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REVOLVING CREDIT AGREEMENT dated as of January 11, 2000 PCSupport.com, Inc. ("Borrower") and ICE HOLDINGS NORTH AMERICA, LLC ("Lender") $1,000,000 ======================================================================== ======== TABLE OF CONTENTS ----------------- Page ---- ARTICLE I....................................................................... ................................... 1 - --------- 1.1 Definitions............................................................. .................................. 1 ----------- "ADA"................................................................... .................................. 1 --- "Affiliate"............................................................. .................................. 1 --------- "Agreement"............................................................. .................................. 1 --------- "Asset Sale"................................................................... ........................... 1 ---------- "Bankruptcy Code"................................................................... ...................... 1 --------------- "Borrower".............................................................. .................................. 1 -------- "Borrowing"............................................................. .................................. 1 --------- "Business Day".................................................................... ........................ 2 ------------ "Capital Expenditures"........................................................... ......................... 2 -------------------- "Capital Lease".................................................................. ......................... 2 ------------- "Capital Lease Obligations"............................................................ ................... 2 ------------------------- "Change of Control"................................................................ ....................... 2 ----------------- "Closing Date"................................................................... ......................... 2 ------------ "Compliance Certificate"............................................................ ...................... 2 ---------------------- "Debt".................................................................. .................................. 3 ---- "Debt Financing Fee".................................................................... .................. 3 ------------------ "Distributions"......................................................... .................................. 3 ------------- "Dollars"............................................................... .................................. 3 ------- "ERISA"................................................................. .................................. 3 ----- "ERISA Event".................................................................. ........................... 3 ----------- "ERISA Group".................................................................. ........................... 3 ----------- "Event of Default"................................................................ ........................ 3 ---------------- "Fees".................................................................. .................................. 3 ---- "Financial Statement(s)"........................................................... ....................... 3 ---------------------- "GAAP".................................................................. .................................. 4 ---- "Governing Documents".............................................................. ....................... 4 ------------------- "Governmental Authority".............................................................. .................... 4 ---------------------- "Hazardous Materials".............................................................. ....................... 4 ------------------- "Insolvency Proceeding"............................................................. ...................... 4 --------------------- "Indemnified Person(s)".............................................................. ..................... 4 --------------------- "Internal Revenue Code"................................................................... ................ 5 --------------------- "Late Payment Fee".................................................................... .................... 5 ---------------- "Lender"................................................................ .................................. 5 ------ "Lender Expenses"............................................................... .......................... 5 --------------- "Lending Rate"................................................................... ......................... 5 ------------ "Lien".................................................................. .................................. 5 ---- "Loans"................................................................. .................................. 5 ----- "Loan Document(s)"............................................................ ............................ 5 ---------------- "Lockbox Agreement".............................................................. ......................... 6 ----------------- ii "Material Adverse Effect"................................................................. ................ 6 ----------------------- "Multiemployer Plan"................................................................... ................... 6 ------------------ "Notes"................................................................. .................................. 6 ----- "Notice of Borrowing".............................................................. ....................... 6 ------------------- "Obligations"........................................................... .................................. 6 ----------- "Operating Lease".................................................................. ....................... 6 --------------- "Participant"........................................................... .................................. 7 ----------- "PBGC".................................................................. .................................. 7 ---- "Permitted Debt"................................................................... ....................... 7 -------------- "Permitted Investments"............................................................ ....................... 7 --------------------- "Permitted Liens".................................................................. ....................... 