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Exhibit 4.3

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is entered into as of January 27, 2007,
by and between Bell Industries, Inc., a California corporation (the “Company”), and Newcastle
Partners, L.P. a Texas limited partnership (the “Investor”).

 R E
C I T A
L
S :

     WHEREAS, the Company has entered into that certain Purchase Agreement, dated as of the date
hereof (the “Purchase Agreement”), with the Investor pursuant to which the Company has agreed to
issue and sell to the Investor a convertible promissory note (the “Note”);

     WHEREAS, the Company has agreed to grant certain registration rights with respect to the
shares of the Company’s Common Stock issuable upon conversion of the Note;

     NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

     Capitalized terms used but not defined herein shall have the respective meanings given to them
in the Purchase Agreement.

     As used herein, the following terms shall have the following respective meanings:

     1.1 “Commission” shall mean the U.S. Securities and Exchange Commission or any other successor
federal agency at the time administering the Securities Act.

     1.2 “Common Stock” shall mean the Company’s common stock.

     1.3 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute and the rules and regulations of the Commission thereunder, all as the same shall
be in effect at the time.

     1.4 “Holders” shall mean and include the Investor and any transferee thereof who holds
Registrable Securities of record.

     1.5 “Register,” “registered” and “registration” refer to a registration effected by preparing
and filing with the Commission a registration statement in compliance with the Securities Act, and
the declaration or ordering by the Commission of the effectiveness of such registration statement.

     1.6 “Registrable Securities” means any and all shares of Common Stock (i) issued or issuable
upon conversion of the Note and (ii) issued or issuable with respect to the Common Stock referred
to in clause (i) above upon any stock split, stock dividend, recapitalization,

 

 

reclassification, exchange, merger or other similar event. The term “Registrable Securities”
shall exclude in all cases, however, such shares of Common Stock (i) following their sale by a
Holder to the public pursuant to a registered offering or pursuant to Rule 144 or (ii) sold in a
private transaction in which the Holder’s registration rights under this Agreement are not
assigned.

     1.7 “Registration Expenses” shall mean all reasonable and customary expenses incurred by the
Company in complying with Articles 2, 3 and 5 hereof, including, without limitation, all
registration, qualification and Commission, National Association of Securities Dealers, Inc., stock
exchange and other filing fees, printing expenses, duplication expenses relating to copies of any
registration statement or prospectus delivered to any Holders, escrow fees, fees and disbursements
of legal counsel for the Company, fees and disbursements of the Company’s accountants and blue sky
fees and expenses.

     1.8 “Rule 144” shall mean Rule 144 under the Securities Act or any other similar rule or
regulation then in effect.

     1.9 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

     1.10 “Selling Expenses” shall mean all underwriting fees, discounts and selling commissions
applicable to the Registrable Securities registered on behalf of the Holders and the fees and
expenses of any special counsel engaged by the Holders.

ARTICLE 2

REQUIRED REGISTRATION

     2.1 Request for Registration.

     (a) At any time from and after the date hereof, the Investor may make a written request to the
Company to file a registration statement under the Securities Act covering all or part of the
Registrable Securities then held by the Investor. No later than 30 days following its receipt of
such written request (the “Demand Registration Filing Date”), the Company will prepare and file
with the Commission a registration statement under the Securities Act covering all of the
Registrable Securities requested to be included therein, and the Company will use its reasonable
best efforts to obtain the effectiveness of such registration as soon as practicable as would
permit or facilitate the original issuance or subsequent resale and distribution of all securities
requested to be registered. If, however, the Company shall furnish to the Investor a certificate
signed by the Chief Operating Officer of the Company prior to the Demand Registration Filing Date
stating that, in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration statement to be
filed by reason of a material pending transaction, then the Company shall have the right to defer
such filing for a period of not more than 90 days after the Demand Registration Filing Date. Such
registration statement shall contain (unless the Investor otherwise directs) substantially the
“Plan of Distribution” attached hereto as Annex A.

     (b) The Company shall be obligated to effect only one registration pursuant to this Section
2.1, subject to the provisions of Section 2.2. If any registration is commenced pursuant

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to this Section 2.1 and is not consummated for any reason whatsoever (a “Failed
Registration”), such Failed Registration shall not be deemed to constitute a registration under
this Section 2.1 and the Investor shall retain its rights pursuant to this Section 2.1. Any
expenses in connection with a Failed Registration shall be paid in accordance with Article 4
hereof.

     2.2 Shelf Registration. At any time from and after the date hereof and from time to time, the
Investor may make a written request to the Company to prepare and file with the Commission a shelf
registration statement under the Securities Act covering all of the Registrable Securities then
outstanding on a delayed or continuous basis pursuant to Section 415 of the Securities Act (a
“Shelf Registration”). No later than 30 days following its receipt of such written request (the
“Shelf Registration Filing Date”), the Company will prepare and file with the Commission a
registration statement under the Securities Act covering all of the Registrable Securities
requested to be included therein and the Company will use its reasonable best efforts to obtain the
effectiveness of such registration as soon as practicable as would permit or facilitate the
original issuance or subsequent resale and distribution of all securities requested to be
registered hereunder. If, however, the Company shall furnish to the Holders a certificate signed
by the Chief Operating Officer of the Company within 30 days of the Shelf Registration Filing Date
stating that, in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration statement to be
filed by reason of a material pending transaction, then the Company shall have the right to defer
such filing for a period of not more than sixty 90 days after the Shelf Registration Filing Date.
Such registration statement shall contain (unless the Holders otherwise direct) substantially the
“Plan of Distribution” attached hereto as Annex A. Notwithstanding anything to the
contrary, in the case of any shelf registration pursuant to this Section 2.2, the Company shall use
its reasonable best efforts to keep the relevant registration statement effective until the date as
of which all the securities requested to be registered (including whether or not subsequently
transferable under Rule 144) under the shelf registration statement have been disposed of in a
manner described therein. Notwithstanding anything to the contrary, in the event that the Company
is not eligible to effect a Shelf Registration, (a) this Section 2.2 shall not apply and (b)
Investor shall have two (as opposed to one) demand rights pursuant to Section 2.1; provided that
the Company shall not be obligated to effect more than one demand registration pursuant to Section
2.1 in any twelve consecutive calendar months.

     2.3 Underwriting.

     (a) The resale distribution of the Registrable Securities covered by the registration
statements referred to in Section 2.1 and 2.2 above shall be effected by means of the method of
distribution selected by the Holders holding a majority in interest of the Registrable Securities.
The Holders holding a majority in interest of the Registrable Securities may also change the resale
distribution method from time to time (subject to amendment of the registration statement at the
expense of the Holders as required to describe such changes). If such distribution is effected by
means of an underwriting, the right of any Holder to registration pursuant to this Article 2 shall
be conditioned upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the extent provided herein.

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     (b) If such distribution is effected by means of an underwriting, the Company (together with
all Holders proposing to distribute their securities through such underwriting) shall enter into an
underwriting agreement in customary form with a managing underwriter of nationally recognized
standing selected for such underwriting by a majority in interest of the Holders and approved by
the Company (such consent not to be unreasonably withheld); provided, however, that the liability
of each Holder thereunder shall in no event exceed an amount equal to the net proceeds from the
offering received by such Holder.

     (c) Notwithstanding any other provision of this Article 2, if the managing underwriter
determines that marketing factors require a limitation of the number of shares to be underwritten,
the Company shall so advise all Holders of Registrable Securities, and the number of shares of
Registrable Securities to be included in the underwriting shall be allocated among the Holders of
Registrable Securities that have elected to participate in such underwritten offering pro rata
according to the number of Registrable Securities held by each Holder. Without the consent of a
majority in interest of the Holders, no securities other than Registrable Securities shall be
covered by such registration.

     (d) If any Holder disapproves of the terms of the underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company, the managing underwriter and the other
Holders, and the applicable registration shall be deemed to be a Failed Registration (and the
Investor shall retain its demand rights) for purposes of Section 2.1(b) hereof. The Registrable
Securities so withdrawn shall also be withdrawn from registration.

ARTICLE 3

COMPANY REGISTRATION

     3.1 Notice of Registration to Investor. If at any time or from time to time from and after
the date hereof, the Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a registration relating
solely to employee benefit plans on Form S-8 (or any successor form), (ii) a registration on Form
S-4 (or any successor form), (iii) a registration on any form that does not permit secondary sales
or (iv) a registration relating solely to a rights offering, the Company will:

     (a) promptly give to the Investor written notice thereof; and

     (b) include in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all of the Registrable Securities specified
in a written request, made within 15 days after receipt of such written notice from the Company
described in Section 3.1(a), by the Investor, but only to the extent that the original issuance or
resale distribution of such Registrable Securities is not already covered by an effective
registration statement under Article 2 above.

     3.2 Underwriting.

     (a) If the registration of which the Company gives notice is for an offering involving an
underwriting, the Company shall so advise the Investor as part of the written notice given pursuant
to Section 3.1(a). In such event, the right of the Investor to registration pursuant to this
Article 3 shall be conditioned upon the Investor’s participation in such underwriting and the

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inclusion of the Investor’s Registrable Securities in the underwriting to the extent provided
herein. The Investor shall (together with the Company) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by the Company;
provided, however, that the liability of the Investor thereunder shall in no event exceed an amount
equal to the net proceeds from the offering received by the Investor.

     (b) Notwithstanding any other provision of this Article 3, if the managing underwriter
determines that marketing factors require a limitation of the number of shares to be underwritten,
the Company shall so advise the Investor, and the number of shares of Common Stock to be included
in such registration shall be allocated as follows: (i) first, for the account of the Company, all
shares of Common Stock proposed to be sold by the Company; and (ii) second, for the account of the
Investor and any other shareholders of the Company participating in such registration, the number
of shares of Common Stock requested to be included in the registration by the Investor and such
other shareholders in proportion, as nearly as practicable, to the respective number of shares that
are proposed to be offered and sold by the Investor and such other shareholders at the time of
filing the registration statement. No Registrable Securities or other shares of Common Stock
excluded from the underwriting in this Article 3 by reason of the underwriters’ marketing
limitation shall be included in such registration.

     (c) The Company shall so advise the Investor and the other shareholders distributing their
securities through such underwriting of any such limitation and the number of shares that may be
included in the registration. If the Investor disapproves of the terms of any such underwriting,
the Investor may elect to withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.

     (d) The Company shall have the right to terminate or withdraw any registration initiated by it
under this Article 3 prior to the effectiveness of such registration, whether or not the Investor
has elected to include Registrable Securities in such registration; provided that the Investor
shall have the right to convert such registration into a demand registration covered by Section 2.1
hereof.

ARTICLE 4

EXPENSES OF REGISTRATION

     All Registration Expenses incurred in connection with any registration, qualification or
compliance pursuant to Articles 2, 3 and 5 hereof, the reasonable fees of one counsel for the
Holders of Registrable Securities in the case of a registration in which a Holder participates and
any other similar out of pocket expenses incurred by any Holder or Holders pursuant to any
applicable underwriting agreement in connection with a registration hereunder shall, in each case,
be borne by the Company. All Selling Expenses relating to Registrable Securities registered on
behalf of a Holder shall be borne by such Holder.

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ARTICLE 5

REGISTRATION PROCEDURES

     (a) In the case of each registration effected by the Company pursuant to this Agreement, the
Company will keep each Holder advised in writing as to the initiation of each registration and as
to the completion thereof. The Company agrees to use its reasonable best efforts to effect or
cause such registration to permit the sale of the Registrable Securities covered thereby by the
Holders thereof in accordance with the intended method or methods of distribution thereof described
in such registration statement. In connection with any registration of any Registrable Securities,
the Company shall:

     (i) prepare and file with the Commission a registration statement with respect to such
Registrable Securities and use its reasonable best efforts to cause such registration
statement filed to become effective;

     (ii) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such registration statement pursuant to the applicable rules
and regulations of the Commission and the instructions applicable to the form of such
registration statement (provided, however, that the Company shall not be obliged to maintain
the effectiveness of such registration statement longer than through the earlier of (A) two
years following the effective date of such registration statement and (B) such time as all
Registrable Securities registered thereunder have been sold pursuant to such registration
statement), and furnish to the Holders of the Registrable Securities covered thereby copies
of any such supplement or amendment prior to its use and/or filing with the Commission;

     (iii) permit one legal counsel for the Holders of Registrable Securities to be included
in a registration statement to review and comment upon a registration statement, and all
amendments and supplements thereto, within a reasonable amount of time prior to its filing
with the Commission, and not file any registration statement, or amendment or supplement
thereto, in a form to which such legal counsel reasonably and timely objects. The Company
shall furnish to such legal counsel, without charge, copies of any correspondence from the
Commission to the Company or its representatives relating to any registration statement;

     (iv) promptly notify the Holders of Registrable Securities to be included in a
registration statement hereunder, the sales or placement agent, if any, therefor and the
managing underwriter of the securities being sold, and confirm such advice in writing, (A)
when such registration statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed and, with respect to such
registration statement or any post-effective amendment, when the same has become effective,
(B) of the issuance by the Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that purpose, (C) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, (D) of any request by the

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Commission for any amendment or supplement to a registration statement or related
prospectus or related information or (E) if, at any time when a prospectus is required to be
delivered under the Securities Act, such registration statement or prospectus, or any
document incorporated by reference in any of the foregoing, contains an untrue statement of
a material fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing. In the case of clause (E), the Company shall promptly prepare a supplement or
amendment to such registration statement to correct such untrue statement or omission;

     (v) use its reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of such registration statement or any post-effective amendment thereto or
of any order suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration statement for sale
in any jurisdiction at the earliest practicable date;

     (vi) furnish to each Holder of Registrable Securities to be included in such
registration statement hereunder, each placement or sales agent, if any, therefor and each
underwriter, if any, thereof, without charge, a conformed copy of such registration
statement and any amendment and supplement thereto (in each case including all exhibits and
documents incorporated by reference) and such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus, any summary prospectus
and any free writing prospectus), and any amendment or supplement thereto, as such Holder,
agent, if any, and underwriter, if any, may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder, sold by such agent or
underwritten by such underwriter and to permit such Holder, agent and underwriter to satisfy
the prospectus delivery requirements of the Securities Act;

     (vii) use its reasonable best efforts to (A) register or qualify the Registrable
Securities to be included in such registration statement under such other securities laws or
blue sky laws of such states of the United States or the District of Columbia as may be
reasonably requested by the Holders of a majority of such Registrable Securities
participating in such registration, each placement or sales agent, if any, therefor or the
managing underwriter, if any, thereof, (B) keep such registrations or qualifications in
effect and comply with such laws at all times during the period described in Section
5(a)(ii) above, and (C) take any and all such actions as may be reasonably necessary to
enable such Holder, agent, if any, and underwriter, if any, to consummate the disposition in
such jurisdictions of such Registrable Securities; provided, however, that in order to
fulfill the foregoing obligations under this Section 5(a)(vii), the Company shall not
(unless otherwise required to do so in any jurisdiction) be required to (1) qualify
generally to do business as a foreign company or a broker-dealer, (2) execute a general
consent to service of process or (3) subject itself to taxation;

     (viii) furnish, at the request of the Holders of a majority of such Registrable
Securities participating in such registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters, on the date

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that the registration statement with respect to such securities becomes effective, (i)
an opinion, dated as of such date, of counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given to underwriters in an
underwritten public offering and reasonably satisfactory to a majority in interest of the
Holders, addressed to the underwriters, if any, and to such Holders and (ii) a letter, dated
as of such date, from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders, addressed to the underwriters, if any, and, if permitted by
applicable accounting standards, to such Holders; and

     (ix) otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission in connection with any registration hereunder.

     (b) The Company may require each Holder of Registrable Securities as to which any registration
is being effected to furnish in writing to the Company such information regarding such Holder and
such Holder’s method of distribution of such Registrable Securities as the Company may from time to
time reasonably request. Each such Holder agrees to notify the Company as promptly as practicable
of any inaccuracy or change in information previously furnished by such Holder to the Company or of
the occurrence of any event as a result of which any prospectus relating to such registration
contains an untrue statement of a material fact regarding such Holder or the distribution of such
Registrable Securities or omits to state any material fact regarding such Holder or the
distribution of such Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing, and promptly to
furnish to the Company any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain, with respect to such
Holder or the distribution of such Registrable Securities, an untrue statement or a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.

     (c) Each of the Holders will comply with the provisions of the Securities Act with respect to
disposition of the Registrable Securities to be included in any registration statement filed by the
Company.

ARTICLE 6

INDEMNIFICATION

     6.1 The Company will indemnify each Holder, each of its officers, directors and partners, such
Holder’s legal counsel and independent accountants, if any, each person controlling such Holder
within the meaning of Section 15 of the Securities Act, each underwriter, if any, and each person
who controls any underwriter within the meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact contained in any
registration statement or prospectus, or any amendment or supplement thereto, or any omission (or
alleged omission) to state therein a material fact required

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to be stated therein or necessary to make the statements therein not misleading, or any
violation by the Company of any rule or regulation promulgated under the Securities Act or any
state securities laws applicable to the Company and relating to action or inaction by the Company
in connection with any such registration, qualification or compliance, and will reimburse each such
Holder, each of its officers, directors and partners, such Holder’s legal counsel and independent
accountants, each person controlling such Holder, each such underwriter and each person who
controls any such underwriter for any legal and other expenses reasonably incurred in connection
with investigating, preparing or defending any such claim, loss, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the extent that any such
expense, claim, loss, damage, liability or action arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use in such registration
statement or prospectus, or any amendment or supplement thereto.

     6.2 Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being effected, severally
indemnify the Company, each of its directors and officers, its legal counsel and independent
accountants, each underwriter, if any, of the Company’s securities covered by such a registration
statement, each person who controls the Company or such underwriter within the meaning of Section
15 of the Securities Act, and each other such Holder, each of its officers, directors, partners,
legal counsel and independent accountants, if any, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement
of any litigation, commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration statement or
prospectus, or any amendment or supplement thereto, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors, officers, partners,
legal counsel, independent accountants, underwriters and control persons for any legal and other
expenses reasonably incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in
such registration statement or prospectus or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Holder regarding such Holder
and/or such Holder’s method of distribution expressly for use in such registration statement or
prospectus, or any amendment or supplement thereto; provided, however, that the obligations of each
Holder hereunder shall be limited to an amount equal to the net proceeds to such Holder of
Registrable Securities sold pursuant to such registration statement.

     6.3 Each party entitled to indemnification under this Article 6 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld). The Indemnified Party

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may participate in such defense at such party’s expense; provided, however, that the
Indemnifying Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest. The failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this Agreement, unless
such failure is materially prejudicial to the ability of the Indemnifying Party to defend the
action. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect of such claim or
litigation.

     6.4 If the indemnification provided for in Section 6.1 or 6.2 is unavailable or insufficient
to hold harmless an Indemnified Party, then each Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in Section 6.1 or 6.2, in
such proportion as is appropriate to reflect the relative fault of the Company on the one hand and
the Holders of Registrable Securities on the other hand in connection with statements or omissions
which resulted in such expenses, claims, losses, damages or liabilities (or actions or proceedings
in respect thereof), as well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Holders of Registrable Securities and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Holders agree that it would not be just and equitable
if contributions pursuant to this Section 6.4 were to be determined by pro rata allocation (even if
all Holders of Registrable Securities were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in the
first sentence of this Section 6.4. The amount paid by an Indemnified Party as a result of the
expenses, claims, losses, damages or liabilities (or actions or proceedings in respect thereof)
referred to in the first sentence of this Section 6.4 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending any claim, action or proceeding which is the subject of this Section 6.4. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of Holders of Registrable Securities to contribute pursuant to
this Section 6.4 shall be several in proportion to the respective amount of Registrable Securities
sold by them pursuant to a registration statement, and shall be limited to an amount equal to the
net proceeds to each such Holder of Registrable Securities sold pursuant to such registration
statement.

ARTICLE 7

RULE 144 REPORTING

     With a view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of securities of the Company to the public without
registration, the Company agrees to use its reasonable best efforts to:

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     7.1 Make and keep public information regarding the Company available, as those terms are
understood and defined in Rule 144, at all times after the date hereof; and

     7.2 File with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act.

ARTICLE 8

TRANSFER OF REGISTRATION RIGHTS

     The rights to cause the Company to register Registrable Securities under Section 2.2 of this
Agreement, together with all related rights and obligations, may be assigned by a Holder to any
other person; provided, however, that (A) the transferor shall furnish to the Company written
notice of the name and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned prior to such transfer and (B) such transferee
shall agree in writing to be subject to all applicable restrictions set forth in this Agreement.
In each case, such rights may only be transferred together with the underlying Registrable
Securities in a transfer permitted by the Securities Act and applicable state securities laws. Any
such permitted transferee or assignee shall be deemed a Holder hereunder.

ARTICLE 9

LIMITATIONS ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES

     From and after the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any
agreement with any holder or prospective holder of any securities of the Company providing for the
grant to such holder of registration rights superior to those granted herein.

ARTICLE 10

MISCELLANEOUS

     10.1 Governing Law; Forum. The laws of the State of Texas shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the law that might be
applied under principles of conflicts of law. EACH OF THE PARTIES TO THIS AGREEMENT CONSENTS TO
SUBMIT TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF TEXAS, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AGREES THAT ALL CLAIMS IN
RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT, AND AGREES NOT
TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY OTHER COURT.
EACH OF THE PARTIES TO THIS AGREEMENT AGREES NOT TO ASSERT IN ANY ACTION OR PROCEEDING ARISING OUT
OF RELATING TO THIS AGREEMENT THAT THE VENUE IS IMPROPER, AND WAIVES ANY DEFENSE OF INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY OR
OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO.

     10.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors and assigns of

-11-

 

each of the parties hereto and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

     10.3 Entire Agreement. This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.

     10.4 Notices. All notices, requests, consents and other communications hereunder shall be made
in writing and shall be deemed given (i) when made if made by hand delivery, (ii) one business day
after being deposited with an overnight courier if made by courier guaranteeing overnight delivery,
(iii) on the date indicated on the notice of receipt if made by first-class mail, return receipt
requested or (iv) on the date of confirmation of receipt of transmission by facsimile, addressed as
follows:

     (a) if to the Company, at

Bell Industries, Inc.

