediately preceding

8

 

year (or Target Annual Bonus if termination occurs during the first year of the Term or before
the Annual Bonus for the prior fiscal year is declared) (“Severance Payments”). In addition, all
unvested stock options, other equity grants and all deferred compensation under the Initial Option
Agreement shall become fully vested and shall remain exercisable or be paid as provided under the
terms of the applicable plan or agreement. Following the termination of the Executive’s employment
by the Company without Cause or by the Executive for Good Reason, the Company shall provide
medical, dental and life insurance coverage, upon the same terms and conditions applicable
generally to similarly situated executives who remain employed with the Company, for a period of
eighteen (18) months; provided, however, that for each of the eighteen (18) months
following such termination the Executive shall be responsible for payment of the regular employee
portion of the monthly insurance premiums for such insurance, applicable to similarly situated
executives who remain employed with the Company, and the Company shall be responsible for payment
of the regular Company portion of the monthly insurance premiums for such insurance, applicable to
similarly situated executives who remain employed with the Company (the “Welfare Severance
Benefits”); and further provided, however, that such obligation shall expire if the Executive
commences new employment prior to the expiration of such eighteen (18)-month period and becomes
covered by substantially similar benefits. Notwithstanding anything herein to the contrary, the
Company portion of the monthly insurance premiums provided pursuant to the immediately preceding
sentence shall be taxable income to the Executive in the year in which such coverage is provided.
In all instances, subject to the terms set forth in Section 7(f) and Section 11 below, including,
but not limited to, Section 11(d), the Severance Payments shall be paid to the Executive in the
form of a single lump sum payment sixty (60) days after the Executive’s termination. For the
avoidance of doubt, in the event that all or substantially all of the assets or stock of a
Subsidiary are acquired by a person or entity (the “Acquirer”) and the Executive is offered
employment, as the principal executive officer of such Subsidiary consistent with the terms of this
Agreement, by the Acquirer or any affiliate of the Acquirer that directly or indirectly owns such
Acquirer, or any successor to the Acquirer or any such affiliate and the Executive accepts such
offer and such Acquirer, affiliate or successor, as applicable, assumes this Agreement, the
Executive shall not be treated as having a termination of employment without Cause or for Good
Reason; provided, however, that the Executive shall have no obligation to accept any such offer of
employment. Notwithstanding anything herein to the contrary, to the extent that the Executive
willfully commits a material breach of any provision of Section 10 hereof (a “Material Breach”),
the Company shall be relieved of its obligation to provide the Welfare Severance Benefits after
such Material Breach and the Executive shall be obligated to pay to the Company, as partial damages
related to the Severance Payments, for such Material Breach an amount equal to X multiplied by Y,
where X is a fraction, the denominator of which is 365 and the numerator of which is the number of
days remaining in the 365 days immediately following the Executive’s termination of employment by
the Company without Cause or by the Executive for Good Reason after any such Material Breach, and Y
is the amount of Severance Payments (the “Severance Mitigation”). For example, if the Executive
commits a Material Breach on the 182nd day following his termination of

9

 

employment by the Company without Cause or by the Executive for Good Reason and the Executive
received $2,000,000 in Severance Payments, the Executive would be obligated to pay $1,000,000 to
the Company. Payment of the Severance Mitigation shall not limit the remedies of the Company and
its affiliates under Section 10 or any other remedies that may be available to them, if a court of
competent jurisdiction or arbitrator, as applicable, determines that the Executive has breached any
of the provisions of this Section 10.

     (d) Termination due to Disability. In the event that the Executive’s employment is
terminated during the Term due to the disability of the Executive under this Agreement, the Company
shall have no further obligation to the Executive other than to pay the Executive (in addition to
any disability insurance payments to which the Executive is entitled pursuant to Section 5 above)
all Enhanced Accrued Benefits (except that for purposes of this Section 7(d), the term “death” in
Section 7(b)(iv) above shall be replaced with the term “disability”), paid in accordance with the
time, form and manner of payment set forth in Section 7(b). In addition, any unvested stock
options under the Stock Option Plan and any deferred compensation under the Initial Option
Agreement that would have become vested on the next date of vesting applicable thereto shall become
vested and shall remain exercisable or be paid as provided under the terms of the applicable plan
or agreement, as to a portion thereof based on a formula, the denominator of which shall be 365 and
the numerator of which shall be the number of days during the year of his disability during which
the Executive was employed by the Company on an active status.