7 --------------- "Person"................................................................ .................................. 7 ------ "Plan".................................................................. .................................. 8 ---- "Purchase Money Lien"................................................................... .................. 8 ------------------- "Real Estate Leases"................................................................. ..................... 8 ------------------ "Reportable Event".................................................................. ...................... 8 ---------------- "Responsible Officer"................................................................ ..................... 8 ------------------- "Retiree Health Plan"................................................................... .................. 8 ------------------- "Revolving Credit Commitment"............................................................. ................ 8 --------------------------- "Revolving Loans".................................................................. ....................... 8 --------------- "Revolving Loans Daily Balances"............................................................... ........... 8 ------------------------------ "Revolving Loans Maturity Date"................................................................... ........ 8 ----------------------------- "Revolving Note"................................................................... ....................... 9 -------------- "Security Agreement".............................................................. ........................ 9 ------------------ "Solvent"............................................................... .................................. 9 ------- "Subsidiary"............................................................ .................................. 9 ---------- "Swaps"................................................................. .................................. 9 ----- "Taxes"................................................................. .................................. 9 ----- "Transferee"............................................................ .................................. 9 ---------- "Unfunded Liabilities"............................................................ ....................... 10 -------------------- "Unmatured Event of Default"................................................................ ............. 10 -------------------------- "Warrants".............................................................. ................................. 10 -------- 1.2 Accounting Terms and Determinations.......................................................... ............ 10 ----------------------------------- 1.3 Computation of Time Periods................................................................. ............. 10 --------------------------- 1.4 Construction............................................................ ................................. 10 ------------ 1.5 Exhibits and Schedules............................................................... .................... 10 ---------------------- 1.6 No Presumption Against Any Party................................................................... ...... 10 -------------------------------- 1.7 Independence of Provisions.............................................................. ................. 11 -------------------------- ARTICLE II...................................................................... .................................. 11 - ---------- 2.1 Revolving Loans .................................................................. ....................... 11 --------------- 2.2 Notice of Borrowing Requirements............................................................ ............. 11 -------------------------------- 2.3 Interest Rates; Payments of Interest................................................................ ..... 12 ------------------------------------ 2.4 Notes; Statements of Obligations............................................................. ............ 12 -------------------------------- 2.5 Holidays................................................................ ................................. 13 -------- 2.6 Time and Place of Payments................................................................ ............... 13 -------------------------- iii 2.7 Debt Financing Fee..................................................................... ........................... 13 ------------------ ARTICLE III..................................................................... ........................................... 13 - ----------- 3.1 Conditions to Initial Loan or Letter of Credit.................................................................. .. 13 ---------------------------------------------- 3.2 Conditions to all Loans .................................................................. ........................ 15 ----------------------- ARTICLE IV...................................................................... ........................................... 15 - ---------- 4.1 Legal Status.................................................................. .................................... 15 ------------ 4.2 No Violation; Compliance.............................................................. ............................ 16 ------------------------ 4.3 Authorization; Enforceability.......................................................... ........................... 16 ----------------------------- 4.4 Approvals; Consents................................................................ ............................... 16 ------------------- 4.5 Liens................................................................... .......................................... 16 ----- 4.6 Debt.................................................................... .......................................... 16 ---- 4.7 Litigation.............................................................. .......................................... 16 ---------- 4.8 No Default................................................................. ....................................... 16 ---------- 4.9 Subsidiaries............................................................ .......................................... 16 ------------ 4.10 Taxes................................................................... .......................................... 17 ----- 4.11 Correctness of Financial Statements.............................................................. ................. 17 ----------------------------------- 4.12 ERISA................................................................... .......................................... 