Exhibit 10.1

 

 

 

EXECUTION COPY

CREDIT AGREEMENT

Dated as of July 17, 2012

among

ENGILITY HOLDINGS, INC.,

as Holdings,

ENGILITY CORPORATION,

as the Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,

and

The Lenders From Time to Time Party Hereto

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, CREDIT
AGRICOLE CORPORATE AND INVESTMENT BANK, REGIONS CAPITAL MARKETS AND SUNTRUST
ROBINSON HUMPHREY, INC.,

as

Joint Lead Arrangers and Joint Book Managers

BARCLAYS BANK PLC, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, REGIONS BANK
AND SUNTRUST BANK,

as

Syndication Agents

CAPITAL ONE, N.A., SUMITOMO MITSUI BANKING CORPORATION AND

MANUFACTURERS AND TRADERS TRUST COMPANY,

as

Documentation Agents

 

 

 

--------------------------------------------------------------------------------

ARTICLE I.

 

DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01

 

Defined Terms

     1   

1.02

 

Other Interpretive Provisions

     33   

1.03

 

Accounting Terms

     34   

1.04

 

Rounding

     35   

1.05

 

Times of Day

     35   

1.06

 

Letter of Credit Amounts

     35   

ARTICLE II.

 

THE COMMITMENTS AND CREDIT EXTENSIONS

     35   

2.01

 

Loans

     35   

2.02

 

Borrowings, Conversions and Continuations of Loans

     36   

2.03

 

Letters of Credit

     38   

2.04

 

Swing Line Loans

     47   

2.05

 

Prepayments

     51   

2.06

 

Termination or Reduction of Commitments

     53   

2.07

 

Repayment of Loans

     54   

2.08

 

Interest

     55   

2.09

 

Fees

     56   

2.10

 

Computation of Interest and Fees

     56   

2.11

 

Evidence of Debt

     57   

2.12

 

Payments Generally; Administrative Agent’s Clawback

     57   

2.13

 

Sharing of Payments by Lenders

     59   

2.14

 

Increase in Revolving Credit Commitments

     60   

2.15

 

Additional Term Loan Facilities

     62   

2.16

 

Cash Collateral

     64   

2.17

 

Defaulting Lenders

     65   

ARTICLE III.

 

TAXES, YIELD PROTECTION AND ILLEGALITY

     68   

3.01

 

Taxes

     68   

3.02

 

Illegality

     72   

3.03

 

Inability to Determine Rates

     73   

3.04

 

Increased Costs; Reserves on Eurodollar Rate Loans

     73   

3.05

 

Compensation for Losses

     75   

3.06

 

Mitigation Obligations; Replacement of Lenders

     75   

3.07

 

Survival

     76   

ARTICLE IV.

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     76   

4.01

 

Conditions to Closing Date and Initial Borrowing

     76   

4.02

 

Conditions to all Credit Extensions

     79   

ARTICLE V.

 

REPRESENTATIONS AND WARRANTIES

     80   

5.01

 

Existence, Qualification and Power

     80   

5.02

 

Authorization; No Contravention

     80   

5.03

 

Governmental Authorization; Other Consents

     80   

5.04

 

Binding Effect

     81   

5.05

 

Financial Statements; No Material Adverse Effect

     81   

5.06

 

Litigation

     82   

5.07

 

No Default

     82   

 

i

--------------------------------------------------------------------------------

5.08

 

Ownership of Property; Liens

     82   

5.09

 

Environmental Compliance

     82   

5.10

 

Insurance

     83   

5.11

 

Taxes

     83   

5.12

 

ERISA Compliance

     84   

5.13

 

Subsidiaries

     84   

5.14

 

Margin Regulations; Investment Company Act

     85   

5.15

 

Accuracy and Completeness of Information

     85   

5.16

 

Compliance with Laws

     85   

5.17

 

Intellectual Property; Licenses, Etc.

     85   

5.18

 

OFAC

     86   

5.19

 

Solvency

     86   

5.20

 

Labor Matters

     86   

5.21

 

Senior Indebtedness

     86   

5.22

 

Collateral Documents

     86   

5.23

 

Foreign Corrupt Practices Act

     87   

5.24

 

Use of Proceeds

     87   

5.25

 

Government Relations and Material Contracts

     87    ARTICLE VI.  

AFFIRMATIVE COVENANTS

     87   

6.01

 

Financial Statements

     87   

6.02

 

Certificates; Other Information

     88   

6.03

 

Notices

     90   

6.04

 

Payment of Obligations

     90   

6.05

 

Preservation of Existence, Etc.

     90   

6.06

 

Maintenance of Insurance

     91   

6.07

 

Compliance with Laws

     91   

6.08

 

Inspection of Property; Books and Records

     91   

6.09

 

Use of Proceeds

     92   

6.10

 

Covenant to Guarantee Obligations and Give Security

     92   

6.11

 

Compliance with Environmental Laws

     93   

6.12

 

Further Assurances

     94   

6.13

 

Maintenance of Ratings

     94   

6.14

 

Material and Government Contracts

     94   

6.15

 

Post-Closing Obligations

     94    ARTICLE VII.  

NEGATIVE COVENANTS

     95   

7.01

 

Liens

     95   

7.02

 

Investments

     97   

7.03

 

Indebtedness

     98   

7.04

 

Fundamental Changes

     100   

7.05

 

Dispositions

     101   

7.06

 

Restricted Payments

     102   

7.07

 

Change in Nature of Business

     103   

7.08

 

Transactions with Affiliates

     103   

7.09

 

Burdensome Agreements

     103   

 

ii

--------------------------------------------------------------------------------

7.10

 

Holdings

     104   

7.11

 

Financial Covenants

     105   

7.12

 

Sales and Lease-Backs

     105   

7.13

 

Other Indebtedness and Agreements

     106   

7.14

 

Fiscal Year

     107   

7.15

 

Spin-Off Transactions

     107    ARTICLE VIII.  

EVENTS OF DEFAULT AND REMEDIES

     107   

8.01

 

Events of Default

     107   

8.02

 

Remedies Upon Event of Default

     109   

8.03

 

Application of Funds

     110    ARTICLE IX.  

ADMINISTRATIVE AGENT

     111   

9.01

 

Appointment and Authority

     111   

9.02

 

Rights as a Lender

     112   

9.03

 

Exculpatory Provisions

     112   

9.04

 

Reliance by Administrative Agent

     113   

9.05

 

Delegation of Duties

     113   

9.06

 

Resignation of Administrative Agent

     114   

9.07

 

Non-Reliance on Administrative Agent and Other Lenders

     115   

9.08

 

No Other Duties, Etc.

     115   

9.09

 

Administrative Agent May File Proofs of Claim

     116   

9.10

 

Collateral and Guaranty Matters

     116   

9.11

 

Secured Cash Management Agreements and Secured Hedge Agreements

     117    ARTICLE X.  

MISCELLANEOUS

     118   

10.01

 

Amendments, Etc.

     118   

10.02

 

Notices; Effectiveness; Electronic Communication

     120   

10.03

 

No Waiver; Cumulative Remedies; Enforcement

     122   

10.04

 

Expenses; Indemnity; Damage Waiver

     123   

10.05

 

Payments Set Aside

     125   

10.06

 

Successors and Assigns

     125   

10.07

 

Treatment of Certain Information; Confidentiality

     130   

10.08

 

Right of Setoff

     131   

10.09

 

Interest Rate Limitation

     132   

10.10

 

Counterparts; Integration; Effectiveness

     132   

10.11

 

Survival of Representations and Warranties

     132   

10.12

 

Severability

     133   

10.13

 

Replacement of Lenders

     133   

10.14

 

Governing Law; Jurisdiction; Etc.

     134   

10.15

 

Waiver of Jury Trial

     135   

10.16

 

No Advisory or Fiduciary Responsibility

     135   

10.17

 

Electronic Execution of Assignments and Certain Other Documents

     136   

10.18

 

USA PATRIOT Act

     136   

10.19

 

Judgment Currency

     136   

10.20

 

Entire Agreement

     137   

 

iii

--------------------------------------------------------------------------------

SCHEDULES

 

1.01(a)    Internal Reorganization 1.01(b)    Subsidiary Guarantors 1.01(c)   
Existing Letter of Credit 2.01    Commitments and Applicable Percentages 5.03   
Governmental Authorization; Other Consents 5.06    Litigation 5.08(a)    Owned
Properties 5.08(b)    Leased Properties 5.13    Subsidiaries 6.15   
Post-Closing Obligations 7.01    Existing Liens 7.02    Existing Investments
7.03    Existing Indebtedness 7.09    Burdensome Agreements 10.02   
Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

 

A    Borrowing Notice B    Swing Line Loan Notice C-1    Term Note C-2   
Revolving Note C-3    Swing Line Note D    Compliance Certificate E   
Assignment and Assumption F    Guarantee and Collateral Agreement G    Form of
Simpson, Thacher & Bartlett LLP Opinion H-1    U.S. Tax Compliance Certificate
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes) H-2    U.S. Tax Compliance Certificate (For Foreign Participants That
Are Not Partnerships For U.S. Federal Income Tax Purposes) H-3    U.S. Tax
Compliance Certificate (For Foreign Participants That Are Partnerships For U.S.
Federal Income Tax Purposes) H-4    U.S. Tax Compliance Certificate (For Foreign
Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) I    Form of
Solvency Certificate J    Form of Perfection Questionnaire

 

iv

--------------------------------------------------------------------------------

CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of July 17, 2012, among
ENGILITY HOLDINGS, INC., a Delaware Corporation (“Holdings”), ENGILITY
CORPORATION, a Delaware corporation, (the “Borrower”), each lender from time to
time party hereto (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer.

The Borrower has requested that the Lenders provide a revolving credit facility
in the aggregate amount of $65,000,000 and a term loan facility in the aggregate
amount of $335,000,000, and the Lenders are willing to do so on the terms and
conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Additional Term Loan Facility” has the meaning specified in Section 2.15(a).

“Additional Term Loan Facility Effective Date” has the meaning specified in
Section 2.15(d).

“Additional Term Loan Lender” has the meaning specified in Section 2.15(c).

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

“Administrative Agent Fee Letter” means the Administrative Agent Fee Letter
dated as of the Closing Date between the Borrower and the Administrative Agent.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
approved by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

 

1

--------------------------------------------------------------------------------

“Aggregate Revolving Credit Commitments” means the Revolving Credit Commitments
of all Lenders. The aggregate principal amount of the Aggregate Revolving Credit
Commitments of all Lenders on the Closing Date is $65,000,000.

“Agreement” means this Credit Agreement.

“Applicable Percentage” means (a) in respect of the Term Loan Facility, with
respect to any Term Loan Lender at any time, the percentage (carried out to the
ninth decimal place) of the Term Loan Facility represented by (i) on or prior to
the Closing Date, such Term Loan Lender’s Term Loan Commitment at such time and
(ii) thereafter, the principal amount of such Term Loan Lender’s Term Loans at
such time and (b) in respect of the Revolving Credit Facility, with respect to
any Revolving Credit Lender at any time, the percentage (carried out to the
ninth decimal place) of the Aggregate Revolving Credit Commitments represented
by such Revolving Credit Lender’s Revolving Credit Commitment at such time,
subject to adjustment as provided in Section 2.17. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender in
respect of the applicable Facility shall be determined based on the Applicable
Percentage of such Lender in respect of such Facility most recently in effect,
giving effect to any subsequent assignments. The initial Applicable Percentage
of each Lender in respect of each Facility is set forth opposite the name of
such Lender in respect of each Facility on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

“Applicable Rate” means (a) 0.50% per annum for the commitment fees referred to
in Section 2.09(a), (b) 3.50% per annum for Base Rate Loans, (c) 4.50% per annum
for Eurodollar Rate Loans and Letter of Credit Fees with respect to Financial
Letters of Credit and (d) 2.70% per annum for Letter of Credit Fees with respect
to Performance Letters of Credit.

“Applicable Revolving Credit Percentage” means with respect to any Revolving
Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage
in respect of the Revolving Credit Facility at such time.

“Approved Fund” means any Fund 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.

“Appropriate Lender” means, at any time, (a) with respect to the Term Loan
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility or holds a Term Loan or a Revolving Credit Loan,
respectively, at such time, (b) with respect to the Letter of Credit Sublimit,
(i) the L/C Issuer and (ii) if any Letters of Credit have been issued pursuant
to Section 2.03(a), the Revolving Credit Lenders and (c) with respect to the
Swing Line Sublimit, (i) the Swing Line Lender and (ii) if any Swing Line Loans
are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form (including electronic
documentation generated by MarkitClear or other electronic platform) approved by
the Administrative Agent.

 

2

--------------------------------------------------------------------------------

“Attributable Indebtedness” means, on any date, (a) the amount of any Capital
Lease Obligations of any Person and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the
relevant lease that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP if such lease were accounted for as a
Capital Lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Holdings, the Borrower and its Subsidiaries for the fiscal year ended
December 31, 2011, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of
Holdings, the Borrower and its Subsidiaries, including the notes thereto.

“Availability Period” means the period commencing from and including the Closing
Date to the earliest of (a) the Maturity Date for the Revolving Credit Facility,
(b) the date of termination of the Revolving Credit Commitments pursuant to
Section 2.06, and (c) the date of termination of the commitment of each Lender
to make Loans and of the obligation of the L/C Issuer to make L/C Credit
Extensions pursuant to Section 8.02.

“Available Basket Amount” means, as of the Closing Date, $0, which amount shall
be (a) increased, on the date of delivery in any fiscal year of the financial
statements and Compliance Certificate required by Section 6.01(a) and
Section 6.02(b) with respect to the immediately preceding fiscal year, by an
amount equal to 25% of Consolidated Net Income for such immediately preceding
fiscal year (or, in the case where such Consolidated Net Income for such
immediately preceding fiscal year is a deficit, reduced by 100% of such
deficit), commencing with the fiscal year ending on December 31, 2012 (it being
understood and agreed that with respect to the fiscal year ending on
December 31, 2012, the amount described in this clause (a) shall be determined
based on the portion of such fiscal year commencing on July 1, 2012 and ending
on December 31, 2012), and (b) reduced by the aggregate amount of any
Investments made pursuant to Section 7.02(i), any Restricted Payments made
pursuant to Section 7.06(g) and any payments, prepayments, repurchases,
redemptions, defeasances or segregations of Indebtedness made pursuant to the
proviso set forth in Section 7.13(a)(i)(1) during the period commencing on the
Closing Date through and including the relevant date of determination (for
purposes of this clause (b), without taking into account the intended usage of
the Available Basket Amount on the relevant date of determination).

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
“prime rate”, (c) the Eurodollar Rate plus 1.00% and (d) 2.25%. The “prime rate”
is a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such prime rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change. Any change in the
Federal Funds Rate or the Eurodollar Rate will take effect on the effective date
of such change.

 

3

--------------------------------------------------------------------------------

“Base Rate Loan” means a Revolving Credit Loan or a Term Loan that bears
interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Revolving Credit Borrowing, a Term Borrowing or a Swing Line
Borrowing, as the context may require.

“Borrowing Notice” means a notice of (a) a Term Borrowing, (b) a Revolving
Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.

“Business” has the meaning specified in Section 5.09.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day that is also a
London Banking Day.

“Capital Expenditures” means, for any period, (a) the additions to property,
plant and equipment and other capital expenditures of Holdings, the Borrower and
its Subsidiaries that are (or should be) set forth in a consolidated statement
of cash flows of Holdings for such period prepared in accordance with GAAP and
(b) Capital Lease Obligations or Synthetic Lease Obligations incurred by
Holdings, the Borrower and its Subsidiaries during such period, but excluding in
each case, without duplication, (i) any such expenditure made to restore,
replace or rebuild property to the condition of such property immediately prior
to any damage, loss, destruction or condemnation of such property, to the extent
such expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation, (ii) Permitted Acquisitions and (iii) reinvestments of Net Cash
Proceeds of Dispositions permitted under this Agreement.

“Capital Lease” means, as applied to any Person, any lease of any property by
that Person as lessee which, in accordance with GAAP, is required to be
accounted for as a liability on the balance sheet of that Person; provided that
if any lease which would not be accounted for as a liability under GAAP in
effect on the date hereof shall be required to be accounted for as a liability
as a result of a change in GAAP after the date hereof, such lease shall not be
treated as a Capital Lease for any purpose hereunder.

“Capital Lease Obligations” means, of any Person as of the date of
determination, the aggregate liability of such Person under Capital Leases
reflected on a balance sheet of such Person under GAAP.

 

4

--------------------------------------------------------------------------------

“Cash Collateralize” means to deposit in a Controlled Account or to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of one or
more of the L/C Issuer or the Lenders, as collateral for L/C Obligations or
obligations of the Lenders to fund participations in respect of L/C Obligations,
cash or deposit account balances or, if the Administrative Agent and the L/C
Issuer shall agree in their sole discretion, other credit support, in each case
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer. “Cash Collateral” shall have a meaning
correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.

“Cash Equivalents” means (a) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and time
deposits with maturities of one year or less from the date of acquisition and
overnight bank deposits of any Lender or of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than one year with respect to securities
issued or fully guaranteed or insured by the United States Government,
(d) commercial paper of a domestic issuer rated at least A-2 by S&P, P-2 by
Moody’s or F-2 by Fitch, or carrying an equivalent rating by a nationally
recognized rating agency if both of S&P and Moody’s cease publishing ratings of
investments, (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P, A by Moody’s or A by Fitch, (f) securities with maturities of one year
or less from the date of acquisition backed by standby letters of credit issued
by any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition or (g) shares of money market mutual or similar funds
(excluding hedge funds) which (i) invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition, (ii) comply with the
criteria set forth in Rule 2a-7 under the Investment Company Act of 1940 or
(iii) are rated AAA by S&P, Aaa by Moody’s or AAA by Fitch.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, purchasing and corporate
cards, credit or debit cards, electronic funds transfer and other cash
management arrangements.

“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement with a Loan Party, is the Administrative Agent, a Joint
Lead Arranger, a Lender or an Affiliate of any of the foregoing Persons, in its
capacity as a party to such Cash Management Agreement.

“CFC” means a “controlled foreign corporation” within the meaning of
Section 957(a) of the Code.

“Change in Law” means the occurrence, after the date of this Agreement (or, in
the case of an Eligible Assignee, after the date such Eligible Assignee becomes
a party to this Agreement), of any of the following: (a) the adoption or taking
effect of any law, rule, regulation

 

5

--------------------------------------------------------------------------------

or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines, requirements and directives thereunder or
issued in connection therewith or in implementation thereof and (y) all
requests, rules, guidelines, requirements and directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, issued or
implemented; provided further, that the increased costs associated with a Change
in Law based on the foregoing clauses (x) and (y) may only be imposed to the
extent the applicable Lender imposes the same charges on other similarly
situated borrowers under credit facilities comparable to the Facilities.

“Change of Control” means an event or series of events by which:

(a) after the consummation of the Spin-Off, any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time
(such right, an “option right”)), directly or indirectly, of 35% or more of the
equity securities of Holdings entitled to vote for members of the board of
directors or equivalent governing body of Holdings on a fully-diluted basis (and
taking into account all such securities that such person or group has the right
to acquire pursuant to any option right); or

(b) prior to the consummation of the Spin-Off, L-3 shall, at any time, cease to
own, directly or indirectly, 100% of the Equity Interests of Holdings; or

(b) a majority of the members of the board of directors of Holdings fail to be
(a) members of the board of directors of Holdings incumbent as of the Closing
Date, or (b) members nominated by the members of the board of directors of
Holdings incumbent on the Closing Date, or (c) members appointed by members of
the board of directors of Holdings nominated under clause (a) or (b); or

(d) prior to the consummation of the Internal Reorganization, L-3 shall, at any
time, cease to own, directly or indirectly, 100% of the Equity Interests of the
Borrower; or

(e) after the consummation of the Internal Reorganization, Holdings shall, at
any time, cease to directly own 100% of the Equity Interests of the Borrower.

 

6

--------------------------------------------------------------------------------

“Closing Date” has the meaning specified in Section 4.01.

“Code” means the Internal Revenue Code of 1986, as amended (unless as otherwise
indicated).

“Collateral” means all of the “Collateral” and “Mortgaged Property” referred to
in the Collateral Documents and all of the other property that is or is intended
under the terms of the Collateral Documents to be subject to Liens in favor of
the Administrative Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, the Guarantee and Collateral
Agreement, the Intellectual Property Security Agreements, the Mortgages (if any)
and each of the collateral assignments, control agreements, security agreements,
pledge agreements or other similar agreements, instruments or documents that
creates or purports to create a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.

“Commitment” means a Term Loan Commitment or a Revolving Credit Commitment, as
the context may require.

“Company Intellectual Property” has the meaning specified in Section 5.17.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Confidential Information Memorandum” means the Confidential Information
Memorandum dated June 2012 relating to the Borrower and the Transactions.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Debt Service Coverage Ratio” means, as of any date of
determination, the ratio of (a) (i) Consolidated EBITDA, less (ii) the aggregate
amount of all Capital Expenditures (other than an amount of Capital Expenditures
made in connection with the Spin-Off after the Closing Date but prior to the
second anniversary of the Closing Date in an aggregate amount not to exceed
$25,000,000 over the term of this Agreement) to (b) the sum of (i) Consolidated
Interest Expense payable in cash plus (ii) the aggregate principal amount of all
regularly scheduled principal payments of outstanding debt for borrowed money of
Holdings, the Borrower and its Subsidiaries, but excluding any such payments to
the extent refinanced through the incurrence of additional Indebtedness
otherwise expressly permitted under Section 7.03, in each case, for the period
of the four prior fiscal quarters ended on such date and as determined on a
consolidated basis in accordance with GAAP.

“Consolidated EBITDA” means, for any period, for Holdings, the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
(excluding, without duplication, (v) impairment losses incurred on goodwill and
other intangible assets or on debt or equity investments computed in accordance
with Financial Accounting Standard No. 142 or other GAAP, (w) gains or losses
incurred on the retirement of debt computed in accordance with Financial
Accounting Standard No. 145, (x) gains and losses in connection with asset

 

7

--------------------------------------------------------------------------------

dispositions whether or not constituting extraordinary gains and losses,
(y) non-cash gains or losses on discontinued operations and (z) gains and losses
with respect to judgments or settlements in connection with litigation matters
for such period) plus the following to the extent, except with respect to clause
(e) below, deducted in calculating such Consolidated Net Income:
(a) Consolidated Interest Expense for such period, (b) the provision for
federal, state, local and foreign income taxes payable by Holdings, the Borrower
and its Subsidiaries for such period, (c) depreciation and amortization expense
for such period, (d) non-cash stock-based compensation expenses for such period,
each as determined on a consolidated basis in accordance with GAAP, (e) the
amount of cost savings, operating expense reductions and synergies projected by
the Borrower in good faith to be realized as a result of specified actions taken
or with respect to which substantial steps have been taken (in the good faith
determination of the Borrower) during such period, net of the amount of actual
benefits realized during such period from such actions; provided that (A) a duly
completed certificate signed by a Responsible Officer of the Borrower shall be
delivered to the Administrative Agent certifying that (x) such cost savings,
operating expense reductions and synergies are reasonably expected and factually
supportable in the good faith judgment of the Borrower and (y) such actions are
to be taken within 12 months after the consummation of the Permitted
Acquisition, Disposition, restructuring or implementation of an initiative which
is expected to result in such cost savings, expense reductions or synergies,
(B) no cost savings, operating expense reductions and synergies shall be added
pursuant to this clause (e) to the extent duplicative of any expenses or charges
otherwise added to Consolidated EBITDA whether through a pro forma adjustment or
otherwise, for such period, (C) the aggregate amount of cost savings, operating
expense reductions and synergies added pursuant to this clause (e) do not exceed
2.5% of Consolidated EBITDA for any four consecutive fiscal quarter period and
(D) projected amounts (and not yet realized) may no longer be added in
calculating Consolidated EBITDA pursuant to this clause (e) to the extent
occurring more than four full fiscal quarters after the specified action taken
in order to realize such projected cost savings, operating expense reductions
and synergies, (f) extraordinary or non-recurring charges, expenses or losses
for such period, (g) other non-cash charges, expenses or losses for such period,
minus the following to the extent added in calculating such Consolidated Net
Income: (a) all non-cash items increasing Consolidated Net Income for such
period and (b) extraordinary or non-recurring income or gains.

“Consolidated Funded Indebtedness” means, as of any date of determination, for
Holdings, the Borrower and its Subsidiaries on a consolidated basis, without
duplication, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) all purchase money Indebtedness,
(c) all drawn amounts owing under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments to the extent not reimbursed, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness in
respect of Capital Leases and Synthetic Lease Obligations and (f) all
Indebtedness of the types referred to in clauses (a) through (e) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Subsidiary
is a general partner or joint venturer, unless such Indebtedness is expressly
made non-recourse to the Borrower or such Subsidiary, in each case to the
extent, if any, reflected as a liability on the balance sheet of Holdings, the
Borrower and its Subsidiaries on such date in accordance with GAAP.

 

8

--------------------------------------------------------------------------------

“Consolidated Interest Expense” means, as of the last day of any fiscal quarter,
the sum of the amount of interest expense of Holdings, the Borrower and its
Subsidiaries for the four fiscal quarters ended on such date, determined on a
consolidated basis, each in accordance with GAAP for such period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) (i) Consolidated Funded Indebtedness as of such date minus (ii) the
Designated Cash Balances as of such date to (b) Consolidated EBITDA for the
period of the four fiscal quarters most recently ended.

“Consolidated Net Income” means, for any period, for Holdings, the Borrower and
its Subsidiaries on a consolidated basis, the net income of Holdings, the
Borrower and its Subsidiaries for that period, determined on a consolidated
basis in accordance with GAAP.

“Consolidated Tangible Assets” means, as of any date of determination, the total
tangible assets of Holdings, the Borrower and its Subsidiaries as determined on
a consolidated basis in accordance with GAAP.

“Consolidated Total Assets” means, as of any date of determination, the total
assets of Holdings, the Borrower and its Subsidiaries as determined on a
consolidated basis in accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“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.

“Controlled Account” means each deposit account and securities account that is
subject to an account control agreement in form and substance satisfactory to
the Administrative Agent and the L/C Issuer.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Cash Equivalents) of Holdings, the Borrower and its Subsidiaries
at such time, calculated in accordance with GAAP.

“Current Liabilities” shall mean, at any time, the consolidated current
liabilities of Holdings, the Borrower and its Subsidiaries at such time,
calculated in accordance with GAAP, but excluding, without duplication, (a) the
current portion of any long-term Indebtedness and (b) outstanding Revolving
Credit Loans and Swing Line Loans.

 

9

--------------------------------------------------------------------------------

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

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

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum.

“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the
Swing Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Line Loans) within two Business Days of the date when due, (b) has
notified the Borrower, the Administrative Agent, the L/C Issuer or the Swing
Line Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the Borrower,
to confirm in writing to the Administrative Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any Equity Interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as

 

10

--------------------------------------------------------------------------------

such ownership interest does not result in or provide such Lender with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above, and of the effective date of such status, shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 2.17(b)) as of the date established
therefor by the Administrative Agent in a written notice of such determination,
which shall be delivered by the Administrative Agent to the Borrower, the L/C
Issuer, the Swing Line Lender and each other Lender promptly following such
determination.

“Designated Cash Balances” means, at any time, (a) $25,000,000, if at such time
Holdings, the Borrower and its Subsidiaries have Unrestricted Cash in an amount
in excess of $50,000,000 or (b) $0, if at such time Holdings, the Borrower and
its Subsidiaries have Unrestricted Cash in an amount less than or equal to
$50,000,000.

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Discharge of the Obligations” has the meaning specified in Section 9.10(a).

“Distribution Agreement” means the Distribution Agreement, substantially in the
form of Exhibit 2.1 to Amendment No. 3 to Form 10 filed by Holdings on June 19,
2012 with the SEC, entered into at or before the Closing Date, between L-3 and
Holdings.

“Documentation Agents” means Capital One, N.A., Sumitomo Mitsui Banking
Corporation and Manufacturers and Traders Trust Company.

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

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States, any state thereof or the District of Columbia and that is not
a Foreign Subsidiary.

“Eligible Assignee” means any Person other than a natural Person that is (a) a
Lender, an Affiliate of any Lender or an Approved Fund (any two or more related
Approved Funds being treated as a single Eligible Assignee for all purposes
hereof), or (b) a 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 of 1933, as amended) and which extends credit or buys
loans in the ordinary course; provided that notwithstanding anything herein to
the contrary, “Eligible Assignee” shall not include the Borrower or any of the
Borrower’s Affiliates.

 

11

--------------------------------------------------------------------------------

“Engagement Letter” means the Engagement Letter dated July 12, 2012 among
Holdings, the Borrower and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

“Engility Services” means Engility Services Inc., a Delaware corporation.

“Environmental Laws” means any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable requirement
(including, without limitation, common law) of any foreign government, the
United States, or any state, local, municipal or other governmental authority,
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health as affected by the environment
as has been, is now, or may at any time hereafter be, in effect, including, but
not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§ 9601 et seq.; the Toxic
Substance Control Act, 15 U.S.C. §§ 9601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. §§ 1802 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901 et seq.; the Clean Water Act; 33 U.S.C. §§ 1251
et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; or other similar federal
and/or state environmental laws.

“Environmental Permits” means any and all permits, licenses, registrations,
notifications, exemptions and any other authorization required under any
applicable Environmental Law.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Materials of Environmental
Concern, (c) exposure to any Materials of Environmental Concern, (d) the release
or threatened release of any Materials of Environmental Concern into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

12

--------------------------------------------------------------------------------

“Eurodollar Rate” means:

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or such other commercially available source providing
quotations of BBA LIBOR as may be designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two London Banking Days
prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period or, (ii) if such rate is not available at such time for any
reason, the rate per annum determined by the Administrative Agent to be the rate
at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Rate Loan
being made, continued or converted and with a term equivalent to such Interest
Period would be offered by Bank of America’s London Branch to major banks in the
London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two London Banking Days prior to the commencement of such Interest
Period; provided that the Eurodollar Rate shall at no time be less than
1.25% per annum; and

(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London
time determined two London Banking Days prior to such date for Dollar deposits
being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the date of determination
in same day funds in the approximate amount of the Base Rate Loan being made or
maintained and with a term equal to one month would be offered by Bank of
America’s London Branch to major banks in the London interbank Eurodollar market
at their request at the date and time of determination; provided that the
Eurodollar Rate shall at no time be less than 1.25% per annum.

“Eurodollar Rate Loan” means a Revolving Credit Loan or a Term Loan that bears
interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” shall mean, for any fiscal year of the Borrower, an amount
equal to the excess of (a) the sum, without duplication, of (i) Consolidated
EBITDA for such fiscal year and (ii) reductions to noncash working capital of
Holdings, the Borrower and its Subsidiaries for such fiscal year (i.e., the
decrease, if any, in Current Assets minus Current Liabilities from the beginning
to the end of such fiscal year) over (b) the sum, without duplication, of
(i) the amount of any Taxes payable in cash by Holdings, the Borrower and its
Subsidiaries with respect to such fiscal year, (ii) Consolidated Interest
Expense for such fiscal year paid in cash, (iii) Capital Expenditures and
Permitted Acquisitions made in cash during such fiscal year, except to the
extent financed with the proceeds of the issuance or incurrence of Indebtedness,
equity issuances, the Net Cash Proceeds of Recovery Events or other proceeds
that would not be included in Consolidated EBITDA, (iv) permanent repayments of
Indebtedness (other than

 

13

--------------------------------------------------------------------------------

mandatory prepayments of Loans under Section 2.05) made in cash by Holdings, the
Borrower and its Subsidiaries during such fiscal year, but only to the extent
that the Indebtedness so prepaid by its terms cannot be reborrowed or redrawn
and such prepayments do not occur in connection with a refinancing of all or any
portion of such Indebtedness and (v) additions to noncash working capital for
such fiscal year (i.e., the increase, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year).

