Document:

exv10w1

Exhibit 10.1

ROCKVILLE BANK

Employment Agreement for John T. Lund

Effective as of January 1, 2010

 

 

ROCKVILLE BANK

Employment Agreement for John T. Lund

Effective as of January 1, 2010

	 	 	 	 	 	 	 	 	 
	1. Employment
	 	 	1	 
	2. Term
	 	 	1	 
	3. Offices and Duties
	 	 	2	 
	 
	 	(a)	 	Generally	 	 	2	 
	 
	 	(b)	 	Place of Employment	 	 	2	 
	4. Salary and Annual Incentive Compensation
	 	 	2	 
	 
	 	(a)	 	Base Salary	 	 	2	 
	 
	 	(b)	 	Annual Incentive Compensation	 	 	3	 
	5.
Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense Reimbursement
	 	 	3	 
	 
	 	(a)	 	Executive Compensation Plans	 	 	3	 
	 
	 	(b)	 	Employee and Executive Benefit Plans	 	 	3	 
	 
	 	(c)	 	Acceleration of Awards Upon a Change in Control	 	 	4	 
	 
	 	(d)	 	Deferral of Compensation	 	 	4	 
	 
	 	(e)	 	Company Registration Obligations	 	 	4	 
	 
	 	(f)	 	Reimbursement of Expenses	 	 	4	 
	 
	 	(g)	 	Limitations Under Code Section 409A	 	 	4	 
	6. Termination Due to Retirement, Death, or Disability
	 	 	5	 
	 
	 	(a)	 	Retirement	 	 	5	 
	 
	 	(b)	 	Death	 	 	6	 
	 
	 	(c)	 	Disability	 	 	7	 
	 
	 	(d)	 	Other Terms of Payment Following Retirement, Death, or Disability	 	 	8	 
	7. Termination of Employment For Reasons Other Than Retirement, Death or Disability
	 	 	9	 
	 
	 	(a)	 	Termination by the Bank for Cause	 	 	9	 
	 
	 	(b)	 	Termination by Executive Other Than For Good Reason	 	 	9	 

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	 	(c)	 	Termination by the Bank Without Cause Prior to or More than Two Years After a Change in Control	 	 	10	 
	 
	 	(d)	 	Termination by Executive for Good Reason Prior to or More than Two Years After a Change in Control	 	 	12	 
	 
	 	(e)	 	Termination by the Bank Without Cause Within Two Years After a Change in Control	 	 	14	 
	 
	 	(f)	 	Termination by Executive for Good Reason Within Two Years After a Change in Control	 	 	16	 
	 
	 	(g)	 	Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A Exemptions; Delayed Payments Under Section 409A	 	 	18	 
	8. Definitions Relating to Termination Events
	 	 	21	 
	 
	 	(a)	 	“Cause	 	 	21	 
	 
	 	(b)	 	“Change in Control	 	 	21	 
	 
	 	(c)	 	“Compensation Accrued at Termination	 	 	22	 
	 
	 	(d)	 	“Disability	 	 	23	 
	 
	 	(e)	 	“Good Reason	 	 	23	 
	 
	 	(f)	 	“Potential Change in Control	 	 	24	 
	 
	 	(g)	 	“Specified Employee	 	 	25	 
	9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions
	 	 	25	 
	 
	 	(a)	 	Rabbi Trust Funded Upon Potential Change in Control	 	 	25	 
	 
	 	(b)	 	Gross-up If Excise Tax Would Apply	 	 	25	 
	10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain Forfeitures
	 	 	27	 
	 
	 	(a)	 	Non-Competition	 	 	27	 
	 
	 	(b)	 	Non-Disclosure; Ownership of Work	 	 	28	 
	 
	 	(c)	 	Cooperation With Regard to Litigation	 	 	28	 
	 
	 	(d)	 	Non-Disparagement	 	 	28	 
	 
	 	(e)	 	Release of Employment Claims	 	 	29	 
	 
	 	(f)	 	Forfeiture of Outstanding Options	 	 	29	 
	 
	 	(g)	 	Forfeiture of Certain Bonuses and Profits	 	 	30	 
	 
	 	(h)	 	Forfeiture Due to Regulatory Restrictions	 	 	30	 
	 
	 	(i)	 	Survival	 	 	30	 
	11. Governing Law; Disputes
	 	 	30	 
	 
	 	(a)	 	Governing Law	 	 	30	 

ii

 

	 	 	 	 	 	 	 	 	 
	 
	 	(b)	 	Reimbursement of Expenses in Enforcing Rights	 	 	31	 
	 
	 	(c)	 	Dispute Resolution	 	 	31	 
	 
	 	(d)	 	Interest on Unpaid Amounts	 	 	32	 
	12. Miscellaneous
	 	 	32	 
	 
	 	(a)	 	Integration	 	 	32	 
	 
	 	(b)	 	Successors; Transferability	 	 	33	 
	 
	 	(c)	 	Beneficiaries	 	 	33	 
	 
	 	(d)	 	Notices	 	 	33	 
	 
	 	(e)	 	Reformation	 	 	34	 
	 
	 	(f)	 	Headings	 	 	34	 
	 
	 	(g)	 	No General Waivers	 	 	34	 
	 
	 	(h)	 	No Obligation To Mitigate	 	 	34	 
	 
	 	(i)	 	Offsets; Withholding	 	 	34	 
	 
	 	(j)	 	Successors and Assigns	 	 	35	 
	 
	 	(k)	 	Counterparts	 	 	35	 
	13. Indemnification
	 	 	35	 

Attachment A

iii

 

ROCKVILLE BANK

Employment Agreement for John T. Lund

Effective as of January 1, 2010

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and among ROCKVILLE FINANCIAL, INC., a
Connecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut savings bank and a
wholly-owned subsidiary of the Company (the “Bank”), and John T. Lund (“Executive”) is effective as
of January 1, 2010.

W I T N E S S E T H

     WHEREAS, the Company and the Bank desire to ensure that the Company and the Bank are assured
of the availability of Executive’s services as provided in this Agreement; and

     WHEREAS, Executive is willing to serve the Company and the Bank on the terms and conditions
hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and
other good and valuable consideration the receipt and adequacy of which the Company, the Bank and
Executive each hereby acknowledge, the Company, the Bank and Executive hereby agree as follows:

1. Employment.

     The Bank hereby agrees to employ Executive as its Senior Vice President (with the principal
executive duties set forth below in Section 3), and Executive hereby agrees to accept such
employment and serve in such capacities, during the Term as defined in Section 2 (subject to
Section 7(c) and 7(e)) and upon the terms and conditions set forth in this Agreement.

2. Term.

     The term of employment of Executive under this Agreement (the “Term”) shall be the period
commencing on the Effective Date and ending on December 31, 2010 and any period of extension
thereof in accordance with this Section 2, except that the Term will end at a date, prior to the
end of such period or extension thereof, specified in Section 6 or 7 in the event of termination of
Executive’s employment. The Term, if not previously ended, shall be extended by one additional year
(added to the end of the Term) first on December 31, 2010 (extending the Term to December 31, 2011)
and on each succeeding December 31st thereafter (a “December 31st extension
date”) but only in the event the Bank serves written notice in accordance with Section 12(d) upon
Executive at least 60 days preceding December 31, 2010 extending the Term to December 31, 2011 and
thereafter at least 60 days preceding a December 31st extension date, in which case the
Term shall be extended to the next succeeding December 31st, subject to earlier

 

 

termination of Executive’s employment and earlier termination of the Term in accordance with
Section 6 or 7. The foregoing notwithstanding, in the event there occurs a Potential Change in
Control during the Term, the Term shall be extended automatically until the day after the earlier
of: (a) the second anniversary of the date the Change in Control is consummated; or (b) the date
the Change in Control contemplated by the Potential Change in Control is fully and finally
abandoned.

3. Offices and Duties.

     The provisions of this Section 3 will apply during the Term, except as otherwise provided in
Section 7(c) or 7(e):

     (a) Generally. Executive shall serve as the Senior Vice President of the Bank.
Executive shall have and perform such duties, responsibilities, and authorities as are prescribed
by or under the Bylaws of the Bank and as are customarily associated with such position or,
irrespective of the office, title or other designation, if any, a position with responsibilities
and powers substantially identical to such position with the Bank. In addition, Executive shall
have and perform such additional duties, responsibilities, and authorities as may be from time to
time assigned by the President and Chief Executive Officer based on his assessment of the business
needs of the Bank, and the Bank reserves the right to change or modify these assignments and any
positions and titles associated therewith. Executive shall devote his full business time and
attention, and his best efforts, abilities, experience, and talent, to the position of Senior Vice
President and other assignments hereunder, and for the business of the Bank, without commitment to
other business endeavors, except that Executive (i) may make personal investments which are not in
conflict with his duties to the Bank and manage personal and family financial and legal affairs,
(ii) may undertake public speaking engagements, and (iii) may serve as a director of (or similar
position with) any other business or an educational, charitable, community, civic, religious, or
similar type of organization with the approval of the President and Chief Executive Officer, so
long as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or render
unlawful Executive’s employment or service to the Bank or otherwise materially inhibit the
performance of Executive’s duties under this Agreement or materially impair the business of the
Bank or its affiliates.

     (b) Place of Employment. Executive’s principal place of employment shall be at the
administrative offices of the Bank.

4. Salary and Annual Incentive Compensation.

     As partial compensation for the services to be rendered hereunder by Executive, the Bank
agrees to pay to Executive during the Term the compensation set forth in this Section 4.

     (a) Base Salary. The Bank will pay to Executive during the Term a base salary, the
annual rate of which shall be $150,800.00, payable in cash in substantially equal semi-monthly
installments commencing at the beginning of the Term, and otherwise in accordance with the Bank’s
usual payroll practices with respect to senior executives (except to the extent deferred under
Section 5(d)). Executive’s annual base salary shall be
reviewed by the Human Resources Committee (the “Committee”) of the Board of Directors of the
Bank (the “Board”) at least once in each calendar year, and may be increased above, but may not be
reduced below, the then-

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current rate of such base salary. For purposes of this Agreement, “Base
Salary” means Executive’s then-current base salary.

     (b) Annual Incentive Compensation. The Bank will pay to Executive during the Term
annual incentive compensation which shall offer to Executive an opportunity to earn additional
compensation based upon performance in amounts determined by the Committee in accordance with the
applicable plan and consistent with past practices of the Bank, with the nature of the performance
and the levels of performance triggering payments of such annual target incentive compensation for
each year to be established and communicated to Executive during the first quarter of such year by
the Committee. In addition, the Committee (or the Board) may determine, in its discretion, to
increase Executive’s annual target incentive opportunity or provide an additional annual incentive
opportunity, in excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual target incentive
amount. Any annual incentive compensation payable to Executive shall be paid in accordance with
the applicable plan (except to the extent deferred under Section 5(d)).

5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense
Reimbursement.

     (a) Executive Compensation Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in executive compensation plans and programs
intended for general participation by senior executives of the Bank, as presently in effect or as
they may be modified or added to by the Bank from time to time, subject to the eligibility and
other requirements of such plans and programs, including without limitation any stock option plans,
plans under which restricted stock/restricted stock units, performance-based restricted
stock/restricted stock units or performance-accelerated restricted stock/restricted stock units
(collectively, “stock plans”) may be awarded, other annual and long-term cash and/or equity
incentive plans, and deferred compensation plans. The Bank makes no commitment under this Section
5(a) to provide participation opportunities to Executive in all plans and programs or at levels
equal to (or otherwise comparable to) the participation opportunity of any other executive.

     (b) Employee and Executive Benefit Plans. Executive shall be entitled during the Term
to participate, without discrimination or duplication, in employee and executive benefit plans and
programs of the Bank, as presently in effect or as they may be modified or added to by the Bank
from time to time, subject to the eligibility and other requirements of such plans and programs,
including without limitation plans providing pensions, supplemental pensions, supplemental and
other retirement benefits, medical insurance, life insurance, disability insurance, and accidental
death or dismemberment insurance, as well as savings, profit-sharing, and stock ownership plans.
The Bank makes no commitment under this Section 5(b) to provide participation opportunities to
Executive in all benefit plans and programs or at levels equal to (or otherwise comparable to) the
participation opportunity of any other executive.

     In furtherance of and not in limitation of the foregoing, during the Term:

     (i) Executive will participate as Senior Vice President in all executive and
employee vacation and time-off programs;

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	 	(ii)	 	The Bank will provide Executive with coverage as Senior Vice President with
respect to long-term disability insurance;
	 
	 	(iii)	 	Executive will be covered by Bank-paid group term life insurance; and
	 
	 	(iv)	 	Executive will be entitled to benefits under the Supplemental Savings and
Retirement Plan (the “SERP”) in accordance with the terms thereof, with the effective
date of Executive’s participation therein to be the Effective Date.

     (c) Acceleration of Awards Upon a Change in Control. In the event of a Change in
Control (as defined in Section 8(b)), all outstanding stock options, restricted stock, and other
equity-based awards then held by Executive shall become vested and exercisable. The time and form
of payment of such equity-based awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such equity-based awards were granted.

     (d) Deferral of Compensation. If the Bank has in effect or adopts any deferral
program or arrangement permitting executives to elect to defer any compensation, Executive will be
eligible to participate in such program. Any plan or program of the Bank which provides benefits
based on the level of salary, annual incentive, or other compensation of Executive shall, in
determining Executive’s benefits, take into account the amount of salary, annual incentive, or
other compensation prior to any reduction for voluntary contributions made by Executive under any
deferral or similar contributory plan or program of the Bank (excluding compensation that would not
be taken into account even if not deferred), but shall not treat any payout or settlement under
such a deferral or similar contributory plan or program to be additional salary, annual incentive,
or other compensation for purposes of determining such benefits, unless otherwise expressly
provided under such plan or program.

     (e) Company Registration Obligations. The Company will use its best efforts to file
with the Securities and Exchange Commission and thereafter maintain the effectiveness of one or
more registration statements registering under the Securities Act of 1933, as amended (the “1933
Act”), the offer and sale of shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or, if shares are
acquired by Executive in a transaction not involving an offer or sale to Executive but resulting in
the acquired shares being “restricted securities” for purposes of the 1933 Act, registering the
reoffer and resale of such shares by Executive.

     (f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for all
reasonable business expenses and disbursements incurred by Executive in the performance of
Executive’s duties during the Term in
accordance with the Bank’s reimbursement policies as in effect from time to time and the
provisions of Section 7(g) of this Agreement.

     (g) Limitations Under Code Section 409A. Anything in this Section 5 to the contrary
notwithstanding, with respect to any payment otherwise required hereunder, in the event of any
delay in the payment date as a result of Section 7(g) of this Agreement (relating to the six-month
delay in payment of certain benefits to Specified Employees as required by Section 409A of the
Code), the Bank will adjust the payment to reflect the deferred payment date by multiplying the
payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment would have been

4

 

made but for the delay multiplied
by a fraction, the numerator of which is the number of days by which such payment was delayed and
the denominator of which is 365. The Bank will pay the adjusted payment at the beginning of the
seventh month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by such payment date is not administratively practicable due to
events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons that
are commercially reasonable, payment will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.

6. Termination Due to Retirement, Death, or Disability.

     (a) Retirement. Executive may elect to terminate employment hereunder by retirement
at or after age 60 (“Retirement”). At the time Executive’s employment terminates due to
Retirement, the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which expressly continue
after termination of employment due to Retirement, and the Bank will pay Executive at the time
specified in Section 6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;
	 
	 	(iii)	 	The vesting and exercisability of stock options held by Executive at
termination and all other terms of such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options were granted
(subject to Section 10(f) hereof);
	 
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plans; and
	 
	 	(v)	 	Upon Retirement, if Executive is not eligible for retiree coverage under the
Bank’s health plan (the “Health Plan”) or Medicare and provided that Executive shall be
in compliance with the conditions set forth in Section 10, the Bank shall pay to
Executive a lump sum amount equal on an after-tax basis to the present

5

 

	 	 	 	value of the total cost of medical coverage under the Health Plan that would have been
incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health
Plan immediately prior to Executive’s Retirement) from the date of Executive’s
Retirement until Executive’s attainment of Social Security retirement age had
Executive remained employed by the Bank during such period, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year of Executive’s Retirement. Such lump sum amount shall be calculated by
an actuary selected by the Bank and paid in cash at the time specified in Section
6(d). Such amount shall not be subject to reduction or forfeiture by reason of any
coverage for which Executive may thereafter become eligible by reason of subsequent
employment or otherwise. For purposes of this Section, present value shall be
calculated on the basis of the discount rate set forth in the Bank’s qualified
retirement plan for the determination of lump sum payments.

     (b) Death. In the event of Executive’s death which results in the
termination of Executive’s employment, the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after death, and the Bank will pay Executive’s beneficiary or
estate at the time specified in Section 6(d), and Executive’s beneficiary or estate will be
entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s death occurred, a lump sum amount equal to the portion of annual
incentive compensation that would have become payable in cash to Executive (i.e.,
excluding the portion payable in stock or in other non-cash awards) for that year if
his employment had not terminated, based on performance actually achieved in that year
(determined by the Committee following completion of the performance year and paid at
the time specified in the applicable plan), multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of his death and the
denominator of which is the total number of days in the year of death;
	 
	 	(iii)	 	The vesting and exercisability of stock options held by Executive at death
and all other terms of such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted;
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plans;
	 
	 	(v)	 	If Executive’s surviving spouse (and eligible dependents, if any) elects
continued coverage under the Bank’s Health Plan in accordance with the applicable

6

 

	 	 	 	provisions of COBRA, the Bank shall pay to Executive’s surviving spouse on a monthly
basis during such COBRA continuation period and in accordance with Section 7(g) of this
Agreement an amount equal on an after-tax basis to the total cost of such coverage. No
further benefits shall be paid under this Section after the expiration of the maximum
COBRA continuation period available to Executive’s surviving spouse and eligible
dependents, if any.

     (c) Disability. The Bank may terminate the employment of Executive
hereunder due to the Disability (as defined in Section 8(d)) of Executive. Upon termination of
employment, the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which expressly continue
after termination of employment due to Disability, and the Bank will pay Executive at the time
specified in Section 6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;
	 
	 	(iii)	 	Stock options held by Executive at termination shall be governed by the
plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(iv)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(v)	 	Disability benefits shall be payable in accordance with the Bank’s plans,
programs and policies, including the SERP, and all deferral arrangements under Section
5(d) will be settled in accordance with the plans and programs governing the deferral;

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	 	(vi)	 	Upon termination of Executive’s employment due to Disability, if Executive is
not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided
that Executive shall be in compliance with the conditions set forth in Section 10, the
Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the
present value of the total cost of medical coverage under the Health Plan that would
have been incurred by both Executive and the Bank on behalf of Executive (and his
spouse and eligible dependents, if any, for whom coverage had been provided under the
Health Plan immediately prior to Executive’s termination of employment) from the date
of Executive’s termination of employment until Executive’s attainment of Social
Security retirement age had Executive remained employed by the Bank during such period,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 6(d). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 6(d) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until Executive’s attainment of Social Security retirement age, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until Executive’s attainment of Social Security retirement age, calculated
on the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set forth
in the Bank’s qualified retirement plan for the determination of lump sum payments.

     (d) Other Terms of Payment Following Retirement, Death, or Disability.
Nothing in this Section 6 shall limit the benefits payable
or provided in the event Executive’s employment terminates due to Retirement, death, or
Disability under the terms of plans or programs of the Bank more favorable to Executive (or his
beneficiaries) than the benefits payable or provided under this Section 6 (except in the case of
annual incentives in lieu of which amounts are paid hereunder), including plans and programs
adopted after the date of this Agreement. Amounts payable under this Section 6 following
Executive’s termination of employment, other than those expressly payable following determination
of performance for the year of termination for purposes of annual incentive compensation or
otherwise expressly payable on a deferred basis, will be paid in the payroll period next following
the payroll period in which termination of employment occurs; subject, however, to the provisions
of Section 7(g) of this Agreement relating to the six-month delay in payment of certain benefits to
Specified Employees as required

8

 

by Section 409A of the Code. Any payment or reimbursement due
within such six-month period shall be delayed to the end of such six-month period as required by
Section 7(g). The Bank will adjust the payment or reimbursement to reflect the deferred payment
date by multiplying the payment by the product of the six-month CMT Treasury Bill annualized yield
rate as published by the U.S. Treasury for the date on which such payment or reimbursement would
have been made but for the delay multiplied by a fraction, the numerator of which is the number of
days by which such payment or reimbursement was delayed and the denominator of which is 365. In the
event of a reimbursement that is required by other terms of this Agreement to be made on an
after-tax basis which is subject to the six-month delay in payment as described in Section 7(g) of
this Agreement, the reimbursement as adjusted in accordance with this Section 6(d) to reflect the
deferred payment date shall be paid to Executive on an after-tax and fully grossed-up basis so that
Executive is held economically harmless. The Bank will pay the adjusted payment or reimbursement at
the beginning of the seventh month following Executive’s termination of employment.
Notwithstanding the foregoing, if calculation of the amounts payable by such payment date is not
administratively practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as
soon as administratively practicable in compliance with Section 409A of the Code and the
Regulations. In the event of Executive’s death during such six-month period, payment will be made
in the payroll period next following the payroll period in which Executive’s death occurs.

7. Termination of Employment For Reasons Other Than Retirement, Death or Disability.

     (a) Termination by the Bank for Cause. The Bank may terminate the
employment of Executive hereunder for Cause (as defined in Section 8(a)) at any time. At the time
Executive’s employment is terminated for Cause, the Term will terminate, all obligations of the
Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after termination of employment by the Bank for Cause, and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;
and
	 
	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, and all rights, if any, under the
SERP and any other benefit plan shall be governed by such plans.

     (b) Termination by Executive Other Than For Good Reason. Executive may
terminate his employment hereunder voluntarily for reasons other than Good Reason (as defined in
Section 8(e)) at any time upon 90 days’ written notice to the Bank. An election by Executive not
to extend the Term pursuant to Section 2 hereof shall be deemed to be a termination of employment
by Executive for reasons other than Good Reason at the date of expiration of the

9

 

Term, unless a
Change in Control (as defined in Section 8(b)) occurs prior to, and there exists Good Reason at,
such date of expiration; provided, however, that, if Executive has attained age 60 at such date of
termination, such termination shall be deemed a Retirement of Executive, which shall instead be
governed by Section 6(a) above. At the time Executive’s employment is terminated by Executive
other than for Good Reason the Term will terminate, all obligations of the Bank and Executive under
Sections 1 through 5 of this Agreement will immediately cease, and the Bank will pay Executive at the
time specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;
	 
	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, and all rights under the SERP and
any other benefit plan shall be governed by such plans.

     (c) Termination by the Bank Without Cause Prior to or More than Two Years After
a Change in Control. The Bank may terminate the employment of Executive hereunder without
Cause, if at the date of termination no Change in Control has occurred or such date of termination
is at least two years after the most recent Change in Control, upon at least 90 days’ written
notice to Executive. The foregoing notwithstanding, the Bank may elect, by written notice to
Executive, to terminate Executive’s positions specified in Sections 1 and 3 and all other
obligations of Executive and the Bank under Section 3 at a date earlier than the expiration of such
90-day period, if so specified by the Bank in the written notice, provided that Executive shall be
treated as an employee of the Bank (without any assigned duties) for all other purposes of this
Agreement, including for purposes of Sections 4 and 5, from such specified date until the
expiration of such 90-day period. At the time Executive’s employment is terminated by the Bank
(i.e., at the expiration of such notice period), the Term will terminate, all remaining obligations
of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease
(except for obligations which continue after termination of employment as expressly provided
herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will
be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination

10

 

	 	 	 	based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(c)(ii) shall be payable a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan;
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-
tax basis to the present value of the total cost of medical coverage under the
Health Plan that would have been incurred by both Executive and the Bank on behalf
of Executive (and his spouse and eligible dependents, if any, for whom coverage had
been provided under the Health Plan immediately prior to Executive’s termination of
employment) from the date of Executive’s termination of employment until the third
anniversary of such date, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year of Executive’s
termination of employment. Such lump sum amount shall be calculated by an actuary
selected by the Bank and paid in cash at 

11

 

	 	 	 	the time specified in Section 7(g). Such
amount shall not be subject to reduction or forfeiture by reason of any coverage for
which Executive may thereafter become eligible by reason of subsequent employment or
otherwise. In addition, provided that Executive shall be in compliance with the
conditions set forth in Section 10, the Bank shall pay to Executive at the time
specified in Section 7(g) a lump sum amount equal on an after-tax basis to the
present value of the sum of (A) the amount that Executive and the Bank would have
paid, had he remained employed, for coverage under the Bank’s group long-term
disability policy from the date of Executive’s termination of employment until the
third anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred. For
purposes of this Section, present value shall be calculated on the basis of the
discount rate set forth in the Bank’s qualified retirement plan for the
determination of lump sum payments.

     (d) Termination by Executive for Good Reason Prior to or More than Two Years After a
Change in Control. Executive may terminate his employment hereunder for Good Reason, prior to
a Change in Control or after the second anniversary of the most recent Change in Control, upon 90
days’ written notice to the Bank; provided, however, that, if the Bank has corrected the basis for
such Good Reason within 30 days after receipt of such notice, Executive may not terminate his
employment for Good Reason, and therefore Executive’s notice of termination will automatically
become null and void. At the time Executive’s employment is terminated by Executive for Good
Reason (i.e., at the expiration of such notice period), the Term will terminate, all obligations of
the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except
for obligations which continue after termination of employment as expressly provided herein), and
the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled
to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(d)(ii) shall be payable in a lump sum;

12

 

	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on
behalf of Executive (and his spouse and eligible dependents, if any, for whom
coverage had been provided under the Health Plan immediately prior to Executive’s
termination of employment) from the date of Executive’s termination of employment
until the third anniversary of such date, calculated on the assumption that the cost
of such coverage would remain unchanged from that in effect for the year of
Executive’s termination of employment. Such lump sum amount shall be calculated by
an actuary selected by the Bank and paid in cash at the time specified in Section
7(g). Such amount shall not be subject to reduction or forfeiture by reason of any
coverage for which Executive may thereafter become eligible by reason of subsequent
employment or otherwise. In addition, 

13

 

	 	 	 	provided that Executive shall be in
compliance with the conditions set forth in Section 10, the Bank shall pay to
Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s
group long-term disability policy from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred; and (B)
the amount that Executive and the Bank would have paid to continue Executive’s group
life insurance coverage, had he remained employed, from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination of
employment, calculated on the assumption that the cost of such coverage would remain
unchanged from that in effect for the year in which Executive’s termination
occurred. For purposes of this Section, present value shall be calculated on the
basis of the discount rate set forth in the Bank’s qualified retirement plan for the
determination of lump sum payments.

If any payment or benefit under this Section 7(d) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(d).