     (e) No Other Benefits. Except as specifically provided in this Section 7 or Section
8, the Executive shall not be entitled to any other compensation, severance or other benefits from
the Company or any of its subsidiaries or affiliates upon the termination of this Agreement or the
Executive’s employment for any reason whatsoever. Payment by the Company of all Accrued Benefits,
Enhanced Accrued Benefits and Severance Payments (if applicable) and contributions to the cost of
the Executive’s confirmed participation in the Company’s group medical, dental and life insurance
plans that may be due to the Executive under the applicable termination provision of this Section 7
shall constitute the entire obligation of the Company to the Executive. Notwithstanding anything
contained in this Agreement to the contrary, the Executive (or his beneficiary or estate) shall be
entitled, under all circumstances, to (i) payment of all amounts under and in accordance with the
terms and provisions of the SERP and other retirement plans, including, without limitation, whether
or not the Executive is employed by the Company, (ii) rights of indemnification that the Executive
has been granted or at law, or (iii) continued coverage under the Company’s director and officer
liability insurance policy at the same level as other officers and directors while potential
liability exists.

     (f) Condition. The Company will not be required to make the payment and provide the
benefits stated in Section 7(c) and Section 8, unless the Executive executes and delivers to the
Company, a waiver and release agreement in the form attached hereto as Exhibit C with all periods
of revocation expired within sixty (60) days of termination.

10

 

     (g) Resignation from Company Offices. In the event of the Executive’s termination of
employment for any reason, the Executive shall resign and shall be deemed to have resigned
immediately from the Board (if the Executive is then a member of the Board) and any and all other
directorships, offices and positions with, on behalf of, or relating to the Company or any of its
subsidiaries, effective as of the date of the Executive’s termination of employment with the
Company.

     (h) Expiration of Term. Upon the expiration of the Term, the Executive shall be
entitled to the Annual Bonus earned in accordance with the terms of the MIB Program for the last
fiscal year of the Term, payable in accordance with the Company’s general payroll policies, but in
no event later than March 15th of the year following the year to which such bonus
relates, despite the fact that the Executive may not be employed with the Company when such bonuses
are paid. To the extent that the Executive’s employment with the Company terminates for any reason
at or following the expiration of the Term, the Executive shall also be entitled to any Accrued
Benefits. In addition, if, at or after the expiration of the Term Executive’s employment with the
Company ceases for any reason without the parties having entered into a new employment contract or
an extension of this Agreement (notwithstanding who declined such future arrangement), the
Executive shall be entitled to the continued vesting of the outstanding and unvested portion of the
2008 Equity Award (the “Outstanding and Unvested Award”) for an additional one-year period
following the expiration of such employment, and the Outstanding Unvested Award shall expire on the
later of the end of such one-year period or as provided under the terms of the applicable award
agreement (but not beyond the original last exercise date of the grant); provided that if the 2008
Equity Award or any such other equity award consists of restricted stock, such additional vesting
shall occur on the date such restricted stock would be treated as taxable income to the Executive.

     Section 8. 280G Gross-Up.

     (a) In the event that the Executive shall become entitled to payments and/or benefits provided
by this Agreement or any other amounts in the “nature of compensation” (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the Company, or any
arrangement or agreement with any person whose actions result in a change of ownership or effective
control covered by Code Section 280G(b)(2) (a “280G Change in Control”) or any person affiliated
with the Company or such person) as a result of a 280G Change in Control (collectively the “Company
Payments”), and such Company Payments will be subject to the tax (the “Excise Tax”) imposed by Code
Section 4999 (and any similar tax that may hereafter be imposed by any taxing authority), subject
to Section 8(d) and Section 11 below the Company shall pay to the Executive at the time specified
below (i) an additional amount (the “Gross-Up Payment”) such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Company Payments and any U.S. federal, state,
and for local income or payroll tax upon the Gross-up Payment provided for by this paragraph, but
before deduction for any U.S. federal, state, and local income or payroll tax on the Company
Payments, shall be equal to the Company Payments and (ii) an

11

 

amount equal to the product of any deductions disallowed for federal, state or local income
tax purposes because of the inclusion of the Gross-Up Payment in the Executive’s adjusted gross
income multiplied by the highest applicable marginal rate of federal, state or local income
taxation, respectively, for the calendar year in which the Gross-Up Payment is to be made.