17 ----- 4.13 Other Obligations............................................................. .................................... 17 ----------------- 4.14 Public Utility Holding Company Act..................................................................... ........... 17 ---------------------------------- 4.15 Investment Company Act..................................................................... ....................... 17 ---------------------- 4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc................................................... 18 ---------------------------------------------------------------- 4.17 Environmental Condition............................................................... ............................ 18 ----------------------- 4.18 Solvency................................................................ .......................................... 18 -------- 4.19 Real Estate Leases.................................................................. .............................. 18 ------------------ 4.20 Compliance With ADA..................................................................... .......................... 18 ------------------- ARTICLE V....................................................................... ........................................... 19 - --------- 5.1 Punctual Payments................................................................ ................................. 19 ----------------- 5.2 Books and Records................................................................. ................................ 19 ----------------- 5.3 Financial Statements.............................................................. ................................ 19 -------------------- 5.4 Existence; Preservation of Licenses; Compliance with Law.......................................................... 20 -------------------------------------------------------- 5.5 Insurance............................................................... .......................................... 21 --------- 5.6 Assets.................................................................. .......................................... 21 ------ 5.7 Taxes and Other Liabilities............................................................. .......................... 21 --------------------------- 5.8 Notice to Lender.................................................................. ................................ 22 ---------------- 5.9 Employee Benefits................................................................ ................................. 22 ----------------- 5.10 Further Assurances.............................................................. .................................. 23 ------------------ 5.11 Bank Accounts................................................................ ..................................... 23 ------------- 5.12 Environment............................................................. .......................................... 23 ----------- 5.13 Real Estate Leases.................................................................. .............................. 23 ------------------ 5.14 ADA..................................................................... .......................................... 23 --- ARTICLE VI...................................................................... ........................................... 24 - ---------- 6.1 Use of Funds; Margin Regulation.............................................................. ..................... 24 ------------------------------- iv 6.2 Debt.................................................................... ......................................... 24 ---- 6.3 Liens................................................................... ......................................... 24 ----- 6.4 Merger, Consolidation, Transfer of Assets.................................................................. ...... 24 ----------------------------------------- 6.5 Leases.................................................................. ......................................... 24 ------ 6.6 Sales and Leasebacks.............................................................. ............................... 25 -------------------- 6.7 Asset Sales................................................................... ................................... 25 ----------- 6.8 Investments............................................................. ......................................... 25 ----------- 6.9 Character of Business................................................................ ............................ 25 --------------------- 6.10 Distributions........................................................... ......................................... 25 ------------- 6.11 Guaranty................................................................ ......................................... 25 -------- 6.12 Transactions with Affiliates.............................................................. ....................... 25 ---------------------------- 6.13 Stock Issuance................................................................ ................................... 26 -------------- 6.14 Transactions Under ERISA................................................................... ...................... 26 ------------------------ ARTICLE VII..................................................................... .......................................... 27 - ----------- 7.1 Events of Default................................................................. ............................... 27 ----------------- 7.2 Remedies................................................................ ......................................... 28 -------- 7.3 Remedies Cumulative.............................................................. ................................ 28 ------------------- ARTICLE VIII.................................................................... .......................................... 29 - ------------ 8.1 Taxes on Payments................................................................ ................................ 29 ----------------- 8.2 Indemnification For Taxes................................................................... ..................... 29 ------------------------- 8.3 Evidence of Payment................................................................. ............................. 29 ------------------- ARTICLE IX...................................................................... .......................................... 29 - ---------- 9.1 Notices................................................................. ......................................... 