     (e) Termination by the Bank Without Cause Within Two Years After a Change in Control.
The Bank may terminate the employment of Executive hereunder without Cause, simultaneously with or
within two years after a Change in Control, upon at least 90 days’ written notice to Executive.
The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate
Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the
Bank under Section 3 at a date earlier than the expiration of such 90-day notice period, if so
specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the
expiration of such notice period), the Term will terminate, all remaining obligations of the Bank
and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination
of employment as expressly provided herein), and the Bank will pay Executive at the time
specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of 

14

 

	 	 	 	termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(e)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any such options granted on or after the Effective Date shall remain outstanding
and exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to

15

 

Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (f) Termination by Executive for Good Reason Within Two Years After a Change in
Control. Executive may terminate his employment hereunder for Good Reason, simultaneously with
or within two years after a Change in Control, upon 90 days’ written notice to the Bank; provided,
however, that, if the Bank has corrected the basis for such Good Reason within 30 days after
receipt of such notice, Executive may not terminate his employment for Good Reason, and therefore
Executive’s notice of termination will automatically become null and void. At the time Executive’s
employment is terminated by Executive for Good Reason (i.e., at the expiration of such notice
period), the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease (except for obligations which continue after
termination of employment as expressly provided herein), and the Bank will pay Executive at the
time specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that

16

 

	 	 	 	became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(f)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any such options granted on or after the Effective Date shall remain outstanding
and exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock and
deferred stock awards, including outstanding stock plan awards, and other long-term
incentive awards (to the extent then or previously earned, in the case of
performance-based awards) shall become fully vested and non-forfeitable at the date
of such termination, and, in other respects, such awards shall be governed by the
plans and programs and the agreements and other documents pursuant to which such
awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination

17

 

	 	 	 	of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

If any payment or benefit under this Section 7(f) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(f).

     (g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section
409A Exemptions; Delayed Payments Under Section 409A.

	 	(i)	 	Whether a termination is deemed to be at or
within two years after a Change in Control for purposes of Sections
7(c), (d), (e), or (f) is determined at the date of termination,
regardless of whether the Change in Control had occurred at the time a
notice of termination was given. In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f),
Executive will be entitled to the benefit of any terms of plans or
agreements applicable to Executive which are more favorable than those
specified in this Section 7 (except in the case of annual incentives
in lieu of which amounts are paid hereunder).
	 
	 	(ii)	 	Amounts payable under this Section 7
following Executive’s termination of employment, other than those
expressly payable

18

 

	 	 	 	on a deferred basis, will be paid in the payroll
period next following the payroll period in which termination of
employment occurs except as otherwise provided in this Section 7.
	 
	 	(iii)	 	Any reimbursements made or in-kind benefits
provided under this Agreement shall be subject to the following
conditions:

     (A) the amount of expenses eligible for reimbursement or
in-kind benefits provided in any one taxable year of Executive
shall not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided in any other taxable year of
Executive;

     (B) the reimbursement of any expense shall be made each
calendar quarter not later than the last day of Executive’s taxable
year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for
reimbursement by an earlier date);

     (C) the right to reimbursement of an expense or payment of an
in-kind benefit shall not be subject to liquidation or exchange for
another benefit.

	 	 	 	In addition, with respect to any reimbursement made under Section
6(b)(v) for expenses for medical coverage purchased by Executive’s
spouse, any such reimbursement made during the period of time
Executive’s spouse or dependents would be entitled to continuation
coverage under the Bank’s Health Plan pursuant to COBRA if
Executive’s spouse or dependents had elected such coverage and
paid the applicable premiums shall be exempt from Section 409A of
the Code and the six-month delay in payment described hereinbelow
pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations.
	 
	 	(iv)	 	Executive’s right to reimbursements under
this Agreement shall be treated as a right to a series of separate
payments under Section 1.409A-2(b)(2)(iii) of the Regulations.
	 
	 	(v)	 	Any tax gross-up payments made under this
Agreement, within the meaning provided by Section 1.409A-3(i)(1)(v) of
the Regulations, shall be made by the end of Executive’s taxable year
next following Executive’s taxable year in which he remits the related
taxes (unless this Agreement specifically provides for payment by an
earlier date).
	 
	 	(vi)	 	It is intended that payments made under this
Agreement due to Executive’s termination of employment which are paid
on or before the 15th day of the third month following the end of

19

 

	 	 	 	Executive’s taxable year in which his termination of employment occurs
shall be exempt from compliance with Section 409A of the Code pursuant
to the exemption for short-term deferrals set forth in Section
1.409A-1(b)(4) of the Regulations (the “Exempt Short-Term Deferral
Payments”); and that payments under this Agreement, other than Exempt
Short-Term Deferral Payments, that are made on or before the last day
of the second taxable year following the taxable year in which
Executive terminates employment in an aggregate amount not exceeding
two times the lesser of: (A) the sum of Executive’s annualized
compensation based on his annual rate of pay for the taxable year
preceding the taxable year in which he terminates employment (adjusted
for any increase during that year that was expected to continue
indefinitely if he had not terminated employment); or (B) the maximum
amount that may be taken into account under a qualified plan pursuant
to Section 401(a)(17) of the Code for the year in which Executive
terminates employment shall be exempt from compliance with Section
409A of the Code pursuant to the exception for payments under a
separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the
Treasury Regulations.
	 
	 	(vii)	 	Anything in this Agreement to the contrary
notwithstanding, payments to be made under this Agreement upon
termination of Executive’s employment which are subject to Section
409A of the Code shall be delayed for six months following such
termination of employment if Executive is a Specified Employee as
defined in Section 8(g) on the date of his termination of employment.
Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period. The Bank will adjust the
payment or reimbursement to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the
six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment or reimbursement
would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365. In the
event of a reimbursement that is required by other terms of this
Agreement to be made on an after-tax basis and which is subject to the
six-month delay provided herein, the reimbursement as adjusted in
accordance with this Section 7(g) to reflect the deferred payment date
shall be paid to Executive on an after-tax and fully grossed-up basis
so that Executive is held economically harmless. The Bank will pay the
adjusted payment or reimbursement at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding
the foregoing, if calculation of the amounts

20

 

	 	 	 	payable by any payment date specified in this Section 7(g) is not
administratively practicable due to events beyond the control of
Executive (or Executive’s beneficiary or estate) and for reasons that
are commercially reasonable, payment will be made as soon as
administratively practicable in compliance with Section 409A of the
Code and the Regulations thereunder. In the event of Executive’s
death during such six-month period, payment will be made in the
payroll period next following the payroll period in which Executive’s
death occurs.

8. Definitions Relating to Termination Events.

      (a) “Cause.” For purposes of this Agreement, “Cause” shall mean:

	 	(i)	 	Executive’s willful and continued failure to substantially perform his duties
hereunder (other than any such failure resulting from incapacity due to physical or
mental illness or Disability or any failure after the issuance of a notice of
termination by Executive for Good Reason) which failure is demonstrably and materially
damaging to the financial condition or reputation of the Company, the Bank and/or their
affiliates, and which failure continues more than 48 hours after a written demand for
substantial performance is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes that Executive has not
substantially performed his duties hereunder and the demonstrable and material damage
caused thereby; or
	 
	 	(ii)	 	the willful engaging by Executive in conduct which is demonstrably and
materially injurious to the Company, the Bank or their affiliates, monetarily or
otherwise.

No act, or failure to act, on the part of Executive shall be deemed “willful” unless done, or
omitted to be done, by Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of the Bank and the Company. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive a copy of the resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board
(after reasonable notice to Executive and an opportunity for Executive, together with Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct set forth above in this definition and specifying the particulars
thereof in detail.

     (b) “Change in Control.” For purposes of this Agreement, a “Change in Control” shall
be deemed to have occurred if, during the term of this Agreement:

	 	(i)	 	the Company, or the mutual holding company parent of the
Company, whether it remains a mutual holding company or converts to the stock
form of organization (the “Mutual Holding Company”), merges into or
consolidates with another corporation, or merges another corporation into the
Company or the Mutual Holding Company, and as a result, with

21

 

	 	 	 	respect to the Company, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by “Persons”
as such term is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) who were stockholders of
the Company immediately before the merger or consolidation or, with respect to
the Mutual Holding Company, less than a majority of the directors of the
resulting corporation immediately after the merger or consolidation were
directors of the Mutual Holding Company immediately before the merger or
consolidation;
	 
	 	(ii)	 	following a conversion of the Mutual Holding Company to the
stock form of organization, any Person (other than any trustee or other
fiduciary holding securities under an employee benefit plan of the Bank or the
Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the resulting
corporation representing 25% or more of the combined voting power of the
resulting corporation’s then-outstanding securities;
	 
	 	(iii)	 	during any period of twenty-four months (not including any
period prior to the Effective Date of this Agreement), individuals who at the
beginning of such period constitute the board of directors of the Company, and
any new director (other than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect a transaction described
in Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any
Person (including the Company) who publicly announces an intention to take or
to consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company’s securities) whose election by the
board of directors of the Company or nomination for election by the Company’s
stockholders was approved in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
	 
	 	(iv)	 	the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; or
	 
	 	(v)	 	the board of directors of the Company adopts a resolution to
the effect that, for purposes of this Agreement, a Change in Control has
occurred.

     (c) “Compensation Accrued at Termination.” For purposes of this Agreement,
“Compensation Accrued at Termination” means the following:

22

 

	 	(i)	 	The unpaid portion of annual base salary at the rate payable, in accordance
with Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in a lump sum at the time specified in
Section 6(d) or 7(g) as the case may be;
	 
	 	(ii)	 	All vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans, programs, and
arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof
(including any earned and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in accordance with the
terms and conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were granted or
accrued; and
	 
	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as authorized
under Section 5(f), in accordance the Company’s reimbursement policies as in effect at
the date of such termination, and payable in a lump sum in accordance with Section
7(g).

     (d) “Disability.” For purposes of this Agreement, “Disability” shall have the meaning
ascribed to it by Section 409A of the Code and the Regulations.

     (e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean, without
Executive’s express written consent, the occurrence of any of the following circumstances provided
that Executive shall have given notice of such circumstance(s) to the Bank within a period not to
exceed 90 days of the initial existence of such circumstance(s) and the Bank shall not have
remedied such circumstance(s) within 30 days after receipt of such notice:

	 	(i)	 	the assignment to Executive of duties materially inconsistent with Executive’s
position and status as Senior Vice President, or an alteration, materially adverse to
Executive, in Executive’s position and status as Senior Vice President or in the nature
of Executive’s duties, responsibilities, and authorities or conditions of Executive’s
employment from those relating to Executive position and status as Senior Vice
President (excluding changes in assignments permitted under Section 3); except the
foregoing shall not constitute Good Reason if occurring in connection with the
termination of Executive’s employment for Cause, Disability, Retirement, as a result of
Executive’s death, or as a result of action by or with the consent of Executive;
	 
	 	(ii)	 	(A) a material reduction by the Bank in Executive’s Base Salary, (B) the
setting of Executive’s annual target incentive opportunity or payment of earned annual
incentive not in material conformity with Section 4 hereof, (C) a change in
compensation or benefits not in material conformity with Section 5, or (D) a material
reduction, after a Change in Control, in perquisites from the level of such perquisites
as in effect immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control, except

23

 

	 	 	 	for across-the-board
perquisite reductions similarly affecting all senior executives of the Bank and all
senior executives of any Person in control of the Company;
	 
	 	(iii)	 	the relocation of the principal place of Executive’s employment to a site that
is outside of a fifty mile radius of his principal place of employment prior to such
relocation; for this purpose, required travel on the Bank’s business will not
constitute a relocation so long as the extent of such travel is substantially
consistent with Executive’s customary business travel obligations in periods prior to
the Effective Date;
	 
	 	(iv)	 	the failure by the Bank to pay to Executive any material portion of Executive’s
compensation or to pay to Executive any material portion of an installment of deferred
compensation under any deferred compensation program of the Bank within a reasonable
time after the date such compensation is due;
	 
	 	(v)	 	the failure by the Bank to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Bank to continue
Executive’s participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amounts of compensation or
benefits provided and the level of Executive’s participation relative to other
participants, as existed at the time of the Change in Control;
	 
	 	(vi)	 	the failure of the Bank to obtain a satisfactory agreement from any successor
to the Bank, the Company or the Mutual Holding Company to fully assume the Bank’s and
the Company’s obligations and to perform under this Agreement, as contemplated in
Section 12(b) hereof, in a form reasonably acceptable to Executive; or
	 
	 	(vii)	 	any other failure by the Bank or the Company to perform any material
obligation under, or breach by the Bank or the Company of any material provision of,
this Agreement;

provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not constitute “Good
Reason.”

     (f) “Potential Change in Control.” For purposes of this Agreement, a “Potential
Change in Control” shall be deemed to have occurred if, during the term of this Agreement:

	 	(i)	 	the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control;
	 
	 	(ii)	 	any Person (including the Company) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change in Control;
or

24

 

	 	(iii)	 	the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

     (g) “Specified Employee” For purposes of this Agreement, a “Specified Employee”
shall mean an employee of the Bank, at a time when any stock of the Company is publicly traded on
an established securities market or otherwise, who satisfies the requirements for being designated
a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section
416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be
considered a Specified Employee for the twelve-month period beginning on the first day of the
fourth month immediately following the end of such calendar year. In the event of any corporate
spinoff or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any
calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions.

     (a) Rabbi Trust Funded Upon Potential Change in Control. In the event of a Potential
Change in Control or Change in Control, the Bank or the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit therein cash in an amount
determined by the actuary for the Bank’s qualified Retirement Plan on the basis of the interest
rate and mortality assumptions set forth in said qualified Retirement Plan, which is sufficient to
provide for full payment of all potential obligations of the Bank and the Company that would arise
assuming consummation of a Change in Control, or has arisen in the case of an actual Change in
Control, and a subsequent termination of Executive’s employment under Section 7(e) or (f). Such
rabbi trust(s) shall be irrevocable and shall provide that neither the Bank nor the Company may,
directly or indirectly, use or recover any assets of the trust(s) until such time as all
obligations which potentially could arise hereunder have been settled and paid in full, subject
only to the claims of creditors of the Bank and the Company in the event of insolvency or
bankruptcy of the Bank or the Company; provided, however, that if no Change in Control has occurred
within two years after such Potential Change in Control, such rabbi trust(s) shall at the end of
such two-year period become revocable and may thereafter be revoked by the Bank.

     (b) Gross-up If Excise Tax Would Apply. In the event Executive becomes entitled to
any amounts or benefits payable in connection with a Change in Control or other change in ownership
or control (whether or not such amounts are payable pursuant to this Agreement) (the “Change in
Control Payments”), if any of such Change in Control Payments are subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (or any similar federal, state or local tax that may
hereafter be imposed), the Bank shall pay to Executive at the time specified in Section 9(b)(iii)
hereof an additional amount (the “Gross-Up Payment”) such that the net amount retained by
Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any
federal, state and local income tax and Excise Tax upon the payments provided for by Section 9(b),
shall be equal to the Total Payments.

	 		 	(i) For purposes of determining whether any of the Change in Control Payments will
be subject to the Excise Tax and the amount of such Excise Tax:

25

 

	 		 	(A) any payments or benefits received or to be received by Executive in
connection with a Change in Control or other change in ownership or control
or Executive’s termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Bank,
any Person whose actions result in a Change in Control or any Person
affiliated with the Bank or such Person) (which, together with the Change in
Control Payments, constitute the “Total Payments”) shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of Section 280G(b)(1)
of the Code shall be treated as subject to the Excise Tax, unless in the
opinion of nationally-recognized tax counsel selected by Executive such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;
	 
	 		 	(B) the amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (x) the total amount of the
Total Payments and (y) the amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying Section 9(b)(i)(A)
hereof); and
	 
	 		 	(C) the value of any non-cash benefits or any
deferred payments or benefit shall be determined by a
nationally-recognized accounting firm selected by Executive in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.

	 		 	(ii) For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate
of federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of taxation in
the state and locality of Executive’s residence in the calendar year in which the
Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes
which could actually be obtained from deduction of such state and local taxes by
Executive. In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account and paid to Executive hereunder, Executive shall
file for a refund of such excess Excise Tax. Executive shall repay to the Bank the
excess Excise Tax amount actually refunded to Executive by the Internal Revenue
Service within ten business days after the later of (A) the date that the Internal
Revenue Service makes a final determination (within the meaning of Section 1313 of
the Code) that an overpayment of such Excise Tax was made (and including a final
determination of the amount thereof) and (B) the actual receipt of the refund check
from the Internal Revenue Service for the amount of such overpayment of Excise Tax
by Executive; provided, however, if no refund shall be due to Executive because such
overpayment of the

26

 

Excise Tax has been applied to satisfy Executive’s other tax
liabilities, Executive shall notify the Bank of such application of the overpayment
to Executive’s other tax liabilities and shall pay to the Bank within ten business
days after such application of the overpayment to Executive’s other tax liabilities
the amount of the Excise Tax that would otherwise have been refunded. In the event
that the Excise Tax is determined to exceed the amount taken into account and paid hereunder,
the Bank shall make an additional Gross-Up Payment in respect of such excess within
ten business days after the time that the amount of such excess is determined but in
no event later than 30 days after the Change in Control. In no event shall any
Gross-Up Payment be made under this Section 9(b) later than the last day of
Executive’s taxable year next following Executive’s taxable year in which Executive
remits the Excise Tax. Anything in this Section 9(b) to the contrary
notwithstanding, any Gross-Up Payment to be made hereunder shall be subject to such
delay in payment as may apply under Section 7(g) of this Agreement (including but
not limited to Section 7(g)(vi)) in the event that such payment is made in
connection with Executive’s termination of employment and is subject to Section 409A
of the Code.

(iii) The Gross-Up Payment provided for in this Section 9(b) shall be made at
the same time as any payments giving rise to an Excise Tax are made; provided,
however, that if the amount of such Gross-Up Payment cannot be finally
determined at the same time as the payments giving rise to an Excise Tax are made,
the Bank shall pay to Executive at the time the payments giving rise to an Excise
Tax are made an estimate, as determined in good faith by the Bank pursuant to
Section 9(b)(iv) hereof, of the amount of such Gross-Up Payment and shall pay the
remainder of such Gross-Up Payment at the time provided in Section 9(b)(ii) above.
Executive’s right to payments under this Section 9(b) shall be treated as a right to
a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations.

(iv) All determinations under this Section 9(b) shall be made by the Bank at
its expense using a nationally recognized public accounting firm selected by
Executive, and such determination shall be binding upon Executive and the Bank.

10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain
Forfeitures.

     (a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, including without limitation, the compensation and benefits provided under
Sections 7(e) and (f), without the consent in writing of the Board, Executive will not, at any time
during the Term and for a period of two years following termination of Executive’s employment for
any reason, acting alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) in
any business of any savings bank, savings and loan association, savings and loan holding company,
bank, bank holding company, or other institution engaged in the business of accepting deposits or
making loans, or any direct or indirect subsidiary or affiliate of any such entity, that conducts
business in any county in which the Company or the Bank maintains an

27

 

office as of Executive’s date of termination or had plans to open an office within six months after Executive’s date of
termination; (ii) induce any customers of the Bank or any of its affiliates with whom Executive has
had contacts or relationships, directly or indirectly, during and within the scope of his
employment with the Bank, to curtail or cancel their business with the Bank or any such affiliate; (iii) induce,
or attempt to influence, any employee of the Bank or any of its affiliates to terminate employment;
or (iv) solicit, hire or retain as an employee or independent contractor, or assist any third party
in the solicitation, hire, or retention as an employee or independent contractor, any person who
during the previous twelve months was an employee of the Bank or any affiliate; provided, however,
that the limitation contained in clause (i) above shall not apply if Executive’s employment is
terminated as a result of a termination by the Company without Cause within two years following a
Change in Control or is terminated by Executive for Good Reason within two years following a Change
in Control or is terminated by Executive other than for Good Reason as provided in Section 7(b)
and, provided further, that activities engaged in by or on behalf of the Bank are not restricted by
this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) above are separate and
distinct commitments independent of each of the other subparagraphs. It is agreed that the
ownership of not more than one percent of the equity securities of any company having securities
listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be
deemed inconsistent with clause (i) of this Section 10(a).

     (b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during the
Term and thereafter (including following Executive’s termination of employment for any reason),
disclose, use, transfer, or sell, except in the course of employment with or other service to the
Bank or the Company, any proprietary information, secrets, organizational or employee information,
or other confidential information belonging or relating to the Bank or the Company and its
affiliates and customers so long as such information has not otherwise been disclosed or is not
otherwise in the public domain, except as required by law or pursuant to legal process. In
addition, upon termination of employment for any reason, Executive will return to the Company or
its affiliates all documents and other media containing information belonging or relating to the
Bank and the Company or its affiliates.

     (c) Cooperation With Regard to Litigation. Executive agrees to cooperate with the
Bank and the Company, during the Term and thereafter (including following Executive’s termination
of employment for any reason), by making himself available to testify on behalf of the Bank or the
Company or any subsidiary or affiliate of the Bank or the Company, in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank and
the Company, or any subsidiary or affiliate of the Company, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Bank or the Company, or any
subsidiary or affiliate of the Company, as requested. The Bank agrees to reimburse Executive, on
an after tax basis each calendar quarter, for all expenses actually incurred in connection with his
provision of testimony or assistance in accordance with the provisions of Section 7(g) of this
Agreement but not later than the last day of the year in which the expense was incurred.

     (d) Non-Disparagement. Executive shall not, at any time during the Term and
thereafter, make statements or representations, or otherwise communicate, directly or indirectly,
in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage

28

 

the Bank or the Company or any of its subsidiaries or affiliates or their respective officers,
directors, employees, advisors, businesses or reputations. Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from making
truthful statements that are required by applicable law, regulation or legal process.

     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination), that he will execute a general release agreement, in substantially the
form set forth in Attachment A to this Agreement, releasing any and all claims arising out of
Executive’s employment other than enforcement of this Agreement and rights to indemnification under
any agreement, law, Bank or Company organizational document or policy, or otherwise. The Bank will
provide Executive with a copy of such release simultaneously with or as soon as administratively
practicable following the delivery of the notice of termination provided in Sections 6 and 7 of
this Agreement, but not later than 21 days before (45 days before if Executive’s termination is
part of an exit incentive or other employment termination program offered to a group or class of
employees) Executive’s termination of employment. Executive shall deliver the executed release to
the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment of
the termination payments and benefits payable under Sections 6 and 7 of this Agreement.

     (f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially comply with any
restrictive covenant under this Section 10 or willfully and materially fails to substantially
comply with any material obligation under this Agreement, all options to purchase common stock
granted by the Company and then held by Executive or a transferee of Executive shall be immediately
forfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive
shall not forfeit any option unless and until there shall have been delivered to him, within six
months after the Board (i) had knowledge of conduct or an event allegedly constituting grounds for
such forfeiture and (ii) had reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote of the membership of
the Board (excluding Executive) at a meeting of the Board called and held for such purpose (after
giving Executive reasonable notice specifying the nature of the grounds for such forfeiture and not
less than 30 days to correct the acts or omissions complained of, if correctable, and affording
Executive the opportunity, together with his counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, Executive has engaged and continues to engage in conduct
set forth in this Section 10(f) which constitutes grounds for forfeiture of Executive’s options;
provided, however, that if any option is exercised after delivery of such notice and the Board
subsequently makes the determination described in this sentence, Executive shall be required to pay
to the Company an amount equal to the difference between the aggregate value of the shares acquired
upon such exercise at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any term or provision
of any option agreement. In addition, options granted to Executive on or after the Effective Date,
and gains resulting from the exercise of such options, shall be subject to forfeiture in accordance
with the Company’s standard policies relating to such forfeitures and clawbacks, as such policies
are in effect at the time of grant of such options.

29

 

     (g) Forfeiture of Certain Bonuses and Profits. If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws, and if Executive,
knowingly or through gross negligence, caused or failed to prevent such misconduct, Executive shall
reimburse the Bank for (i) any bonus or other incentive based or equity-based compensation received
by Executive during the 12-month period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of the financial document embodying
such financial reporting requirement; and (ii) any profits realized from the sale of securities of
the Company during that 12-month period.

     (h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the SERP
to the contrary notwithstanding, (i) any payments made pursuant to this Agreement or the SERP shall
be subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any regulations
promulgated thereunder; and (ii) payments contemplated to be made by the Bank pursuant to this
Agreement or the SERP shall not be immediately payable to the extent such payments are barred or
prohibited by an action or order issued by the Connecticut Banking Commissioner or the Federal
Deposit Insurance Corporation.

     (i) Survival. The provisions of this Section 10 shall survive the termination of the
Term and any termination or expiration of this Agreement.

11. Governing Law; Disputes.

     (a) Governing Law. This Agreement and the rights and obligations of the Company, the
Bank and Executive are governed by and are to be construed, administered, and enforced in
accordance with the laws of the State of Connecticut, without regard to conflicts of law
principles. If under the governing law, any portion of this Agreement is at any time deemed to be
in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary to conform thereto
or, if that is not possible, to be omitted therefrom. The invalidity of any such portion shall not
affect the force, effect, and validity of the remaining portion thereof. If any court determines
that any provision of Section 10 of this Agreement is unenforceable because of the duration or
geographic scope of such provision, it is the parties’ intent that such court shall have the power
to modify the duration or geographic scope of such provision, as the case may be, to the extent
necessary to render the provision enforceable and, in its modified form, such provision shall be
enforced. Anything in this Agreement to the contrary notwithstanding, the terms of this Agreement
shall be interpreted and applied in a manner consistent with the requirements of Section 409A of
the Code and the Regulations so as not to subject Executive to the payment of any tax penalty or
interest which may be imposed by Section 409A of the Code and the Bank shall have no right to
accelerate or make any payment under this Agreement except to the extent such action would not
subject Executive to the payment of any tax penalty or interest under Section 409A of the Code. If
all or a portion of the benefits and payments provided under this Agreement constitute taxable
income to Executive for any taxable year that is prior to the taxable year in which such payments
and/or benefits are to be paid to Executive as a result of the Agreement’s failure to comply with
the requirements of Section 409A of the Code and the Regulations, the applicable payment or benefit shall be paid
immediately to Executive to the extent such payment or benefit is required to be included in
income. If Executive becomes

30

 

subject to any tax penalty or interest under Section 409A of the Code by reason of this Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax
basis for any such tax penalty or interest (so that Executive is held economically harmless) ten
business days prior to the date such tax penalty or interest is due and payable by Executive to the
government.

     (b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, the
Bank shall promptly pay or reimburse all reasonable costs and expenses (including fees and
disbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spouse
in seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in any
proceeding in connection therewith brought by Executive or Executive’s surviving spouse, whether or
not Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights or
in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses
relating to any unsuccessful assertion of rights or proceeding if and to the extent that such
assertion or proceeding was initiated or maintained in bad faith or was frivolous, as determined
in accordance with Section 11(c) or a court having jurisdiction over the matter. Any such payment
or reimbursement shall be made on an after-tax basis each calendar quarter for all costs and
expenses actually incurred as provided in this Section 11(b) and in accordance with the provisions
of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense
was incurred.

     (c) Dispute Resolution.

(i) Negotiation. The Bank and the Company (collectively, the
“Employer”) and Executive shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiation between the Chief Executive Officer of the Bank and Executive.
Any party may give the other party written notice of any dispute in
accordance with the notice procedures set forth in Section 12(d). Within
15 days after delivery of the notice, the receiving party shall submit to
the other, in accordance with the notice procedures set forth in Section
12(d), a written response. The notice and response shall include a
statement of that party’s position and summary of arguments supporting that
position. Within 30 days after delivery of the initial notice, the parties
shall meet at a mutually acceptable time and place, and thereafter as often
as they reasonably deem necessary, to attempt to resolve the dispute. All
negotiations pursuant to this clause (i) are confidential and shall be
treated as compromise and settlement negotiations for purposes of
applicable rules of evidence.