     (b) Notwithstanding the foregoing, if it shall be determined that the Executive is entitled to
a Gross-Up Payment, but that if the Company Payments (other than that portion valued under Treasury
Regulation Section 1.280G, Q&A 24(c)) (the “Cash Payments”) are reduced by the amount
necessary such that the receipt of the Company Payments would not give rise to any Excise Tax (the
“Reduced Payment”) and the Reduced Payment would not be less than ninety-five percent (95%)
of the Cash Payment, then no Gross-Up Payment shall be made to the Executive and the Cash Payments,
in the aggregate, shall be reduced to the Reduced Payment. If the Reduced Payment is to be
effective, payments shall be reduced in the following order (i) any cash severance based on a
multiple of Base Salary or Annual Bonus, (ii) any other cash amounts payable to the Executive,
(iii) any benefits valued as parachute payments; (iv) acceleration of vesting of any stock options
for which the exercise price exceeds the then fair market value; and (v) acceleration of vesting of
any equity not covered by subsection (iv) above.

     (c) In the event that the Internal Revenue Service or court ultimately makes a determination
that the excess parachute payments plus the base amount is an amount other than as determined
initially, an appropriate adjustment shall be made with regard to the Gross-Up Payment or Reduced
Payment, as applicable to reflect the final determination and the resulting impact on whether the
preceding Section 8(d) applies.

     (d) For purposes of determining whether any of the Company Payments and Gross-Up Payments
(collectively the “Total Payments”) will be subject to the Excise Tax and the amount of such Excise
Tax, (i) the Total Payments shall be treated as “parachute payments” within the meaning of Code
Section 280G(b)(2), and all “parachute payments” in excess of the “base amount” (as defined under
Code Section 280G(b)(3)) shall be treated as subject to the Excise Tax, unless and except to the
extent that, in the opinion of the Company’s independent certified public accountants appointed
prior to any change in ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected
by such accountants or the Company (the “Accountants”) such Total Payments (in whole or in part)
either do not constitute “parachute payments,” including giving effect to the recalculation of
stock options in accordance with Treasury Regulation Section 1.280G-1, Q&A 33, represent reasonable
compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess
of the “base amount” or are otherwise not subject to the Excise Tax, and (ii) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in
accordance with the principles of Code Section 280G. To the extent permitted under Revenue
Procedure 2003-68, the value determination shall be recalculated to the extent it would be
beneficial to the Executive. In the event that the Accountants are serving as accountant or
auditor for the individual, entity or group effecting the Change in Control, the

12

 

Executive may appoint with the approval of the Company, which approval shall not be
unreasonable or unreasonably delayed, another nationally recognized accounting firm to make the
determinations hereunder (which accounting firm shall then be referred to as the “Accountants”
hereunder). All determinations hereunder shall be made by the Accountants which shall provide
detailed supporting calculations both to the Company and the Executive at such time as it is
requested by the Company or the Executive. If the Accountants determine that payments under this
Agreement must be reduced pursuant to this paragraph, they shall furnish the Executive with a
written opinion to such effect. The determination of the Accountants shall be final and binding
upon the Company and the Executive.

     (e) For purposes of determining the amount of the Gross-Up Payment, the Executive’s actual
U.S. federal income tax rate in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the Executive’s actual rate of taxation in the state and locality
of the Executive’s residence for the calendar year in which the Company Payment is to be made, net
of the maximum reduction in U.S. federal income taxes which could be obtained from deduction of
such state and local taxes if paid in such year, shall be used. In the event that the Excise Tax
is subsequently determined by the Accountants to be less than the amount taken into account
hereunder at the time the Gross-Up Payment is made, the Executive shall repay to the Company, at
the time that the amount of such reduction in Excise Tax is finally determined, the portion of the
prior Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax imposed on the portion
of the Gross-up Payment being repaid by the Executive if such repayment results in a reduction in
Excise Tax or a U.S. federal, state and local income tax deduction), plus interest on the amount of
such repayment at the rate provided in Code Section 1274(b)(2)(B). Notwithstanding the foregoing,
in the event any portion of the Gross-Up Payment to be refunded to the Company has been paid to any
U.S. federal, state and local tax authority, repayment thereof (and related amounts) shall not be
required until actual refund or credit of such portion has been made to the Executive, and interest
payable to the Company shall not exceed the interest received or credited to the Executive by such
tax authority for the period it held such portion. The Executive and the Company shall mutually
agree upon the course of action to be pursued (and the method of allocating the expense thereof) if
the Executive’s claim for refund or credit is denied.

     (f) In the event that the Excise Tax is later determined by the Accountant or the Internal
Revenue Service to exceed the amount taken into account hereunder at the time the Gross-Up Payment
is made (including by reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest or penalties payable with respect to such excess) at the
time that the amount of such excess is finally determined.