“Excluded Assets” has the meaning specified in the Guarantee and Collateral
Agreement.

“Excluded Subsidiary” means (a) any Foreign Subsidiary, (b) any Immaterial
Subsidiary and (c) any Subsidiary that is not a Wholly Owned Subsidiary.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated,
and including backup withholding in respect thereof (including, for the
avoidance of doubt, U.S. federal backup withholding Taxes under section 3406 of
the Code)), franchise Taxes, and branch profits Taxes, in each case, (i) imposed
as a result of such Recipient being organized under the laws of, or having its
principal office or, in the case of any Lender, its Lending Office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 10.13) or (ii) such Lender changes its Lending Office,
except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c),
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) (except for
Section 3.01(e)(ii)(D)) and (d) any U.S. federal withholding Taxes imposed
pursuant to FATCA.

“Existing Letter of Credit” means the letter of credit issued by Bank of
America, N.A. that is outstanding on the Closing Date and identified on Schedule
1.01(c).

“Facility” means the Term Loan Facility or the Revolving Credit Facility, as the
context may require.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

“FCPA” has the meaning specified in Section 5.23.

 

14

--------------------------------------------------------------------------------

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

“Federal Government” means the United States government or any department,
instrumentality or agency thereof, and any state government or any department,
instrumentality or agency thereof.

“Fitch” means Fitch, Inc., and any successor thereto.

“Financial Letter of Credit” means a Letter of Credit not constituting a
Performance Letter of Credit.

“Foreign Lender” means a Lender that is not a U.S. Person. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary that either (i) is not organized under
the laws of the United States, any state thereof or the District of Columbia;
(ii) is a direct or indirect Subsidiary of a CFC; or (iii) is a Subsidiary that
is treated as a disregarded entity for U.S. federal income tax purposes and that
has no material assets other than Equity Interests of one or more Subsidiaries
that are CFCs.

“Form 10” means Holdings’ registration statement on Form 10, as amended.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage
of Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders in
accordance with the terms hereof.

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

 

15

--------------------------------------------------------------------------------

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

“Government Contracts” means (a) written contracts between Holdings, the
Borrower or any of its Subsidiaries, on the one hand, and the Federal
Government, on the other hand; and (b) written subcontracts (a “Subcontract”)
between Holdings, the Borrower or any of its Subsidiaries, on the one hand, and
a prime contractor who is providing goods or services to the Federal Government
pursuant to a written contract with the Federal Government (the “Prime
Contract”), on the other hand, provided that the Subcontract relates only to
goods or services being provided to the Federal Government pursuant to the Prime
Contract.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, (the “guaranteeing person”) (a) any
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantee and Collateral Agreement” means the Guarantee and Collateral
Agreement dated as of the Closing Date among the Loan Parties and the
Administrative Agent, substantially in the form of Exhibit F.

 

16

--------------------------------------------------------------------------------

“Guarantors” means Holdings, the Borrower and the Subsidiary Guarantors.

“Guaranty” means, collectively, the Guaranty made by the Guarantors in favor of
the Administrative Agent and the Lenders pursuant to Section 2 of the Guarantee
and Collateral Agreement.

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract
with a Loan Party, is the Administrative Agent, a Joint Lead Arranger, a Lender
or an Affiliate of any of the foregoing Persons, in its capacity as a party to
such Swap Contract.

“Holdings” has the meaning specified in the introductory paragraph hereto.

“Immaterial Subsidiary” means, at any time, with respect to any Subsidiary to
the extent that any such Subsidiary (a) individually has aggregate assets of
less than 5.0% of Consolidated Total Assets or (b) in the aggregate with other
Subsidiaries designated as “Immaterial Subsidiaries”, has aggregate assets of
less than 5.0% of Consolidated Total Assets.

“Incremental Revolving Credit Commitment” has the meaning specified in
Section 2.14(a).

“Incremental Revolving Credit Lender” has the meaning specified in
Section 2.14(c).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money (including the Loans
hereunder) and all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, whether or not matured or
drawn;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary practices);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) the Attributable Indebtedness of such Person with respect to Capital Leases
and Synthetic Lease Obligations;

 

17

--------------------------------------------------------------------------------

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, (i) the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person and (ii) the Indebtedness of a Person shall not
include the obligation of a Person to make payments after the closing of an
acquisition or merger which are based on financial or performance metrics of the
acquisition or merger target or for consulting, noncompetition or
nonsolicitation agreements unless required to be reflected as a liability of
such Person on such Person’s balance sheet in accordance with GAAP. The amount
of any net obligation under any Swap Contract on any date shall be deemed to be
the Swap Termination Value thereof as of such date. The amount of any Capital
lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Insolvent” means, with respect to any Multiemployer Plan, the meaning of such
term provided in Section 4245 of ERISA. Derivatives of such term have
corresponding meanings.

“Intellectual Property” has the meaning specified in the Guarantee and
Collateral Agreement.

“Intellectual Property Security Agreements” means the Patent Security Agreement,
the Trademark Security Agreement and the Copyright Security Agreement (each as
defined in the Guarantee and Collateral Agreement).

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each March, June, September and December and the Maturity Date.

 

18

--------------------------------------------------------------------------------

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and, as selected by the Borrower in its Borrowing
Notice, ending on the date one, two, three or six months (or nine or twelve
months if consented to by all of the Appropriate Lenders); provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

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

(iii) no Interest Period shall extend beyond the Maturity Date.

“Internal Reorganization” has the meaning assigned to such term in
Schedule 1.01(a).

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance (excluding commission, travel, petty cash, relocation and similar
advances to officers and employees made in the ordinary course of business) or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, or (c) the purchase or other acquisition (in
one transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment but net of any
returns on such Investment received in cash by any Loan Party to the extent such
returns are identified in a Compliance Certificate delivered to the
Administrative Agent pursuant to Section 6.02(b).

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the
L/C Issuer and relating to such Letter of Credit.

“Joint Lead Arrangers” means each of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Barclays Bank PLC, Credit Agricole Corporate and Investment Bank,
Regions Capital Markets and SunTrust Robinson Humphries, Inc., in their
respective capacities as joint lead arrangers and joint bookrunners for the
Facilities.

 

19

--------------------------------------------------------------------------------

“L-3” shall mean L-3 Communications Holdings, Inc., a Delaware corporation.

“Laws” means as to any Person, any law, treaty, executive order, 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.

“L/C Advance” means, with respect to each Revolving Credit Lender, such
Revolving Credit Lender’s funding of its participation in any Unreimbursed
Amount in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

“Lender” has the meaning specified in the introductory paragraph hereto and,
unless the context otherwise requires, includes the Swing Line Lender, each
Incremental Revolving Credit Lender and each Additional Term Loan Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Letter of Credit” means any standby letter of credit issued hereunder providing
for the payment of cash upon the honoring of a presentation thereunder and the
Existing Letter of Credit. Letters of Credit shall be issued in Dollars.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

 

20

--------------------------------------------------------------------------------

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Letter of Credit Sublimit” means an amount equal to $15,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Revolving
Credit Commitments.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan.

“Loan Documents” means this Agreement, each Note, the Collateral Documents, each
Issuer Document and any agreement creating or perfecting rights in Cash
Collateral pursuant to the provisions of Section 2.16 of this Agreement.

“Loan Parties” means, collectively, Holdings, the Borrower and the Subsidiary
Guarantors.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, property or condition (financial or otherwise) of Holdings,
the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“Material Contract” means, as of any date of determination, any or all of the
following: (a) any Government Contract or other contract or agreement of
Holdings, the Borrower or any of its Subsidiaries, pursuant to which, after
giving effect to any and all applicable options, renewals, extensions and other
similar rights of Holdings, the Borrower or such Subsidiary to extend the term
and/or increase the value of such Government Contract or other contract or
agreement, Holdings, the Borrower or such Subsidiary would be entitled to
receive payments and/or other compensation having an aggregate remaining value
in excess of $25,000,000, (b) any Government Contract pursuant to which, after
giving effect to any and all applicable options, renewals, extensions and other
similar rights to extend the term and/or increase the value of such Government
Contract, Holdings, the Borrower or any of its Subsidiaries is obligated to make
payments or have any other obligation or liability thereunder (direct or
contingent) in excess of $25,000,000, in the aggregate, or which, as a result of
any reasonably anticipated act, event, circumstance or condition arising
thereunder, relating thereto or contemplated thereby, could reasonably be
expected to have a Material Adverse Effect or (c) any contract or agreement of
Holdings, the Borrower or any of its Subsidiaries (other than a Government
Contract) which, as a result of any act, omission or default by any party
thereto, or as a result of the occurrence of any reasonably anticipated act,
event, circumstance or condition arising thereunder, relating thereto or
contemplated thereby, could reasonably be expected to have a Material Adverse
Effect.

 

21

--------------------------------------------------------------------------------

“Material Government Contract” means any Government Contract that is a Material
Contract.

“Material Subsidiary” means any Subsidiary that is not an Immaterial Subsidiary.

“Materials of Environmental Concern” means any substances, materials or wastes
of any nature, defined, listed or regulated as “hazardous” or “toxic” (or words
of similar meaning) in or under, that could give rise to liability under, or are
otherwise regulated by, any applicable Environmental Law, including, without
limitation, asbestos or asbestos-containing material, polychlorinated biphenyls,
urea-formaldehyde insulation, petroleum (including gasoline or crude oil or any
fraction thereof), petroleum products or by-products, explosive or radioactive
materials, radon gas, or infectious or medical wastes.

“Maturity Date” means July 17, 2017.

“Merger” means the merger of Engility Services with and into the Borrower
occurring on the Closing Date, as more fully described in Schedule 1.01(a), with
the Borrower being the surviving entity.

“Merrill Lynch” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and its
successors.

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances provided to reduce or
eliminate Fronting Exposure during the existence of a Defaulting Lender, an
amount equal to 105% of the Fronting Exposure of the L/C Issuer with respect to
Letters of Credit issued and outstanding at such time, (ii) with respect to Cash
Collateral consisting of cash or deposit account balances provided in accordance
with the provisions of Section 2.16(a)(i), (a)(ii) or (a)(iii), an amount equal
to 105% of the Outstanding Amount of all LC Obligations, and (iii) otherwise, an
amount determined by the Administrative Agent and the L/C Issuer in their sole
discretion.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means any mortgage, deed of trust or other document executed or
required herein to be executed by any Loan Party and granting a security
interest over real property in favor of the Administrative Agent as security for
the Obligations.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Proceeds” means (a) in connection with any Disposition or Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or

 

22

--------------------------------------------------------------------------------

purchase price adjustment receivable or by the Disposition of any non-cash
consideration received in connection therewith or otherwise, but only as and
when received) of such Disposition or Recovery Event, net of attorneys’ fees,
accountants’ fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien on any asset that is the subject
of such Disposition or Recovery Event (other than any Lien pursuant to a
Collateral Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof and (b) in connection with any incurrence or issuance of
Indebtedness, the cash proceeds received from such incurrence or issuance, net
of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 10.01 and (ii) has been
approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Note” means the Term Notes, Revolving Notes and the Swing Line Note,
individually or collectively, as appropriate.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, Secured Cash Management
Agreement or Secured Hedge Agreement, in each case whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing

 

23

--------------------------------------------------------------------------------

such Tax (other than connections arising from such Recipient having executed,
delivered, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.06).

“Outstanding Amount” means (i) with respect to Term Loans, Revolving Credit
Loans and Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the
case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by the Borrower of Unreimbursed
Amounts.

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“PATRIOT Act” has the meaning specified in Section 10.18.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to the provisions of Title IV of ERISA or Sections 412 or 430 of the
Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or to
which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

“Perfection Questionnaire” means a perfection questionnaire or perfection
certificate in form and substance satisfactory to the Administrative Agent
substantially in the form of Exhibit J.

“Performance Letter of Credit” means a Letter of Credit issued to ensure the
performance of services and/or delivery of goods by or on behalf of the Borrower
or any of its Subsidiaries.

“Permitted Acquisition” means any acquisition by the Borrower or any Subsidiary
of all or substantially all the assets of a Person or line of business of such
Person, or all or substantially all of the Equity Interests (other than
directors’ qualifying shares) of a Person (referred to herein as the “Acquired
Entity”); provided that (i) such acquisition was not preceded by an unsolicited

 

24

--------------------------------------------------------------------------------

tender offer for such Equity Interests by, or proxy contest initiated by,
Holdings, the Borrower or any Subsidiary; (ii) the Acquired Entity shall be in a
line of business permitted under Section 7.07; and (iii) at the time of such
transaction (A) both before and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing; (B) the Borrower would be in
compliance with the covenants set forth in Section 7.11 as of the most recently
completed period of four consecutive fiscal quarters ending prior to such
transaction for which the financial statements and Compliance Certificates
required by Section 6.01(a) or Section 6.01(b), as the case may be, and
Section 6.02(b) have been delivered or for which comparable financial statements
have been delivered hereunder, after giving pro forma effect to such transaction
and to any other event occurring after such period and at or prior to such
calculation as to which pro forma recalculation is appropriate (including any
other Permitted Acquisition occurring after such period) as if such transaction
had occurred as of the first day of such period (assuming, for purposes of pro
forma compliance with Section 7.11, that the maximum Consolidated Leverage Ratio
permitted at the time by such Section was in fact 0.25 to 1.00 less than the
applicable ratio actually provided for in such Section at such time); (C) after
giving effect to such acquisition, there must be at least $25,000,000 in the
aggregate of unused and available Revolving Credit Commitments and Unrestricted
Cash; (D) (i) the total consideration paid in connection with such acquisition
(including any Indebtedness of the Acquired Entity that is assumed by
the Borrower or any Subsidiary following such acquisition and any payments
following such acquisition pursuant to earn-out provisions or similar
obligations) shall not exceed $75,000,000 and (ii) the total consideration paid
in connection with such acquisition and any other Permitted Acquisitions
(including any Indebtedness of the Acquired Entity that is assumed by
the Borrower or any Subsidiary following such acquisition and any payments
following such acquisition pursuant to earn-out provisions or similar
obligations) shall not in the aggregate exceed $150,000,000; (E) with respect to
any such acquisition the total consideration for which exceeds $5,000,000
(including any Indebtedness of the Acquired Entity that is assumed by
the Borrower or any Subsidiary following such acquisition and any payments
following such acquisition pursuant to earn-out provisions or similar
obligations), the Borrower shall have delivered a certificate of a Responsible
Officer, certifying as to the foregoing and containing reasonably detailed
calculations in support thereof, in form and substance satisfactory to the
Administrative Agent and (F) the Borrower shall comply, and shall cause the
Acquired Entity to comply, with the applicable provisions of Section 6.10 and
the Collateral Documents.

“Permitted Refinancing Indebtedness” means, as to any Indebtedness, the
incurrence of other Indebtedness to refinance, extend, renew, defease,
restructure, replace or refund (collectively, “refinance”) such existing
Indebtedness; provided that, in the case of such other Indebtedness, the
following conditions are satisfied: (a) the weighted average life to maturity of
such refinancing Indebtedness shall be greater than or equal to the weighted
average life to maturity of the Indebtedness being refinanced; (b) except as
otherwise permitted hereunder, the principal amount of such refinancing
Indebtedness shall be less than or equal to the principal amount (including any
accreted or capitalized amount) then outstanding of the Indebtedness being
refinanced, plus any required premiums and other reasonable amounts paid, and
fees and expenses reasonably incurred, in connection with such modification,
refinancing, refunding, renewal or extension, plus any amount equal to any
existing commitments unutilized thereunder; (c) the respective obligor or
obligors shall be the same on the refinancing Indebtedness as on the
Indebtedness being refinanced; (d) the security, if any, for the refinancing
Indebtedness shall be the same as that for the Indebtedness being refinanced
(except to the extent that less security is

 

25

--------------------------------------------------------------------------------

granted to holders of refinancing Indebtedness); (e) the refinancing
Indebtedness is subordinated to the Obligations to the same degree, if any, or
to a greater degree as the Indebtedness being refinanced; and (f) with respect
to Indebtedness permitted under Section 7.03(b) only, no material terms (other
than interest rate and other pricing terms) applicable to such refinancing
Indebtedness or, if applicable, the related security or guarantees of such
refinancing Indebtedness (including covenants, events of default, remedies,
acceleration rights) shall be, taken as a whole, materially more favorable to
the refinancing lenders (in the commercially reasonable determination of the
Borrower) than the terms that are applicable under the instruments and documents
governing the Indebtedness being refinanced.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by, maintained by or contributed to the
Borrower.

“Platform” has the meaning specified in Section 6.02.

“Pro Forma Basis” means, for purposes of calculating the financial covenants set
forth in Section 7.11, that any Permitted Acquisition and any Disposition
permitted pursuant to Section 7.05(k) shall be deemed to have occurred as of the
first day of the most recent four fiscal quarter period preceding the date of
such Permitted Acquisition or Disposition, as applicable, for which the Borrower
has delivered financial statements pursuant to Section 6.01. In connection with
the foregoing, income statement items attributable to the Person or property or
assets acquired shall be included to the extent relating to any period
applicable in such calculations to the extent (i) such items are not otherwise
included in such income statement items for Holdings, the Borrower and its
Subsidiaries in accordance with GAAP or in accordance with any defined terms set
forth in Section 1.01 (provided, that any non-recurring consulting, investment
banking, legal, accounting, auditing, financing, change of control and/or
similar costs incurred in connection with any Permitted Acquisition and included
in the income statement of the Person or property or assets acquired shall not
be so included), (ii) such items are supported by financial statements or other
information reasonably satisfactory to the Administrative Agent and (iii) any
Indebtedness incurred or assumed by Holdings, the Borrower or any Subsidiary
(including the Person or property acquired) in connection with such Permitted
Acquisition and any Indebtedness of the Person or property acquired which is not
retired in connection with such Permitted Acquisition (A) shall be deemed to
have been incurred as of the first day of the most recent four fiscal quarter
period preceding the date for such Permitted Acquisition and (B) if such
Indebtedness has a floating or formula rate, shall have an implied rate of
interest for the most recent four fiscal quarter period preceding the date for
such Permitted Acquisition for purposes of this definition determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination. Additionally, in
connection with the foregoing, income statement items attributable to the Person
or property or assets in connection with a Disposition pursuant to
Section 7.05(k) shall be excluded to the extent relating to any period
applicable in such calculations to the extent such items are otherwise included
in such income statement items for Holdings, the Borrower and its Subsidiaries
in accordance with GAAP or in accordance with any defined terms set forth in
Section 1.01.

 

26

--------------------------------------------------------------------------------

“Properties” has the meaning specified in Section 5.09.

“Public Lender” has the meaning specified in Section 6.02.

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any
other recipient of any payment to be made by or on account of any obligation of
any Loan Party hereunder.

“Recovery Event” means any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any asset
of Holdings, the Borrower or any of its Subsidiaries.

“Register” has the meaning specified in Section 10.06(c).

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

“Reorganization” means, with respect to any Multiemployer Plan, has the meaning
provided such term in Section 4241 of ERISA.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Repricing Transaction” means the prepayment, refinancing, substitution or
replacement of all or a portion of the Term Loans with the incurrence by the
Borrower of any debt financing having an effective interest cost or weighted
average yield (with the comparative determinations to be made by the
Administrative Agent consistent with generally accepted financial practices,
after giving effect to, among other factors, margin, interest rate floors,
upfront or similar fees or original issue discount shared with all providers of
such financing, but excluding the effect of any arrangement, structuring,
syndication or other fees payable in connection therewith that are not shared
with all providers of such financing, and without taking into account any
fluctuations in the Eurodollar Rate) that is less than the effective interest
cost or weighted average yield (as determined by the Administrative Agent on the
same basis) of such Term Loans so repaid, refinanced, substituted or replaced,
including without limitation, as may be effected through any amendment to this
Agreement relating to the interest rate for, or weighted average yield of, such
Term Loans.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Term Loans or Revolving Credit Loans, a Borrowing Notice,
(b) with respect to an L/C Credit Extension, a Letter of Credit Application, and
(c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, at any time, two or more Lenders having Total Credit
Exposures representing a majority of the Total Credit Exposures of all Lenders.
The Total Credit Exposure of any Defaulting Lender shall be disregarded (in both
the numerator and the denominator) in determining Required Lenders at any time;
provided that, the amount of any participation in any Swing Line Loan and
Unreimbursed Amounts that such Defaulting Lender

 

27

--------------------------------------------------------------------------------

has failed to fund that have not been reallocated to and funded by another
Lender shall be deemed to be held by the Lender that is the Swing Line Lender or
L/C Issuer, as the case may be, in making such determination.

“Required Revolving Credit Lenders” means, at any time, two or more Lenders
having unused Revolving Credit Commitments and Revolving Credit Exposures
representing a majority of the total unused Revolving Credit Commitments and
Revolving Credit Exposures of all Lenders. The unused Revolving Credit
Commitment and Revolving Credit Exposure of any Defaulting Lender shall be
disregarded (in both the numerator and the denominator) in determining Required
Revolving Credit Lenders at any time; provided that, the amount of any
participation in any Swing Line Loan and Unreimbursed Amounts that such
Defaulting Lender has failed to fund that have not been reallocated to and
funded by another Lender shall be deemed to be held by the Lender that is the
Swing Line Lender or L/C Issuer, as the case may be, in making such
determination.

“Required Term Loan Lenders” means, at any time, two or more Lenders having
unused Term Loan Commitments and Term Loan Exposures representing a majority of
the total unused Term Loan Commitments and Term Loan Exposures of all Lenders.
The unused Term Loan Commitment and Term Loan Exposure of any Defaulting Lender
shall be disregarded (in both the numerator and the denominator) in determining
Required Revolving Credit Lenders at any time.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, senior vice president, treasurer, assistant treasurer or
controller of a Loan Party, solely for purposes of the delivery of incumbency
certificates pursuant to Section 4.01, the secretary or any assistant secretary
of a Loan Party and, solely for purposes of notices given pursuant to Article
II, any other officer of the applicable Loan Party so designated by any of the
foregoing officers in a notice to the Administrative Agent. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of Holdings the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to Holdings’ or the Borrower’s
stockholders, partners or members (or the equivalent Person thereof).

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by the Revolving Credit Lenders
pursuant to Section 2.01(b).

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its
obligation to (a) make Revolving Credit Loans to the Borrower pursuant to
Section 2.01(b), (b)

 

28

--------------------------------------------------------------------------------

purchase participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Revolving Credit Commitment” or opposite such caption in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.

“Revolving Credit Commitment Increase Effective Date” has the meaning specified
in Section 2.14(d).

“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate
principal amount at such time of its outstanding Revolving Credit Loans and such
Lender’s participation in L/C Obligations and Swing Line Loans at such time.

“Revolving Credit Facility” means, at any time, the aggregate amount of the
Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means, at any time, any Lender that has a Revolving
Credit Commitment at such time.

“Revolving Credit Loan” has the meaning specified in Section 2.01(b).

“Revolving Credit Note” has the meaning specified in Section 2.11(a).

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc. and any successor thereto.

“Sanction(s)” means any international economic sanction administered or enforced
by OFAC, the United Nations Security Council, the European Union, Her Majesty’s
Treasury or other relevant sanctions authority.

“Sanctioned Person” means a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treasury.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published from time to time, or a Person that is majority owned or controlled by
a Sanctioned Person.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Loan Party or any Subsidiary of any Loan Party
and any Cash Management Bank.

“Secured Hedge Agreement” means any Swap Contract permitted under Article VI or
VII that is entered into by and between any Loan Party and any Hedge Bank.

“Secured Parties” has the meaning specified in the Guarantee and Collateral
Agreement.

 

29

--------------------------------------------------------------------------------

“Single Employer Plan” means any Pension Plan maintained solely by Holdings, the
Borrower or any ERISA Affiliates.

“Spin-Off” means the distribution by L-3 on the Closing Date of all of the
issued and outstanding shares of Holdings’ common stock on a pro rata basis to
holders of L-3 common stock in accordance with the Distribution Agreement, as
more fully described in Schedule 1.01(a).

“Spin-Off Transactions” means, collectively, (a) the Internal Reorganization and
the other transactions expressly contemplated by the Spin-Off Transaction
Documents specified in clause (a) of the definition thereof, (b) the Spin-Off
and (c) the Merger.

“Spin-Off Transaction Documents” means the Distribution Agreement, the Ancillary
Agreements (as defined in the Distribution Agreement) and any other contribution
and separation agreements and other documents relating to the Internal
Reorganization and the Spin-Off (including as to the allocation of liabilities
and receivables).

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which the shares of stock
or other interests having ordinary voting power for the election of a majority
of the board of directors or other governing body (other than stock or interests
having such power only by reason of the happening of a contingency) are at the
time beneficially owned, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Guarantor” each Subsidiary listed on Schedule 1.01(b) and each other
Subsidiary that is or becomes a party to the Guarantee and Collateral Agreement.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and

 

30

--------------------------------------------------------------------------------

termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may
include a Lender or any Affiliate of a Lender).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Note” has the meaning specified in Section 2.11(a).

“Swing Line Sublimit” means an amount equal to the lesser of (a) $10,000,000 and
(b) the Aggregate Revolving Credit Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Revolving Credit Commitments.

“Syndication Agents” means Barclays Bank PLC, Credit Agricole Corporate and
Investment Bank, Regions Bank and SunTrust Bank.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Tax Matters Agreement” means the Tax Matters Agreement, substantially in the
form of Exhibit 10.2 to Amendment No. 3 to Form 10 filed by Holdings on June 19,
2012 with the SEC, entered into at or before the Closing Date, between L-3 and
Holdings.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by the Term Loan Lenders pursuant to Section 2.01(a).

“Term Loan” means an advance made by any Term Loan Lender under the Term Loan
Facility.

 

31

--------------------------------------------------------------------------------

“Term Loan Commitment” means, as to each Term Loan Lender, its obligation to
make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Term Loan Lender’s name on Schedule 2.01 under the caption “Term
Loan Commitment” or opposite such caption in the Assignment and Assumption
pursuant to which such Term Loan Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

“Term Loan Exposure” means, as to any Lender at any time, the aggregate
principal amount at such time of its outstanding Term Loans.

“Term Loan Facility” means, at any time, (a) on or prior to the Closing Date,
the aggregate amount of the Term Loan Commitments at such time and
(b) thereafter, the aggregate principal amount of the Term Loans of all
Term Loan Lenders outstanding at such time.

“Term Loan Lender” means (a) at any time on or prior to the Closing Date, any
Lender that has a Term Loan Commitment at such time and (b) at any time after
the Closing Date, any Lender that holds Term Loans at such time.

“Term Note” has the meaning specified in Section 2.11(a).

“Threshold Amount” means $20,000,000.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Total Credit Exposure” means, as to any Lender at any time, the unused
Commitments, Revolving Credit Exposure and Term Loan Exposure of such Lender at
such time.

“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of
all Revolving Credit Loans, Swing Line Loans and L/C Obligations.

“Transaction Documents” means, collectively, (a) the Spin-Off Transaction
Documents and (b) all other documents, instruments and agreements relating to
the Transactions (other than the Loan Documents).

“Transaction Expenses” means all legal fees, auditors fees and other fees or
expenses incurred by Holdings, the Borrower and its Subsidiaries in connection
with the Transactions (including financing fees, financial and other advisory
fees, accounting and consulting fees and legal fees and related costs and
expenses).

“Transactions” means, collectively, (a) Spin-Off Transactions, (b) the
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is to be a party, the borrowing or issuance of Loans, the use of any
proceeds thereof and the issuance of Letters of Credit hereunder, (c) the
payment of the Transaction Expenses and (d) any other transactions related to or
entered into in connection with any of the foregoing.

 

32

--------------------------------------------------------------------------------

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce (“ICC”)
Publication No. 600 (or such later version thereof as may be in effect at the
time of issuance).

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Unrestricted Cash” means, as of any date of determination, unrestricted cash
that would appear in cash accounts listed on a consolidated balance sheet of
Holdings, the Borrower and its Subsidiaries on such date calculated in
accordance with GAAP, only to the extent such cash is (i) subject to a control
agreement in form and substance satisfactory to the Administrative Agent and
subject to a first priority security interest in favor of the Administrative
Agent, (ii) free and clear of all other Liens other than non-consensual Liens
permitted under Section 7.01 and (iii) not prohibited by any applicable Law or
any Contractual Obligation to which Holdings, the Borrower and its Subsidiaries
are party to from being applied to pay Indebtedness under this Agreement or the
other Loan Documents.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in
Section 3.01(e)(ii)(B)(III).

“Wholly Owned Subsidiary” means, as to any Person, any other Person all of the
Equity Interests of which (other than directors’ qualifying shares required by
law) are owned and controlled, directly or indirectly, by such Person. Unless
otherwise specified, all references herein to a “Wholly Owned Subsidiary” or to
“Wholly Owned Subsidiaries” shall refer to a Wholly Owned Subsidiary or Wholly
Owned Subsidiaries of the Borrower.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “hereto,” “herein,”
“hereof” and “hereunder,” and words of similar import when used in any

 

33

--------------------------------------------------------------------------------

Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. Neither this Agreement nor any other
agreement, document or instrument referred to herein or delivered in connection
herewith shall be construed against any Person as the principal draftsperson
hereof or thereof.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP, as in
effect from time to time, applied consistently throughout the periods reflected
therein, except as otherwise specifically prescribed herein. For the avoidance
of doubt, any obligations or liabilities of a Person which are identified in
footnote disclosures but not the balance sheet of such Person shall not be
considered liabilities on the balance sheet of such Person under GAAP.
Notwithstanding the foregoing, for purposes of determining compliance with any
covenant (including the computation of any financial covenant) contained herein,
Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried
at 100% of the outstanding principal amount thereof, and the effects of FASB ASC
825 financial liabilities shall be disregarded.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (A) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (B) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

 

34

--------------------------------------------------------------------------------

(c) Pro Forma Basis Calculation. Notwithstanding the foregoing, the parties
hereto acknowledge and agree that all calculations of the Consolidated Debt
Service Ratio and the Consolidated Leverage Ratio for purposes of determining
compliance with Sections 7.11(a) and (b) shall be made on a Pro Forma Basis.

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Loans.

(a) Term Loan Borrowing. Subject to the terms and conditions set forth herein,
each Term Loan Lender severally agrees to make a single loan to the Borrower on
the Closing Date in an amount not to exceed such Term Loan Lender’s Applicable
Percentage in respect of the Term Loan Facility. The Term Loan Borrowing shall
consist of Term Loans made simultaneously by the Term Loan Lenders in accordance
with their respective Applicable Percentage in respect of the Term Loan
Facility. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may
not be reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans,
as further provided herein.

(b) Revolving Credit Borrowings. Subject to the terms and conditions set forth
herein, each Revolving Credit Lender severally agrees to make loans (each such
revolving credit loan, a “Revolving Credit Loan”) to the Borrower from time to
time, on any Business Day during the Availability Period, in an aggregate amount
not to exceed at any time outstanding the amount of such Lender’s Revolving
Credit Commitment; provided, however, that after giving effect to any Revolving
Credit Borrowing, (i) the Total Revolving Credit Outstandings shall not exceed
the Aggregate Revolving Credit Commitments, and (ii) the Revolving Credit
Exposure of any Lender shall not exceed such Lender’s Revolving Credit
Commitment; and provided, further, that the aggregate principal amount of
Revolving Credit Loans made on the Closing Date, when combined with the
aggregate principal amount of Swing Line Loans made on the Closing Date and the
aggregate face amount of Letters of Credit issued on the Closing Date, shall not
exceed $15,000,000. Within the limits of each Revolving Credit Lender’s
Commitment, and subject to

 

35

--------------------------------------------------------------------------------

the other terms and conditions hereof, the Borrower may borrow under this
Section 2.01(b), prepay under Section 2.05, and reborrow under this
Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion of
Term Loans or Revolving Credit Loans from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of
any Borrowing of Base Rate Loans; provided, however, that if the Borrower wishes
to request Eurodollar Rate Loans having an Interest Period other than one, two,
three or six months in duration as provided in the definition of “Interest
Period,” the applicable notice must be received by the Administrative Agent not
later than 11:00 a.m. four Business Days prior to the requested date of such
Borrowing, conversion or continuation, whereupon the Administrative Agent shall
give prompt notice to the Appropriate Lenders of such request and determine
whether the requested Interest Period is acceptable to all of them. Not later
than 11:00 a.m., three Business Days before the requested date of such
Borrowing, conversion or continuation, the Administrative Agent shall notify the
Borrower (which notice may be by telephone) whether or not the requested
Interest Period has been consented to by all of the Appropriate Lenders. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Borrowing Notice, appropriately completed and signed by a Responsible Officer of
the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar
Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Borrowing Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Term Borrowing, a Revolving Credit Borrowing, a
conversion of Term Loans or Revolving Credit Loans from one Type to the other,
or a continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans
or Revolving Credit Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Borrower fails to
specify a Type of Loan in a Borrowing Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable Term
Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate
Loans. Any such automatic conversion to Base Rate Loans shall be effective as of
the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Borrowing
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. Notwithstanding anything to the
contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate
Loan.