(ii) Mediation. If the dispute has not been resolved by
negotiation as provided herein within 45 days after delivery of the initial
notice of negotiation, or if the parties failed to meet within 30 days
after delivery, the parties shall endeavor to settle the dispute by
mediation under the CPR Mediation Procedure then currently in effect; provided, however, that
if one party fails to participate in the negotiation as provided herein,
the other party can initiate mediation prior to the expiration of

31

 

the 45 days. Unless otherwise agreed, the parties will select a
mediator from the CPR Panels of Distinguished Neutrals.

(iii) Arbitration. Any dispute arising under or in connection
with this Agreement which has not been resolved by mediation as provided
herein within 45 days after initiation of the mediation procedure, shall
be finally resolved by arbitration in accordance with the CPR Rules for
Non-Administered Arbitration then currently in effect, by three
independent and impartial arbitrators, of whom each party shall
designate one; provided, however, that if one party fails to participate
in either the negotiation or mediation as agreed herein, the other party
can commence arbitration prior to the expiration of the time periods set
forth above. The arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered
by the arbitrators may be entered by any court having jurisdiction
thereof. The place of arbitration shall be Hartford, Connecticut. For
purposes of entering any judgment upon an award rendered by the
arbitrators, the Company, the Bank and Executive hereby consent to the
jurisdiction of any or all of the following courts: (i) the United
States District Court for the District of Connecticut, (ii) any of the
courts of the State of Connecticut, or (iii) any other court having
jurisdiction. The Company, the Bank and Executive hereby agree that a
judgment upon an award rendered by the arbitrators may be enforced in
other jurisdictions by suit on the judgment or in any other manner
provided by law. Subject to Section 11(b) of this Agreement, the Bank
shall bear all costs and expenses arising in connection with any
arbitration proceeding pursuant to this Section 11(c) in accordance with
the provisions of Section 7(g) of this Agreement, but not later than the
last day of the year in which the expense was incurred. Notwithstanding
any provision in this Section 11(c), Executive shall be entitled to seek
specific performance of Executive’s right to be paid during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.

     (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to
this Section 11 but which has not been timely paid shall bear interest at the prime rate in effect
at the time such amount first becomes payable, as quoted by the Bank, except as otherwise provided
in Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with respect to
certain delayed payments that are subject to Section 409A of the Code).

12. Miscellaneous.

     (a) Integration. This Agreement cancels and supersedes any and all prior employment
agreements and understandings between the parties hereto with respect to the employment of
Executive by the Bank, any parent or predecessor company, and the Company’s subsidiaries during the
Term, except for contracts relating to compensation under executive compensation and employee
benefit plans of the Bank. This Agreement constitutes the entire

32

 

agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any provision hereof shall
be effective unless in writing and signed by the parties hereto. Executive shall not be entitled
to any payment or benefit under this Agreement which duplicates a payment or benefit received or
receivable by Executive under any prior agreements and understandings or under any benefit or
compensation plan of the Bank which are in effect.

     (b) Successors; Transferability. The Bank and the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank or the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Bank and the
Company would be required to perform it if no such succession had taken place.

     As used in this Agreement, “Bank “and “Company” shall mean the Bank and the Company
respectively as hereinbefore defined and any successor to its or their business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise and,
in the case of an acquisition of the Bank or the Company in which the corporate existence of the
Bank or the Company, as the case may be, continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Bank and the Company may transfer and assign this
Agreement and the Bank’s and the Company’s rights and obligations hereunder. Neither this
Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and distribution or as
specified in Section 12(c).

     (c) Beneficiaries. Executive shall be entitled to designate (and change, to the
extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation
or benefits provided hereunder following Executive’s death.

     (d) Notices. Whenever under this Agreement it becomes necessary to give notice, such
notice shall be in writing, signed by the party or parties giving or making the same, and shall be
served on the person or persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or registered mail, return
receipt requested, postage prepaid and addressed to such party at the address set forth below or at
such other address as may be designated by such party by like notice:

33

 

If to the Bank or the Company:

ROCKVILLE BANK 

1645 Ellington Road 

South Windsor, CT 06074 

Att: Chief Executive Officer

If to Executive:

John T. Lund

9 Hemlock Trail 

Ellington, CT 06029

     If the parties by mutual agreement supply each other with telecopier numbers for the purposes
of providing notice by facsimile, such notice shall also be proper notice under this Agreement. In
the case of Federal Express or other similar overnight service, such notice or advice shall be
effective when sent, and, in the cases of certified or registered mail, shall be effective two days
after deposit into the mails by delivery to the U.S. Post Office.

     (e) Reformation. The invalidity of any portion of this Agreement shall not be deemed
to render the remainder of this Agreement invalid.

     (f) Headings. The headings of this Agreement are for convenience of reference only
and do not constitute a part hereof.

     (g) No General Waivers. The failure of any party at any time to require performance
by any other party of any provision hereof or to resort to any remedy provided herein or at law or
in equity shall in no way affect the right of such party to require such performance or to resort
to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such
waiver shall be effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.

     (h) No Obligation To Mitigate. Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of employment, and any
compensation or benefits received from any other employment of Executive shall not mitigate or
reduce the obligations of the Bank and the Company or the rights of Executive hereunder.

     (i) Offsets; Withholding. The amounts required to be paid by the Bank to Executive pursuant to
this Agreement shall not be subject to offset other than with respect to any amounts that are owed
to the Bank by Executive due to his receipt of funds as a result of his fraudulent activity. The
foregoing and other provisions of this Agreement notwithstanding, all payments to be made to
Executive under this Agreement, including under Sections 6 and 7, or otherwise by

34

 

the Bank, will be subject to withholding to satisfy required withholding taxes and other
required deductions.

     (j) Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be
binding upon and inure to the benefit of the Bank and the Company and their successors and assigns.

     (k) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and the same instrument.

13. Indemnification.

     All rights to indemnification by the Bank or the Company now existing in favor of Executive as
provided in the Bank’s and the Company’s Certificate of Incorporation or By-laws or pursuant to
other agreements in effect on or immediately prior to the Effective Date shall continue in full
force and effect from the Effective Date (including all periods after the expiration of the Term),
and the Bank and the Company shall also advance expenses for which indemnification may be
ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable
law and in accordance with Section 7(g); provided, however, that any determination required to be
made with respect to whether Executive’s conduct complies with the standards required to be met as
a condition of indemnification or advancement of expenses under applicable law and the Bank’s or
the Company’s Certificate of Incorporation, By-laws, or other agreement shall be made by
independent counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). After the date hereof, the Bank and the Company shall not amend its
Certificate of Incorporation or By-laws or any agreement in any manner which adversely affects the
rights of Executive to indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of Executive to indemnification pursuant to
applicable law. In addition, the Company will maintain directors’ and officers’ liability
insurance in effect and covering acts and omissions of Executive during the Term and for a period
of six years thereafter on terms substantially no less favorable than those in effect on the date
of execution of this Agreement.

[Signature Page Follows]

35

 

     IN WITNESS WHEREOF, Executive has hereunto set his hand and the Bank and the Company have each
caused this instrument to be duly executed this                 day of                            , 2009.

	 	 	 	 	 
	 	ROCKVILLE BANK

 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ROCKVILLE FINANCIAL, INC.

 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	  	
 	 
	 	 	John T. Lund 	 

36

 

ATTACHMENT A

RELEASE

     We advise you to consult an attorney before you sign this Release. You have until the date
which is seven (7) days after the Release is signed and returned to Rockville Bank to change your
mind and revoke your Release. Your Release shall not become effective or enforceable until after
that date.

In consideration for the benefits provided under your Employment Agreement with Rockville Bank
effective as of January 1, 2010 (the “Employment Agreement”), and more specifically enumerated in
Exhibit 1 hereto, by your signature below, you, for yourself and on behalf of your heirs,
executors, agents, representatives, successors and assigns, hereby release and forever discharge
the Rockville Financial, Inc., its past and present parent corporations, subsidiaries, divisions,
subdivisions, affiliates and related companies (collectively, the “Company”) and the Company’s
past, present and future agents, directors, officers, employees, representatives, successors and
assigns (hereinafter “those associated with the Company”) with respect to any and all claims,
demands, actions and liabilities, whether in law or equity, which you may have against the Company
or those associated with the Company of whatever kind, including but not limited to those arising
out of your employment with the Company or the termination of that employment. You agree that this
release covers, but is not limited to, claims arising under the Age Discrimination in Employment
Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et
seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair Employment
Practices Act, C.G.S. § 46a-51 et seq., and any other local, state or federal law,
regulation or order dealing with discrimination in employment on the basis of sex, race, color,
national origin, veteran status, marital status, religion, disability, handicap, or age. You also
agree that this release includes claims based on wrongful termination of employment, breach of
contract (express or implied), tort, or claims otherwise related to your employment or termination
of employment with the Company and any claim for attorneys’ fees, expenses or costs of litigation.

This Release covers all claims based on any facts or events, whether known or unknown by you, that
occurred on or before the date of this Release. Except to enforce this Release, you agree that you
will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of
any kind against the Company or those associated with the Company in any forum and agree to
withdraw with prejudice all complaints or charges, if any, that you have filed against the Company
or those associated with the Company.

Anything in this Release to the contrary notwithstanding, this Release does not include a release
of: (i) your rights under the Employment Agreement or your right to enforce the Employment
Agreement; (ii) any rights you may have to indemnification under any agreement, law, Company
organizational document or policy, or otherwise; (iii) any rights you may have to benefits under
the Company’s benefit plans; or (iii) your right to enforce this Release.

 

 

By signing this Release, you further agree as follows:

     i. You have read this Release carefully and fully understand its terms;

     ii. You have had at least twenty-one (21) days to consider the terms of the Release;

     iii. You have seven (7) days from the date you sign this Release to revoke it by written
notification to the Company. After this seven (7) day period, this Release is final and binding
and may not be revoked;

     iv. You have been advised to seek legal counsel and have had an opportunity to do so;

     v. You would not otherwise be entitled to the benefits provided under your Employment
Agreement had you not agreed to execute this Release; and

     vi. Your agreement to the terms set forth above is voluntary.

	 	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 
	Signature:

	 	 	 	     Date:	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	Received By:

	 	 	 	    Date:	 	 
	 

	 	 
	 	 	 	 

2exv10w1

Exhibit 10.1

LOAN AND SECURITY AGREEMENT

          THIS LOAN AND SECURITY AGREEMENT (this “Agreement”), dated as of December 31, 2009 (the
“Effective Date”) by and among (a) SILICON VALLEY BANK, a California corporation, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462, as administrative agent and collateral agent (collectively, in such
capacities, “Agent”) and as Issuing Lender (as defined herein), (b) the several banks and other
financial institutions or entities from time to time parties to this Agreement (“Lenders”), and (c)
TELECOMMUNICATION SYSTEMS, INC., a Maryland corporation (“TCS”), LONGHORN ACQUISITION, LLC, a
Maryland limited liability company (“Longhorn”), SOLVERN INNOVATIONS, INC., a Maryland corporation
(“Solvern”), QUASAR ACQUISITION, LLC, a Maryland limited liability company (“Quasar”), and NETWORKS
IN MOTION, INC., a Delaware corporation (“NIM”, and together with TCS, Longhorn, Solvern and
Quasar, jointly and severally, individually and collectively, referred to herein as “Borrower”),
each with a principal place of business located at 275 West Street, Suite 400, Annapolis, Maryland
21401, provides the terms on which Lenders shall lend to Borrower and Borrower shall repay Lenders.
The parties agree as follows:

     1 ACCOUNTING AND OTHER TERMS

          Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 14. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein.

     2 LOAN AND TERMS OF PAYMENT

     2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Lenders the outstanding
principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due
in accordance with this Agreement.

     2.1.1 Revolving Advances.

          (a) Availability. Subject to the terms and conditions of this Agreement and to
deduction of Reserves, each Revolving Lender severally agrees to make Advances from time to time in
an aggregate amount not to exceed at any time outstanding the amount of such Revolving Lender’s
Revolving Line Commitment; furthermore, such Advances shall not exceed the Availability Amount.
Amounts borrowed under the Revolving Line may be repaid, and prior to the Revolving Line Maturity
Date, reborrowed, subject to the applicable terms and conditions precedent herein.

          (b) Termination; Repayment. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all
other Obligations relating to the Revolving Line shall be immediately due and payable.

     2.1.2 Letters of Credit Sublimit.

          As part of the Revolving Line and subject to deduction of Reserves, Issuing Lender shall issue
or have issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s
account; provided that Issuing Lender shall not be obligated to issue any Letter of
Credit if any Lender is at such time a Defaulting Lender or Deteriorating Lender hereunder, unless
Issuing Lender has entered into reasonably satisfactory arrangements with Borrower or such Lender
to eliminate Issuing Lender’s risk with respect to such Lender. The aggregate Dollar Equivalent
amount utilized for the issuance of Letters of Credit shall at all times reduce the amount
otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent of the
face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit
and any Letter of Credit Reserve) may not exceed the lesser of (A) Ten Million Dollars
($10,000,000), minus (i) the sum of all amounts used for Cash Management Services, and
minus (ii) the FX Reduction Amount, or (B) the lesser of the Revolving Line or the
Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances (including
any amounts used for Cash Management Services, and minus (ii) the FX Reduction Amount.

          (a) If, on the Revolving Line Maturity Date (or the effective date of any termination of this
Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide
to Agent, for the

 

 

benefit of Issuing Lender and Letter of Credit Lenders, cash collateral in an amount equal to
105% of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest,
fees, and costs due or to become due in connection therewith (as estimated by Issuing Lender in its
good faith business judgment), to secure all of the Obligations relating to such Letters of Credit.
All Letters of Credit shall be in form and substance acceptable to Issuing Lender in its sole
discretion and shall be subject to the terms and conditions of Issuing Lender’s standard
Application and Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees
to execute any further documentation in connection with the Letters of Credit as Issuing Lender may
reasonably request. Borrower further agrees to be bound by the regulations and interpretations of
the issuer of any Letters of Credit guarantied by Issuing Lender and opened for Borrower’s account
or by Issuing Lender’s interpretations of any Letter of Credit issued by Issuing Lender for
Borrower’s account, and Borrower understands and agrees that Issuing Lender shall not be liable for
any error, negligence, or mistake, whether of omission or commission, in following Borrower’s
instructions or those contained in the Letters of Credit or any modifications, amendments, or
supplements thereto.

          (b) The obligation of Borrower to immediately reimburse Issuing Lender for drawings made under
Letters of Credit shall be absolute, unconditional, and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of
Credit Application. If Issuing Lender shall not have received from Borrower the payment that it
is required to make pursuant to this Section 2.1.2(b) with respect to any Letter of Credit,
Issuing Lender will promptly notify Agent of any payment or disbursement made by Issuing Lender
pursuant to such Letter of Credit (a “Letter of Credit Disbursement”) and Agent will promptly
notify each Letter of Credit Lender of such Letter of Credit Disbursement and its Letter of Credit
Commitment Percentage thereof, and each Letter of Credit Lender shall pay to Issuing Lender upon
demand at Issuing Lender’s address for notices specified herein an amount equal to such Letter of
Credit Lender’s Letter of Credit Commitment Percentage of such Letter of Credit Disbursement; upon
such payment pursuant to this Section 2.1.2(b) to reimburse Issuing Lender for any Letter
of Credit Disbursement, Borrower shall be required to reimburse Letter of Credit Lenders for such
payments (including interest accrued thereon from the date of such payment until the date of such
reimbursement at the rate applicable to Advances plus five percent (5%) per annum) on
demand; provided that, if at the time of and after giving effect to such payment by
Letter of Credit Lenders, the conditions to Credit Extensions set forth in Section 3.2 are
satisfied, Borrower may, by written notice to Agent certifying that such conditions are satisfied
and that all interest owing under this Section 2.1.2(b) has been paid, request that such
payments by Letter of Credit Lenders be converted into Advances under the Revolving Line (a
“Revolving Line Conversion”), in which case, if such conditions are in fact satisfied, Letter of
Credit Lenders shall be deemed to have extended, and Borrower shall be deemed to have accepted, an
Advance in the aggregate principal amount of such payment without further action on the part of any
party, and the Total Letter of Credit Commitments shall be permanently reduced by such amount; any
amount so paid pursuant to this Section 2.1.2(b) shall, on and after the payment date
thereof, be deemed to be Advances under the Revolving Line for all purposes hereunder;
provided, however, Issuing Lender, at its option, may effectuate a Revolving Line
Conversion regardless of whether the conditions to Credit Extensions set forth in Section
3.2 are satisfied.

          (c) Borrower may request that Issuing Lender issue a Letter of Credit payable in a Foreign
Currency. If a demand for payment is made under any such Letter of Credit, Issuing Lender shall
treat such demand as an Advance to Borrower of the Dollar Equivalent of the amount thereof (plus
fees and charges in connection therewith such as wire, cable, SWIFT or similar charges).

          (d) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter
of Credit payable in a Foreign Currency, Issuing Lender shall create a reserve (the “Letter of
Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face
amount of such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by
Issuing Lender from time to time to account for fluctuations in the exchange rate. The
availability of funds under the Revolving Line shall be reduced by the amount of such Letter of
Credit Reserve for as long as such Letter of Credit remains outstanding.

          (e) Issuing Lender irrevocably agrees to grant and hereby grants to each Letter of Credit
Lender, and, to induce Issuing Lender to issue Letters of Credit, each Letter of Credit Lender
irrevocably agrees to accept and purchase and hereby accepts and purchases from Issuing Lender, on
the terms and conditions set forth below, for such Letter of Credit Lender’s own account and risk
an undivided interest equal to such Letter of Credit Lender’s Letter of Credit Commitment
Percentage in Issuing Lender’s obligations and rights under and in respect of each Letter of Credit
and the amount of each draft paid by Issuing Lender thereunder. Each Letter of Credit Lender
agrees with Issuing Lender that, if a draft is paid under any Letter of Credit for which Issuing
Lender is not

-2-

 

reimbursed in full by Borrower pursuant to Section 2.1.2(e), such Letter of Credit
Lender shall pay to Issuing Lender upon demand at Issuing Lender’s address for notices specified
herein an amount equal to such Letter of Credit Lender’s Letter of Credit Commitment Percentage of
the amount of such draft, or any part thereof, that is not so reimbursed. Each Letter of Credit
Lender’s obligation to pay such amount shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other
right that such Letter of Credit Lender may have against Issuing Lender, Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in Section 3, (iii)
any adverse change in the condition (financial or otherwise) of Borrower, (iv) any breach of this
Agreement or any other Loan Document by Borrower or any other Letter of Credit Lender or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

          (f) If Issuing Lender shall make any Letter of Credit Disbursement in respect of a Letter of
Credit, then, unless either Borrower shall reimburse such Letter of Credit Disbursement in full
within the time period specified in Section 2.1.2(b) or Letter of Credit Lenders shall
reimburse such Letter of Credit Disbursement in full on such date as provided in Section
2.1.2(b), in each case the unpaid amount thereof shall bear interest for the account of Issuing
Lender, for each day from and including the date of such Letter of Credit Disbursement to but
excluding the earlier of the date of payment by Borrower, at the rate per annum that would apply to
such amount if such amount were an Advance; provided that the provisions of
Section 2.4(b) shall be applicable to any such amounts not paid when due.

          (g) Issuing Lender may resign at any time by giving at least thirty (30) days’ prior written
notice to Agent, Lenders and Borrower. Subject to the next succeeding sentences, upon the
acceptance of any appointment as Issuing Lender hereunder by a Lender that shall agree to serve as
successor Issuing Lender, such successor shall succeed to and become vested with all the interests,
rights and obligations of the retiring Issuing Lender and the retiring Issuing Lender shall be
discharged from its obligations to issue additional Letters of Credit hereunder without affecting
its rights and obligations with respect to Letters of Credit previously issued by it. At the time
such resignation shall become effective, Borrower shall pay all accrued and unpaid fees pursuant to
Section 2.5(b). The acceptance of any appointment as Issuing Lender hereunder by a
successor Lender shall be evidenced by an agreement entered into by such successor, in a form
satisfactory to Borrower and Agent, and, from and after the effective date of such agreement, (i)
such successor Lender shall have all the rights and obligations of the previous Issuing Lender
under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term “Issuing Lender” shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context
shall require. After the resignation of Issuing Lender hereunder, the retiring Issuing Lender
shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing
Lender under this Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation, but shall not be required to issue additional Letters of Credit.

     2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line and subject to deduction of
Reserves, Borrower may enter into foreign exchange contracts with SVB under which Borrower commits
to purchase from or sell to SVB a specific amount of Foreign Currency (each, a “FX Forward
Contract”) on a specified date (the “Settlement Date”). FX Forward Contracts shall have a
Settlement Date of at least one (1) FX Business Day after the contract date and shall be subject to
a reserve of ten percent (10%) of each outstanding FX Forward Contract (the “FX Reserve”). The
aggregate amount of FX Forward Contracts at any one time may not exceed ten (10) times the lesser
of (A) Ten Million Dollars ($10,000,000), minus (i) the sum of all amounts used for Cash
Management Services, and minus (ii) the Dollar Equivalent of the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve), or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the
sum of all outstanding principal amounts of any Advances (including any amounts used for Cash
Management Services), and minus (ii) the Dollar Equivalent of the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve). The amount otherwise available for Credit Extensions under the Revolving Line
shall be reduced by an amount equal to ten percent (10%) of each outstanding FX Forward Contract
(the “FX Reduction Amount”). Any amounts needed to fully reimburse SVB for any amounts not paid by
Borrower in connection with FX Forward Contracts will be treated as Advances under the Revolving
Line and will accrue interest at the interest rate applicable to Advances.

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     2.1.4 Cash Management Services Sublimit. Borrower may use the Revolving Line for SVB’s cash
management services, which may include merchant services, direct deposit of payroll, business
credit card, and check cashing services identified in SVB’s various cash management services
agreements (collectively, the “Cash Management Services”), in an aggregate amount not to exceed the
lesser of (A) Ten Million Dollars ($10,000,000), minus (i) the Dollar Equivalent of the
face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve), and minus (ii) the FX Reduction Amount, or (B)
the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding
principal amounts of any Advances, minus (ii) the Dollar Equivalent of the face amount of
any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any
Letter of Credit Reserve), and minus (iii) the FX Reduction Amount. Any amounts SVB pays
on behalf of Borrower for any Cash Management Services will be treated as Advances under the
Revolving Line and will accrue interest at the interest rate applicable to Advances.

     2.1.5 Term Loan.

          (a) Availability. Each Term Lender severally agrees to make a term loan available to
Borrower in up to two (2) draws (as and when provided in this Section 2.1.5(a)) in an
aggregate amount not to exceed such Term Lender’s Term Loan Commitment, subject to the satisfaction
of the terms and conditions of this Agreement. The initial draw under the Term Loan shall be made
on the Effective Date and shall be in the amount of Thirty Million Dollars ($30,000,000.00) (the
“Initial Draw”). The remaining draw under the Term Loan shall be in the amount of Ten Million
Dollars ($10,000,000.00) (the “Second Draw”) and shall (i) be made in accordance with the
provisions hereof no later than September 30, 2010, (ii) be made upon not less than five (5)
Business Days’ prior written notice from Borrower to Term Lenders, and (iii) be advanced by Term
Lenders, only upon the reasonable determination by Term Lenders that all the conditions to Credit
Extensions set forth in Section 3.2 are satisfied. In no event shall the aggregate amount
of the Initial Draw and the Second Draw exceed the Term Loan Amount.

          (b) Use of Proceeds — Term Loan. Borrower acknowledges that it is indebted to SVB
pursuant to certain term loans made pursuant to the Prior Loan Agreement with a current outstanding
principal balance of $18,404,375.01 (the “Prior Term Loan”). Borrower acknowledges and agrees that
a portion of the proceeds of the Term Loan hereunder shall be used to immediately repay in full all
remaining outstanding principal and accrued and unpaid interest on the Prior Term Loan, together
with any additional fees associated therewith under the terms of the Prior Loan Agreement.

          (c) Repayment. Borrower shall repay the Initial Draw under the Term Loan in (i) fifty
four (54) equal consecutive monthly installments of principal, each in the amount of Five Hundred
Fifty-Five Thousand Five Hundred Fifty-Five Dollars and 56/100 ($555,555.56), plus (ii) monthly
payments of accrued interest as set forth in Section 2.4(a)(ii) below, commencing on
January 29, 2010. Borrower shall repay the Second Draw under the Term Loan in (i) equal
consecutive monthly installments of principal in an amount sufficient to fully amortize the
principal balance of the Second Draw of the Term Loan over the number of months remaining prior to
the Term Loan Maturity Date, plus (ii) monthly payments of accrued interest as set forth in
Section 2.4(a)(ii) below, commencing on the last Business Day of the first month
immediately following the month in which the Second Draw is funded. Each payment of the Initial
Draw and the Second Draw of the Term Loan (each, a “Term Loan Payment”) shall be payable on the
last Business Day of each month. Borrower’s final Term Loan Payment, due on the Term Loan Maturity
Date, shall include all outstanding principal and accrued and unpaid interest under the Term Loan
(including both the Initial Draw and the Second Draw) as of such date. Once repaid, the Term Loan
may not be reborrowed.

          (d) Prepayment. Borrower may, at any time and from time to time, prepay the Term
Loan, in whole or in part, without premium or penalty, upon irrevocable notice delivered to Agent
no later than 11:00 A.M., Eastern time one Business Day prior to the date of prepayment, which
notice shall specify the date and amount of such prepayment; provided that if such
notice of prepayment indicates that such prepayment is to be funded with the proceeds of a
refinancing, such notice of prepayment may be revoked by Borrower if the financing is not
consummated. Upon receipt of any such notice of prepayment, Agent shall promptly notify each
relevant Lender thereof. The principal amount specified in any such notice of prepayment shall be
due and payable on the date specified therein, together with accrued interest to such date on the
amount prepaid. Partial prepayments of the Term Loan shall be in aggregate principal amounts of
$1,000,000 or whole multiples thereof. Amounts to be applied in connection with prepayments made
pursuant to this Section 2.1.5(d) shall be applied to the prepayment of the Term Loan in
accordance with Section 2.6(d).

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     2.2 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable
conditions to the making of an Advance set forth in this Agreement, to obtain an Advance other than
Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Agent (which notice
shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Eastern time one
Business Day prior to the requested Funding Date of the Advance. Together with any such electronic
or facsimile notification, Borrower shall deliver to Agent by electronic mail or facsimile a
completed Transaction Report executed by a Responsible Officer or his or her designee. Agent may
rely on any telephone notice given by a person whom Agent reasonably believes is a Responsible
Officer or designee. Upon receipt of any such notice from Borrower, Agent shall promptly notify
each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro
rata share of each borrowing available to Agent for the account of Borrower at the Funding
Office prior to 2:00 P.M., Eastern time, on the requested Funding Date of the Advance in funds
immediately available to Agent. Such borrowing will then be made available to Borrower by Agent
crediting such Advances to the Designated Deposit Account. Agent may make Advances under this
Agreement based on instructions from a Responsible Officer or his or her designee or without
instructions (in accordance with the terms of Section 2.6(h)) if the Advances are necessary to meet
Obligations which have become due.