13

 

     (g) Subject to Section 11 below, including, but not limited to, Section 11(d)(1), the Gross-up
Payment or portion thereof provided for above shall be paid not later than the thirtieth (30th) day
following a 280G Change in Control which subjects the Executive to the Excise Tax; provided,
however, that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such day an estimate,
as determined in good faith by the Accountant, of the minimum amount of such payments and shall pay
the remainder of such payments, subject to further payments pursuant to Section 8(c) hereof, as
soon as the amount thereof can reasonably be determined, but in no event later than the ninetieth
(90th) day after the occurrence of the event subjecting the Executive to the Excise Tax.
Notwithstanding any other provision of this Agreement, all Gross-Up Payments under this Section 8
shall be made to the Executive no later than by the end of the Executive’s taxable year following
the Executive’s taxable year in which the Executive remits the applicable taxes. In the event that
the amount of the estimated payments exceeds the amount subsequently determined to have been due,
subject to Section 8(m) below, such excess shall constitute a loan by the Company to the Executive,
payable on the fifth (5th) day after demand by the Company (together with interest at the rate
provided in Code Section 1274(b)(2)(B)).

     (h) In the event of any controversy with the Internal Revenue Service (or other taxing
authority) with regard to the Excise Tax, the Executive shall permit the Company to control issues
related to the Excise Tax (at its expense), but the Executive shall control any other issues
unrelated to the Excise Tax. In the event that the issues are interrelated, the Executive and the
Company shall in good faith cooperate. In the event of any conference with any taxing authority as
to the Excise Tax or associated income taxes, the Executive shall permit the representative of the
Company to accompany the Executive, and the Executive and his representative shall cooperate with
the Company and its representative.

     (i) The Company shall be responsible for all charges of the Accountant.

     (j) The Company and the Executive shall promptly deliver to each other copies of any written
communications, and summaries of any verbal communications, with any taxing authority regarding the
Excise Tax covered by this provision.

     (k) Nothing in this Section 8 is intended to violate the Sarbanes-Oxley Act and to the extent
that any advance or repayment obligation hereunder would do so, such obligation shall be modified
so as to make the advance a nonrefundable payment to the Executive and the repayment obligation
null and void.

     Section 9. Mitigation and Offset. The Executive is not required to seek other
employment or otherwise mitigate the amount of any payments to be made by the Company pursuant to
this Agreement. The payments provided in this Agreement shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer after the termination date
or otherwise. However, the amounts

14

 

payable under this Agreement (including, but not limited to, any Severance Payments) shall be
subject to setoff for any amounts that the Executive owes to the Company, but not any other claim
of the Company; provided that (i) any set off against amounts subject to Code Section 409A shall be
limited to debts incurred in the ordinary course of the service relationship between the Executive
and the Company, (ii) the entire amount of such set off against amounts subject to Code Section
409A in any of the Executive’s taxable years does not exceed $5000, and (iii) the set off is made
at the same time and in the same amount as the debt otherwise would have been due and collected
from the Company.

     Section 10. Restrictive Covenants.

     (a) Proprietary Information. In the course of service to the Company, the Executive
will have access to confidential specifications, know-how, strategic or technical data, marketing
research data, product research and development data, manufacturing techniques, confidential
customer lists, sources of supply and trade secrets, all of which are confidential and may be
proprietary and are owned or used by the Company, or any of its subsidiaries or affiliates. Such
information shall hereinafter be called “Proprietary Information” and shall include any and all
items enumerated in the preceding sentence and coming within the scope of the business of the
Company or any of its subsidiaries or affiliates as to which the Executive may have access, whether
conceived or developed by others or by the Executive alone or with others during the Executive’s
period of service with the Company, whether or not conceived or developed during regular working
hours. Proprietary Information shall not include any records, data or information which are in the
public domain during Executive’s service with the Company or after the Executive’s service with the
Company has terminated, provided the same are not in the public domain as a consequence of
disclosure by the Executive in violation of this Agreement.

     (b) Non-Use and Non-Disclosure. The Executive shall not during the Term or at any
time thereafter (i) disclose any Proprietary Information to any person other than (A) the Company,
(B) the Company’s or its affiliates’ directors, officers or employees who, in the reasonable
judgment of the Executive, need to know such Proprietary Information, (C) such other persons to
whom the Executive has been specifically instructed to make disclosure by the Board; and in all
such cases only to the extent required in the course of the Executive’s service to the Company, (D)
as required by law or court or administrative order, or (E) in the good faith performance of the
Executive’s duties hereunder or (ii) use any Proprietary Information, directly or indirectly, for
his own benefit or for the benefit of any other person or entity.