8888 Keystone Crossing

Suite 1700

Indianapolis, Indiana 46240

Facsimile: (317) 715-6816

Attention: Chief Financial Officer

with a copy to:

Manatt, Phelps & Phillips, LLP

11355 West Olympic Boulevard

Los Angeles, CA 90064

Facsimile: (310) 914-5712

Attention: Mark Kelson, Esq.

     (b) if to the Investor, in care of:

Newcastle Partners, L.P.

200 Crescent Court, Suite 1400

Dallas, TX 75201

Facsimile: (214) 661-7475

Attention: Evan D. Stone, Esq.

:

     (c) if to a Holder, to the address reflected on the records of the Company, or such other
address or addresses as shall have been furnished in writing by such party to the Company and to
the other parties to this Agreement.

     10.5 Severability. The invalidity, illegality or unenforceability of one or more of the
provisions of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or

-12-

 

enforceability of this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.

     10.6 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

     10.7 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together constitute one instrument.

     10.8 Amendment and Modification. This Agreement may be amended, modified or supplemented in
any respect only by written agreement by the Company and Holders representing at least a majority
of the Registrable Securities, voting together as a single class; provided, that no such amendment
shall unfairly discriminate against a particular Holder relative to the other Holders. Any action
taken by the Holders, as provided in this Section 10.8, shall bind all Holders.

-13-

 

     IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Newcastle Partners, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	Bell Industries, Inc.         	 	By:	 	Newcastle Capital Management,
L.P., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John A. Fellows	 	By	 	/s/ Mark Schwarz	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its

	 	Chief Executive Officer	 	Its	 	Chief Executive Officer	 	 
	 

	 	 
	 	 	 	 	 	 

-14-

 

ANNEX A

PLAN OF DISTRIBUTION

     We are registering the shares offered by this prospectus on behalf of the selling
shareholders. The selling shareholders, which as used herein includes donees, pledgees, transferees
or other successors-in-interest selling shares of common stock or interests in shares of common
stock received after the date of this prospectus from a selling shareholder as a gift, pledge,
partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise
dispose of any or all of their shares of common stock or interests in shares of common stock on any
stock exchange, market or trading facility on which the shares are traded or in private
transactions. These dispositions may be at fixed prices, at prevailing market prices at the time
of sale, at prices related to the prevailing market price, at varying prices determined at the time
of sale or at negotiated prices.

     The selling shareholders may use any one or more of the following methods when disposing of
shares or interests therein:

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	short sales;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
	 
	 	•	 	broker-dealers may agree with the selling shareholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.

     The selling shareholders may, from time to time, pledge or grant a security interest in some
or all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock,
from time to time, under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list of selling
shareholders to include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholders also may transfer the shares

 

 

of common stock in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of this prospectus.

     In connection with the sale of our common stock or interests therein, the selling shareholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The selling shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The selling shareholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).

     The aggregate proceeds to the selling shareholders from the sale of the common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if any. Each
of the selling shareholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering.

     The selling shareholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet
the criteria and conform to the requirements of that rule.

     The selling shareholders and any broker-dealers that act in connection with the sale of
securities might be deemed to be “underwriters” within the meaning of Section 2(11) of the
Securities Act, and any commissions received by such broker-dealers and any profit on the resale of
the securities sold by them while acting as principals might be deemed to be underwriting discounts
or commissions under the Securities Act.

     To the extent required, the shares of our common stock to be sold, the names of the selling
shareholders, the respective purchase prices and public offering prices, the names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this prospectus.

     In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.

-2-

 

     We have advised the selling shareholders that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of shares in the market and to the activities of the
selling shareholders and their affiliates. In addition, we will make copies of this prospectus (as
it may be supplemented or amended from time to time) available to the selling shareholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling
shareholders may indemnify any broker-dealer that participates in transactions involving the sale
of the shares against certain liabilities, including liabilities arising under the Securities Act.

     We have agreed to indemnify the selling shareholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.

     We have agreed with the selling shareholders to keep the registration statement that includes
this prospectus effective until the earlier of (1) two years following the effective date of the
registration statement and (2) such time as all shares of common stock covered by this prospectus
have been sold pursuant to this prospectus; provided that the limitation set forth in clause (1)
shall not apply in the case of any shelf registration.

-3-exv10w1

 

Exhibit 10.1

 

CREDIT AGREEMENT

by and among

BELL INDUSTRIES, INC.

and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, INC.

as the Arranger and Administrative Agent

Dated as of January 31, 2007

 

 

 

TABLE
OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1. DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	1	 
	1.2 Accounting Terms
	 	 	1	 
	1.3 Code
	 	 	1	 
	1.4 Construction
	 	 	1	 
	1.5 Schedules and Exhibits
	 	 	2	 
	 
	 	 	 	 
	2. LOAN AND TERMS OF PAYMENT
	 	 	2	 
	 
	 	 	 	 
	2.1 Revolver Advances
	 	 	2	 
	2.2 [Intentionally Omitted]
	 	 	2	 
	2.3 Borrowing Procedures and Settlements
	 	 	2	 
	2.4 Payments
	 	 	6	 
	2.5 Overadvances
	 	 	8	 
	2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations
	 	 	8	 
	2.7 Cash Management
	 	 	9	 
	2.8 Crediting Payments
	 	 	10	 
	2.9 Designated Account
	 	 	10	 
	2.10 Maintenance of Loan Account; Statements of Obligations
	 	 	11	 
	2.11 Fees
	 	 	11	 
	2.12 Letters of Credit
	 	 	11	 
	2.13 LIBOR Option
	 	 	13	 
	2.14 Capital Requirements
	 	 	15	 
	2.15 Joint and Several Liability of Borrowers
	 	 	16	 
	 
	 	 	 	 
	3. CONDITIONS; TERM OF AGREEMENT
	 	 	18	 
	 
	 	 	 	 
	3.1 Conditions Precedent to the Initial Extension of Credit
	 	 	18	 
	3.2 Conditions Precedent to all Extensions of Credit
	 	 	18	 
	3.3 Term
	 	 	18	 
	3.4 Effect of Termination
	 	 	18	 
	3.5 Early Termination by Borrowers
	 	 	19	 
	3.6 Conditions Subsequent to the Initial Extension of Credit
	 	 	19	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	 
	 	 	 	 
	4.1 No Encumbrances
	 	 	20	 
	4.2 Eligible Accounts
	 	 	20	 
	4.3 Eligible Inventory
	 	 	20	 

 

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	4.4 Equipment
	 	 	20	 
	4.5 Location of Inventory and Equipment
	 	 	20	 
	4.6 Inventory Records
	 	 	20	 
	4.7 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification
Number; Commercial Tort Claims
	 	 	21	 
	4.8 Due Organization and Qualification; Subsidiaries
	 	 	21	 
	4.9 Due Authorization; No Conflict
	 	 	22	 
	4.10 Litigation
	 	 	23	 
	4.11 No Material Adverse Change
	 	 	23	 
	4.12 Fraudulent Transfer
	 	 	23	 
	4.13 Employee Benefits
	 	 	23	 
	4.14 Environmental Condition
	 	 	23	 
	4.15 Intellectual Property
	 	 	24	 
	4.16 Leases
	 	 	24	 
	4.17 Deposit Accounts and Securities Accounts
	 	 	24	 
	4.18 Complete Disclosure
	 	 	24	 
	4.19 Indebtedness
	 	 	24	 
	 
	 	 	 	 
	5. AFFIRMATIVE COVENANTS
	 	 	25	 
	 
	 	 	 	 
	5.1 Accounting System
	 	 	25	 
	5.2 Collateral Reporting
	 	 	25	 
	5.3 Financial Statements, Reports, Certificates
	 	 	25	 
	5.4 Guarantor Reports
	 	 	25	 
	5.5 Inspection
	 	 	25	 
	5.6 Maintenance of Properties
	 	 	25	 
	5.7 Taxes
	 	 	26	 
	5.8 Insurance
	 	 	26	 
	5.9 Location of Inventory and Equipment
	 	 	26	 
	5.10 Compliance with Laws
	 	 	26	 
	5.11 Leases
	 	 	26	 
	5.12 Existence
	 	 	26	 
	5.13 Environmental
	 	 	27	 
	5.14 Disclosure Updates
	 	 	27	 
	5.15 Control Agreements
	 	 	27	 
	5.16 Formation of Subsidiaries
	 	 	27	 

-2-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	5.17 Further Assurances
	 	 	27	 
	5.18 Material Contracts
	 	 	28	 
	5.19 Senior Management
	 	 	28	 
	5.20 Copyrights
	 	 	28	 
	5.21 Assignment of Agreements
	 	 	28	 
	 
	 	 	 	 
	6. NEGATIVE COVENANTS
	 	 	28	 
	 
	 	 	 	 
	6.1 Indebtedness
	 	 	28	 
	6.2 Liens
	 	 	29	 
	6.3 Restrictions on Fundamental Changes
	 	 	29	 
	6.4 Disposal of Assets
	 	 	29	 
	6.5 Change Name
	 	 	29	 
	6.6 Nature of Business
	 	 	29	 
	6.7 Prepayments and Amendments
	 	 	29	 
	6.8 Change of Control
	 	 	29	 
	6.9 Consignments
	 	 	30	 
	6.10 Distributions
	 	 	30	 
	6.11 Accounting Methods
	 	 	30	 
	6.12 Investments
	 	 	30	 
	6.13 Transactions with Affiliates
	 	 	30	 
	6.14 Use of Proceeds
	 	 	30	 
	6.15 Inventory and Equipment with Bailees
	 	 	30	 
	6.16 Financial Covenants
	 	 	30	 
	 
	 	 	 	 
	7. EVENTS OF DEFAULT
	 	 	31	 
	 
	 	 	 	 
	8. THE LENDER GROUP’S RIGHTS AND REMEDIES
	 	 	33	 
	 
	 	 	 	 
	8.1 Rights and Remedies
	 	 	33	 
	8.2 Remedies Cumulative
	 	 	34	 
	 
	 	 	 	 
	9. TAXES AND EXPENSES
	 	 	34	 
	 
	 	 	 	 
	10. WAIVERS; INDEMNIFICATION
	 	 	34	 
	 
	 	 	 	 
	10.1 Demand; Protest; etc.
	 	 	34	 
	10.2 The Lender Group’s Liability for Collateral
	 	 	34	 
	10.3 Indemnification
	 	 	34	 
	 
	 	 	 	 
	11. NOTICES
	 	 	35	 
	 
	 	 	 	 
	12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
	 	 	36	 

-3-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS
	 	 	37	 
	 
	 	 	 	 
	13.1 Assignments and Participations
	 	 	37	 
	13.2 Successors
	 	 	39	 
	 
	 	 	 	 
	14. AMENDMENTS; WAIVERS
	 	 	39	 
	 
	 	 	 	 
	14.1 Amendments and Waivers
	 	 	39	 
	14.2 Replacement of Holdout Lender
	 	 	40	 
	14.3 No Waivers; Cumulative Remedies
	 	 	40	 
	 
	 	 	 	 
	15. AGENT; THE LENDER GROUP
	 	 	40	 
	 
	 	 	 	 
	15.1 Appointment and Authorization of Agent
	 	 	40	 
	15.2 Delegation of Duties
	 	 	41	 
	15.3 Liability of Agent
	 	 	41	 
	15.4 Reliance by Agent
	 	 	41	 
	15.5 Notice of Default or Event of Default
	 	 	42	 
	15.6 Credit Decision
	 	 	42	 
	15.7 Costs and Expenses; Indemnification
	 	 	42	 
	15.8 Agent in Individual Capacity
	 	 	43	 
	15.9 Successor Agent
	 	 	43	 
	15.10 Lender in Individual Capacity
	 	 	43	 
	15.11 Collateral Matters
	 	 	44	 
	15.12 Restrictions on Actions by Lenders; Sharing of Payments
	 	 	44	 
	15.13 Agency for Perfection
	 	 	45	 
	15.14 Payments by Agent to the Lenders
	 	 	45	 
	15.15 Concerning the Collateral and Related Loan Documents
	 	 	45	 
	15.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports
and Information
	 	 	45	 
	15.17 Several Obligations; No Liability
	 	 	46	 
	 
	 	 	 	 
	16. WITHHOLDING TAXES
	 	 	46	 
	 
	 	 	 	 
	17. GENERAL PROVISIONS
	 	 	48	 
	 
	 	 	 	 
	17.1 Effectiveness
	 	 	48	 
	17.2 Section Headings
	 	 	48	 
	17.3 Interpretation
	 	 	48	 
	17.4 Severability of Provisions
	 	 	48	 
	17.5 Bank Product Providers
	 	 	48	 
	17.6 Lender-Creditor Relationship
	 	 	48	 

-4-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	17.7 Counterparts; Electronic Execution
	 	 	48	 
	17.8 Revival and Reinstatement of Obligations
	 	 	49	 
	17.9 Confidentiality
	 	 	49	 
	17.10 Lender Group Expenses
	 	 	49	 
	17.11 USA PATRIOT Act
	 	 	49	 
	17.12 Integration
	 	 	50	 
	17.13 Parent as Agent for Borrowers
	 	 	50	 

-5-

 

EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A-1

	 	Form of Assignment and Acceptance
	Exhibit B-1

	 	Form of Borrowing Base Certificate
	Exhibit C-1

	 	Form of Compliance Certificate
	Exhibit L-1

	 	Form of LIBOR Notice
	Schedule A-1

	 	Agent’s Account
	Schedule A-2

	 	Authorized Persons
	Schedule C-1

	 	Commitments
	Schedule D-1

	 	Designated Account
	Schedule E-1

	 	Eligible Inventory Locations
	Schedule P-1

	 	Permitted Holders
	Schedule P-2

	 	Permitted Liens
	Schedule 1.1

	 	Definitions
	Schedule 2.7(a)

	 	Cash Management Banks
	Schedule 3.1

	 	Conditions Precedent
	Schedule 4.5

	 	Locations of Inventory and Equipment
	Schedule 4.7(a)

	 	States of Organization
	Schedule 4.7(b)

	 	Chief Executive Offices
	Schedule 4.7(c)

	 	Organizational Identification Numbers
	Schedule 4.7(d)

	 	Commercial Tort Claims
	Schedule 4.8(b)

	 	Capitalization of Borrowers
	Schedule 4.8(c)

	 	Capitalization of Borrowers’ Subsidiaries
	Schedule 4.10

	 	Litigation
	Schedule 4.14

	 	Environmental Matters
	Schedule 4.15

	 	Intellectual Property
	Schedule 4.17

	 	Deposit Accounts and Securities Accounts
	Schedule 4.19

	 	Permitted Indebtedness
	Schedule 4.20

	 	Material Contracts
	Schedule 5.2(a)

	 	Collateral Reporting – Recreational Products Group and Technology Solutions Group
	Schedule 5.2(b)

	 	Collateral Reporting – Skytel Group
	Schedule 5.3

	 	Financial Statements, Reports, Certificates

 

CREDIT AGREEMENT

          THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of January 31, 2007, by
and among the lenders identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, “Agent”), BELL INDUSTRIES, INC.,
a California corporation (“Parent”), and each of Parent’s Subsidiaries identified on the
signature pages hereof (such Subsidiaries, together with Parent are referred to hereinafter each
individually as a “Borrower”, and individually and collectively, jointly and severally, as
the “Borrowers”).

          The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

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

     1.2 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term “Borrowers” or the
term “Parent” is used in respect of a financial covenant or a related definition, it shall be
understood to mean Parent and its Subsidiaries on a consolidated basis, unless the context clearly
requires otherwise.

     1.3 Code. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined herein;
provided, however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code, the definition of
such term contained in Article 9 of the Code shall govern.

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

 

 

Record so transmitted shall constitute a representation and warranty as to the accuracy and
completeness of the information contained therein.

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

2. LOAN AND TERMS OF PAYMENT.

     2.1 Revolver Advances.

          (a) Subject to the terms and conditions of this Agreement, and during the term of
this Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly or jointly
and severally) to make advances (“Advances”) to Borrowers in an amount at any one time
outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the
Maximum Revolver Amount less the Letter of Credit Usage at such time, and (ii) the Borrowing Base
at such time less the Letter of Credit Usage at such time.

          (b) Anything to the contrary in this Section 2.1 notwithstanding, Agent
shall have the right to establish reserves against the Borrowing Base in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem necessary or appropriate,
including reserves with respect to (i) sums that Borrowers or their Subsidiaries are required to
pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts payable under such
leases) and have failed to pay, and (ii) amounts owing by Borrowers or their Subsidiaries to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a
Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a
priority superior to the Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable law) in and to such
item of the Collateral.

          (c) Amounts borrowed pursuant to this Section 2.1 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time during the term of
this Agreement. The outstanding principal amount of the Advances, together with interest accrued
thereon, shall be due and payable on the Maturity Date or, if earlier, on the date on which they
are declared due and payable pursuant to the terms of this Agreement.

     2.2 [Intentionally Omitted].

     2.3 Borrowing Procedures and Settlements.

          (a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent. Unless Swing Lender is not obligated
to make a Swing Loan pursuant to Section 2.3(b) below, such notice must be received by
Agent no later than 10:00 a.m. (California time) on the Business Day that is the requested Funding
Date specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall
be a Business Day; provided, however, that if Swing Lender is not obligated to make
a Swing Loan as to a requested Borrowing, such notice must be received by Agent no later than 10:00
a.m. (California time) on the Business Day prior to the date that is the requested Funding Date.
At Agent’s election, in lieu of delivering the above-described written request, any Authorized
Person may give Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed in writing within
24 hours of the giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request.

          (b) Making of Swing Loans. In the case of a request for an Advance and so long as
either (i) the aggregate amount of Swing Loans made since the last Settlement Date plus the amount
of the

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requested Advance does not exceed $3,000,000, or (ii) Swing Lender, in its sole discretion,
shall agree to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make
an Advance in the amount of such Borrowing (any such Advance made solely by Swing Lender pursuant
to this Section 2.3(b) being referred to as a “Swing Loan” and such Advances being
referred to collectively as “Swing Loans”) available to Borrowers on the Funding Date
applicable thereto by transferring immediately available funds to Borrowers’ Designated Account.
Each Swing Loan shall be deemed to be an Advance hereunder and shall be subject to all the terms
and conditions applicable to other Advances, except that all payments on any Swing Loan shall be
payable to Swing Lender solely for its own account. Subject to the provisions of Section
2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if
Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date.
Swing Lender shall not otherwise be required to determine whether the applicable conditions
precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto
prior to making any Swing Loan. The Swing Loans shall be secured by the Agent’s Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to time to Advances that
are Base Rate Loans.

          (c) Making of Loans.

               (i) In the event that Swing Lender is not obligated to make a Swing Loan, then
promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall
notify the Lenders, not later than 1:00 p.m. (California time) on the Business Day immediately
preceding the Funding Date applicable thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of such Lender’s Pro
Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s
Account, not later than 10:00 a.m. (California time) on the Funding Date applicable thereto. After
Agent’s receipt of the proceeds of such Advances, Agent shall make the proceeds thereof available
to Administrative Borrower on the applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Administrative Borrower’s Designated Account;
provided, however, that, subject to the provisions of Section 2.3(d)(ii),
Agent shall not request any Lender to make, and no Lender shall have the obligation to make, any
Advance if Agent shall have actual knowledge that (1) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding Date for
the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.

               (ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California
time) on the date of a Borrowing, that such Lender will not make available as and when required
hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent
in immediately available funds on the Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If
and to the extent any Lender shall not have made its full amount available to Agent in immediately
available funds and Agent in such circumstances has made available to Borrowers such amount, that
Lender shall on the Business Day following such Funding Date make such amount available to Agent,
together with interest at the Defaulting Lender Rate for each day during such period. A notice
submitted by Agent to any Lender with respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is so made available, such payment to Agent
shall constitute such Lender’s Advance on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business Day following the Funding Date,
Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent,
Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing. The failure of any Lender to make
any Advance on any Funding Date shall not relieve any other Lender of any obligation hereunder to
make an Advance on such Funding Date, but no Lender shall be

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responsible for the failure of any other Lender to make the Advance to be made by such other
Lender on any Funding Date.

               (iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in the absence of such
transfer to the Defaulting Lender, Agent shall transfer any such payments to each other
non-Defaulting Lender member of the Lender Group ratably in accordance with their Commitments (but
only to the extent that such Defaulting Lender’s Advance was funded by the other members of the
Lender Group) or, if so directed by Administrative Borrower and if no Default or Event of Default
had occurred and is continuing (and to the extent such Defaulting Lender’s Advance was not funded
by the Lender Group), retain same to be re-advanced to Borrowers as if such Defaulting Lender had
made Advances to Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such
payments received and retained by Agent for the account of such Defaulting Lender. Solely for the
purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting
Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero. This Section shall remain effective with respect to such Lender until (x) the Obligations
under this Agreement shall have been declared or shall have become immediately due and payable, (y)
the non-Defaulting Lenders, Agent, and Administrative Borrower shall have waived such Defaulting
Lender’s default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts owing by Defaulting Lender in respect thereof.
The operation of this Section shall not be construed to increase or otherwise affect the Commitment
of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent or to the Lenders other than such Defaulting
Lender. Any such failure to fund by any Defaulting Lender shall constitute a material breach by
such Defaulting Lender of this Agreement and shall entitle Administrative Borrower at its option,
upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be acceptable to Agent. In connection with the
arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance
in favor of the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being repaid its share of the
outstanding Obligations (other than Bank Product Obligations, but including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind
whatsoever; provided, however, that any such assumption of the Commitment of such
Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or
Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation to
such failure to fund.

          (d) Protective Advances and Optional Overadvances.