     2.3 Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any
Advances (including any amounts used for Cash Management Services), plus (b) the face
amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and
any Letter of Credit Reserve), plus (c) the FX Reduction Amount exceeds the lesser of
either the Revolving Line or the Borrowing Base (such excess amount being referred to herein as an
“Overadvance”), Borrower shall immediately pay to Revolving Lenders in cash an amount equal to such
Overadvance, which cash payment shall be applied to reduce the outstanding principal amount of
Advances. Without limiting Borrower’s obligation to repay Revolving Lenders the amount of any
Overadvance, Borrower agrees to pay Revolving Lenders interest on the outstanding amount of any
Overadvance, on demand, at the Default Rate.

     2.4 Payment of Interest on the Credit Extensions.

          (a) Interest Rate.

          (i) Advances. Subject to Section 2.4(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per annum rate
equal to the Prime Rate, which interest shall be payable monthly, in arrears, in accordance
with Section 2.4(g) below.

          (ii) Term Loan. Subject to Section 2.4(b), the principal amount
outstanding under the Term Loan shall accrue interest at a floating per annum rate equal to
one-half of one percentage point (0.50%) above the Prime Rate, which interest shall be
payable monthly.

          (b) Default Rate. If any principal amount payable under any Loan Document is not paid
when due (after the expiration of any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such overdue amount shall bear interest until paid at a rate per annum
which is four percentage points (4.00%) above the rate that is otherwise applicable thereto (the
“Default Rate”). Upon the occurrence and during the continuance of any other Event of Default,
Agent, at the direction of Required Lenders, shall notify Borrower that all outstanding Obligations
shall bear interest at a rate per annum equal to the Default Rate to the fullest extent permitted
by applicable law. Fees and expenses which are required to be paid by Borrower pursuant to the
Loan Documents (including, without limitation, Secured Party Expenses) but are not paid when due
shall bear interest until paid at a rate per annum equal to the highest rate applicable to the
Obligations. Payment or acceptance of the increased interest rate provided in this Section
2.4(b) is not a permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of Lenders.

          (c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of any change to the
Prime Rate and to the extent of any such change. Agent shall, as soon as practicable, notify
Borrower and the relevant Lenders of the effective date and the amount of each such change in the
Prime Rate. Each determination of an interest rate by Agent pursuant to any provision of this
Agreement shall be conclusive and binding on Borrower and Lenders in the absence of manifest error.

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          (d) Computation; 360-Day Year. In computing interest, the date of the making of any
Credit Extension shall be included and the date of payment shall be excluded; provided,
however, that if any Credit Extension is repaid on the same day on which it is made, such
day shall be included in computing interest on such Credit Extension. Interest shall be computed
on the basis of a 360-day year for the actual number of days elapsed.

          (e) Debit of Accounts. Agent may debit any of Borrower’s deposit accounts, including
the Designated Deposit Account, for principal and interest payments or any other amounts Borrower
owes Lenders when due. These debits shall not constitute a set-off.

          (f) Interest Payment Date. Unless otherwise provided, interest is payable monthly on
the last calendar day of each month.

          (g) Payment; Interest Computation; Float Charge. Interest is payable monthly on the
last calendar day of each month. In computing interest on the Obligations, all Payments received
after 12:00 p.m. Eastern time on any day shall be deemed received on the next Business Day. All
wire transfers shall be deemed applied on account of the Obligations on the date of receipt thereof
by Agent, and Agent shall be entitled to charge Borrower a “float” charge in an amount equal to one
(1) Business Day interest, at the interest rate applicable to the Advances, on all Payments
consisting of checks and/or other items of Payment other than wire transfers received by Agent for
the account of Revolving Lenders. Said float charge is not included in interest for purposes of
computing Minimum Monthly Interest (if any) under this Agreement. The float charge for each month
shall be payable on the last day of the month. Agent shall not, however, be required to credit
Borrower’s account for the amount of any item of payment which is unsatisfactory to Agent in its
good faith business judgment, and Agent may charge Borrower’s Designated Deposit Account for the
amount of any item of payment which is returned to Agent unpaid.

     2.5 Fees.

(a) Commitment Fee.

          (i) Borrower shall pay to Agent, for the account of the Revolving Lenders, a fully
earned, non refundable commitment fee of Three Hundred Fifty Thousand Dollars ($350,000),
equal to one percent (1.00%) of the Total Revolving Line Commitments, on the Effective Date;
and

          (ii) Borrower shall pay to Agent, for the account of the Term Lenders, a fully earned,
non refundable commitment fee of Six Hundred Thousand Dollars ($600,000), equal to one and
one-half percent (1.50%) of the Total Term Loan Commitments, on the Effective Date.

(b) Letter of Credit Fees.

          (i) Borrower shall pay to Agent, for the account of each Letter of Credit Lender in
accordance with its Letter of Credit Commitment Percentage, a letter of credit fee with
respect to each outstanding Letter of Credit issued for the account of (or at the request
of) Borrower equal to two percent (2.00%) per annum of the face amount of each such
outstanding Letter of Credit, payable upon the issuance of such Letter of Credit, each
anniversary of the issuance during the term of such Letter of Credit, and upon the renewal
of such Letter of Credit by Issuing Lender; and

          (ii) Borrower shall pay to Issuing Lender, for its own account, Issuing Lender’s
customary fees and expenses for the issuance, amendment, renewal or extension of any Letter
of Credit issued for the account of (or at the request of) Borrower, payable upon the
issuance of such Letter of Credit, each anniversary of the issuance during the term of such
Letter of Credit, and upon the renewal of such Letter of Credit by Issuing Lender.

          (c) Unused Revolving Line Facility Fee. Borrower shall pay to Agent, for the account
of each Revolving Lender in accordance with its Revolving Line Commitment Percentage, a fee (the
“Unused Revolving Line Facility Fee”), payable monthly, in arrears, on a calendar year basis, in an
amount equal to one-half of one percent (0.50%) per annum of the average unused portion of the
Revolving Line, as determined by Agent. The unused portion of the Revolving Line, for the purposes
of this calculation, shall include amounts reserved for products provided in connection with Cash
Management Services and F/X Forward Contracts. Borrower shall not

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be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Revolving Lenders pursuant to this Section notwithstanding any termination of
this Agreement or the suspension or termination of Revolving Lenders’ obligation to make loans and
advances hereunder.

          (d) Secured Party Expenses. Borrower shall pay to Agent, for its own account and the
account of each Lender, all Secured Party Expenses incurred through and after the Effective Date,
when due.

          (e) Other Fees. Borrower shall pay to Agent for its own account fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.

     2.6 Payments; Pro Rata Treatment and Application of Payments.

          (a) All payments (including prepayments) to be made by Borrower under any Loan Document shall
be made to Agent, for the account of Lenders, at the Funding Office in immediately available funds
in U.S. Dollars, without setoff or counterclaim, before 12:00 p.m. Eastern time on the date when
due. Agent shall distribute such payments to Lenders in like funds as set forth in Section
2.7. Payments of principal and/or interest received after 12:00 p.m. Eastern time are
considered received at the opening of business on the next Business Day. When a payment is due on
a day that is not a Business Day, the payment shall be due the next Business Day, and additional
fees or interest, as applicable, shall continue to accrue until paid.

          (b) Agent shall apply the whole or any part of collected funds against the Revolving Line or
credit such collected funds to a depository account of Borrower with SVB (or an account maintained
by an Affiliate of SVB) in accordance with the terms of Sections 6.3(c) and 9.4.
Borrower shall have no right to specify the order or the accounts to which Agent shall allocate or
apply any payments required to be made by Borrower to Lenders or otherwise received by Agent or any
Lender under this Agreement when any such allocation or application is not specified elsewhere in
this Agreement.

          (c) Each borrowing by Borrower from Lenders hereunder shall be made pro rata
according to the respective Term Loan Commitment Percentages, Letter of Credit Commitment
Percentages or Revolving Line Commitment Percentages, as the case may be, of the relevant Lenders.

          (d) Except as otherwise provided herein, each payment (including each prepayment) by Borrower
on account of principal of and interest on the Term Loan shall be applied pro rata
according to the respective outstanding principal amounts of the Term Loan then held by each Term
Lender. The amount of each principal prepayment of the Term Loan shall be applied to reduce the
then remaining installments of the Term Loan pro rata based upon the respective
then remaining principal amounts thereof. Amounts prepaid on account of the Term Loan may not be
reborrowed.

          (e) Each payment (including each prepayment) by Borrower on account of principal of and
interest on Advances under the Revolving Line shall be applied pro rata according
to the respective outstanding principal amounts of the Advances then held by Revolving Lenders.

          (f) Unless Agent shall have been notified in writing by any Lender prior to the date of any
borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to Agent, Agent may assume that such Lender is making such amount available to
Agent, and Agent may, in reliance upon such assumption, make available to Borrower a corresponding
amount. If such amount is not made available to Agent by the required time on the Funding Date
therefor, such Lender shall pay to Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate or (ii) a rate determined by Agent in
accordance with banking industry rules on interbank compensation, for the period until such Lender
makes such amount immediately available to Agent. If such Lender’s share of such borrowing is not
made available to Agent by such Lender within three (3) Business Days after such Funding Date,
Agent shall also be entitled to recover such amount with interest thereon at the rate per annum
applicable to the Term Loan or to Advances under the Revolving Line, as applicable, on demand, from
Borrower.

          (g) Unless Agent shall have been notified in writing by Borrower prior to the date of any
payment due to be made by Borrower hereunder that Borrower will not make such payment to Agent,
Agent may

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assume that Borrower is making such payment, and Agent may, but shall not be required to, in
reliance upon such assumption, make available to Lenders their respective pro rata
shares of a corresponding payment amount. If such payment is not made to Agent by Borrower within
three (3) Business Days after such due date, Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the preceding sentence, such
amount with interest thereon at the rate per annum equal to the daily average Federal Funds
Effective Rate. Nothing herein shall be deemed to limit the rights of Agent or any Lender against
Borrower.

          (h) Notwithstanding anything to the contrary in this Agreement, Agent may, in its discretion
at any time or from time to time, without Borrower’s request and even if the conditions set forth
in Section 3.2 would not be satisfied, make an Advance in an amount equal to the portion of
the Obligations constituting interest and fees from time to time due and payable to itself, any
Revolving Lender or Issuing Lender, and apply the proceeds of any such Advance to those
Obligations; provided that, if the conditions set forth in Section 3.2 are
not satisfied, the making of any such Advance shall require the consent of the Required Lenders;
provided further that, after giving effect to any such Advance, the aggregate
outstanding Advances will not exceed the Total Revolving Line Commitments.

     2.7 Settlement Procedures.

          (a) The amount of each Lender’s Revolving Line Commitment Percentage of outstanding Advances
shall be computed every third Business Day (or more frequently in Agent’s discretion) and shall be
adjusted upward or downward based on all Advances and repayments of Advances received by Agent as
of 3:00 p.m. Eastern time on the first Business Day (such date, the “Settlement Date”) following
the end of the period specified by Agent.

          (b) Agent shall deliver to each Lender promptly after a Settlement Date a summary statement of
the amount of outstanding Advances for the period and the amount of repayments received for the
period. As reflected on the summary statement, (i) Agent shall transfer to each Lender its
Revolving Line Commitment Percentage of repayments, and (ii) each Lender shall transfer to Agent
(as provided below) or Agent shall transfer to each Lender, such amounts as are necessary to insure
that, after giving effect to all such transfers, the amount of Advances made by each Lender shall
be equal to such Lender’s Revolving Line Commitment Percentage of all Advances outstanding as of
such Settlement Date. If the summary statement requires transfers to be made to Agent by Lenders
and is received prior to 11:00 a.m. Eastern time on a Business Day, such transfers shall be made in
immediately available funds no later than 2:00 p.m. Eastern time that day; and, if received after
11:00 a.m. Eastern time, then no later than 2:00 p.m. Eastern time on the next Business Day. The
obligation of each Lender to transfer such funds is irrevocable, unconditional and without recourse
to or warranty by Agent. If and to the extent any Lender shall not have so made its transfer to
Agent, such Lender agrees to pay to Agent, on demand, such amount, with interest thereon, for each
day from such date until the date such amount is paid to Agent, equal to the greater of (i) the
Federal Funds Effective Rate or (ii) a rate determined by Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing, or similar fees customarily
charged by Agent in connection with the foregoing.

     2.8 Taxes.

          (a) All payments made by Borrower under this Agreement shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on Agent or any
Lender as a result of a present or former connection between Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld
from any amounts payable to Agent or any Lender hereunder, the amounts so payable to Agent or such
Lender shall be increased to the extent necessary to yield to Agent or such Lender (after payment
of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement; provided, however, that
Borrower shall not be required to increase any such amounts payable to any Lender with respect to
any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to comply with the
requirements of Section 2.8(d) or Section 2.8(e) or (ii) that are United States
withholding taxes imposed on amounts

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payable to such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from Borrower with respect to such Non-Excluded Taxes pursuant to this
Section 2.8(a).

          (b) In addition, Borrower shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.

          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by Borrower, as promptly as
possible thereafter, Borrower shall send to Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official receipt received by
Borrower showing payment thereof. If Borrower fails to pay any Non-Excluded Taxes or Other Taxes
when due to the appropriate taxing authority or fails to remit to Agent the required receipts or
other required documentary evidence, Borrower shall indemnify Agent and Lenders for any incremental
taxes, interest or penalties that may become payable by Agent or any Lender as a result of any such
failure.

          (d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Internal Revenue Code (a “Non-U.S. Lender”) shall deliver to Borrower and Agent (or in the
case of a Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in
the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Internal Revenue Code with respect to payments of “portfolio interest”, an
Exemption Certificate and a Form W-8BEN, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by Borrower under this Agreement and
the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation). In addition, each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify Borrower at any time
it determines that it is no longer in a position to provide any previously delivered certificate to
Borrower (or any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be
required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.

          (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax
under the law of the jurisdiction in which any Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to TCS (with a
copy to Agent), at the time or times prescribed by applicable law or reasonably requested by
Borrower, such properly completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate; provided
that such Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

          (f) If Agent or any Lender determines, in its sole discretion, that it has received a refund
of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by Borrower or with
respect to which Borrower has paid additional amounts pursuant to this Section 2.8, it
shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrower under this Section 2.8 with respect to the
Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
Agent or such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided that Borrower, upon
the request of Agent or such Lender, agrees to repay the amount paid over to Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to Agent or
such Lender in the event Agent or such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems confidential) to
Borrower or any other Person.

          (g) The agreements in this Section 2.8 shall survive the termination of this Agreement
and the payment of the Obligations and all other amounts payable hereunder.

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     3 CONDITIONS OF LOANS

     3.1 Conditions Precedent to Initial Credit Extension. The obligation of each Lender to make
the initial Credit Extension is subject to the condition precedent that Agent shall have received,
in form and substance reasonably satisfactory to Agent, such documents, and completion of such
other matters, as Agent may reasonably deem necessary or appropriate, each of which shall be
originals, telecopies or other electronic image scan transmission
(e.g., “pdf” or “tif ” via
e-mail) (followed promptly by originals) unless otherwise specified, including, without limitation:

          (a) duly executed signatures to the Loan Documents (other than the Fee Letter);

          (b) duly executed signatures to the Control Agreements;

          (c) copies of each Borrower’s Operating Documents and a good standing certificate of each
Borrower certified by the Secretary of State of each applicable jurisdiction as of a date no
earlier than thirty (30) days prior to the Effective Date;

          (d) duly executed signatures to the Secretary’s Certificate and Borrowing Resolutions for each
Borrower;

          (e) a certificate signed by an authorized officer of each Borrower, reasonably satisfactory in
form and substance to Agent, certifying that (i) the conditions specified in Section 3.2(b)
have been satisfied, and (ii) as of the Effective Date after giving effect to the transactions
contemplated hereby, Borrower is solvent;

          (f) evidence that all amounts outstanding under the Prior Loan Agreement have been, or will
concurrently with the funding of the initial Credit Extension be, paid in full;

          (g) certified copies, dated as of a recent date, of financing statement searches, as Agent
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Credit Extension, will be terminated or released;

          (h) the Perfection Certificate of each Borrower, together with the duly executed signatures
thereto;

          (i) a landlord’s consent in favor of Agent for each of Borrower’s leased locations by the
respective landlord thereof, as required by Agent, together with the duly executed signatures
thereto;

          (j) a bailee’s/warehouseman’s waiver executed by each bailee, if any, of Borrower as required
by Agent, in favor of Agent;

          (k) a legal opinion of Borrower’s counsel, in form and substance acceptable to Agent, in its
reasonable discretion, dated as of the Effective Date together with the duly executed signature
thereto;

          (l) evidence satisfactory to Agent that the insurance policies required by Section 6.7
hereof are in full force and effect, together with appropriate evidence showing lender loss payable
and/or additional insured clauses or endorsements in favor of Agent;

          (m) payment of the fees and Secured Party Expenses then due as specified in Section
2.5 hereof;

          (n) evidence that the capital structure of Borrower and its Subsidiaries is acceptable to
Agent, in its sole discretion; and

          (o) such other documents, certificates and agreements in respect of Borrower and its
Subsidiaries as Agent may request, in its sole discretion.

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     3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender to make each
Credit Extension, including the initial Credit Extension, is subject to the following conditions
precedent:

          (a) except as otherwise provided in Section 2.2, timely receipt of an executed
Transaction Report;

          (b) (i) the representations and warranties in this Agreement shall be true, accurate, and
complete in all material respects on the date of the Transaction Report and on the Funding Date of
each Credit Extension; provided, however, 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; and provided further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date; and (ii) no Default or Event of Default shall have occurred and
be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s
representation and warranty on that date that the representations and warranties in this Agreement
remain true, accurate, and complete in all material respects; provided, however,
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; and provided
further that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date; and

          (c) in Agent’s reasonable discretion, after consultation with Borrower, there has not been:
(i) a material impairment in the perfection or priority of Agent’s Lien in the Collateral or in the
value of such Collateral; (ii) a material adverse change in the business, operations, or condition
(financial or otherwise) of Borrower; or (iii) a material impairment of the prospect of repayment
of the Obligations.

     3.3 Covenant to Deliver. Borrower agrees to deliver to Agent each item required to be
delivered to Agent under this Agreement (as of the applicable date of delivery for such item as
provided in this Agreement or the other Loan Documents, including any applicable grace periods) as
a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension
made prior to the receipt by Agent of any such item shall not constitute a waiver by Agent or any
Lender of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the
absence of a required item shall be in Agent’s sole discretion (unless Required Lenders
otherwise direct Agent to cease making Credit Extensions).

     4 CREATION OF SECURITY INTEREST

     4.1 Grant of Security Interest. Borrower hereby grants Agent, for the ratable benefit of the
Secured Parties, to secure the payment and performance in full of all of the Obligations, a
continuing security interest in, and pledges to Agent, for the ratable benefit of the Secured
Parties, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof.

     4.2 Priority of Security Interest. Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a first priority
perfected security interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Agent’s Lien under this Agreement). If Borrower shall acquire a commercial
tort claim, Borrower shall promptly notify Agent in a writing signed by Borrower of the general
details thereof and grant to Agent, for the ratable benefit of the Secured Parties, in such writing
a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to Agent.

          If this Agreement is terminated, Agent’s Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment
in full in cash of the Obligations and at such time as Lenders’ obligation to make Credit
Extensions has terminated in accordance with the terms of this Agreement, Agent shall, at
Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall
revert to Borrower.

     4.3 Authorization to File Financing Statements. Borrower hereby authorizes Agent to file
financing statements, without notice to Borrower, with any necessary jurisdictions to perfect or
protect Agent’s interest or rights hereunder, including an appropriate notice that any disposition
of certain of the Collateral by either Borrower or any other Person (other than such dispositions
as are expressly permitted pursuant to the terms of this

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Agreement or any other Loan Document) shall be deemed to violate the rights of Agent under the
Code. Such financing statements may indicate the Collateral as “all assets of the Debtor” or words
of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Agent’s
discretion.

     5 REPRESENTATIONS AND WARRANTIES

          To induce Agent and Lenders to enter into this Agreement and to make the Credit Extensions
hereunder, Borrower represents and warrants to Agent and each Lender as follows:

     5.1 Due Organization; Authorization; Power and Authority. Each Borrower and each of its
Subsidiaries is duly existing and in good standing in its jurisdiction of formation and each is
qualified and licensed to do business and each is in good standing in any jurisdiction in which the
conduct of each of its business or its ownership of property requires that it be qualified except
where the failure to do so could not reasonably be expected to have a material adverse effect on
Borrower’s business. In connection with this Agreement, Borrower has delivered to Agent a
completed certificate signed by each Borrower, entitled “Perfection Certificate”. Borrower
represents and warrants to Agent and each Lender that: (a) Borrower’s exact legal name is that
indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an
organization of the type and is organized in the jurisdiction set forth in the Perfection
Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational
identification number or accurately states that Borrower has none; (d) the Perfection Certificate
accurately sets forth Borrower’s place of business, or, if more than one, its chief executive
office as well as Borrower’s mailing address (if different than its chief executive office); (e)
except as otherwise indicated in the Perfection Certificate, no Borrower (or any of its
predecessors) has, in the past five (5) years, changed its jurisdiction of formation,
organizational structure or type, or any organizational number assigned by its jurisdiction; and
(f) all other information set forth on the Perfection Certificate pertaining to each Borrower and
each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may
from time to time update certain information in the Perfection Certificate after the Effective Date
to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not
now a Registered Organization but later becomes one, Borrower shall promptly notify Agent of such
occurrence and provide Agent with Borrower’s organizational identification number.

          The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by which Borrower or any
of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval from, any
Governmental Authority (except such Governmental Approvals which have already been obtained and are
in full force and effect) or (v) constitute an event of default under any material agreement by
which Borrower is bound. Borrower is not in default under any agreement to which it is a party or
by which it is bound in which the default could reasonably be expected to have a material adverse
effect on Borrower’s business.

     5.2 Collateral. Borrower has good title to, has rights in, and has the power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and
all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts
with SVB, the deposit accounts, if any described in the Perfection Certificate delivered to Agent
in connection herewith, or of which Borrower has given Agent notice and taken such actions as Agent
has requested to give Agent, for the ratable benefit of the Secured Parties, a perfected security
interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

          The Collateral is not in the possession of any third party bailee (such as a warehouse) except
as otherwise provided in the Perfection Certificate. None of the components of the Collateral
shall be maintained at locations other than as provided in the Perfection Certificate or as
permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will
first receive the written consent of Agent and such bailee must execute and deliver a bailee
agreement in form and substance satisfactory to Agent in its sole discretion.

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          All Inventory included in Borrower’s Books and intended for sale to its customers is in all
material respects of good and marketable quality, free from material defects.

          Borrower is the sole owner of the Intellectual Property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary course of business,
(b) over-the-counter software that is commercially available to the public, and (c) material
Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent
which it owns or purports to own and which is material to Borrower’s business is valid and
enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and
which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in
part. To the best of Borrower’s knowledge, no claim has been made that any part of the
Intellectual Property violates the rights of any third party except to the extent such claim would
not have a material adverse effect on Borrower’s business.

          Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by,
any Restricted License.

     5.3 Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base
Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and
other documents evidencing such Eligible Account is and shall be true and correct in all material
respects and all such invoices, instruments and other documents, and all of Borrower’s Books are
genuine and in all material respects what they purport to be. Whether or not an Event of Default
has occurred and is continuing, Agent may notify any Account Debtor owing Borrower money of Agent’s
security interest in such funds and verify the amount of such Eligible Account. All sales and
other transactions underlying or giving rise to each Eligible Account shall comply in all material
respects with all applicable laws and governmental rules and regulations. Borrower has no
knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are
Eligible Accounts in any Borrowing Base Certificate. To Borrower’s knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are
genuine, and all such documents, instruments and agreements are legally enforceable in accordance
with their terms.

     5.4 Litigation. Except as set forth on the Perfection Certificate, there are no actions or
proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or
against Borrower or any of its Subsidiaries involving any individual claim in excess of Fifty
Thousand Dollars ($50,000) or two or more claims involving One Hundred Thousand Dollars ($100,000)
in the aggregate.

     5.5 Financial Condition. All consolidated financial statements for Borrower and any of its
Subsidiaries delivered to Agent, and distributed to each Lender, fairly present in all material
respects Borrower’s consolidated financial condition and Borrower’s consolidated results of
operations as of the dates and for the periods indicated therein. There has not been any material
deterioration in Borrower’s consolidated financial condition since the date of the most recent
financial statements submitted to Agent and distributed to each Lender.

     5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.

     5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not
engaged as one of its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries
is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a
“holding company” as each term is defined and used in the Public Utility Holding Company Act of
2005. Borrower has not violated any laws, ordinances or rules of any applicable Governmental
Authority, the violation of which could reasonably be expected to have a material adverse effect on
its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by
Borrower or any Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous substance other than legally. Borrower
and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Government Authorities that are
necessary to continue their respective businesses as currently conducted.

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     5.8 Subsidiaries; Investments. Except as set forth in the Perfection Certificate, Borrower
does not own any stock, partnership interest or other equity securities except for Permitted
Investments.

     5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower, other than those that are not yet
delinquent, or that are contested in good faith as to which adequate reserves have been provided to
the extent required by law and in accordance with GAAP. Borrower may defer payment of any
contested taxes, provided that Borrower (a) in good faith contests its obligation
to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b)
notifies Agent in writing of the commencement of, and any material development in, the proceedings,
(c) posts bonds or takes any other steps required to prevent the governmental authority levying
such contested taxes from obtaining a Lien upon any of the Collateral that is other than a
“Permitted Lien”. Borrower is unaware of any material claims or adjustments proposed for any of
Borrower’s prior tax years which could result in additional taxes becoming due and payable by
Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and
deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from
participation in, and has not permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any such plan which could reasonably be expected to
result in any liability of Borrower, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other governmental agency.

     5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely (a) to
refinance all outstanding obligations under the Prior Loan Agreement and to pay fees and expenses
related thereto, (b) as working capital, (c) to fund its general business requirements and not for
personal, family, household or agricultural purposes, and (d) to fund Permitted Acquisitions and to
pay fees and expenses related thereto.

     5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Agent or any Lender, as of the date such
representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Agent or any Lender, contains any untrue statement of
a material fact or omits to state a material fact necessary to make the statements contained in the
certificates or statements not misleading (it being recognized by Agent and Lenders that the
projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions
are not viewed as facts and that actual results during the period or periods covered by such
projections and forecasts may differ from the projected or forecasted results).

     5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation
or warranty is made to Borrower’s knowledge, knowledge means the actual knowledge, after reasonable
investigation, of the Responsible Officers.

     6 AFFIRMATIVE COVENANTS

          Borrower shall do all of the following:

     6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good
standing in their respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower’s business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the
noncompliance with which could have a material adverse effect on Borrower’s business.