     (c) Return of Documents. All notes, letters, documents, records, tapes and other
media of every kind and description containing Proprietary Information and any copies, in whole or
in part, thereof (collectively, the “Documents”), whether or not prepared by the Executive, shall
be the sole and exclusive property of the Company. The Executive shall safeguard all Documents in
the Executive’s possession and shall

15

 

surrender to the Company at the time his employment terminates, or at such other time or times
as the Board or its designee may specify, all Documents then in the Executive’s possession or
control; provided, that the Executive shall be permitted to retain his rolodex and similar address
books, including those in electronic form.

     (d) Non-Competition. At all times during the Executive’s employment with the Company
or any affiliate during the Term, and for a period of twelve (12) months following the termination
during the Term of employment with the Company or any affiliate for any reason (or twenty-four (24)
months in the case of termination following a Change in Control) (the “Restricted Period”), the
Executive will not engage in Competition (as defined below) with the Company. For purposes of this
Agreement, “Competition” shall mean engaging in, or otherwise directly or indirectly being employed
by, or acting as a consultant or adviser (paid or unpaid) to, or being a director, officer,
employee, principal, agent, stockholder, member, owner or partner of (i) Boeing, Lockheed, Alcatel
Space or Astrium, (ii) PanAmSat, SES Astra, Intelsat, New Skies Satellites, (iii) any business
similar to the businesses described in clause (i) or (ii) above that competes with the services
provided by the Company, (iv) any business that competes with a business that the Company engages
in as of the date of the Executive’s termination of employment with the Company, as described or
otherwise contemplated in the Company’s business plan for the year of such termination of
employment, or (v) any business that competes with a business that the Company is, to the knowledge
of the Executive, preparing to engage in as of the date of the Executive’s termination of
employment with the Company, and any transferee of or successor to any of the foregoing businesses;
provided, however, that the foregoing shall not prevent or be violated by the Executive’s service
in a non-competitive portion of a company or business enterprise in Competition with the Company
or, as a result thereof, owning compensatory equity in such a company or business enterprise in
Competition with the Company; and further provided, however, that the prohibition of clauses (i)
and (ii) above shall apply only so long as such entities compete with the services provided by the
Company. Notwithstanding anything to the contrary in this Agreement, the Executive may, directly
or indirectly, own, solely as an investment, securities of a business enterprise in Competition
with the Company or its subsidiaries which are publicly traded on a national or regional stock
exchange or on the over-the-counter market if the Executive (i) is not a controlling person of or a
member of a group which controls such business enterprise and (ii) does not, directly or
indirectly, own five percent (5%) or more of any class of securities of such business enterprise or
less than five percent (5%) in any mutual fund, private equity fund, hedge fund or similar
collective investment, so long as the Executive’s investment is passive.

     (e) Non-Solicitation of Employees. At all times during the Restricted Period, except
in the course of the Executive’s service to the Company and consistent with Executives duties to
the Company, the Executive will not directly or indirectly solicit or in any manner encourage
employees of the Company or any affiliate who were employed by the Company within the six (6)-month
period prior to the termination of the Executive’s employment with the Company or any affiliate to
leave its employ and will

16

 

not offer or cause to be offered employment to any such person; provided, however, that the
restrictions in this paragraph shall not apply to (i) general solicitations that are not
specifically directed to employees of the Company or any affiliate, (ii) any administrative support
staff or (iii) serving as a reference at the request of an employee.

     (f) Non-Solicitation of Customers or Suppliers. At all times during the Restricted
Period, the Executive will not knowingly solicit or in any manner encourage, directly or
indirectly, customers of or suppliers to the Company or any affiliate who were customers of or
suppliers to the Company or any affiliate within the twelve-month period prior to the termination
of the Executive’s employment with the Company or any affiliate to terminate or diminish their
relationship with the Company or any affiliate.

     (g) Reasonableness. The Executive has carefully considered the nature, extent and
duration of the restrictions and obligations contained in this Agreement, including, without
limitation, provisions of this Section 10 and acknowledges and agrees that such restrictions are
fair and reasonable in all respects to protect the legitimate interests of the Company and its
affiliates and that these restrictions are designed for the reasonable protection of the business
of the Company and that of its affiliates.