29 ------- 9.2 No Waivers................................................................. ...................................... 30 ---------- 9.3 Lender Expenses; Documentary Taxes; Indemnification......................................................... ..... 30 --------------------------------------------------- 9.4 Amendments and Waivers................................................................. .......................... 31 ---------------------- 9.5 Successors and Assigns; Participations; Disclosure.............................................................. . 31 -------------------------------------------------- 9.6 Counterparts; Effectiveness; Integration............................................................. ............ 32 ---------------------------------------- 9.7 Severability............................................................ ......................................... 32 ------------ 9.8 Governing Law..................................................................... ............................... 32 ------------- 9.9 Judicial Reference............................................................... ................................ 32 ------------------ v EXHIBITS AND SCHEDULES ---------------------- Exhibit 2.4(b) - Form of Notice of Borrowing Exhibit 3.1(b) - Form of Opinions of Borrower's Counsel Exhibit 5.3(c) - Form of Compliance Certificate Exhibit 9.6 - Engagement Letter Schedule 4.7 - Litigation Schedule 4.9 - Subsidiaries Schedule 4.12 - Employee Benefit Plans Schedule 4.18 - Real Estate Leases vi REVOLVING CREDIT AGREEMENT -------------------------- This REVOLVING CREDIT AGREEMENT, dated as of January 11, 2000, is entered into among Borrower and Lender. The parties hereto agree as follows: DEFINITIONS AND INTERPRETATIONS ------------------------------- 1.1 Definitions. ----------- The following terms, as used herein, shall have the following meanings: "ADA" means the Americans with Disabilities Act, 42 U.S.C. (S) 12101, --- et. seq., and all applicable rules and regulations promulgated thereunder. "Affiliate" means any Person (i) that, directly or indirectly, --------- controls, is controlled by or is under common control with Borrower or any Subsidiary; (ii) which directly or indirectly beneficially owns or controls five percent (5%) or more of any class of voting stock of Borrower or any Subsidiary; or (iii) five percent (5%) or more of the voting stock of which is directly or indirectly beneficially owned or held by Borrower or any Subsidiary. For purposes of the foregoing, "control" (including "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement" means this Revolving Credit Agreement, together with any --------- concurrent or subsequent rider, amendment, schedule or exhibit to this Term Loan and Revolving Credit Agreement. "Asset" means any interest of a Person in any kind of property or ----- asset, whether real, personal, or mixed real and personal, and whether tangible or intangible. "Asset Sale" means any sale, transfer or other disposition of ---------- Borrower's or any Subsidiary's businesses or Asset(s) now owned or hereafter acquired, including shares of stock and indebtedness of any Subsidiary, receivables and leasehold interests. "Bankruptcy Code" means The Bankruptcy Reform Act of 1978 (Pub. L. --------------- No. 95-598; 11 U.S.C.), as amended or supplemented from time to time, or any successor statute, and any and all rules and regulations issued or promulgated in connection therewith. "Borrower" means PCSupport.Com, Inc. and its subsidiaries and -------- affiliates. "Borrowing" means a borrowing of a Revolving Loan pursuant to the --------- terms and conditions hereof. -1- "Business Day" means any day other than a Saturday, a Sunday, or a ------------ day on which commercial banks in the City of New York are authorized or required by law or executive order or decree to close. "Capital Expenditures" means expenditures made in cash, or financed -------------------- with long term debt, by any Person for the acquisition of any fixed Assets or improvements, replacements, substitutions, or additions thereto that have a useful life of more than one (1) year, including the direct or indirect acquisition of such Assets by way of increased product or service charges, offset items, or otherwise, and the principal portion of payments with respect to Capital Lease Obligations, calculated in accordance with GAAP. "Capital Lease" means any lease of an Asset by a Person as lessee ------------- which would, in conformity with GAAP, be required to be accounted for as an Asset and corresponding liability on the balance sheet of that Person. "Capital Lease Obligations" of a Person means the amount of the ------------------------- obligations of such Person under all Capital Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP. "Change of Control" means the time at which (i) any Person (including ----------------- a Person's Affiliates and associates) or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) (other than the shareholders of Borrower on the Closing Date) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of Borrower equal to at least thirty percent (30%), or such Person or group shall otherwise obtain the power to control the election of the Board of Directors of Borrower, (ii) there shall be consummated any consolidation or merger of Borrower pursuant to which Borrower's common stock (or other capital stock) would be converted into cash, securities or other property, other than a merger or consolidation of Borrower in which the holders of such common stock (or other capital stock) immediately prior to the merger have the same proportionate ownership, directly or indirectly, of common stock of the surviving corporation immediately after the merger as they had of Borrower's common stock immediately prior to such merger, (iii) all or substantially all of Borrower's Assets shall be sold, leased, conveyed or otherwise disposed of as an entirety or substantially as an entirety to any Person (including an Affiliate or associate of Borrower) in one or a series of transactions, or (iv) Michael G. McLean and Steven W. Macbeth both --- ---- fail for any reason to serve actively as the President/CEO and Chief Technology Officer/Secretary, Treasurer respectively of Borrower, whether by reason of death, disability, resignation, action by the Board of Directors or shareholders of Borrower, or otherwise. "Closing Date" means the date when all of the conditions set forth ------------ in Section 3.1 have been fulfilled to the satisfaction of Lender and its counsel. "Compliance Certificate" means a certificate of compliance to be ---------------------- delivered quarterly in accordance with Section 5.3(c), substantially