     6.2 Financial Statements, Reports, Certificates.

          (a) Borrower shall provide Agent, for distribution to each Revolving Lender or Term Lender, as
applicable, with the following:

               (i) (A) monthly, within thirty (30) days after the end of each month, and (B) upon each
request for a Credit Extension, a Transaction Report; provided that, upon
the occurrence and during the continuance of any Event of Default, such Transaction Report
shall be delivered weekly and upon each request for a Credit Extension;

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               (ii) within fifteen (15) days after the end of each month, (A) monthly accounts
receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by
invoice date, and outstanding or held check registers, if any, and (C) monthly
reconciliations of accounts receivable agings (aged by invoice date), transaction reports,
deferred revenue report and general ledger;

               (iii) as soon as available, and in any event within thirty (30) days after the end of
each month, monthly management prepared unaudited financial statements;

               (iv) within thirty (30) days after the end of each month, a monthly Compliance
Certificate signed by a Responsible Officer, certifying that as of the end of such month,
Borrower was in full compliance with all of the terms and conditions of this Agreement, and
setting forth calculations showing compliance with the financial covenants set forth in this
Agreement and such other information as Agent shall reasonably request, including, without
limitation, a statement that at the end of such month there were no held checks;

               (v) as soon as available, and in any event within forty-five (45) days after the end of
each fiscal quarter of Borrower, quarterly consolidated and consolidating management
prepared unaudited financial statements;

               (vi) within sixty (60) days prior to the end of each fiscal year of Borrower, annual
financial projections for the following fiscal year (on a quarterly basis), together with
any related business forecasts used in the preparation of such annual financial projections;
and within sixty (60) days after the end of each fiscal year of Borrower, annual operating
budgets (including income statements, balance sheets and cash flow statements, by month) for
the current fiscal year of Borrower, as approved by Borrower’s board of directors;

               (vii) as soon as available, and in any event within one hundred twenty (120) days
following the end of Borrower’s fiscal year, annual consolidated and consolidating financial
statements certified by, and with an unqualified opinion of, independent certified public
accountants acceptable to Agent; and

               (viii) a prompt report of any legal actions pending or threatened in writing against
Borrower or any of its Subsidiaries that could reasonably be expected to result in damages
or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, One
Million Dollars ($1,000,000) or more.

          (b) Borrower shall provide Agent, for distribution to each Revolving Lender or Term Lender, as
applicable, within five (5) days after filing, all reports on Form 10-K, 10-Q and 8-K filed with
the SEC or a link thereto on Borrower’s or another website on the Internet.

     6.3 Accounts Receivable.

          (a) Schedules and Documents Relating to Accounts. Borrower shall deliver to Agent,
for distribution to each Revolving Lender, transaction reports and schedules of collections, as
provided in Section 6.2, on Agent’s standard forms; provided, however, that
Borrower’s failure to execute and deliver the same shall not affect or limit Agent’s Lien and other
rights in all of Borrower’s Accounts, nor shall Lenders’ failure to advance or lend against a
specific Account affect or limit Agent’s Lien and other rights therein. If requested by Agent,
Borrower shall furnish Agent with copies (or, at Agent’s request, originals) of all contracts,
orders, invoices, and other similar documents, and all shipping instructions, delivery receipts,
bills of lading, and other evidence of delivery, for any goods the sale or disposition of which
gave rise to such Accounts. In addition, Borrower shall deliver to Agent, on its request, the
originals of all instruments, chattel paper, security agreements, guarantees and other documents
and property evidencing or securing any Accounts, in the same form as received, with all necessary
endorsements, and copies of all credit memos.

          (b) Disputes. Borrower shall promptly notify Agent of all disputes or claims relating
to Accounts (i) in excess of an aggregate amount for any Account Debtor in excess Two
Hundred Fifty Thousand Dollars ($250,000) and (ii) in excess of an aggregate amount for all Account
Debtors of One Million Dollars

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($1,000,000). Borrower may forgive (completely or partially), compromise, or settle any
Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower
does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in
arm’s-length transactions, and reports the same to Agent in the regular reports provided to Agent;
(ii) no Event of Default has occurred and is continuing; and (iii) after taking into account all
such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the
Availability Amount.

          (c) Collection of Accounts. Borrower shall have the right to collect all Accounts,
unless and until an Event of Default has occurred and is continuing. All payments on, and proceeds
of, Accounts shall be deposited directly by the applicable Account Debtor into a lockbox account,
or such other “blocked account” as Agent may specify, pursuant to a blocked account agreement in
form and substance satisfactory to Agent in its sole discretion. Whether or not an Event of
Default has occurred and is continuing, Borrower shall hold all payments on, and proceeds of,
Accounts in trust for Agent and Lenders, and Borrower shall promptly deliver all such payments and
proceeds to Agent in their original form, duly endorsed, to be applied to the Obligations pursuant
to the terms of Section 9.4 hereof.

          (d) Returns. Provided that no Event of Default has occurred and is continuing, if any
Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason
for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount,
and (iii) provide a copy of such credit memorandum to Agent, upon request from Agent. In the event
any attempted return occurs after the occurrence and during the continuance of any Event of
Default, Borrower shall hold the returned Inventory in trust for Agent and Lenders, and immediately
notify Agent of the return of the Inventory.

          (e) Verification. Agent may, from time to time, verify directly with the respective
Account Debtors the validity, amount and other matters relating to the Accounts, either in the name
of Borrower or Agent.

          (f) No Liability. Neither Agent nor any Lender shall be responsible or liable for any
shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other
disposition of which gives rise to an Account, or for any error, act, omission, or delay of any
kind occurring in the settlement, failure to settle, collection or failure to collect any Account,
or for settling any Account in good faith for less than the full amount thereof, nor shall Agent or
any Lender be deemed to be responsible for any of Borrower’s obligations under any contract or
agreement giving rise to an Account. Nothing herein shall, however, relieve Agent or any Lender
from liability for its own gross negligence or willful misconduct.

     6.4 Remittance of Proceeds. Except as otherwise provided in Section 6.3(c), deliver,
in kind, all proceeds arising from the disposition of any Collateral to Agent in the original form
in which received by Borrower not later than the following Business Day after receipt by Borrower,
to be applied to the Obligations pursuant to the terms of Section 9.4 hereof;
provided that, if no Default or Event of Default has occurred and is continuing,
Borrower shall not be obligated to remit to Agent the proceeds of the sale of worn out or obsolete
Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate
purchase price of Five Hundred Thousand Dollars ($500,000) or less (for all such transactions in
any fiscal year). Borrower agrees that it will not commingle proceeds of Collateral with any of
Borrower’s other funds or property, but will hold such proceeds separate and apart from such other
funds and property and in an express trust for Agent and Lenders. Nothing in this Section limits
the restrictions on disposition of Collateral set forth elsewhere in this Agreement.

     6.5 Taxes; Pensions; Withholding. Timely file, and require each of its Subsidiaries to timely
file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to
timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested
pursuant to the terms of Section 5.9 hereof, and shall deliver to Agent, on demand,
appropriate certificates attesting to such payments, and pay all amounts necessary to fund all
present pension, profit sharing and deferred compensation plans in accordance with their terms.

     6.6 Access to Collateral; Books and Records. At reasonable times, on one (1) Business Day’s
notice (provided that no notice is required if an Event of Default has occurred and
is continuing), Agent, or its agents, shall have the right, on an annual basis (or more frequently
in Agent’s sole discretion after a Default or an Event of Default has occurred and is continuing),
to inspect the Collateral and the right to audit and copy Borrower’s Books. The foregoing
inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $850

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per person per day (or such higher amount as shall represent Agent’s then-current standard
charge for the same), plus reasonable out-of-pocket expenses; provided, however,
that the cost of such inspections and audits will not exceed Fifteen Thousand Dollars ($15,000) in
any twelve (12) month period (excluding the cost of inspections and audits conducted after the
occurrence and during the continuance of an Event of Default) and such inspections and audits will
not be conducted more frequently than once in any calendar quarter (unless a Default or an Event of
Default has occurred and is continuing, in which case such inspections and audits may be conducted
more frequently in Agent’s sole discretion). In the event Borrower and Agent schedule an audit
more than ten (10) days in advance, and Borrower cancels or seeks to reschedule the audit with less
than ten (10) days written notice to Agent, then (without limiting any of Agent’s rights or
remedies), Borrower shall pay Agent a fee of $1,000 plus any out-of-pocket expenses incurred by
Agent to compensate Agent for the anticipated costs and expenses of the cancellation or
rescheduling.

     6.7 Insurance. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrower’s industry and location and as Agent may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are satisfactory to Agent. All
property policies shall have a lender’s loss payable endorsement showing Agent as an additional
lender loss payee and waive subrogation against Agent and shall provide that the insurer must give
Agent at least twenty (20) days notice before canceling, amending, or declining to renew its
policy. All liability policies shall show, or have endorsements showing, Agent as an additional
insured, and all such policies (or the loss payable and additional insured endorsements) shall
provide that the insurer shall give Agent at least twenty (20) days notice before canceling,
amending, or declining to renew its policy. At Agent’s request, Borrower shall deliver certified
copies of policies and evidence of all premium payments. Proceeds payable under any policy shall,
at Agent’s option, be payable to Agent on account of the Obligations. Notwithstanding the
foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have
the option of applying the proceeds of any casualty policy up to One Hundred Thousand Dollars
($100,000) with respect to any loss, but in any event not exceeding Five Hundred Thousand Dollars
($500,000) in the aggregate for all losses under all casualty policies in any one year, toward the
replacement or repair of destroyed or damaged property; provided that any such
replaced or repaired property (i) shall be of equal or like value as the replaced or repaired
Collateral and (ii) shall be deemed Collateral in which Agent has been granted a first priority
security interest, and (b) after the occurrence and during the continuance of an Event of Default,
all proceeds payable under such casualty policy shall, at the option of Agent, be payable to Agent
on account of the Obligations. If Borrower fails to obtain insurance as required under this
Section 6.7 or to pay any amount or furnish any required proof of payment to third persons
and Agent with respect to such insurance, Agent may make all or part of such payment or obtain such
insurance policies required in this Section 6.7, and take any action under the policies
that Agent deems prudent.

     6.8 Operating Accounts.

          (a) Maintain its and its Subsidiaries’ primary depository and operating accounts with SVB and
SVB’s affiliates, and maintain with Lenders depository, operating and securities accounts which
represent at least seventy percent (70%) of the dollar value of Borrower’s and such Subsidiaries’
accounts at all financial institutions (with all excess funds maintained at or invested through
Lenders or affiliates of Lenders), excluding cash collateral held at other financial institutions
used to secure letters of credit or cash held as lease deposits; and

          (b) Provide Agent five (5) days prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than SVB or SVB’s Affiliates. For each
Collateral Account that Borrower at any time maintains, Borrower shall, upon Agent’s request, cause
the applicable bank or financial institution (other than SVB) at or with which any Collateral
Account is maintained to execute and deliver a Control Agreement or other appropriate instrument
with respect to such Collateral Account to perfect Agent’s Lien in such Collateral Account in
accordance with the terms hereunder, which Control Agreement may not be terminated without the
prior written consent of Agent. The provisions of the previous sentence shall not apply to (i)
deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of Borrower’s employees and identified to Agent by Borrower as such,
(ii) deposits held at other financial institutions used to secure letters of credit, (iii) cash
held as lease deposits, and (iv) other Collateral Accounts having account balances less than One
Million Dollars ($1,000,000).

     6.9 Financial Covenants.

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          Maintain as of the last day of each month, unless otherwise noted, on a consolidated basis
with respect to Borrower and its Subsidiaries:

          (a) Adjusted Quick Ratio. (i) for each monthly period beginning with the monthly
period ending December 31, 2009 through and including the monthly period ending June 30, 2010, an
Adjusted Quick Ratio of not less than 1.10:1.00; and (ii) for each monthly period beginning with
the monthly period ending July 31, 2010 and as of the last day of each monthly period thereafter,
an Adjusted Quick Ratio of not less than 1.25:1.00.

          (b) Fixed Charge Coverage Ratio. (i) for each quarterly period beginning with the
quarterly period ending December 31, 2009 through and including the quarterly period ending
December 31, 2010, a Fixed Charge Coverage Ratio of not less than 1.25:1.00; and (ii) for each
quarterly period beginning with the quarterly period ending March 31, 2011 and as of the last day
of each quarterly period thereafter, a Fixed Charge Coverage Ratio of not less than 1.50:1.00.

     6.10 Protection and Registration of Intellectual Property Rights.

          (a) (i) Protect, defend and maintain the validity and enforceability of its material
Intellectual Property; (ii) promptly advise Agent in writing of material infringements of its
material Intellectual Property; and (iii) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public without Agent’s prior
written consent, such consent not to be unreasonably withheld.

          (b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered
mask work, or any pending application for any of the foregoing, whether as owner, licensee or
otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall
promptly provide written notice thereof to Agent and shall execute such intellectual property
security agreements and other documents and take such other actions as Agent shall request in its
good faith business judgment to perfect and maintain a first priority perfected security interest
in favor of Agent, for the ratable benefit of the Secured Parties, in such property. If Borrower
decides to register any Copyrights or mask works in the United States Copyright Office, Borrower
shall: (x) provide Agent with at least fifteen (15) days prior written notice of Borrower’s intent
to register such Copyrights or mask works together with a copy of the application it intends to
file with the United States Copyright Office (excluding exhibits thereto); (y) execute an
intellectual property security agreement and such other documents and take such other actions as
Agent may request in its good faith business judgment to perfect and maintain a first priority
perfected security interest in favor of Agent in the Copyrights or mask works intended to be
registered with the United States Copyright Office; and (z) record such intellectual property
security agreement with the United States Copyright Office contemporaneously with filing the
Copyright or mask work application(s) with the United States Copyright Office. Borrower shall
promptly provide to Agent copies of all applications that it files for Patents or for the
registration of Trademarks, Copyrights or mask works, together with evidence of the recording of
the intellectual property security agreement necessary for Agent to perfect and maintain a first
priority security interest in such property.

          (c) Provide written notice to Agent within thirty (30) days of entering or becoming bound by
any Restricted License (other than over-the-counter software that is commercially available to the
public). Borrower shall take such steps as Agent requests to obtain the consent of, or waiver by,
any person whose consent or waiver is necessary for (i) any Restricted License to be deemed
“Collateral” and for Agent to have a security interest in it that might otherwise be restricted or
prohibited by law or by the terms of any such Restricted License, whether now existing or entered
into in the future, and (ii) Agent to have the ability in the event of a liquidation of any
Collateral to dispose of such Collateral in accordance with Agent’s rights and remedies under this
Agreement and the other Loan Documents.

     6.11 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Agent, without expense to Agent, Borrower and its officers,
employees and agents and Borrower’s Books, to the extent that Agent may deem them reasonably
necessary to prosecute or defend any third-party suit or proceeding instituted by or against Agent
with respect to any Collateral or relating to Borrower.

     6.12 Creation/Acquisition of Subsidiaries. Notwithstanding and without limiting the negative
covenant contained in Section 7.3 hereof, in the event Borrower or any Subsidiary creates
or acquires any Subsidiary: (a) Borrower and such Subsidiary shall promptly notify Agent of the
creation or acquisition of such new Subsidiary and, at Agent’s request, in its sole discretion,
take all such action as may be reasonably required by

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Agent to cause each such new Subsidiary to, in Agent’s sole discretion, become a co-Borrower
or Guarantor under the Loan Documents and grant a continuing pledge and security interest in and to
the assets of such new Subsidiary (substantially as described on Exhibit A hereto); and (b)
Borrower or such Subsidiary shall, at Agent’s request, grant and pledge to Agent, for the ratable
benefit of the Secured Parties, a perfected security interest in the stock, units or other evidence
of ownership of such new Subsidiary (provided that, in the case of each entity that
is a “controlled foreign corporation” under Section 957 of the Internal Revenue Code, Borrower or
such Subsidiary shall only be required to pledge 66% of the capital stock of each new first-tier
foreign Subsidiary to the extent the pledge of any greater percentage would, in the good faith
judgment of Borrower or such Subsidiary, as applicable, result in material adverse tax consequences
to Borrower or such Subsidiary, as applicable).

     6.13 Further Assurances. Execute any further instruments and take further action as Agent
reasonably requests to perfect or continue Agent’s Lien in the Collateral, and deliver to Agent,
within five (5) days after the same are sent or received, copies of all correspondence, reports,
documents and other filings with any Governmental Authority regarding compliance with or
maintenance of Governmental Approvals or Requirements of Law that, if not complied with or
maintained, could reasonably be expected to have a material adverse effect on the operations of
Borrower or any of its Subsidiaries.

     7 NEGATIVE COVENANTS

          Borrower shall not do any of the following without the prior written consent of Required
Lenders:

     7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers: (a) of Inventory in the ordinary course of business;
(b) of worn out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted
Investments; (d) of non-exclusive licenses for the use of the property of Borrower or its
Subsidiaries in the ordinary course of business and licenses that could not result in a legal
transfer of title of the licensed property but that may be exclusive in respects other than
territory and that may be exclusive as to territory only as to discreet geographical areas outside
of the United States; (e) between or among Borrowers; and (f) other Transfers of property having a
fair market value not exceeding Five Hundred Thousand Dollars ($500,000) in the aggregate in any
calendar year.

     7.2 Changes in Business, Control, or Business Locations. (a) Engage in or permit any of its
Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower
and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve (other
than a liquidation or dissolution of a Borrower that is a Subsidiary of TCS, pursuant to which the
assets of such Borrower are distributed to TCS before, or within three (3) Business Days after,
such liquidation or dissolution, and TCS has caused the former assets of such Borrower to be
pledged to the Agent for the benefit of the Secured Parties to the extent required pursuant to the
terms of this Agreement); or (c) permit or suffer any Change in Control.

          Borrower shall not, without at least thirty (30) days prior written notice to Agent: (1) add
any new offices or business locations, including warehouses (unless such new offices or business
locations contain less than One Hundred Thousand Dollars ($100,000) in Borrower’s assets or
property at any one location and not more than Five Hundred Thousand Dollars ($500,000) in the
aggregate at all such locations) or deliver any portion of the Collateral valued, individually or
in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee at a location other
than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its
jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal
name, or (5) change any organizational number (if any) assigned by its jurisdiction of
organization. If Borrower intends to deliver any portion of the Collateral valued, individually or
in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee that has not executed
and delivered a bailee agreement with Agent, such bailee shall execute and deliver a bailee
agreement in form and substance satisfactory to Agent in its sole discretion.

     7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person in an acquisition or
acquisitions in which the aggregate consideration paid for all such acquisitions after the
Effective Date exceeds Five Million Dollars ($5,000,000) (a “Permitted Acquisition”);
provided, however, that no Default or Event of Default shall exist immediately
prior to or

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immediately after giving effect to such Permitted Acquisition. A Subsidiary may merge or
consolidate into another Subsidiary or into a Borrower, and a Borrower may merge or consolidate
into another Borrower.

     7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

     7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the
first priority security interest granted herein, or enter into any agreement, document, instrument
or other arrangement (except with or in favor of Agent) with any Person which directly or
indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or
any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1
hereof and the definition of “Permitted Liens” herein.

     7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.8(b) hereof.

     7.7 Distributions; Investments.

          (a) Pay any dividends or make any distribution or payment with respect to any capital stock or
other equity interests of any Borrower, or redeem, retire, purchase or otherwise acquire any
capital stock or other equity interests of any Borrower, with the following exceptions:

          (i) dividends, distributions and other payments between or among Borrowers;

          (ii) dividends payable solely in the common stock or other common equity interests of
any Borrower; and

          (iii) as long as no Event of Default then exists or would result therefrom, the
redemption, retirement, purchase or other acquisition, directly or indirectly, of any
capital stock or other equity interests of Borrower in an aggregate amount not to exceed Two
Million Dollars ($2,000,000) from and after the Effective Date.

          (b) Directly or indirectly make any Investment other than Permitted Investments, or permit any
of its Subsidiaries to do so.

     7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for transactions between one Borrower
and another Borrower or with any Subsidiary of a Borrower that is a party to the Loan Documents, or
that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no
less favorable to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person and transactions permitted pursuant to the terms of Section 7.2 or
Section 7.3 hereof.

     7.9 Repayment of Indebtedness; Amendment of Subordinated Debt. (a) Make or permit any payment
on any Indebtedness, except (i) as long as no Event of Default then exists or would arise
therefrom, regularly scheduled repayments of Permitted Indebtedness (other than Subordinated Debt),
(ii) payments permitted pursuant to the terms of the subordination, intercreditor, or other similar
agreement to which any Subordinated Debt (other than the NIM Subordinated Notes) is subject, (iii)
as long as no Event of Default then exists or would arise therefrom, payments with respect to
purchase price adjustments in connection with the Solvern Acquisition and the Sidereal Acquisition,
and (iv) as long as the Payment Conditions are satisfied, the regularly scheduled repayment of
principal and interest on account of the NIM Subordinated Notes; or (b) amend any provision in any
document relating to the Subordinated Debt which would increase the amount thereof or adversely
affect the subordination thereof to Obligations owed to Lenders.

     7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities

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extending credit to purchase or carry margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for
that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
non-exempt Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal
Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably
be expected to have a material adverse effect on Borrower’s business, or permit any of its
Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event with respect to,
any present pension, profit sharing and deferred compensation plan which could reasonably be
expected to result in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.

     7.11 Subsidiary Limitations. Permit any Subsidiary that is not a Borrower to maintain assets
in an aggregate amount for all such Subsidiaries in excess of Three Million Dollars ($3,000,000).

     8 EVENTS OF DEFAULT

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

     8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within five (5) Business Days
after such Obligations are due and payable (which five (5) Business Day cure period shall not apply
to payments due on the Revolving Line Maturity Date or the Term Loan Maturity Date). During the
cure period, the failure to make or pay any payment specified under clause (a) or (b) hereunder is
not an Event of Default (but no Credit Extension will be made during the cure period);

     8.2 Covenant Default.

          (a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4,
6.5, 6.6, 6.7, 6.8, 6.9, 6.10, or 6.11, or
violates any covenant in Section 7; or

          (b) Borrower fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any
default (other than those specified in this Section 8) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the default within fifteen
(15) days after the occurrence thereof; provided, however, that if the default
cannot by its nature be cured within the fifteen (15) day period or cannot after diligent attempts
by Borrower be cured within such fifteen (15) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional period (which shall not in any
case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time
period the failure to cure the default shall not be deemed an Event of Default (but no Credit
Extensions shall be made during such cure period). Cure periods provided under this section shall
not apply, among other things, to financial covenants or any other covenants set forth in clause
(a) above;

     8.3 Material Adverse Change; Change in Control. A Material Adverse Change or a Change in
Control occurs;

     8.4 Attachment; Levy; Restraint on Business.

          (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under the control of Borrower (including a Subsidiary) on deposit or
otherwise maintained with SVB or any SVB Affiliate, or (ii) a notice of lien or levy is filed
against any of Borrower’s assets with a fair market value of Five Hundred Thousand Dollars
($500,000) or more, individually or in the aggregate, by any government agency, and the same under
subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof,
discharged or stayed (whether through the posting of a bond or otherwise); provided,
however, no Credit Extensions shall be made during the 10-day cure period (unless such
Event of Default is cured before the expiration of such period); or

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          (b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents
Borrower from conducting any material part of its business;

     8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they
become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45)
days (but no Credit Extensions shall be made while of any of the conditions described in clause (a)
exist and/or until any Insolvency Proceeding is dismissed);

     8.6 Other Agreements. There is, under any agreement to which Borrower is a party with a third
party or parties: (a) any default by Borrower under any agreement relating to Indebtedness
resulting in a right by the holder of such Indebtedness, whether or not exercised, to accelerate
the maturity of such Indebtedness in an amount individually or in the aggregate in excess of One
Million Dollars ($1,000,000); or (b) any default by Borrower under any such agreement, the result
of which could reasonably be expected to have a Material Adverse Change;

     8.7 Judgments. One or more final judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least One Million Dollars ($1,000,000) (not covered
by independent third-party insurance as to which liability has been accepted by such insurance
carrier) shall be rendered against Borrower and the same are not, within ten (10) days after the
entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such judgments
are not discharged prior to the expiration of any such stay (provided that no
Credit Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or
decree);

     8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Agent or any Lender or to induce Agent or any Lender to enter this Agreement or any
Loan Document, and such representation, warranty, or other statement is incorrect in any material
respect when made;

     8.9 Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated
Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and
effect, any Person shall be in breach thereof or contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation thereunder, or the
Obligations shall for any reason be subordinated or shall not have the priority contemplated by
this Agreement or the Subordination Agreement; or

     8.10 Governmental Approvals. Any Governmental Approval shall have been revoked, rescinded,
suspended, modified in an adverse manner or not renewed in the ordinary course, and such
revocation, rescission, suspension, modification or non-renewal has had, or could reasonably be
expected to have, a Material Adverse Change.

     9 RIGHTS AND REMEDIES UPON EVENT OF DEFAULT

     9.1 Rights and Remedies. While an Event of Default occurs and continues, with the consent of
Required Lenders, Agent may, or upon the request of Required Lenders, Agent shall, without notice
or demand, do any or all of the following:

          (a) declare all Obligations immediately due and payable; provided, however, if
an Event of Default described in Section 8.5 occurs, all Obligations are immediately due
and payable without any action by Agent;

          (b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Agent or any Lender; provided,
however, if an Event of Default described in Section 8.5 occurs, the Commitments
and the obligation of each Lender to make Advances and any obligation of Issuing Lender to issue
Letters of Credit shall automatically terminate without any action by Agent;

          (c) demand that Borrower (i) deposit cash with Agent in an amount equal to 105% of the Dollar
Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all
interest, fees,

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and costs due or to become due in connection therewith (as estimated by Issuing
Lender in its good faith business judgment)), to secure all of the Obligations relating to such
Letters of Credit, as collateral security for the repayment of any future drawings under such
Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in
advance all letter of credit fees scheduled to be paid or payable over the remaining term of any
Letters of Credit; provided, however, if an Event of Default described in
Section 8.5 occurs, the obligation of Borrower to cash collateralize all Letters of Credit
remaining undrawn shall automatically become effective without any action by Agent;

          (d) terminate any FX Forward Contracts;

          (e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Agent considers advisable, notify any Person owing Borrower money of Agent’s
security interest in such funds, and verify the amount of such account;

          (f) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral
if Agent requests and make it available as Agent designates. Agent may enter premises where the
Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its security
interest and pay all reasonable expenses incurred. Borrower grants Agent a license to enter and
occupy any of its premises, without charge, to exercise any of Agent’s rights or remedies;

          (g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Agent owing to or for the credit or the account of Borrower;

          (h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell the Collateral. Agent is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of
use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar
property as it pertains to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in connection with Agent’s exercise of its rights under this Section,
Borrower’s rights under all licenses and all franchise agreements inure to Agent’s benefit;

          (i) place a “hold” on any account maintained with Agent and/or deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to any Control
Agreement or similar agreements providing control of any Collateral;

          (j) demand and receive possession of Borrower’s Books; and

          (k) exercise all rights and remedies available to Agent under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of the Collateral
pursuant to the terms thereof).