 

36

--------------------------------------------------------------------------------

(b) Following receipt of a Borrowing Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage under the
applicable Facility of the applicable Term Loans or Revolving Credit Loans, and
if no timely notice of a conversion or continuation is provided by the Borrower,
the Administrative Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in Section 2.02(a). In the
case of a Term Borrowing or a Revolving Credit Borrowing, each Appropriate
Lender shall make the amount of its Loan available to the Administrative Agent
in immediately available funds at the Administrative Agent’s Office not later
than 1:00 p.m. on the Business Day specified in the applicable Borrowing Notice.
Upon satisfaction of the applicable conditions set forth in Section 4.02 (and,
if such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date a Borrowing Notice with
respect to a Revolving Credit Borrowing is given by the Borrower, there are
Unreimbursed Amounts outstanding, then the proceeds of such Borrowing, first,
shall be applied to the payment in full of any such Unreimbursed Amounts, and
second, shall be made available to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e) After giving effect to all Term Borrowings, all conversions of Term Loans
from one Type to the other, and all continuations of Term Loans as the same
Type, there shall not be more than 10 Interest Periods in effect in respect of
the Term Loan Facility. After giving effect to all Revolving Credit Borrowings,
all conversions of Revolving Credit Loans from one Type to the other, and all
continuations of Revolving Credit Loans as the same Type, there shall not be
more than 10 Interest Periods in effect in respect of the Revolving Credit
Facility.

(f) Notwithstanding anything herein to the contrary, the Borrower may not select
(i) the Eurodollar Rate for the initial Credit Extension or (ii) Interest
Periods for Eurodollar Rate Loans that have a duration of more than one month
during the period from the Closing Date to the 60th day after the Closing Date
(or such earlier date as shall be specified by the Administrative Agent in a
notice to the Borrower and the Lenders).

 

37

--------------------------------------------------------------------------------

2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower or any of its Subsidiaries, and to amend
or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower or any of its Subsidiaries and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (x) the Total Revolving Credit Outstandings
shall not exceed the Aggregate Revolving Credit Commitments, (y) the Revolving
Credit Exposure of any Lender shall not exceed such Lender’s Revolving Credit
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit; and provided, further that the aggregate
face amount of Letters of Credit issued on the Closing Date, when combined with
the aggregate principal amount of Swing Line Loans made on the Closing Date and
the aggregate principal amount of Revolving Credit Loans made on the Closing
Date, shall not exceed $15,000,000. Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed. The Existing Letter of Credit shall be deemed to have been
issued hereunder and shall be subject to and governed by the terms and
conditions hereof.

(ii) The L/C Issuer shall not issue any Letter of Credit, if:

(A) subject to Section 2.03(b)(iii), the expiry date of the requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Revolving Credit Lenders have approved such
expiry date; or

(B) the expiry date of the requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date.

 

38

--------------------------------------------------------------------------------

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or the
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to the Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

(B) the issuance of the Letter of Credit would violate one or more policies of
the L/C Issuer applicable to letters of credit generally;

(C) [Reserved];

(D) the Letter of Credit is to be denominated in a currency other than Dollars;

(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has
entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or
such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure
(after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or
that Letter of Credit and all other L/C Obligations as to which the L/C Issuer
has actual or potential Fronting Exposure, as it may elect in its sole
discretion.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue the Letter of Credit in its amended form
under the terms hereof.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue the Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of the
Letter of Credit does not accept the proposed amendment to the Letter of Credit.

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

 

39

--------------------------------------------------------------------------------

(vii) If the maturity date in respect of any tranche of Revolving Credit
Commitments occurs prior to the expiration of any Letter of Credit, then (a) if
one or more other tranches of Revolving Credit Commitments in respect of which
the maturity date shall not have occurred are then in effect, such Letters of
Credit shall automatically be deemed to have been issued (including for purposes
of the obligations of the Revolving Credit Lenders to purchase participations
therein pursuant to Section 2.03 and to make Revolving Credit Loans and payments
in respect thereof pursuant to Section 2.03) under (and ratably participated in
by Revolving Credit Lenders pursuant to) the Revolving Credit Commitments in
respect of such non-terminating tranches up to an aggregate amount not to exceed
the aggregate principal amount of the unutilized Revolving Credit Commitments
thereunder at such time (it being understood that no partial face amount of any
Letter of Credit may be so reallocated) and (b) to the extent not reallocated
pursuant to immediately preceding clause (a) and unless provisions satisfactory
to the L/C Issuer for the treatment of such Letter of Credit as a letter of
credit under a successor credit facility have been agreed upon, the Borrower
shall, on or prior to such maturity date occurring prior to the expiration of
such Letters of Credit, cause all such Letters of Credit to be replaced and
returned to the L/C Issuer undrawn and marked “cancelled” or to the extent that
the Borrower is unable to so replace and return any Letter(s) of Credit, such
Letter(s) of Credit shall be secured by a “back to back” letter of credit
satisfactory to the L/C Issuer, or Cash Collateralize the same in an amount
equal to 105% of the face amount of such Letter(s) of Credit. Such cash shall be
remitted to the Borrower upon the expiration, cancellation or other termination
or satisfaction of all Obligations hereunder. Except to the extent of
reallocations of participations pursuant to clause (a) of the preceding
sentence, the occurrence of a maturity date with respect to a given tranche of
Revolving Credit Commitments shall have no effect upon (and shall not diminish)
the percentage participations of the Revolving Credit Lenders in any Letter of
Credit issued before such maturity date.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application may be sent by facsimile, by United States
mail, by overnight courier, by electronic transmission using the system provided
by the L/C Issuer, by personal delivery or by any other means acceptable to the
L/C Issuer. Such Letter of Credit Application must be received by the L/C Issuer
and the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the Administrative Agent and the L/C Issuer
may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such

 

40

--------------------------------------------------------------------------------

Letter of Credit Application shall specify in form and detail reasonably
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; (G) the purpose and nature of the
requested Letter of Credit; and (H) such other matters as the L/C Issuer may
require. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C Issuer
may require. Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof and inform the Administrative Agent whether such
Letter of Credit Application is for a Financial Letter of Credit or a
Performance Letter of Credit. Unless the L/C Issuer has received written notice
from any Lender, the Administrative Agent or any Loan Party, at least one
Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in
Section 4.02 shall not then be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Borrower (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Applicable Percentage times the amount of such
Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter
of Credit that has automatic extension provisions (each, an “Auto-Extension
Letter of Credit”); provided that any such Auto-Extension Letter of Credit must
permit the L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “Non-Extension Notice Date”) in each such twelve-month period to be agreed
upon at the time such Letter of Credit is issued. Unless otherwise directed by
the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit
has been issued, the Lenders shall be deemed to have

 

41

--------------------------------------------------------------------------------

authorized (but may not require) the L/C Issuer to permit the extension of such
Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not permit
any such extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is seven Business Days before the Non-Extension Notice Date
(1) from the Administrative Agent that the Required Lenders have elected not to
permit such extension or (2) from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Section 4.02
is not then satisfied, and in each such case directing the L/C Issuer not to
permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower
and the Administrative Agent thereof. Not later than 3:00 p.m. on the date of
any payment by the applicable L/C Issuer under a Letter of Credit if the
applicable L/C Issuer delivers notice of such payment by 11:00 a.m. on such day
(or, if notice of such payment by the applicable L/C Issuer is delivered after
11:00 a.m., not later than 10:00 a.m. on the next succeeding Business Day) (each
such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through
the Administrative Agent in an amount equal to the amount of such drawing. If
the Borrower fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount
of such Lender’s Applicable Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Credit Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Revolving Credit Commitments and the
conditions set forth in Section 4.02 (other than the delivery of a Borrowing
Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Credit Lender shall upon any notice pursuant to
Section 2.03(c)(i) make funds available (and the Administrative Agent may apply
Cash Collateral provided for this purpose) for the account of the L/C Issuer at
the

 

42

--------------------------------------------------------------------------------

Administrative Agent’s Office in an amount equal to its Applicable Percentage of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds
available shall be deemed to have made a Revolving Credit Loan that is a Base
Rate Loan to the Borrower in such amount. The Administrative Agent shall remit
the funds so received to the L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Credit Borrowing of Base Rate Loans because the conditions set forth
in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall
be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Lender’s payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.

(iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C
Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such Revolving
Credit Lender’s Applicable Percentage of such amount shall be solely for the
account of the L/C Issuer.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or
L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Credit Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Borrowing Notice). No
such making of an L/C Advance shall relieve or otherwise impair the obligation
of the Borrower to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as provided
herein.

(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), then, without limiting the other
provisions of this Agreement, the L/C Issuer shall be entitled to recover from
such Revolving Credit Lender (acting through the Administrative Agent), on
demand, such amount

 

43

--------------------------------------------------------------------------------

with interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the L/C Issuer at a
rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by the L/C Issuer in connection with the foregoing. If such
Revolving Credit Lender pays such amount (with interest and fees as aforesaid),
the amount so paid shall constitute such Lender’s Revolving Credit Loan included
in the relevant Revolving Credit Borrowing or L/C Advance in respect of the
relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Applicable Percentage thereof in the same funds as those received by the
Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary

 

44

--------------------------------------------------------------------------------

or any such transferee may be acting), the L/C Issuer or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by such Letter of Credit or any agreement or instrument relating thereto, or
any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv) waiver by the L/C Issuer of any requirement that exists for the L/C
Issuer’s protection and not the protection of the Borrower or any waiver by the
L/C Issuer which does not in fact materially prejudice the Borrower;

(v) honor of a demand for payment presented electronically even if such Letter
of Credit requires that demand be in the form of a draft;

(vi) any payment made by the L/C Issuer in respect of an otherwise complying
item presented after the date specified as the expiration date of, or the date
by which documents must be received under such Letter of Credit if presentation
after such date is authorized by the UCC, the ISP or the UCP, as applicable;

(vii) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

(viii) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in

 

45

--------------------------------------------------------------------------------

connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the L/C Issuer, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the L/C Issuer shall be liable or responsible for any of the matters
described in clauses (i) through (viii) of Section 2.03(e); provided, however,
that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence or
the L/C Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
The L/C Issuer may send a Letter of Credit or conduct any communication to or
from the beneficiary via the Society for Worldwide Interbank Financial
Telecommunication (“SWIFT”) message or overnight courier, or any other
commercially reasonable means of communicating with a beneficiary.

(g) Applicability of ISP; Limitation of Liability. Unless otherwise expressly
agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the
rules of the ISP shall apply to each Letter of Credit. Notwithstanding the
foregoing, the L/C Issuer shall not be responsible to the Borrower for, and the
L/C Issuer’s rights and remedies against the Borrower shall not be impaired by,
any action or inaction of the L/C Issuer required or permitted under any law,
order, or practice that is required or permitted to be applied to any Letter of
Credit or this Agreement, including the Law or any order of a jurisdiction where
the L/C Issuer or the beneficiary is located, the practice stated in the ISP, or
in the decisions, opinions, practice statements, or official commentary of the
ICC Banking Commission, the Bankers Association for Finance and Trade -
International Financial Services Association (BAFT-IFSA), or the Institute of
International Banking Law & Practice, whether or not any Letter of Credit
chooses such law or practice.

(h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance, subject to Section 2.17, with its
Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for
each Letter of Credit equal to the Applicable Rate times the daily amount
available to be drawn under such Letter of Credit. For purposes of computing the
daily amount available to be drawn under any Letter of Credit, the amount of
such Letter of Credit shall be determined in accordance with Section 1.06.
Letter of Credit Fees shall be (i) due and payable on the first Business Day
after the end of each March, June, September

 

46

--------------------------------------------------------------------------------

and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand and (ii) computed on a quarterly basis in arrears. If there is any change
in the Applicable Rate during any quarter, the daily amount available to be
drawn under each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Borrower shall pay directly to the L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit, at a rate per annum equal to 0.15%,
computed on the daily amount available to be drawn under such Letter of Credit
on a quarterly basis in arrears Such fronting fee shall be due and payable on
the tenth Business Day after the end of each March, June, September and December
in respect of the most recently-ended quarterly period (or portion thereof, in
the case of the first payment), commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. In addition, the
Borrower shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.

(j) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Borrower shall be obligated to
reimburse the L/C Issuer hereunder for any and all drawings under such Letter of
Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries.

2.04 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender, in reliance upon the agreements of the other Lenders set
forth in this Section 2.04, shall make loans (each such loan, a “Swing Line
Loan”) to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as
Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit
Commitment; provided, however, that (x) after giving effect to any Swing Line
Loan, (i) the Total Revolving Credit Outstandings shall not exceed the Aggregate
Revolving Credit Commitments, and (ii) the Revolving Credit Exposure of

 

47

--------------------------------------------------------------------------------

any Lender shall not exceed such Lender’s Revolving Credit Commitment, (y) the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan, and (z) the Swing Line Lender shall not be under
any obligation to make any Swing Line Loan if it shall determine (which
determination shall be conclusive and binding absent manifest error) that it
has, or by such Credit Extension may have, Fronting Exposure; and provided,
further, that, the aggregate principal amount of Swing Line Loans made on the
Closing Date, when combined with the aggregate principal amount of Revolving
Credit Loans made on the Closing Date and the aggregate face amount of Letters
of Credit issued on the Closing Date, shall not exceed $15,000,000. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Applicable Percentage times the amount of
such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 3:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 4:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a result
of the limitations set forth in the first proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 5:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrower.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole discretion may request, on
behalf of the Borrower (which hereby irrevocably authorizes the Swing Line
Lender to so request on its behalf), that each Revolving Credit Lender make a
Revolving Credit Loan that is a Base Rate Loan in an amount equal to such
Lender’s Applicable Percentage of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request shall
be deemed to be a Borrowing Notice for purposes hereof) and in accordance with
the requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the

 

48

--------------------------------------------------------------------------------

principal amount of Base Rate Loans, but subject to the unutilized portion of
the Aggregate Commitments and the conditions set forth in Section 4.02. The
Swing Line Lender shall furnish the Borrower with a copy of the applicable
Borrowing Notice promptly after delivering such notice to the Administrative
Agent. Each Lender shall make an amount equal to its Applicable Percentage of
the amount specified in such Borrowing Notice available to the Administrative
Agent in immediately available funds (and the Administrative Agent may apply
Cash Collateral available with respect to the applicable Swing Line Loan) for
the account of the Swing Line Lender at the Administrative Agent’s Office not
later than 1:00 p.m. on the day specified in such Borrowing Notice, whereupon,
subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds
available shall be deemed to have made a Revolving Credit Loan that is a Base
Rate Loan to the Borrower in such amount. The Administrative Agent shall remit
the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request
for Revolving Credit Loans that are Base Rate Loans submitted by the Swing Line
Lender as set forth herein shall be deemed to be a request by the Swing Line
Lender that each of the Revolving Credit Lenders fund its risk participation in
the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank compensation, plus
any administrative, processing or similar fees customarily charged by the Swing
Line Lender in connection with the foregoing. If such Lender pays such amount
(with interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Revolving Credit Loan included in the relevant Revolving Credit
Borrowing or funded participation in the relevant Swing Line Loan, as the case
may be. A certificate of the Swing Line Lender submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.

(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or
to purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower

 

49

--------------------------------------------------------------------------------

or any other Person for any reason whatsoever, (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that each Revolving Credit
Lender’s obligation to make Revolving Credit Loans pursuant to this
Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.

(d) Repayment of Participations.

(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage thereof (appropriate adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s risk
participation was funded) in the same funds as those received by the Swing Line
Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Revolving Credit Lender funds its Revolving Credit Loan that is a
Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance
such Revolving Credit Lender’s Applicable Percentage of any Swing Line Loan,
interest in respect of such Applicable Percentage shall be solely for the
account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

(g) Extensions. If the maturity date shall have occurred in respect of any
tranche of Revolving Credit Commitments at a time when another tranche or
tranches of Revolving Credit Commitments is or are in effect with a longer
maturity date, then on the earliest occurring maturity date all then outstanding
Swing Line Loans shall be repaid in full on such date (and there shall be no
adjustment to the participations of the Revolving Credit Lenders therein as a
result of the occurrence of such maturity date); provided, however, that if on
the occurrence of such earliest maturity date (after giving effect to any
repayments of Revolving Credit Loans and any reallocation of Letter of Credit
participations as contemplated in Section 2.03(a)(vii)), there shall exist
sufficient unutilized extended Revolving Credit Commitments so that the
respective

 

50

--------------------------------------------------------------------------------

outstanding Swing Line Loans could be incurred pursuant to the extended
Revolving Credit Commitments which will remain in effect after the occurrence of
such maturity date, then there shall be an automatic adjustment on such date of
the participations in such Swing Line Loans and the same shall be deemed to have
been incurred solely pursuant to the relevant extended Revolving Credit
Commitments, and such Swing Line Loans shall not be so required to be repaid in
full on such earliest maturity date.

2.05 Prepayments.

(a) Optional. (i) The Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay Term Loans and Revolving Credit
Loans in whole or in part without premium or penalty (subject to the last
sentence of this Section 2.05(a)); provided that (i) such notice must be
received by the Administrative Agent not later than 11:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and
(B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment (and prepayment fee, if any) and the Type(s) of Loans to be prepaid
and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such
Loans. The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s Applicable Percentage of
such prepayment (and prepayment fee, if any). If such notice is given by the
Borrower, the Borrower shall make such prepayment (and prepayment fee, if any)
and the payment amount (and prepayment fee, if any) specified in such notice
shall be due and payable on the date specified therein. Any prepayment of a
Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with any additional amounts required pursuant to Section 3.05.
Each prepayment of the outstanding Term Loans pursuant to this Section 2.05(a)
shall be applied to the principal repayment installments thereof as directed by
the Borrower. Each prepayment (and prepayment fee, if any) shall be paid to the
Lenders in accordance with their respective Applicable Percentages. In the event
that, on or prior to the first anniversary of the Closing Date, the Borrower
(i) prepays, refinances, substitutes or replaces any Term Loans pursuant to any
Repricing Transaction or (ii) effects any amendment of this Agreement resulting
in a Repricing Transaction, then the Borrower shall pay to the Lenders (x) in
the case of clause (i), a fee of 1.0% of the aggregate principal amount of Term
Loans so prepaid, refinanced, substituted or replaced and (y) in the case of
clause (ii), a fee equal to 1.0% of the aggregate principal amount of the
applicable Term Loans outstanding immediately prior to such amendment.

(ii) The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

 

51

--------------------------------------------------------------------------------

(b) Mandatory. (i) No later than the earlier of (x) 90 days after the end of
each fiscal year of the Borrower, commencing with the fiscal year ending on
December 31, 2013, and (y) the date on which the financial statements and
Compliance Certificate with respect to such period are delivered pursuant to
Section 6.01(a) and Section 6.02(b), if the Consolidated Leverage Ratio as of
the end of such fiscal year is greater than 2.50:1.00, the Borrower shall prepay
an aggregate principal amount of Loans equal to the lesser of (A) 50% of Excess
Cash Flow for such fiscal year minus optional prepayments of Term Loans and
Revolving Credit Loans pursuant to Section 2.05(a) during such fiscal year but
only to the extent that the Indebtedness so prepaid by its terms cannot be
reborrowed or redrawn and such prepayments do not occur in connection with a
refinancing of all or any portion of such Indebtedness and (B) the amount that
would have been necessary to reduce the Consolidated Total Leverage Ratio as of
the end of such fiscal year to 2.50:1.00 (such prepayments to be applied as set
forth in clauses (v) and (vii) below).

(ii) If Holdings, the Borrower or any of its Subsidiaries Disposes of any
property (including sales or issuances of Equity Interests by Subsidiaries of
Holdings) or a Recovery Event occurs, but excluding, in each case, any
Disposition of any property permitted by Section 7.05(a), (b), (c), (d),
(e) (with respect to such clause (e), other than Dispositions described in
Section 7.04(b) which are not also permitted by Section 7.05(a), (b), (c), (d),
(f), (g), (i) or (j)), (f), (g), (i) or (j), which results in the realization by
such Person of Net Cash Proceeds, the Borrower shall prepay an aggregate
principal amount of Loans equal to 100% of such Net Cash Proceeds immediately
upon receipt thereof by such Person (such prepayments to be applied as set forth
in clauses (v) and (vii) below); provided, however, that, with respect to any
Net Cash Proceeds realized under a Disposition or Recovery Event described in
this Section 2.05(b)(ii), at the election of the Borrower (as notified by the
Borrower to the Administrative Agent promptly upon the occurrence of such
Disposition or Recovery Event), and so long as no Default or Event of Default
shall have occurred and be continuing, the Borrower may reinvest all or any
portion of such Net Cash Proceeds in either (i) long-term assets useful in the
business of the Borrower or any of its Subsidiaries or (ii) a Permitted
Acquisition so long as within twelve months after the receipt of such Net Cash
Proceeds, such reinvestment shall have been consummated (as certified by the
Borrower in writing to the Administrative Agent); and provided further, however,
that any Net Cash Proceeds not so reinvested shall be immediately applied to the
prepayment of the Loans as set forth in this Section 2.05(b)(ii).

(iii) Upon the incurrence or issuance by Holdings, the Borrower or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to Section 7.03), the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by Holdings, the Borrower or
such Subsidiary (such prepayments to be applied as set forth in clauses (v) and
(vii) below).

(iv) [Reserved].

 

52

--------------------------------------------------------------------------------

(v) Each prepayment of Loans pursuant to the foregoing provisions of this
Section 2.05(b) shall be applied, first, to the principal repayment installments
of the outstanding Term Loan Facility on a pro-rata basis and, second, to the
Revolving Credit Facility in the manner set forth in clause (vii) of this
Section 2.05(b).

(vi) [Reserved].

(vii) Prepayments of the Revolving Credit Facility made pursuant to this
Section 2.05(b), first, shall be applied ratably to the L/C Borrowings and the
Swing Line Loans, second, shall be applied ratably to the outstanding Revolving
Credit Loans, and, third, shall be used to Cash Collateralize the remaining L/C
Obligations; and, in the case of prepayments of the Revolving Credit Facility
required pursuant to clause (ii) or (iii) of this Section 2.05(b), the amount
remaining, if any, after the prepayment in full of all L/C Borrowings, Swing
Line Loans and Revolving Credit Loans outstanding at such time and the Cash
Collateralization of the remaining L/C Obligations in full may be retained by
the Borrower for use in the ordinary course of its business. Upon the drawing of
any Letter of Credit that has been Cash Collateralized, the funds held as Cash
Collateral shall be applied (without any further action by or notice to or from
the Borrower or any other Loan Party) to reimburse the L/C Issuer or the
Revolving Credit Lenders, as applicable.

(c) If for any reason the Total Revolving Credit Outstandings at any time exceed
the Aggregate Revolving Credit Commitments then in effect, the Borrower shall
immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.05(c) unless after the prepayment in full of the Revolving Credit
Loans and the Swing Line Loans the Total Revolving Credit Outstandings exceed
the Aggregate Revolving Credit Commitments then in effect. If for any reason the
Outstanding Amount of all Swing Line Loans exceeds the Swing Line Sublimit, the
Borrower shall immediately prepay the Swing Line Loans in an aggregate amount
equal to such excess.

2.06 Termination or Reduction of Commitments. (a) Optional. The Borrower may,
upon notice to the Administrative Agent, terminate the Aggregate Revolving
Credit Commitments or the aggregate Term Loan Commitments, or from time to time
permanently reduce the Aggregate Revolving Credit Commitments or the aggregate
Term Loan Commitments; provided that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. three Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall be
in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Revolving Credit Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Revolving Credit Outstandings would
exceed the Aggregate Revolving Credit Commitments, and (iv) if, after giving
effect to any reduction of the Aggregate Revolving Credit Commitments, the
Letter of Credit Sublimit or the Swing Line Sublimit, exceeds the amount of the
Aggregate Revolving Credit Commitments, such sublimit shall be automatically
reduced by the amount of such excess. The Administrative Agent will promptly
notify the Appropriate Lenders of any such notice of termination or reduction of
any Commitments. Any reduction of the Aggregate Revolving Credit Commitments
shall be applied to the Revolving Credit Commitment of each Revolving Credit
Lender according to its Applicable Percentage of

 

53

--------------------------------------------------------------------------------

the Revolving Credit Facility. Any reduction of the aggregate Term Loan
Commitments shall be applied to the Term Loan Commitment of each Term Loan
Lender according to its Applicable Percentage of the Term Loan Facility. All
fees accrued until the effective date of any termination of the Aggregate
Revolving Credit Commitments shall be paid on the effective date of such
termination.

(b) Mandatory. The Term Loan Commitments shall automatically terminate upon the
making of the Term Loans on the Closing Date. Notwithstanding anything herein or
in any other Loan Document to the contrary, the Aggregate Commitments shall
automatically terminate at 5:00 p.m. on August 31, 2012, if the initial Credit
Extension shall not have occurred by such time.

2.07 Repayment of Loans.

(a) Term Loans. The Borrower shall repay to the Term Loan Lenders the aggregate
principal amount of all Term Loans outstanding on the following date in the
respective amounts set forth opposite such dates (which amounts shall be reduced
as provided in Sections 2.05(a) or 2.05(b)(v)):

 

Date

   Amount  

March 31, 2013

   $ 12,562,500   

June 30, 2013

   $ 12,562,500   

September 30, 2013

   $ 12,562,500   

December 31, 2013

   $ 12,562,500   

March 31, 2014

   $ 12,562,500   

June 30, 2014

   $ 12,562,500   

September 30, 2014

   $ 12,562,500   

December 31, 2014

   $ 12,562,500   

March 31, 2015

   $ 12,562,500   

June 30, 2015

   $ 12,562,500   

September 30, 2015

   $ 12,562,500   

December 31, 2015

   $ 12,562,500   

March 31, 2016

   $ 12,562,500   

June 30, 2016

   $ 12,562,500   

September 30, 2016

   $ 12,562,500   

December 31, 2016

   $ 12,562,500   

March 31, 2017

   $ 12,562,500   

June 30, 2017

   $ 12,562,500   

Maturity Date

    
 
 
 
 
 
  Remaining
aggregate
outstanding
principal
amount of
all Term
Loans   
  
  
  
  
  
  

provided, however, that the final principal repayment installment of the Term
Loans shall be repaid on the Maturity Date and in any event shall be in an
amount equal to the remaining aggregate outstanding principal amount of all Term
Loans outstanding on such date.

 

54

--------------------------------------------------------------------------------

(b) The Borrower shall repay to the Revolving Credit Lenders on the Maturity
Date the aggregate principal amount of all Revolving Credit Loans outstanding on
such date.

(c) The Borrower shall repay each Swing Line Loan on the earlier to occur of
(i) the date ten Business Days after such Swing Line Loan is made and (ii) the
Maturity Date.

2.08 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan under a Facility shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate for such Facility;
(ii) each Base Rate Loan under a Facility shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Rate for such Facility; and
(iii) each Swing Line Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate plus the Applicable Rate for the Revolving Credit Facility.

(b) (i) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, all outstanding Obligations shall
thereafter bear interest, payable on demand, at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws until such defaulted amount shall have been paid in full.

(ii) While any Event of Default arising pursuant to Section 8.1(f) or
Section 8.1(g) exists, all outstanding Obligations shall thereafter bear
interest, payable on demand, at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by applicable
Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists (other than as set forth in clauses (b)(i) and (b)(ii) above), all
outstanding Obligations shall thereafter bear interest, payable on demand, at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

55

--------------------------------------------------------------------------------

2.09 Fees. In addition to certain fees described in subsections (h) and (i) of
Section 2.03:

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Applicable
Percentage of the Revolving Credit Facility, a commitment fee equal to the
Applicable Rate times the actual daily amount by which the Aggregate Revolving
Credit Commitments exceed the sum of (i) the Outstanding Amount of Revolving
Credit Loans and (ii) the Outstanding Amount of L/C Obligations, subject to
adjustment as provided in Section 2.14. For the avoidance of doubt, the
Outstanding Amount of Swing Line Loans shall not be counted towards or
considered usage of the Aggregate Revolving Credit Commitments for purposes of
determining the commitment fee. The commitment fee shall accrue at all times
commencing on the Closing Date and through the Availability Period, including at
any time during which one or more of the conditions in Article IV is not met,
and shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing with the first such date to
occur after the Closing Date, and on the last day of the Availability Period.
The commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.

(b) Other Fees. (i) The Borrower shall pay to Joint Lead Arrangers and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Engagement Letter, the Administrative Agent Fee
Letter or as otherwise agreed in writing. Such fees shall be in all respects
fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) The Borrower shall pay on the Closing Date to the Administrative Agent for
the account of each Lender party to this Agreement as a Lender on the Closing
Date, as fee compensation for the funding of such Lender’s Term Loan and funded
and unfunded Revolving Credit Commitments, a closing fee in an amount equal to
1.00% of the aggregate amount of the stated principal amount of such Lender’s
Term Loan and funded and unfunded Revolving Credit Commitments of such Lender,
payable to the Administrative Agent for the account of such Lender from the
proceeds of the Loans as and when funded on the Closing Date. Such closing fee
shall be in all respects fully earned when paid and shall not be refundable for
any reason whatsoever.

(iii) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.

2.10 Computation of Interest and Fees.

(a) All computations of interest for Base Rate Loans shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.12(a), bear interest for one
day. Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

56

--------------------------------------------------------------------------------

2.11 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records. Each such Note shall (i) in the
case of Term Loans, be in the form of Exhibit C-1 (a “Term Note”), (ii) in the
case of Revolving Credit Loans, be in the form of Exhibit C-2 (a “Revolving
Note”), and (iii) in the case of Swing Line Loans, be in the form of Exhibit C-3
(a “Swing Line Note”). Each Lender may attach schedules to its Note and endorse
thereon the date, Type (if applicable), amount and maturity of its Loans and
payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a) above,
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.

2.12 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made free and
clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.