in the form of Exhibit 5.3(c). -2- "Debt" means, as of the date of determination, the sum, but without ---- duplication, of any and all of a Person's: (i) indebtedness heretofore or hereafter created, issued, incurred or assumed by such Person (directly or indirectly) for or in respect of money borrowed; (ii) Capital Lease Obligations; (iii) obligations evidenced by bonds, debentures, notes, or other similar instruments; (iv) obligations for the deferred purchase price of property or services (including trade obligations; (v) current liabilities in respect of unfunded vested benefits under any Plan; (vi) obligations under letters of credit; (vii) obligations under acceptance facilities; (viii) obligations under all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, or supply funds to invest in any other Person, or otherwise to assure a creditor against loss; (ix) obligations secured by any Lien, whether or not such obligations have been assumed; and (x) Swaps. "Debt Financing Fee" has the meaning set forth in Section 2.7(a). ------------------ "Distributions" means dividends or distributions of earnings made by ------------- Borrower to its shareholders. "Dollars" or "$" means lawful currency of the United States of ------- America. "ERISA" means the Employee Retirement Income Security Act of 1974, ----- as amended from time to time, or any successor statute, and any and all regulations thereunder. "ERISA Event" means (a) a Reportable Event with respect to a Plan or ----------- Multiemployer Plan, (b) the withdrawal of a member of the ERISA Group from a Plan during a plan year in which it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate a Plan in a distress termination (as described in Section 4041(c) of ERISA), (d) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan, (e) any event or condition (i) that provides a basis under Section 4042(a)(1), (2), or (3) of ERISA for the termination of or the appointment of a trustee to administer, any Plan or Multiemployer Plan, of (ii) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA of a member of the ERISA Group from a Multiemployer Plan, or (g) providing any security to any Plan under Section 401(a)(29) of the Internal Revenue Code by a member of the ERISA Group. "ERISA Group" means Borrower and all members of a controlled group of ----------- corporations and all trades or business (whether or not incorporated) under common control which, together with Borrower are treated as a single employer under Section 414 of the Internal Revenue Code. "Event of Default" has the meaning set forth in Section 7.1. ---------------- "Fees" means the Debt Financing Fee, and the Late Payment Fee. ---- "Financial Statement(s)" means, with respect to any accounting period ---------------------- of any Person, statements of income and statements of cash flows of such Person for such period, and -3- balance sheets of such Person as of the end of such period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year or, if such period is a full fiscal year, corresponding figures from the preceding annual audit, all prepared in reasonable detail and in accordance with GAAP, subject to year-end adjustments in the case of monthly Financial Statements. Financial Statement(s) shall include the schedules thereto and annual Financial Statements shall also include the footnotes thereto. "GAAP" means generally accepted accounting principles in the United States of America, consistently applied, which are in effect as of the date of this Agreement. If any changes in accounting principles from those in effect on the date hereof are hereafter occasioned by promulgation of rules, regulations, pronouncements or opinions by or are otherwise required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions), and any of such changes results in a change in the method of calculation of, or affects the results of such calculation of, any of the financial covenants, standards or terms found herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to equitably reflect such changes, with the desired result that the criteria for evaluating financial condition and results of operations of Borrower and the Subsidiaries shall be the same after such changes as if such changes had not been made. "Governing Documents" means the certificate or articles of ------------------- incorporation, by-laws, or other organizational or governing documents of any Person. "Governmental Authority" means any federal, state, local or other ---------------------- governmental department, commission, board, bureau, agency, central bank, court, tribunal or other instrumentality or authority or subdivision thereof, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Hazardous Materials" means all or any of the following: (a) ------------------- substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity" or are otherwise regulated for the protection of persons, property or the environment; (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; and (d) asbestos in any form or electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty (50) parts per million. "Insolvency Proceeding" means any proceeding commenced by or against --------------------- any Person, under any provision of the Bankruptcy Code, or under any other bankruptcy or insolvency law, including, but not limited to, assignments for the benefit of creditors, formal or informal moratoriums, compositions, or extensions with some or all creditors. "Indemnified Person(s)" has the meaning given to such term in Section --------------------- 9.3(c). -4- "Internal Revenue Code" means the Internal Revenue Code of 1986, as --------------------- amended from time to time, or any successor statute, and any and all regulations thereunder. "Late Payment Fee" has the meaning given to such term in Section ---------------- 2.9(d). "Lender" means ICE Holdings North America, LLC, a Delaware Limited ------ Liability Company. "Lender Expenses" means (i) all expenses of Lender paid or incurred in --------------- connection with Lender's due diligence and investigation of Borrower, including appraisal, filing, recording, documentation, publication and search fees and other such expenses, and all attorneys' fees and expenses incurred in connection with the structuring, negotiation, drafting, preparation, execution and delivery of this Agreement, the Loan Documents, and any and all other documents, instruments and agreements entered into in connection herewith up to a maximum of US$75,000.00; (ii) all expenses of Lender paid or incurred in connection with or pursuant to any proceedings arising under the Bankruptcy Code; ( iii) all expenses of Lender, including attorneys' fees and expenses (including attorneys' fees incurred pursuant to proceedings arising under the Lender