               (i) Agent hereby is authorized by Borrowers and the Lenders, from time to time in
Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an
Event of Default, or (B) at any time that any of the other applicable conditions precedent set
forth in Section 3 are not satisfied, to make Advances to Borrowers on behalf of the
Lenders that Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or
protect the Collateral, or any portion thereof, (2) to enhance the likelihood of repayment of the
Obligations (other than the Bank Product Obligations), or (3) to pay any other amount chargeable to
Borrowers pursuant to the terms of this Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in Section 9 (any of the Advances described in this
Section 2.3(d)(i) shall be referred to as “Protective Advances”).

               (ii) Any contrary provision of this Agreement notwithstanding, the Lenders hereby
authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable,
may, but is not obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would be created,
so long as (A) after giving effect to such Advances, the outstanding Revolver Usage does not exceed
the Borrowing Base by more than

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$3,000,000, and (B) after giving effect to such Advances, the outstanding Revolver Usage
(except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group
Expenses) does not exceed the Maximum Revolver Amount. In the event Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions,
regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless
Agent determines that prior notice would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall, together with Agent, jointly determine
the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a
reasonable time, the outstanding principal amount of the Advances to Borrowers to an amount
permitted by the preceding sentence. In such circumstances, if any Lender with a Revolver
Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of
reduction or repayment thereof shall be implemented according to the determination of the Required
Lenders. Each Lender with a Revolver Commitment shall be obligated to settle with Agent as
provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging
to the Loan Account of interest, fees, or Lender Group Expenses.

               (iii) Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a LIBOR
Rate Loan and all payments on the Protective Advances shall be payable to Agent solely for its own
account. The Protective Advances and Overadvances shall be repayable on demand, secured by the
Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time
to time to Advances that are Base Rate Loans. The provisions of this Section 2.3(d) are
for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit
any Borrower in any way.

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

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

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Such amounts made available to Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable Swing Loans or Protective Advances and,
together with the portion of such Swing Loans or Protective Advances representing Swing Lender’s
Pro Rata Share thereof, shall constitute Advances of such Lenders. If any such amount is not made
available to Agent by any Lender on the Settlement Date applicable thereto to the extent required
by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from
such Lender together with interest thereon at the Defaulting Lender Rate.

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

               (iii) Between Settlement Dates, Agent, to the extent no Protective Advances or
Swing Loans are outstanding, may pay over to Swing Lender any payments received by Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of the Advances, for
application to Swing Lender’s Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections of Borrowers or their Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have,
as of such Settlement Date, its Pro Rata Share of the Advances. During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Protective
Advances, and each Lender (subject to the effect of agreements between Agent and individual
Lenders) with respect to the Advances other than Swing Loans and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this Agreement on the daily
amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

          (f) Notation. Agent shall record on its books the principal amount of the
Advances owing to each Lender, including the Swing Loans owing to Swing Lender, and Protective
Advances owing to Agent, and the interests therein of each Lender, from time to time and such
records shall, absent manifest error, conclusively be presumed to be correct and accurate.

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

     2.4 Payments.

          (a) Payments by Borrowers.

               (i) Except as otherwise expressly provided herein, all payments by Borrowers shall
be made to Agent’s Account for the account of the Lender Group and shall be made in immediately
available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any
payment received by Agent later than 11:00 a.m. (California time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall continue to accrue
until such following Business Day.

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

          (b) Apportionment and Application.

               (i) So long as no Event of Default has occurred and is continuing and except as
otherwise provided with respect to Defaulting Lenders, all principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and expenses (other
than fees or expenses that are for Agent’s separate account) shall be apportioned ratably among the
Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee
or expense relates. All payments to be made hereunder by Borrowers shall be remitted to Agent and
all (subject to Section 2.4(b)(iv) hereof) such payments, and all proceeds of Collateral received
by Agent, shall be applied, so long as no Event of Default has occurred and is continuing, to
reduce the balance of the Advances outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.

               (ii) At any time that an Event of Default has occurred and is continuing and
except as otherwise provided with respect to Defaulting Lenders, all payments remitted to Agent and
all proceeds of Collateral received by Agent shall be applied as follows:

                    (A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

                    (B) second, to pay any fees or premiums then due to Agent under the Loan
Documents until paid in full,

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

                    (D) fourth, to pay the principal of all Protective Advances until paid in
full,

                    (E) fifth, ratably to pay any Lender Group Expenses (including cost or
expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents,
until paid in full,

                    (F) sixth, ratably to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,

                    (G) seventh, ratably to pay interest due in respect of the Advances (other
than Protective Advances), and the Swing Loans, until paid in full,

                    (H) eighth, ratably (i) to pay the principal of all Swing Loans until paid
in full, (ii) to pay the principal of all Advances until paid in full, (iii) to Agent, to be held
by Agent, for the ratable benefit of Issuing Lender and those Lenders having a Revolver Commitment,
as cash collateral in an amount up to 105% of the Letter of Credit Usage, and (iv) to Agent, to be
held by Agent, for the benefit of the

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Bank Product Providers, as cash collateral in an amount up to the amount of the Bank Product
Reserve established prior to the occurrence of, and not in contemplation of, the subject Event of
Default,

                    (I) ninth, to pay any other Obligations (including the provision of
amounts to Agent, to be held by Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount determined by Agent in its Permitted Discretion as the
amount necessary to secure Borrowers and their Subsidiaries’ obligations in respect of Bank
Products), and

                    (J) tenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.

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

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

               (v) For purposes of Section 2.4(b)(ii), “paid in full” means payment of
all amounts owing under the Loan Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest (and specifically including interest accrued after the
commencement of any Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole
or in part in any Insolvency Proceeding.

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

          (c) [Intentionally Omitted].

     2.5 Overadvances. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section
2.12 is greater than any of the limitations set forth in Section 2.1 or Section
2.12, as applicable (an “Overadvance”), Borrowers immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to reduce the Obligations in
accordance with the priorities set forth in Section 2.4(b). Borrowers promise to pay the
Obligations (including principal, interest, fees, costs, and expenses) in Dollars in full on the
Maturity Date or, if earlier, on the date on which the Obligations are declared due and payable
pursuant to the terms of this Agreement.

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

          (a) Interest Rates. Except as provided in Section 2.6(c), all Obligations
(except for undrawn Letters of Credit and except for Bank Product Obligations) that have been
charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance
thereof as follows:

               (i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to
the LIBOR Rate plus the LIBOR Rate Margin, and

               (ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate
Margin.

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          (b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any agreements between Agent and individual
Lenders), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set
forth in Section 2.12(e)) which shall accrue at a rate equal to 2.25% per annum times the
Daily Balance of the undrawn amount of all outstanding Letters of Credit.

          (c) Default Rate. Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders),

               (i) all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per annum rate equal to 2 percentage points above
the per annum rate otherwise applicable hereunder, and

               (ii) the Letter of Credit fee provided for in Section 2.6(b) shall be
increased to 2 percentage points above the per annum rate otherwise applicable hereunder.

          (d) Payment. Except as provided to the contrary in Section 2.11 or
Section 2.13(a), interest, Letter of Credit fees, and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any time that Obligations
or Commitments are outstanding. Borrowers hereby authorize Agent, from time to time without prior
notice to Borrowers, to charge all interest and fees (when due and payable), all Lender Group
Expenses (as and when incurred), all charges, commissions, fees, and costs provided for in
Section 2.12(e) (as and when accrued or incurred), all fees and costs provided for in
Section 2.11 (as and when accrued or incurred), and all other payments as and when due and
payable under any Loan Document (including any amounts due and payable to the Bank Product
Providers in respect of Bank Products up to the amount of the Bank Product Reserve) to Borrowers’
Loan Account, which amounts thereafter shall constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances that are Base Rate Loans. Any interest not paid
when due shall be compounded by being charged to the Loan Account and shall thereafter constitute
Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base
Rate Loans.

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

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

     2.7 Cash Management.

          (a) Borrowers shall and shall cause each of their Subsidiaries to (i) establish
and maintain cash management services of a type and on terms satisfactory to Agent at one or more
of the banks set forth on Schedule 2.7(a) (each a “Cash Management Bank”), and
shall request in writing and otherwise take such reasonable steps to ensure that all of their and
their Subsidiaries’ Account Debtors forward payment of the amounts owed by them directly to such
Cash Management Bank, and (ii) deposit or cause to be

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deposited promptly, and in any event no later than the first Business Day after the date of
receipt thereof, all of their Collections (including those sent directly by their Account Debtors
to Borrowers or their Subsidiaries) into a bank account in Agent’s name (a “Cash Management
Account”) at one of the Cash Management Banks.

          (b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrowers. Each such Cash Management Agreement shall provide, among
other things, that (i) the Cash Management Bank will comply with any instructions originated by
Agent directing the disposition of the funds in such Cash Management Account without further
consent by Borrowers or their Subsidiaries, as applicable, (ii) the Cash Management Bank has no
rights of setoff or recoupment or any other claim against the applicable Cash Management Account
other than for payment of its service fees and other charges directly related to the administration
of such Cash Management Account and for returned checks or other items of payment, and (iii) the
Cash Management Bank will forward, by daily sweep, all amounts in the applicable Cash Management
Account to the Agent’s Account.

          (c) So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash Management Bank
or Cash Management Account; provided, however, that (i) such prospective Cash
Management Bank shall be reasonably satisfactory to Agent, and (ii) prior to the time of the
opening of such Cash Management Account, a Borrower (or its Subsidiary, as applicable) and such
prospective Cash Management Bank shall have executed and delivered to Agent a Cash Management
Agreement. Borrowers (or their Subsidiaries, as applicable) shall close any of their Cash
Management Accounts (and establish replacement cash management accounts in accordance with the
foregoing sentence) promptly and in any event within 30 days of notice from Agent that the
creditworthiness of any Cash Management Bank is no longer acceptable in Agent’s reasonable
judgment, or as promptly as practicable and in any event within 60 days of notice from Agent that
the operating performance, funds transfer, or availability procedures or performance of the Cash
Management Bank with respect to Cash Management Accounts or Agent’s liability under any Cash
Management Agreement with such Cash Management Bank is no longer acceptable in Agent’s reasonable
judgment.

          (d) Each Cash Management Account shall be a cash collateral account subject to a
Control Agreement.

     2.8 Crediting Payments. The receipt of any payment item by Agent (whether
from transfers to Agent by the Cash Management Banks pursuant to the Cash Management Agreements or
otherwise) shall not be considered a payment on account unless such payment item is a wire transfer
of immediately available federal funds made to the Agent’s Account or unless and until such payment
item is honored when presented for payment. Should any payment item not be honored when presented
for payment, then Borrowers shall be deemed not to have made such payment and interest shall be
calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment
item shall be deemed received by Agent only if it is received into the Agent’s Account on a
Business Day on or before 11:00 a.m. (California time). If any payment item is received into the
Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it
shall be deemed to have been received by Agent as of the opening of business on the immediately
following Business Day.

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

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     2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”) on which
Borrowers will be charged with all Advances (including Protective Advances and Swing Loans) made by
Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit
issued by Issuing Lender for Borrowers’ account, and with all other payment Obligations hereunder
or under the other Loan Documents (except for Bank Product Obligations), including, accrued
interest, fees and expenses, and Lender Group Expenses. In accordance with Section 2.8,
the Loan Account will be credited with all payments received by Agent from Borrowers or for
Borrowers’ account, including all amounts received in the Agent’s Account from any Cash Management
Bank. Agent shall render statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account stated between Borrowers
and the Lender Group unless, within 60 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto describing the error or
errors contained in any such statements.

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

     2.12 Letters of Credit.

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

               (i) the Letter of Credit Usage would exceed the Borrowing Base less the
outstanding amount of Advances, or

               (ii) the Letter of Credit Usage would exceed $3,000,000, or

               (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the
outstanding amount of Advances less the Bank Product Reserve, and less the aggregate amount of
reserves, if any, established by Agent under Section 2.1(b).

          Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit
may be issued to support letters of credit that already are outstanding as of the Closing Date.
Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and
substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including
the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender
is obligated to advance funds under a Letter of Credit, Borrowers immediately shall reimburse such
L/C Disbursement to Issuing Lender by paying to

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Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on
the date that such L/C Disbursement is made, if Administrative Borrower shall have received written
or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date,
or, if such notice has not been received by Administrative Borrower prior to such time on such
date, then not later than 11:00 a.m., California time, on the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on
the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately
and automatically shall be deemed to be an Advance hereunder and, initially, shall bear interest at
the rate then applicable to Advances that are Base Rate Loans. To the extent an L/C Disbursement
is deemed to be an Advance hereunder, Borrowers’ obligation to reimburse such L/C Disbursement
shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of
any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to Section
2.12(b) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their
interests may appear.

          (b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share
of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as
if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts
so received by it from the Lenders. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Lender or the Lenders with Revolver Commitments, the Issuing Lender shall be deemed to have
granted to each Lender with a Revolver Commitment, and each Lender with a Revolver Commitment shall
be deemed to have purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and each such Lender
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any
payments made by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on
the date due as provided in Section 2.12(a), or of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges and
agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant
to this Section 2.12(b) shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or Default or the
failure to satisfy any condition set forth in Section 3. If any such Lender fails to make
available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the
Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender shall
be deemed to be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall be
entitled to recover such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.

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

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

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

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

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

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

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

and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender
Group of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any
time within a reasonable period after the additional cost is incurred or the amount received is
reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent
may specify to be necessary to compensate the Lender Group for such additional cost or reduced
receipt, together with interest on such amount from the date of such demand until payment in full
thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Agent of
any amount due pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.

     2.13 LIBOR Option.

          (a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR Option”) to
have interest on all or a portion of the Advances be charged (whether at the time when made (unless
otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon
continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR
Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the date on which all or

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any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date
on which this Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Administrative Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall
convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At
any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have
the option to request that Advances bear interest at a rate based upon the LIBOR Rate and Agent
shall have the right to convert the interest rate on all outstanding LIBOR Rate Loans to the rate
then applicable to Base Rate Loans hereunder.

          (b) LIBOR Election.

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

               (ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense incurred by Agent or any Lender as a result of
(A) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any
LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the
failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”).
Funding Losses shall, with respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any, of (1) the amount of interest that
would have accrued on the principal amount of such LIBOR Rate Loan had such event not occurred, at
the LIBOR Rate that would have been applicable thereto, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert, or continue, for the period that would have been the Interest Period therefor),
minus (2) the amount of interest that would accrue on such principal amount for such period at the
interest rate which Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered to Administrative Borrower setting
forth any amount or amounts that Agent or such Lender is entitled to receive pursuant to this
Section 2.13 shall be conclusive absent manifest error.

               (iii) Borrowers shall have not more than 8 LIBOR Rate Loans in effect at any given
time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of at least
$1,000,000 and integral multiples of $250,000 in excess thereof.

          (c) Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans are converted or
prepaid on any date that is not the last day of the Interest Period applicable thereto, including
as a result of any automatic prepayment through the required application by Agent of proceeds of
Borrowers’ and their Subsidiaries’ Collections in accordance with Section 2.4(b) or for any
other reason, including early termination of the term of this Agreement or acceleration of all or
any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend,
and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses
in accordance with Section 2.13 (b)(ii) above.

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          (d) Special Provisions Applicable to LIBOR Rate.

               (i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes
in applicable law occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in corporate income tax
laws) and changes in the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), excluding the Reserve Percentage, which additional or increased
costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate.
In any such event, the affected Lender shall give Administrative Borrower and Agent notice of such
a determination and adjustment and Agent promptly shall transmit the notice to each other Lender
and, upon its receipt of the notice from the affected Lender, Administrative Borrower may, by
notice to such affected Lender (y) require such Lender to furnish to Administrative Borrower a
statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the
amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to which such adjustment
is made (together with any amounts due under Section 2.13(b)(ii)).

               (ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of application thereof, shall
at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative Borrower and Agent promptly shall
transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender
that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day
of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such
Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z)
Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it
would no longer be unlawful or impractical to do so.

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

     2.14 Capital Requirements. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies, or any change in the interpretation or
application thereof by any Governmental Authority charged with the administration thereof, or (ii)
compliance by such Lender or its parent bank holding company with any guideline, request, or
directive of any such entity regarding capital adequacy (whether or not having the force of law),
has the effect of reducing the return on such Lender’s or such holding company’s capital as a
consequence of such Lender’s Commitments hereunder to a level below that which such Lender or such
holding company could have achieved but for such adoption, change, or compliance (taking into
consideration such Lender’s or such holding company’s then existing policies with respect to
capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed
by such Lender to be material, then such Lender may notify Administrative Borrower and Agent
thereof. Following receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined, payable within 90
days after presentation by such Lender of a statement in the amount and setting forth in reasonable
detail such Lender’s calculation thereof and the assumptions upon which such calculation was based
(which statement shall be deemed true and correct absent manifest error). In determining such
amount, such Lender may use any reasonable averaging and attribution methods.

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     2.15 Joint and Several Liability of Borrowers.

          (a) Each Borrower is accepting joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be provided by the Lender
Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.

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

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

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

          (e) Except as otherwise expressly provided in this Agreement, each Borrower hereby
waives notice of acceptance of its joint and several liability, notice of any Advances or Letters
of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default,
Event of Default, or of any demand for any payment under this Agreement, notice of any action at
any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement). Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any
time or times in respect of any default by any Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever
by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any other action or delay in acting or
failure to act on the part of any Agent or Lender with respect to the failure by any Borrower to
comply with any of its respective Obligations, including, without limitation, any failure strictly
or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder, which might, but for the provisions of this Section 2.15 afford
grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of
its Obligations under this Section 2.15, it being the intention of each Borrower that, so
long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under
this Section 2.15 shall not be discharged except by performance and then only to the extent
of such performance. The Obligations of each Borrower under this Section 2.15 shall not be
diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any Agent or Lender.

          (f) Each Borrower represents and warrants to Agent and Lenders that such Borrower
is currently informed of the financial condition of Borrowers and of all other circumstances which
a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.
Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and
understands the terms and

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conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower will
continue to keep informed of Borrowers’ financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.

          (g) Each Borrower waives all rights and defenses arising out of an election of
remedies by Agent or any Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed Agent’s or such
Lender’s rights of subrogation and reimbursement against such Borrower by the operation of Section
580(d) of the California Code of Civil Procedure or otherwise:

          (h) Each Borrower waives all rights and defenses that such Borrower may have
because the Obligations are secured by Real Property. This means, among other things:

               (i) Agent and Lenders may collect from such Borrower without first foreclosing on
any Real or Personal Property Collateral pledged by Borrowers.

               (ii) If Agent or any Lender forecloses on any Real Property Collateral pledged by
Borrowers:

                    (A) The amount of the Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale
price.

                    (B) Agent and Lenders may collect from such Borrower even if Agent or Lenders, by
foreclosing on the Real Property Collateral, has destroyed any right such Borrower may have to
collect from the other Borrowers.

This is an unconditional and irrevocable waiver of any rights and defenses such Borrower may have
because the Obligations are secured by Real Property. These rights and defenses include, but are
not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California
Code of Civil Procedure.

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

          (j) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders
with respect to any of the Obligations or any collateral security therefor. Any claim which any
Borrower may have against any other Borrower with respect to any payments to any Agent or Lender
hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the event of any
insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under
the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary
or involuntary, all such Obligations shall be paid in full in cash before any payment or
distribution of any character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.

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          (k) Each Borrower hereby agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the payment of any amounts due with respect to the
indebtedness owing by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that after the occurrence
and during the continuance of any Default or Event of Default, such Borrower will not demand, sue
for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower
until the Obligations shall have been paid in full in cash. If, notwithstanding the foregoing
sentence, such Borrower shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).

3. CONDITIONS; TERM OF AGREEMENT.

     3.1 Conditions Precedent to the Initial Extension of Credit. The
obligation of each Lender to make its initial extension of credit provided for hereunder, is
subject to the fulfillment, to the satisfaction of Agent and each Lender of each of the conditions
precedent set forth on Schedule 3.1 (the making of such initial extension of credit by a
Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent ).

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

          (a) the representations and warranties of Borrowers or their Subsidiaries
contained in this Agreement or in the other Loan Documents shall be true and correct in all
material respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof) on and as of the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to an earlier date);

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

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

          (d) no Material Adverse Change shall have occurred since November 30, 2006.

     3.3 Term. This Agreement shall continue in full force and effect for a
term ending on January 31 2012 (the “Maturity Date”). The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the occurrence and during the
continuation of an Event of Default.

     3.4 Effect of Termination. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers with respect to
outstanding Letters of Credit and including all Bank Product Obligations) immediately shall become
due and payable without notice or demand (including the requirement that Borrower provide (a)
Letter of Credit Collateralization, and (b) Bank Product Collateralization). No termination of
this Agreement, however, shall relieve or discharge Borrowers or their Subsidiaries of their
duties, Obligations, or covenants hereunder or under any other Loan Document and the Agent’s Liens
in the Collateral shall remain in effect until all Obligations have been paid in full and the
Lender Group’s obligations to provide additional credit hereunder have been terminated. When this
Agreement has been terminated and all of the Obligations have been paid in full and the Lender
Group’s

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obligations to provide additional credit under the Loan Documents have been terminated
irrevocably, Agent will, at Borrowers’ sole expense, execute and deliver any termination
statements, lien releases, mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, the Agent’s Liens and all notices of
security interests and liens previously filed by Agent with respect to the Obligations.

     3.5 Early Termination by Borrowers. Borrowers have the option, at any
time upon 30 days prior written notice to Agent, to terminate this Agreement and terminate the
Commitments hereunder by paying to Agent, in cash, the Obligations (including (a) providing Letter
of Credit Collateralization with respect to the then existing Letter of Credit Usage, and (b)
providing Bank Product Collateralization with respect to the then existing Bank Products), in full.
If Borrowers have sent a notice of termination pursuant to the provisions of this Section, then
the Commitments shall terminate and Borrowers shall be obligated to repay the Obligations
(including (a) providing Letter of Credit Collateralization with respect to the then existing
Letter of Credit Usage, and (b) providing Bank Product Collateralization with respect to the then
existing Bank Products), in full, on the date set forth as the date of termination of this
Agreement in such notice.