     9.2 Power of Attorney. Borrower hereby irrevocably appoints Agent as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Agent determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Agent or a third party as the Code permits. Borrower hereby appoints
Agent as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect
or continue the perfection of Agent’s security interest in the Collateral regardless of whether an
Event of Default has occurred until all Obligations have been satisfied in full and Agent is under
no further obligation to make Credit Extensions hereunder. Agent’s foregoing appointment as
Borrower’s attorney-in-fact, and all of Agent’s rights and powers, coupled with an interest, are
irrevocable until all Obligations have been fully repaid and performed and Lenders’ obligation to
provide Credit Extensions terminates.

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     9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section
6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is
obligated to pay under this Agreement or any other Loan Document, Agent may obtain such insurance
or make such payment, and all amounts so paid by Agent are Secured Party Expenses and immediately
due and payable, bearing interest at the then highest rate applicable to the Obligations, and
secured by the Collateral. Agent will make reasonable efforts to provide Borrower with notice of
Agent obtaining such insurance at the time it is obtained or within a reasonable time thereafter.
No payments by Agent are deemed an agreement to make similar payments in the future or Agent’s
waiver of any Event of Default.

     9.4 Application of Payments and Proceeds.

          (a) Unless an Event of Default has occurred and is continuing, Agent may apply any funds in
its possession, whether from Borrower account balances, payments, or proceeds realized as the
result of any collection of Accounts or other disposition of the Collateral, first, to
Secured Party Expenses, including, without limitation, the reasonable costs, expenses, liabilities,
obligations and attorneys’ fees incurred by Agent and Lenders in the exercise of their rights under
this Agreement; second, to the interest due upon any of the Obligations; and third,
to the principal of the Obligations and any applicable fees and other charges, in such order as
Agent shall determine in its sole discretion. Any surplus shall be paid to Borrower or other
Persons legally entitled thereto; Borrower shall remain liable to Lenders for any deficiency.
Borrower shall have no right to specify the order or the accounts to which Agent shall allocate or
apply any payments required to be made by Borrower to Lenders or otherwise received by Agent or any
Lender under this Agreement when any such allocation or application is not specified elsewhere in
this Agreement.

          (b) If an Event of Default has occurred and is continuing, Agent shall apply any funds in its
possession, whether from Borrower account balances, payments, proceeds realized as the result of
any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations
in the following order:

          First, to payment of that portion of the Obligations (excluding Cash Management
Services and F/X Forward Contracts) constituting fees, indemnities, Secured Party Expenses and
other amounts (including fees, charges and disbursements of counsel to Agent and amounts payable
under Section 2.8) payable to Agent, in its capacity as such;

          Second, to payment of that portion of the Obligations (excluding Cash Management
Services and F/X Forward Contracts) constituting indemnities, Secured Party Expenses, and other
amounts (other than principal, interest and fees) payable to Lenders and Issuing Lender (including
fees, charges and disbursements of counsel to the respective Lenders and Issuing Lender and
amounts payable under Section 2.8), ratably among them in proportion to the amounts
described in this clause Second payable to them;

          Third, to the extent not previously reimbursed by Lenders, to payment to Lenders of
that portion of the Obligations constituting principal and accrued and unpaid interest on any
Overadvances, ratably among the Lenders in proportion to the amounts described in this clause
Third payable to them;

          Fourth, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Advances, the Term Loan and the other Obligations, and fees (including letter of
credit fees), ratably among Lenders and Issuing Lender in proportion to the respective amounts
described in this clause Fourth payable to them;

          Fifth, to payment of that portion of the Obligations constituting unpaid principal of
the Advances, the Term Loan and the other Obligations and to cash collateralize the aggregate
undrawn amount of Letters of Credit in accordance with the provisions of Section 9.1
hereof, ratably among Lenders and Issuing Lender in proportion to the respective amounts described
in this clause Fifth held by them;

          Sixth, to payment of that portion of the Obligations arising from Cash Management
Services and F/X Forward Contracts, payable to SVB and SVB’s Affiliates;

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          Seventh, to payment of all other Obligations (including, without limitation, the cash
collateralization of unliquidated indemnification obligations as provided in Section
13.4), ratably among Secured Parties in proportion to the respective amounts described in this
clause Sixth held by them; and

          Eighth, the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to Borrower or credited to a depository account of Borrower with SVB (or an account
maintained by an Affiliate of SVB) or as otherwise required by Law; Borrower shall remain liable
to Lenders for any deficiency.

          Amounts used to cash collateralize the aggregate undrawn amount of Letters of Credit pursuant
to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they
occur. If any amount remains on deposit as cash collateral after all Letters of Credit have either
been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if
any, in the order set forth above.

          If Agent, in its good faith business judgment, directly or indirectly enters into a deferred
payment or other credit transaction with any purchaser at any sale of Collateral, Agent shall have
the option, exercisable at any time, of either reducing the Obligations by the principal amount of
the purchase price or deferring the reduction of the Obligations until the actual receipt by Agent
of cash therefor.

     9.5 Agent’s Liability for Collateral. So long as Agent complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under the control of
Agent, Agent shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act
or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.

     9.6 No Waiver; Remedies Cumulative. Agent’s or any Lender’s failure, at any time or times, to
require strict performance by Borrower of any provision of this Agreement or any other Loan
Document shall not waive, affect, or diminish any right of Agent or any Lender thereafter to demand
strict performance and compliance herewith or therewith. No waiver hereunder shall be effective
unless signed by the party granting the waiver and then is only effective for the specific instance
and purpose for which it is given. Agent’s rights and remedies under this Agreement and the other
Loan Documents are cumulative. Agent has all rights and remedies provided under the Code, by law,
or in equity. Agent’s exercise of one right or remedy is not an election and shall not preclude
Agent from exercising any other remedy under this Agreement or other remedy available at law or in
equity, and waiver of any Event of Default is not a continuing waiver. Agent’s or any Lender’s
delay in exercising any remedy is not a waiver, election, or acquiescence.

     9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by
Agent or any Lender on which Borrower is liable.

     9.8 Borrower Liability. Any Borrower may, acting singly, request Advances hereunder. Each
Borrower hereby appoints the other as agent for the other for all purposes hereunder, including
with respect to requesting Advances/Credit Extensions hereunder. Each Borrower hereunder shall be
jointly and severally obligated to repay all Advances/Credit Extensions made hereunder, regardless
of which Borrower actually receives said Advances/Credit Extensions, as if each Borrower hereunder
directly received all Advances/Credit Extensions. Each Borrower waives (a) any suretyship defenses
available to it under the Code or any other applicable law, and (b) any right to require Agent or
any Lender to: (i) proceed against any Borrower or any other person; (ii) proceed against or
exhaust any security; or (iii) pursue any other remedy. Agent may exercise or not exercise any
right or remedy it has against any Borrower or any security it holds (including the right to
foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability.
Notwithstanding any other provision of this Agreement or other related document, until the
Obligations have been indefeasibly paid in full, each Borrower irrevocably waives all rights that
it may have at law or in equity (including, without limitation, any law subrogating Borrower to the
rights of Agent or any Lender under this Agreement) to seek contribution, indemnification or any
other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily
or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to
the Obligations in connection with this Agreement or otherwise and all rights that it might have to
benefit from, or to participate in, any security for the Obligations as a result of any payment
made by Borrower with respect to the Obligations in connection with this

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Agreement or otherwise. If any payment is made to a Borrower in contravention of this
Section, such Borrower shall hold such payment in trust for Agent and Lenders and such payment
shall be promptly delivered to Agent for application to the Obligations, whether matured or
unmatured.

     10 AGENT

     10.1 Appointment and Authority.

          (a) Each Lender hereby irrevocably appoints SVB to act on its behalf as Agent hereunder and
under the other Loan Documents and authorizes Agent to take such actions on its behalf and to
exercise such powers as are delegated to Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto.

          (b) The provisions of this Section 10 are solely for the benefit of Agent, Lenders and
Issuing Lender, and neither Borrower nor any Guarantor shall have rights as a third party
beneficiary of any of such provisions. Notwithstanding any provision to the contrary elsewhere in
this Agreement, Agent shall not have any duties or responsibilities to any Lender or any other
Person, except those expressly set forth herein, or 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.

     10.2 Delegation of Duties. Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by Agent. Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through their respective Related Parties. The exculpatory
provisions of this Section shall apply to any such sub-agent and to the Related Parties of Agent
and any such sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities as Agent.

     10.3 Exculpatory Provisions. Agent shall have no duties or obligations except those expressly
set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, Agent shall not:

          (a) be subject to any fiduciary or other implied duties, regardless of whether any Default or
any Event of Default has occurred and is continuing;

          (b) have any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents
that Agent is required to exercise as directed in writing by Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the other Loan
Documents), as applicable; provided that Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose Agent to liability or that is
contrary to any Loan Document or applicable law; and

          (c) except as expressly set forth herein and in the other Loan Documents, have any duty to
disclose, and Agent shall not be liable for the failure to disclose, any information relating to
Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as
Agent or any of its Affiliates in any capacity.

          Agent shall not be liable for any action taken or not taken by it (i) with the consent or at
the request of Required Lenders (or such other number or percentage of Lenders as shall be
necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances as
provided in Section 13.1) or (ii) in the absence of its own gross negligence or willful
misconduct.

          Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement, instrument or

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document or (v) the satisfaction of any condition set forth in Section 3 or elsewhere
herein, other than to confirm receipt of items expressly required to be delivered to Agent.

     10.4 Reliance by Agent. Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Credit Extension that, by its terms, must be fulfilled to the satisfaction of a Lender,
Agent may presume that such condition is satisfactory to such Lender unless Agent shall have
received notice to the contrary from such Lender prior to the making of such Credit Extension.
Agent may consult with legal counsel (who may be counsel for Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts. Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of Required Lenders (or such other number
or percentage of Lenders as shall be provided for herein or in the other Loan Documents) as it
deems appropriate or it shall first be indemnified to its satisfaction by 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 and the other Loan Documents in accordance with a request of Required Lenders
(or such other number or percentage of Lenders as shall be provided for herein or in the other Loan
Documents), and such request and any action taken or failure to act pursuant thereto shall be
binding upon Lenders and all future holders of the Loans.

     10.5 Notice of Default. Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless Agent has received notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that Agent receives such a notice, Agent shall
give notice thereof to Lenders. Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that, unless and until Agent shall have received
such directions, Agent may (but shall not be obligated to) take such action or refrain from taking
such action with respect to such Default or Event of Default as it shall deem advisable in the best
interests of Lenders.

     10.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly acknowledges that neither
Agent nor any of its officers, directors, employees, agents, attorneys in fact or affiliates has
made any representations or warranties to it and that no act by Agent hereafter taken, including
any review of the affairs of a Group Member or any Affiliate of a Group Member, shall be deemed to
constitute any representation or warranty by Agent to any Lender. Each Lender represents to Agent
that it has, independently and without reliance upon Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal of, and
investigation into, the business, operations, property, financial and other condition and
creditworthiness of the Group Members and their Affiliates and made its own decision to make its
Credit Extensions hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition and creditworthiness of the Group
Members and their Affiliates. Except for notices, reports and other documents expressly required
to be furnished to Lenders by Agent hereunder, Agent shall have no duty or responsibility to
provide any Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of any Group Member or
any Affiliate of a Group Member that may come into the possession of Agent or any of its officers,
directors, employees, agents, attorneys in fact or Affiliates.

     10.7 Indemnification. Each Lender agrees to indemnify Agent in its capacity as such (to the
extent not reimbursed by Borrower or any Guarantor and without limiting the obligation of Borrower
or any Guarantor to do so, according to its Commitment Percentage in effect on the date on which
indemnification is sought under this Section 10.7 (or, if indemnification is sought after
the date upon which the Commitments shall have terminated and the Obligations shall have been paid
in full, in accordance with its Commitment Percentage immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before
or after the payment

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of the Loans) be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted primarily from Agent’s gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other amounts payable
hereunder.

     10.8 Agent in Its Individual Capacity. The Person serving as Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as
though it were not Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include each such Person serving as Agent
hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with Borrower, any Guarantor or any Subsidiary or other Affiliate
thereof as if such Person were not Agent hereunder and without any duty to account therefor to
Lenders.

     10.9 Successor Agent. Agent may at any time give notice of its resignation to Lenders and
Borrower. Upon receipt of any such notice of resignation, Required Lenders shall have the right,
in consultation with Borrower, to appoint a successor, which shall be a bank with an office in the
State of New York, or an Affiliate of any such bank with an office in the State of New York. If no
such successor shall have been so appointed by Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its resignation, then the
retiring Agent may on behalf of Lenders, appoint a successor Agent meeting the qualifications set
forth above provided that if the retiring Agent shall notify Borrower and Lenders that no
qualifying Person has accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that in the case of any
collateral security held by Agent on behalf of the Secured Parties under any of the Loan Documents,
the retiring Agent shall continue to hold such collateral security until such time as a successor
Agent is appointed and such collateral security is assigned to such successor Agent) and (2) all
payments, communications and determinations provided to be made by, to or through Agent shall
instead be made by or to each Lender directly, until such time as Required Lenders appoint a
successor Agent as provided for above in this Section 10.9. Upon the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations hereunder or under the
other Loan Documents (if not already discharged therefrom as provided above in this Section
10.9). The fees payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Borrower and such successor. After the
retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this
Section 10 and Section 13.12 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Agent was acting as Agent.

     10.10 Defaulting Lender.

          (a) If for any reason any Lender shall fail or refuse to abide by its obligations under this
Agreement, including, without limitation, its obligation to make available to Agent its Revolving
Line Commitment Percentage of any Advances, expenses or setoff or purchase its Letter of Credit
Commitment Percentage of a participation interest in the Letters of Credit and such failure is not
cured within two (2) days of receipt from Agent of written notice thereof, then, in addition to the
rights and remedies that may be available to the other Secured Parties, Borrower or any other party
at law or in equity, and not at limitation thereof, (i) such Defaulting Lender’s right to
participate in the administration of, or decision-making rights related to, the Obligations, this
Agreement or the other Loan Documents shall be suspended during the pendency of such failure or
refusal, and (ii) a Defaulting Lender shall be deemed to have assigned any and all payments due to
it from Borrower, whether on account of outstanding Advances, interest, fees or otherwise, to the
remaining non-Defaulting Lenders for application to, and reduction of, their proportionate shares
of all outstanding Obligations until, as a result of application of such assigned payments,
Lenders’ respective Commitment Percentages of all outstanding Obligations shall have returned to
those in effect immediately prior to such delinquency and without giving effect to the nonpayment
causing such delinquency, and (iii) at the option of Agent, any amount payable to such Defaulting
Lender hereunder (whether on

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account of principal, interest, fees or otherwise) shall, in lieu of being distributed to such
Defaulting Lender, be retained by Agent as cash collateral for future funding obligations of the
Defaulting Lender in respect of any Advance or existing or future participating interest in any
Letter of Credit. The Defaulting Lender’s decision-making and participation rights and rights to
payments as set forth in clauses (i) and (ii) hereinabove shall be restored only upon the payment
by the Defaulting Lender of its Commitment Percentage of any Obligations, any participation
obligation, or expenses as to which it is delinquent, together with interest thereon at the rate
set forth in Section 2.6(f) hereof from the date when originally due until the date upon
which any such amounts are actually paid.

          (b) The non-Defaulting Lenders shall also have the right, but not the obligation, in their
respective, sole and absolute discretion, to cause the termination and assignment, without any
further action by the Defaulting Lender for no cash consideration (pro rata, based
on the respective Commitments of those Lenders electing to exercise such right), of the Defaulting
Lender’s Revolving Line Commitment to fund future Advances. Upon any such purchase of the
Commitment Percentage of any Defaulting Lender, the Defaulting Lender’s share in future Credit
Extensions and its rights under the Loan Documents with respect thereto shall terminate on the date
of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment and Assumption.

          (c) Each Defaulting Lender shall indemnify Agent and each non-Defaulting Lender from and
against any and all loss, damage or expenses, including but not limited to reasonable attorneys’
fees and funds advanced by Agent or by any non-Defaulting Lender, on account of a Defaulting
Lender’s failure to timely fund its Revolving Line Commitment Percentage of an Advance or to
otherwise perform its obligations under the Loan Documents.

     11 NOTICES

          All notices, consents, requests, approvals, demands, or other communication (collectively,
“Communication”), other than Advance requests made pursuant to Section 2.2, by any party to
this Agreement or any other Loan Document must be in writing and be delivered or sent by facsimile
or electronic mail (i) at the addresses, facsimile numbers or electronic mail addresses listed
below, in the case of Borrower and Agent, and (ii) as set forth in an administrative questionnaire
delivered to Agent, in the case of Lenders. Any party may change its notice address by giving the
other parties written notice thereof. Each such Communication shall be deemed to have been validly
served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days
after deposit in the U.S. mail, registered or certified mail, return receipt requested, with proper
postage prepaid; (b) upon transmission, when sent by facsimile transmission or electronic mail
transmission (with such facsimile or electronic mail promptly confirmed by delivery of a copy by
personal delivery or United States mail as otherwise provided in this Section 11); (c) one
(1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d)
when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated below. Advance requests made
pursuant to Section 2.2 must be in writing and may be in the form of electronic mail,
delivered to Agent by Borrower at the e-mail address of Agent provided below and shall be deemed to
have been validly served, given, or delivered when sent (with such electronic mail promptly
confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in
this Section 11). Any party may change its address, facsimile number, or electronic mail
address by giving the other parties written notice thereof in accordance with the terms of this
Section 11.

	 	 	 	 	 
	 

	 	If to Borrower:
	 	TELECOMMUNICATION SYSTEMS, INC.
	 

	 	 	 	LONGHORN ACQUISITION, LLC
	 

	 	 	 	SOLVERN INNOVATIONS, INC.
	 

	 	 	 	QUASAR ACQUISITION, LLC
	 

	 	 	 	NETWORKS IN MOTION, INC.
	 

	 	 	 	c/o TELECOMMUNICATION SYSTEMS, INC.
	 

	 	 	 	275 West Street, Suite 400
	 

	 	 	 	Annapolis, Maryland 21401
	 

	 	 	 	Attn: Thomas M. Brandt, Jr., Chief Financial Officer
	 

	 	 	 	Fax: (410) 280-1048
	 

	 	 	 	Email: tbrandt@telecomsys.com

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	 	with a copy to:
	 	TELECOMMUNICATION SYSTEMS, INC.
	 

	 	 	 	275 West Street, Suite 400
	 

	 	 	 	Annapolis, Maryland 21401
	 

	 	 	 	Attn: Bruce White, Vice President and General Counsel
	 

	 	 	 	Fax: (410) 280-1048
	 

	 	 	 	Email: bwhite@telecomsys.com
	 
	 	 	 	 
	 

	 	If to Agent:
	 	Silicon Valley Bank
	 

	 	 	 	One Newton Executive Park, Suite 200
	 

	 	 	 	2221 Washington Street, Newton, MA 02462
	 

	 	 	 	Attn: Mr. Ryan Ravenscroft
	 

	 	 	 	Fax: (617) 969-5962
	 

	 	 	 	Email: rravenscroft@svb.com
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Riemer & Braunstein LLP
	 

	 	 	 	Three Center Plaza
	 

	 	 	 	Boston, Massachusetts 02108
	 

	 	 	 	Attn: Charles W. Stavros, Esquire
	 

	 	 	 	Fax: (617) 880-3456
	 

	 	 	 	Email: cstavros@riemerlaw.com

     12
CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE

          New York law governs the Loan Documents without regard to principles of conflicts of law.
Each party hereto submits to the exclusive jurisdiction of the State and Federal courts in New
York; provided, however, that nothing in this Agreement shall be deemed to operate
to preclude Agent or any Lender from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce
a judgment or other court order in favor of Agent or any Lender. Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any such court, and
Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction,
improper venue, or forum non conveniens and hereby consents to the granting of such legal or
equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service
of the summons, complaints, and other process issued in such action or suit and agrees that service
of such summons, complaints, and other process may be made by registered or certified mail
addressed to Borrower at the address set forth in Section 11 of this Agreement and that
service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH HEREINABOVE, AGENT SHALL SPECIFICALLY HAVE THE RIGHT TO BRING
ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION
WHICH AGENT DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE
ENFORCE AGENT’S RIGHTS AGAINST BORROWER OR ITS PROPERTY.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. EACH
PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

     13 GENERAL PROVISIONS

     13.1 Amendments and Waivers.

          (a) Neither this Agreement nor any other Loan Document, nor any terms hereof or thereof, may
be amended, supplemented or modified except in accordance with the provisions of this Section
13.1. Required Lenders and Borrower may, or, with the written consent of Required Lenders,
Agent and Borrower may, from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for

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the purpose of adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of Lenders or of Borrower hereunder or thereunder or (ii) waive, on such
terms and conditions as Required Lenders or Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver and
no such amendment, supplement or modification shall (A) forgive the principal amount or extend the
final scheduled date of maturity of any Advance or the Term Loan, extend the scheduled date of any
amortization payment in respect of the Term Loan, reduce the stated rate of any interest or fee
payable hereunder (except that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for
purposes of this clause (A)) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender’s Revolving Line Commitment, in each case
without the written consent of each Lender directly affected thereby; (B) eliminate or reduce the
voting rights of any Lender under this Section 13.1 without the written consent of such
Lender; (C) reduce any percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents or release all or substantially all of the Collateral, in each case
without the written consent of all Lenders; (D) (i) amend, modify or waive the pro rata
requirements of Section 2.6 in a manner that adversely affects Revolving Lenders or Letter
of Credit Lenders without the written consent of Majority Revolving Lenders or (ii) amend, modify
or waive the pro rata requirements of Section 2.6 in a manner that adversely affects Term
Lenders without the written consent of Majority Term Lenders; (E) reduce the percentage specified
in the definition of Majority Revolving Lenders without the written consent of all Revolving
Lenders or reduce the percentage specified in the definition of Majority Term Lenders without the
written consent of all Term Lenders; (F) amend, modify or waive any provision of Section 10
without the written consent of Agent; (G) amend, modify or waive any provision of Section
2.1.2 without the written consent of Issuing Lender; or (H) (i) amend or modify the application
of payments set forth in Section 2.1.5(d) in a manner that adversely affects Revolving
Lenders or Letter of Credit Lenders without the written consent of Majority Revolving Lenders, (ii)
amend or modify the application of payments set forth in Section 2.1.5(d) in a manner that
adversely affects Term Lenders without the written consent of Majority Term Lenders, (iii) amend or
modify the application of payments and proceeds set forth in Section 9.4 in a manner that
adversely affects Revolving Lenders or Letter of Credit Lenders without the written consent of
Majority Revolving Lenders, or (iv) amend or modify the application of payments and proceeds set
forth in Section 9.4 in a manner that adversely affects Term Lenders without the written
consent of Majority Term Lenders. Any such waiver and any such amendment, supplement or
modification shall apply equally to each Lender and shall be binding upon Borrower, Lenders, Agent
and all future holders of the Obligations. In the case of any waiver, Borrower, Lenders and Agent
shall be restored to their former position and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not continuing during
the period such waiver is
effective; provided that no such waiver shall extend to
any subsequent or other Default or Event of Default, or impair any right consequent thereon.

          (b) Notwithstanding the foregoing, this Agreement may be amended (or amended and restated)
with the written consent of Required Lenders, Agent and Borrower (i) to add one or more additional
credit facilities to this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the
benefits of this Agreement and the other Loan Documents with the Obligations and the accrued
interest and fees in respect thereof and (ii) to include appropriately Lenders holding such credit
facilities in any determination of Required Lenders and Majority Revolving Lenders or Majority Term
Lenders, as applicable.

          (c) Notwithstanding anything to the contrary herein, no Defaulting Lender or Deteriorating
Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended without the consent of
such Lender.

     13.2 Termination Prior to Maturity Date.

          (a) Term Loan. The Term Loan may be prepaid as provided in Section 2.1.5(d) hereof.
The Term Loan may be terminated, without penalty, prior to the Term Loan Maturity Date by Borrower,
effective one (1) Business Day after written notice of termination is given to Agent.
Notwithstanding any such prepayment or termination of the Term Loan, Agent’s lien and security
interest in the Collateral shall continue until Borrower fully satisfies its Obligations. Amounts
so prepaid or terminated cannot be reborrowed. Upon payment in full of the Obligations and at such
time as Lenders’ obligation to make Credit Extensions has terminated, Agent shall release its Liens
and security interests in the Collateral and all rights therein shall revert to Borrower.

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          (b) Revolving Line. The Revolving Line may be repaid in whole or in part at any time,
without penalty. Subject in any event to the provisions of Section 13.10 hereof, the
Revolving Line Commitment may be terminated prior to the Revolving Line Maturity Date by Borrower,
effective one (1) Business Day after
written notice of such termination is given to Agent, or if Lenders’ obligation to fund Credit
Extensions terminates pursuant to the terms of Section 9.1. Notwithstanding any such
termination, Agent’s Lien and security interest in the Collateral shall continue until Borrower
fully satisfies its Obligations. Upon payment in full of the Obligations and at such time as
Lenders’ obligation to make Credit Extensions has terminated, Agent shall release its Liens and
security interests in the Collateral and all rights therein shall revert to Borrower.

     13.3 Successors and Assigns.

          (a) This Agreement binds and is for the benefit of the successors and permitted assigns of
each party. Borrower may not assign this Agreement or any rights or obligations under it without
each Lender’s prior written consent (which may be granted or withheld in such Lender’s discretion).

          (b) Subject to the conditions set forth below in Section 13.3(c), any Lender may
assign to one or more banks, mutual funds or financials institutions or entities (each, an
“Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Obligations at the time owing to it) with the prior written
consent of:

               (i) Agent (such consent not to be unreasonably withheld or delayed);

               (ii) with respect to any proposed assignment of all or a portion of the Letter of
Credit Commitment, Issuing Lender; and

               (iii) TCS (such consent not to be unreasonably withheld or delayed), provided
that no such consent of TCS shall be required (A) if an Event of Default has
occurred and is continuing or (B) such assignment is to a Lender, an Affiliate of a Lender
or an Approved Fund (as defined below).

          (c) Assignments shall be subject to the following additional conditions:

               (i) except in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund (as defined below), or an assignment of the entire remaining amount of the
assigning Lender’s Commitments and the Obligations at the time owing to it, the amount of
the Commitment or, if the Commitment is not then in effect, the principal outstanding
balance of the Obligations of the assigning Lender subject to each such assignment
(determined as of the date of the Assignment and Assumption with respect to such assignment
is delivered to Agent), shall not be less than $1,000,000 (provided that
simultaneous assignments to or by two or more Approved Funds shall be aggregated for
purposes of determining such amount), unless each of Borrower and Agent otherwise consent,
provided that no such consent of Borrower shall be required if an Event of
Default has occurred and is continuing;

               (ii) the parties to each assignment of all or a portion of any Commitment shall (A)
electronically execute and deliver to Agent an Assignment and Assumption via an electronic
settlement system acceptable to Agent or (B) manually execute and deliver to Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500, payable
by the assigning or assignee Lender as they shall mutually agree; and

               (iii) the Assignee, if it shall not be a Lender, shall deliver to Agent an
administrative questionnaire.

For the purposes of this Section 13.3, the term “Approved Fund” means any Person
(other than a natural person) that is engaged in making, purchasing, holding or investing in bank
loans and similar extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

          (d) Subject to acceptance and recording thereof pursuant to Section 13.3(e) below,
from and after the effective date specified in each Assignment and Assumption, the Assignee
thereunder shall be a party

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hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.8 and 13.12). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 13.3 shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with Section 13.3(g).