 

57

--------------------------------------------------------------------------------

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Appropriate Lenders or the L/C Issuer, as the case
may be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Appropriate Lenders or the L/C Issuer, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or the L/C Issuer, in immediately
available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

 

58

--------------------------------------------------------------------------------

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall promptly return such funds (in like funds as received from such
Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Term Loans and Revolving Credit Loans, to fund participations in Letters of
Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c)
are several and not joint. The failure of any Lender to make any Loan, to fund
any such participation or to make any payment under Section 10.04(c) on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan, to purchase its participation
or to make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Term Loans or Revolving Credit Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by
it resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Term Loans or Revolving Credit Loans or participations and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Term Loans and Revolving Credit Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Term
Loans, Revolving Credit Loans and other amounts owing them, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of the Borrower pursuant to and in accordance with
the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender), (y) the application of Cash
Collateral provided for in Section 2.16, or (z) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Loans or subparticipations in L/C

 

59

--------------------------------------------------------------------------------

Obligations or Swing Line Loans to any assignee or participant, other than an
assignment to the Borrower or any Subsidiary thereof (as to which the provisions
of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

2.14 Increase in Revolving Credit Commitments.

(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Administrative Agent (which shall promptly notify the
Lenders), the Borrower may (from time to time), request an increase in the
Aggregate Revolving Credit Commitments by an amount that, in addition to all
other increases under this Section 2.14 and all Additional Term Loan Facilities
established pursuant to Section 2.15, does not exceed $35,000,000 in the
aggregate for all such increases and Additional Term Loan Facilities; provided
that (i) any such request for an increase shall be in a minimum amount of
$10,000,000, and (ii) the Borrower may make a maximum of five such requests,
inclusive of any requests for the establishment of Additional Term Loan
Facilities pursuant to Section 2.15 (any such increase to the Aggregate
Revolving Credit Commitments, an “Incremental Revolving Credit Commitment”). At
the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than 10 Business Days or
more than 20 Business Days from the date of delivery of such notice to the
Lenders). No Lender shall be obligated to increase its Revolving Credit
Commitments.

(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within the time period set forth in the applicable notice provided
pursuant to Section 2.14(a) whether or not it agrees, in its sole discretion, to
increase its Revolving Credit Commitment and, if so, the amount by which it
seeks to increase its commitment (whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase). Any Lender
not responding within such time period shall be deemed to have declined to
increase its Revolving Credit Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrower and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase,
subject to the approval of (i) the Administrative Agent if such proposed
Incremental Revolving Credit Lender is not an Affiliate of an existing Lender
and (ii) each L/C Issuer and the Swing Line Lender, the Borrower may also invite
additional Eligible Assignees to become Incremental Revolving Credit Lenders
pursuant to an amendment or a joinder agreement in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower (each such Eligible
Assignee and Lender providing an Incremental Revolving Credit Commitment, an
“Incremental Revolving Credit Lender”).

 

60

--------------------------------------------------------------------------------

(d) Effective Date and Allocations. In connection with any increase in the
Aggregate Revolving Credit Commitments pursuant to this Section 2.14, the
Administrative Agent and the Borrower shall determine the effective date (the
“Revolving Credit Commitment Increase Effective Date”) and the final allocation
of such increase. The Administrative Agent shall promptly notify the Borrower
and the Lenders of the final allocation of such increase and the Revolving
Credit Commitment Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, (i) the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Revolving Credit Commitment
Increase Effective Date signed by a Responsible Officer of such Loan Party
(A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, (B) confirming its respective Guaranty
and grant of security interest in the Collateral and agreeing that such Guaranty
and such Collateral shall continue to be in full force and effect and shall
guarantee and secure, as applicable, all of the Obligations (including with
respect to any Incremental Revolving Credit Commitment made pursuant to this
Section 2.14), (C) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (x) the representations and warranties
contained in Article V and the other Loan Documents are true and correct in all
material respects (or in all respects if qualified by materiality or “Material
Adverse Effect”) on and as of the Revolving Credit Commitment Increase Effective
Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct in all
material respects (or in all respects if qualified by materiality or “Material
Adverse Effect”) as of such earlier date, and except that for purposes of this
Section 2.14, the representations and warranties contained in Sections 5.05(a)
and 5.05(b) shall be deemed to refer to the most recent statements furnished
pursuant to Sections 6.01(a) and 6.01(b), respectively, and (y) no Default or
Event of Default exists and (D) after giving effect to such Incremental
Revolving Credit Commitment on a Pro Forma Basis as of the last day of the most
recently ended test period applicable to such covenants, certifying that the
Borrower shall be in compliance with Sections 7.11(a) and (b), (ii) the Borrower
shall deliver or cause to be delivered any customary legal opinions or other
documents reasonably requested by the Administrative Agent in connection with
such Incremental Revolving Credit Commitment and (iii) all fees and expenses
owing to the Administrative Agent and the Lenders in respect of such Incremental
Revolving Credit Commitment shall have been paid. On each Revolving Credit
Commitment Increase Effective Date, after giving effect to the increase to the
Aggregate Revolving Credit Commitments occurring on such date, the
Administrative Agent shall reallocate the outstanding Loans and the Revolving
Credit Commitments among the Lenders to the extent necessary to cause the
outstanding Loans to conform to any revised Applicable Percentages arising from
any nonratable increase in the Revolving Credit Commitments under this
Section 2.14. In connection with any such reallocation the Borrower shall be
required to pay any amounts that it would otherwise owe under Section 3.05 as a
result of such reallocation.

(f) Amendment. Notwithstanding any provisions of Section 10.01 to the contrary,
with the consent of the Incremental Revolving Credit Lenders, the Borrower and
the Administrative Agent (and without the consent of the other Lenders), this
Agreement may be amended to give effect to an Incremental Revolving Credit
Commitment; provided that the terms applicable to each Incremental Revolving
Credit Commitment shall be identical to the Revolving Credit Commitments other
than fees that may be payable to such Incremental Revolving Credit Lenders.

 

61

--------------------------------------------------------------------------------

(g) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or Section 10.01 to the contrary.

(h) Equal and Ratable Treatment. The Incremental Revolving Credit Commitments
and credit extensions thereunder shall constitute Commitments and Credit
Extensions under, and shall be entitled to all the benefits afforded by, this
Agreement and the other Loan Documents, and shall, without limiting the
foregoing, benefit equally and ratably from the Guaranty and security interests
created by the Collateral Documents.

2.15 Additional Term Loan Facilities.

(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to and approval (not to be unreasonably withheld or delayed) of the
Administrative Agent (which shall promptly notify the Lenders), the Borrower
may, without the consent of any Lender, from time to time, request the
establishment of one or more term loan facilities (each, an “Additional Term
Loan Facility”) in an amount (for all such requests) that, in addition to all
other Additional Term Loan Facilities under this Section 2.15 and all increases
in the Aggregate Revolving Credit Commitments pursuant to Section 2.14, does not
exceed $35,000,000 in the aggregate for all such Additional Term Loan Facilities
and increases in the Aggregate Revolving Credit Commitments; provided that
(i) any such request for an Additional Term Loan Facility shall be in a minimum
amount of $10,000,000, and (ii) the Borrower may make a maximum of five such
requests, inclusive of any requests for increases in the Aggregate Revolving
Credit Commitments pursuant to Section 2.14. At the time of sending such notice,
the Borrower (in consultation with the Administrative Agent) shall specify the
time period within which each Lender is requested to respond (which shall in no
event be less than 10 Business Days or more than 20 Business Days from the date
of delivery of such notice to the Lenders). No Lender shall be obligated to
provide the Additional Term Loan Facility.

(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within the time period set forth in the applicable notice provided
pursuant to Section 2.15(a) whether or not it agrees, in its sole discretion, to
provide such Additional Term Loan Facility and, if so, the amount of its
commitment to such Additional Term Loan Facility. Any Lender not responding
within such time period shall be deemed to have declined to provide a commitment
to such Additional Term Loan Facility.

(c) Notification by Administrative Agent; Additional Term Loan Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder. Subject to the approval of the
Administrative Agent if such proposed Additional Term Loan Lender is not an
Affiliate of an existing Lender, the Borrower may also invite additional
Eligible Assignees to become Additional Term Loan Lenders pursuant to an
amendment or a joinder agreement in form and substance reasonably satisfactory
to the Administrative Agent and the Borrower (each such Eligible Assignee and
Lender providing a commitment to an Additional Term Loan Facility, an
“Additional Term Loan Lender”).

 

62

--------------------------------------------------------------------------------

(d) Closing Date and Allocations. In connection with the Additional Term Loan
Facility in accordance with this Section 2.15, the Administrative Agent and the
Borrower shall determine the effective date (the “Additional Term Loan Facility
Effective Date”) and the final allocation of such Additional Term Loan Facility.
The Administrative Agent shall promptly notify the Borrower and the Additional
Term Loan Lenders of the final allocation of such Additional Term Loan Facility
and the Additional Term Loan Facility Effective Date.

(e) Conditions to Additional Term Loan Facility. As a condition precedent to
such Additional Term Loan Facility, (i) the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Additional
Term Loan Facility Effective Date signed by a Responsible Officer of such Loan
Party (A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such Additional Term Loan Facility, (B) confirming
its respective Guaranty and grant of security interest in the Collateral and
agreeing that such Guaranty and such Collateral shall continue to be in full
force and effect and shall guarantee and secure, as applicable, all of the
Obligations (including with respect to any Additional Term Loan Facilities
provided pursuant to this Section 2.15), (C) in the case of the Borrower,
certifying that, before and after giving effect to such Additional Term Loan
Facility, (x) the representations and warranties contained in Article V and the
other Loan Documents are true and correct in all material respects (or in all
respects if qualified by materiality or “Material Adverse Effect”) on and as of
the Additional Term Loan Facility Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct in all material respects (or in all respects if
qualified by materiality or “Material Adverse Effect”) as of such earlier date,
and except that for purposes of this Section 2.15, the representations and
warranties contained in Sections 5.05(a) and 5.05(b) shall be deemed to refer to
the most recent statements furnished pursuant to Sections 6.01(a) and 6.01(b),
respectively, and (y) no Default or Event of Default exists and (D) after giving
effect to such Additional Term Loan Facility on a pro forma basis as of the last
day of the most recently ended test period applicable to such covenants,
certifying that the Borrower shall be in compliance with Sections 7.11(a) and
(b), (ii) the Borrower shall deliver or cause to be delivered any customary
legal opinions or other documents reasonably requested by the Administrative
Agent in connection with such Additional Term Loan Facility and (iii) all fees
and expenses owing to the Administrative Agent and the Lenders in respect of
such Additional Term Loan Facility shall have been paid. The loans in respect of
such Additional Term Loan Facility shall be made by the Additional Term Loan
Lenders participating therein pursuant to the procedures set forth in the
joinder agreement to such Additional Term Loan Facility.

(f) Amendment. Notwithstanding any provisions of Section 10.01 to the contrary,
with the consent of the parties electing to participate in a particular
Additional Term Loan Facility pursuant to this Section, the Borrower and the
Administrative Agent (and without the consent of the other Lenders), this
Agreement may be amended to give effect to such Additional Term Loan Facility.
The terms and provisions of the Additional Term Loan Facility shall be as set
forth herein or in any such amendment or joinder agreement; provided, that
(i) the weighted average life to maturity of any Additional Term Loan Facility
shall be no shorter than the weighted average life to maturity of the Term Loan
Facility; (ii) the applicable maturity date of any Additional Term Loan Facility
shall be no shorter than the latest of the final maturity of the Term Loan
Facility; and (iii) the Additional Term Loan Facility may be an increase in the
Term Loan Commitments or may contain different terms and provisions than the
Term Loan Commitments subject to the restrictions set forth in this
Section 2.15.

 

63

--------------------------------------------------------------------------------

(g) Conflicting Provisions. This Section shall supersede any provisions of
Section 2.13 or Section 10.01 to the contrary.

(h) Equal and Ratable Treatment. The Additional Term Loan Facilities and credit
extensions thereunder shall constitute Commitments and Credit Extensions under,
and shall be entitled to all the benefits afforded by, this Agreement and the
other Loan Documents, and shall, without limiting the foregoing, benefit equally
and ratably from the Guaranty and security interests created by the Collateral
Documents.

2.16 Cash Collateral.

(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has resulted
in an Unreimbursed Amount, (ii) as of the Letter of Credit Expiration Date, any
L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be
required to provide Cash Collateral pursuant to Section 8.02(c), or (iv) there
shall exist a Defaulting Lender, the Borrower shall immediately (in the case of
clause (iii) above) or within one Business Day (in all other cases) following
any request by the Administrative Agent or the L/C Issuer, provide Cash
Collateral in an amount not less than the applicable Minimum Collateral Amount
(determined in the case of Cash Collateral provided pursuant to clause
(iv) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral
provided by the Defaulting Lender).

(b) Grant of Security Interest. The Borrower, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the
control of) the Administrative Agent, for the benefit of the Administrative
Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority
security interest in all such cash, deposit accounts and all balances therein,
and all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to Section 2.16(c). If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent or the L/C Issuer as
herein provided, or that the total amount of such Cash Collateral is less than
the Minimum Collateral Amount, the Borrower will, promptly upon demand by the
Administrative Agent, pay or provide to the Administrative Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency. All Cash
Collateral (other than credit support not constituting funds subject to deposit)
shall be maintained in one or more Controlled Accounts at Bank of America. The
Borrower shall pay on demand therefor from time to time all customary account
opening, activity and other administrative fees and charges in connection with
the maintenance and disbursement of Cash Collateral.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section 2.16 or Sections
2.03, 2.04, 2.05, 2.17 or 8.02 in respect of Letters of Credit shall be held and
applied to the satisfaction of the specific L/C Obligations, obligations to fund
participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

 

64

--------------------------------------------------------------------------------

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or to secure other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee following compliance with Section 10.06(b)(vi))) or (ii) the
determination by the Administrative Agent and the L/C Issuer that there exists
excess Cash Collateral; provided, however, (x) any such release shall be without
prejudice to, and any disbursement or other transfer of Cash Collateral shall be
and remain subject to, any other Lien conferred under the Loan Documents and the
other applicable provisions of the Loan Documents, and (y) the Person providing
Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be
released but instead held to support future anticipated Fronting Exposure or
other obligations.

2.17 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders” and
Section 10.01.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 10.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder;
third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to
such Defaulting Lender in accordance with Section 2.16; fourth, as the Borrower
may request (so long as no Default or Event of Default exists), to the funding
of any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the L/C
Issuer’s future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.16; sixth, to the payment of any amounts owing to the Lenders,
the L/C Issuer or Swing Line Lender as a result of any judgment of a court of
competent jurisdiction obtained

 

65

--------------------------------------------------------------------------------

by any Lender, the L/C Issuer or the Swing Line Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; seventh, so long as no Default or Event of Default exists, to
the payment of any amounts owing to the Borrower as a result of any judgment of
a court of competent jurisdiction obtained by the Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or L/C
Borrowings in respect of which such Defaulting Lender has not fully funded its
appropriate share, and (y) such Loans were made or the related Letters of Credit
were issued at a time when the conditions set forth in Section 4.02 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or L/C Obligations owed
to, such Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders
pro rata in accordance with the Commitments hereunder without giving effect to
Section 2.17(a)(iv). Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.17(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees.

(A) No Defaulting Lender shall be entitled to receive any fee payable under
Section 2.09(a) for any period during which that Lender is a Defaulting Lender
(and the Borrower shall not be required to pay any such fee that otherwise would
have been required to have been paid to that Defaulting Lender).

(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees
for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its Applicable Percentage of the stated amount of Letters of
Credit for which it has provided Cash Collateral pursuant to Section 2.16.

(C) With respect to any Letter of Credit Fee not required to be paid to any
Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall
(x) pay to each Non-Defaulting Lender that portion of any such fee otherwise
payable to such Defaulting Lender with respect to such Defaulting Lender’s
participation in L/C Obligations or Swing Line Loans that has been reallocated
to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C
Issuer and Swing Line Lender, as applicable, the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to the L/C
Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and
(z) not be required to pay the remaining amount of any such fee.

 

66

--------------------------------------------------------------------------------

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or
any part of such Defaulting Lender’s participation in L/C Obligations and Swing
Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective Applicable Percentages (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent that (x) the conditions
set forth in Section 4.02 are satisfied at the time of such reallocation (and,
unless the Borrower shall have otherwise notified the Administrative Agent at
such time, the Borrower shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y) such reallocation does not
cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to
exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swing Line Loans. If the reallocation
described in clause (a)(iv) above cannot, or can only partially, be effected,
the Borrower shall, without prejudice to any right or remedy available to it
hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an
amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash
Collateralize the L/C Issuers’ Fronting Exposure in accordance with the
procedures set forth in Section 2.16.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, Swing
Line Lender and the L/C Issuer agree in writing that a Lender is no longer a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, if it is a Revolving Credit Lender, to the
extent applicable, purchase at par that portion of outstanding Loans of the
other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Revolving Credit Loans and funded and
unfunded participations in Letters of Credit and Swing Line Loans to be held on
a pro rata basis by the Lenders in accordance with their Applicable Percentages
(without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

 

67

--------------------------------------------------------------------------------

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.

(i) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in the good faith discretion of the Administrative Agent or a Loan
Party) require the deduction or withholding of any Tax from any such payment by
the Administrative Agent or a Loan Party, then the Administrative Agent or such
Loan Party shall be entitled to make such deduction or withholding, upon the
basis of the information and documentation to be delivered pursuant to
subsection (e) below (or, if no such information or documentation has been so
delivered, upon the basis of the Administrative Agent’s or such Loan Party’s
good faith application of such Laws).

(ii) If any Loan Party or the Administrative Agent shall be required by the Code
to withhold or deduct any Taxes, including both U.S. federal backup withholding
and withholding Taxes, from any payment, then (A) the Administrative Agent shall
withhold or make such deductions as are determined by the Administrative Agent
to be required based upon the information and documentation it has received
pursuant to subsection (e) below (or, if no such information or documentation
has been so received, based upon the Administrative Agent’s good faith
application of the Code), (B) the Administrative Agent shall timely pay the full
amount withheld or deducted to the relevant Governmental Authority in accordance
with the Code, and (C) to the extent that the withholding or deduction is made
on account of Indemnified Taxes, the sum payable by the applicable Loan Party
shall be increased as necessary so that after any required withholding or the
making of all required deductions (including deductions applicable to additional
sums payable under this Section 3.01) the applicable Recipient receives an
amount equal to the sum it would have received had no such withholding or
deduction been made.

(iii) If any Loan Party or the Administrative Agent shall be required by any
applicable Laws other than the Code to withhold or deduct any Taxes from any
payment, then (A) such Loan Party or the Administrative Agent, as required by
such Laws, shall withhold or make such deductions as are determined by it to be
required based upon the information and documentation it has received pursuant
to subsection (e) below (or, if no such information or documentation has been so
received, based upon the Administrative Agent’s or such Loan Party’s good faith
application of such Laws), (B) such Loan Party or the Administrative Agent, to
the extent required by such Laws, shall timely pay the full amount withheld or
deducted to the relevant Governmental Authority in accordance with such Laws,
and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums
payable under this Section 3.01) the applicable Recipient receives an amount
equal to the sum it would have received had no such withholding or deduction
been made.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Loan Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.

 

68

--------------------------------------------------------------------------------

(c) Tax Indemnifications.

(i) Each of the Loan Parties shall, and does hereby, jointly and severally
indemnify each Recipient, and shall make payment in respect thereof within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 3.01) payable or paid by such Recipient or required
to be withheld or deducted from a payment to such Recipient, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the L/C
Issuer (with a copy to the Administrative Agent), or by the Administrative Agent
on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive absent manifest error.

(ii) Each Lender and the L/C Issuer shall, and does hereby, severally indemnify,
and shall make payment in respect thereof within 10 days after demand therefor,
(x) the Administrative Agent against any Indemnified Taxes attributable to such
Lender or the L/C Issuer (but only to the extent that any Loan Party has not
already indemnified the Administrative Agent for such Indemnified Taxes and
without limiting the obligation of the Loan Parties to do so), (y) the
Administrative Agent against any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 10.06(d) relating to the maintenance of a
Participant Register and (z) the Administrative Agent against any Excluded Taxes
attributable to such Lender or the L/C Issuer, in each case, that are payable or
paid by the Administrative Agent or a Loan Party in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender and the L/C Issuer hereby
authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Lender or the L/C Issuer, as the case may be, under this
Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii).

(d) Evidence of Payments. Upon request by the Borrower or the Administrative
Agent, as the case may be, after any payment of Taxes by the Borrower or by the
Administrative Agent to a Governmental Authority as provided in this
Section 3.01, the Borrower shall deliver to the Administrative Agent or the
Administrative Agent shall deliver to the Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such
payment or other evidence of such payment reasonably satisfactory to the
Borrower or the Administrative Agent, as the case may be.

 

69

--------------------------------------------------------------------------------

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding Tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(I) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(II) executed originals of IRS Form W-8ECI;

 

70

--------------------------------------------------------------------------------

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit H-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

(IV) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or
Exhibit H-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine whether such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

71

--------------------------------------------------------------------------------

(iii) Each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its
legal inability to do so.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to
any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from
funds paid for the account of such Lender or the L/C Issuer, as the case may be.
If any Recipient determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
by any Loan Party or with respect to which any Loan Party has paid additional
amounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by a Loan Party under this Section 3.01 with respect to
the Taxes giving rise to such refund), net of all out-of-pocket expenses
(including Taxes) incurred by such Recipient, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Loan Party, upon the request of the Recipient, agrees
to repay the amount paid over to the Loan Party (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Recipient
in the event the Recipient is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this subsection, in no
event will the applicable Recipient be required to pay any amount to the Loan
Party pursuant to this subsection the payment of which would place the Recipient
in a less favorable net after-Tax position than such Recipient would have been
in if the indemnification payments or additional amounts giving rise to such
refund had never been paid. This subsection shall not be construed to require
any Recipient to make available its tax returns (or any other information
relating to its Taxes that it deems confidential) to any Loan Party or any other
Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender or the L/C Issuer, the termination of
the Commitments and the repayment, satisfaction or discharge of all other
Obligations.

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its Lending Office to make, maintain or fund Loans whose interest is
determined by reference to the Eurodollar Rate, or to determine or charge
interest rates based upon the Eurodollar Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
(i) any obligation of such Lender to make or continue Eurodollar Rate Loans or
to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and
(ii) if such notice asserts the illegality of such Lender making or maintaining
Base Rate Loans the interest rate on which is determined by reference to the
Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate
Loans of such Lender shall, if necessary to avoid such illegality, be determined
by the Administrative Agent without reference to the Eurodollar Rate component
of the Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrower that the

 

72

--------------------------------------------------------------------------------

circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, (x) the Borrower shall, upon demand from such Lender (with a copy
to the Administrative Agent), prepay or, if applicable, convert all Eurodollar
Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base
Rate Loans of such Lender shall, if necessary to avoid such illegality, be
determined by the Administrative Agent without reference to the Eurodollar Rate
component of the Base Rate), either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans and (y) if such notice asserts the
illegality of such Lender determining or charging interest rates based upon the
Eurodollar Rate, the Administrative Agent shall during the period of such
suspension compute the Base Rate applicable to such Lender without reference to
the Eurodollar Rate component thereof until the Administrative Agent is advised
in writing by such Lender that it is no longer illegal for such Lender to
determine or charge interest rates based upon the Eurodollar Rate. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the Borrower
and each Lender. Thereafter, (x) the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the Eurodollar
Rate component of the Base Rate, the utilization of the Eurodollar Rate
component in determining the Base Rate shall be suspended, in each case until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e)) or the L/C
Issuer;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

 

73

--------------------------------------------------------------------------------

(iii) impose on any Lender or the L/C Issuer or any other condition, cost or
expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or
any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender, by an amount which such Lender deems to be material in its sole
discretion, of making or maintaining any Eurodollar Rate Loan (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
the L/C Issuer of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrower will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C Issuer’s holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit or Swing Line Loans held by, such
Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that
which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the L/C Issuer’s policies and the policies of
such Lender’s or the L/C Issuer’s holding company with respect to capital
adequacy), by an amount deemed by such Lender to be material in its sole
discretion, then from time to time the Borrower will pay to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s
holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section 3.04 shall not constitute a waiver of such Lender’s or the L/C Issuer’s
right to demand such compensation, provided that the Borrower shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than 120 days prior to the date that such Lender or the L/C
Issuer, as the case may

 

74

--------------------------------------------------------------------------------

be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 120-day period referred
to above shall be extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least ten (10) days’ prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.
If a Lender fails to give notice ten (10) days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable ten (10) days
from receipt of such notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Eurodollar Loan
on a day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Eurodollar
Loan on the date or in the amount notified by the Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 10.13;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or requires the Borrower to pay any Indemnified
Taxes or additional amounts to any Lender, the L/C Issuer, or any Governmental
Authority for the account of any

 

75

--------------------------------------------------------------------------------

Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then at the request of the Borrower such Lender
or the L/C Issuer shall, as applicable, use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender or the L/C Issuer,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 3.01 or 3.04, as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.02, as applicable, and
(ii) in each case, would not subject such Lender or the L/C Issuer, as the case
may be, to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender or the L/C Issuer, as the case may be. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender or the L/C Issuer in connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01 and, in each case, such Lender has
declined or is unable to designate a different lending office in accordance with
Section 3.06(a), the Borrower may replace such Lender in accordance with
Section 10.13.

3.07 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder and resignation of the Administrative Agent.

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions to Closing Date and Initial Borrowing. This Agreement shall
become effective as of the date hereof and the obligations of the Lenders to
make Loans and of the L/C Issuer to issue Letters of Credit hereunder shall
become effective, in each case upon the satisfaction of the conditions precedent
set forth in this Section 4.01 (the date upon which all such conditions
precedent under this Section 4.01 shall be satisfied is referred to as the
“Closing Date”) (in addition, in the case of the obligations of the Lenders to
make Loans and of the L/C Issuer to issuer Letters of Credit hereunder, to the
satisfaction of each of the conditions precedent set forth in Section 4.02):

(a) Receipt by the Administrative Agent of the following:

(i) (x) Executed counterparts of this Agreement, each properly executed by a
Responsible Officer of Holdings and the Borrower, and by each Lender and the L/C
Issuer and (y) executed counterparts of the Loan Documents (other than this
Agreement), each properly executed by a Responsible Officer of the signing Loan
Party;

(ii) Copies of the Organization Documents of each Loan Party certified to be
true and complete as of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant secretary of such Person,
as of the Closing Date, to be true and correct as of such date;

 

76

--------------------------------------------------------------------------------

(iii) Such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is or will be a party;

(iv) Such documents and certifications, as of a recent date, as the
Administrative Agent may reasonably require to evidence that each of the Loan
Parties is duly organized or formed, and that each of the Loan Parties is
validly existing, in good standing and qualified to engage in business in its
jurisdiction of organization or formation;

(v) A favorable opinion of Simpson, Thacher & Bartlett LLP, counsel to the Loan
Parties, dated as of the Closing Date, addressed to the Administrative Agent,
the L/C Issuer and each Lender, in the form of Exhibit G;

(vi) An executed Perfection Questionnaire with respect to the Loan Parties
(after giving effect to the Transactions to be consummated on the Closing Date)
dated the Closing Date and duly executed by a Responsible Officer of the
Borrower, together with the results of searches of judgments, tax liens and
Uniform Commercial Code filings (or equivalent filings), made with respect to
such Loan Parties, in each case, as applicable, in the states (or other
jurisdictions) of formation of such Persons, in which the chief executive office
of each such Person is located and in the other jurisdictions in which such
Persons maintain property and as indicated on such Perfection Questionnaire,
together with copies of the financing statements (or similar documents)
disclosed by such Uniform Commercial Code search, and accompanied by evidence
satisfactory to the Administrative Agent that the Liens indicated in any such
financing statement (or similar document) would be otherwise permitted hereunder
or have been or will be contemporaneously with the occurrence of the Closing
Date released or terminated; and

(vii) A certificate dated the Closing Date and signed by a Responsible Officer
of the Borrower certifying that the conditions specified in Section 4.01(j),
Section 4.01(k) (accompanied by reasonably detailed backup calculations in
support thereof), Section 4.01(n), Section 4.01(g), Section 4.02(a) and
Section 4.02(b) have been satisfied.

(b) The Borrower shall have received (i) a public corporate credit rating from
Moody’s and a public corporate family rating from S&P, and (ii) a public rating
of the Facilities by each of Moody’s and S&P, in each case giving effect to the
Transactions to be consummated on the Closing Date.

 

77

--------------------------------------------------------------------------------

(c) The Administrative Agent shall have received (i) the financial statements
referred to in Sections 5.05(a) and 5.05(b) and (ii) the pro forma financial
statements referred to in Section 5.05(d).

(d) The Administrative Agent, on behalf of each Lender, shall have received all
documentation and other information required by bank regulatory authorities
under applicable “know-your-customer” and anti-money laundering rules and
regulations, including the PATRIOT Act, that have been requested by the
Administrative Agent and the Lenders no later than five days prior to the
Closing Date.

(e) The Joint Lead Arrangers shall be reasonably satisfied with the terms and
conditions of the drafts of the Spin-Off Transaction Documents filed as exhibits
to Amendment No. 3 to Form 10 filed by Holdings on June 19, 2012 with the SEC.

(f) The Lenders, the Administrative Agent and the Joint Lead Arrangers shall
have received all fees and other amounts due and payable on or prior to the
Closing Date, including reimbursement or payment of all reasonable and
documented out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder, in all cases to the extent invoiced at least two Business
Days prior to the Closing Date.

(g) All material governmental and third party approvals necessary in connection
with the Facilities and the Loan Documents shall have been obtained and be in
full force and effect.

(h) The Collateral Documents shall have been duly executed by each Loan Party
that is to be a party thereto and shall be in full force and effect on the
Closing Date. Except as provided for in Section 6.15, the Administrative Agent
shall be reasonably satisfied that all actions necessary to establish that the
Administrative Agent will have a security interest on behalf of the Secured
Parties in the Collateral of the type and priority described in each Collateral
Document shall have been taken.

(i) The Administrative Agent shall have received a copy of, or a certificate as
to coverage under, the insurance policies required by Section 6.06 and the
applicable provisions of the Collateral Documents, each of which shall be
endorsed or otherwise amended to include a customary lender’s loss payable
endorsement and to name the Administrative Agent as additional insured, in form
and substance reasonably satisfactory to the Administrative Agent. In addition,
the Administrative Agent shall have received a schedule setting forth a true,
complete and correct description of all material insurance maintained by or on
behalf of Holdings, the Borrower and its Subsidiaries as of the Closing Date. As
of such date, such insurance shall be in full force and effect and all premiums
due on or before the Closing Date shall have been duly paid.

(j) There shall not have occurred since December 31, 2011 any event or condition
that has had or could be reasonably expected, either individually or in the
aggregate, to have a Material Adverse Effect.

(k) As of the Closing Date, the Consolidated Leverage Ratio (after giving pro
forma effect to the Transactions) shall not exceed 2.75:1.00.

 

78

--------------------------------------------------------------------------------

(l) The Administrative Agent shall have received a certificate in the form of
Exhibit I dated the Closing Date executed by the chief financial officer of the
Borrower certifying that Holdings, the Borrower and its Subsidiaries, on a
consolidated basis after giving effect to the Transactions, are solvent.

(m) The terms and conditions of the Spin-Off Transactions shall be consistent in
all material respects with the terms set forth in the Spin-Off Transaction
Documents and the information set forth in the Form 10. The Administrative Agent
shall be reasonably satisfied that immediately following the initial Credit
Extension on the Closing Date, the Spin-Off Transactions shall be consummated on
terms and conditions consistent with the Spin-Off Transaction Documents.

(n) On the Closing Date, after giving effect to the Transactions, Holdings, the
Borrower and its Subsidiaries shall not have outstanding Consolidated Funded
Indebtedness in an aggregate principal amount in excess of $350,000,000. The
amount paid by Holdings, the Borrower and its Subsidiaries in cash to L-3
Communications Corporation on the Closing Date shall not exceed the sum of
(i) $335,000,000 and (ii) the aggregate cash balances held in bank accounts of
Holdings, the Borrower and such Subsidiaries on the Closing Date (excluding the
effect of any borrowings hereunder).

Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Borrowing Notice requesting only
a conversion of Loans to the other Type, or a continuation of Eurodollar Rate
Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct in all material respects (or in all respects if
qualified by materiality or “Material Adverse Effect”) on and as of the date of
such Credit Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects (or in all respects if qualified by
materiality or “Material Adverse Effect”) as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in Sections 5.05(a) and 5.05(b) shall be deemed to refer to the most
recent statements furnished pursuant to Sections 6.01(a) and 6.01(b),
respectively.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

 

79

--------------------------------------------------------------------------------

(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

Each Request for Credit Extension (other than a Borrowing Notice requesting only
a conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and 4.02(b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V. REPRESENTATIONS AND WARRANTIES

Each of Holdings and the Borrower represent and warrant to the Administrative
Agent, the L/C Issuer and the Lenders that:

5.01 Existence, Qualification and Power. Each Loan Party (a) is duly organized
or formed, validly existing and, as applicable, in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) execute, deliver and perform its obligations under the Loan Documents
and the Transaction Documents to which it is a party and consummate the
Transactions to be entered into by it, and (c) is duly qualified and is licensed
and, as applicable, in good standing under the Laws of each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such qualification or license; except in each case referred to in
clause (b)(i) or (c), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document and each Transaction Document to which
such Person is or is to be a party have been duly authorized (or, in the case of
the Subsidiary Guarantors, will be duly authorized on or prior to the Closing
Date) by all necessary corporate or other organizational action, and do not and
will not (a) contravene the terms of any of such Person’s Organization
Documents; (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, or require any payment to be made under (i) any
Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or
Transaction Document, (b) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (c) the perfection or maintenance of the
Liens created under the Collateral Documents (including the first priority
nature thereof) or (d) the exercise by the Administrative Agent or any Lender of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for the authorizations, approvals,
actions, notices and filings listed on Schedule 5.03.

 

80

--------------------------------------------------------------------------------

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of
Holdings, the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of Holdings, the Borrower and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of Holdings, the Borrower and its
Subsidiaries dated March 30, 2012, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Holdings,
the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses
(i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

(c) Since December 31, 2011, there has been no event or condition that has had
or could be reasonably expected, either individually or in the aggregate, to
have a Material Adverse Effect.

(d) The consolidated pro forma balance sheet of Holdings, the Borrower and its
Subsidiaries as at March 30, 2012, and the related consolidated pro forma
statement of income of Holdings, the Borrower and its Subsidiaries for the three
months then ended, certified by the chief financial officer or treasurer of the
Borrower, fairly present the consolidated pro forma financial condition of
Holdings, the Borrower and its Subsidiaries as at such date and the consolidated
pro forma results of operations of Holdings, the Borrower and its Subsidiaries
for the period ended on such date, in each case giving effect to the
Transactions, all in accordance with GAAP. The consolidated pro forma statement
of income of Holdings, the Borrower and its Subsidiaries for the year ended
December 31, 2011, certified by the chief financial officer or treasurer of the
Borrower, fairly presents the consolidated pro forma results of operations of
Holdings, the Borrower and its Subsidiaries for the period ended on such date,
in each case giving effect to the Transactions, all in accordance with GAAP.

 

81

--------------------------------------------------------------------------------

5.06 Litigation. Except as set forth on Schedule 5.06, no litigation by,
investigation by, or proceeding of or before any arbitrator or any Governmental
Authority is pending or, to the knowledge of the Borrower, overtly threatened by
or against Holdings, the Borrower or any of its Subsidiaries or against any of
its or their respective properties or revenues (i) with respect to any Loan
Document, any Transaction Document or any of the Transactions or (ii) which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. For the avoidance of doubt, if any litigation,
investigation or proceeding identified on Schedule 5.06 shall result in a
Material Adverse Effect, the Loan Parties hereby agree that the Lenders shall be
under no obligation to make any Loan and the L/C Issuer shall be under no
obligation to issue or extend any Letter of Credit hereunder.

5.07 No Default. Neither Holdings, the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.

5.08 Ownership of Property; Liens. Each of Holdings, the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Borrower and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01. Schedule 5.08(a) sets
forth, after giving effect to the Transactions, a complete and accurate list of
all real property owned by Holdings, the Borrower and its Subsidiaries, showing
as of the Closing Date the street address, county or other relevant
jurisdiction, state, record owner and estimated fair value thereof.
Schedule 5.08(b) sets forth, after giving effect to the Transactions, with
respect to any leasehold interest of real property with a value of more than
$2,000,000, a complete and accurate list of all such leases under which
Holdings, the Borrower or any Subsidiary is the lessee or lessor, showing as of
the Closing Date the street address, county or other relevant jurisdiction,
state, lessor, lessee, expiration date and annual rental cost thereof.

5.09 Environmental Compliance. Except insofar as any exception to any of the
following, or any aggregation of such exceptions, is not reasonably likely to
result in a Material Adverse Effect:

(a) The facilities and properties owned, leased or operated by Holdings, the
Borrower or any of its Subsidiaries (the “Properties”) do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii) could
reasonably be expected to give rise to Environmental Liability.

(b) None of Holdings, the Borrower nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened.

 

82

--------------------------------------------------------------------------------

(c) Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to Environmental Liability, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could reasonably be expected to give rise to any Environmental Liability.

(d) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Borrower, threatened, under any Environmental Law to
which Holdings, the Borrower or any Subsidiary is or, to the knowledge of the
Borrower, will be named as a party or with respect to the Properties or the
business operated by Holdings, the Borrower or any of its Subsidiaries (the
“Business”), nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or the Business.

(e) There has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of Holdings, the Borrower or any Subsidiary in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could reasonably give rise to any Environmental Liability.

(f) Holdings, the Borrower and its Subsidiaries, the Properties and all
operations at the Properties are in compliance and have, in the last 3 years,
been in compliance in all material respects with all applicable Environmental
Laws, and there is no contamination at, under or about the Properties or
violation of any applicable Environmental Law with respect to the Properties or
the Business which could interfere with the continued operation of the
Properties or the Business.

(g) Holdings, the Borrower and its Subsidiaries hold and are in compliance with
all Environmental Permits necessary for their operations.

5.10 Insurance. The properties of Holdings, the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Holdings, the Borrower or
the applicable Subsidiary operates.

5.11 Taxes. Each of Holdings, the Borrower and its Subsidiaries have filed all
federal, state and other material tax returns and reports which, to the
knowledge of the Borrower, are required to be filed, and has paid all federal,
state and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
Holdings, the Borrower or

 

83

--------------------------------------------------------------------------------

any Subsidiary that would, if made, have a Material Adverse Effect. Neither any
Loan Party nor any Subsidiary thereof is a party to any tax sharing agreement
other than the Tax Matters Agreement.

5.12 ERISA Compliance.

(a) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, (i) no Reportable Event has
occurred with respect to any Single Employer Plan; (ii) all contributions
required to be made with respect to a Plan have been timely made; (iii) none of
Holdings, the Borrower nor any ERISA Affiliate has incurred any material
liability to or on account of a Plan that remains unsatisfied pursuant to
Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 4971, 4975 or 4980 of the Code or reasonably expects to incur
any liability (including any indirect, contingent or secondary liability) under
any of the foregoing Sections with respect to any Plan; (iv) no termination of,
or institution of proceedings to terminate or appoint a trustee to administer,
any Single Employer Plan or Multiemployer Plan has occurred; (v) each Plan has
complied with the applicable provisions of ERISA and the Code (except that with
respect to any Multiemployer Plan, such representation is deemed made only to
the knowledge of the Borrower); (vi) no failure to satisfy the minimum funding
standards under Sections 412 or 430 of the Code or Sections 302 or 303 of ERISA,
extension of any amortization period (within the meaning of Section 412 of the
Code) or Lien in favor of the PBGC or a Single Employer Plan has arisen or has
occurred during the five year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan
and (v) no determination that any Pension Plan or Multiemployer Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA has occurred.

(b) Neither Holdings, the Borrower nor any ERISA Affiliate has had a complete or
partial withdrawal from any Multiemployer Plan for which there is any
outstanding material liability, and neither Holdings, the Borrower nor any ERISA
Affiliate would become subject to any liability under ERISA if Holdings, the
Borrower or any such ERISA Affiliate were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made in an amount which would be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect. To the knowledge of the Borrower, no Multiemployer Plan is in
Reorganization or Insolvent except to the extent that any such event could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

5.13 Subsidiaries. Schedule 5.13 sets forth as of the Closing Date (after giving
effect to the Transactions) a list of all Subsidiaries and the percentage
ownership interest of the Borrower therein. The shares of capital stock or other
ownership interests so indicated on Schedule 5.13 are fully paid and
non-assessable and are owned by the Borrower as of the Closing Date, directly or
indirectly, free and clear of all Liens (other than Liens created under the
Collateral Documents). On and after the Closing Date, the Borrower’s Equity
Interests are fully paid and non-assessable and are directly owned by Holdings
free and clear of all Liens (other than Liens created under the Collateral
Documents).

 

84

--------------------------------------------------------------------------------

5.14 Margin Regulations; Investment Company Act.

(a) No part of the proceeds of any Loans will be used for “purchasing” or
“carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect.

(b) None of Holdings, the Borrower or any of its Subsidiaries is an “investment
company,” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended. None of Holdings, the
Borrower or any of its Subsidiaries is subject to regulation under any Federal
or State statute or regulation (other than Regulation X of the Board of
Governors of the Federal Reserve System) which limits its ability to incur the
types of Indebtedness comprising the Obligations.

5.15 Accuracy and Completeness of Information. Neither (a) the Confidential
Information Memorandum nor (b) any other information, report, financial
statement, exhibit or schedule furnished in writing by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or included herein or delivered pursuant hereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not materially misleading; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, the Borrower represents only that it acted
in good faith and utilized assumptions believed by it to be reasonable in the
preparation of such information, report, financial statement, exhibit or
schedule.

5.16 Compliance with Laws. Each of Holdings, the Borrower and its Subsidiaries
is in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5.17 Intellectual Property; Licenses, Etc. Holdings, the Borrower and each of
its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted (the “Company
Intellectual Property”) except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any Company Intellectual Property or the validity, enforceability or
effectiveness of any Company Intellectual Property, nor does the Borrower know
of any valid basis for any such claim. To the best of the Borrower’s knowledge,
the conduct of the business of, and the use of Company Intellectual Property by,
the Borrower and its Subsidiaries does not infringe, misappropriate, dilute or
otherwise violate the rights of any Person. To the best of the Borrower’s
knowledge, no Person is infringing, misappropriating, diluting, or otherwise
violating any Intellectual Property of any of Holdings, the Borrower and any of
its Subsidiaries.

 

85

--------------------------------------------------------------------------------

5.18 OFAC. In addition to and without limiting the generality of Section 5.16,
no Loan Party, nor, to the knowledge of any Loan Party, any Related Party of a
Loan Party: (i) is a Sanctioned Person, (ii) is located, organized or residing
in any Designated Jurisdiction, or (iii) is or has been (within the previous
five years), to the best of such Person’s knowledge, engaged in any transaction
with any Person who is now or was then the subject of Sanctions or who is
located, organized or residing in any Designated Jurisdiction. No Loan, nor the
proceeds from any Loan, has been used, directly or indirectly, to lend,
contribute, provide or has otherwise been made available to fund any activity or
business in any Designated Jurisdiction or to fund any activity or business of
any Person located, organized or residing in any Designated Jurisdiction or who
is the subject of any Sanctions, or in any other manner that will result in any
violation by any Person (including any Lender, the Joint Lead Arrangers, the
Administrative Agent, the L/C Issuer or the Swing Line Lender) of Sanctions.

5.19 Solvency. On the Closing Date and immediately after giving effect to the
consummation of the Transactions, (a) the fair value of the assets of Holdings,
the Borrower and its Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated, contingent or otherwise of
Holdings, the Borrower and its Subsidiaries on a consolidated basis; (b) the
present fair saleable value of the property of Holdings, the Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the debts and other liabilities,
subordinated, contingent or otherwise of Holdings, the Borrower and its
Subsidiaries on a consolidated basis, as such debts and other liabilities become
absolute and matured; (c) Holdings, the Borrower and its Subsidiaries on a
consolidated basis will be able to pay the debts and liabilities, subordinated,
contingent or otherwise of Holdings, the Borrower and its Subsidiaries on a
consolidated basis, as such debts and liabilities become absolute and matured;
and (d) Holdings, the Borrower and its Subsidiaries on a consolidated basis will
not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed to
be conducted following the Closing Date. For purposes of this representation,
the amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

5.20 Labor Matters. There are no strikes pending or, to the Borrower’s
knowledge, overtly threatened against Holdings, the Borrower or any of its
Subsidiaries which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. The hours worked and payments made
to employees of Holdings, the Borrower and each of its Subsidiaries (and their
predecessors) have not been in violation of the Fair Labor Standards Act or any
other applicable Law, except to the extent such violations could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.

5.21 Senior Indebtedness. The Obligations constitute, to the extent applicable,
“Senior Debt” and “Designated Senior Debt” (however denominated) of the Loan
Parties under any subordinated Indebtedness of the Loan Parties in an aggregate
principal amount in excess of the Threshold Amount.

5.22 Collateral Documents. The provisions of the Collateral Documents are
effective to create in favor of the Administrative Agent for the benefit of the
Secured Parties a legal, valid

 

86

--------------------------------------------------------------------------------

and enforceable first priority Lien (subject to Liens permitted by Section 7.01)
on all right, title and interest of the respective Loan Parties in the
Collateral described therein. Except for filings completed on or prior to the
Closing Date and as contemplated hereby and by the Collateral Documents, no
filing or other action will be necessary to perfect or protect such Liens other
than the actions described in Section 6.15 and on Schedule 5.03.

5.23 Foreign Corrupt Practices Act. No part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977 (the “FCPA”).

5.24 Use of Proceeds. The proceeds of the borrowings under the Term Loan
Facility on the Closing Date shall be used (i) to pay the Transaction Expenses
and (ii) to pay a dividend or other distribution to L-3 Communications
Corporation. The proceeds of the Revolving Credit Facility shall be used to
provide ongoing working capital and for other general corporate purposes
(including Permitted Acquisitions).

5.25 Government Relations and Material Contracts. As of the Closing Date, no
notice of suspension or debarment has been issued and remains outstanding by the
Federal Government to Holdings, the Borrower or any of the Material
Subsidiaries, and none of Holdings, the Borrower or any of the Material
Subsidiaries is a party to any pending suspension or debarment. As of the
Closing Date, there is no pending or threatened litigation, or any other legal
or administrative proceeding or investigation pending or threatened, against
Holdings, the Borrower or any of its Subsidiaries arising from or related to any
Material Contract which could reasonably be expected to have a Material Adverse
Effect.

ARTICLE VI. AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, Holdings and the Borrower shall, and shall (except in
the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent (who will make
available to the Lenders):

(a) The Borrower will deliver to the Administrative Agent, whether or not the
Borrower or Holdings has a class of securities registered under the Exchange
Act, (i) within 90 days after the end of each fiscal year of the Borrower, the
annual reports and (ii) within 45 days after the end of each fiscal quarter of
the Borrower, quarterly reports (except with respect to the fourth quarter of
each fiscal year) that the Borrower or Holdings would be required to file if the
Borrower or Holdings were subject to section 13(a) or 15(d) of the Exchange Act;
provided, that any reports required to be delivered pursuant to this
Section 6.01 which are made available on EDGAR or any successor system of the
SEC shall be deemed delivered when so made available; and

 

87

--------------------------------------------------------------------------------

(b) All such financial reports shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by the accountants or officer auditing or preparing
such financial reports, as the case may be, and disclosed therein) and, in the
case of quarterly reports, subject to year-end audit adjustments and footnote
disclosures.

As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrower shall not be separately required to furnish such
information under subsection (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.

6.02 Certificates; Other Information. Deliver to the Administrative Agent (who
will make available to the Lenders):

(a) within five days after the date on which Borrower delivers the annual
financial statements required by Section 6.01, a certificate of its independent
certified public accountants certifying such financial statements without
material qualification;

(b) within five days after the delivery of the financial statements required by
Section 6.01, a certificate signed by a Responsible Officer of the Borrower
(i) stating, to the best of such Responsible Officer’s knowledge, during such
period (A) that no Subsidiary has been formed or acquired (or, if any such
Subsidiary has been formed or acquired, the Borrower has complied with the
requirements of Section 6.10 with respect thereto), (B) that such Responsible
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (C) the amount of returns on any Investments
received in cash by any Loan Party during such period, and (ii) setting forth,
in the form of the Compliance Certificate, the computation of the financial
covenants in Section 7.11 as of the last day of the fiscal quarter most recently
ended;

(c) promptly, after their becoming available, copies of all proxy statements and
all registration statements filed by the Borrower or Holdings under the
Securities Act of 1933, as amended (other than registration statements on Form
S-8 or any registration statement filed in connection with a dividend
reinvestment plan), and regular and periodic reports, if any, which the Borrower
or Holdings shall have filed or are required to file, with the SEC (or any
governmental agency or agencies substituted therefore) under Section 13 or
Section 15(d) of the Securities and Exchange Act of 1934, as amended, or with
any national securities exchange (other than those which have already been
delivered pursuant to Section 6.01 or on Form 11-K or any successor form);
provided, that documents required to be delivered under this clause (d) which
are made available on the internet via the EDGAR, or any successor, system of
the SEC shall be deemed delivered when made so available;

(d) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities (with an aggregate outstanding
principal amount exceeding the Threshold Amount) of any Loan Party pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lenders pursuant to Section 6.01 or
any other clause of this Section 6.02;

 

88

--------------------------------------------------------------------------------

(e) as soon as available, but in any event at least 15 days before the end of
each fiscal year of the Borrower, a forecast prepared by management of the
Borrower consisting of a consolidated balance sheet and consolidated statement
of income of Holdings, the Borrower and its Subsidiaries on a quarterly basis
for the immediately following fiscal year;

(f) within five days after the delivery of the financial statements required by
Section 6.01(a)(i), a certificate signed by a Responsible Officer of the
Borrower attaching a supplement to the Perfection Questionnaire reflecting any
changes to the information set forth therein during such fiscal year or
confirming that there has been no change in such information since the date of
the Perfection Questionnaire or latest supplement thereto;

(g) promptly after the request by any Lender, all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the PATRIOT Act; and

(h) promptly, such additional information regarding the business, financial or
corporate affairs of Holdings, the Borrower or any of its Subsidiaries, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Joint Lead Arrangers may, but shall not be obligated to, make available to the
Lenders and the L/C Issuer materials and/or information provided by or on behalf
of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on Debt Domain, IntraLinks, Syndtrak or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to Holdings, the Borrower or their
respective Affiliates, or the respective securities of any of the foregoing, and
who may be engaged in investment and other market-related activities with
respect to such Persons’ securities. The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent, the Joint Lead Arrangers, the L/C Issuer
and the Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to Holdings, the Borrower, their respective
Affiliates or their respective securities for purposes of United States Federal
and state securities laws (provided, however, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in
Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Side
Information;” and (z) the Administrative Agent and the Joint Lead Arrangers
shall be entitled to treat any Borrower Materials that are not marked “PUBLIC”
as being suitable only for posting on a portion of the Platform not designated
“Public Side Information.”

 

89

--------------------------------------------------------------------------------

6.03 Notices.

(a) Promptly upon any Responsible Officer of the Borrower obtaining knowledge of
any of the following, furnish to the Administrative Agent written notice of the
following:

(i) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;

(ii) the filing or commencement of any action, investigation, suit or proceeding
(including pursuant to any applicable Environmental Laws), whether at law or in
equity or by or before any Governmental Authority, against Holdings, the
Borrower or any of its Subsidiaries that could reasonably be expected to result
in a Material Adverse Effect;

(iii) the (i) occurrence of any Disposition of property or assets for which the
Borrower is required to make a mandatory prepayment pursuant to
Section 2.05(b)(ii), (ii) incurrence or issuance of any Indebtedness for which
the Borrower is required to make a mandatory prepayment pursuant to
Section 2.05(b)(iii), and (iii) receipt of any Net Cash Proceeds in respect of a
Recovery Event for which the Borrower is required to make a mandatory prepayment
pursuant to Section 2.0(b)(ii); and

(iv) any other development that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect.

(b) Notify the Administrative Agent of any material change in accounting
policies or financial reporting practices by Holdings, the Borrower or any
Subsidiary concurrently with the delivery of the financial statements required
hereunder first affected by such change.

The Administrative Agent agrees that it will promptly send to the Lenders any
written notice received by the Administrative Agent pursuant to Section 6.03(a)
or (b).

6.04 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
(a) material taxes, fees, assessments, and other governmental charges and
(b) other obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be, except in the
case of clause (b), to the extent any failure to pay, discharge or otherwise
satisfy could not reasonably be expected to have a Material Adverse Effect.

6.05 Preservation of Existence, Etc. Except as not prohibited by Sections 7.04
and 7.05, (a) preserve, renew and keep in full force and effect its corporate
existence; (b) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
if (i) in the reasonable business judgment of Holdings, the Borrower or such
Subsidiary, as the case may be, it is in its best economic interest not to
preserve and maintain such rights, privileges or franchises, and (ii) such
failure to preserve and

 

90

--------------------------------------------------------------------------------

maintain such privileges, rights or franchises could not reasonably be expected
to have a Material Adverse Effect; (c) keep all tangible property useful and
necessary in its business in good working order and condition (ordinary wear and
tear and damage by fire and/or other casualty or taking by condemnation
excepted) and make all necessary repairs thereto and renewals and replacements
thereof except to the extent that the failure to do so could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect; and
(d) comply with all Contractual Obligations except to the extent that the
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.

6.06 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies, (a) insurance in such amounts and against such risks as are
customarily maintained by companies of similar stature engaged in the same or
similar businesses operating in the same or similar locations and (b) on such
real property that is encumbered by any Mortgage and located in an area that has
been identified by the Secretary of Housing and Urban Development as an area
having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968, flood insurance
written in an amount not less than the outstanding principal amount of the
Indebtedness secured by such Mortgage that is reasonably allocable to such real
property or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of 1968,
whichever is less, with a term ending not later than the maturity of the
Indebtedness secured by such Mortgage. The Borrower will furnish to the
Administrative Agent, upon request, information in reasonable detail as to the
insurance so maintained and ensure that such insurance shall be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement and
to name the Administrative Agent as additional insured, in form and substance
reasonably satisfactory to the Administrative Agent.

6.07 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.08 Inspection of Property; Books and Records. Keep proper books of records and
account in which full, true and correct entries in conformity with GAAP and with
all applicable Law in all material respects shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records (except to the extent any such access is restricted by a Law) at any
reasonable time on a Business Day and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of Holdings, the Borrower and its Subsidiaries with officers and
employees of Holdings, the Borrower and its Subsidiaries and with its
independent certified public accountants; provided that the Administrative Agent
or such Lender shall notify the Borrower prior to any contact with such
accountants and give the Borrower the opportunity to participate in such
discussions; provided, further, that the Administrative Agent or such Lender
shall notify the Borrower of any such visits, inspections or discussions prior
to each occurrence thereof.

 

91

--------------------------------------------------------------------------------

6.09 Use of Proceeds. Use the proceeds of the Credit Extensions for purposes not
in contravention of the purposes described in Section 5.24.

6.10 Covenant to Guarantee Obligations and Give Security. (a) With respect to
any property acquired after the Closing Date by any Loan Party (other than
(x) any property described in paragraph (b), (c) or (d) below, (y) any Excluded
Assets and (z) property acquired by any Excluded Subsidiary) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the applicable Collateral Documents or such other documents
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in such property, (ii) take all actions necessary or advisable to grant
to the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in such property, including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the applicable Collateral Documents or by law and, in the case of
Intellectual Property, the recordation of an Intellectual Property Security
Agreement evidencing the security interest created in such Intellectual Property
suitable for recordation in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, or such other instrument in form
and substance reasonably acceptable to the Administrative Agent, or as may be
requested by the Administrative Agent and (iii) take such actions with respect
to such property as are required by the applicable Collateral Documents.

(b) With respect to any fee interest in any real property owned by any Loan
Party having a value (together with improvements thereof) of at least
$15,000,000 acquired after the Closing Date promptly (i) execute and deliver a
first priority Mortgage, in favor of the Administrative Agent, for the benefit
of the Secured Parties, covering such real property, (ii) provide the Secured
Parties with (x) title insurance covering such real property in an amount equal
to 110% of the purchase price of such real property (or such other lesser amount
as shall be reasonably acceptable to the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor’s certificate, (y) any
consents, affidavits or estoppels reasonably deemed necessary or advisable by
the Administrative Agent in connection with such Mortgage, each of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent and
(z) any flood certificates and proof of flood insurance, if applicable, covering
such real property, (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent and (iv) take such actions with respect
to such real property as are required by the applicable Collateral Documents.

(c) With respect to any new Subsidiary (other than an Excluded Subsidiary)
created or acquired after the Closing Date by any Loan Party or any Subsidiary
that ceases to be an Excluded Subsidiary, promptly (i) execute and deliver to
the Administrative Agent such Collateral Documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Equity Interests of such Subsidiary, (ii) deliver to the Administrative
Agent the certificates representing such Equity Interests, together with undated
stock or other transfer powers, in blank, executed and delivered by a duly
authorized officer of the relevant Loan Party, (iii) cause such Subsidiary
(A) to become a party to the applicable Collateral Documents

 

92

--------------------------------------------------------------------------------

(including the Guarantee and Collateral Agreement), (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Secured Parties a perfected first priority security interest in the assets
of such Subsidiary as the Administrative Agent shall determine, in its
reasonable discretion, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Collateral Documents
or by law or as may be requested by the Administrative Agent, (iv) deliver to
the Administrative Agent, for each such Subsidiary board resolutions and other
secretary’s certificates reasonably requested by the Administrative Agent and
consistent with those delivered on the Closing Date under Section 4.01, (v) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent and (vi) take such actions with respect to such Subsidiary
as are required by the applicable Collateral Documents.

(d) With respect to any new Excluded Subsidiary created or acquired after the
Closing Date by any Loan Party or any Subsidiary that becomes an Excluded
Subsidiary, promptly (i) execute and deliver to the Administrative Agent such
Collateral Documents as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Equity Interests of such
Subsidiary (provided that in no event shall more than 65% of the total
outstanding voting Equity Interests and 100% of the total outstanding non-voting
Equity Interests of any such Subsidiary that is a Foreign Subsidiary be required
to be so pledged), (ii) deliver to the Administrative Agent the certificates
representing such Equity Interests, together with undated stock or other
transfer powers, in blank, executed and delivered by a duly authorized officer
of the relevant Loan Party and take such other action as may be necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Administrative
Agent’s security interest therein, (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent and (iv) take such
actions with respect to such Subsidiary as are required by the applicable
Collateral Documents.

(e) Notwithstanding anything to the contrary contained in this Agreement, if at
any time any Subsidiary that is not required to be a Subsidiary Guarantor
hereunder provides a guarantee of the Borrower’s obligations in respect of any
other Indebtedness or grants a Lien on its assets to secure the Borrower’s
obligations in respect of any other Indebtedness, then promptly (and in any
event within 30 days thereof), the Borrower shall and shall cause such
Subsidiary to comply with the requirements of Sections 6.10(a), 6.10(b) and
6.10(c) (without giving regard to any exceptions therein applicable to Excluded
Subsidiaries).

6.11 Compliance with Environmental Laws. In each case except to the extent that
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, comply, and cause all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and renew all
Environmental Permits necessary for its operations and properties; and conduct
any investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all Materials
of Environmental Concern from any of its properties, in accordance with the
requirements of all Environmental Laws; provided,

 

93

--------------------------------------------------------------------------------

however, that none of Holdings, the Borrower or any Subsidiary shall be required
to undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP.

6.12 Further Assurances. Promptly upon request by the Administrative Agent, or
any Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) to the fullest extent
permitted by applicable law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents,
(ii) perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created thereunder and
(iii) enable the Administrative Agent, upon an Event of Default, to realize upon
any assignment of Material Government Contracts made pursuant to the Loan
Documents.

6.13 Maintenance of Ratings. At all times, Borrower shall use commercially
reasonable efforts to maintain (i) a public corporate family rating issued by
Moody’s and a public corporate credit rating issued by S&P and (ii) a public
credit rating from each of Moody’s and S&P with respect to the Facilities (it
being understood and agreed that no minimum ratings shall be required).

6.14 Material and Government Contracts. (a) Perform and observe all the terms
and provisions of each Material Contract to be performed or observed by it,
maintain each such Material Contract in full force and effect and enforce each
such Material Contract and Material Government Contract in accordance with its
terms, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

(b) Apply for and maintain all material facility security clearances and
personnel security clearances required of Holdings, the Borrower and its
Subsidiaries under all applicable Laws to perform and deliver under any and all
Government Contracts and as otherwise may be necessary to continue to perform
the business of Holdings, the Borrower and its Subsidiaries, except where
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

6.15 Post-Closing Obligations. Deliver to the Administrative Agent executed
control agreements sufficient to perfect the Administrative Agent’s Lien on the
relevant accounts with respect to each deposit or securities account of each
Loan Party set forth on Schedule 6.15 within 60 days after the Closing Date (or
such later date as the Administrative Agent may agree in its sole discretion).

 

94

--------------------------------------------------------------------------------

ARTICLE VII. NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, Holdings and the Borrower shall not, nor shall they
permit any Subsidiary to, directly or indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

(a) Liens created pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.03(b), (iii) the direct or any contingent
obligor with respect thereto is not changed, and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by Section 7.03(b);

(c) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in accordance with GAAP;

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 60 days or which are being contested in good faith and by
appropriate proceedings;

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements, other than any Lien imposed by ERISA;

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

(g) easements, rights-of-way, zoning restrictions, other restrictions and other
similar encumbrances previously or hereafter incurred in the ordinary course of
business affecting real property which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or such Subsidiary;

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(i) Liens upon any property acquired, constructed or improved by the Borrower or
any Subsidiary which are created or incurred within 180 days of such
acquisition, construction or improvement to secure or provide for the payment of
the purchase price of such property or the cost of such construction or
improvement, including carrying costs (but no other amounts) and including Liens
on any such property securing Capital Lease Obligations, provided that (x) any

 

95

--------------------------------------------------------------------------------

such Lien shall not apply to any other property of the Borrower or any
Subsidiary (other than after acquired title in or on such property and proceeds
of the existing collateral in accordance with the instrument creating such Lien)
and (y) such Liens secure only Indebtedness (including Capital Lease
Obligations) permitted by Section 7.03(e);

(j) Liens on the property or assets of a Person which becomes a Subsidiary after
the Closing Date, provided that (i) such Liens existed at the time such Person
became a Subsidiary and were not created in anticipation thereof, (ii) any such
Lien is not expanded to cover any property or assets of such Person after the
time such Person becomes a Subsidiary (other than after acquired title in or on
such property and proceeds of the existing collateral in accordance with the
instrument creating such Lien), (iii) the amount of the obligations secured
thereby is not increased (assuming that any unfunded commitments in respect
thereof have been fully funded) and (iv) such Liens secure only Indebtedness
permitted by Section 7.03(h);

(k) Liens on property and assets securing obligations assumed by the Borrower or
a Subsidiary in connection with a Permitted Acquisition of such property or
assets, provided that (i) such Liens existed at the time of such Permitted
Acquisition and were not created in anticipation thereof, (ii) any such Lien is
not expanded to cover any other property or assets (other than after-acquired
title in or on the property or assets acquired and proceeds of the existing
collateral in accordance with the instrument creating such Lien) and (iii) the
amount of obligations secured by such Liens is not increased (assuming that any
unfunded commitments in respect thereof have been fully funded);

(l) Liens on the property of the Borrower or any of its Subsidiaries in favor of
landlords securing licenses, subleases or leases entered into in the ordinary
course of business;

(m) non-exclusive licenses, leases or subleases not prohibited hereunder granted
to other Persons in the ordinary course of business consistent with past
practice and not interfering in any material respect in the business of the
Borrower or any of its Subsidiaries;

(n) Liens arising from precautionary Uniform Commercial Code financing statement
filings with respect to operating leases or consignment arrangements entered
into by the Borrower, or any of its subsidiaries in the ordinary course of
business;

(o) Liens in favor of a banking institution arising by operation of law
encumbering deposits (including the right of set off) held by such banking
institutions incurred in the ordinary course of business and which are within
the general parameters customary in the banking industry;

(p) Liens securing obligations in respect of trade letters of credit covering
the goods (or the documents of title in respect of such goods) financed by such
trade letters of credit and the proceeds and products thereof;

(q) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

(r) Liens securing Synthetic Lease Obligations incurred to finance the
acquisition, construction or improvement of any fixed or capital assets acquired
by the Borrower or any Subsidiary after the Closing Date; provided that such
Liens secure only Indebtedness permitted by Section 7.03(g);

 

96

--------------------------------------------------------------------------------

(s) Liens on Equity Interests of a Person being acquired by the Borrower or any
Subsidiary as security for such purchaser’s deferred payment obligations with
respect thereto;

(t) Liens (not otherwise permitted hereunder) which secure obligations in an
aggregate amount at any time outstanding not to exceed $15,000,000; and

(u) Liens referred to in paragraphs (i), (j), (k) and (r) of this Section 7.01
with respect to extensions, renewals and replacements of obligations secured
thereby, provided that any such extension, renewal or replacement Lien shall be
limited to the property or assets covered by the Lien extended, renewed or
replaced (other than after acquired title in or on such property or assets and
proceeds of the existing collateral in accordance with the instrument creating
such Lien) and that the obligations secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the amounts of the
obligations secured by the Lien extended, renewed or replaced (assuming that any
unfunded commitments in respect of such extended, renewed or replaced
obligations have been fully funded).