     3.6 Conditions Subsequent to the Initial Extension of Credit. The
obligation of the Lender Group (or any member thereof) to continue to make Advances (or otherwise
extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto,
of each of the following conditions subsequent (the failure by Borrowers to so perform or cause to
be performed constituting an Event of Default):

          (a) Within 5 Business Days after the Closing Date, Agent shall have received the
Ingram Micro Subordination Agreement, duly executed by the parties thereto;

          (b) Within 5 Business Days after the Closing Date, Agent shall have received an
opinion of Bell Minnesota’s counsel in form and substance satisfactory to Agent;

          (c) Within 5 Business Days after the Closing Date, Agent shall have received
evidence satisfactory to Agent that Parent shall have increased its property insurance to an amount
satisfactory to Agent to account for the acquisition of the Skytel Assets,

          (d) Agent shall have received evidence satisfactory to Agent within 15 days after
the Closing Date, that the Bell Industries Minnesota Actions listed on Schedule 4.11 have
been dismissed or settled in a manner that is satisfactory to Agent;

          (e) Within 30 days after the Closing Date, Agent shall have received Control
Agreements and Cash Management Agreements with respect to the Deposit Accounts of the Borrowers and
their Subsidiaries at Union Bank of California and Huntington Bank, which Control Agreements and
Cash Management Agreements shall be duly executed by the parties thereto, in full force and effect,
and otherwise in form and substance satisfactory to Agent,

          (f) Within 30 days after the Closing Date, Agent shall have received certain
credit card receipts agreements, executed and delivered by Borrowers and their Subsidiaries and
Union Bank of California, which such credit card receipts agreements shall be duly executed by the
parties thereto, in full force and effect, and otherwise in form and substance satisfactory to
Agent,

          (g) In the event that that certain Real Property commonly known as 306 E. Alondra
Boulevard, Carson, California is not sold pursuant to the terms of that certain Standard Offer,
Agreement and Escrow Instructions for Purchase of Real Estate, dated October 5, 2006, by and
between Parent and Jim Fletcher within 20 days after the Closing Date, then within 30 days after
the Closing Date, Agent shall have received with respect to such Real Property the following: (i)
Mortgages with respect to such Real Property, (ii) mortgagee title insurance policies (or marked
commitments to issue the same) issued by a title insurance

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company satisfactory to Agent in amounts satisfactory to Agent assuring Agent that the
Mortgages on such Real Property are valid and enforceable first priority mortgage Liens on such
Real Property free and clear of all defects and encumbrances except Permitted Liens, and such
mortgage policies otherwise shall be in form and substance satisfactory to Agent; (iii) a phase-I
environmental report and a real estate survey; the environmental consultants and surveyors retained
for such reports or surveys with respect to such Real Property, the scope of the reports or
surveys, and the results thereof shall be acceptable to Agent; and (iv) all other documentation
(including one or more opinions of counsel satisfactory to Agent and including evidence of flood
insurance with respect to such Real Property), in each case, which in Agent’s opinion is
appropriate with respect to the execution and delivery of any of the documentation referenced in
(i) through (iii) above.

          (h) Within 30 days after the Closing Date, Agent shall have received (i) evidence
reasonably satisfactory to Agent that each Borrower has filed for recordation with the United
States Copyright Office, copyright registration applications for each existing and unregistered
copyrights of each Borrower, together with the Copyright Security Agreement (which is referenced
and defined in the Security Agreement), in each case, along with a petition for special or
expedited handling; and (ii) an opinion of counsel for Borrowers with respect to such Copyright
Security Agreement in form and substance reasonably satisfactory to Agent;

          (i) If any Borrower owns any Source Code, then within 30 days after the Closing
Date, Agent shall have received (i) duly executed counterparts of the Source Code Escrow Agreement;
and (ii) evidence satisfactory to Agent that Borrowers have deposited all of its Source Code with
the escrow agent in accordance with the terms and conditions of the Source Code Escrow Agreement;

          (j) Within 30 days after the Closing Date, Borrowers shall terminate (i) that
certain patent security agreement, dated as of April 15, 1993, in favor of Chemical Bank that was
recorded on June 17, 1993, and (ii) that certain trademark security agreement, dated as of April
15, 1993, in favor of Chemical Bank that was recorded on June 17, 1993;

          (k) Within 30 days after the Closing Date, Agent shall have received Collateral
Access Agreements with respect to the following locations: (i) 8888 Keystone Crossing, Suite #1700,
Indianapolis, IN 46240 (chief executive office); (ii) 1960 E. Grand Avenue, El Segundo, CA 90245
(chief executive office); (iii) 580 Yankee Doodle Rd., Eagan, MN 55121 (inventory and equipment),
(iv) 4674 Clay Ave., Grand Rapids, MI 49548 (inventory and equipment); (v) N. 117 W. 18456 Fulton
Drive, Germantown, WI 53022 (inventory and equipment); and (vi) 500 Clinton Center Drive, Clinton,
MS (former chief executive office of Skytel).

          (l) Within 30 days after the Closing Date, Borrowers shall have used best efforts
to obtain Collateral Access Agreements with respect to the following locations: (i) 11425 W. Brown
Deer Road, Milwaukee, WI 53224, (ii) 9211 Arboretum Parkway, #500, Richmond, VA 23236, (iii) 5604
Fortune Circle South, Indianapolis, IN 46241, and (iv) 5777 Decatur Blvd, Suite A, Indianapolis, IN
46241 (and Borrowers shall have provided Agent with evidence of such best efforts);

          (m) Within 60 days after the Closing Date, each Borrower shall use its best
efforts to provide Agent a certificate of title for each motor vehicle owned by such Borrower, with
the Agent’s Lien noted thereon, and otherwise in form and substance satisfactory to Agent (and each
such Borrower shall have provided Agent with evidence of such best efforts); and

          (n) Agent shall have received evidence satisfactory to Agent that within 75 days
after the Closing Date, the Inactive Subsidiaries have been dissolved and that a certificate of
dissolution in respect of each such Inactive Subsidiary has been filed and accepted by the
Secretary of State of the jurisdiction of organization of each such Inactive Subsidiary.

4. REPRESENTATIONS AND WARRANTIES.

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

     4.1 No Encumbrances. Each Borrower and its Subsidiaries has good and
indefeasible title to, or a valid leasehold interest in, their personal property assets and good
and marketable title to, or a valid leasehold interest in, their Real Property, in each case, free
and clear of Liens except for Permitted Liens.

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

     4.3 Eligible Inventory. As to each item of Inventory that is identified
by Administrative Borrower as Eligible Inventory in a borrowing base report submitted to Agent,
such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not
excluded as ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Inventory.

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

     4.5 Location of Inventory and Equipment. The Inventory and Equipment
(other than vehicles or Equipment out for repair) of Borrowers and their Subsidiaries are not
stored with a bailee, warehouseman, or similar party and are located only at, or in-transit
between, the locations identified on Schedule 4.5 (as such Schedule may be updated pursuant
to Section 5.9).

     4.6 Inventory Records. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and
the book value thereof.

     4.7 Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.

          (a) The name of (within the meaning of Section 9-503 of the Code) and jurisdiction
of organization of each Borrower and each of its Subsidiaries is set forth on Schedule
4.7(a) (as such Schedule may be updated from time to time to reflect changes permitted to be
made under Section 6.5).

          (b) The chief executive office of each Borrower and each of its Subsidiaries is
located at the address indicated on Schedule 4.7(b) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.9).

          (c) Each Borrower’s and each of its Subsidiaries’ tax identification numbers and
organizational identification numbers, if any, are identified on Schedule 4.7(c) (as such
Schedule may be updated from time to time to reflect changes permitted to be made under Section
6.5).

          (d) As of the Closing Date, Borrowers and their Subsidiaries do not hold any
commercial tort claims, except as set forth on Schedule 4.7(d).

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     4.8 Due Organization and Qualification; Subsidiaries.

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

          (b) Set forth on Schedule 4.8(b) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.16), is a complete and
accurate description of the authorized capital Stock of each Borrower, by class, and, as of the
Closing Date, a description of the number of shares of each such class that are issued and
outstanding. Other than as described on Schedule 4.8(b), there are no subscriptions,
options, warrants, or calls relating to any shares of each Borrower’s capital Stock, including any
right of conversion or exchange under any outstanding security or other instrument. No Borrower is
subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire
any shares of its capital Stock or any security convertible into or exchangeable for any of its
capital Stock.

          (c) Set forth on Schedule 4.8(c) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.16), is a complete and
accurate list of each Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and preferred Stock
authorized for each of such Subsidiaries, and (iii) the number and the percentage of the
outstanding shares of each such class owned directly or indirectly by the applicable Borrower. All
of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid
and non-assessable.

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

     4.9 Due Authorization; No Conflict.

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

          (b) As to each Borrower, the execution, delivery, and performance by such Borrower
of this Agreement and the other Loan Documents to which it is a party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable to any Borrower, the
Governing Documents of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any Material Contract of any
Borrower, (iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of any Borrower, other than Permitted Liens, or (iv)
require any approval of any Borrower’s interestholders or any approval or consent of any Person
under any Material Contract of any Borrower, other than consents or approvals that have been
obtained and that are still in force and effect. Each Borrower has all requisite power and
authority, and has all material governmental licenses, authorizations, consents and approvals
necessary, to own its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such qualification is
required, except where failure to have such power, authority, licenses, authorizations, consents,
approvals and qualifications could not reasonably be expected to have a Material Adverse Change.

          (c) Other than the filing of financing statements, the recordation of the
Mortgages, and other filings or actions necessary to perfect Liens granted to Agent in the
Collateral, the execution, delivery, and performance by each Borrower of this Agreement and the
other Loan Documents to which such Borrower
 

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is a party do not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority, other than consents or approvals
that have been obtained and that are still in force and effect. Each Borrower is in compliance
with all applicable Governmental Requirements and all agreements and other instruments binding upon
it, and possesses all licenses, permits, franchises, exemptions, approvals and other Governmental
Authorizations necessary for the ownership of its property and the conduct of its business, except
in any of the foregoing cases where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Change.

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

          (e) The Agent’s Liens are validly created, perfected (other than (i) in respect of
motor vehicles and (ii) any Deposit Accounts and Securities Accounts not subject to a Control
Agreement as permitted by Section 6.12, and subject only to the filing of financing
statements and the recordation of the Mortgages), and first priority Liens, subject only to
Permitted Liens.

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

          (g) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party do not and will not (i) violate any provision of federal, state,
or local law or regulation applicable to such Guarantor, the Governing Documents of such Guarantor,
or any order, judgment, or decree of any court or other Governmental Authority binding on such
Guarantor, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any Material Contract of such Guarantor, (iii) result in or require
the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of
such Guarantor, other than Permitted Liens, or (iv) require any approval of such Guarantor’s
interestholders or any approval or consent of any Person under any Material Contract of such
Guarantor, other than consents or approvals that have been obtained and that are still in force and
effect.

          (h) Other than the filing of financing statements, the recordation of the
Mortgages, and other filings or actions necessary to perfect Liens granted to Agent in the
Collateral, the execution, delivery, and performance by each Guarantor of the Loan Documents to
which such Guarantor is a party do not and will not require any registration with, consent, or
approval of, or notice to, or other action with or by, any Governmental Authority, other than
consents or approvals that have been obtained and that are still in force and effect.

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

     4.10 Litigation. Other than those matters disclosed on Schedule
4.10 and other than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or proceedings
pending or, to the best knowledge of each Borrower, threatened against any Borrower or any of its
Subsidiaries.

     4.11 No Material Adverse Change. All financial statements relating to
Borrowers and their Subsidiaries that have been delivered by Borrowers to the Lender Group have
been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for
the lack of footnotes and being subject to

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year-end audit adjustments) and present fairly in all material respects,
Borrowers’ and their Subsidiaries’ financial condition as of the date thereof and results of
operations for the period then ended. There has not been a Material Adverse Change with respect to
Borrowers and their Subsidiaries since November 30, 2006.

     4.12 Fraudulent Transfer.

          (a) Each Borrower and each Subsidiary of a Borrower is Solvent.

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

     4.13 Employee Benefits. None of Borrowers, any of their Subsidiaries, or
any Borrower’s or such Subsidiary’s ERISA Affiliates maintains or contributes to any Benefit Plan.

     4.14 Environmental Condition. Except as set forth on Schedule
4.14, (a) to Borrowers’ knowledge, none of Borrowers’ or their Subsidiaries’ properties or
assets has ever been used by Borrowers, their Subsidiaries, or by previous owners or operators in
the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such use, production, storage, handling, treatment, release or transport was in
violation, in any material respect, of any applicable Environmental Law, (b) to Borrowers’
knowledge, none of Borrowers’ nor their Subsidiaries’ properties or assets has ever been designated
or identified in any manner pursuant to any environmental protection statute as a Hazardous
Materials disposal site, (c) none of Borrowers nor any of their Subsidiaries have received notice
that a Lien arising under any Environmental Law has attached to any revenues or to any Real
Property owned or operated by Borrowers or their Subsidiaries, and (d) none of Borrowers nor any of
their Subsidiaries have received a summons, citation, notice, or directive from the United States
Environmental Protection Agency or any other federal or state governmental agency concerning any
action or omission by any Borrower or any Subsidiary of Borrower a resulting in the releasing or
disposing of Hazardous Materials into the environment.

     4.15 Intellectual Property. Each Borrower and each Subsidiary of a
Borrower owns, or holds licenses in, all trademarks, trade names, copyrights, patents, patent
rights, and licenses that are necessary to the conduct of its business as currently conducted, and
attached hereto as Schedule 4.15 (as updated from time to time) is a true, correct, and
complete listing of all material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which each Borrower or one of its Subsidiaries is the
owner or is an exclusive licensee; provided, however, that Borrowers may amend
Schedule 4.15 to add additional property so long as such amendment occurs by written notice
to Agent not less than 10 days before the date on which a Borrower or any Subsidiary of a Borrower
acquires any such property after the Closing Date.

     4.16 Leases. Borrowers and their Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which they are parties or
under which they are operating, and all of such material leases are valid and subsisting and no
material default by Borrowers or their Subsidiaries exists under any of them.

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

     4.18 Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Borrowers or their Subsidiaries in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other Loan Documents) for
purposes of or in connection with this Agreement, the other Loan Documents, or any transaction contemplated herein or therein is, and
all other such factual

- 24 -

 

information (taken as a whole) hereafter furnished by or on behalf of
Borrowers or their Subsidiaries in writing to Agent or any Lender will be, true and accurate, in
all material respects, on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Agent, such additional Projections
represent Borrowers’ good faith estimate of theirs and their Subsidiaries’ future performance for
the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the
time of the delivery thereof to Agent (it being understood that such projections and forecasts are
subject to uncertainties and contingencies, many of which are beyond the control of Borrowers and
their Subsidiaries and no assurances can be given that such projections or forecasts will be
realized).

     4.19 Indebtedness. Set forth on Schedule 4.19 is a true and
complete list of all Indebtedness of each Borrower and each Subsidiary of a Borrower outstanding
immediately prior to the Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately sets forth the aggregate principal amount of such Indebtedness and the
principal terms thereof.

     4.20 Material Contracts. Set forth on Schedule 4.20 is a
description of all Material Contracts of Parent and its Subsidiaries, showing the parties and
principal subject matter thereof and amendments and modifications thereto; provided,
however, that Borrower may amend Schedule 4.20 to add additional Material Contracts
so long as such amendment occurs by written notice to Agent not less than 5 days after the date on
which Parent or its Subsidiary enters into such Material Contract after the Closing Date. Except
for matters which, either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Change, each Material Contract (other than those that have expired at
the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable
against Borrowers or their Subsidiaries and, to the best of Borrowers’ knowledge, each other Person
that is a party thereto in accordance with its terms, (b) has not been otherwise amended or
modified (other than amendments or modifications permitted by Section 6.7(d)), and (c) is
not in default due to the action or inaction of Borrowers or any of their Subsidiaries.

     4.21 SkyTel Acquisition. The SkyTel Acquisition Documents comply with,
and the SkyTel Acquisition has been consummated in accordance with all applicable laws. The
execution, delivery, and performance by Parent of the SkyTel Acquisition Documents do not and will
not require any material registration with, consent, or approval of, or notice to, or other action
with or by any Governmental Authority, other than consents or approvals that have been obtained and
that are still in full force and effect. To the best of each Borrower’s knowledge, none of the
representations or warranties of any Person in any SkyTel Acquisition Documents contain any untrue
statement of a material fact or omit any fact necessary to make the statements therein not
misleading.

     4.22 Inactive Subsidiaries. None of the Inactive Subsidiaries owns any
assets, has any liabilities, or engages in any business activity.

5. AFFIRMATIVE COVENANTS.

          Each Borrower covenants and agrees that, until termination of all of the Commitments and
payment in full of the Obligations, Borrowers shall and shall cause each of their respective
Subsidiaries to do all of the following:

     5.1 Accounting System. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain records pertaining
to the Collateral that contain information as from time to time reasonably may be requested by
Agent. Borrowers also shall keep a reporting system that shows all additions, sales, claims,
returns, and allowances with respect to their and their Subsidiaries’ sales.

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

     5.3 Financial Statements, Reports, Certificates. Deliver to Agent, with
copies to each Lender, each of the financial statements, reports, or other items set forth on
Schedule 5.3 at the times specified therein. In addition, Parent agrees that no Subsidiary
of Parent will have a fiscal year different from that of Parent.

     5.4 Guarantor Reports. Cause each Guarantor to deliver its annual
financial statements at the time when Parent provides its audited financial statements to Agent,
but only to the extent such Guarantor’s financial statements are not consolidated with Parent’s
financial statements.

     5.5 Inspection. Permit Agent, each Lender, and each of their duly
authorized representatives or agents to visit any of its properties and inspect any of its assets
or books and records, to examine and make copies of its books and records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its officers and
employees at such reasonable times and intervals as Agent or any such Lender may designate and, so
long as no Default or Event of Default exists, with reasonable prior notice to Administrative
Borrower.

     5.6 Maintenance of Properties. Maintain and preserve all of their
properties which are necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear, tear, and casualty excepted (and except where the failure to do
so could not be expected to result in a Material Adverse Change), and comply at all times with the
provisions of all material leases to which it is a party as lessee, so as to prevent any loss or
forfeiture thereof or thereunder. Preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material to the conduct of
its business and maintain, if necessary, its qualification to do business in each other
jurisdiction in which its properties are located or the ownership of its properties requires such
qualification, except where the failure to do any of the foregoing could not reasonably be expected
to have a Material Adverse Change.

     5.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers, their
Subsidiaries, or any of their respective assets to be paid in full, before delinquency or before
the expiration of any extension period, except to the extent that the validity of such assessment
or tax shall be the subject of a Permitted Protest. Borrowers will and will cause their
Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes required
of them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability,
and local, state, and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that the applicable Borrower or Subsidiary of a Borrower has made
such payments or deposits.

     5.8 Insurance.

          (a) At Borrowers’ expense, maintain insurance respecting their and their
Subsidiaries’ assets wherever located, covering loss or damage by fire, theft, explosion, and all
other hazards and risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses. Borrowers also shall maintain business interruption, public liability, and
product liability insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and with such insurance
companies as are reasonably satisfactory to Agent. Borrowers shall deliver copies of all such
policies to Agent with an endorsement naming Agent as the sole loss payee (under a satisfactory
lender’s loss payable endorsement) or additional insured, as appropriate. Each policy of insurance
or endorsement shall contain a clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for any reason whatsoever.

          (b) Administrative Borrower shall give Agent prompt notice of any loss exceeding
$250,000 covered by such insurance. So long as no Event of Default has occurred and is continuing,

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Borrowers shall have the exclusive right to adjust any losses payable under any such insurance
policies which are less than $250,000. Following the occurrence and during the continuation of an
Event of Default, Agent shall have the exclusive right to adjust any losses payable under any such
insurance policies, without any liability to Borrowers whatsoever in respect of such adjustments.
In the case of any losses payable under such insurance exceeding $250,000, Agent shall have the
exclusive right to adjust any losses payable under any such insurance policies after consulting
with the Administrative Borrower regarding such adjustment, without any liability to a Borrower
whatsoever in respect of such adjustments; provided, however, that the failure of
Agent to so consult with Administrative Borrower shall not result in a breach by Agent of this
Agreement.

     5.9 Location of Inventory and Equipment. Keep Borrowers’ and their
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for repair) only at
the locations identified on Schedule 4.5 and their chief executive offices only at the
locations identified on Schedule 4.7(b); provided, however, that
Administrative Borrower may amend Schedule 4.5 or Schedule 4.7 so long as such
amendment occurs by written notice to Agent not less than 30 days prior to the date on which such
Inventory or Equipment is moved to such new location or such chief executive office is relocated,
so long as such new location is within the continental United States, and so long as, at the time
of such written notification, the applicable Borrower provides Agent a Collateral Access Agreement
with respect thereto.

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

     5.11 Leases. Pay when due all rents and other amounts payable under any
material leases to which any Borrower or any Subsidiary of a Borrower is a party or by which any
Borrower’s or any of its Subsidiaries’ properties and assets are bound, unless such payments are
the subject of a Permitted Protest.

     5.12 Existence. At all times preserve and keep in full force and effect
each Borrower and its Subsidiary’s, valid existence and good standing and, except as could not
reasonably be expected to result in a Material Adverse Change, any rights, franchises, permits,
licenses, accreditations, authorizations, or other approvals material to their businesses.