Bankruptcy Code) paid or incurred in connection with the negotiation, preparation, execution and delivery of any waiver, forbearance, consent, amendment or addition to this Agreement or any Loan Document, or the termination hereof and thereof; ( iv) all costs or expenses paid or advanced by Lender which are required to be paid by Borrower under this Agreement or the Loan Documents, including taxes and insurance premiums of every nature and kind of Borrower; and ( v) if an Event of Default occurs, all expenses paid or incurred by Lender, including attorneys' fees and expenses (including attorneys' fees incurred pursuant to proceedings arising under the Lender Bankruptcy Code), costs of collection, suit, arbitration, judicial reference and other enforcement proceedings, and any other out-of-pocket expenses incurred in connection therewith or resulting therefrom, whether or not suit is brought, or in connection with any refinancing or restructuring of the Obligations and the liabilities of Borrower under this Agreement, any of the Loan Documents, or any other document, instrument or agreement entered into in connection herewith in the nature of a "workout." "Lending Rate" means the per annum rate equal to eleven (11%) per cent ------------ per anum. "Lien" means any mortgage, deed of trust, pledge, security interest, ---- hypothecation, assignment, deposit arrangement or other preferential arrangement, charge or encumbrance (including, any conditional sale or other title retention agreement, or finance lease) of any kind. "Loans" means the Revolving Loans. ----- "Loan Document(s)" means each of the following documents, instruments, ---------------- and agreements individually or collectively, as the context requires: (i) the Revolving Note; (ii) the Security Agreement; -5- (iii) the Lockbox Agreement; (iv) the Warrant; and (v) such other documents, instruments, and agreements (including control agreements, financing statements and fixture filings) as Lender may reasonably request in connection with the transactions contemplated hereunder or to perfect or protect the liens and security interests granted to Lender in connection herewith. "Lockbox Agreement" means that certain agreement among Lender, ----------------- Borrower and Republic National Bank, N.A. or such other bank that is acceptable to Lender. "Material Adverse Effect" means a material adverse effect on (i) the ----------------------- business, Assets, condition (financial or otherwise), results of operations, or prospects of Borrower, or any Subsidiary, (ii) the ability of Borrower to perform its obligations under this Agreement (including, without limitation, repayment of the Obligations as they come due), or (iii) the validity or enforceability of this Agreement, the Loan Documents, or the rights or remedies of Lender hereunder and thereunder. "Multiemployer Plan" means a "multiemployer plan" as defined in (S) ------------------ 4001(a)(3) of ERISA or (S) 3(37) of ERISA to which any member of the ERISA Group has contributed, or was obligated to contribute, within the preceding six plan years (while a member of such ERISA Group) including for these purposes any Person which ceased to be a member of the ERISA Group during such six year period. "Notes" means the Revolving Note. ----- "Notice of Borrowing" means an irrevocable notice from Borrower to ------------------- Lender of Borrower's request for a Borrowing pursuant to the terms of Section 2.4(b), substantially in the form of Exhibit 2.4(b). "Obligations" means any and all indebtedness, liabilities, and ----------- obligations of Borrower owing to Lender and to its successors and assigns, previously, now, or hereafter incurred, and howsoever evidenced, whether direct or indirect, absolute or contingent, joint or several, liquidated or unliquidated, voluntary or involuntary, due or not due, legal or equitable, whether incurred before, during, or after any Insolvency Proceeding, and whether recovery thereof is or becomes barred by a statute of limitations or is or becomes otherwise unenforceable or unallowable as claims in any Insolvency Proceeding, together with all interest thereupon (including interest under Section 2.5(b) and all interest accruing during the pendency of an Insolvency Proceeding). The Obligations shall include, without limiting the generality of the foregoing, all principal and interest owing under the Loans, all Lender Expenses, the Fees, any other fees and expenses due hereunder, and all other indebtedness evidenced by this Agreement and/or the Notes. "Operating Lease" means any lease of an Asset by a Person which, in --------------- conformity with GAAP, is not a Capital Lease. -6- "Participant" has the meaning set forth in Section 9.5(d). ----------- "PBGC" means the Pension Benefit Guaranty Corporation or any entity ---- succeeding to any or all of its functions under ERISA. "Permitted Debt" means (i) Debt owing to Lender in accordance with the -------------- terms of this Agreement and the Loan Documents; (ii) Trade debt that is not more than 30 days past due; (iii) Debt which has been approved in writing by Lender and is listed on Schedule 1.1P, but no voluntary prepayments, renewals, extensions, or refinancing thereof; and (iv) Debt secured by a Purchase Money Lien and Capital Lease Obligations up to a maximum aggregate principal amount outstanding for all such Debt of Borrower and the Subsidiaries under this clause (iv) of Ten Thousand Dollars ($10,000). "Permitted Investments" means any of the following investments --------------------- denominated and payable in Dollars, maturing within one year from the date of acquisition, selected by Borrower: (i) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by any agency thereof and backed by the full faith and credit of the United States; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof and, at the time of acquisition, having the highest credit rating obtainable from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper or corporate promissory notes bearing at the time of acquisition the highest credit rating either of S&P or Moody's issued by United States, Canadian, European or Japanese Lender holding companies or industrial or financial companies; (iv) certificates of deposit issued by and Lender acceptances of and interest bearing deposits with Lender; and (v) money market funds organized under the laws of the United States or any state thereof, Canada or any of its provinces that invest predominantly in any of the foregoing investments permitted under clauses (i), (ii), (iii) and (iv). "Permitted Liens" means (i) Liens for current taxes, assessments or --------------- other governmental charges which are not delinquent or remain payable without any penalty, (ii) Liens in favor of Lender in