7.02 Investments. Make any Investments, except:

(a) Investments held by the Borrower or such Subsidiary in the form of Cash
Equivalents;

(b) advances to officers, directors and employees of the Borrower and
Subsidiaries (excluding any reimbursement obligations in the ordinary course of
business in connection with “corporate credit cards”) in an aggregate amount not
to exceed $5,000,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;

(c) (i) Investments by the Borrower and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by the
Borrower and its Subsidiaries in Loan Parties (other than Holdings),
(iii) additional Investments by Subsidiaries of the Borrower that are not Loan
Parties in other Subsidiaries of the Borrower that are not Loan Parties and
(iv) so long as no Default or Event of Default has occurred and is continuing or
would result from such Investment, additional Investments by the Loan Parties in
Subsidiaries that are not Loan Parties in an aggregate amount not to exceed,
when combined with the amount of Investments made pursuant to Sections 7.02(h)
and (j), Restricted Payments made pursuant to Section 7.06(h) and payments,
prepayments, repurchases, redemptions, defeasances and segregations made
pursuant to the proviso set forth in Section 7.13(a)(i)(2), $30,000,000;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.03;

 

97

--------------------------------------------------------------------------------

(f) Investments existing on the date hereof (other than those referred to in
Section 7.02(c)(i)) and set forth on Schedule 7.02;

(g) Permitted Acquisitions;

(h) Investments in joint ventures and minority interests in third parties by the
Borrower or its Subsidiaries in an aggregate amount not to exceed, when combined
with the amount of Investments made pursuant to Sections 7.02(c)(iv) and (j),
Restricted Payments made pursuant to Section 7.06(h) and payments, prepayments,
repurchases, redemptions, defeasances and segregations made pursuant to the
proviso set forth in Section 7.13(a)(i)(2), $30,000,000;

(i) so long as no Default or Event of Default has occurred and is continuing or
would result from such Investments, Investments in an aggregate amount not to
exceed the portion, if any, of the Available Basket Amount on the date of the
making of such Investments that the Borrower elects to apply to this
Section 7.02(i), provided that at the time of the making of any such Investment,
the Consolidated Leverage Ratio (after giving pro forma effect thereto and to
the incurrence or issuance of any Indebtedness in connection therewith) shall
not exceed 2.50:1.00; and

(j) so long as no Default or Event of Default has occurred and is continuing or
would result from such Investments, Investments (not otherwise permitted
hereunder) so long as the aggregate amount of such Investments (determined
without regard to any write-downs or write-offs of such Investments) does not
exceed, when combined with the amount of Investments made pursuant to Sections
7.02(c)(iv) and (h), Restricted Payments made pursuant to Section 7.06(h) and
payments, prepayments, repurchases, redemptions, defeasances and segregations
made pursuant to the proviso set forth in Section 7.13(a)(i)(2), $30,000,000.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and
any Permitted Refinancing Indebtedness in respect thereof;

(c) Guarantees by the Borrower or any Subsidiary Guarantor in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary
Guarantor;

(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that such obligations are
(or were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view”;

(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets
(including Capital Lease Obligations), and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof except as otherwise permitted hereunder;

 

98

--------------------------------------------------------------------------------

provided that (i) such Indebtedness is incurred prior to or within 180 days
after such acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this
Section 7.03(e), when combined with the aggregate principal amount of all
Indebtedness incurred pursuant to Sections 7.03(f), (g) and (h) shall not exceed
the greater of (x) $30,000,000 and (y) 5.0% of Consolidated Tangible Assets, at
any time outstanding;

(f) Indebtedness of the Borrower or any Subsidiary incurred in connection with
the issuance of any surety bonds, letters of credit or other similar bonds in
the ordinary course of business; provided that the aggregate principal amount of
Indebtedness permitted by this Section 7.03(f), when combined with the aggregate
principal amount of all Indebtedness incurred pursuant to Sections 7.03(e),
(g) and (h) shall not exceed the greater of (i) $30,000,000 and (ii) 5.0% of
Consolidated Tangible Assets, at any time outstanding

(g) Synthetic Lease Obligations of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets acquired by the Borrower or such Subsidiary subsequent to the Closing
Date; provided that the aggregate principal amount of Indebtedness permitted by
this Section 7.03(g), when combined with the aggregate principal amount of all
Indebtedness incurred pursuant to Section 7.03(e), (f) and (h) shall not exceed
the greater of (i) $30,000,000 and (ii) 5.0% of Consolidated Tangible Assets, at
any time outstanding.

(h) Indebtedness of any Person that becomes a Subsidiary after the Closing Date;
provided that (i) such Indebtedness exists at the time such Persons becomes a
Subsidiary and is not created in anticipation of such Person becoming a
Subsidiary, (ii) immediately before and after such Person becomes a Subsidiary,
no Default or Event of Default shall have occurred and be continuing and
(iii) the aggregate principal amount of Indebtedness permitted by this
Section 7.03(h), when combined with the aggregate principal amount of all
Indebtedness incurred pursuant to Section 7.03(e), (f) and (g) shall not exceed
the greater of (x) $30,000,000 and (y) 5.0% of Consolidated Tangible Assets, at
any time outstanding;

(i) unsecured Indebtedness on terms customary at the time for high-yield debt
securities issued in a public offering, the proceeds of which are used either to
prepay or repay Term Loans or to finance a Permitted Acquisition, and Permitted
Refinancing Indebtedness in respect thereof, provided that:

(i) the Borrower would be in compliance with the covenants set forth in
Section 7.11 as of the most recently completed period of four consecutive fiscal
quarters ending prior to such incurrence of additional Indebtedness (or
Permitted Refinancing Indebtedness in respect thereof) for which the financial
statements and Compliance Certificates required by Section 6.01(a) or
Section 6.01(b), as the case may be, and Section 6.02(b) have been delivered or
for which comparable financial statements have been delivered hereunder, after
giving pro forma effect to such additional Indebtedness (including the use of
the proceeds thereof) (or Permitted Refinancing Indebtedness in respect thereof)
as if such Indebtedness had been incurred as of the first day of such period (in
the case of such additional unsecured Indebtedness the proceeds of which are
used to finance a Permitted Acquisition, assuming, for purposes of pro forma
compliance

 

99

--------------------------------------------------------------------------------

with Section 7.11, that the maximum Consolidated Leverage Ratio permitted at the
time by such Section was in fact 0.25 to 1.00 less than the applicable ratio
actually provided for in such Section at such time);

(ii) both immediately before and after giving effect to the incurrence of any
such additional Indebtedness (including the use of the proceeds thereof) (or
Permitted Refinancing Indebtedness in respect thereof), no Default or Event of
Default shall have occurred and be continuing or would result therefrom;

(iii) immediately after giving effect to such additional Indebtedness (or
Permitted Refinancing Indebtedness in respect thereof), there must be at least
$25,000,000 in the aggregate of unused and available Revolving Credit
Commitments and Unrestricted Cash; and

(iv) such additional Indebtedness (or Permitted Refinancing Indebtedness in
respect thereof) has a weighted average life to maturity that is longer than the
Term Loans and does not mature or require any payment of principal prior to the
date that is at least six months after the Maturity Date; and

(j) additional unsecured Indebtedness, other than pursuant to the foregoing
provisions of this Section 7.03, in an aggregate amount at any one time
outstanding not to exceed $35,000,000.

7.04 Fundamental Changes. Merge or consolidate with or into any other Person,
dissolve, liquidate, amalgamate or wind up, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
property, business or assets (whether now owned or hereafter acquired) to or in
favor of any Person, except that, so long as no Default or Event of Default
exists or would result therefrom:

(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any Subsidiary Guarantor is merging with
another Subsidiary that is not a Subsidiary Guarantor, such Subsidiary Guarantor
shall be the continuing or surviving Person;

(b) the Borrower or any Subsidiary may make any conveyance, sale, assignment or
disposition of assets not prohibited by Section 7.05;

(c) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a Subsidiary Guarantor,
then the transferee must either be the Borrower or a Subsidiary Guarantor;

(d) any Subsidiary may merge with another Person to effect a transaction
permitted under Section 7.02;

(e) the Merger may be consummated in accordance with applicable law.

 

100

--------------------------------------------------------------------------------

7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete, surplus or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business;

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Subsidiary Guarantor, the transferee thereof must either be the Borrower or a
Subsidiary Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) Dispositions by the Borrower and its Subsidiaries of property pursuant to
sale-leaseback transactions, provided that the book value of all property so
Disposed of shall not exceed $25,000,000 from and after the Closing Date;

(g) non-exclusive licensing and cross-licensing arrangements involving
technology or other Intellectual Property of the Borrower or a Subsidiary
entered into in the ordinary course of business consistent with past practice
and not interfering in any material respect in the business of the Borrower or
any of its Subsidiaries;

(h) Dispositions resulting from any casualty or condemnation of property or
assets;

(i) any consignment arrangements or similar arrangements for the sale of assets
in the ordinary course of business;

(j) the sale or discount of overdue accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof; and

(k) Dispositions by the Borrower and its Subsidiaries not otherwise permitted
under this Section 7.05; provided that (i) at the time of such Disposition, no
Default or Event of Default shall exist or would result from such Disposition
and (ii) the aggregate fair market value of all property Disposed of in reliance
on this clause (k) in any fiscal year shall not exceed $10,000,000 and in the
aggregate shall not exceed $50,000,000.

 

101

--------------------------------------------------------------------------------

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default or Event of Default shall have occurred and
be continuing at the time of any action described below or would result
therefrom:

(a) each Subsidiary may make Restricted Payments to the Borrower, the Subsidiary
Guarantors and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;

(b) Holdings, the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;

(c) Holdings, the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests;

(d) the Borrower may declare and pay cash dividends to Holdings not to exceed an
amount necessary to permit Holdings to pay (i) reasonable and customary
corporate and operating expenses (including reasonable out-of-pocket expenses
for legal, administrative and accounting services provided by third parties, and
compensation, benefits and other amounts payable to officers and employees in
connection with their employment in the ordinary course of business and to board
of director observers), (ii) franchise fees or similar taxes and fees required
to maintain its corporate existence and (iii) to the extent relating to the
ownership of Equity Interests in the Borrower, cash or Cash Equivalents, any
income Taxes with respect to any consolidated group of which the Borrower is a
member and Holdings is the parent;

(e) Holdings and the Borrower shall be permitted to use the proceeds of the Term
Loans on the Closing Date to pay a dividend or other distribution to L-3
Communications Corporation;

(f) the Spin-Off Transactions may be consummated in accordance with the
Distribution Agreement and the other Spin-Off Transaction Documents and
applicable law;

(g) Holdings, the Borrower and its Subsidiaries may make Restricted Payments in
an aggregate amount not to exceed the portion, if any, of the Available Basket
Amount on the date of such Restricted Payments that the Borrower elects to apply
to this Section 7.06(g); provided that at the time of the making of any such
Restricted Payment, the Consolidated Leverage Ratio (after giving pro forma
effect thereto and to the incurrence or issuance of any Indebtedness in
connection therewith) shall not exceed 2.50:1.00; and

(h) Holdings, the Borrower and its Subsidiaries may make additional Restricted
Payments (not otherwise permitted hereunder) so long as the aggregate amount of
such Restricted Payments does not exceed, when combined with the amount of
Investments made pursuant to Sections 7.02(c)(iv), (h) and (j) and payments,
prepayments, repurchases, redemptions, defeasances and segregations made
pursuant to the proviso set forth in Section 7.13(a)(i)(2), $30,000,000.

 

102

--------------------------------------------------------------------------------

7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business that is reasonably
similar thereto or a reasonable extension, development or expansion thereof or
ancillary thereto.

7.08 Transactions with Affiliates.

(a) Enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate (other than the Borrower or any Subsidiary) unless such transaction is
(i) not otherwise prohibited under this Agreement and (ii) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm’s length transaction with
a Person which is not an Affiliate.

(b) In addition, notwithstanding the foregoing, the Borrower and its
Subsidiaries shall be entitled to make the following payments and/or to enter
into the following transactions:

(i) the payment of reasonable and customary fees and reimbursement of expenses
payable to directors of the Borrower and Holdings or to any Plan, Plan
administrator or Plan trustee;

(ii) loans and advances to directors, officers and employees to the extent not
prohibited by Section 8.02;

(iii) the arrangements with respect to the procurement of services of directors,
officers, independent contractors, consultants or employees in the ordinary
course of business and the payment of reasonable fees in connection therewith;

(iv) transactions with Holdings not prohibited by this Agreement;

(v) payments to directors and officers of the Borrower and its Subsidiaries in
respect of the indemnification of such Persons in such respective capacities
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements, as the
case may be, pursuant to the Organization Documents or other corporate action of
the Borrower or its Subsidiaries, respectively, or pursuant to applicable law;

(vi) the Spin-Off Transactions; and

(vii) Restricted Payments permitted under Section 7.06.

7.09 Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that limits
the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or
any Guarantor or to otherwise transfer property to or invest in the Borrower or
any Guarantor, except for (A) any agreement in effect on the date hereof and set
forth on Schedule 7.09, (B) purchase money obligations for property acquired in
the ordinary course of business and Capital Lease Obligations that impose
restrictions of the nature discussed in clause (i) above on the property so
acquired, (C)

 

103

--------------------------------------------------------------------------------

requirements of Law or any applicable rule, regulation or order, (D) any
agreement or instrument of a Person acquired by the Borrower or any Subsidiary,
or that is assumed in connection with the acquisition of property or assets from
any Person, in each case that is in existence at the time of such transaction
(but not created in contemplation thereof), which limitation is not applicable
to any Person, or the properties or assets of any Person, other than the Person
so acquired and its Subsidiaries, or the property or assets so acquired,
(E) customary restrictions with respect to a Subsidiary of the Borrower pursuant
to an agreement that has been entered into for the sale or disposition of all or
substantially all of the Equity Interests or assets of such Subsidiary,
(F) secured Indebtedness otherwise permitted to be incurred pursuant to
Section 7.01 that limits the right of the debtor to dispose of the assets
securing such Indebtedness, (G) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into the ordinary course of
business, (H) other Indebtedness or preferred stock of Subsidiaries permitted to
be incurred subsequent to the Closing Date pursuant to Section 7.01 and the
provisions relating to such limitation contained in such Indebtedness are no
less favorable to the Borrower, taken as a whole, as determined by the board of
directors of the Borrower in good faith, than the provisions contained in this
Agreement as in effect on the Closing Date, (I) customary provisions in joint
venture agreements or arrangements and other similar agreements or arrangements
relating solely to such joint venture, (J) customary provisions contained in
leases, sub-leases, licenses, sub-licenses or similar agreements, in each case,
entered into in the ordinary course of business or (K) any limitations of the
type referred to in clause (i) above imposed by any amendments, modifications,
restatements, renewals, increases, supplements, replacements or refinancings of
the contracts, instruments or obligations referred to in clauses (A) through
(J) above; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refunding, replacements or refinancings are, in the good
faith judgment of the Borrower’s board of directors, no more restrictive with
respect to such limitation than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing, (ii) of any Subsidiary to provide the Guaranty to the
Administrative Agent or (iii) of the Borrower or any Subsidiary to create,
incur, assume or suffer to exist Liens on property of such Person to secure the
Obligations as required hereunder; provided, however, that this clause
(iii) shall not prohibit (A) any negative pledge incurred or provided in
connection with any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby solely to the extent any such negative pledge relates to the
property financed by or the subject of the relevant Indebtedness, (B) customary
joint venture agreements relating to purchase options, rights of first refusal
or call or similar rights of a third party that owns Equity Interests in such
joint venture or (C) customary provisions restricting assignment of any
agreement entered into in the ordinary course of business.

7.10 Holdings.

(a) Holdings shall not have outstanding or acquire any Investment in any Person
other than (i) Investments in the Equity Interests of the Borrower and Cash
Equivalents and (ii) temporary Investments in Equity Interests in International
Resources Group Ltd. in connection with the Internal Reorganization.

(b) Holdings shall not engage in any business activity or own any assets or
incur any Indebtedness other than (i) its ownership and voting of the Equity
Interests of the Borrower and any activities reasonably related thereto,
(ii) the negotiation, execution, delivery of, and the

 

104

--------------------------------------------------------------------------------

performance of its obligations under the Loan Documents and the Transaction
Documents to which it is a party and any instruments, documents or other
agreements related to such Indebtedness and any activities reasonably related
thereto, (iii) cash and Cash Equivalents, (iv) any other Investments not
prohibited by Section 7.10(a), (v) a guarantee of Indebtedness or other
obligations of the Borrower or any of its Subsidiaries, provided that the
Guaranty of Holdings pursuant to the Guarantee and Collateral Agreement ranks at
least pari passu in priority of payment with the guarantee of such other
Indebtedness or other obligations and (vii) the Transactions. Holdings shall not
create, incur, assume or suffer to exist any Lien upon the Equity Interests in
the Borrower other than the Liens created by the Loan Documents.

7.11 Financial Covenants.

(a) Consolidated Debt Service Coverage Ratio. Permit the Consolidated Debt
Service Coverage Ratio as of the end of any fiscal quarter of the Borrower to be
less than 1.25:1.00.

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter of the Borrower to be greater than the ratio set
forth below opposite such end of such fiscal quarter:

 

Four Fiscal Quarters Ending

   Maximum Consolidated Leverage Ratio

September 30, 2012

   3.50:1.00

December 31, 2012

   3.50:1.00

March 31, 2013

   3.50:1.00

June 30, 2013

   3.25:1.00

September 30, 2013

   3.25:1.00

December 31, 2013

   3.25:1.00

March 31, 2014

   3.25:1.00

June 30, 2014 and thereafter

   3.00:1.00

7.12 Sales and Lease-Backs. Enter into any arrangement, directly or indirectly,
with any Person whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or

 

105

--------------------------------------------------------------------------------

hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred unless (a) the Disposition of such property
is permitted by Section 7.05 and (b) any Capital Lease Obligations or Liens
arising in connection therewith are permitted by Sections 7.03 and 7.01, as the
case may be.

7.13 Other Indebtedness and Agreements.

(a) (i) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to Indebtedness permitted by Section 7.03(i) or
Section 7.03(j) (provided that, so long as no Default or Event of Default has
occurred and is continuing or would result from any such payment, prepayment,
repurchase, redemption, defeasance or segregation, Holdings, the Borrower or any
of its Subsidiaries shall be permitted to make such payment, prepayment,
repurchase, redemption, defeasance or segregation in an aggregate amount not to
exceed (1) the portion, if any, of the Available Basket Amount on the date of
the making of such payment, prepayment, repurchase, redemption, defeasance or
segregation that the Borrower elects to apply to this Section 7.13(a)(i),
provided that at the time of the making of any such payment, prepayment,
repurchase, redemption, defeasance or segregation, the Consolidated Leverage
Ratio (after giving pro forma effect thereto and to the incurrence or issuance
of any Indebtedness in connection therewith) shall not exceed 2.50:1.00) plus
(2) when combined with the amount of Investments made pursuant to Sections
7.02(c)(iv), (h) and (j) and Restricted Payments made pursuant to
Section 7.06(h), $30,000,000); or (ii) waive, supplement, modify, amend,
terminate or release or agree to any waiver, supplement, modification,
amendment, termination or release of any of the terms of Indebtedness permitted
by Section 7.03(i) or Section 7.03(j) (other than any such waiver, supplement,
modification, amendment, termination or release that (x) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon or (y) would, taken as a
whole, not result in covenants, events of default, guarantees and other terms
(other than interest rates and redemption premiums) that are more restrictive to
the Borrower or any of its Subsidiaries than those applicable to any such
Indebtedness as of the date of incurrence thereof); provided that a certificate
of a Responsible Officer of the Borrower delivered to the Administrative Agent
at least five Business Days (or such shorter period as the Administrative Agent
may agree in its sole discretion) prior to the effectiveness of any such waiver,
supplement, modification, amendment, termination or release, together with a
reasonably detailed description of the material terms and conditions thereof or
substantially final drafts or execution versions of the documentation relating
thereto, stating that the Borrower has determined in good faith that such terms
and conditions satisfy the foregoing requirement, shall be conclusive evidence
that such terms and conditions satisfy the foregoing requirement unless the
Administrative Agent notifies the Borrower within such period that it disagrees
with such determination (including a reasonable description of the basis upon
which it disagrees)).

(b) Permit any waiver, supplement, modification or amendment of its Organization
Documents or any Spin-Off Transaction Document, in each case to the extent that
any such waiver, supplement, modification or amendment would be adverse to the
Lenders in any material respect.

 

106

--------------------------------------------------------------------------------

7.14 Fiscal Year. Make any change in fiscal year.

7.15 Spin-Off Transactions. For the avoidance of doubt, notwithstanding anything
else to the contrary in this Agreement, Holdings, the Borrower and its
Subsidiaries shall be permitted to consummate the Spin-Off Transactions in
accordance with the Spin-Off Transaction Documents and applicable law.

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrower or any other Loan Party shall fail to pay any
principal of any Loan or any L/C Obligation when due in accordance with the
terms thereof or hereof; or the Borrower or any other Loan Party shall fail to
pay any interest on any Loan or on any L/C Obligation, or any other amount
payable hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms thereof
or hereof; or

(b) Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 6.03(a), Section 6.05(a) (with
respect to any Loan Party), Section 6.09 or Article VII, or any Guarantor fails
to perform or observe any term, covenant or agreement contained in Section 2 of
the Guarantee and Collateral Agreement; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

(d) Representations and Warranties. Any representation or warranty made or
deemed made by the Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been incorrect in
any material respect (or in any respect if qualified by materiality or “Material
Adverse Effect”) on or as of the date made or deemed made; or

(e) Cross-Default. (i) Holdings, the Borrower or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness under the Loan Documents and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or

 

107

--------------------------------------------------------------------------------

beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an early termination date resulting from (A) any event of default
under such Swap Contract as to which Holdings, the Borrower or any Subsidiary is
the defaulting party and such party fails to make any payment of the amounts due
and owing as a result thereof, and (B) the Swap Termination Value owed by
Holdings, the Borrower or such Subsidiary as a result thereof is greater than
the Threshold Amount; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Holdings, the Borrower or any
Material Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 60 days after its issue or levy; or

(h) Judgments. One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance (which coverage has been
acknowledged by the appropriate insurers)) in excess of the Threshold Amount,
and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof; or

(i) ERISA. (i) Any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any failure to satisfy the minimum funding standards under Section 412 or
430 of the Code or Sections 302 or 303 of ERISA, whether or not waived, shall
exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any ERISA Affiliate (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, reasonably likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower or any ERISA Affiliate
shall, or in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a

 

108

--------------------------------------------------------------------------------

withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other similar event or condition shall occur or exist with respect to a
Plan that is not in the ordinary course; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse
Effect; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

(k) Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01, 6.10 or 6.12 shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority Lien
(subject to Liens permitted by Section 7.01) on the Collateral purported to be
covered thereby; or

(l) Governmental Authority. (i) Holdings, the Borrower or any Material
Subsidiary is debarred or suspended from contracting with the Federal Government
and such suspension or debarment shall not have been lifted within 60 days after
imposition thereof; or (ii) the actual termination of any Material Government
Contract due to alleged fraud, dishonesty, malfeasance, misappropriation of
funds, moral turpitude or any other criminal activity which could reasonably be
expected to have a Material Adverse Effect; provided that, if any such
debarment, suspension or termination referred to in clause (i) or (ii) above is
being diligently contested in good faith, the occurrence thereof shall not
constitute an Event of Default for 60 days after the date the occurrence thereof
(which may be increased by up to an additional 120 days at the sole discretion
of the Administrative Agent) would have otherwise constituted an Event of
Default under clause (i) or (ii) above, as the case may be; or

(m) Change of Control. There occurs any Change of Control; or

(n) Spin-Off Transactions. The Spin-Off Transaction shall not have been
consummated as soon as practicable and, in any case, within two Business Days
after the Closing Date.

Each notice given with respect to the occurrence of any Default or Event of
Default shall be accompanied by a statement of a Responsible Officer setting
forth details of the occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

 

109

--------------------------------------------------------------------------------

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the Minimum Collateral Amount with respect thereto); and

(d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and
remedies available to it, the Lenders and the L/C Issuer under the Loan
Documents or applicable law or in equity;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall, subject to the provisions of
Sections 2.16 and 2.17, be applied by the Administrative Agent in the following
order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings and Obligations then owing under
Secured Hedge Agreements and Secured Cash Management Agreements, ratably among
the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in
proportion to the respective amounts described in this clause Fourth held by
them;

 

110

--------------------------------------------------------------------------------

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit to the extent not otherwise Cash Collateralized by
the Borrower pursuant to Sections 2.03 and 2.16; and

Last, the balance, if any, after all of the Obligations have been paid in full
in cash, to the Borrower or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.16, 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.

Notwithstanding the foregoing, Obligations arising under Secured Cash Management
Agreements and Secured Hedge Agreements shall be excluded from the application
described above if the Administrative Agent has not received written notice
thereof, together with such supporting documentation as the Administrative Agent
may reasonably request, from the applicable Cash Management Bank or Hedge Bank,
as the case may be. Each Cash Management Bank or Hedge Bank not a party to the
Credit Agreement that has given the notice contemplated by the preceding
sentence shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of Article IX
hereof for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX. ADMINISTRATIVE AGENT

9.01 Appointment and Authority. (a) Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and the Borrower shall not
have rights as a third party beneficiary of any of such provisions. It is
understood and agreed that the use of the term “agent” herein or in any other
Loan Documents (or any other similar term) with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead such
term is used as a matter of market custom, and is intended to create or reflect
only an administrative relationship between contracting parties.

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (including in its capacities as a
potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuer
hereby irrevocably appoints and authorizes the Administrative Agent to act as
the agent of such Lender and the L/C Issuer for purposes of

 

111

--------------------------------------------------------------------------------

acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Obligations, together with such powers
and discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article X
(including Section 10.04(c), as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.

9.02 Rights as a Lender. The Person serving as the Administrative 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 the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, own
securities of, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with Holdings, the Borrower or
any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents, and its duties hereunder shall be administrative in nature. Without
limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not 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 the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law or that may effect a forfeiture, modification or termination of
property of a Defaulting Lender in violation of any Debtor Relief Law; and

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

 

112

--------------------------------------------------------------------------------

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final and non-appealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given in writing to the Administrative Agent
by the Borrower, a Lender or the L/C Issuer.

The Administrative 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, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative 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. The Administrative 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 Loan, or the issuance, extension, renewal or increase of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such
Letter of Credit. The Administrative Agent may consult with legal counsel (who
may be counsel for the 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.

9.05 Delegation of Duties. The Administrative 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 the
Administrative Agent. The Administrative 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
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative 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 Administrative Agent. The Administrative
Agent shall not be responsible for the negligence or misconduct of any
sub-agents except to the extent that a court of competent jurisdiction
determines in a final and non-appealable judgment that the Administrative Agent
acted with gross negligence or willful misconduct in the selection of such
sub-agents.

 

113

--------------------------------------------------------------------------------

9.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to
the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (not to be unreasonably withheld or delayed), unless an Event of
Default shall have occurred and is continuing, in which case the consent of the
Borrower shall not be required, to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Administrative Agent may (but shall not be
obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above. Whether or not
a successor has been appointed (and whether or not the Borrower has provided
such consent), such resignation shall become effective in accordance with such
notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by applicable law, by notice in writing to the Borrower and
such Person remove such Person as Administrative Agent and, with the consent of
the Borrower (not to be unreasonably withheld or delayed), unless an Event of
Default shall have occurred and is continuing, in which case the consent of the
Borrower shall not be required, appoint a successor. If no such successor shall
have been so appointed by the Required Lenders (and been consented to by the
Borrower, if required) and shall have accepted such appointment within 30 days
(or such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (1) the retiring or removed Administrative 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 the
Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the
Loan Documents, the retiring or removed Administrative Agent shall continue to
hold such collateral security until such time as a successor Administrative
Agent is appointed) and (2) except for any indemnity payments or other amounts
then owed to the retiring or removed Administrative Agent, all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided for above. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or removed) Administrative Agent (other than as provided
in Section 3.01(g) and other than any rights to indemnity payments or other
amounts owed to the retiring or removed Administrative Agent as of the
Resignation Effective Date or the Removal Effective Date, as applicable), and
the retiring or removed

 

114

--------------------------------------------------------------------------------

Administrative 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). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring or removed Administrative Agent’s resignation or removal
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring or
removed Administrative 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 or removed Administrative Agent was acting as Administrative
Agent.

(d) Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the
rights, powers, privileges and duties of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation
as L/C Issuer and all L/C Obligations with respect thereto, including the right
to require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c). If Bank of America resigns as
Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment
by the Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which
successor shall in all cases be a Lender other than a Defaulting Lender),
(a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender,
as applicable, (b) the retiring L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangements satisfactory to Bank
of America to effectively assume the obligations of Bank of America with respect
to such Letters of Credit.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
L/C Issuer acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the L/C Issuer also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Joint Lead Arrangers, Syndication Agents or Documentation Agents listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

 

115

--------------------------------------------------------------------------------

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan or L/C Obligation shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the L/C Issuer in any such proceeding.

9.10 Collateral and Guaranty Matters. Without limiting the provisions of
Section 9.09, each of the Lenders (including in its capacities as a potential
Cash Management Bank and a potential Hedge Bank) and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than (A) contingent
indemnification obligations and (B) obligations and liabilities under Secured
Cash Management Agreements and Secured Hedge Agreements as to which arrangements

 

116

--------------------------------------------------------------------------------

satisfactory to the applicable Cash Management Bank or Hedge Bank shall have
been made) and the expiration or termination of all Letters of Credit (other
than Letters of Credit as to which other arrangements satisfactory to the
Administrative Agent and the L/C Issuer shall have been made) (the occurrence of
the events described in this clause (i), the “Discharge of the Obligations”),
(ii) that is sold or otherwise disposed of or to be sold or otherwise disposed
of as part of or in connection with any sale or other disposition permitted
hereunder or under any other Loan Document, or (iii) subject to Section 10.01,
if approved, authorized or ratified in writing by the Required Lenders;

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and

(c) to release any Subsidiary Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
under the Loan Documents.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under the Guaranty pursuant to
this Section 9.10. In each case as specified in this Section 9.10, the
Administrative Agent will, at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such item of Collateral from the assignment and
security interest granted under the Collateral Documents or to subordinate its
interest in such item, or to release such Subsidiary Guarantor from its
obligations under the Guaranty, in each case in accordance with the terms of the
Loan Documents and this Section 9.10.