     (h) Remedies. The Executive recognizes that any breach of this Section 8
shall cause irreparable injury to the Company or its affiliates, inadequately compensable in
monetary damages. Accordingly, in addition to any other legal or equitable remedies that may be
available to the Company, Executive agrees that the Company or its affiliates shall be able to seek
and obtain injunctive relief in the form of a temporary restraining order, preliminary injunction,
or permanent injunction against the Executive to enforce this Agreement. To the extent that any
damages are calculable resulting from the breach of this Agreement, the Company and its affiliates
shall also be entitled to recover such damages. Any recovery of damages by the Company and its
affiliates shall be in addition to and not in lieu of the injunctive relief to which the Company
and its affiliates are entitled and any Severance Mitigation.

     Section 11. Section 409A of the Code.

     (a) Section 409A. It is intended that the provisions of this Agreement comply with
Code Section 409A or be exempt therefrom, and this Agreement shall be administered, and all
provisions of this Agreement shall be construed, in a manner consistent with the requirements for
avoiding taxes or penalties under Code Section 409A.

     (b) Installments. If under this Agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be treated as a separate
payment.

     (c) Separation From Service. Notwithstanding anything herein to the contrary, the
payment (or commencement of a series of payments) hereunder of any nonqualified deferred
compensation (within the meaning of Code § 409A) upon a

17

 

termination of employment shall be delayed until such time as Employee has also undergone a
“separation from service” as defined in Treas. Reg. § 1.409A-1(h), at which time such nonqualified
deferred compensation (calculated as of the date of the Executive’s termination of employment
hereunder) shall be paid (or commence to be paid) to the Executive on the schedule set forth
hereunder with respect to such nonqualified deferred compensation as if the Executive had undergone
such termination of employment (under the same circumstances) on the date of his ultimate
“separation from service”; provided, however, that the Executive shall be deemed to have suffered a
“separation from service” as of a given date for purposes of Treas. Reg. § 1.409A-1(h) to the
extent that it is reasonably anticipated that the Executive’s level of bona fide services to the
Company, as an employee, independent contractor, or otherwise, will permanently decrease to less
than 50% of the average level of services performed by the Executive for the Company in the
36-month period immediately preceding such date.

     (d) Specified Employee. If the Executive is deemed on the date of termination of his
employment to be a “specified employee”, within the meaning of that term under Section
409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from
time to time, or if none, the default methodology, then:

     (i) With regard to any payment, the providing of any benefit or any distribution of
equity that constitutes “deferred compensation” subject to Code Section 409A, payable upon
separation from service, such payment, benefit or distribution shall not be made or
provided prior to the earlier of (i) the expiration of the six-month period measured from
the date of the Executive’s Separation from Service or (ii) the date of the Executive’s
death; and

     (ii) On the first day of the seventh month following the date of the Executive’s
Separation from Service or, if earlier, on the date of his death, (x) all payments delayed
pursuant to this Section 11 shall be paid or reimbursed to the Executive in a lump sum
without interest, and any remaining payments and benefits due under this Agreement shall be
paid or provided in accordance with the normal dates specified from them herein and (y) all
distributions of equity delayed pursuant to this Section 11(d) shall be made to the
Executive.

     (e) Reimbursement. With regard to any provision herein that provides for
reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A,
(i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange
for another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits,
provided during any taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii)
shall not be violated without regard to expenses reimbursed under any arrangement covered by
Section 105(b) of the Code solely because such expenses are subject to a limit related to the
period the arrangement is in effect and (iii) such payments shall be made on or before the last day
of the Executive’s taxable year following the taxable year in which the expense occurred.

18

 

     (f) Payment Period. Whenever a payment under this Agreement specifies a payment
period with reference to a number of days (e.g., “payment shall be made within forty (40) days
following the date of termination), the actual date of payment within the specified period shall be
within the sole discretion of the Company.

     (g) Compliance. If any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur any additional tax or
interest under Code Section 409A, the Company shall, after consulting with the Executive, reform
such provision to comply with Code Section 409A, but only if, after consultation, such provision
can be reformed to so comply; provided that the Company agrees to maintain, to the maximum extent
practicable, the original intent and economic benefit to the Executive of the applicable provision
without violating the provisions of Code Section 409A. The Company shall indemnify and hold the
Executive harmless, on an after tax basis, for any additional tax (including interest and penalties
with respect there to) that may be imposed on the Executive by Code Section 409A as a result of the
Option being granted subject to the Approvals. Any payment or reimbursement for taxes made
pursuant to this Section 11(g) (and any gross up thereon) shall be paid to the Executive promptly
after such obligation is incurred, but in no event later than the end of the calendar year
following the calendar year in which the tax is paid by the Executive.