accordance with the Loan Documents, (iii) statutory Liens, such as inchoate mechanics', inchoate materialmen's, landlord's, warehousemen's, and carriers' liens, and other similar liens, other than those described in clause (i) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith by appropriate proceedings, provided that, if delinquent, adequate reserves have been set aside with respect thereto as required by GAAP and, by reason of nonpayment, no property is subject to a material risk of loss or forfeiture; (iv) Liens relating to Capital Lease Obligations, (v) judgment Liens that do not constitute an Event of Default under Section 7.1(i), (vi) Liens, if they constitute such, of any Operating Lease UCC filings permitted hereunder, and (vii) Liens securing any Debt listed on Schedule 1.1P. "Person" means and includes natural persons, corporations, limited ------ partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, Lender, trust companies, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. -7- "Plan" means an "employee benefit plan" as defined in (S) 3(3) of ---- ERISA in which any personnel of any member of the ERISA Group participate or from which any such personnel may derive a benefit or with respect to which any member of the ERISA Group may incur liability, excluding any Multiemployer Plan, but including any plan either established or maintained by any member of the ERISA Group or to which such Person contributes under the laws of any foreign country. "Purchase Money Lien" means a Lien on any Asset acquired by Borrower ------------------- or any of its Subsidiaries; provided that (i) such Lien attaches only to the Asset being acquired; (ii) a description of the Asset being acquired is furnished to Lender; and (iii) the Debt incurred in connection with such acquisition does not exceed one hundred percent (100%) of the purchase price of such Asset. "Real Estate Leases" means all leases, licenses, and any and all other ------------------ agreements regarding a right of entry to and/or a possessory interest in real property now or hereinafter entered into by either Borrower as a tenant or licensee, or which have been, or are in the future, being purchased, assigned or sublet to either Borrower as a tenant or licensee. "Reportable Event" means any of the events described in Section ---------------- 4043(c) of ERISA other than a Reportable Event as to which the provision of 30 days notice to the PBGC is waived under applicable regulations. "Responsible Officer" means either the Chief Executive Officer, Chief ------------------- Financial Officer or Controller of a Person, or such other officer, employee, or agent of such Person designated by a Responsible Officer in a writing delivered to Lender. "Retiree Health Plan" means an "employee welfare benefit plan" within ------------------- the meaning of Section 3(1) of ERISA that provides benefits to individuals after termination of their employment, other than as required by Section 601 of ERISA. "Revolving Credit Commitment" means One Million Dollars --------------------------- ($1,000,000.00), reduced by the amount, if any, of exercise proceeds paid to Borrower (in any manner permitted by the warrant) as the result of the exercise of any of the warrants issued to Lender on the Closing Date. "Revolving Loans" has the meaning given to such term in Section 2.2. --------------- "Revolving Loans Daily Balances" means the amount determined by taking ------------------------------ the amount of the obligations owed under the Revolving Loans at the beginning of a given day, adding any new Revolving Loans advanced or incurred on such date, and subtracting any payments or collections on the Revolving Loans which are deemed to be paid on that date under the provisions of this Agreement. "Revolving Loans Maturity Date" means one year from the Closing Date. ----------------------------- -8- "Revolving Note" means that certain Secured Revolving Note in the -------------- principal amount of One Million Dollars ($1,000,000.00), dated as of even date herewith, executed by Borrower to the order of Lender. "Security Agreement" means that certain Security Agreement, dated as ------------------ of even date herewith, between Borrower and Lender. "Solvent" means, with respect to any Person on the date any ------- determination thereof is to be made, that on such date: (a) the present fair valuation of the Assets of such Person is greater than such Person's probable liability in respect of existing debts; (b) such Person does not intend to, and does not believe that it will, incur debts beyond such Person's ability to pay as such debts mature; and (c) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, which would leave such Person with Assets remaining which would constitute unreasonably small capital after giving effect to the nature of the particular business or transaction. For purposes of this definition (i) the "fair valuation" of any property or assets means the amount realizable within a reasonable time, either through collection or sale of such Assets at their regular market value, which is the amount obtainable by a capable and diligent Person from an interested buyer willing to purchase such property or assets within a reasonable time under ordinary circumstances; and (ii) the term "debts" includes any payment obligation, whether or not reduced to judgment, equitable or legal, matured or unmatured, liquidated or unliquidated, disputed or undisputed, secured or unsecured, absolute, fixed or contingent. "Subsidiary" means any corporation, limited liability company, ---------- partnership, trust or other entity (whether now existing or hereafter organized or acquired) of which Borrower or one or more Subsidiaries of Borrower at the time owns or controls directly or indirectly more than 50% of the shares of stock or partnership or other ownership interest having general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees or otherwise exercising control of such corporation, limited liability company, partnership, trust or other entity (irrespective of whether at the time stock or any other form of ownership of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Swaps" means payment obligations with respect to interest rate swaps, ----- currency swaps and similar obligations obligating a Person to make payments, whether periodically or upon the happening of a contingency. For the purposes of this Agreement, the amount of the obligation under any Swap shall be the amount determined, in respect thereof as of the end of the then most recently ended fiscal quarter of Borrower, based on the assumption that such Swap had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to each party thereto or if any such agreement provides for the simultaneous payment of amounts by and to each party, then in each such case, the amount of such obligation shall be the net amount so determined. "Taxes" has the meaning set forth in Section 8.1. ----- "Transferee" has the meaning set forth in Section 9.5(e). ---------- -9- "Unfunded Liabilities" means, with respect to any Plan at any time, -------------------- the amount (if any) by which (i) the present value of all benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or an appointed trustee under Title IV of ERISA. "Unmatured Event of Default" means any condition or event which with -------------------------- the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Warrants" means those certain Warrants, dated as of even date -------- herewith, executed by Borrower in favor of Lender. 