The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Loan Party in connection therewith, nor shall the Administrative
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral.

9.11 Secured Cash Management Agreements and Secured Hedge Agreements. Except as
otherwise expressly set forth herein or in any Collateral Document, no Cash
Management Bank or Hedge Bank that obtains the benefits of Section 8.03, the
Guaranty or any Collateral by virtue of the provisions hereof or of the Guaranty
or any Collateral Document shall have any right to notice of any action or to
consent to, direct or object to any action hereunder or under any other Loan
Document or otherwise in respect of the Collateral (including the release or
impairment of any Collateral) other than in its capacity as a Lender and, in
such case, only to the extent expressly provided in the Loan Documents.
Notwithstanding any other provision of this Article IX to the contrary, the
Administrative Agent shall not be required to verify the payment of, or that
other satisfactory arrangements have been made with respect to, Obligations
arising under Secured Cash Management Agreements and Secured Hedge Agreements
unless the Administrative Agent has received written notice of such Obligations,
together with such supporting documentation as the Administrative Agent may
request, from the applicable Cash Management Bank or Hedge Bank, as the case may
be.

 

117

--------------------------------------------------------------------------------

ARTICLE X. MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

(a) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 2.06 or Section 8.02) without the written consent
of such Lender;

(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory
reduction of the Aggregate Commitments hereunder or under any other Loan
Document without the written consent of each Lender adversely affected thereby;

(c) reduce the principal of, or the rate of interest specified herein on, any
Loan or any L/C Borrowing, or (subject to clause (iv) of the second proviso to
this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender adversely
affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary (i) to amend the definition of “Default Rate” or to
waive any obligation of the Borrower to pay interest or Letter of Credit Fees at
the Default Rate or (ii) to amend any financial covenant hereunder (or any
defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;

(d) change (i) Section 8.03 in a manner that would alter the pro rata sharing
(other than in connection with Sections 2.14 or 2.15) or order of application of
payments required thereby without the written consent of each Lender adversely
affected thereby or (ii) the order of application of any reduction in the
Commitments or any prepayment of Loans among the Facilities from the application
thereof set forth in the applicable provisions of Sections 2.05(b) or 2.06(b),
respectively, in any manner that materially and adversely affects the Lenders
under a Facility without the written consent of (x) if such Facility is the Term
Loan Facility, the Required Term Loan Lenders, and (y) if such Facility is the
Revolving Credit Facility, the Required Revolving Credit Lenders;

(e) change (i) any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender or (ii) the definition of “Required Revolving Credit
Lenders,” or “Required Term Loan Lenders” without the written consent of each
Lender under the applicable Facility;

 

118

--------------------------------------------------------------------------------

(f) release all or substantially all of the Collateral in any transaction or
series of related transactions or release all or substantially all of the value
of the Guaranty without the written consent of each Lender, except to the extent
the release of any Guarantor is permitted pursuant to Section 9.10 (in which
case such release may be made by the Administrative Agent acting alone);

(g) impose any further restriction on the ability of any Lender to assign any of
its rights or obligations hereunder, without the written consent of each Lender;
or

(h) with respect to any Revolving Credit Loan, waive any condition set forth in
Section 4.02 without the written consent of the Required Revolving Credit
Lenders;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; and (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of
all Lenders or each adversely affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each adversely affected Lender that by its terms
affects any Defaulting Lender disproportionately adversely relative to other
affected Lenders shall require the consent of such Defaulting Lender.
Notwithstanding anything to the contrary herein, an increase of the amount of
the Letter of Credit Sublimit (but not to an amount greater than the Aggregate
Revolving Credit Commitments then in effect) shall require only the written
consent of the Borrower and the L/C Issuer and shall not require the consent of
any Lender or the Administrative Agent.

Notwithstanding any provision herein to the contrary, this Agreement may be
amended with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (i) to add one or more additional revolving credit or
term loan facilities to this Agreement and to permit the extensions of credit
and all related obligations and liabilities arising in connection therewith from
time to time outstanding to share ratably in the benefits of this Agreement and
the other Loan Documents with the obligations and liabilities from time to time
outstanding in respect of the existing facilities hereunder, and (ii) in
connection with the foregoing, to permit, as deemed appropriate by the
Administrative Agent and approved by the Required Lenders, the Lenders providing
such additional credit facilities to participate in any required vote or action
required to be approved by the Required Lenders or by any other number,
percentage or class of Lenders hereunder (and this Section 10.01 may be amended
to permit class voting in connection with such additional facilities).

 

119

--------------------------------------------------------------------------------

The Borrower may, by written notice to the Administrative Agent from time to
time (and with the consent of the Administrative Agent, not to be unreasonably
withheld or delayed), make one or more offers (each, a “Loan Modification
Offer”) to all of the Revolving Lenders or all of the Term Loan Lenders to make
one or more amendments or modifications to (A) allow the maturity and scheduled
amortization (if any) of the Loans and Commitments (if any) of the Accepting
Lenders (as defined below) to be extended and (B) increase the Applicable Rate
and/or fees payable with respect to the Loans and Commitments (if any) of the
Accepting Lenders (“Permitted Amendments”) pursuant to procedures reasonably
specified by the Administrative Agent and reasonably acceptable to the Borrower.
Such notice shall set forth (x) the terms and conditions of the requested
Permitted Amendment and (y) the date on which such Permitted Amendment is
requested to become effective. Permitted Amendments shall become effective only
with respect to the Loans and/or Commitments of the Lenders that accept the
applicable Loan Modification Offer (such Lenders, the “Accepting Lenders”) and,
in the case of any Accepting Lender, only with respect to such Lender’s Loans
and/or Commitments as to which such Lender’s acceptance has been made. The
Borrower, each other Loan Party and each Accepting Lender shall execute and
deliver to the Administrative Agent such documentation (the “Loan Amendment”) as
the Administrative Agent shall reasonably specify to evidence the acceptance of
the Permitted Amendments and the terms and conditions thereof, and the Loan
Parties shall also deliver such corporate resolutions, opinions and other
documents as reasonably requested by the Administrative Agent. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Loan Amendment. Each of the parties hereto hereby agrees that (1) upon
the effectiveness of any Loan Amendment, this Agreement shall be deemed amended
to the extent (but only to the extent) necessary to reflect the existence and
terms of the Permitted Amendment evidenced thereby and only with respect to the
Loans and Commitments of the Accepting Lenders as to which such Lenders’
acceptance has been made and (2) any applicable Lender who is not an Accepting
Lender may be replaced by the Borrower in accordance with Section 10.13.

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing
Line Lender, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a

 

120

--------------------------------------------------------------------------------

Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to Holdings,
the Borrower, their Affiliates or any of their respective securities).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent, the Swing Line
Lender, the L/C Issuer or the Borrower may each, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii), if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities

 

121

--------------------------------------------------------------------------------

or expenses of any kind (whether in tort, contract or otherwise) arising out of
the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of
Borrower Materials through the Internet.

(d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the
L/C Issuer and the Swing Line Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In
addition, each Lender agrees to notify the Administrative Agent from time to
time to ensure that the Administrative Agent has on record (i) an effective
address, contact name, telephone number, facsimile number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender. Furthermore, each Public Lender agrees to
cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable Law, including United States Federal and state securities Laws,
to make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to Holdings, the Borrower, their Affiliates
or their respective securities for purposes of United States Federal or state
securities laws.

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic or electronic Borrowing Notices, Letter of Credit
Applications and Swing Line Loan Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower. All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, the
L/C Issuer or the Administrative Agent to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided, and provided under each other Loan Document, are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document or Transaction Document, the authority to enforce rights and remedies
hereunder and

 

122

--------------------------------------------------------------------------------

under the other Loan Documents against the Loan Parties or any of them shall be
vested exclusively in, and all actions and proceedings at law in connection with
such enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders and the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the
rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C
Issuer or the Swing Line Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender,
as the case may be) hereunder and under the other Loan Documents, (c) any Lender
from exercising setoff rights in accordance with Section 10.08 (subject to the
terms of Section 2.13), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 8.02 and (ii) in addition to the matters set forth in clauses (b),
(c) and (d) of the preceding proviso and subject to Section 2.13, any Lender
may, with the consent of the Required Lenders, enforce any rights and remedies
available to it and as authorized by the Required Lenders.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent, the Lead Arrangers,
the L/C Issuer and their respective Affiliates (but limited to the reasonable
and documented fees, charges and disbursements of a single counsel for such
Persons collectively (plus applicable local and special/regulatory counsel to
the extent customary and reasonably requested by the Administrative Agent)), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the Transactions
shall be consummated), (ii) all reasonable and documented out-of-pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the L/C Issuer (including the reasonable and
documented fees, charges and disbursements of any counsel for the Administrative
Agent, any Lender or the L/C Issuer), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Joint Lead Arranger, each Lender and the L/C Issuer,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements

 

123

--------------------------------------------------------------------------------

of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all reasonable and documented fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any Person (including the
Borrower or any other Loan Party), other than such Indemnitee and its Related
Parties, arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder, the Transactions
(whether or not consummated), or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents (including in respect of any matters
addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Materials of Environmental Concern on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
from (x) the gross negligence or willful misconduct of such Indemnitee or (y) a
material breach of such Indemnitee’s obligations hereunder or under any other
Loan Document. Without limiting the provisions of Section 3.01(c), this
Section 10.4(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer, the Swing Line Lender or any Related Party of any of
the foregoing, each Lender severally agrees to pay to the Administrative Agent
(or any such sub-agent), the L/C Issuer, the Swing Line Lender or such Related
Party, as the case may be, such Lender’s pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought
based on such Lender’s share of the Total Credit Exposure at such time) of such
unpaid amount (including any such unpaid amount in respect of a claim asserted
by such Lender), such payment to be made severally among them based on such
Lenders’ Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought), provided, further that,
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line
Lender in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent), the L/C
Issuer or the Swing Line Lender in connection with such capacity. The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.12(d).

 

124

--------------------------------------------------------------------------------

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, and
acknowledges that no other Person shall have, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and non-appealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section and the indemnity provisions of
Section 10.02(e) shall survive the resignation of the Administrative Agent, the
L/C Issuer and the Swing Line Lender, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and

 

125

--------------------------------------------------------------------------------

assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (e) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that (in each case with
respect to any Facility) any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment under any Facility and/or the Loans at the time owing to it
(in each case with respect to any Facility) or contemporaneous assignments to
related Approved Funds that equal at least the amount specified in paragraph
(b)(i)(B) of this Section in the aggregate or in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be
assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000, in the case of any assignment in
respect of the Revolving Credit Facility, or $1,000,000, in the case of any
assignment in respect of the Term Facility unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed); provided that the Borrower shall be deemed to have consented to any
such lesser amount unless it shall object thereto by written notice to the
Administrative Agent within ten Business Days after having received notice
thereof.

 

126

--------------------------------------------------------------------------------

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not (A) apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit
any Lender from assigning all or a portion of its rights and obligations among
separate Facilities on a non-pro rata basis;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within ten Business Days
after having received notice thereof; and provided, further, that the Borrower’s
consent shall not be required during the primary syndication of Facilities to
persons identified by the Lead Arrangers to the Borrower in consultation
therewith on or prior to the Closing Date;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (i) any
unfunded Term Loan Commitment or any Revolving Credit Commitment if such
assignment is to a Person that is not a Lender with a Commitment in respect of
the applicable Facility, an Affiliate of such Lender or an Approved Fund with
respect to such Lender or (ii) any Term Loan to a Person that is not a Lender,
an Affiliate of a Lender or an Approved Fund; and

(C) the consent of the L/C Issuer and the Swing Line Lender shall be required
for any assignment in respect of the Revolving Credit Facility.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) to any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B), or (C) to a natural Person.

 

127

--------------------------------------------------------------------------------

(vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer
or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund
as appropriate) its full pro rata share of all Loans and participations in
Letters of Credit and Swing Line Loans in accordance with its Applicable
Percentage. Notwithstanding the foregoing, in the event that any assignment of
rights and obligations of any Defaulting Lender hereunder shall become effective
under applicable Law without compliance with the provisions of this paragraph,
then the assignee of such interest shall be deemed to be a Defaulting Lender for
all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement 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 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of the Borrower (and such agency being solely for tax
purposes), shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it (or the equivalent thereof in
electronic form) and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amounts (and stated
interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive absent manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and any Lender at any reasonable time and from time to time upon reasonable
prior notice.

 

128

--------------------------------------------------------------------------------

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural Person, a Defaulting Lender or the Borrower or any
of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 10.04(c) without regard to the
existence of any participation.

Any agreement or instrument 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 or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in clauses (a), (b),
(c) or (f) of the first proviso to Section 10.01 that affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations
therein, including the requirements under Section 3.01(e) (it being understood
that the documentation required under Section 3.01(e) shall be delivered to the
Lender who sells the participation)) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section; provided that such Participant (A) agrees to be subject to the
provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph
(b) of this Section and (B) shall not be entitled to receive any greater payment
under Sections 3.01 or 3.04, with respect to any participation, than the Lender
from whom it acquired the applicable participation would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation. Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 3.06 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any Commitments, Loans,
Letters of Credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan, Letter of Credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

129

--------------------------------------------------------------------------------

(e) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(f) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Revolving Credit Commitment and Revolving Credit
Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days’
notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30
days’ notice to the Borrower, resign as Swing Line Lender. In the event of any
such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by the Borrower to appoint
any such successor shall affect the resignation of Bank of America as L/C Issuer
or Swing Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights, powers, privileges and duties of the L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Revolving Credit Lenders to
make Revolving Credit Loans that are Base Rate Loans or fund risk participations
in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns
as Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Revolving Credit Lenders to make Revolving Credit Loans that are
Base Rate Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.

10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its Related Parties (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 the extent required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any

 

130

--------------------------------------------------------------------------------

other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights and obligations
under this Agreement or any Eligible Assignee invited to be a Lender pursuant to
Section 2.14(c) or Section 2.15(c) or the penultimate paragraph of Section 10.01
(ii) any actual or prospective party (or its Related Parties) to any swap,
derivative or other transaction under which payments are to be made by reference
to the Borrower and its obligations, this Agreement or payments hereunder,
(g) on a confidential basis to (i) any rating agency in connection with rating
the Borrower or its Subsidiaries or the credit facilities provided hereunder or
(ii) the CUSIP Service Bureau or any similar agency in connection with the
issuance and monitoring of CUSIP numbers or other market identifiers with
respect to the credit facilities provided hereunder, (h) with the consent of the
Borrower or (i) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower. For
purposes of this Section, “Information” means all information received from the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential
basis prior to disclosure by the Borrower or any Subsidiary, provided that, in
the case of information received from the Borrower or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
the Borrower or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable Law, including United States Federal and state securities Laws.

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of the Borrower against any and all of the Obligations of the Borrower then due
and payable under this Agreement or any other Loan Document to such Lender or
the L/C Issuer or their respective Affiliates, irrespective of whether or not
such Lender, L/C Issuer or Affiliate shall have made any demand under this
Agreement or any other Loan Document and although such obligations of the
Borrower are owed to a branch, office or Affiliate of such Lender or the L/C
Issuer different from the branch, office or Affiliate holding such deposit or
obligated on such indebtedness; provided, that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.17 and, pending such payment, shall

 

131

--------------------------------------------------------------------------------

be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the L/C Issuer and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
The rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have. Each Lender and the L/C Issuer agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the other Loan Documents,
the Engagement Letter and the Administrative Agent Fee Letter, constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or other electronic imaging means (e.g.
“pdf” or “tif”) shall be effective as delivery of a manually executed
counterpart of this Agreement.

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

132

--------------------------------------------------------------------------------

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 10.12, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or
the Swing Line Lender, as applicable, then such provisions shall be deemed to be
in effect only to the extent not so limited.

10.13 Replacement of Lenders. If the Borrower is entitled to replace a Lender
pursuant to the provisions of Section 3.06, or if any Lender is a Defaulting
Lender or a Non-Consenting Lender or if any other circumstance exists hereunder
that gives the Borrower the right to replace a Lender as a party hereto, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative 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 10.06), all of its interests, rights (other than
its existing rights to payments pursuant to Sections 3.01 and 3.04) and
obligations under this Agreement and the related Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
(if any) specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of an assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent.

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 the Borrower to require such assignment and delegation
cease to apply.

 

133

--------------------------------------------------------------------------------

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH
THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION,
LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY,
WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT,
ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

 

134

--------------------------------------------------------------------------------

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower and each other Loan Party acknowledges and agrees, and acknowledges
its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent, the Joint Lead
Arrangers and the Lenders are arm’s-length commercial transactions between the
Borrower , each other Loan Party and their respective Affiliates, on the one
hand, and the Administrative Agent, the Joint Lead Arrangers and the Lenders, on
the other hand, (B) each of the Borrower and the other Loan Parties has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate, and (C) the Borrower and each other Loan Party is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent, each Joint Lead Arranger and each
Lender is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary for the Borrower, any other Loan Party
or any of their respective Affiliates, or any other Person and (B) neither the
Administrative Agent, any Joint Lead Arranger nor any Lender has any obligation
to the Borrower, any other Loan Party or any of their respective Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent, the Joint Lead Arrangers and the Lenders and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, the other Loan Parties
and their respective Affiliates, and neither the Administrative Agent, any Joint
Lead Arranger nor any Lender has any obligation to disclose any of such
interests to the Borrower, any other Loan Party or any of their respective
Affiliates. To the fullest extent permitted by law, each of the Borrower and
each other Loan Party hereby waives and releases any claims that it may have
against the Administrative Agent, any Joint Lead Arranger or any Lender with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

 

135

--------------------------------------------------------------------------------

10.17 Electronic Execution of Assignments and Certain Other Documents. The words
“execute,” “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Administrative Agent, or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

10.18 USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “PATRIOT Act”), it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance with
the Act. The Borrower shall, promptly following a request by the Administrative
Agent or any Lender, provide all documentation and other information that the
Administrative Agent or such Lender reasonably requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Act.

10.19 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of the Borrower
in respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under the other Loan Documents shall, notwithstanding any judgment
in a currency (the “Judgment Currency”) other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
“Agreement Currency”), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent or such Lender, as the case may
be, of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent or such Lender, as the case may be, may in accordance with
normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent or any Lender from the Borrower
in the Agreement Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Lender, as the case may be, against such loss. If the amount of the Agreement
Currency so purchased is greater than the sum originally due to the
Administrative Agent or any Lender in such currency, the Administrative Agent or
such Lender, as the case may be, agrees to promptly return the amount of any
excess to the Borrower (or to any other Person who may be entitled thereto under
applicable law).

 

136

--------------------------------------------------------------------------------

10.20 Entire Agreement. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE ENGAGEMENT
LETTER AND THE ADMINISTRATIVE AGENT FEE LETTER REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Remainder of page intentionally left blank]

 

137

--------------------------------------------------------------------------------

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

 

ENGILITY HOLDINGS, INC. By:  

/s/ Thomas O. Miiler

Name:  

Thomas O. Miiler

Title:  

Senior Vice President, General Counsel and Lead Corporate Secretary

ENGILITY CORPORATION By:  

/s/ Thomas O. Miiler

Name:  

Thomas O. Miiler

Title:  

Senior Vice President, General Counsel and Lead Corporate Secretary

 

[S-1]

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as
Administrative Agent By:  

/s/ Roberto Salazar

Name:  

Roberto Salazar

Title:  

Vice President

 

[S-2]

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender By:  

/s/ Barbara P. Levy

Name:  

Barbara P. Levy

Title:  

Senior Vice President

 

[S-3]

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as a Lender By:  

/s/ Ronnie Glenn

Name:  

Ronnie Glenn

Title:  

Vice President

 

[S-4]

--------------------------------------------------------------------------------

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, as a Lender By:  

/s/ Michael Madnick

Name:  

Michael Madnick

Title:  

Managing Director

For any Lender requiring a second signature block: By:  

/s/ Brad Matthews

Name:  

Brad Matthews

Title:  

Vice President

 

[S-5]

--------------------------------------------------------------------------------

REGIONS BANK, as a Lender By:  

/s/ Greg Jones

Name:  

Greg Jones

Title:  

Senior Vice President

 

[S-6]

--------------------------------------------------------------------------------

SUNTRUST BANK, as a Lender By:  

/s/ J. Christopher Reasoner

Name:  

J. Christopher Reasoner

Title:  

Managing Director

 

[S-7]

--------------------------------------------------------------------------------

CAPITAL ONE, N.A., as a Lender By:  

/s/ Kip Hurd

Name:  

Kip Hurd

Title:  

Senior Vice President

 

[S-8]

--------------------------------------------------------------------------------

SUMITOMO MITSUI BANKING CORPORATION, as a Lender By:  

/s/ David W. Kee

Name:  

David W. Kee

Title:  

Managing Director

 

[S-9]

--------------------------------------------------------------------------------

MANUFACTURERS AND TRADERS TRUST COMPANY, as a Lender By:  

/s/ R. Mark Swaak

Name:  

R. Mark Swaak

Title:  

Vice President

 

[S-10]

--------------------------------------------------------------------------------

PNC BANK, NATIONAL ASSOCIATION, as a Lender By:  

/s/ Douglas T. Brown

Name:  

Douglas T. Brown

Title:  

Senior Vice President

 

[S-11]

--------------------------------------------------------------------------------

THE BANK OF NOVA SCOTIA, as a Lender By:  

/s/ Laura Gimena

Name:  

Laura Gimena

Title:  

Director

For any Lender requiring a second signature block: By:  

/s/ Michael Grad

Name:  

Michael Grad

Title:  

Associate Director

 

[S-12]

--------------------------------------------------------------------------------

CALIFORNIA FIRST NATIONAL BANK, as a Lender By:  

/s/ D.N. Lee

Name:  

D.N. Lee

Title:  

S.V.P.

 

[S-13]

--------------------------------------------------------------------------------

Schedule 1.01(a)

INTERNAL REORGANIZATION

The general terms and conditions relating to the spin-off will be set forth in
the Distribution Agreement.

Internal Reorganization

As part of the spin-off, L-3 (as defined in the chart below) will undergo an
internal reorganization that will, among other things and subject to limited
exceptions: (i) allocate and transfer to Engility Holdings, Inc. (“Holdings”)
and its subsidiaries those assets, and allocate and assign responsibility for
those liabilities, in respect of the activities of the applicable businesses of
such entities and (ii) allocate, transfer and assign, as applicable, those
assets and liabilities in respect of other current and former businesses and
activities of L-3 and its current and former subsidiaries.

The diagram below shows the structure of L-3’s government services businesses,
simplified for illustrative purposes only, prior to the internal reorganization
and distribution:

 

LOGO [g381537ex10_7pg156.jpg]

 

Schedule 1.01(a) – Page 1

--------------------------------------------------------------------------------

The internal reorganization will be effected by a series of actions, including
the following:

 

  •  

The Borrower, a wholly-owned indirect subsidiary of L-3, will borrow up to $350
million of indebtedness on the Closing Date and distribute $335 million of the
proceeds of such indebtedness to L-3 Communications Corporation, a wholly-owned
subsidiary of L-3;

 

  •  

The Borrower will distribute all of the issued and outstanding shares of L-3
Domestic Holdings, Inc. to L-3 Communications Corporation;

 

  •  

L-3 Communications Corporation will contribute all of the issued and outstanding
shares of the Borrower and International Resources Group Ltd., an indirect
wholly-owned subsidiary of L-3, to Holdings;

 

  •  

Holdings will contribute all of the issued and outstanding shares of
International Resources Group Ltd. to the Borrower;

 

  •  

L-3 Communications Corporation will distribute all of the issued and outstanding
shares of Holdings to L-3.

To complete the spin-off, L-3 will, following the internal reorganization,
distribute to its shareholders all of the outstanding shares of Holdings’ common
stock. On the distribution date, Engility Services Inc., a wholly-owned indirect
subsidiary of Holdings, will merge with and into the Borrower with the Borrower
being the surviving corporation.

The diagram below shows the structure of Holdings, simplified for illustrative
purposes only, after the completion of the spin-off:

 

LOGO [g381537ex10_7pg157.jpg]

 

Schedule 1.01(a) – Page 2

--------------------------------------------------------------------------------

Schedule 1.01(b)

SUBSIDIARY GUARANTORS

 

Subsidiary

   Jurisdiction of
Incorporation or
Formation

International Resources Group Ltd.

   Delaware

 

Schedule 1.01(b) – Page 1

--------------------------------------------------------------------------------

Schedule 1.01(c)

EXISTING LETTER OF CREDIT

 

Letter of Credit No.

   Issue Date      Expiry Date      Amount     

Beneficiary

3125107

     07/05/12         03/02/13       $ 50,264.85       Samba Financial Group

 

Schedule 1.01(c) – Page 1

--------------------------------------------------------------------------------

Schedule 2.01

Commitments and Applicable Percentages

Term Loan Commitments

 

Lender

   Term Loan
Commitment      Applicable
Percentage  

Bank of America, N.A.

   $ 111,857,512.64         33.390302281 % 

Barclays Bank PLC

   $ 22,950,000.00         6.850746269 % 

Credit Agricole Corporate & Investment Bank

   $ 26,949,579.12         8.044650484 % 

Regions Bank

   $ 26,949,579.12         8.044650484 % 

Suntrust Bank

   $ 26,949,579.12         8.044650484 % 

Capital One, N.A.

   $ 27,218,750.00         8.125000000 % 

Sumitomo Mitsui Banking Corporation

   $ 27,218,750.00         8.125000000 % 

Manufacturers and Traders Trust Company

   $ 27,218,750.00         8.125000000 % 

PNC Bank, National Association

   $ 16,750,000.00         5.000000000 % 

The Bank of Nova Scotia

   $ 16,750,000.00         5.000000000 % 

California First National Bank

   $ 4,187,500.00         1.250000000 %    

 

 

    

 

 

 

Total

   $ 335,000,000.00         100.000000000 %    

 

 

    

 

 

 

 

Schedule 2.01 – Page 1

--------------------------------------------------------------------------------

Revolving Credit Commitments

 

Lender

   Revolving Credit
Commitment      Applicable
Percentage  

Bank of America, N.A.

   $ 9,642,487.36         14.834595938 % 

Barclays Bank PLC

   $ 11,050,000.00         17.000000000 % 

Credit Agricole Corporate & Investment Bank

   $ 7,050,420.88         10.846801354 % 

Regions Bank

   $ 7,050,420.88         10.846801354 % 

Suntrust Bank

   $ 7,050,420.88         10.846801354 % 

Capital One, N.A.

   $ 5,281,250.00         8.125000000 % 

Sumitomo Mitsui Banking Corporation

   $ 5,281,250.00         8.125000000 % 

Manufacturers and Traders Trust Company

   $ 5,281,250.00         8.125000000 % 

PNC Bank, National Association

   $ 3,250,000.00         5.000000000 % 

The Bank of Nova Scotia

   $ 3,250,000.00         5.000000000 % 

California First National Bank

   $ 812,500.00         1.250000000 %    

 

 

    

 

 

 

Total

   $ 65,000,000.00         100.000000000 %    

 

 

    

 

 

 

 

Schedule 2.01 – Page 2

--------------------------------------------------------------------------------

Schedule 5.03

GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS

1. Filings with the Office of the Secretary of State of the State of Delaware

2. Filings with the U.S. Patent and Trademark Office

3. Filings with, deliveries of notices and other required documentation and
authorizations of the applicable Governmental Authorities in connection with the
validity, perfection or enforcement of the security interests of the
Administrative Agent subject to the Federal Assignment of Claims Act, 31 U.S.C.
3727, the Federal Assignment of Contracts Act, 41 U.S.C. 15 or any similar state
or foreign statute

4. The actions specified in Section 6.15 of the Credit Agreement

 

Schedule 5.03 – Page 1

--------------------------------------------------------------------------------

Schedule 5.06

LITIGATION

Al-Quraishi. On May 5, 2008, seventy-two plaintiffs who had purportedly been
detained in certain Iraqi prisons filed suits alleging that the Borrower (f/k/a
L-3 Services, Inc.) and other defendants either participated in, approved of, or
condoned the mistreatment of prisoners by United States military officials, and
are seeking recovery on a variety of legal theories based upon U.S. Federal law,
state law, treaty obligations and the Alien Tort Statute. These cases were
consolidated in the U.S. District Court for the District of Maryland (the “MD
Trial Court”). The complaint seeks unspecified monetary damages, including
punitive damages and legal fees. On July 29, 2010, the MD Trial Court denied the
Borrower’s motion to dismiss the complaint. On May 11, 2012, the U.S. Court of
Appeals for the Fourth Circuit (the “Fourth Circuit”) sitting en banc denied the
Borrower’s appeal of this decision on the basis that the Fourth Circuit lacked
interlocutory jurisdiction to hear the appeal, and remanded the case to the MD
Trial Court. On June 21, 2012, the Fourth Circuit denied the Borrower’s motion
to stay the Fourth Circuit’s en banc ruling pending the filing and resolution of
a petition for a writ of certiorari at the Supreme Court of the United States.
The Borrower is unable to estimate a range of loss, if any, that is reasonably
possible for this matter because: (1) the proceedings are in the early stages,
as they have not progressed beyond consideration of the Borrower’s pre-answer
motions, (2) there are significant factual issues to be resolved, as no
discovery has taken place, and plaintiffs have not yet been required to provide
any evidence to support the allegations set forth in their complaint,
(3) plaintiffs have not claimed a specific amount of money damages, and have not
yet been required to provide any evidence of damages alleged to have been
suffered, and (4) there are significant legal issues to be resolved, including
whether punitive damages can be awarded under applicable law.

 

Schedule 5.06 – Page 1

--------------------------------------------------------------------------------

Schedule 5.08(a)

OWNED PROPERTIES

 

Owner

  

Address/City/State/Zip Code

  

County

   Estimated Fair
Value  

Engility Corporation

   350 Centre Pointe Drive, Virginia Beach, VA 23462    N/A1    $
 
$ 2,653,040.00
-
3,070,496.00   
  
  

Engility Corporation

   7104 Laird Street, Panama City Beach, FL 32407    Bay    $ 350,000.00   

 

1 

Virginia Beach is not located in any county.

 

Schedule 5.08(a) – Page 1

--------------------------------------------------------------------------------

Schedule 5.08(b)

LEASED PROPERTIES

 

Lessee

  

Lessor

  

Address/City/State/Zip Code

  

County

   Expiration
Date      Annual Rent  

MPRI, Inc. (as a predecessor-in-interest to Engility Corporation)

   Washington Real Estate Investment, Trust, PO Box 79555, Baltimore,
MD 21279-0555    1320 Braddock Place, Alexandria, VA 22314    Alexandria City   
  09/30/17       $ 4,745,924.88   

Engility Corporation

   Gate APG Lot 3 Business Trust, 2560 Lord Baltimore Drive, Baltimore, MD 21244
   6289 Guardian Gateway, Aberdeen Proving Grounds, MD 21005    Harford     
10/31/20       $ 2,028,946.56   

Titan Corporation (as a predecessor-in-interest to Engility Corporation)

   Sixth Exploration, LLC, c/o Wildewood Property Management, LLC, California,
MD 20619    22290 Exploration Drive, Lexington Park, MD 20653    St. Mary’s     
01/31/17       $ 1,451,837.52   

Engility Corporation

   Thompson National Properties (TNPPM North), 1900 main Street, Suite 700,
Irvine, CA 92614    50 Tech Parkway, Stafford, VA 22554    Stafford     
11/30/17       $ 428,431.44   

Engility Corporation

   1211 Financial Associates, LLC, 999 Waterside Drive, Suite 2300, Norfolk,
VA 23510    1211 Connecticut Avenue, Washington, DC 20036    Washington     
04/30/14       $ 1,472,561.64   

 

Schedule 5.08(b) – Page 1

--------------------------------------------------------------------------------

Engility Corporation

   Northpointe Development Corporation, 3600 Pointe Center Court/Suite 100,
Dumfries, VA 22026    2525 Pointe Center Court, Dumfrieds, VA 22026    Prince
William      02/29/16       $ 721,702.08   

Titan Corporation (as a predecessor-in-interest to Engility Corporation)

   400 Virginia Avenue, LLC, PO Box 414291, Boston, MA 02241-4291    400
Virginia Avenue, S.W., Washington, DC 20024    Washington      09/30/15       $
594,985.68   

Engility Corporation

   HG Fenton Company, 7577 Mission Valley Road, Suite 200, San Diego, CA 92108
   7420 Mission Valley Rd., San Diego, CA 92108    San Diego      09/30/15      
$ 691,200   

 

Schedule 5.08(b) – Page 2

--------------------------------------------------------------------------------

Schedule 5.13

SUBSIDIARIES

 

Owner

  

Issuer

   Ownership Interest  

Engility Corporation

   Cayenta, Inc.     
  75.68% of common shares; 0%
of preferred shares   
  

Engility Corporation

   LinCom Wireless, Inc.      96.98 % 

Engility Corporation

   Titan Systems Solutions UK Ltd.2      100 % 

Engility Corporation

   Titan Wireless, Inc.      99.88 % 

Engility Corporation

   Forfeiture Support Associates, LLC      50.1 % 

Engility Corporation

   MPRI International Services, Ltd.      100 % 

Engility Corporation

   Titan Deutschland GmbH      100 % 

Engility Corporation

   Titan Italia Srl      99 %3 

Engility Corporation

   International Resources Group Ltd.      100 % 

International Resources Group Ltd.