     (h) Other Company Plans, Agreements and Programs. If any provision of any Company
plan, agreement or program in which the Executive participates would cause the Executive to incur
any additional tax or interest under Code Section 409A, upon the Executive’s request, the Company
shall reform such provision to comply with Code Section 409A, but only, if after such request, such
provision can be reformed to so comply, in a manner that shall maintain, to the maximum extent
practicable, the economic benefit to the Company and the Executive of the applicable provision
without violating the provisions of Code Section 409A, provided that nothing herein, and no action
taken or not taken by the Company at the request of or in consultation with the Executive, is
intended to guarantee compliance with Code Section 409A.

19

 

     Section 12. Severable Provisions. The provisions of this Agreement are severable and
the invalidity of any one or more provisions shall not affect the validity of any other provision.
In the event that a court of competent jurisdiction shall determine that any provision of this
Agreement or the application thereof is unenforceable in whole or in part because of the duration
or scope thereof, the parties hereto agree that said court in making such determination shall have
the power to reduce the duration and scope of such provision to the extent necessary to make it
enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full
extent permitted by law.

     Section 13. Notices. All notices hereunder, to be effective, shall be in writing and
shall be delivered by hand or mailed by certified mail, postage and fees prepaid, as follows:

	 	 	 	 	 
	     If to the Company:
	 	Loral Space & Communications Inc.
	 

	 	 	 	600 Third Avenue 
	 

	 	 	 	New York, New York 10016
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	     If to the Executive
	 	to the address on file with the Company.

or to such other address as a party may notify the other pursuant to a notice given in accordance
with this Section 13. All notices to any person shall be deemed given when actually received by
the person.

     Section 14. Miscellaneous.

     (a) Amendment. This Agreement may not be amended or revised except by a writing
signed by the parties.

     (b) Assignment and Transfer. The provisions of this Agreement shall be binding on and
shall inure to the benefit of any successor in interest to the Company. Neither this Agreement nor
any of the rights, duties or obligations of the Executive shall be assignable by the Executive, nor
shall any of the payments required or permitted to be made to the Executive by this Agreement be
encumbered, transferred or in any way anticipated, except as required by applicable laws. This
Agreement shall not be terminated solely by reason of the merger or consolidation of the Company
with any corporate or other entity or by the transfer of all or substantially all of the assets of
the Company to any other person, corporation, firm or entity; provided that the assignee or
transferee is the successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the rights and duties of the Company as contained in this Agreement,
either contractually or as a matter of law. However, all rights of the Executive under this
Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable
to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s
estate, heirs or representatives.

20

 

     (c) Withholding. The Company shall be entitled to withhold from any amounts to be
paid or benefits provided to the Executive hereunder any federal, state, local, or foreign
withholding or other taxes or charges which it is from time to time required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any question as to the amount or
requirement of any such withholding shall arise.

     (d) Waiver of Breach. A waiver by the Company or the Executive of any breach of any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
other or subsequent breach by the other party.

     (e) Survival of Certain Provisions. Provisions of this Agreement shall survive any
termination of employment and the expiration of the Term if so provided herein or if necessary or
desirable fully to accomplish the purposes of such provision, including, without limitation, the
obligations of the Company under Sections 7 and 8 hereof if the Executive is terminated during the
Term and the obligations of the Executive under Section 10 hereof.

     (f) Attorney’s Fees.

     (i) The Company shall pay the reasonable legal fees incurred by the Executive in
connection with this Agreement and to the extent such payment is taxed to the Executive,
the Company shall gross up such amount so that the Executive has no after-tax cost
therefrom (collectively, “Legal Fees”). The Company shall pay all Legal Fees to the
Executive no later than by the end of the calendar year following the calendar year the
legal services are provided to the Executive.

     (ii) In the event that any action is brought to enforce any of the provisions of this
Agreement, or to obtain money damages for the breach thereof, all expenses (including
reasonable attorneys’ fees and expenses) shall be paid by the party incurring such fees or
expenses; provided, however, that the Company shall reimburse Executive for such fees and
expenses to the extent that the Executive prevails on any issues raised in such action.
The Company shall reimburse the Executive for such fees and expenses in the form of a
single lump sum payment thirty (30) days from the date of the arbitrator’s final
determination but in any event no later than March 15th following the year in
which the arbitrator makes his final determination.

     (g) Entire Agreement. This Agreement, the Stock Option Plan, the Option Agreements,
the Indemnification Agreement referred to in Section 5(f) hereof, the Certificates of Incorporation
of the Company and of each of its affiliates and the SERP, constitute the entire understanding of
the parties with respect to the subject matter hereof and supercede all prior negotiations,
understandings, discussions, and agreements, whether written or oral, between them.