     5.13 Environmental.

          (a) Keep any property either owned or operated by any Borrower or any Subsidiary
of a Borrower free of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such Environmental Liens, (b)
comply, in all material respects, with Environmental Laws and provide to Agent documentation of
such compliance which Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material in any reportable quantity from or onto property owned or operated by any
Borrower or any Subsidiary of a Borrower and take any Remedial Actions required to abate said
release or otherwise to come into compliance with applicable Environmental Law, and (d) promptly,
but in any event within 5 days of its receipt thereof, provide Agent with written notice of any of
the following: (i) notice that an Environmental Lien has been filed against any of the real or
personal property of any Borrower or any Subsidiary of a Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed against any Borrower or
any Subsidiary of a Borrower, and (iii) notice of a violation, citation, or other administrative
order which reasonably could be expected to result in a Material Adverse Change.

     5.14 Disclosure Updates. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report
furnished to the Lender Group contained, at the time it was furnished, any untrue statement of a
material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of
the circumstances in which made. The foregoing to the contrary notwithstanding, any notification
pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue
statement of a material fact or omission of any material fact

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nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

     5.15 Control Agreements. Take all reasonable steps in order for Agent to
obtain control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the Code with
respect to (subject to the proviso contained in Section 6.12) all of its Securities
Accounts, Deposit Accounts, electronic chattel paper, investment property, and letter-of-credit
rights.

     5.16 Formation of Subsidiaries. At the time that any Borrower or any
Guarantor forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary
after the Closing Date, such Borrower or such Guarantor shall (a) cause such new Subsidiary to
provide to Agent the Guaranty (or, if such Guaranty has already been provided, then provide to
Agent a joinder to the Guaranty) and a joinder to the Security Agreement, together with such other
security documents (including Mortgages with respect to any Real Property of such new Subsidiary),
as well as appropriate financing statements (and with respect to all property subject to a
Mortgage, fixture filings), all in form and substance satisfactory to Agent (including being
sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets
of such newly formed or acquired Subsidiary), (b) provide to Agent a pledge agreement and
appropriate certificates and powers or financing statements, hypothecating all of the direct or
beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to Agent,
and (c) provide to Agent all other documentation, including one or more opinions of counsel
satisfactory to Agent, which in its opinion is appropriate with respect to the execution and
delivery of the applicable documentation referred to above (including policies of title insurance
or other documentation with respect to all property subject to a Mortgage). Any document,
agreement, or instrument executed or issued pursuant to this Section 5.16 shall be a Loan
Document.

     5.17 Further Assurances. At any time upon the request of Agent, Borrowers
shall execute or deliver to Agent, and shall cause their Subsidiaries to execute or deliver to
Agent, any and all financing statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel,
and all other documents (collectively, the “Additional Documents”) that Agent may request
in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected
or to better perfect the Agent’s Liens in all of the properties and assets of Borrowers and their
Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or
personal), to create and perfect Liens in favor of Agent in any Real Property acquired by Borrowers
or their Subsidiaries after the Closing Date, and in order to fully consummate all of the
transactions contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, Borrowers authorize Agent to execute any such Additional Documents in
Borrowers’ or their Subsidiaries’ names, as applicable, and authorizes Agent to file such executed
Additional Documents in any appropriate filing office.

     5.18 Material Contracts. Contemporaneously with the delivery of each
Compliance Certificate pursuant hereto, provide Agent with copies of (a) each Material Contract
entered into since the delivery of the previous Compliance Certificate, and (b) each amendment or
modification of any Material Contract entered into since the delivery of the previous Compliance
Certificate.

     5.19 Senior Management. Cause the position of Chief Executive Officer of
Parent to be occupied by a Person who is reasonably acceptable to Agent; Agent hereby confirms
that, as of the Closing Date, Mr. John Fellows is reasonably acceptable as the Chief Executive
Officer of Parent. If Mr. John Fellows (or another individual who is reasonably acceptable to
Agent) ceases to hold the position of Chief Executive Officer of Parent, then, within 60 days
thereafter, Parent shall propose to Agent in writing the name of an individual who is Parent’s
proposed replacement Person to hold such office (such writing to be accompanied by a professionally
performed background check). Within 5 Business Days of receipt by Agent of such writing, Agent
shall notify Parent if it does not deem such proposed replacement Person to be reasonably
acceptable (which Agent agrees it will not do unreasonably). If Agent does not so notify
Parent within such time period, such replacement Person shall be deemed reasonably acceptable to
Agent. If Agent opposes the appointment of such individual within such time period, such
individual shall not be appointed and Parent shall

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propose a different proposed replacement Person
within 60 days thereafter. Borrowers shall not be required to comply with the provisions of this
Section 5.19 from and after the first anniversary of the Closing Date.

     5.20 Copyrights. On and after the date that is 30 days after the Closing
Date, (a) maintain the registration of each of its copyrights with the United States Copyright
Office, and (b) deposit all Source Code, if any, with an escrow agent in accordance with the Source
Code Escrow Agreement.

     5.21 Assignment of Agreements. Use commercially reasonable efforts to
ensure that any written agreement entered into after the Closing Date by Borrowers or one of their
Subsidiaries that generates or, by its terms, will generate revenue for Borrowers or any of their
Subsidiaries permits the assignment of such agreement (and all rights of Parent or such Subsidiary,
as applicable, thereunder) to Borrowers’ or such Subsidiary’s lenders or agent of any lenders (and
any transferees of such lenders or such agent, as applicable).

     5.22 Secured Trade Debt. On Monday of each week, Parent shall provide to
Agent (a) a certificate signed by the Chief Financial Office of Parent, certifying as to (i) the
outstanding principal balances of the Ingram Micro Debt, the GE Debt, and the IBM Debt in each case
as of such Monday; (ii) whether Parent has missed any required payments in respect of each such
Indebtedness; and (b) any and all additional documentation in respect of each such Indebtedness
that is reasonably requested by Agent.

6. NEGATIVE COVENANTS.

          Each Borrower covenants and agrees that, until termination of all of the Commitments and
payment in full of the Obligations, Borrowers will not and will not permit any of their respective
Subsidiaries to do any of the following:

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

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

          (b) Indebtedness set forth on Schedule 4.19 and any Refinancing
Indebtedness in respect of such Indebtedness,

          (c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,

          (d) endorsement of instruments or other payment items for deposit,

          (e) Indebtedness composing Permitted Investments,

          (f) the Ingram Micro Debt in an aggregate amount not to exceed at any one time
$3,000,000; provided, however, that from and after the date that is 5 Business Days
after the Closing Date, the Ingram Micro Debt may only remain outstanding so long as (i) the Ingram
Micro Subordination Agreement is in full force and effect; and (ii) the aggregate amount of the
Ingram Micro Debt does not exceed at any one time $3,000,000,

          (g) the Newcastle Debt in an aggregate amount at any one time not to exceed
$10,000,000 plus capitalized interest with respect thereto, so long as such Indebtedness is
subordinated to the Obligations pursuant to the terms of the Newcastle Note as in effect on the
date hereof,

          (h) the GE Debt in an aggregate amount not to exceed at any one time $300,000,
and

          (i) the IBM Debt in an aggregate amount not to exceed at any one time $100,000.

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

     6.3 Restrictions on Fundamental Changes.

          (a) Enter into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock,

          (b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or

          (c) Suspend or go out of a substantial portion of its or their business.

     6.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey,
sell, lease, license, assign, transfer, or otherwise dispose of) any of the assets of any Borrowers
or any Subsidiary of a Borrower.

     6.5 Change Name. Change any Borrower’s or any of its Subsidiaries’ name,
organizational identification number, state of organization or organizational identity;
provided, however, that a Borrower or a Subsidiary of a Borrower may change its
name upon at least 30 days prior written notice by Administrative Borrower to Agent of such change
and so long as, at the time of such written notification, such Borrower or such Subsidiary provides
any financing statements necessary to perfect and continue perfected the Agent’s Liens.

     6.6 Nature of Business. Make any change in the nature of their business
as described in Schedule 6.6 or acquire any properties or assets that are not reasonably
related to the conduct of such business activities.

     6.7 Prepayments and Amendments. Except in connection with Refinancing
Indebtedness permitted by Section 6.1,

          (a) optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Borrower or any Subsidiary of a Borrower, other than the Obligations in
accordance with this Agreement,

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

          (c) directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of (i) any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Section 6.1(b), (c),
(f), (g), (h), or (i), or (ii) any other Material Contract except
to the extent that such amendment, modification, alteration, increase, or change could not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

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

     6.9 Consignments. Consign any of their Inventory or sell any of their
Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale.

     6.10 Distributions. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock) on, or purchase, acquire, redeem, or retire
any of any Borrower’s Stock, of any class, whether now or hereafter outstanding.

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     6.11 Accounting Methods. Modify or change their fiscal year or their
method of accounting (other than as may be required to conform to GAAP).

     6.12 Investments. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
Administrative Borrower and its Subsidiaries shall not have Permitted Investments (other than in
the Cash Management Accounts) in Deposit Accounts or Securities Accounts in an aggregate amount in
excess of $35,000 at any one time unless Administrative Borrower or its Subsidiary, as applicable,
and the applicable securities intermediary or bank have entered into Control Agreements governing
such Permitted Investments in order to perfect (and further establish) the Agent’s Liens in such
Permitted Investments. Subject to the foregoing proviso, Borrowers shall not and shall not permit
their Subsidiaries to establish or maintain any Deposit Account or Securities Account unless Agent
shall have received a Control Agreement in respect of such Deposit Account or Securities Account in
accordance with Section 3.6.

     6.13 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower or any Subsidiary of a Borrower
except for:

          (a) transactions (other the payment of management, consulting, monitoring, or
advisory fees) between Borrowers or their Subsidiaries, on the one hand, and any Affiliate of
Borrowers or their Subsidiaries, on the other hand, so long as such transactions (i) are upon fair
and reasonable terms, (ii) are fully disclosed to Agent if they involve one or more payments by any
Borrower or any of Subsidiary of a Borrower in excess of $50,000 for any single transaction or
series of transactions, and (iii) are no less favorable to Borrowers or their Subsidiaries, as
applicable, than would be obtained in an arm’s length transaction with a non-Affiliate; and

          (b) the payment of reasonable fees, compensation, or employee benefit arrangements
to, and any indemnity provided for the benefit of, outside directors of Parent in the ordinary
course of business and consistent with industry practice.

     6.14 Use of Proceeds. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, (i) to finance a portion of the consideration payable in
connection with the consummation of the SkyTel Acquisition, and (ii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent with the terms and
conditions hereof, for its lawful and permitted purposes.

     6.15 Inventory and Equipment with Bailees. Store the Inventory or
Equipment of Borrowers or their Subsidiaries at any time now or hereafter with a bailee,
warehouseman, or similar party.

     6.16 Financial Covenants.

          (a) Minimum EBITDA.

          In the event that, as of any date of determination, a Liquidity Trigger has occurred, then
Borrowers shall not fail to achieve EBITDA, measured on a quarter-end basis, of at least the
required amount set forth in the following table for both (i) the fiscal quarter immediately
preceding such date of determination (the “Antecedent Quarter”) and (ii) the fiscal quarter
immediately following the Antecedent Quarter (the “Current Quarter”). If Borrowers shall
have at least the required amount set forth in the following table for both the Antecedent Quarter
and the Current Quarter, then so long as the Borrowers shall have Excess Availability plus
Qualified Cash of at least $5,000,000 at all times during the 30 day period immediately preceding
the date that a Compliance Certificate in respect of the Current Quarter is delivered to Agent,
then

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     Borrowers shall not be required to achieve EBITDA of at least the required amount set forth in
the following table until such date as another Liquidity Trigger has occurred.

	 	 	 
	Applicable Amount	 	Applicable Period
	($1,000,000)
	 	For the 3 month period

ending March 31, 2007
	 	 	 
	$2,200,000
	 	For the 6 month period

ending June 30, 2007
	 	 	 
	$4,900,000
	 	For the 9 month period

ending September 30, 2007
	 	 	 
	$7,600,000
	 	For the 12 month period ending

December 31, 2007
	 	 	 
	$7,700,000
	 	For the 12 month period ending

March 31, 2008
	 	 	 
	$8,800,000
	 	For the 12 month period ending

June 30, 2008
	 	 	 
	$10,000,000
	 	For the 12 month period ending

September 30, 2008
	 	 	 
	$10,000,000
	 	For the 12 month period ending

December 31, 2008 and

for each 12 month period

ending as of the last day of

each fiscal quarter thereafter

          (b) Capital Expenditures. Make Capital Expenditures in any fiscal year in excess
of the amount set forth in the following table for the applicable period:

	 	 	 	 	 	 	 	 	 
	Fiscal Year 2007

	 	Fiscal Year 2008
	 	Fiscal Year 2009

	$6,490,000

	 	$	10,560,000	 	 	$	13,200,000	 
	 
	 	 	 	 	 	 	 	 
	Fiscal Year 2010

	 	Fiscal Year 2011
	 	Fiscal Year 2012

	$13,200,000

	 	$	13,200,000	 	 	$	0	 

     6.17 Inactive Subsidiaries. Permit any of the Inactive Subsidiaries to
own any assets, incur any liabilities, or engage in any business activity.

7. EVENTS OF DEFAULT.

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

     7.1 If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the
Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion
thereof constituting principal) constituting Obligations (including any portion thereof that
accrues after the commencement of an Insolvency Proceeding, 

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regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure
continues for a period of 3 Business Days, or (b) all or any portion of the principal of the
Obligations;

     7.2 If Borrowers or any Subsidiary of any Borrower:

          (a) fails to perform or observe any covenant or other agreement contained in any
of Sections 2.7, 5.2, 5.3, 5.4, 5.5, 5.8,
5.12, 5.14, 5.18, 5.19, 5.20, 5.21, and 6.1
through 6.17 of this Agreement or Section 6 of the Security Agreement;

          (b) fails to perform or observe any covenant or other agreement contained in any
of Sections 5.6, 5.7, 5.9, 5.10, 5.11, 5.15,
5.16, 5.17, of this Agreement and such failure continues for a period of 10 days
after the earlier of (i) the date on which such failure shall first become known to any officer of
any Borrower or (ii) written notice thereof is given to Administrative Borrower by Agent; or

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

     7.3 If any material portion of any Borrower’s or any of its Subsidiaries’ assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any third Person and the same is not discharged before the earlier of 30 days after
the date it first arises or 5 days prior to the date on which such property or asset is subject to
forfeiture by such Borrower or the applicable Subsidiary;

     7.4 If an Insolvency Proceeding is commenced by any Borrower or any Subsidiary of
a Borrower;

     7.5 If an Insolvency Proceeding is commenced against any Borrower or any
Subsidiary of a Borrower and any of the following events occur: (a) the applicable Borrower or such
Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof,
(d) an interim trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the business of, any
Borrower or any Subsidiary of a Borrower, or (e) an order for relief shall have been issued or
entered therein;

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

     7.7 If one or more judgments, orders, or awards involving an aggregate amount of
$250,000 or more (except to the extent fully covered by insurance pursuant to which the insurer has
accepted liability therefor in writing) shall be entered or filed against any Borrower or any
Subsidiary of any Borrower or with respect to any of their respective assets, and the same is not
released, discharged, bonded against, or stayed pending appeal before the earlier of 30 days after
the date it first arises or 5 days prior to the date on which such asset is subject to being
forfeited by the applicable Borrower or the applicable Subsidiary;

     7.8 If there is a default in (a) any of the SkyTel Acquisition Documents, (b) any
of the documentation in respect of the Newcastle Debt, the Ingram Micro Debt, the IBM Debt, or the
GE Debt, or (c)
one or more agreements to which any Borrower or any Subsidiary of a Borrower is a party with
one or more third Persons relative to Indebtedness of any Borrower or any Subsidiary of any
Borrower involving an aggregate amount of $250,000 or more, and such default (i) occurs at the
final maturity of the obligations

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thereunder, or (ii) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of the applicable Borrower’ or
Subsidiary’s obligations thereunder;

     7.9 If any warranty, representation, statement, or Record made herein or in any
other Loan Document or delivered to Agent or any Lender in connection with this Agreement or any
other Loan Document proves to be untrue in any material respect (except that such materiality
qualifier shall not be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof) as of the date of issuance or making or deemed
making thereof;

     7.10 If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor, or any such Guarantor becomes the subject of
an Insolvency Proceeding;

     7.11 If the Security Agreement or any other Loan Document that purports to create
a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien on or security interest in the
Collateral covered hereby or thereby, except as a result of a disposition of the applicable
Collateral in a transaction permitted under this Agreement; or

     7.12 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be contested by any
Borrower or any Subsidiary of a Borrower (except for the provision set forth in Section
12(c) of this Agreement), or a proceeding shall be commenced by any Borrower or any Subsidiary
of a Borrower, or by any Governmental Authority having jurisdiction over any Borrower or any
Subsidiary of a Borrower, seeking to establish the invalidity or unenforceability thereof, or any
Borrower or any Subsidiary of a Borrower shall deny that it has any liability or obligation
purported to be created under any Loan Document.

8. THE LENDER GROUP’S RIGHTS AND REMEDIES.

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

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

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

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

          (d) The Lender Group shall have all other rights and remedies available at law or
in equity or pursuant to any other Loan Document.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default
described in Section 7.4 or Section 7.5, in addition to the remedies set forth
above, without any notice to Borrowers or any other Person or any act by the Lender Group, the
Commitments shall automatically terminate and the Obligations then outstanding, together with all
accrued and unpaid interest thereon and all fees and all other
amounts due under this Agreement and the other Loan Documents, shall automatically and immediately
become due and payable, without presentment, demand, protest, or notice of any kind, all of which
are expressly waived by Borrowers.

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

9. TAXES AND EXPENSES.

     If any Borrower or its Subsidiaries fail to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable
under such leases) due to third Persons, or fails to make any deposits or furnish any required
proof of payment or deposit, all as required under the terms of this Agreement, then, Agent, in its
sole discretion and without prior notice to any Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves against the Borrowing Base
or the Maximum Revolver Amount as Agent deems necessary to protect the Lender Group from the
exposure created by such failure, or (c) in the case of the failure to comply with Section
5.8 hereof, obtain and maintain insurance policies of the type described in Section 5.8
and take any action with respect to such policies as Agent deems prudent. Any such amounts paid by
Agent shall constitute Lender Group Expenses and any such payments shall not constitute an
agreement by the Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as to, or contest the
validity of, any such expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and owing.

10. WAIVERS; INDEMNIFICATION.

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

     10.2 The Lender Group’s Liability for Collateral. Each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under the Code, the
Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of
the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from
any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or
destruction of the Collateral shall be borne by Borrowers.

     10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an
“Indemnified Person”) harmless (to the fullest extent permitted by law) from and against
any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines,
costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or
consultants and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred
by any of them (a) in connection with or as a result of or related to the execution, delivery,
enforcement, performance, or administration (including any restructuring or workout with respect
hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby
or thereby or the monitoring of Borrowers’ and their Subsidiaries’ compliance with the terms of the
Loan Documents, (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other Loan Document,
or the use of the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto, and (c) in connection with or arising out of any presence or release of Hazardous
Materials at, on, under, to or from any assets or properties owned, leased or

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operated by Parent or
any of its Subsidiaries or any Environmental Actions, Environmental Liabilities and Costs or
Remedial Actions related in any way to any such assets or properties of Parent or any of its
Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The foregoing
to the contrary notwithstanding, Borrowers shall have no obligation to any Indemnified Person under
this Section 10.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of
such Indemnified Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified
Person with respect to an Indemnified Liability as to which Borrowers were required to indemnify
the Indemnified Person receiving such payment, the Indemnified Person making such payment is
entitled to be indemnified and reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION,
THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION
OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

11. NOTICES.

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

	 	 	 
	If to Borrower:

	 	BELL INDUSTRIES, INC.
	 

	 	8888 Keystone Crossing, Suite 1700
	 

	 	Indianapolis, IN 46240
	 

	 	Attn: Kevin J. Thimjon
	 

	 	Fax No. 317-715-6816
	 
	 	 
	with copies to:

	 	MANATT, PHELPS & PHILLIPS LLP
	 

	 	11355 West Olympic Boulevard
	 

	 	Los Angeles, CA 90071
	 

	 	Attn: Mark J. Kelson, Esq.
	 

	 	Fax No. 310-312-4224
	 
	 	 
	If to Agent:

	 	WELLS FARGO FOOTHILL, INC.
	 

	 	2450 Colorado Avenue
	 

	 	Suite 3000 West
	 

	 	Santa Monica, CA 90404
	 

	 	Attn: Business Finance Division Manager
	 

	 	Fax No.: 310-453-7413
	 
	 	 
	with copies to:

	 	PAUL, HASTINGS, JANOFSKY & WALKER LLP
	 

	 	515 S. Flower Street
	 

	 	Twenty-fifth Floor
	 

	 	Los Angeles, CA 90071
	 

	 	Attn: John Francis Hilson, Esq.
	 

	 	Fax No.: 213-627-0705

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          Agent and Borrowers may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other party. All notices or demands sent in
accordance with this Section 11, other than notices by Agent in connection with enforcement
rights against the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.
Each Borrower acknowledges and agrees that notices sent by the Lender Group in connection with the
exercise of enforcement rights against Collateral under the provisions of the Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.

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

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

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

          (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS AND EACH MEMBER
OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

     13.1 Assignments and Participations.

          (a) Any Lender may assign and delegate to one or more assignees (each an
“Assignee”) that are Eligible Transferees all or any portion of the Obligations, the
Commitments and the other rights and obligations of such Lender hereunder and under the other Loan
Documents, in a minimum amount (unless waived by the Agent) of $5,000,000 (except such minimum
amount shall not apply to (x) an assignment or

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delegation by any Lender to any other Lender or an
Affiliate of any Lender or (y) a group of new Lenders, each of whom is an Affiliate of each other
or a fund or account managed by any such new Lender or an Affiliate of such new Lender to the
extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000);
provided, however, that (i) Borrowers and Agent may continue to deal solely and
directly with such Lender in connection with the interest so assigned to an Assignee until (x)
written notice of such assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (y) such Lender and its Assignee have delivered to Administrative
Borrower and Agent an Assignment and Acceptance and Agent has notified the assigning Lender of its
receipt thereof in accordance with Section 13.1(b), and (z) unless waived by the Agent, the
assigning Lender or Assignee has paid to Agent for Agent’s separate account a processing fee in the
amount of $3,500 and (ii) so long as no Default or Event of Default has occurred and is continuing,
Agent shall endeavor to consult with Administrative Borrower prior to any assignment pursuant to
this subsection (a), it being understood that Agent’s failure to so consult Administrative Borrower
shall not be a breach of Agent’s obligations under this Agreement. Anything contained herein to
the contrary notwithstanding, the payment of any fees shall not be required and the Assignee need
not be an Eligible Transferee, and Agent need not consult with Borrower if such assignment is in
connection with any merger, consolidation, sale, transfer, or other disposition of all or any
substantial portion of the business or loan portfolio of the assigning Lender.