          (e) Agent, acting for this purpose as an agent of Borrower, shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a register for the recordation
of the names and addresses of Revolving Lenders, and the Revolving Line Commitments of, and
principal amount of the Advances owing to, each Revolving Lender pursuant to the terms hereof from
time to time, and the names and addresses of Letter of Credit Lenders, and the Letter of Credit
Commitments of, and principal amounts owing to, each Letter of Credit Lender pursuant to the terms
hereof from time to time (the “Revolving Line Register”). The entries in the Revolving Line
Register shall be conclusive, and Borrower, Agent, Issuing Lender and Lenders may treat each Person
whose name is recorded in the Revolving Line Register pursuant to the terms hereof as a Revolving
Lender and a Letter of Credit Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Revolving Line Register shall be available for inspection by Borrower,
Issuing Lender, Agent and any Lender, at any reasonable time and from time to time upon reasonable
prior notice. Agent, acting for this purpose as an agent of Borrower, shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a register for the recordation
of the names and addresses of Term Lenders, and the Term Loan Commitments of, and principal amount
of the Term Loan owing to, each Term Lender pursuant to the terms hereof from time to time (the
“Term Loan Register”). The entries in the Term Loan Register shall be conclusive, and Borrower,
Agent, Issuing Lender and Lenders may treat each Person whose name is recorded in the Term Loan
Register pursuant to the terms hereof as a Term Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Term Loan Register shall be available for
inspection by Borrower, Issuing Lender, Agent and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

          (f) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in Section
13.3(c) and any written consent to such assignment required by Sections 13.3(b) or
(c) (in each case to the extent required), Agent shall accept such Assignment and Assumption
and record the information contained therein in the applicable Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the applicable Register as
provided in this Section 13.3(f).

          (g) (i) Any Lender may, without the consent of Borrower or Agent, sell participations to one
or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitments and the Obligations
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (C) Borrower, Agent, Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole right to enforce
this Agreement and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or waiver that (1)
requires the consent of each Lender directly affected thereby pursuant to the proviso to the second
sentence of Section 13.1 and (2) directly affects such Participant. Subject to Section
13.3(g)(ii), Borrower agrees that each Participant shall be entitled to the benefits of
Section 2.8 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Sections 13.3(b) and (c). To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 13.13(b) as though it
were a Lender, provided that such Participant shall be subject to Section
13.13(a) as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under Section
2.8 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. Any Participant that is a

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Non-U.S. Lender shall
not be entitled to the benefits of Section 2.8 unless such Participant complies with
Section 2.8(d).

          (h) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.

          (i) Borrower, upon receipt of written notice from the relevant Lender, agrees to issue a
promissory note to any Lender requiring a promissory note to facilitate transactions of the type
described in Section 13.3(h) above.

          (j) Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the
Commitments or Obligations, as the case may be, represents and warrants as of the Effective Date or
as of the effective date of the applicable Assignment and Assumption that: (i) it is an Eligible
Assignee; (ii) it has experience and expertise in the making of or investing in commitments, loans
or investments such as the Commitments and Obligations; and (iii) it will make or invest in its
Commitments and Obligations for its own account in the ordinary course of its business and without
a view to distribution of such Commitments and Obligations within the meaning of the Securities Act
or the Exchange Act, or other federal securities laws (it being understood that, subject to the
provisions of this Section 13.3, the disposition of such Commitments and Obligations or any
interests therein shall at all times remain within its exclusive control).

     13.4 Indemnification. Borrower agrees to indemnify, defend and hold Agent and each Lender and
their respective Related Parties (each, an “Indemnified Person”) harmless from and against: (a) any
and all recording and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) which do not constitute Non-Excluded Taxes, if any, that may
be payable or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the
other Loan Documents and any such other documents; and (b) any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to or arising out of or in connection
with the execution, delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents (regardless of whether any Indemnified Person is
a party hereto and regardless or whether any such matter is initiated by a third party, Borrower,
any Guarantor or any other Person), including any of the foregoing relating to the use of proceeds
of the Credit Extensions, and the reasonable fees and expenses of legal counsel in connection with
claims, actions or proceedings by any Indemnified Person against Borrower or any Guarantor under
any Loan Document (all the foregoing in this clause (b), collectively, the “Indemnified
Liabilities”), provided that Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities to the extent such Indemnified
Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such Indemnified Person. All
amounts due under this Section 13.4 shall be payable not later than ten (10) days after
written demand therefor. Statements payable by Borrower or any Guarantor pursuant to this
Section 13.4 shall be submitted to Thomas M. Brandt, Jr., Chief Financial Officer (Telecopy
No. (410) 280-1048), at the address of Borrower set forth in Section 11, or to such other
Person or address as may be hereafter designated by Borrower or any Guarantor in a written notice
to Agent. The agreements in this Section 13.4 shall survive repayment of the Obligations
and all other amounts payable hereunder.

     13.5 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.

     13.6 Correction of Loan Documents. Agent may correct patent errors and fill in any blanks in
the Loan Documents consistent with the agreement of the parties so long as Agent provides Borrower
with written notice of such correction and allows Borrower at least ten (10) days to object to such
correction. In the event of such objection, such correction shall not be made except by an
amendment signed by Agent, Required Lenders and Borrower.

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     13.7 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.

     13.8 Amendments in Writing; Waiver; Integration. No purported amendment or modification of any
Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall
be enforceable or admissible unless, and only to the extent, expressly set forth in a writing
signed by the party against which enforcement or admission is sought. Without limiting the
generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure
to require performance or course of conduct shall operate as, or evidence, an amendment, supplement
or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to
the specific circumstance expressly described in it, and shall not apply to any subsequent or other
circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or
commitment to
grant any further waiver. The Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the parties about the subject
matter of the Loan Documents merge into the Loan Documents.

     13.9 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, is an
original, and all taken together, constitute one Agreement.

     13.10 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been paid in full and satisfied. The obligation of
Borrower in Section 13.4 to indemnify the Indemnified Parties shall survive until the
statute of limitations with respect to such claim or cause of action shall have run.

     13.11 Confidentiality. In handling any confidential information received from Borrower or any
Person on Borrower’s behalf regarding or relating to Borrower, Agent and each Lender shall exercise
the same degree of care that it exercises for its own proprietary information, and Agent and each
Lender shall not disclose such confidential information other than as follows: (a) to Agent’s and
each Lender’s Subsidiaries or Affiliates (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such information and instructed
to keep such information confidential); (b) to prospective transferees or purchasers of any
interest in the Obligations (provided, however, Agent and each Lender shall first
obtain any such prospective transferee’s or purchaser’s agreement to comply with the terms of this
Section 13.11); (c) as required by law, regulation, subpoena, or other order of any
Governmental Authority; (d) to any regulatory authority purporting to have jurisdiction over Agent
or any Lender (including any self-regulatory authority, such as the National Association of
Insurance Commissioners); (e) in connection with the exercise of any remedies under the Loan
Documents; and (f) to third-party service providers of Agent and any Lender in connection with any
examination or audit so long as such service providers have executed a confidentiality agreement
with Agent or such Lender, as applicable, with terms no less restrictive than those contained
herein. Confidential information does not include information that is either: (i) in the public
domain or in Agent’s or any Lender’s possession when disclosed to Agent or such Lender, or becomes
part of the public domain after disclosure to Agent or such Lender; or (ii) disclosed to Agent or
any Lender by a third party, if Agent or such Lender does not know that the third party is
prohibited from disclosing the information.

          Agent and each Lender may use confidential information for the development of databases,
reporting purposes, and market analysis so long as such confidential information is aggregated and
anonymized prior to distribution unless otherwise expressly permitted by Borrower. The provisions
of the immediately preceding sentence shall survive the termination of this Agreement.

     13.12 Attorneys’ Fees, Costs and Expenses. Borrower shall pay all Secured Party Expenses,
including, without limitation, all Secured Party Expenses incurred in any action or proceeding
between Borrower and Agent or any Lender arising out of or relating to the Loan Documents.

     13.13 Adjustments; Right of Set Off.

          (a) Except to the extent that this Agreement expressly provides for payments to be allocated
to a particular Lender or to Term Lenders or Revolving Lenders, as applicable, if any Lender (a
“Benefitted

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Lender”) shall, at any time after the Obligations and other amounts payable hereunder shall
immediately become due and payable pursuant to Section 9, receive any payment of all or
part of the Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred
to in Section 8.5, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of the Obligations owing to such other
Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or shall provide such
other Lenders with the benefits of any such collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but without interest.

          (b) Borrower hereby grants to each Lender a lien, security interest and right of set off as
security for all Obligations, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of any Lender or any entity under the control of any Lender (including a
Lender subsidiary) or in transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, in addition to any rights and remedies of Lenders provided by
law, each Lender shall have the right, without prior notice to Borrower or any Guarantor, any such
notice being expressly waived by Borrower and each Guarantor to the extent permitted by applicable
law, upon any amount becoming due and payable by Borrower or any Guarantor hereunder (whether at
the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against
such amount any and all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the account of Borrower or such
Guarantor, as the case may be. Each Lender agrees promptly to notify Borrower and Agent after any
such setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application. ANY AND ALL RIGHTS TO
REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF BORROWER OR ANY GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.

     13.14 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and
words of like import in any Loan Document shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal effect, validity
and enforceability as a manually executed signature or the use of a paper-based recordkeeping
systems, as the case may be, to the extent and as provided for in any applicable law, including,
without limitation, any state law based on the Uniform Electronic Transactions Act.

     13.15 Captions. The headings used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.

     13.16 Construction of Agreement. The parties mutually acknowledge that they and their
attorneys have participated in the preparation and negotiation of this Agreement. In cases of
uncertainty, this Agreement shall be construed without regard to which of the parties caused the
uncertainty to exist.

     13.17 Relationship. The relationship of the parties to this Agreement is determined solely by
the provisions of this Agreement. The parties do not intend to create any agency, partnership,
joint venture, trust, fiduciary or other relationship with duties or incidents different from those
of parties to an arm’s-length contract.

     13.18 Third Parties. Nothing in this Agreement, whether express or implied, is intended to:
(a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons
other than the express parties to it and their respective permitted successors and assigns; (b)
relieve or discharge the obligation or liability of any person not an express party to this
Agreement; or (c) give any person not an express party to this Agreement any right of subrogation
or action against any party to this Agreement.

     13.19 Releases of Guarantees and Liens.

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          (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document,
Agent is hereby irrevocably authorized by each Lender (without requirement of notice to, or consent
of, any Lender except as expressly required by Section 13.1) to take any action requested
by Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 13.1 or (2) under the circumstances
described in Section 13.19(b) below.

          (b) At such time as the Obligations under the Loan Documents shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral
shall be released from the Liens created by this Agreement and the other Loan Documents, and this
Agreement and the other Loan Documents and all obligations (other than those expressly stated to
survive such termination) of Agent, each Lender and Borrower under this Agreement and the other
Loan Documents shall terminate, all without delivery of any instrument or performance of any act by
any Person.

     13.20 Replacement of Lenders. If Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8,
or if any Lender is a Defaulting Lender, then Borrower may, at its sole expense and effort, upon
notice to such Lender and Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents required by, Section
13.3), all of its interests, rights and obligations under this Agreement and the related Loan
Documents to an Assignee that shall assume such obligations (which assignee may be another Lender,
if a Lender accepts such assignment), provided that:

          (a) Borrower shall have paid to Agent the assignment fee specified in Section
13.3(c)(ii);

          (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Credit Extensions, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents from the Assignee (to the extent of such outstanding
principal and accrued interest and fees) or Borrower (in the case of all other amounts);

          (c) in the case of any such assignment resulting from payments required to be made pursuant to
Section 2.8, such assignment will result in a reduction in such compensation or payments
thereafter; and

          (d) such assignment does not conflict with applicable laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling Borrower to require
such assignment and delegation cease to apply.

     14 DEFINITIONS

     14.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word
“may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not
limiting, the singular includes the plural, and numbers denoting amounts that are set off in
brackets are negative. As used in this Agreement, the following capitalized terms have the
following meanings:

          “Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

          “Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.

          “Adjusted Quick Ratio” means the ratio of (A) (i) Borrower’s domestic unrestricted cash and
domestic unrestricted Cash Equivalents plus (ii) the aggregate value of Borrower’s net
billed accounts receivable divided by (B) (i) Borrower’s Current Liabilities (including,
without limitation, all Indebtedness owed to Lenders and any Reserves established by Agent),
less (ii) the current portion of Borrower’s Deferred Revenue, less (iii) to the
extent included as Current Liabilities, all principal Indebtedness owing under the NIM Seller
Notes.

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          “Advance” or “Advances” means an advance (or advances) under the Revolving Line.

          “Affiliate” is, with respect to any Person, each other Person that owns or controls directly
or indirectly the Person, any Person that controls or is controlled by or is under common control
with the Person.

          “Agent” means SVB, together with its Affiliates, as the administrative agent and the
collateral agent under this Agreement and the other Loan Documents, together with any of its
successors in such capacity.

          “Agreement” is defined in the preamble hereof.

          “Approved Fund” is defined in Section 13.3(c).

          “Assignee” is defined in Section 13.3(b).

          “Assignment and Assumption” is an Assignment and Assumption, substantially in the form of
Exhibit D.

          “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available
under the Borrowing Base minus (b) the Dollar Equivalent of the face amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit plus an amount
equal to the Letter of Credit Reserve), minus (c) the FX Reduction Amount, minus
(d) any amounts used for Cash Management Services, and minus (e) the outstanding principal
balance of any Advances.

          “Benefitted Lender” is defined in Section 13.13(a).

          “Borrower” is defined in the preamble hereof.

          “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.

          “Borrowing Base” is eighty-five percent (85%) of Eligible Accounts, as determined by Agent
from Borrower’s most recent Borrowing Base Certificate.

          “Borrowing Base Certificate” is that certain certificate included within each Transaction
Report.

          “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors or other appropriate body and delivered by such Person to Agent and
Lenders approving the Loan Documents to which such Person is a party and the transactions
contemplated thereby.

          “Business Day” is any day that is not a Saturday, Sunday or a day on which Agent is closed.

          “Capital Expenditures” means, with respect to any Person for any period, the sum of (a) 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, plus (b) to the extent not covered by clause (a), the aggregate of all
expenditures by such Person and its Subsidiaries during such period to acquire by purchase or
otherwise the business or capitalized assets or the capital stock of any other Person.

          “Cash Equivalents” means: (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1)
year after its creation and having the highest rating from either Standard & Poor’s Ratings Group
or Moody’s Investors Service, Inc.; (c) any Lender’s certificates of deposit issued maturing no
more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%)
of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through
(c) of this definition.

          “Cash Management Services” is defined in Section 2.1.4.

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          “Change in Control” is a transaction in which any “person” or “group” (within the meaning of
Section 13(d) and 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of greater than 35% of the shares of all
classes of stock then outstanding of TCS ordinarily entitled to vote in the election of directors.

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

          “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit
A.

          “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

          “Commitment” means, as to any Lender, the sum of the Revolving Line Commitment, the Letter of
Credit Commitment (which is a sublimit of the Revolving Line Commitment) and the Term Loan
Commitment of such Lender.

          “Commitment Percentage” means, as to any Lender at any time, the percentage (carried out to
the fourth decimal place) of the Total Commitments represented by such Lender’s Commitment at such
time. The initial Commitment Percentage of each Lender is set forth opposite the name of such
Lender on Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

          “Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.

          “Communication” is defined in Section 11.

          “Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit B.

          “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for: (a) any indebtedness, lease, dividend, letter of credit or other
obligation of another, in each case directly or indirectly guaranteed, endorsed, co made,
discounted or sold with recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c)
all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; provided
that “Contingent Obligation” does not include endorsements in the ordinary course of
business. The amount of a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable, the maximum
reasonably anticipated liability for it determined by the Person in good faith; provided
further that the amount may not exceed the maximum of the obligations under any guarantee
or other support arrangement.

          “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Agent
pursuant to which Agent, for the ratable benefit of the Secured Parties, obtains control (within
the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

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          “Convertible Senior Unsecured Notes” means the convertible senior unsecured notes of TCS due
November 1, 2014 in the aggregate original principal amount of up to $103,500,000.

          “Copyrights” are any and all copyright rights, copyright applications, copyright registrations
and like protections in each work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret.

          “Credit Extension” is any Advance, Letter of Credit, Term Loan, FX Forward Contract, amount
utilized for Cash Management Services, or any other extension of credit by any Lender for
Borrower’s benefit.

          “Current Liabilities” are all obligations and liabilities of Borrower to Lenders (including,
without limitation, all long term obligations and liabilities of Borrower to Lenders in respect of
the Term Loan), plus, without duplication, the aggregate amount of Borrower’s Total Liabilities
that mature within one (1) year.

          “Declined Amount” is defined in Section 2.1.5(d).

          “Default” means any event which with notice or passage of time or both, would constitute an
Event of Default.

          “Defaulting Lender” means any Lender that (a) has failed to fund any portion of Advances or
participations in Letters of Credit required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to Agent or
any other Lender any other amount required to be paid by it hereunder within one Business Day of
the date when due, or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.

          “Default Rate” is defined in Section 2.4(b).

          “Deferred Revenue” is all amounts received or invoiced in advance of performance under
contracts and not yet recognized as revenue.

          “Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.

          “Designated Deposit Account” is Borrower’s deposit account, account number 3300363939,
maintained with SVB.

          “Deteriorating Lender” means any Defaulting Lender or any Lender as to which (a) Issuing
Lender has a good faith belief that such Lender has defaulted in fulfilling its obligations under
one or more other syndicated credit facilities, or (b) a Person that Controls such Lender has been
deemed insolvent or become the subject of a bankruptcy, insolvency or similar proceeding.

          “Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and
not any other currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United States.

          “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent
amount therefor in Dollars as determined by Agent at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to
the country issuing such Foreign Currency.

          “EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the
extent deducted in the calculation of Net Income, depreciation expense and amortization expense,
plus (d) income tax expense, plus (e) reasonable add-backs for non-cash deductions from Net
Income, including, without limitation, non-cash stock compensation expense, in each case in this
clause (e) in Agent’s sole discretion, minus (f) capitalized software development expense.

          “Effective Date” is defined in the preamble hereof.

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          “Eligible Accounts” are Accounts which arise in the ordinary course of Borrower’s
business that meet all Borrower’s representations and warranties in Section 5.3. Agent
reserves the right at any time and from time to time after the Effective Date upon notice to
Borrower, to adjust any of the criteria set forth below and to establish new criteria in its good
faith business judgment. Without limiting the fact that the determination of which Accounts are
eligible for borrowing is a matter of Agent’s good faith judgment, the following (“Minimum
Eligibility Requirements”) are the minimum requirements for an Account to be an Eligible Account.
Unless Agent agrees otherwise in writing, Eligible Accounts shall not include:

          (a) Accounts for which the Account Debtor has not been invoiced or where goods or services
have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

          (b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date,
regardless of invoice payment period terms;

          (c) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;

          (d) Accounts billed and/or payable outside the United States;

          (e) Accounts with credit balances over ninety (90) days from invoice date;

          (f) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed thirty percent (30%) of all Accounts, for the amounts that exceed that percentage,
unless Agent approves in writing;

          (g) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
billings, milestone billings, or fulfillment contracts);

          (h) Accounts owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the
extent of the amount withheld; sometimes called retainage billings);

          (i) Accounts owing from an Account Debtor which does not have its principal place of business
in the United States or Canada except for Eligible Foreign Accounts;

          (j) Accounts owing from the United States or any department, agency, or instrumentality
thereof except for Accounts of the United States if Borrower has assigned its payment rights to
Agent and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940,
as amended;

          (k) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated
in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called
“contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;

          (l) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms
if Account Debtor’s payment may be conditional;

          (m) Accounts that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;

          (n) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

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          (o) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to
the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding,
or becomes insolvent, or goes out of business;

          (p) Accounts subject to liens in favor of any other Person;

          (q) Accounts subject to chargebacks or other payment deductions taken by an Account Debtor, in
the amount of such chargebacks or other payment deductions;

          (r) Accounts for which Agent in its good faith business judgment determines collection to be
doubtful; and

          (s) other Accounts which Agent deems ineligible in the exercise of its good faith business
judgment.

          “Eligible Assignee” means any commercial bank, insurance company, investment or mutual fund or
other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act)
and which extends credit or buys loans as one of its businesses; provided that
neither Borrower nor any Affiliate of Borrower shall be an Eligible Assignee.

          “Eligible Foreign Accounts” are Accounts for which the Account Debtor does not have its
principal place of business in the United States or Canada but are otherwise Eligible Accounts
that: (a) Agent pre-approves in writing; and (b) are supported by letter(s) of credit acceptable to
Agent, in its sole discretion.

          “Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.

          “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

          “Event of Default” is defined in Section 8.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time and any
successor statute.

          “Exemption Certificate” is an Exemption Certificate, substantially in the form of Exhibit
C.

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

          “Fee Letter” means that certain letter agreement to be entered into after the Effective Date
between Borrower and Agent.

          “Fixed Charge Coverage Ratio” means the ratio of (A) (i) Borrower’s EBITDA for the trailing
twelve (12) month period then ending minus (ii) Borrower’s unfinanced Capital Expenditures
(made during such period) minus (iii) taxes and dividends paid in cash (during such
period), divided by (B) Borrower’s Fixed Charges for the trailing three (3) month period
then ended (including, for the period ending December 31, 2009, an amount equal to three regularly
scheduled Term Loan Payments) multiplied by four (4).

          “Fixed Charges” means the sum of (i) Borrower’s Interest Expense plus (ii) all
required principal payments on Indebtedness (other than Indebtedness owing under the NIM Seller
Notes) during the trailing three (3) month period then ended.

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          “Foreign Currency” means lawful money of a country other than the United States.

          “Funding Date” is any date on which a Credit Extension is made to or for the account of
Borrower which shall be a Business Day.

          “Funding Office” means the office of Agent specified in Section 11 or such other
office as may be specified from time to time by Agent as its funding office by written notice to
Borrower and Lenders.

          “FX Business Day” is any day when (a) SVB’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to
SVB from the entity from which SVB shall buy or sell such Foreign Currency.

          “FX Forward Contract” is defined in Section 2.1.3.

          “FX Reserve” is defined in Section 2.1.3.

          “FX Reduction Amount” is defined in Section 2.1.3.

          “GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date of determination.

          “General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all Intellectual Property, claims, income and other tax refunds, security and other
deposits, payment intangibles, contract rights, options to purchase or sell real or personal
property, rights in all litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property damage, and business
interruption insurance), payments of insurance and rights to payment of any kind.

          “Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.

          “Governmental Authority” is any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.

          “Group Member” means, collectively, Borrower, any Guarantor and their respective Subsidiaries.

          “Guarantor” is any present or future guarantor of the Obligations.

          “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.

          “Indemnified Liabilities” is defined in Section 13.4.

          “Indemnified Person” is defined in Section 13.4.

          “Initial Draw” is defined in Section 2.1.5(a).

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          “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

          “Intellectual Property” means all of Borrower’s right, title, and interest in and to the
following:

          (t) its Copyrights, Trademarks and Patents, and all related applications;

          (u) any and all trade secrets and trade secret rights, including, without limitation, any
rights to unpatented inventions, know-how and operating manuals;

          (v) any and all source code;

          (w) any and all design rights which may be available to a Borrower;

          (x) any and all claims for damages by way of past, present and future infringement of any of
the foregoing, with the right, but not the obligation, to sue for and collect such damages for said
use or infringement of the Intellectual Property rights identified above; and

          (y) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

          “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower,
including, without limitation or duplication, all commissions, discounts, or related amortization
and other fees and charges with respect to letters of credit and bankers’ acceptance financing and
the net costs associated with interest rate swap, cap, and similar arrangements, and the interest
portion of any deferred payment obligation (including leases of all types).

          “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations adopted thereunder.

          “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished
products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title
representing any of the above.

          “Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.

          “IP Agreement” is that certain Intellectual Property Security Agreement executed and delivered
by Borrower to Agent dated as of the date hereof.

          “Issuing Lender” means, as the context may require, SVB or any Affiliate thereof, in its
capacity as issuer of any Letter of Credit. Issuing Lender may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates of Issuing Lender or other financial
institutions, in which case the term “Issuing Lender” shall include any such Affiliate or other
financial institution with respect to Letters of Credit issued by such Affiliate or other financial
institution.

          “Lenders” is defined in the preamble of this Agreement; provided that, unless
the context otherwise requires, each reference herein to Lenders shall be deemed to include Issuing
Lender.

          “Letter of Credit” means a standby letter of credit issued by Issuing Lender or another
institution based upon an application, guarantee, indemnity or similar agreement on the part of
Issuing Lender as set forth in Section 2.1.2.

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          “Letter
of Credit Application” is defined in
Section 2.1.2(a).

          “Letter of Credit Commitment” means, as to any Letter of Credit Lender, the obligation of such
Letter of Credit Lender, if any, to purchase an undivided interest in Issuing Lender’s obligations
and rights under and in respect of each Letter of Credit (including to make payments with respect
to draws made under any Letter of Credit pursuant to
Section 2.1.2(b)) in an aggregate
principal amount not to exceed the amount set forth under the heading “Revolving Line Commitment”
opposite such Letter of Credit Lender’s name on Schedule 2.1 or in the Assignment and
Assumption pursuant to which such Letter of Credit Lender became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof. The Letter of Credit Commitment is a
sublimit of the Revolving Line Commitment and the aggregate Letter of Credit Commitment shall not
exceed the lesser of (a) Ten Million Dollars ($10,000,000), minus (i) the sum of all amounts used for Cash
Management Services, and minus (ii) the FX Reduction Amount, or (b) the lesser of the
Revolving Line Commitment or the Borrowing Base, minus (i) the sum of all outstanding
principal amounts of any Advances (including any amounts used for Cash Management Services, and
minus (ii) the FX Reduction Amount.

          “Letter of Credit Commitment Percentage” means, as to any Letter of Credit Lender at any time,
the percentage of the Total Letter of Credit Commitments represented by such Letter of Credit
Lender’s Letter of Credit Commitment.

          “Letter
of Credit Disbursement” has the meaning set forth in
Section 2.1.2(b).

          “Letter of Credit Lender” means a Lender with a Letter of Credit Commitment.

          “Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(d).

          “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise
against any property.

          “Loan Documents” are, collectively, this Agreement, the Perfection Certificate, the IP
Agreement, the Fee Letter, any note, or notes or guaranties executed by Borrower or any Guarantor,
and any other present or future agreement between Borrower or any Guarantor and/or for the benefit
of any Lender or any of its Affiliates in connection with this Agreement, all as amended, restated,
or otherwise modified.

          “Longhorn” is defined in the preamble hereof.

          “Majority Revolving Lenders” means, as of any date of determination, at least two Revolving
Lenders holding more than 66 2/3% of the Total Revolving Line Commitments or, if the Revolving Line
Commitment of each Revolving Lender has been terminated, at least two Revolving Lenders holding in
the aggregate more than 66 2/3% of the aggregate amount of the Revolving Credit Extensions then
outstanding (with the aggregate amount of each Revolving Lender’s risk participation and funded
participation in Letters of Credit being deemed “held” by such Revolving Lender for purposes of
this definition); provided that the Revolving Line Commitment of, and the portion
of the Revolving Credit Extensions held or deemed held by, any Defaulting Lender or Deteriorating
Lender shall be excluded for purposes of making a determination of Majority Revolving Lenders.