21

 

     (h) Captions. Captions herein have been inserted solely for convenience of reference
and in no way define, limit or describe the scope or substance of any provision of this Agreement.

     (i) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and shall have the same effect as if the signatures hereto and
thereto were on the same instrument.

     (j) Governing Law. This Agreement and the enforcement thereof shall be governed and
controlled in all respects by the internal laws of the State of New York, without application of
the conflict of laws provisions thereof.

     (k) Arbitration. Any dispute or controversy arising from or relating to this
Agreement and/or the Executive’s employment or relationship with the Company shall be resolved by
binding arbitration, to be held in New York or in any other location mutually agreed to by the
Company and the Executive in accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

     (l) Acknowledgement of Representation. The Executive and the Company acknowledge that
they have been represented by counsel of their own choosing and have received a full and complete
explanation of their rights and obligations under this Agreement and, therefore, in the event of a
dispute over the meaning of this Agreement or any provision thereof, neither party shall be
entitled to any presumption of correctness in favor of the interpretation advanced by such party or
against the interpretation advanced by the other party.

     (m) Guarantee.

     (i) Each of Loral Holdings Corporation and Space Systems/Loral, Inc. (each a
“Guarantor”) hereby acknowledge the benefit they will receive as a result of the Executive
serving as Chief Executive Officer of the Company and accordingly, irrevocably and
unconditionally guarantees the due and punctual payment and performance of all obligations
of the Company under this Agreement; provided, however, that a Guarantor’s guarantee
obligation hereunder shall terminate and cease to have any force or effect immediately upon
(x) such Guarantor ceasing to be a direct or indirect subsidiary or parent of the Company
or (y) the sale of all or substantially all of such Guarantor’s assets pursuant to an
Approved Transaction (as defined below) in which a Guarantor does not receive all or
substantially all of the consideration of such sale.

     (ii) Notwithstanding anything in this Agreement to the contrary and for as long as the
Guarantor’s obligations hereunder are in effect, the Executive hereby acknowledges and
agrees that at any time a Guarantor may effectuate, and this Agreement shall not in any way
prohibit or restrict the Guarantor from effectuating, and the Executive shall not have any
right or claim with respect to,

22

 

rely upon, or challenge (A) any transfer by the Guarantor of any or all of its funds,
assets or other property to either: (1) the Company or any of its direct or indirect
subsidiaries or their successors (each a “Group Entity”), including by way of dividend,
distribution, payment, lease, sale, assignment, transfer, merger, consolidation or
otherwise, or (2) any other person, pursuant to a transaction that the Guarantor’s Board of
Directors determines in good faith to effect in furtherance of a legitimate business
purpose of the Guarantor or any Group Entity (an “Approved Transaction”) or (B) the
liquidation or dissolution of a Guarantor.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	 	LORAL SPACE & COMMUNICATIONS INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Avi Katz
	 

	 	 	 	 
	 	 	Name: Avi Katz
	 	 	Title: Senior Vice President, General Counsel and Secretary
	 
	 	 	 	 
	 	 	/s/ Michael B. Targoff
	 	 	 
	 	 	Michael B. Targoff

LORAL HOLDINGS CORPORATION (solely for purposes of Section 14(m) hereof)

	 	 	 	 	 
	By: 

Name:

	 	/s/ Avi Katz
 

Avi Katz
	 	 
	Title:

	 	Senior Vice President and Secretary	 	 

SPACE SYSTEMS/LORAL, INC. (solely for purposes of Section 14(m) hereof)

	 	 	 	 	 
	By: 

Name:

	 	/s/ Avi Katz
 

Avi Katz
	 	 
	Title:

	 	Senior Vice President and Secretary	 	 

23

 

Schedule I

Outside Business Relationships

	1.	 	Chairman of the Board of Directors and member of the Audit Committee of Communication Power
Industries.
	 
	2.	 	Member of the Board of Directors, Chairman of the Audit Committee of Leap Wireless
International, Inc., and member of the Compensation Committee and Nominating and Corporate
Governance Committee of Leap Wireless International, Inc.
	 
	3.	 	Member of the Board of Directors of ViaSat Inc.

and any replacements for any of the foregoing that does not materially change the time commitment
or violate Section 10 of the Employment Agreement.

Perquisites and Individual Benefits

	 	 	 
	Executive	 	 
	Life	 	 
	Insurance	 	 
	Annual premium	 	Executive
	not to exceed	 	Medical
	$25,000
	 	$4,000

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