          (b) From and after the date that Agent notifies the assigning Lender (with a copy
to Administrative Borrower) that it has received an executed Assignment and Acceptance and, if
applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 10.3 hereof) and be
released from any future obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall effect a novation among Borrowers, the assigning Lender, and
the Assignee; provided, however, that nothing contained herein shall release any
assigning Lender from obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 17.9(a) of this
Agreement.

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

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          (d) Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b),
this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.

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

          (f) In connection with any such assignment or participation or proposed assignment
or participation, a Lender may, subject to the provisions of Section 17.9, disclose all
documents and information which it now or hereafter may have relating to Borrowers and their
Subsidiaries and their respective businesses.

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

     13.2 Successors. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder without the Lenders’
prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent
to assignment by the Lenders shall release any Borrower from its

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Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 hereof and, except as expressly required pursuant to Section
13.1 hereof, no consent or approval by any Borrower is required in connection with any such
assignment.

14. AMENDMENTS; WAIVERS.

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

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

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

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

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

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

          (f) other than as permitted by Section 15.11, release Agent’s Lien in and
to any of the Collateral,

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

          (h) contractually subordinate any of the Agent’s Liens,

          (i) other than in connection with a merger, liquidation, dissolution or sale of
such Person expressly permitted by the terms hereof or the other Loan Documents, release any
Borrower or any Guarantor from any obligation for the payment of money,

          (j) amend any of the provisions of Section 2.4(b)(i) or (ii),

          (k) change the definition of Borrowing Base or the definitions of Eligible
Accounts, Eligible Inventory, Maximum Revolver Amount, or change Section 2.1(b), or

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

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

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     14.2 Replacement of Holdout Lender.

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

          (b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the
Holdout Lender being repaid its share of the outstanding Obligations (including an assumption of
its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed
to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout
Lender shall be made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the
Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and
to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of
the Risk Participation Liability of such Letter of Credit.

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

15. AGENT; THE LENDER GROUP.

     15.1 Appointment and Authorization of Agent. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan
Documents on its behalf and to take such other action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together
with such powers as are reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this Section 15. The provisions of this Section 15 are
solely for the benefit of Agent and the Lenders, and Borrowers and their Subsidiaries shall have no
rights as a third party beneficiary of any of the provisions contained herein. Any provision to
the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding,
Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor
shall Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against Agent; it being expressly understood and agreed that the
use of the word “Agent” is for convenience only, that WFF is merely the representative of the
Lenders, and only has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of
any other provision of the Loan

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Documents that provides rights or powers to Agent, Lenders agree
that Agent shall have the right to exercise the following powers as long as this Agreement remains
in effect: (a) maintain, in accordance with its customary business practices, ledgers and records
reflecting the status of the Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, and related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to the Loan Documents, (c) make Advances, for itself or on
behalf of Lenders as provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections of Borrowers and their Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections of Borrowers and their Subsidiaries, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect to Borrowers or
their Subsidiaries, the Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and (g) incur
and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance
and fulfillment of its functions and powers pursuant to the Loan Documents.

     15.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall
be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not
be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

     15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by any Borrower or any of its
Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in
any other Loan Document, or in any certificate, report, statement or other document referred to or
provided for in, or received by Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or its Subsidiaries or any
other party to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or properties of
Borrowers or their Subsidiaries.

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

     15.5 Notice of Default or Event of Default. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of

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principal, interest, fees, and expenses required to be paid to Agent
for the account of the Lenders and, except with respect to Events of Default of which Agent has
actual knowledge, unless Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.” Agent promptly will notify the Lenders of its receipt of any
such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and
Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to
its Participants, if any. Subject to Section 15.4, Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 8; provided, however, that unless and until Agent
has received any such request, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of Default as it shall deem
advisable.

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

     15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance
and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to
this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Borrowers and their Subsidiaries received by Agent to reimburse
Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to
Lenders. In the event Agent is not reimbursed for such costs and expenses by Borrowers or their
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such
Lender’s Pro Rata Share thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of
Borrowers and without limiting the obligation of Borrowers to do so), according to their Pro Rata
Shares, from and against any and all Indemnified Liabilities; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct
nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an
Advance or other extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender’s Pro Rata Share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred
by Agent in

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connection with the preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

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

     15.9 Successor Agent. Agent may resign as Agent upon 45 days notice to
the Lenders (unless such notice is waived by the Required Lenders). If Agent resigns under this
Agreement, the Required Lenders shall appoint a successor Agent for the Lenders. If no successor
Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially breached or failed
to perform any material provision of this Agreement or of applicable law, the Required Lenders may
agree in writing to remove and replace Agent with a successor Agent from among the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder, such successor
Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term
“Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as
Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders
appoint a successor Agent as provided for above.

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

     15.11 Collateral Matters.

          (a) The Lenders hereby irrevocably authorize Agent, at its option and in its sole
discretion, to release any Lien on any Collateral (i) upon the termination of the Commitments and
payment and

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satisfaction in full by Borrowers of all Obligations, (ii) constituting property being
sold or disposed of if a release is required or desirable in connection therewith and if
Administrative Borrower certifies to Agent that the sale or disposition is permitted under
Section 6.4 of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property in which no Borrower
or its Subsidiaries owned any interest at the time the Agent’s Lien was granted nor at any time
thereafter, or (iv) constituting property leased to a Borrower or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this Agreement. Except as
provided above, Agent will not execute and deliver a release of any Lien on any Collateral without
the prior written authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to this Section
15.11; provided, however, that (1) Agent shall not be required to execute any
document necessary to evidence such release on terms that, in Agent’s opinion, would expose Agent
to liability or create any obligation or entail any consequence other than the release of such Lien
without recourse, representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those expressly being
released) upon (or obligations of Borrowers in respect of) all interests retained by Borrowers,
including, the proceeds of any sale, all of which shall continue to constitute part of the
Collateral.

          (b) Agent shall have no obligation whatsoever to any of the Lenders to assure that
the Collateral exists or is owned by Borrowers or their Subsidiaries or is cared for, protected, or
insured or has been encumbered, or that the Agent’s Liens have been properly or sufficiently or
lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity,
or to continue exercising, any of the rights, authorities and powers granted or available to Agent
pursuant to any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given
Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall
have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.

     15.12 Restrictions on Actions by Lenders; Sharing of Payments.

          (a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the
written request of Agent, set off against the Obligations, any amounts owing by such Lender to any
Borrower or its Subsidiaries or any deposit accounts of any Borrower or its Subsidiaries now or
hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not,
unless specifically requested to do so in writing by Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings to enforce any Loan Document
against the Borrowers or any Guarantor or to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.

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

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therefor shall be returned to such purchasing party, but without interest except to the
extent that such purchasing party is required to pay interest in connection with the recovery of
the excess payment.

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

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

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

     15.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender:

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

          (b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any
information contained in any Report,

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

          (d) agrees to keep all Reports and other material, non-public information
regarding Parent and its Subsidiaries and their operations, assets, and existing and contemplated
business plans in a confidential manner in accordance with Section 17.9, and

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

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

     15.17 Several Obligations; No Liability. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent
in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part
of Agent (if any) to make any credit available hereunder shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time
outstanding, the amount of their respective Commitments. Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the
business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan Documents to the
extent any such notice may be required, and no Lender shall have any obligation, duty, or liability
to any Participant of any other Lender. Except as provided in Section 15.7, no member of
the Lender Group shall have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender
to fulfill its obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its behalf hereunder or
in connection with the financing contemplated herein.

16. WITHHOLDING TAXES.

          (a) All payments made by any Borrower hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. In addition, all such
payments will be made free and clear of, and without deduction or withholding for, any present or
future Taxes, and in the event any deduction or withholding of Taxes is required, each Borrower
shall comply with the penultimate sentence of this Section 16(a). “Taxes” shall
mean, any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding any tax imposed by any jurisdiction
or by any political subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of any Lender) and all interest, penalties or similar liabilities with
respect thereto. If any Taxes are so levied or imposed, each Borrower agrees to pay the full
amount of such Taxes and such additional amounts as may be necessary so that every payment of all
amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to
this Section 16(a) after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein; provided, however, that Borrowers shall not be
required to increase any such amounts if the increase in such amount payable results from Agent’s
or such Lender’s own willful misconduct or gross negligence (as finally determined by a court of
competent
jurisdiction). Each Borrower will furnish to Agent as promptly as possible after the date the
payment of any Tax is due pursuant to applicable law certified copies of tax receipts evidencing
such payment by any Borrower.

          (b) If a Lender claims an exemption from United States withholding tax, Lender
agrees with and in favor of Agent and any Borrower, to deliver to Agent:

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               (i) if such Lender claims an exemption from United States withholding tax pursuant
to its portfolio interest exception, (A) a statement of the Lender, signed under penalty of
perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10%
shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a
controlled foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of
the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before receiving its first
payment under this Agreement and at any other time reasonably requested by Agent or any Borrower;

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

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

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

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

          (c) If a Lender claims an exemption from withholding tax in a jurisdiction other
than the United States, Lender agrees with and in favor of Agent and Borrowers, to deliver to Agent
any such form or forms, as may be required under the laws of such jurisdiction as a condition to
exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its
first payment under this Agreement and at any other time reasonably requested by Agent or
Administrative Borrower.

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

          (d) If any Lender claims exemption from, or reduction of, withholding tax and such
Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to such Lender, such Lender agrees to notify Agent and Administrative
Borrower of the percentage amount in which it is no longer the beneficial owner of Obligations of
Borrowers to such Lender. To the extent of such percentage amount, Agent and Borrowers will treat
such Lender’s documentation provided pursuant to Sections 16(b) or 16(c) as no longer
valid. With respect to such percentage amount, Lender may provide new documentation, pursuant to
Sections 16(b) or 16(c), if applicable.

          (e) If any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation
required by subsection (b) or (c) of this Section 16 are not delivered to Agent,
then Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent to the applicable
withholding tax.

          (f) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from amounts paid to or for
the account of any Lender due to a failure on the part of the Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender failed to notify Agent of a
change in circumstances which rendered

 - 48 - 

 

the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless for all
amounts paid, directly or indirectly, by Agent, as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent under
this Section 16, together with all costs and expenses (including attorneys fees and
expenses). The obligation of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of Agent.

17. GENERAL PROVISIONS.

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

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

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

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

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

     17.6 Lender-Creditor Relationship. The relationship between the Lenders
and Agent, on the one hand, and Borrowers, on the other hand, is solely that of creditor and
debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship
or duty to Borrowers arising out of or in connection with, and there is no agency or joint venture
relationship between the members of the Lender Group, on the one hand, and Borrowers, on the other
hand, by virtue of any Loan Document or any transaction contemplated therein.

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

     17.8 Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by any Borrower or Guarantor or the transfer to the Lender Group of any
property should for any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors’ rights,

 - 49 - 

 

including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (each, a “Voidable Transfer”), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof
that the Lender Group is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability of Borrowers or
Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such
Voidable Transfer had never been made.

     17.9 Confidentiality.

          (a) Agent and Lenders each individually (and not jointly or jointly and severally)
agree that material, non-public information regarding Borrowers and their Subsidiaries, their
operations, assets, and existing and contemplated business plans shall be treated by Agent and the
Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons
who are not parties to this Agreement, except: (i) to attorneys for and other advisors,
accountants, auditors, and consultants to any member of the Lender Group, (ii) to Subsidiaries and
Affiliates of any member of the Lender Group (including the Bank Product Providers), provided that
any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to
the terms of this Section 17.9, (iii) as may be required by statute, decision, or judicial
or administrative order, rule, or regulation, (iv) as may be agreed to in advance by Administrative
Borrower or its Subsidiaries or as requested or required by any Governmental Authority pursuant to
any subpoena or other legal process, (v) as to any such information that is or becomes generally
available to the public (other than as a result of prohibited disclosure by Agent or the Lenders),
(vi) in connection with any assignment, participation or pledge of any Lender’s interest under
this Agreement, provided that any such assignee, participant, or pledgee shall have agreed in
writing to receive such information hereunder subject to the terms of this Section, and (vii) in
connection with any litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or duties of such parties
under this Agreement or the other Loan Documents. The provisions of this Section 17.9(a)
shall survive for 2 years after the payment in full of the Obligations.

          (b) Anything in this Agreement to the contrary notwithstanding, Agent may provide
information concerning the terms and conditions of this Agreement and the other Loan Documents to
loan syndication and pricing reporting services.

     17.10 Lender Group Expenses. Borrowers agree to pay any and all Lender
Group Expenses promptly after demand therefor by Agent and agrees that their obligations contained
in this Section 17.10 shall survive payment or satisfaction in full of all other
Obligations.

     17.11 USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”) hereby notifies Borrowers that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies Borrowers, which information
includes the name and address of Borrowers and other information that will allow such Lender to
identify the Borrowers in accordance with the Act.

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

     17.13 Parent as Agent for Borrowers. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers (the
“Administrative Borrower”) which appointment shall remain in full force and effect unless
and until Agent shall have received prior written notice signed by each Borrower that such
appointment has been revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide
Agent with all notices with respect to Advances and Letters of Credit obtained for the

 - 50 - 

 

benefit of
any Borrower and all other notices and instructions under this Agreement and (ii) to take such
action as the Administrative Borrower deems appropriate on its behalf to obtain Advances and
Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry
out the purposes of this Agreement. It is understood that the handling of the Loan Account and
Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the
most efficient and economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued successful performance of
the integrated group. To induce the Lender Group to do so, and in consideration thereof, each
Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold
each member of the Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third party whosoever,
arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of
Borrowers as herein provided, (b) the Lender Group’s relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group hereunder or under the
other Loan Documents, except that Borrowers will have no liability to the relevant Agent-Related
Person or Lender-Related Person under this Section 17.13 with respect to any liability that
has been finally determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as
the case may be.

[Signature pages to follow.]

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

	 	 	 	 	 
	 	 	BELL INDUSTRIES, INC.,
	 	 	a California corporation, as Borrower
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kevin Thimjon
	 

	 	 	 	 
	 

	 	Name:	 	Kevin Thimjon
	 

	 	 	 	 
	 

	 	Title:	 	Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BELL INDUSTRIES, INC.,

a Minnesota corporation, as Borrower
	 
	 	 	 	 
	 

	 	By:	 	Kevin Thimjon
	 

	 	 	 	 
	 

	 	Name:	 	Kevin Thimjon
	 

	 	 	 	 
	 

	 	Title:	 	Chief Financial Officer
	 

	 	 	 	 

 

 

	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, INC.,

a California corporation, as Agent and as a Lender
	 
	 	 	 	 
	 

	 	By:	 	/s/ Anna M. Bellinghausen
	 

	 	 	 	 
	 

	 	Name:	 	Anna M. Bellinghausen
	 

	 	 	 	 
	 

	 	Title:	 	Wells Fargo Foothill –
Business Finance
	 

	 	 	 	 

 

 

Schedule 1.1

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

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

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

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

          “Act” has the meaning specified therefor in Section 17.11.

          “Additional Documents” has the meaning specified therefor in Section 5.17.

          “Administrative Borrower” has the meaning specified therefor in Section 17.13.

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

          “Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly through one or more intermediaries, of the
power to direct the management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of the definition of
Eligible Accounts, Eligible Bell Accounts, Eligible Dating Terms Accounts, or Eligible SkyTel
Accounts, and Section 6.13 of the Agreement: (a) any Person which owns directly or
indirectly 10% or more of the Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the partnership or other
ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner
shall be deemed an Affiliate of such Person.

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

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

          “Agent’s Account” means the Deposit Account of Agent identified on Schedule
A-1.

          “Agent’s Liens” means the Liens granted by Borrowers or their Subsidiaries to Agent
under the Loan Documents.

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

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

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

          “Authorized Person” means any one of the individuals identified on Schedule
A-2.

 

 

          “Availability” means, as of any date of determination, the amount that Borrowers are
entitled to borrow as Advances under Section 2.1 of the Agreement (after giving effect to
all then outstanding Obligations (other than Bank Product Obligations) and all sublimits and
reserves then applicable hereunder).

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

          “Bank Product Agreements” means those agreements entered into from time to time by
Parent or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of
the Bank Products.

          “Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank
Product Providers in an amount determined by Agent as sufficient to satisfy the reasonably
estimated credit exposure with respect to the then existing Bank Products.

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

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

          “Bank Product Reserve” means, as of any date of determination, the amount of reserves
that Agent has established (based upon the Bank Product Providers’ reasonable determination of the
credit exposure of Parent and its Subsidiaries in respect of Bank Products) in respect of Bank
Products then provided or outstanding.

          “Bankruptcy Code” means title 11 of the United States Code, as in effect from time to
time.

          “Base LIBOR Rate” means the rate per annum, determined by Agent in accordance with its
customary procedures, and utilizing such electronic or other quotation sources as it considers
appropriate, to be the rate at which Dollar deposits (for delivery on the first day of the
requested Interest Period) are offered to major banks in the London interbank market 2 Business
Days prior to the commencement of the requested Interest Period, for a term and in an amount
comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate
Loan to a LIBOR Rate Loan) by Administrative Borrower or any other Borrower in accordance with the
Agreement, which determination shall be conclusive in the absence of manifest error.

          “Base Rate” means, the rate of interest announced, from time to time, within Wells
Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the
“prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and
serves as

2

 

the basis upon which effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate.

          “Base Rate Loan” means the portion of the Advances that bears interest at a rate
determined by reference to the Base Rate.

          “Base Rate Margin” means 0.75 percentage points.

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

          “Bell Minnesota” means Bell Industries, Inc., a Minnesota corporation.

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

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

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

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

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

(a) 85% of the amount of Eligible Bell Accounts, less the amount, if any,
of the Bell Dilution Reserve, plus

(b) 60% of the amount of Eligible Dating Terms Accounts, less the amount,
if any, of the Dating Terms Dilution Reserve, plus

(c) the lesser of

                        (i) 85% of the amount of Eligible SkyTel Accounts, less the amount,
if any, of the SkyTel Dilution Reserve, and

                        (ii) an amount equal to Parent’s Collections with respect to Accounts
that arise out of the rendition of services from its SkyTel Group for the
immediately preceding 60 day period, plus

(d) the least of

                        (i) $7,500,000,

                        (ii) 50% of the value of Eligible Inventory, and

3

 

                  (iii) 80% times the most recently determined Net Liquidation
Percentage (the “NOLV Percentage”) times the book value of Bell
Minnesota’s Eligible Inventory (it being understood that based on the
appraisal of the Net Liquidation Percentage applicable to Bell Minnesota’s
Eligible Inventory conducted as of October 31, 2006, the NOLV Percentage
for the period from January 1 through June 30 is 52% and the NOLV
Percentage for the period from July 1 through December 31 is 42%), minus

          (e) the sum of (i) the Bank Product Reserve, (ii) the Landlord Reserve, (iii)
the Ingram Micro Reserve, (iv) the GE Reserve, (v) the IBM Reserve, and (vi) the
aggregate amount of reserves, if any, established by Agent under Section
2.1(b).

          “Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

          “Business Day” means any day that is not a Saturday, Sunday, or other day on which
banks are authorized or required to close in the state of California, except that, if a
determination of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also
shall exclude any day on which banks are closed for dealings in Dollar deposits in the London
interbank market.

          “Capital Expenditures” means, with respect to any Person for any period, the aggregate
of all expenditures by such Person and its Subsidiaries during such period that are capital
expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or
financed.

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

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

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

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

4

 

          “Cash Management Agreements” means those certain cash management agreements, in form
and substance satisfactory to Agent, each of which is among Administrative Borrower or one of its
Subsidiaries, Agent, and one of the Cash Management Banks.

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

          “Change of Control” means that (a) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20%, or more,
of the Stock of Parent having the right to vote for the election of members of the Board of
Directors, or (b) a majority of the members of the Board of Directors do not constitute Continuing
Directors, or (c) Parent fails to own and control 100% of the Stock of Bell Minnesota.

          “Closing Date” means the date of the making of the initial Advance (or other extension
of credit) hereunder.

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

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

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

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

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

          “Compliance Certificate” means a certificate substantially in the form of Exhibit
C-1 delivered by the chief financial officer of Parent to Agent.

          “Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Closing Date, and (b) any individual who becomes
a member of the Board of Directors after the Closing Date if such individual was appointed or
nominated for election to the Board of Directors by a majority of the Continuing Directors, but
excluding any such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election contest relating to the
election of the directors (or comparable managers) of Parent and whose initial assumption of office
resulted from such contest or the settlement thereof.

          “Control Agreement” means a control agreement, in form and substance satisfactory to
Agent, executed and delivered by the Parent or one of its Subsidiaries, Agent, and the applicable

5

 

securities intermediary (with respect to a Securities Account) or bank (with respect to a
Deposit Account).

          “Copyright Security Agreement” has the meaning specified therefor in the Security
Agreement.

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

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

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

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

          “Defaulting Lender Rate” means (a) for the first 3 days from and after the date the
relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to
Advances that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

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

          “Designated Account” means the Deposit Account of Administrative Borrower identified
on Schedule D-1.

          “Designated Account Bank” has the meaning specified therefor in Schedule D-1.

          “Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 90 consecutive days, that is the result of dividing the Dollar
amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive
items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings with
respect to Accounts during such period.