          “Majority Term Lenders” means, as of any date of determination, at least two Term Lenders
holding more than 66 2/3% of the Total Term Loan Commitments or, if the Term Loan Commitment of
each Term Lender has been terminated, at least two Term Lenders holding in the aggregate more than
66 2/3% of the aggregate unpaid principal amount of the Term Loan then outstanding;
provided that the Term Loan Commitment of, and the portion of the Term Loan held or
deemed held by, any Defaulting Lender or Deteriorating Lender shall be excluded for purposes of
making a determination of Majority Term Lenders.

          “Material Adverse Change” is: (a) a material impairment in the perfection or priority of
Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in
the business, operations, or condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole; or (c) a material impairment of the prospect of repayment of the Obligations.

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          “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of November 25,
2009, by and among TCS, Olympus, NIM and G. Bradford Jones, as the Stockholders’ Representative (as
defined therein), including all schedules, exhibits and annexes thereto, as in effect on December
15, 2009.

          “Minimum Eligibility Requirements” is defined in the defined term “Eligible Accounts”.

          “Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries,
if any, for any period as at any date of determination, the net profit (or loss), after provision
for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period;
provided, however, that there shall be excluded from Net Income extraordinary gains
(including, without limitation, extraordinary gains arising from the Sybase Settlement) and
extraordinary losses for such period in accordance with GAAP.

          “NIM” is defined in the preamble hereof.

          “NIM Acquisition” means the acquisition by TCS of all of the outstanding capital stock of NIM
pursuant to the terms and conditions of the Merger Agreement.

          “NIM Indemnification Notes” means those certain Indemnification Promissory Notes made by TCS
in favor of the holders thereof in the aggregate original principal amount of Twenty Million
Dollars ($20,000,000), which original principal amount is subject to set-off by the holders’
indemnification obligations, if any, under the Merger Agreement.

          “NIM Seller Notes” means (a) the NIM Subordinated Notes, and (b) the NIM Indemnification
Notes.

          “NIM Subordinated Notes” means those certain Twelve Month Promissory Notes made by TCS in
favor of the holders thereof in the aggregate original principal amount of Twenty Million Dollars
($20,000,000), which original principal amount is subject to set-off by certain post-closing
working capital adjustments to the Merger Consideration (as defined in the Merger Agreement) under
the circumstances described in Section 2.7(a) of the Merger Agreement.

          “Non-Excluded Taxes” is defined in Section 2.8(a).

          “Non-U.S. Lender” is defined in Section 2.8(d).

          “Obligations” are Borrower’s obligation to pay when due any debts, principal, interest,
Secured Party Expenses and other amounts Borrower owes Agent and Lenders now or later, whether
under this Agreement or the other Loan Documents, including, without limitation, all obligations
relating to Letters of Credit (including reimbursement obligations for drawn and undrawn letters of
credit), Cash Management Services, and F/X Forward Contracts, if any, and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower
assigned to Agent or any Lender, and to perform Borrower’s duties under the Loan Documents.

          “Olympus” means Olympus Merger Sub, Inc., a Delaware corporation.

          “Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and (a) if such Person is a corporation, its bylaws in current
form, (b) if such Person is a limited liability company, its limited liability company agreement
(or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or
similar agreement), each of the foregoing with all current amendments or modifications thereto.

          “Other Taxes” means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or from
the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

          “Participant” is defined in Section 13.3(f).

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          “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

          “Payment” means all checks, wire transfers and other items of payment received by Agent or any
Lender (including proceeds of Accounts and payment of all the Obligations in full) for credit to
Borrower’s outstanding Credit Extensions or, if the balance of the Credit Extensions has been
reduced to zero, for credit to its Deposit Accounts.

          “Payment Conditions” means, at the time of determination with respect to any payment under the
NIM Subordinated Notes, that (a) no Default or Event of Default shall have occurred and be
continuing or would occur as a result of the making of such payment, and (b) at the time of such
determination and immediately following, and after giving effect to, such payment, Borrower
maintains either (i) a Fixed Charge Coverage Ratio (which, for purposes of demonstrating
compliance with the Payment Conditions, shall include in the denominator any payment to be made
under the NIM Subordinated Notes) of not less than 1.00:1.00 or (ii) domestic unrestricted cash at
SVB and domestic unrestricted Cash Equivalents at SVB of not less than Fifty Million Dollars
($50,000,000). Prior to making any payment under the NIM Subordinated Notes, Borrower shall
deliver to Agent (A) a certificate signed by a Responsible Officer of Borrower certifying that the
conditions contained in clauses (a) and (b) of the preceding sentence have been satisfied, and (B)
if Borrower is relying upon clause (b)(i) of the preceding sentence in order to make such payment,
forecasts prepared in good faith by management of Borrower of consolidated and consolidating
balance sheets, statements of income or operations and cash flows, which projected financial
information shall give due consideration to results for prior fiscal periods, shall give effect to
the proposed payment under the NIM Subordinated Notes and shall be in a form and based upon
assumptions reasonably satisfactory to Agent.

          “Perfection Certificate” is defined in Section 5.1.

          “Permitted Acquisition” is defined in Section 7.3.

          “Permitted Indebtedness” is:

          (z) Borrower’s Indebtedness to Lenders under this Agreement and the other Loan Documents;

          (aa) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;

          (bb) (i) the NIM Indemnification Notes and (ii) Subordinated Debt, including, without
limitation, the Indebtedness owing under the NIM Subordinated Notes;

          (cc) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

          (dd) Indebtedness secured by Permitted Liens;

          (ee) Indebtedness owed by one Borrower to another Borrower, or, subject to clause (d) of the
definition of “Permitted Investments” hereof, Indebtedness owed by a Subsidiary to a Borrower;

          (ff) Indebtedness of TCS under the Convertible Senior Unsecured Notes;

          (gg) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (g) above, provided that the principal amount
thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon
Borrower or its Subsidiary, as the case may be; and

          (hh) other unsecured Indebtedness in an aggregate principal amount not to exceed Five Hundred
Thousand Dollars ($500,000) at any time outstanding.

          “Permitted Investments” are:

-47-

 

          (ii) Investments shown on the Perfection Certificate and existing on the Effective Date;

          (jj) Cash Equivalents;

          (kk) Investments consisting of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of Borrower’s business;

          (ll) Investments by Borrower in Subsidiaries that are not a Borrower in an amount not to
exceed Three Million Dollars ($3,000,000) in the aggregate for all such Subsidiaries at any time,
with the amount of each such Investment to be measured at the time that such Investment is made;

          (mm) Investments consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans to employees,
officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries
pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors;

          (nn) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of business;

          (oo) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
provided that this clause (g) shall not apply to Investments of Borrower in any
Subsidiary; and

          (pp) Investments in other assets in an amount not to exceed One Million Dollars ($1,000,000)
in the aggregate.

          “Permitted Liens” are:

          (qq) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement and the other Loan Documents;

          (rr) Liens for taxes, fees, assessments or other government charges or levies, either (i) not
due and payable or (ii) being contested in good faith and for which Borrower maintains adequate
reserves on its Books, provided that no notice of any such Lien has been filed or
recorded under the Internal Revenue Code;

          (ss) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment, or (ii) existing on Equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the Equipment; provided
that in no event shall Liens permitted pursuant to subclause (i) of this clause (c),
together with Liens permitted pursuant to clause (d) of this definition, secure more than Two
Million Dollars ($2,000,000) in the aggregate amount outstanding;

          (tt) Liens securing capital lease obligations; provided that such Liens are
limited to the property being leased; provided further that in no event shall Liens
permitted pursuant to this clause (d), together with Liens permitted pursuant to clause (c)(i) of
this definition, secure more than Two Million Dollars ($2,000,000) in the aggregate amount
outstanding (it being agreed that the amount of such obligations shall be the capitalized amount
thereof, as determined in accordance with GAAP);

          (uu) statutory Liens securing claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other Persons imposed without action of such parties, provided
that such Liens do not have priority over any of Agent’s Lien, such Liens attach only to
Inventory and the aggregate amount of the Indebtedness secured by such Liens does not at any time
exceed Two Hundred Fifty Thousand Dollars ($250,000) and is not delinquent or is being contested in
good faith by appropriate proceedings;

          (vv) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of business,
provided that such Liens do not have priority over any of Agent’s Liens;

-48-

 

          (ww) Liens in favor of customs and revenue authorities securing the payment of customs duties
in connection with the importation of goods in the ordinary course of Borrower’s business,
consistent with past practices;

          (xx) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (f), but any extension, renewal or replacement Lien must be limited
to the property encumbered by the existing Lien and the principal amount of the indebtedness may
not increase;

          (yy) leases or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or
Intellectual Property) granted in the ordinary course of Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Agent a security interest;

          (zz) non-exclusive licenses of Intellectual Property granted to third parties in the ordinary
course of business;

          (aaa) security deposits paid pursuant to the terms of leases or subleases of real property
entered into by Borrower in the ordinary course of business;

          (bbb) deposits to secure the performance of bids and trade contracts, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like nature incurred by
Borrower in the ordinary course of business; and

          (ccc) Liens arising from judgments, decrees or attachments in circumstances not constituting
an Event of Default under Sections 8.4 or 8.7.

          “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.

          “Prepayment Date” is defined in Section 2.1.5(d).

          “Prime Rate” is the greater of (i) four percent (4.00%) per annum, or (ii) SVB’s most recently
announced “prime rate,” even if it is not SVB’s lowest rate; provided that in no
event shall SVB’s “prime rate” be less than the “prime rate” published from time to time in the
Wall Street Journal.

          “Prior Loan Agreement” means that certain Third Amended and Restated Loan and Security
Agreement, dated as of June 26, 2009, by and among TCS, Longhorn, Solvern, Quasar and SVB.

          “Prior Term Loan” is defined in Section 2.1.5(b).

          “Quasar” is defined in the preamble hereof.

          “Register” means the Revolving Line Register or the Term Loan Register, as the context
requires.

          “Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made.

          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.

          “Required Lenders” means, as of any date of determination, at least two Lenders holding more
than 66 2/3% of the Total Commitments or, if the Commitment of each Lender has been terminated, at
least two Lenders holding in the aggregate more than 66 2/3% of the aggregate amount of the Credit
Extensions then outstanding (with the aggregate amount of each Lender’s risk participation and
funded participation in Letters of Credit being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and

-49-

 

the portion of the Credit Extensions held or deemed held by, any Defaulting Lender or
Deteriorating Lender shall be excluded for purposes of making a determination of Required Lenders.

          “Requirement of Law” is, as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), 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.

          “Reserves” means, as of any date of determination, such amounts as Agent may from time to time
establish and revise in good faith reducing the amount of Advances, Letters of Credit and other
financial accommodations which would otherwise be available to Borrower under the lending formulas:
(a) to reflect events, conditions, contingencies or risks which, as determined by Agent in good
faith, do or may have a material adverse effect on (i) the Collateral or any other property which
is security for the Obligations or its value (including, without limitation, any increase in
delinquencies of Accounts), (ii) the assets or business of Borrower or any Guarantor, or (iii) the
security interests and other rights of Agent in the Collateral (including the enforceability,
perfection and priority thereof); or (b) to reflect Agent’s good faith belief that any collateral
report or financial information furnished by or on behalf of Borrower or any Guarantor to Agent or
any Lender is or may have been incomplete, inaccurate or misleading in any material respect; or (c)
in respect of any state of facts which Agent determines in good faith constitutes an Event of
Default or may, with notice or passage of time or both, constitute an Event of Default.

          “Responsible Officer” is any of the Chief Executive Officer, Chief Financial Officer and Chief
Operating Officer of Borrower.

          “Restricted License” is any material license or other agreement with respect to which Borrower
is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security
interest in Borrower’s interest in such license or agreement or any other property, or (b) for
which a default under or termination of could interfere with the Agent’s right to sell any
Collateral.

          “Revolving Credit Extensions” means all Credit Extensions other than the Term Loan.

          “Revolving Lender” means each Lender that has a Revolving Line Commitment or that holds
Advances under the Revolving Line.

          “Revolving Line” is an Advance or Advances in an amount equal to Thirty Five Million Dollars
($35,000,000).

          “Revolving Line Commitment” means, as to any Lender, the obligation of such Lender, if any, to
make Advances and participate in Letters of Credit in an aggregate principal amount not to exceed
the amount set forth under the heading “Revolving Line Commitment” opposite such Lender’s name on
Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms hereof (including
in connection with assignments permitted hereunder).

          “Revolving Line Commitment Percentage” means, as to any Lender at any time, the percentage
(carried out to the fourth decimal place) of the Total Revolving Line Commitments represented by
such Lender’s Revolving Line Commitment at such time. The initial Revolving Line Commitment
Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.1 or
in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

          “Revolving Line Maturity Date” is the earlier of (a) June 25, 2012 or (b) the date on which
the maturity of the Obligations is accelerated (or deemed accelerated) and the Commitments are
irrevocably terminated (or deemed terminated) in accordance with Section 9.1.

          “Revolving Line Register” is defined in Section 13.3(d).

          “SEC” means the Securities and Exchange Commission, any successor thereto, and any analogous
Governmental Authority.

-50-

 

          “Second Draw” is defined in Section 2.1.5(a).

          “Secretary’s Certificate” means, with respect to a Person, a certificate executed by its
secretary or other appropriate officer on behalf of such Person certifying that (a) such Person has
the authority to execute, deliver, and perform its obligations under each of the Loan Documents to
which it is a party, (b) that attached to such certificate is a true, accurate, and complete copy
of the resolutions then in full force and effect authorizing and ratifying the execution, delivery,
and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the
Person(s) authorized to execute the Loan Documents on behalf of such Person, together with a sample
of the true signature(s) of such Person(s), and (d) that Agent and Lenders may conclusively rely on
such certificate unless and until such Person shall have delivered to Agent and Lenders a further
certificate canceling, amending or replacing such prior certificate

          “Secured Parties” means: (a) individually, (i) each Lender and its Affiliates, (ii) Agent and
its Affiliates, (iii) Issuing Lender, (iv) each beneficiary of each indemnification obligation
undertaken by Borrower under any Loan Document, (v) any other Person to whom Obligations under this
Agreement and other Loan Documents are owing, and (vi) the successors and assigns of each of the
foregoing; and (b) collectively, all of the foregoing.

          “Secured Party Expenses” are (a) all out-of-pocket costs and expenses incurred by Agent in
connection with the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to
Agent and filing and recording fees and expenses, with statements with respect to the foregoing to
be submitted to Borrower prior to the Effective Date (in the case of amounts to be paid on the
Effective Date) and from time to time thereafter on a quarterly basis or such other periodic basis
as Agent shall deem appropriate, and (b) all costs and expenses incurred by Agent and, after
acceleration of the Obligations, each Lender in connection with the enforcement or preservation of
any rights under this Agreement, the other Loan Documents and any such other documents, including
the reasonable fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to Agent.

          “Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.

          “Securities Act” means the Securities Act of 1933, as amended from time to time and any
successor statute.

          “Settlement Date” is defined in Section 2.7.

          “Sidereal Acquisition” means the acquisition by Quasar of substantially all of the assets of
Sidereal Solutions Incorporated, a Georgia corporation (“Sidereal”), pursuant to the terms and
conditions of a certain Asset Purchase Agreement, dated as of November 16, 2009, by and among
Sidereal, the former shareholders of Sidereal, TCS and Quasar.

          “Solvern” is defined in the preamble hereof.

          “Solvern Acquisition” means the acquisition by TCS of substantially all of the common stock of
Solvern pursuant to the terms and conditions of a certain Purchase and Sale Agreement, dated as of
October 30, 2009, by and among Solvern, the former shareholders of Solvern and TCS.

          “Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now
or hereafter indebtedness to Lenders (pursuant to a subordination, intercreditor, or other similar
agreement in form and substance satisfactory to Lenders and entered into between Agent and the
other creditor), on terms acceptable to Lenders.

          “Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or
other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of

-51-

 

the board of directors or other managers of such corporation, partnership or other entity
are at the time owned, or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless the context otherwise
requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower.

          “SVB” means Silicon Valley Bank and its successors.

          “Sybase Settlement” means the settlement and license agreement entered into between TCS and
Sybase, Inc. (“Sybase”) on or about December 22, 2009, pursuant to which Sybase will make a
one-time cash payment to TCS and TCS will dismiss with prejudice its pending suit against Sybase
365 (a subsidiary of Sybase) in the United States District Court for the Eastern District of
Virginia, as well as its pending suit against Sybase 365 involving U.S. patent No. 7,460,425.

          “TCS” is defined in the preamble hereof.

          “Term Lender” means each Lender that has a Term Loan Commitment or that holds a portion of the
Term Loan.

          “Term Loan” means, collectively, the term loans made by Term Lenders pursuant to the terms of
Section 2.1.5 hereof.

          “Term Loan Amount” is an aggregate original principal amount equal to Forty Million Dollars
($40,000,000).

          “Term Loan Commitment” means, as to any Lender, the obligation of such Lender, if any, to make
a Term Loan to Borrower in a principal amount not to exceed the amount set forth under the heading
“Term Loan Commitment” opposite such Lender’s name on Schedule 2.1.

          “Term Loan Commitment Percentage” means, as to any Lender at any time, the percentage (carried
out to the fourth decimal place) of the Total Term Loan Commitments represented by such Lender’s
Term Loan Commitment at such time. The initial Term Loan Commitment Percentage of each Lender is
set forth opposite the name of such Lender on Schedule 2.1 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

          “Term Loan Maturity Date” is the earlier of (a) June 30, 2014 or (b) the date on which the
maturity of the Obligations is accelerated (or deemed accelerated) and the Commitments are
irrevocably terminated (or deemed terminated) in accordance with Section 9.1.

          “Term Loan Payment” is defined in Section 2.1.5(b).

          “Term Loan Register” is defined in Section 13.3(d).

          “Total Commitments” means, at any time, the aggregate amount of the Commitments then in
effect. The initial amount of the Total Commitments on the Effective Date is Seventy Five Million
Dollars ($75,000,000).

          “Total Letter of Credit Commitments” means, at any time, the sum of all Letter of Credit
Commitments at such time, as the same may be reduced from time to time pursuant to Section
2.1.2(b). The initial amount of the Total Letter of Credit Commitments on the Effective Date
is Ten Million Dollars ($10,000,000).

          “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, [and current
portion of Subordinated Debt permitted to be paid by Borrower, but excluding all other Subordinated
Debt].

-52-

 

          “Total Revolving Line Commitments” means, at any time, the aggregate amount of the Revolving
Line Commitments then in effect. The initial amount of the Total Revolving Line Commitments on the
Effective Date is Thirty Five Million Dollars ($35,000,000).

          “Total Term Loan Commitments” means, at any time, the aggregate amount of the Term Loan
Commitments then in effect. The initial amount of the Total Term Loan Commitments on the Effective
Date is Forty Million Dollars ($40,000,000).

          “Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of Borrower connected with and symbolized by such trademarks.

          “Transaction Report” is Agent’s standard reporting package provided by Agent to Borrower.

          “Transfer” is defined in Section 7.1.

          “Transferee” means any Assignee or Participant.

          “Unused Revolving Line Facility Fee” is defined in Section 2.5(c).

[Signature page follows.]

-53-

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.

	 	 	 	 	 
	BORROWER:

TELECOMMUNICATION SYSTEMS, INC.

 	 
	By  	
 	 	 
	 	Name: Thomas M. Brandt, Jr. 	 
	 	Title:   Senior Vice President and Chief Financial Officer 	 
	 
	LONGHORN ACQUISITION, LLC

 	 
	By  	 	 
	 	Name: Thomas M. Brandt, Jr. 	 
	 	Title:   Senior Vice President and Chief Financial Officer 	 
	 
	SOLVERN INNOVATIONS, INC.

 	 
	By  	 	 
	 	Name: Thomas M. Brandt, Jr. 	 
	 	Title:   Treasurer 	 
	 
	QUASAR ACQUISITION, LLC

 	 
	By  	 	 
	 	Name: Thomas M. Brandt, Jr. 	 
	 	Title:   Senior Vice President and Chief Financial Officer 	 
	 
	NETWORKS IN MOTION, INC.

 	 
	By  	 	 
	 	Name: Thomas M. Brandt, Jr. 	 
	 	Title:   Senior Vice President, Chief Financial Officer and Treasurer 	 
	 
	AGENT:

SILICON VALLEY BANK

 	 
	By  	
 	 
	 	Name: Ryan Ravenscroft 	 
	 	Title:   Vice President 	 
	 
	LENDERS:

SILICON VALLEY BANK

 	 
	By  	
 	 
	 	Name: Ryan Ravenscroft 	 
	 	Title:   Vice President 	 

[Signature Page to Loan and Security Agreement]

 

 

	 	 	 	 	 

OTHER LENDERS:

MANUFACTURERS & TRADERS TRUST COMPANY

	 	 	 	 	 
	 	 
	By  	 	 
	 	Name: 

	 
	 	Title:  

	 

Effective Date: December 31, 2009

[Signature Page to Loan and Security Agreement]

 

 

EXHIBIT A — COLLATERAL DESCRIPTION

     The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:

     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

     all of Borrower’s Books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions, attachments, accessories,
accessions and improvements to and replacements, products, proceeds and insurance proceeds of any
or all of the foregoing.

1

 

EXHIBIT B

COMPLIANCE CERTIFICATE

	 	 	 	 	 
	TO:

	 	SILICON VALLEY BANK, AS AGENT
	 	Date:

	 
	 	 	 	 
	FROM:

	 	TELECOMMUNICATION SYSTEMS, INC.
	 	 
	 

	 	LONGHORN ACQUISITION, LLC	 	 
	 

	 	SOLVERN INNOVATIONS, INC.	 	 
	 

	 	QUASAR ACQUISITION, LLC	 	 
	 

	 	NETWORKS IN MOTION, INC.	 	 

     The undersigned authorized officer of each of TELECOMMUNICATION SYSTEMS, INC., LONGHORN
ACQUISITION, LLC, SOLVERN INNOVATIONS, INC., QUASAR ACQUISITION, LLC and NETWORKS IN MOTION, INC.
(jointly and severally, individually and collectively, the “Borrower”) certifies that under the
terms and conditions of the Loan and Security Agreement, dated as of December 31, 2009, among
Borrower, Lenders and Agent (the “Agreement”), (1) Borrower is in complete compliance for the
period ending _________ with all required covenants except as noted below, (2) there are no
Events of Default, (3) all representations and warranties in the Agreement are true and correct in
all material respects on this date except as noted below; provided, however, 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; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all
required tax returns and reports, and Borrower has timely paid all foreign, federal, state and
local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted
pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or
claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee
payroll or benefits of which Borrower has not previously provided written notification to Agent.
Attached are the required documents supporting the certification. The undersigned certifies that
these are prepared in accordance with generally GAAP consistently applied from one period to the
next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that
no borrowings may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is determined not just at
the date this certificate is delivered. Capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly financial statements with 

Compliance Certificate

	 	Monthly within 30 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Quarterly consolidated and consolidating
financial statements (management prepared)

	 	Quarterly within 45 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Annual financial statement (CPA Audited) + CC

	 	FYE within 120 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	10-Q, 10-K and 8-K

	 	Within 5 days after filing with SEC
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	A/R & A/P Agings

	 	Monthly within 15 days
	 	Yes
	 	No

1

 

	 	 	 	 	 	 	 
	Projections

	 	60 days prior to FYE and as amended
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Transaction Reports

	 	Weekly (monthly within 30 days if no
Event of Default) and with each
request for a Credit Extension
	 	Yes
	 	No

The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)

 

The following Collateral Accounts were established after the Effective Date (if no such Collateral Accounts, state “None”):

 

	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain as indicated:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Minimum Adjusted Quick Ratio (Monthly)

	 	*
	 	___:1.00
	 	Yes
	 	No
	 
	 	 	 	 	 	 	 	 
	Minimum Fixed Charge Coverage Ratio (Quarterly)

	 	**
	 	___:1.00
	 	Yes
	 	No

 

			
	*	 	See Section 6.9(a)
	 
	**	 	See Section 6.9(b)

     The following financial covenant analyses and information set forth in Schedule 1
attached hereto are true and accurate as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)

 

     
 

     
 

	 	 	 	 	 	 	 	 	 
	TELECOMMUNICATION SYSTEMS, INC.	 	AGENT USE ONLY	 	 
	LONGHORN ACQUISITION, LLC

	 	 	 	 	 	 	 	 
	SOLVERN INNOVATIONS, INC.

	 	 	 	 	 	 	 	 
	QUASAR ACQUISITION, LLC

	 	 	 	 	 	 	 	 
	NETWORKS IN MOTION, INC.

	 	Received by:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	authorized signer	 	 

2

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:

	By:
	 	 	 	 	 	 	 	 
	 

	 

	 	 	 	 	 	 
	 	Name: 

	 	 	 	 	Verified:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	authorized signer
	 	Title: 
	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:

	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Compliance Status:       Yes      No

3

 

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:                     

	 	 	 	 	 	 	 	 	 
	I.

	 	Adjusted Quick Ratio (Section 6.9(a))
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Required: See Section 6.9(a)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Actual:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	A.

	 	Borrower’s domestic unrestricted cash and domestic unrestricted Cash Equivalents
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	B.

	 	Aggregate value of net billed accounts receivable of Borrower
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	C.

	 	Quick Assets (the sum of lines A
plus B)
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	D.

	 	Borrower’s Current Liabilities (including, without limitation, all long term
obligations and liabilities of Borrower to Lenders in respect of the Term Loan,
all other Indebtedness owed to Lenders and any Reserves established by Agent),
less the current portion of Borrower’s Deferred Revenue,
less, to the extent
included as Current Liabilities, principal Indebtedness owing under the NIM
Seller Notes
	 	 	$	 	 	 
	 
	 	 	 	 	 	 	 	 
	E.

	 	Adjusted Quick Ratio (line C divided by line D)	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	Is line E equal to or greater than                     :1:00?	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	                     No, not in compliance                          Yes, in compliance	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	II.

	 	Fixed Charge Coverage Ratio
(Section 6.9(b))	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Required: See
Section 6.9(b)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Actual:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	A.

	 	Borrower’s EBITDA for the trailing twelve (12) month period then ending
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	B.

	 	Borrower’s unfinanced Capital Expenditures (made during such period)
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	C.

	 	taxes and dividends paid in cash (during such period)
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	D.

	 	Adjusted EBITDA (the sum of lines A
minus B minus C)
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	E.

	 	Borrower’s Fixed Charges for
the trailing three (3) month period then ended (including, for the period ending December 31, 2009, an amount
equal to three regularly scheduled Term Loan Payments)
multiplied by
four (4)
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 
 

4

 

	 	 	 	 	 	 	 	 	 
	F.

	 	Fixed Charge Coverage Ratio (line D divided by line E)	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
 
	 
	 	 	 	 	 	 	 	 
	Is line D equal to or greater than                     :1.00?	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	                    
No, not in compliance                          Yes, in compliance	 	 	 	 	 	 

5

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