1.2 Accounting Terms and Determinations. Unless otherwise specified ----------------------------------- herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP. 1.3 Computation of Time Periods. In this Agreement, with respect to --------------------------- the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding." Periods of days referred to in this Agreement shall be counted in calendar days unless otherwise stated. 1.4 Construction. Unless the context of this Agreement clearly ------------ requires otherwise, references to the plural include the singular and to the singular include the plural, references to any gender include any other gender, the part includes the whole, the term "including" is not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." References in this Agreement to "determination" by Lender include good faith estimates by Lender (in the case of quantitative determinations), and good faith beliefs by Lender (in the case of qualitative determinations). The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, exhibit and schedule references are to this Agreement, unless otherwise specified. Any reference in this Agreement or any of the Loan Documents to this Agreement or any of the Loan Documents includes any and all permitted alterations, amendments, changes, extensions, modifications, renewals, or supplements thereto or thereof, as applicable. 1.5 Exhibits and Schedules. All of the exhibits and schedules ---------------------- attached hereto shall be deemed incorporated herein by reference. 1.6 No Presumption Against Any Party. Neither this Agreement, any of -------------------------------- the Loan Documents, any other document, agreement, or instrument entered into in connection herewith, nor any uncertainty or ambiguity herein or therein shall be construed or resolved using any presumption against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement, the Loan Documents, and the other documents, instruments, -10- and agreements entered into in connection herewith have been reviewed by each of the parties and their counsel and shall be construed and interpreted according to the ordinary meanings of the words used so as to accomplish fairly the purposes and intentions of all parties hereto. 1.7 Independence of Provisions. All agreements and covenants -------------------------- hereunder, under the Loan Documents, and the other documents, instruments, and agreements entered into in connection herewith shall be given independent effect such that if a particular action or condition is prohibited by the terms of any such agreement or covenant, the fact that such action or condition would be permitted within the limitations of another agreement or covenant shall not be construed as allowing such action to be taken or condition to exist. ARTICLE II ---------- TERMS OF THE CREDIT ------------------- 2.1 Revolving Loans. Provided that no Event of Default or Unmatured --------------- Event of Default has occurred, and subject to the other terms and conditions hereof, Lender agrees to make revolving loans ("Revolving Loans") to Borrower, upon notice in accordance with Section 2.4(b), from the Closing Date up to but not including the Maturity Date, the proceeds of which shall be used only for the purposes allowed in Section 6.1(b), subject to the following conditions and limitations: (a) the aggregate principal amount of Revolving Loans outstanding after giving effect to any proposed Borrowing on such date shall not exceed the amount of the Revolving Credit Commitment then in effect; (b) All repayments of Revolving Loans shall be without penalty or premium. On the Maturity Date, Borrower shall pay to Lender the entire unpaid principal balance of the Revolving Loans together with all accrued but unpaid interest thereon. 2.2 Notice of Borrowing Requirements. -------------------------------- (a) Each Borrowing shall be made on a Business Day. (b) Each Borrowing shall be made upon telephonic notice given by a Responsible Officer of Borrower, followed by a Notice of Borrowing, given by facsimile or personal service, delivered to Lender at the address set forth in the Notice of Borrowing. Lender shall be given such notice no later than 11:00 a.m., New York, New York time, on the day on which such Borrowing is to be made, and such notice shall state the amount thereof (subject to the limitations set forth in Section 2.2). Any Notice of Borrowing (or telephonic notice in respect thereof) shall be irrevocable and Borrower shall be bound to borrow in accordance therewith. (c) Lender shall not incur any liability to Borrower in acting upon any telephonic notice which Lender believes in good faith to have been given by a Responsible Officer of Borrower, or for otherwise acting in good faith under this Section 2.3, and in making any Revolving Loans pursuant to telephonic notice. -11- (d) So long as all of the conditions for a Borrowing set forth herein have been satisfied, Lender shall make the proceeds of such Borrowing available to Borrower on the applicable Borrowing date by transferring same day funds, equal to the amount of such Borrowing, in accordance with written disbursement instructions given by Borrower to Lender, in form and substance satisfactory to Lender and otherwise consistent with Section 6.1. 2.3 Interest Rates; Payments of Interest. ------------------------------------ (a) Interest Rate. The unpaid principal balance of all Loans ------------- shall bear interest at the Lending Rate. (b) Default Rate. If any payment of principal or interest on ------------ the Loans shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), in addition to and not in substitution of any of Lender's other rights and remedies with respect to such nonpayment, the entire unpaid principal balance of the Loans shall bear interest at the Lending Rate plus five hundred (500) basis points until such overdue payment is paid in full. In addition, interest, Lender Expenses, the Fees, and other amounts due hereunder not paid when due sha