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

          “EBITDA” means, with respect to any fiscal period, Parent’s and its’ Subsidiaries’
consolidated net earnings (or loss), minus extraordinary gains and interest income and all non-cash
charges, plus interest expense, income taxes, and depreciation and amortization for such period, in
each case, determined on a consolidated basis in accordance with GAAP.

          “Eligible Bell Accounts” means those Accounts created by Parent or Bell Minnesota in
the ordinary course of its business that arise out of Bell Minnesota’s sale of goods from its
Recreational Products Group or Parent’s sale of goods or rendition of services from its Technology
Solutions Group that comply with each of the representations and warranties respecting Eligible
Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or
more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the
results of any audit performed by Agent from time to time after the Closing Date. In determining
the amount to be

6

 

included, Eligible Bell Accounts shall be calculated net of customer deposits and unapplied
cash. Eligible Bell Accounts shall not include the following:

          (a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date
(other than Accounts with respect to Bell Inc. which may be 120 days), Accounts with selling terms
of more than 30 days (other than Accounts with respect to Bell Inc. which may be 60 days), or
Accounts for which Borrowers permit installment payments to be made,

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

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

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

          (e) Accounts that are not payable in Dollars,

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

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

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

          (i) Accounts with respect to (i) Philip Morris USA to the extent that its total obligations
owing to Borrowers exceed 20% of all Eligible Bell Accounts plus all Eligible Dating Terms
Accounts, (ii) Sun Rocket, Inc. to the extent that its total obligations owing to Borrowers exceed
(x) prior to Agent’s receipt of the results of an audit of Borrowers in form and substance
satisfactory to Agent, 10% of all Eligible Bell Accounts plus all Eligible Dating Terms Accounts,
and (y) after Agent’s receipt of the results of an audit in form and substance satisfactory to
Agent, 15% of all Eligible Bell Accounts plus all Eligible Dating Terms Accounts, and (iii) any
other Account Debtor to the extent that its total obligations owing to Borrowers exceed 10% (such
percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Bell Accounts plus all Eligible Dating Terms Accounts; provided, however, that, in
each case, the amount of Eligible Bell Accounts or Eligible Dating Terms Accounts that are excluded
because they exceed the foregoing percentages shall be determined by Agent based on all of the
otherwise Eligible Bell Accounts and Eligible Dating

7

 

Terms Accounts prior to giving effect to any eliminations based upon the foregoing
concentration limits,

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

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

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

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

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

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

          (p) Eligible SkyTel Accounts or Eligible Dating Terms Accounts.

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

          (a) Accounts generated in respect of the sale of goods that the Account Debtor has failed to
pay within 150 days of the invoice date set forth on the first invoice that a Borrower generates in
respect of the sale of such goods,

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

8

 

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

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

          (e) Accounts that are not payable in Dollars,

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

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

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

          (i) Accounts with respect to (i) Philip Morris USA to the extent that its total obligations
owing to Borrowers exceed 20% of all Eligible Bell Accounts plus all Eligible Dating Terms
Accounts, (ii) Sun Rocket, Inc. to the extent that its total obligations owing to Borrowers exceed
(x) prior to Agent’s receipt of the results of an audit of Borrowers in form and substance
satisfactory to Agent, 10% of all Eligible Bell Accounts plus all Eligible Dating Terms Accounts,
and (y) after Agent’s receipt of the results of an audit in form and substance satisfactory to
Agent, 15% of all Eligible Bell Accounts plus all Eligible Dating Terms Accounts, and (iii) any
other Account Debtor to the extent that its total obligations owing to Borrowers exceed 10% (such
percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Bell Accounts plus all Eligible Dating Terms Accounts; provided, however, that, in
each case, the amount of Eligible Bell Accounts or Eligible Dating Terms Accounts that are excluded
because they exceed the foregoing percentages shall be determined by Agent based on all of the
otherwise Eligible Bell Accounts and Eligible Dating Terms Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limits,

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

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

9

 

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

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

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

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

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

          (p) Eligible Bell Accounts or Eligible SkyTel Accounts.

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

          (a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date
or Accounts with selling terms of more than 30 days,

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

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

          (d) [Intentionally Omitted],

          (e) Accounts that are not payable in Dollars,

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

10

 

Account is covered by credit insurance in form, substance, and amount, and by an insurer,
satisfactory to Agent,

          (g) Accounts with respect to which the Account Debtor is either (i) the United States or any
department, agency, or instrumentality of the United States (exclusive, however, of (A) Accounts
with respect to which a Borrower has complied, to the reasonable satisfaction of Agent, with the
Assignment of Claims Act, 31 USC § 3727, and (B) solely during the 45 day period immediately
following the Closing Date, Accounts that would qualify as Eligible SkyTel Accounts but for the
failure to satisfy this subsection (b)(i)), or (ii) any state of the United States,

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

          (i) Accounts with respect to (i) Account Debtors which are the United States or any department
agency, or instrumentality of the United States to the extent that the total obligations owing to
any Borrower from all such Account Debtors in the aggregate exceed 30% of all Eligible SkyTel
Accounts so long as within 45 days after the Closing Date, such Borrower has complied, to the
reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC § 3727, with respect to
such Accounts; and (ii) any other Account Debtor whose total obligations owing to Borrowers exceed
10% (such percentage, as applied to a particular Account Debtor, being subject to reduction by
Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of
all Eligible SkyTel Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage; provided, however, that, in each case, the amount of
Eligible SkyTel Accounts that are excluded because they exceed the foregoing percentage shall be
determined by Agent based on all of the otherwise Eligible SkyTel Accounts prior to giving effect
to any eliminations based upon the foregoing concentration limit,

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

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

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

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

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

11

 

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

          (p) Eligible Bell Accounts or Eligible Dating Terms Accounts.

          “Eligible Inventory” means Inventory consisting of first quality finished goods from
Bell Minnesota’s Recreational Products Group that are held for sale in the ordinary course of Bell
Minnesota’s business, that complies with each of the representations and warranties respecting
Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of
one or more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the
results of any audit or appraisal performed by Agent from time to time after the Closing Date. In
determining the amount to be so included, Inventory shall be valued at the lower of cost or market
on a basis consistent with Borrowers’ historical accounting practices. An item of Inventory shall
not be included in Eligible Inventory if:

          (a) Bell Minnesota does not have good, valid, and marketable title thereto,

          (b) it is not located at one of the locations in the continental United States set forth on
Schedule E-1 (or in-transit from one such location to another such location),

          (c) it is located on real property leased by Bell Minnesota or in a contract warehouse, in
each case, unless it is subject to a Collateral Access Agreement executed by the lessor or
warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises,

          (d) it is not subject to a valid and perfected first priority Agent’s Lien,

          (e) it consists of goods returned or rejected by Bell Minnesota’s customers, or

          (f) it consists of goods that are obsolete or slow moving, restrictive or custom items,
work-in-process, raw materials, or goods that constitute spare parts, packaging and shipping
materials, supplies used or consumed in Bell Minnesota’s business, bill and hold goods, defective
goods, “seconds,” or Inventory acquired on consignment.

          “Eligible Transferee” means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a
commercial bank organized under the laws of any other country which is a member of the Organization
for Economic Cooperation and Development or a political subdivision of any such country and which
has total assets in excess of $250,000,000, provided that such bank is acting through a branch or
agency located in the United States, (c) a finance company, insurance company, financial
institution, or fund that is engaged in making, purchasing, or otherwise investing in commercial
loans in the ordinary course of its business and having (together with its Affiliates) total assets
in excess of $250,000,000, (d) any Affiliate (other than individuals) of a Lender, (e) so long as
no Event of Default has occurred and is continuing, any other Person approved by Agent and
Administrative Borrower (which approval of Administrative Borrower shall not be unreasonably
withheld, delayed, or conditioned), and (f) during the continuation of an Event of Default, any
other Person approved by Agent.

          “Environmental Actions” means any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter,
or other communication from any Governmental Authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses

12

 

of Parent, its Subsidiaries, or any of their predecessors in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received Hazardous Materials
generated by Parent, its Subsidiaries, or any of their predecessors in interest.

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

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

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

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

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

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

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

          “Excess Availability” means, as of any date of determination, the amount equal to
Availability minus the aggregate amount, if any, of all trade payables of Borrowers and their
Subsidiaries aged in excess of their historical levels with respect thereto and all book overdrafts
of Borrowers and their Subsidiaries in excess of their historical practices with respect thereto,
in each case as determined by Agent in its Permitted Discretion.

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

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

13

 

          “Financing Statements Letter Agreement” means that certain letter agreement in respect
of certain financing statements between Borrowers and Agent, in form and substance satisfactory to
Agent.

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

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

          “Funds Flow Agreement” means that certain flow of funds agreement by and among Agent
and Borrowers in form and substance satisfactory to Agent.

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

          “GE” means GE Commercial Distribution Finance Corporation.

          “GE Debt” means that certain means the Indebtedness owed by Parent to GE or Deutsche
Financial Services Corporation in connection with those certain Agreements for Wholesale Financing
entered into prior to the Closing Date by and between Parent, on the one hand, and GE or Deutsch
Financial Services Corporation, on the other hand.

          “GE Reserve” means, as of any date of determination, an amount equal to the aggregate
amount of GE Debt outstanding as of such date of determination (it being understood that as of the
Closing Date such amount is $200,000).

          “Governing Documents” means, with respect to any Person, the certificate or articles
of incorporation, by-laws, or other organizational documents of such Person.

          “Governmental Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.

          “Governmental Authorization” means any permit, license, authorization, plan,
directive, consent, permission, consent order or consent decree of or from any Governmental
Authority.

          “Guarantors” means (a) each Subsidiary of Parent (other than Borrower and other than
the Inactive Subsidiaries), and (b) each other Person which from time to time executes a Guaranty,
and “Guarantor” means any one of them.

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

          “Hazardous Materials” means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define,
list, or classify substances by reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids,
produced waters, and other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any
radioactive materials, and

14

 

(d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of 50 parts per million.

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

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

          “Inactive Subsidiaries” means Bell Industries California, formerly known as J.W.
Miller Company, a California corporation, Milgray Ltd., a New York corporation, and Bell
Tech.logix, Inc., an Indiana corporation, and any one or more of them.

          “IBM” means GE Commercial Distribution Finance Corporation.

          “IBM Debt” means that certain means the Indebtedness owed by Parent to IBM in
connection with those certain Agreements for Wholesale Financing entered into prior to the Closing
Date by and between Parent, on the one hand, and IBM, on the other hand.

          “IBM Reserve” means, as of any date of determination, an amount equal to the aggregate
amount of IBM Debt outstanding as of such date of determination (it being understood that as of the
Closing Date such amount is $0).

          “Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other
financial products, (c) all obligations as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of a Person or its Subsidiaries, irrespective
of whether such obligation or liability is assumed, (e) all obligations to pay the deferred
purchase price of assets (other than trade payables incurred in the ordinary course of business and
repayable in accordance with customary trade practices), (f) all obligations owing under Hedge
Agreements, and (g) any obligation guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any
other Person that constitutes Indebtedness under any of clauses (a) through (f) above.

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

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

          “Ingram Micro” means Ingram Micro Inc.

          “Ingram Micro Debt” means that certain means the Indebtedness owed by Parent to Ingram
Micro arising out of the purchase by Parent from Ingram Micro of Equipment and Inventory pursuant
to purchase orders.

          “Ingram Micro Reserve” means, as of any date of determination, an amount equal to the
aggregate amount of Ingram Micro Debt outstanding as of such date of determination (it being
understood that as of the Closing Date such amount is $2,500,000).

15

 

          “Ingram Micro Subordination Agreement” means an intercreditor and subordination
agreement executed and delivered by Agent and Ingram Micro, and acknowledged by Parent and each of
Parent’s Subsidiaries, the form and substance of which is satisfactory to Agent.

          “Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal moratoria, compositions,
extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.

          “Intercompany Advances” means loans or advances or the repayment of loans or advances
from Parent or one of its Subsidiaries to Parent or one of its Subsidiaries.

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

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

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

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

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

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

          (a) “Landlord Reserve” an amount equal to the sum of (i) at all times
during which Agent shall not have received a Collateral Access Agreement for 8888 Keystone
Crossing,

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Suite #1700, Indianapolis, IN 46240 (chief executive office), an amount equal to 3 months rent
for such location (and at all other times, $0); plus (ii) at all times during which Agent
shall not have received a Collateral Access Agreement for 1960 E. Grand Avenue, El Segundo, CA
90245 (chief executive office), an amount equal to 3 months rent for such location (and at all
other times, $0); plus (iii) at all times during which Agent shall not have received a
Collateral Access Agreement for 580 Yankee Doodle Rd., Eagan, MN 55121 (inventory and equipment),
an amount equal to 3 months rent for such location (and at all other times, $0); plus (iv)
at all times during which Agent shall not have received a Collateral Access Agreement for 4674 Clay
Ave., Grand Rapids, MI 49548 (inventory and equipment), an amount equal to 3 months rent for such
location (and at all other times, $0); plus (v) at all times during which Agent shall not
have received a Collateral Access Agreement for N. 117 W. 18456 Fulton Drive, Germantown, WI 53022
(inventory and equipment); an amount equal to 3 months rent for such location (and at all other
times, $0), plus (vi) at all times during which Agent shall not have received a Collateral
Access Agreement for 500 Clinton Center Drive, Clinton, MS (former chief executive office of
Skytel), an amount equal to 3 months rent for such location (and at all other times, $0).

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

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

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

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

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

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

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syndicating, or amending the Loan Documents, and (i) Agent’s and each Lender’s reasonable
costs and expenses (including reasonable attorneys, accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning Parent or any of its Subsidiaries or in
exercising rights or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action concerning the
Collateral.

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

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

          “Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the then existing Letter of
Credit Usage, (ii) causing the Underlying Letters of Credit to be returned to the Issuing Lender,
or (iii) providing Agent with a standby letter of credit, in form and substance reasonably
satisfactory to Agent, from a commercial bank acceptable to the Agent (in its sole discretion) in
an equal to 105% of the then existing Letter of Credit Usage.

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

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

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

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

          “LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate per
annum determined by Agent by dividing (a) the Base LIBOR Rate for such Interest Period, by (b) 100%
minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of
any change in the Reserve Percentage.

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

          “LIBOR Rate Margin” means 2.25 percentage points.

          “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other
security arrangement and any other preference, priority, or preferential arrangement of any kind or
nature whatsoever, including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing.

          “Liquidity Trigger” means (a) from the Closing Date through March 31, 2007, Excess
Availability plus Qualified Cash is less than $3,000,000; and (b) from and after April 1, 2007,
Excess Availability plus Qualified Cash is less than $5,000,000.

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

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          “Loan Documents” means the Agreement, the Bank Product Agreements, any Borrowing Base
Certificate, the Cash Management Agreements, the Control Agreements, the Copyright Security
Agreement, the Fee Letter, the Financing Statements Letter Agreement, the Funds Flow Agreement, the
Guaranty, the Ingram Micro Subordination Agreement, the Intercompany Subordination Agreement, the
Letters of Credit, the Mortgages, the Patent Security Agreement, the Security Agreement, the
Trademark Security Agreement, any note or notes executed by a Borrower in connection with the
Agreement and payable to a member of the Lender Group, and any other agreement entered into, now or
in the future, by Parent or any of its Subsidiaries and the Lender Group in connection with the
Agreement.

          “Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition (financial or
otherwise) of Parent and its Subsidiaries, taken as a whole, (b) a material impairment of Parent
and its Subsidiaries ability to perform their obligations under the Loan Documents to which they
are parties or of the Lender Group’s ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of the Agent’s Liens
with respect to the Collateral as a result of an action or failure to act on the part of Parent or
any Subsidiary of Parent.

          “Material Contract” means, (a) the SkyTel Acquisition Documents, (b) as of any date of
determination and with respect to any Person, each contract or agreement to which such Person or
any of its Subsidiaries is a party involving aggregate revenues or expenses to Parent or its
Subsidiaries during the immediately preceding trailing 12 months ending on the last day of the
immediately preceding month of $2,000,000 or more (other than purchase orders in the ordinary
course of the business of such Person or such Subsidiary and other than contracts that by their
terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon
less than 60 days notice without penalty or premium), and (c) with respect to any Person, all other
contracts or agreements material to the business, operations, condition (financial or otherwise),
performance, prospects or properties of such Person or such Subsidiary.

          “Maturity Date” has the meaning specified therefor in Section 3.3.

          “Maximum Revolver Amount” means $30,000,000.

          “Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.

          “Mortgage Policy” has the meaning specified therefor in Schedule 3.1(v).

          “Mortgages” means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by Parent or its Subsidiaries in favor of
Agent, in form and substance satisfactory to Agent, that encumber the Real Property Collateral.

          “Net Liquidation Percentage” means the percentage of the book value of Borrowers’
Eligible Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory
net of all associated costs and expenses of such liquidation, such percentage to be as determined
from time to time by an appraisal company selected by Agent.

          “Newcastle” means Newcastle Partners, L.P. a Texas limited partnership.

          “Newcastle Debt” means that certain means the Indebtedness under the Newcastle Note.

19

 

          “Newcastle Note” means that certain subordinated unsecured promissory note in the
principal amount of $10,000,000, dated as of January 31, 2007, issued by Parent in favor of
Newcastle.

          “NOLV Percentage” has the meaning specified therefor in the definition of Borrowing
Base.

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

          “Originating Lender” has the meaning specified therefor in Section 13.1(e).

          “Overadvance” has the meaning specified therefor in Section 2.5.

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

          “Participant” has the meaning specified therefor in Section 13.1(e).

          “Patent Security Agreement” has the meaning specified therefor in the Security
Agreement.

          “Permitted Discretion” means a determination made in the exercise of reasonable (from
the perspective of a secured lender) business judgment.

          “Permitted Dispositions” means (a) sales or other dispositions of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business, (b) sales of Inventory
to buyers in the ordinary course of business, (c) the use or transfer of money or Cash Equivalents
in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents, and
(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business.

          “Permitted Holder” means the Person identified on Schedule P-1.

          “Permitted Intercompany Advance” means so long as (i) no Default or Event of Default
has occurred and is continuing or would result therefrom, and (ii) all parties to such transaction
are parties to the Intercompany Subordination Agreement, Intercompany Advances made by one Borrower
to another Borrower.

20

 

          “Permitted Investments” means (a) Investments in cash and Cash Equivalents, (b)
Investments in negotiable instruments for collection, (c) advances made in connection with
purchases of goods or services in the ordinary course of business, (d) Investments received in
settlement of amounts due to Parent or any of its Subsidiaries effected in the ordinary course of
business or owing to Parent or any of its Subsidiaries as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of Parent
or its Subsidiaries, and (e) Permitted Intercompany Advances.

          “Permitted Liens” means (a) Liens held by Agent to secure the Obligations, (b) Liens
for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet
delinquent, or (ii) do not have priority over the Agent’s Liens and the underlying taxes,
assessments, or charges or levies are the subject of Permitted Protests, (c) judgment Liens that do
not constitute an Event of Default under Section 7.7 of the Agreement, (d) Liens set forth
on Schedule P-2, provided that any such Lien only secures the Indebtedness that it secures
on the Closing Date and any Refinancing Indebtedness in respect thereof, (e) the interests of
lessors under operating leases, (f) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and
so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof,
and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased
or acquired or any Refinancing Indebtedness in respect thereof, (g) Liens arising by operation of
law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers,
incurred in the ordinary course of business and not in connection with the borrowing of money, and
which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (h) Liens on amounts deposited in connection with obtaining worker’s compensation or
other unemployment insurance, (i) Liens on amounts deposited in connection with the making or
entering into of bids, tenders, or leases in the ordinary course of business and not in connection
with the borrowing of money, (j) Liens on amounts deposited as security for surety or appeal bonds
in connection with obtaining such bonds in the ordinary course of business, (k) with respect to any
Real Property, easements, rights of way, and zoning restrictions that do not materially interfere
with or impair the use or operation thereof; (l) Liens held by Ingram Micro solely to secure any
Ingram Micro Debt that is permitted by Section 6.1 of the Agreement; provided,
however, that from and after the date that is 5 Business Days after the Closing Date, such
Liens shall only be permitted so long as (i) the Ingram Micro Subordination Agreement is in full
force and effect; and (ii) the Ingram Micro Debt is permitted by Section 6.1 of the
Agreement; and (m) Liens held by Newcastle solely to secure any Newcastle Debt that is permitted by
Section 6.1 of the Agreement so long as (i) Newcastle executes and delivers to Agent an
intercreditor and subordination agreement in form and substance reasonably satisfactory to Agent
(which agreement is acknowledged and agreed to by Borrowers) and (ii) all documents that evidence
or relate to such Lien (including any security agreement) are in form and substance reasonably
satisfactory to Agent.

          “Permitted Protest” means the right of Parent or any of its Subsidiaries to protest
any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental payment, provided that
(a) a reserve with respect to such obligation is established on Parent’s or its Subsidiaries’ books
and records in such amount as is required under GAAP, (b) any such protest is instituted promptly
and prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith, and (c) Agent
is satisfied that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent’s Liens.

          “Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount
outstanding at any one time not in excess of $5,000,000.

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          “Person” means natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they are legal entities,
and governments and agencies and political subdivisions thereof.

          “Pro Rata Share” means, as of any date of determination:

          (a) with respect to a Lender’s obligation to make Advances and right to receive payments of
principal, interest, fees, costs, and expenses with respect thereto, (i) prior to the Revolver
Commitments being terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the aggregate outstanding principal amount of such Lender’s
Advances plus such Lender’s ratable portion of the Risk Participation Liability with respect to
outstanding Letters of Credit by (z) the aggregate outstanding principal amount of all Advances
plus such Lender’s ratable portion of the Risk Participation Liability with respect to outstanding
Letters of Credit,

          (b) with respect to a Lender’s obligation to participate in Letters of Credit, to reimburse
the Issuing Lender, and right to receive payments of fees with respect thereto, (i) prior to the
Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (y)
such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero,
the percentage obtained by dividing (y) the aggregate outstanding principal amount of such Lender’s
Advances by (z) the aggregate outstanding principal amount of all Advances,

          (c) [intentionally omitted], and

          (d) with respect to all other matters as to a particular Lender (including the indemnification
obligations arising under Section 15.7), the percentage obtained by dividing (i) such
Lender’s Revolver Commitment, by (ii) the aggregate amount of Revolver Commitments of all Lenders;
provided, however, that in the event the Revolver Commitments have been terminated
or reduced to zero, Pro Rata Share under this clause shall be the percentage obtained by dividing
(A) the outstanding principal amount of such Lender’s Advances plus such Lender’s ratable portion
of the Risk Participation Liability with respect to outstanding Letters of Credit, by (B) the
outstanding principal amount of all Advances plus the aggregate amount of the Risk Participation
Liability with respect to outstanding Letters of Credit.

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

          “Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of the acquisition
cost thereof.

          “Qualified Cash” means, as of any date of determination, the amount of unrestricted
cash and Cash Equivalents of Parent or its Subsidiaries that is in Deposit Accounts or in
Securities Accounts, or any combination thereof, and which such Deposit Account or Securities
Account is the subject of a Control Agreement and is maintained by a branch office of the bank or
securities intermediary located within the United States.

          “Real Property” means any estates or interests in real property now owned or hereafter
acquired by Parent or its Subsidiaries and the improvements thereto.

22

 

          “Real Property Collateral” means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by Parent or its Subsidiaries.

          “Record” means information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.

          “Recreational Products Group” means the division of Borrowers that is a wholesale
distributor of replacement parts and accessories for recreational and leisure-time vehicles,
including snow mobiles, motorcycles, all terrain vehicles, and other similar vehicles.

          “Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness
so long as: (a) the terms and conditions of such refinancings, renewals, or extensions do not, in
Agent’s reasonable judgment, materially impair the prospects of repayment of the Obligations by
Borrowers or materially impair Borrowers’ creditworthiness, (b) such refinancings, renewals, or
extensions do not result in an increase in the principal amount of the Indebtedness so refinanced,
renewed, or extended, (c) such refinancings, renewals, or extensions do not result in an increase
in the interest rate with respect to the Indebtedness so refinanced, renewed, or extended, (d) such
refinancings, renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive to Borrowers, (e)
if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment
to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must
include subordination terms and conditions that are at least as favorable to the Lender Group as
those that were applicable to the refinanced, renewed, or extended Indebtedness, and (f) the
Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable
on account of the Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended.

          “Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or
outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform
any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or
(e) conduct any other actions with respect to Hazardous Materials authorized by Environmental Laws.

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

          “Report” has the meaning specified therefor in Section 15.16.

          “Required Availability” means that the sum of (a) Excess Availability, plus (b)
Qualified Cash exceeds $3,000,000.

          “Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (d) of the definition of Pro Rata Shares) equal or exceed 50.1%;
provided that at any time that there are 2 or more Lenders with Commitments hereunder or,
if the Commitments have been terminated, there are 2 or more Lenders holding unpaid Advances, then
“Required Lenders” shall require the inclusion of at least 2 Lenders.

          “Requirement of Law” means as to any Person, any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its
property is subject.

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          “Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental
Authority) for determining the reserve requirements (including any basic, supplemental, marginal,
or emergency reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities”) of that Lender, but so long as such Lender is
not required or directed under applicable regulations to maintain such reserves, the Reserve
Percentage shall be zero.

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

          “Revolver Usage” means, as of any date of determination, the sum of (a) the amount of
outstanding Advances, plus (b) the amount of the Letter of Credit Usage.

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

          “SEC” means the United States Securities and Exchange Commission and any successor
thereto.

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

          “Security Agreement” means a security agreement, in form and substance satisfactory to
Agent, executed and delivered by Borrowers and Guarantors to Agent.

          “Seller Certificate” means a certificate, in form and substance satisfactory to Agent,
executed and delivered by Parent and SkyTel in respect of the satisfaction of the conditions in
respect of the SkyTel Acquisition.

          “Settlement” has the meaning specified therefor in Section 2.3(e)(i).

          “Settlement Date” has the meaning specified therefor in Section 2.3(e)(i).

          “SkyTel” means SkyTel Corp., a Delaware corporation.

          “SkyTel Acquisition” means the purchase by Parent of substantially all of the assets
of SkyTel, all as more particularly described in the SkyTel Acquisition Agreement.

          “SkyTel Acquisition Agreement” means that certain Asset Purchase Agreement, dated as
of November 10, 2006, by and between Parent and SkyTel Corp., a Delaware corporation, as amended by
that certain Amendment No. 1 to the Asset Purchase Agreement, dated as of November 16, 2006, by and
between Parent and SkyTel Corp., a Delaware corporation, (but without giving effect to any further
amendments to such Asset Purchase Agreement to which the Agent has not provided express written
consent thereto).

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          “SkyTel Acquisition Documents” means (a) the SkyTel Acquisition Agreement, and (b) all
other agreements and documents that may be executed or delivered in connection therewith, together
with all scheduled and exhibits thereto.

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

          “SkyTel Group” means the division of a Borrower that provides wireless and support
services, including email, interactive two-way messaging, wireless telemetry services, and
traditional text and numeric paging, to business and government entities throughout the United
States.

          “Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s debts.

          “S&P” has the meaning specified therefor in the definition of Cash Equivalents.

          “Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

          “Subsidiary” of a Person means a corporation, partnership, limited liability company,
or other entity in which that Person directly or indirectly owns or controls the shares of Stock
having ordinary voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability company, or other entity.

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

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

          “Taxes” has the meaning specified therefor in Section 16(a).

          “Technology Solutions Group” means the division of Parent that (a) purchases and
re-sells technology products for resale, including desktop and laptop computers, servers, and
software, and (b) provides managed lifecycle services, including planning, product sourcing,
deployment and disposal (logistics and software installation), and support services (such as help
desk, technical maintenance and depot services).

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

          “Trademark Security Agreement” has the meaning specified therefor in the Security
Agreement.

25

 

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

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

          “United States” means the United States of America.

          “Voidable Transfer” has the meaning specified therefor in Section 17.8.

          “Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

          “WFF” means Wells Fargo Foothill, Inc., a California corporation.

26

 

Schedule 3.1

     The obligation of each Lender to make its initial extension of credit provided for in the
Agreement is subject to the fulfillment, to the satisfaction of each Lender (the making of such
initial extension of credit by any Lender being conclusively deemed to be its satisfaction or
waiver of the following), of each of the following conditions precedent:

          (a) the Closing Date shall occur on or before January 31, 2007;

          (b) Agent shall have received letters duly executed by Borrowers authorizing Agent
to file appropriate financing statements in such office or offices as may be necessary or, in the
opinion of Agent, desirable to perfect the security interests to be created by the Loan Documents;

          (c) Agent shall have received evidence that appropriate financing statements have
been duly filed in such office or offices as may be necessary or, in the opinion of Agent,
desirable to perfect the Agent’s Liens in and to the Collateral, and Agent shall have received
searches reflecting the filing of all such financing statements;

          (d) Agent shall have received each of the following documents, in form and
substance satisfactory to Agent, duly executed, and each such document shall be in full force and
effect:

	 	(i)	 	the Borrowing Base Certificate,
	 
	 	(ii)	 	the Security Agreement, together with all certificates representing the
shares of Stock pledged thereunder, as well as Stock powers with respect thereto endorsed in blank,
	 
	 	(iii)	 	the Trademark Security Agreement,
	 
	 	(iv)	 	the Copyright Security Agreement,
	 
	 	(v)	 	the Patent Security Agreement,
	 
	 	(vi)	 	the Seller Certificate,
	 
	 	(vii)	 	the Fee Letter,
	 
	 	(viii)	 	the Financing Statements Letter Agreement,
	 
	 	(ix)	 	the Funds Flow Agreement,
	 
	 	(x)	 	the Intercompany Subordination Agreement,

          (e) Agent shall have received certificates from the Secretary of each Borrower (i)
attesting to the resolutions of such Borrower’s Board of Directors authorizing its execution,
delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is
a party, (ii) authorizing specific officers of such Borrower to execute the same, and (iii)
attesting to the incumbency and signatures of such specific officers of such Borrower;

          (f) Agent shall have received copies of each Borrower’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the Secretary of each
Borrower;

 

 

          (g) Agent shall have received a certificate of status with respect to each
Borrower, dated within 10 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of each Borrower, which certificate shall
indicate that such Borrower is in good standing in such jurisdiction;

          (h) Agent shall have received certificates of status with respect to each
Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of organization of such
Borrower) in which its failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Borrower is in good standing in such
jurisdictions;

          (i) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 5.8, the form and substance of which shall
be satisfactory to Agent;

          (j) [intentionally omitted];

          (k) Agent shall have received an opinion of Parent’s counsel in form and substance
satisfactory to Agent;

          (l) Borrowers shall have the Required Availability after giving effect to the
initial extensions of credit hereunder and the payment of all fees and expenses required to be paid
by Borrowers on the Closing Date under this Agreement or the other Loan Documents;

          (m) Agent shall have completed its business, legal, and collateral due diligence,
including (i) a collateral audit and review of Borrowers’ books and records and verification of
Borrower’s representations and warranties to Lender Group, the results of which shall be
satisfactory to Agent, and (ii) an inspection of each of the locations where Borrowers’ Inventory
is located, the results of which shall be satisfactory to Agent;

          (n) Agent shall have received completed reference checks and U.S. Patriot Act
searches with respect to each Borrower’s senior management (including on the Chairman of the Board
of Directors), the results of which are satisfactory to Agent in its sole discretion;

          (o) Agent shall have received copies of the each Borrower’s financial statements
for October 2006 and November 2006, which, in each case, must be in form and substance satisfactory
to Agent and consistent with the forecasted balance sheets, profit and loss statements and cash
flow statements of each Borrower provided to Agent prior to the Closing Date;

          (p) each Borrower shall have paid all Lender Group Expenses incurred in connection
with the transactions evidenced by this Agreement;

          (q) Agent shall have received copies of each of the Skytel Acquisition Documents,
together with a certificate of the Secretary of each Borrower certifying each such document as
being a true, correct, and complete copy thereof and in full force and effect;

          (r) Agent shall have received evidence satisfactory to it that (i) all
documentation associated with the Skytel Acquisition shall be in form and substance satisfactory to
Agent (it being understood that Agent has reviewed the Skytel Acquisition Agreement, and Agent
hereby confirms that the Skytel Acquisition Agreement (including the schedules and exhibits
thereto) is in form and substance satisfactory to Agent), (ii) all conditions precedent to the
consummation of the Skytel Acquisition (other than the payment of the purchase price required
thereunder, which shall be paid concurrently with the closing of the SkyTel Acquisition and other
than delivery of evidence of the wire transfer as required by Section 9.2(e) of the

-2-

 

Skytel Acquisition Agreement) shall have been satisfied in accordance with the terms and
conditions thereof, (iii) no such term or condition (other than immaterial conditions) shall have
been waived, (iv) all applicable governmental licenses, permits, and approvals for the Skytel
Acquisition shall have been obtained as required by the Skytel Acquisition Agreement, (v) the
Skytel Acquisition and all of the terms and conditions of the Skytel Acquisition Documents have
been duly authorized by the board of directors (or other managing body) and (if required by
applicable law) the shareholders or members of the parties to the Skytel Acquisition Documents,
(vi) contemporaneous with the extensions of credit hereunder, evidence satisfactory to it that the
Skytel Acquisition has become effective in accordance with the terms and provisions of the Skytel
Acquisition Documents and applicable law; and (vii) Agent has completed (i) a collateral audit and
review of the assets that are the subject of the SkyTel Acquisition on a roll forward basis through
the Closing Date, and (ii) an inspection of each of the locations where the Inventory to be
purchased pursuant to the SkyTel Acquisition is located, in each case, the results of which shall
be satisfactory to Agent;

          (s) Agent shall have received evidence satisfactory to Agent that Borrower shall
have received proceeds of the Newcastle Notes in an aggregate principal amount of $10,000,000;

          (t) Parent and each of its Subsidiaries shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in connection with
the execution and delivery by Parent or its Subsidiaries of the Loan Documents or with the
consummation of the transactions contemplated thereby; and

          (u) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in
form and substance satisfactory to Agent.

-3-

 

Schedule 5.2(a)

     Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the
documents set forth below at the following times in form satisfactory to Agent:

	 	 	 
	Daily

	 	(a) a detailed aging, by total, of the Borrowers’ Accounts, together with a
reconciliation and supporting documentation for any reconciling items noted (delivered
electronically in an acceptable format, if Borrowers have implemented electronic
reporting),
	 
	 	 
	 

	 	(b) a detailed aging, by vendor, of Borrowers’ and their Subsidiaries’ accounts payable,
any book overdraft, accrued expenses, and a reconciliation of the preceding items to
Borrower’s general ledger (delivered electronically in an acceptable format, if Borrowers
have implemented electronic reporting) and an aging, by vendor, of any held checks,
	 
	 	 
	Weekly (no later
than Thursday based
on status as of
previous Friday)

	 	(c) an Account roll-forward with supporting details supplied from sales journals,
collection journals, credit registers and any other records,

(d) Inventory system/perpetual reports specifying the cost of Borrowers’ and their
Subsidiaries’ Inventory, by category, with additional detail showing additions to and
deletions therefrom (delivered electronically in an acceptable format, if Borrowers have
implemented electronic reporting),
	 
	 	 
	Monthly (no later
than the 15th day
of each month)

	 	(e) a Borrowing Base Certificate,

(f) a detailed calculation of those Accounts that are not eligible for the Borrowing Base,

(g) a detailed deferred revenue report and a deferred revenue roll-forward of Borrower,
in a format acceptable to Agent in its discretion, with a reconciliation to the
Borrowers’ general ledger,

(h) a monthly Account roll-forward, in a format acceptable to Agent in its discretion,
tied to the beginning and ending account receivable balances of Borrowers’ general
ledger,

(i) copies of invoices together with corresponding shipping and delivery documents, and
credit memos together with corresponding supporting documentation, with respect to
invoices and credit memos in excess of an amount determined in the sole discretion of
Agent, from time to time,

(j) a detailed report regarding Borrowers’ and their Subsidiaries’ cash and Cash
Equivalents, including (i) an indication of which amounts constitute Qualified Cash,

(k) a detailed Inventory system/perpetual report (delivered electronically in an
acceptable format, if Borrower has implemented electronic reporting),

(l) a detailed calculation of Inventory categories that are not eligible for the
Borrowing Base,

(m) notice of all claims, offsets, or disputes asserted by Account Debtors with respect
to Borrowers’ and their Subsidiaries’ Accounts,

 

 

	 	 	 
	Monthly (no later
than the 30th day
of each month)

	 	(n) a reconciliation of Accounts, trade accounts payable, and Inventory of Borrowers’
general ledger accounts to its monthly financial statements including any book reserves
related to each category,
	 
	 	 
	Quarterly (no later
than the 45th day
of each quarter)

	 	(o) a report regarding accrued but unpaid, ad valorem taxes of Borrowers and their
Subsidiaries,

(p) a report identifying all Material Contracts of Borrowers terminated or not renewed in
the previous quarter,
	 
	 	 
	Annually (no later
than the 90th day
of each year)

	 	[(q) a detailed list of Borrowers’ and their Subsidiaries’ customers, with address and
contact information.]
	 
	 	 
	Upon request by 

Agent

	 	(r) copies of purchase orders and invoices for Inventory and Equipment acquired by
Borrowers or their Subsidiaries,

(s) such other reports as to the Collateral or the financial condition of Borrowers and
their Subsidiaries, as Agent may reasonably request.

-2-

 

Schedule 5.2(b)

     Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the
documents set forth below at the following times in form satisfactory to Agent:

	 	 	 
	Weekly (no later
than Thursday based
on status as of
previous Friday)

	 	(a) a detailed aging, by total, of the SkyTel’s Accounts, together with a reconciliation
and supporting documentation for any reconciling items noted (delivered electronically in
an acceptable format, if SkyTel has implemented electronic reporting),

(b) a detailed aging, by vendor, of SkyTel’s accounts payable, any book overdraft,
accrued expenses, and a reconciliation of the preceding items to SkyTel’s general ledger
(delivered electronically in an acceptable format, if SkyTel has implemented electronic
reporting) and an aging, by vendor, of any held checks,
	 
	 	 
	Monthly (no later
than the 15th day
of each month)

	 	(c) an Account roll-forward, in a format acceptable to Agent in its discretion, tied to
the beginning and ending account receivable balances of SkyTel’s general ledger with
supporting details supplied from sales journals, collection journals, credit registers
and any other records,

(d) Inventory system/perpetual reports specifying the cost of SkyTel’s Inventory, by
category, with additional detail showing additions to and deletions therefrom (delivered
electronically in an acceptable format, if SkyTel has implemented electronic reporting),

(e) a Borrowing Base Certificate,

(f) a detailed calculation of those Accounts that are not eligible for the Borrowing Base,

(g) a detailed deferred revenue report and a deferred revenue roll-forward of SkyTel, in
a format acceptable to Agent in its discretion, with a reconciliation to the SkyTel’s
general ledger,

(h) copies of invoices together with corresponding shipping and delivery documents, and
credit memos together with corresponding supporting documentation, with respect to
invoices and credit memos in excess of an amount determined in the sole discretion of
Agent, from time to time,

(i) a detailed report regarding SkyTel’s cash and Cash Equivalents, including (i) an
indication of which amounts constitute Qualified Cash,

(j) a detailed Inventory system/perpetual report (delivered electronically in an
acceptable format, if SkyTel has implemented electronic reporting),

(k) a detailed calculation of Inventory categories that are not eligible for the
Borrowing Base,

(l) notice of all claims, offsets, or disputes asserted by Account Debtors with respect
to SkyTel’s Accounts,

 

 

	 	 	 
	Monthly (no later
than the 30th day
of each month)

	 	(m) a reconciliation of Accounts, trade accounts payable, and Inventory of SkyTel’s
general ledger accounts to its monthly financial statements including any book reserves
related to each category,
	 
	 	 
	Quarterly (no later
than the 45th day
of each quarter)

	 	(n) a report regarding accrued but unpaid, ad valorem taxes of SkyTel,

(o) a report identifying all Material Contracts of SkyTel terminated or not renewed in
the previous quarter,
	 
	 	 
	Annually (no later
than the 90th day
of each year)

	 	[(p) a detailed list of SkyTel’s customers, with address and contact information.]
	 
	 	 
	Upon request by 

Agent

	 	(q) copies of purchase orders and invoices for Inventory and Equipment acquired by SkyTel
or its Subsidiaries,

(r) such other reports as to the Collateral or the financial condition of SkyTel, as
Agent may reasonably request.

-2-

 

Schedule 5.3

     Deliver to Agent, with copies to each Lender, each of the financial statements, reports, or
other items set forth set forth below at the following times in form satisfactory to Agent:

	 	 	 
	as soon as
available, but in
any event within 30
days (45 days in
the case of a month
that is the end of
one of Parent’s
fiscal quarters)
after the end of
each month during
each of Parent’s
fiscal years

	 	(a) an unaudited consolidated and consolidating balance sheet, income
statement, and consolidated statement of cash flow covering Parent’s and its
Subsidiaries’ operations during such period, and

(b) a Compliance Certificate with detailed calculation of TTM EBITDA,
and

(c) a management discussion of operating results, and

(d) [materiality threshold for Tower leases]
	 
	 	 
	as soon as
available, but in
any event within 90
days after the end
of each of Parent’s
fiscal years

	 	(e) consolidated financial statements of Parent and its Subsidiaries for each such
fiscal year, audited by independent certified public accountants reasonably
acceptable to Agent and certified, without any qualifications (including any (A)
“going concern” or like qualification or exception, (B) qualification or exception
as to the scope of such audit, or (C) qualification which relates to the treatment
or classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which would
be to cause any noncompliance with the provisions of Section 6.16), by such
accountants to have been prepared in accordance with GAAP (such audited financial
statements to include a balance sheet, income statement, and statement of cash flow
and, if prepared, such accountants’ letter to management), and

(f) consolidating financial statements of Parent and its Subsidiaries for each
such fiscal year

(g) a Compliance Certificate with detailed calculation of TTM EBITDA.
	 
	 	 
	as soon as
available, but in
any event within 30
days after the end
of each of Parent’s
fiscal years,

	 	(h) copies of Borrowers’ Projections including a management summary, in form and
substance (including as to scope and underlying assumptions) satisfactory to Agent,
in its Permitted Discretion, for the forthcoming 3 years, year by year, and for the
forthcoming fiscal year, month by month, certified by the chief financial officer
of Parent as being such officer’s good faith estimate of the financial performance
of Borrowers during the period covered thereby.
	 
	 	 
	At the times set
forth in Section
5.22
(Secured Trade
Debt)

	 	(i) All information required to be provided by Section 5.22 (Secured Trade Debt).
	 
	 	 

-1-

 

	 	 	 
	if and when filed
by Borrower,

	 	(j) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current
reports,

(j) any other filings (other than immaterial filings) made by any Borrower with
the SEC, and

(k) any other information that is provided by any Borrower to its shareholders
generally.

-2-

 

	 	 	 
	promptly, but in
any event within 5
days after a
Borrower has
knowledge of any
event or condition
that constitutes a
Default or an Event
of Default,

	 	(k) notice of such event or condition and a statement of the curative action that
Borrowers propose to take with respect thereto.
	 
	 	 
	promptly after the
commencement
thereof, but in any
event within 5 days
after the service
of process with
respect thereto on
any Borrower or any
Subsidiary of a
Borrower,

	 	(l) notice of all actions, suits, or proceedings brought by or against Borrower
or any of Subsidiary of a Borrower before any Governmental Authority which
reasonably could be expected to result in a Material Adverse Change.
	 
	 	 
	upon the request of
Agent,

	 	(m) any other information reasonably requested relating to the financial
condition of Borrowers or their Subsidiaries.

-3-

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