   IRG Systems South Asia Private Limited      90 % 

 

2 

This entity will be formally dissolved via UK Companies House effective October
of 2012.

3 

Titan Deutschland GmbH owns the remaining 1%.

 

Schedule 5.13 – Page 1

--------------------------------------------------------------------------------

Schedule 6.15

POST-CLOSING OBLIGATIONS

 

Borrower/Grantor

  

Type of Account

  

Account
Number

    

Name & Address of Financial Institutions

Engility Corporation

   Concentration    8188094328     

Bank of America

540 West Madison

Chicago, IL 60661

   Deposit    8765463257     

Bank of America

540 West Madison

Chicago, IL 60661

   Concentration    1891503862     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92397)    1891506972     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92996)    1891506956     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 51234)    1892992015     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92979)    1891505032     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92981)    1891505057     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92931)    1891505107     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92932)    1891505115     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92924)    1891506014     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 92003)    1891507491     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 51446)    1891946467     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

   Receipts (Lockbox 51368)    1892991660     

Comerica Bank

39200 Six Mile Road

Livnia, MI 48152

 

Schedule 6.15 – Page 1

--------------------------------------------------------------------------------

Borrower/Grantor

  

Type of Account

  

Account
Number

  

Name & Address of Financial Institutions

   Concentration    964259121   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 21753)    656510997   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 905048)    10-90851   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 21027)    11-05907   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 29980)    777150079   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 25092)    777146176   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

   Receipts (Lockbox 21892)    11-00437   

JP Morgan Chase

611 Woodward Avenue

Detroit, MI 48226

 

Schedule 6.15 – Page 2

--------------------------------------------------------------------------------

Schedule 7.01

EXISTING LIENS

Liens existing upon the Closing Date upon any property leased by the Borrower or
any Subsidiary, provided that (x) any such Lien shall not apply to any other
property of the Borrower or any Subsidiary (other than after acquired title in
or on such property and proceeds of the existing collateral in accordance with
the instrument creating such Lien) and (y) such Liens secure related obligations
in an aggregate amount not to exceed $1.8 million

 

Schedule 7.01 – Page 1

--------------------------------------------------------------------------------

Schedule 7.02

EXISTING INVESTMENTS

None.

 

Schedule 7.02 – Page 1

--------------------------------------------------------------------------------

Schedule 7.03

EXISTING INDEBTEDNESS

 

Entity

   Amount     

Description

Engility Corporation

   $ 600,000      

Standby Letter of Credit issued on November 22, 2011 with an expiration date of
January 1, 2014 by ANZ Bank to National Bank of Kuwait which then issued a
guarantee to the Kuwait National Guard4

Engility Corporation

   $ 500,000      

Surety Bond for license to conduct business in Florida issued by Westchester
Fire Insurance Company to the State of Florida

Engility Corporation

   $ 450,000      

Surety Bond – Performance

 

Issued by Hartford Fire Insurance Company to Office of Management & Budget for
performance bond

Engility Corporation

   $ 100,000     

Surety Bond – Customs

 

Issued by Westchester Fire Insurance Company to US Customs for customs bond

Engility Corporation

   $ 315,000      

Surety Bond – Performance & Payment

 

Issued by Westchester Fire Insurance Company to United Fire Authority for
performance & payment bond

 

4 

Engility Corporation is working to replace this letter of credit with one issued
by Bank of America subject to National Bank of Kuwait’s approval.

 

Schedule 7.03 – Page 1

--------------------------------------------------------------------------------

IRG Systems South Asia Ltd.

  

Approx. $120,000 in the aggregate (6,770,513 INR local currency)

  

9 bank guarantees/advance payment guarantees issued by Punjab National Bank,
India to customers who have provided the company with advance payments

 

Schedule 7.03 – Page 2

--------------------------------------------------------------------------------

Schedule 7.09

BURDENSOME AGREEMENTS

None.

 

Schedule 7.09 – Page 1

--------------------------------------------------------------------------------

Schedule 10.02

Administrative Agent’s Office; Certain Addresses for Notices

LOAN PARTIES:

Engility Corporation

3750 Centerview Drive

Chantilly, VA 20151

Attention: Thomas O. Miiller, Senior Vice President and General Counsel

Telephone: (703) 375-6439

Facsimile: (703) 708-5703

Electronic Mail: Tom.Miiller@engilitycorp.com

Taxpayer Identification Number: 95-2588754

With a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

Attention: Marissa Wesely

Telephone: (212) 455-7173

Facsimile: (212) 455-2502

Electronic Mail: mwesely@stblaw.com

 

Schedule 10.02 – Page 1

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT:

For borrowings, conversions, continuations and payments of loans, etc.:

Bank of America, N.A., as Administrative Agent

One Independence Center, 101 N. Tryon St.

Mail Code: NC1-001-04-39

Charlotte, NC 28255-0001

Attention: David Hamilton, Credit Services Representative

Telephone: (980) 388-1553

Facsimile: (704) 548-6968

Electronic Mail: james.d.hamilton@baml.com

Wire Instructions:

 

Pay to:    Bank of America, N.A.    New York, NY    ABA 026009593    Account
No.: 1366212250600    Account Name: Corporate Credit Services    Ref: Engility
Corp.

For all other notices and deliveries to Administrative Agent (financial
reporting requirements, Bank Group Communications, etc.):

Bank of America, N.A., as Administrative Agent

135 S. LaSalle St.

Mail Code: IL4-135-05-41

Chicago, IL 60603

Attention: Roberto O. Salazar, Agency Management Officer

Telephone: (312) 828-3185

Facsimile: (877) 207-2382

Electronic Mail: roberto.o.salazar@baml.com

L/C ISSUER:

For issuance, amendment, etc. of Standby Letters of Credit:

Bank of America, N.A., as L/C Issuer

1 Fleet Way

Mail Code: PA6-580-02-30

Scranton, PA 18507

Attention: Alfonso Malave, Jr., Sr. Operations Manager

Telephone: (570) 496-9622

Facsimile: (800) 755-8743

Electronic Mail: alfonso.malave@baml.com

 

Schedule 10.02 – Page 2

--------------------------------------------------------------------------------

SWING LINE LENDER:

For borrowings and payments of Swing Line Loans:

Bank of America, N.A., as Swing Line Lender

One Independence Center, 101 N. Tryon St.

Mail Code: NC1-001-04-39

Charlotte, NC 28255-0001

Attention: David Hamilton, Credit Services Representative

Telephone: (980) 388-1553

Facsimile: (704) 548-6968

Electronic Mail: james.d.hamilton@baml.com

 

Schedule 10.02 – Page 3

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF

BORROWING NOTICE

Date:                 ,         

 

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of July 17, 2012
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement”; the terms defined therein being used
herein as therein defined), among Engility Corporation, a Delaware corporation
(the “Borrower”), Engility Holdings, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

The undersigned hereby requests (select one):

 

  ¨ A [Term Borrowing] [Revolving Credit Borrowing]

 

  ¨ A conversion or continuation of [Term Loans] [Revolving Credit Loans]

 

  1. On                      (a Business Day).

 

  2. In the amount of $        .

 

  3. Comprised of                                                              .

[Type of requested Loan]

 

  4. For Eurodollar Rate Loans: With an Interest Period of      months.

In the case of a Term Borrowing or Revolving Credit Borrowing, funds are
requested to be disbursed to the Borrower’s account with
                                         (Account No.
                                        ).

[The Borrower hereby represents and warrants that each of the conditions set
forth in Section 4.02(a) and Section 4.02(b) of the Credit Agreement have been
satisfied on and as of the date of the requested Borrowing.]5

[Remainder of page intentionally left blank]

 

5 

To be provided for each Borrowing other than a request for conversion or
continuation only.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Borrowing Notice on the
date first written above.

 

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF

SWING LINE LOAN NOTICE

Date:                 ,         

 

To: Bank of America, N.A., as Swing Line Lender

     Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of July 17, 2012
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement”; the terms defined therein being used
herein as therein defined), among Engility Corporation, a Delaware corporation
(the “Borrower”), Engility Holdings, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

The undersigned hereby requests a Swing Line Loan:

 

  1. On                      (a Business Day).

 

  2. In the amount of $        .

Funds are requested to be disbursed to the Borrower’s account with
                                         (Account No.
                                        ).

The Borrower hereby represents and warrants that (a) the Swing Line Loan
requested herein complies with the requirements of clause (y) of the proviso to
the first sentence of Section 2.04(a) of the Credit Agreement and (b) each of
the conditions set forth in Section 4.02(a) and Section 4.02(b) of the Credit
Agreement have been satisfied on and as of the date of the requested Swing Line
Loan.

 

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

EXHIBIT C-1

FORM OF

TERM NOTE

[                , 20    ]

FOR VALUE RECEIVED, the undersigned, a Delaware corporation (the “Borrower”),
hereby promises to pay to                                          or registered
assigns (the “Lender”), in accordance with the provisions of the Credit
Agreement (as hereinafter defined), the principal amount of each Term Loan made
by the Lender to the Borrower under that certain Credit Agreement, dated as of
July 17, 2012 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined), among the Borrower, Engility
Holdings, Inc., a Delaware corporation (“Holdings”), the Lenders from time to
time party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer.

The Borrower promises to pay interest on the unpaid principal amount of each
Term Loan from the date of such Term Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Credit
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent’s Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Credit Agreement.

This Term Note is one of the Term Notes referred to in the Credit Agreement, is
entitled to the benefits thereof and may be prepaid in whole or in part subject
to the terms and conditions provided therein. This Term Note is also entitled to
the benefits of the Guaranty and is secured by the Collateral. Upon the
occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Term Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Credit Agreement. Term Loans made by the Lender shall be evidenced by one or
more loan accounts or records maintained by the Lender in the ordinary course of
business. The Lender may also attach schedules to this Term Note and endorse
thereon the date, amount and maturity of its Term Loans and payments with
respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Term Note.

THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

 

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

TERM LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

   Type of Loan
Made    Amount of
Loan Made    End of
Interest
Period    Amount of
Principal or
Interest Paid
This Date    Outstanding
Principal
Balance This
Date    Notation
Made By                  

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

--------------------------------------------------------------------------------

EXHIBIT C-2

FORM OF

REVOLVING NOTE

[                , 20    ]

FOR VALUE RECEIVED, the undersigned, a Delaware corporation (the “Borrower”),
hereby promises to pay to                                          or registered
assigns (the “Lender”), in accordance with the provisions of the Credit
Agreement (as hereinafter defined), the principal amount of each Revolving
Credit Loan from time to time made by the Lender to the Borrower under that
certain Credit Agreement, dated as of July 17, 2012 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Credit Agreement”; the terms defined therein being used herein as therein
defined), among the Borrower, Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Loan from the date of such Revolving Credit Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Credit Agreement. All payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent’s Office. If any amount
is not paid in full when due hereunder, such unpaid amount shall bear interest,
to be paid upon demand, from the due date thereof until the date of actual
payment (and before as well as after judgment) computed at the per annum rate
set forth in the Credit Agreement.

This Revolving Note is one of the Revolving Notes referred to in the Credit
Agreement, is entitled to the benefits thereof and may be prepaid in whole or in
part subject to the terms and conditions provided therein. This Revolving Note
is also entitled to the benefits of the Guaranty and is secured by the
Collateral. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on
this Revolving Note shall become, or may be declared to be, immediately due and
payable all as provided in the Credit Agreement. Revolving Credit Loans made by
the Lender shall be evidenced by one or more loan accounts or records maintained
by the Lender in the ordinary course of business. The Lender may also attach
schedules to this Revolving Note and endorse thereon the date, amount and
maturity of its Revolving Credit Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Revolving Note.

THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

REVOLVING CREDIT LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

   Type of Loan
Made    Amount of
Loan Made    End of
Interest
Period    Amount of
Principal or
Interest Paid
This Date    Outstanding
Principal
Balance This
Date    Notation
Made By                  

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

                 

 

  

 

  

 

  

 

  

 

  

 

  

 

--------------------------------------------------------------------------------

EXHIBIT C-3

FORM OF

SWING LINE NOTE

[                , 20    ]

FOR VALUE RECEIVED, the undersigned, a Delaware corporation (the “Borrower”),
hereby promises to pay to BANK OF AMERICA, N.A. or registered assigns (the
“Swing Line Lender”), in accordance with the provisions of the Credit Agreement
(as hereinafter defined), the principal amount of each Swing Line Loan from time
to time made by the Swing Line Lender to the Borrower under that certain Credit
Agreement, dated as of July 17, 2012 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Credit
Agreement”; the terms defined therein being used herein as therein defined),
among the Borrower, Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Borrower promises to pay interest on the unpaid principal amount of each
Swing Line Loan from the date of such Swing Line Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Credit Agreement. All payments of principal and interest with respect to
each Swing Line Loan shall be made directly to the Swing Line Lender in Dollars
in immediately available funds. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit
Agreement.

This Swing Line Note is one of the Swing Line Notes referred to in the Credit
Agreement, is entitled to the benefits thereof and may be prepaid in whole or in
part subject to the terms and conditions provided therein. This Swing Line Note
is also entitled to the benefits of the Guaranty and is secured by the
Collateral. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on
this Swing Line Note shall become, or may be declared to be, immediately due and
payable all as provided in the Credit Agreement. Swing Line Loans made by the
Swing Line Lender shall be evidenced by one or more loan accounts or records
maintained by the Swing Line Lender in the ordinary course of business. The
Swing Line Lender may also attach schedules to this Swing Line Note and endorse
thereon the date, amount and maturity of its Swing Line Loans and payments with
respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Swing Line Note.

THIS SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

SWING LINE LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

   Amount of
Loan Made    Amount of
Principal or
Interest Paid
This Date    Outstanding
Principal
Balance This
Date    Notation
Made By            

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF

COMPLIANCE CERTIFICATE

Financial Statement Date:                    

 

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of July 17, 2012
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement”; the terms defined therein being used
herein as therein defined), among Engility Corporation, a Delaware corporation
(the “Borrower”), Engility Holdings, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                          of the Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and that to the best of
his/her knowledge and belief:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a)(i) of the Credit Agreement for the fiscal year of
the Borrower ended as of the above date (the “Reported Fiscal Year”), together
with the certification of the Borrower’s independent certified public accountant
certifying such financial statements without material qualification, as required
by Section 6.02 of the Credit Agreement. Such financial statements are complete
and correct in all material respects and have been prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by the accountants
auditing such financial statements and disclosed therein). [Attached hereto as
Schedule 3 is a supplement to the Perfection Questionnaire reflecting any
changes to the information set forth therein during the Reported Fiscal Year.]
[There has been no change to the information set forth in the Perfection
Questionnaire since the date of the Perfection Questionnaire or the latest
supplement thereto.]6

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(a)(ii) of the Credit Agreement for the fiscal quarter of the
Borrower ended as of the above date (the “Reported Fiscal Quarter”). Such
financial statements are complete and correct in all material respects and have
been prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by the officer preparing such financial statements and
disclosed therein), subject to year-end audit adjustments and footnote
disclosures.

 

6  Insert whichever of the two preceding sentences is accurate.

--------------------------------------------------------------------------------

2. During the Reported Fiscal [Quarter] [Year]:

(i) no Subsidiary has been formed or acquired (or, if any such Subsidiary has
been formed or acquired, the Borrower has complied with the requirements of
Section 6.10 of the Credit Agreement with respect thereto);

(ii) he/she has obtained no knowledge of any Default or Event of Default [except
as specified below]; and

(iii) the aggregate amount of returns on any Investments received in cash by any
Loan Party during the fiscal period described in Paragraph 1 above was $        
and, if the fiscal period described in Paragraph 1 above is a fiscal quarter,
the aggregate amount of such returns on any Investments received in cash by any
Loan Party in the current fiscal year through the end of such fiscal quarter was
$        .

[Insert description of Default or Event of Default]

3. The financial covenant calculations set forth on Schedule 2 attached hereto
are true and accurate on and as of the date of this Certificate.

4. Attached hereto as Schedule 4 is a written summary of each new Material
Government Contract entered into during the Reported Fiscal Quarter or during
the fourth fiscal quarter of the Reported Fiscal Year, as applicable, and, with
respect to any Receivables relating to such new Material Government Contracts,
the validity, perfection or enforcement of the security interest of the
Administrative Agent therein is subject to the Federal Assignment of Claims Act,
31 U.S.C. 3727, the Federal Assignment of Contracts Act, 41 U.S.C. 15 or any
similar state or foreign statute, attached to Schedule 4 is all documentation
necessary or desirable to ensure the validity, perfection and enforcement of the
security interest of the Administrative Agent in such new Material Government
Contracts, including, without limitation, executed notices to the applicable
Governmental Authority of the security interest of the Administrative Agent
therein.

[Use following paragraphs 5 and 6 for fiscal year-end financial statements]

5. The Consolidated Leverage Ratio as of the end of the Reported Fiscal Year was
[    ]:1.00. [As such Consolidated Leverage Ratio was greater than 2.50:1.00,
the Borrower is required under Section 2.05(b) of the Credit Agreement to prepay
an aggregate principal amount of Loans equal to the lesser of (A) 50% of Excess
Cash Flow for the Reported Fiscal Year minus optional prepayments of Term Loans
and Revolving Credit Loans pursuant to Section 2.05(a) of the Credit Agreement
during the Reported Fiscal Year but only to the extent that the Indebtedness so
prepaid by its terms cannot be reborrowed or redrawn and such prepayments do not
occur in connection with a refinancing of all or any portion of such
Indebtedness, and such amount is equal to $[        ], and (B) the amount that
would have been necessary to reduce the Consolidated Total Leverage Ratio as of
the end of the Reported Fiscal Year to 2.50:1.00, and such amount is equal to
$[        ].]7

6. As of the date hereof, the amount of the Available Basket Amount is set forth
on Schedule 5 attached hereto.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                , 20    .

 

7 

Include bracketed language if the Reported Fiscal Year ended on or after
December 31, 2013 and if so, as applicable.

--------------------------------------------------------------------------------

ENGILITY CORPORATION, a Delaware corporation By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

SCHEDULE 1 TO COMPLIANCE CERTIFICATE

FINANCIAL STATEMENTS

See attached.

--------------------------------------------------------------------------------

SCHEDULE 2 TO COMPLIANCE CERTIFICATE

FINANCIAL COVENANT CALCULATIONS

For the four consecutive fiscal quarters ending                 , 20    

Consolidated EBITDA

 

1   

Consolidated Net Income

   $                   

excluding (without duplication)

   (v)   

impairment losses incurred on goodwill and other intangible assets or on debt or
equity investments computed in accordance with Financial Accounting Standard No.
142 or other GAAP

   $      (w)   

gains or losses incurred on the retirement of debt computed in accordance with
Financial Accounting Standard No. 145

   $      (x)   

gains and losses in connection with asset dispositions whether or not
constituting extraordinary gains and losses

   $      (y)   

non-cash gains or losses on discontinued operations

   $      (z)   

gains and losses with respect to judgments or settlements in connection with
litigation matters for such period

   $      2   

sum of (v) through (z)

   $        

plus (to the extent, except with respect to line (e) below, deducted in
calculating Consolidated Net Income above)

   (a)   

Consolidated Interest Expense for such period

   $      (b)   

the provision for federal, state, local and foreign income taxes payable by
Holdings, the Borrower and its Subsidiaries for such period

   $      (c)   

depreciation and amortization expense for such period

   $      (d)   

non-cash stock-based compensation expenses for such period, each as determined
on a consolidated basis in accordance with GAAP

   $      (e)   

the amount of cost savings, operating expense reductions and synergies projected
by the Borrower in good faith to be realized as a result of specified actions
taken or with respect to which substantial steps have been taken (in the good
faith determination of the Borrower) during such period, net of the amount of
actual benefits realized during such period from such actions8

   $     

 

8 

Subject to the following conditions: (A) A duly completed certificate signed by
a Responsible Officer of the Borrower shall be delivered to the Administrative
Agent certifying that (x) such cost savings, operating expense reductions and
synergies are reasonably expected and factually supportable in the good faith
judgment of the Borrower and (y) such actions are to be taken within 12 months
after the consummation of the Permitted Acquisition, Disposition, restructuring
or implementation of an initiative which is expected to result in such cost
savings, expense reductions or synergies, (B) no cost savings, operating expense
reductions and synergies shall be added to this line (e) to the extent
duplicative of any expenses or charges otherwise added to Consolidated EBITDA
whether through a pro forma adjustment or otherwise, for such period, (C) the
aggregate amount of cost savings, operating expense reductions and synergies
added included in this line (e) do not exceed 2.5% of Consolidated EBITDA for
any four consecutive fiscal quarter period and (D) projected amounts (and not
yet realized) may no longer be added in calculating Consolidated EBITDA in this
line (e) to the extent occurring more than four full fiscal quarters after the
specified action taken in order to realize such projected cost savings,
operating expense reductions and synergies.

--------------------------------------------------------------------------------

(f)   

extraordinary or non-recurring charges, expenses or losses for such period

   $                 (g)   

other non-cash charges, expenses or losses for such period

   $      3   

sum of (a) through (f)

   $        

minus (to the extent added in calculating Consolidated Net Income above)

   (a)   

all non-cash items increasing Consolidated Net Income for such period

   (b)   

extraordinary or non-recurring income or gains

   4   

sum of (a) through (b)

   $        

Consolidated EBITDA (line 1 minus line 2 plus line 3 minus line 4)

   $     

--------------------------------------------------------------------------------

Consolidated Debt Service Coverage Ratio

 

(a)   

Consolidated EBITDA (from above)

   $                 (b)   

the aggregate amount of all Capital Expenditures (other than an amount of
Capital Expenditures made in connection with the Spin-Off after the Closing Date
but prior to the second anniversary of the Closing Date in an aggregate amount
not to exceed $25,000,000 over the term of the Credit Agreement)

   $      1   

(a) minus (b)

   $      (x)   

Consolidated Interest Expense payable in cash

   $      (y)   

the aggregate principal amount of all regularly scheduled principal payments of
outstanding debt for borrowed money of Holdings, the Borrower and its
Subsidiaries, but excluding any such payments to the extent refinanced through
the incurrence of additional Indebtedness otherwise expressly permitted under
Section 7.03 of the Credit Agreement

   $      2   

(x) plus (y)

   $        

Consolidated Debt Service Coverage Ratio (line 1 divided by line 2)

         :1.00      

Permitted minimum Consolidated Debt Service Coverage Ratio

     1.25:1.00      

In Compliance?

     Yes / No   

--------------------------------------------------------------------------------

Consolidated Leverage Ratio

 

  

Without duplication and, in each case to the extent, if any, reflected as a
liability on the balance sheet of Holdings, the Borrower and its Subsidiaries on
such date in accordance with GAAP

   (a)   

the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations under the Credit Agreement)
and all obligations evidenced by bonds, debentures, notes, loan agreements or
other similar instruments

   $                 (b)   

all purchase money Indebtedness

   $      (c)   

all drawn amounts owing under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments to the extent not reimbursed

   $      (d)   

all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business)

   $      (e)   

Attributable Indebtedness in respect of Capital Leases and Synthetic Lease
Obligations

   $      (f)   

all Indebtedness of the types referred to in (a) through (e) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Subsidiary
is a general partner or joint venturer, unless such Indebtedness is expressly
made non-recourse to the Borrower or such Subsidiary

   $      (x)   

Consolidated Funded Indebtedness (sum of (a) through (f))

   $      (y)   

Designated Cash Balances9 as of the end of such fiscal period

   $      1   

(x) minus (y)

   $      2   

Consolidated EBITDA (from above)

   $        

Consolidated Leverage Ratio (line 1 divided by line 2)

         :1.00      

Permitted maximum Consolidated Leverage Ratio

         :1.00      

In Compliance?

     Yes / No   

 

9 

“Designated Cash Balances” means, at any time, (a) $25,000,000, if at such time
Holdings, the Borrower and its Subsidiaries have Unrestricted Cash in an amount
in excess of $50,000,000 or (b) $0, if at such time Holdings, the Borrower and
its Subsidiaries have Unrestricted Cash in an amount less than or equal to
$50,000,000.

--------------------------------------------------------------------------------

[Calculate Excess Cash Flow for fiscal year-end financial statements]

Excess Cash Flow

 

(a)   

Consolidated EBITDA (from above)

   $                 (b)   

reductions to noncash working capital of Holdings, the Borrower and its
Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current Assets
minus Current Liabilities from the beginning to the end of such fiscal year)10

   $   11  1   

without duplication, sum of (a) through (b)

   $        

Reductions (without duplication):

   (i)   

The amount of any Taxes payable in cash by Holdings, the Borrower and its
Subsidiaries with respect to such fiscal year

   $      (ii)   

Consolidated Interest Expenses for such fiscal year paid in cash

   $      (iii)   

Capital Expenditures and Permitted Acquisitions made in cash during such fiscal
year, except to the extent financed with the proceeds of the issuance or
incurrence of Indebtedness, equity issuances, the Net Cash Proceeds of Recovery
Events or other proceeds that would not be included in Consolidated EBITDA

   $      (iv)   

Permanent repayments of Indebtedness (other than mandatory prepayments of Loans
under Section 2.05 of the Credit Agreement) made in cash by Holdings, the
Borrower and its Subsidiaries during such fiscal year, but only to the extent
that the Indebtedness so prepaid by its terms cannot be reborrowed or redrawn
and such prepayments do not occur in connection with a refinancing of all or any
portion of such Indebtedness

   $      (v)   

additions to noncash working capital for such fiscal year (i.e., the increase,
if any, in Current Assets minus Current Liabilities from the beginning to the
end of such fiscal year)6

   $   7  2   

without duplication, sum of (i) through (v)

   $        

Excess Cash Flow (line 1 minus line 2)

   $     

 

10 

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Cash Equivalents) of Holdings, the Borrower and its Subsidiaries
at such time, calculated in accordance with GAAP.

“Current Liabilities” shall mean, at any time, the consolidated current
liabilities of Holdings, the Borrower and its Subsidiaries at such time,
calculated in accordance with GAAP, but excluding, without duplication, (a) the
current portion of any long-term Indebtedness and (b) outstanding Revolving
Credit Loans and Swing Line Loans.

 

11 

Only one of line (b) and line (v) should be filled.

--------------------------------------------------------------------------------

SCHEDULE 3 TO COMPLIANCE CERTIFICATE

PERFECTION QUESTIONNAIRE SUPPLEMENT

See attached.

--------------------------------------------------------------------------------

SCHEDULE 4 TO COMPLIANCE CERTIFICATE

NEW MATERIAL GOVERNMENT CONTRACTS

--------------------------------------------------------------------------------

SCHEDULE 5 TO COMPLIANCE CERTIFICATE

AVAILABLE BASKET AMOUNT

[Use the following only for the Compliance Certificate delivered with audited
financial statements for the fiscal year ending December 31, 2012]

As of the Closing Date, the Available Basket Amount was $0. As of the date
hereof, the Available Basket Amount is increased by an amount equal to 25% of
Consolidated Net Income for the Reported Fiscal Year (or, in the case where such
Consolidated Net Income for such Reported Fiscal Year is a deficit, reduced by
100% of such deficit) (with respect to the fiscal year ending on December 31,
2012, the amount described in this sentence shall be determined based on the
portion of such fiscal year commencing on July 1, 2012 and ending on
December 31, 2012). As of the date hereof, the Available Basket Amount is
$        .

[Use the following for each Compliance Certificate delivered with audited
financial statements for the fiscal year ending December 31, 2013 and each
fiscal year thereafter]

As of the date of the delivery of most recently delivered Compliance Certificate
accompanying financial statements delivered pursuant to Section 6.01(a)(i) of
the Credit Agreement, the Available Basket Amount was $        . From the date
of the delivery of most recently delivered Compliance Certificate accompanying
financial statements delivered pursuant to Section 6.01(a)(i) of the Credit
Agreement to the date hereof, the usage of the Available Basket Amount pursuant
to clause (b) of the definition thereof set forth in the Credit Agreement was
$        . As of the date hereof, the Available Basket Amount is increased by an
amount equal to 25% of Consolidated Net Income for the Reported Fiscal Year (or,
in the case where such Consolidated Net Income for such Reported Fiscal Year is
a deficit, reduced by 100% of such deficit). As of the date hereof, the
Available Basket Amount is $        .

--------------------------------------------------------------------------------

EXHIBIT E

FORM OF

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto in the amount[s]
and equal to the percentage interest[s] identified below of all the outstanding
rights and obligations under the credit facility identified below (including, in
the case of an assignment with respect to the Revolving Credit Facility, the
Letters of Credit and the Swing Line Loans included therein) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by [the][any]
Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the][an] “Assigned Interest”). Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.

 

1.   Assignor[s]:   

 

       

 

  

 

 

1 

For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

2  For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

3 

Select as appropriate.

4  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

--------------------------------------------------------------------------------

2.   Assignee[s]:   

 

       

 

     [for each Assignee, indicate [Affiliate][Approved Fund] of [identify
Lender]] 3.   Borrower: Engility Corporation, a Delaware corporation. 4.  
Administrative Agent: Bank of America, N.A., as the administrative agent under
the Credit Agreement. 5.   Credit Agreement: Credit Agreement, dated as of
July 17, 2012 (as amended, restated, extended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
Engility Holdings, Inc., a Delaware corporation (“Holdings”), the Lenders from
time to time party thereto and Bank of America, N.A., as Administrative Agent,
L/C Issuer, and Swing Line Lender. 6.   Assigned Interest[s]:   

 

Assignor[s]5

   Assignee[s]6   

Facility

Assigned7

   Aggregate
Amount of
Commitment/Loans
for all Lenders8      Amount of
Commitment/Loans
Assigned      Percentage
Assigned of
Commitment/
Loans9                         $                    $                          
%                        $                    $                           %    
                   $                    $                           % 

 

[7.   Trade Date:                     ]10   

 

5 

List each Assignor, as appropriate.

6 

List each Assignee, as appropriate.

7 

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment”, “Term Loan Commitment”, etc.).

8 

Amounts in this column and in the column immediately to the right to be adjusted
by the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.

9 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

10 

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

--------------------------------------------------------------------------------

Effective Date:                     , 20         [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

--------------------------------------------------------------------------------

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR[S]11 [NAME OF ASSIGNOR] By:  

 

[NAME OF ASSIGNOR] By:  

 

  Title: ASSIGNEE[S]12 [NAME OF ASSIGNEE] By:  

 

  Title: [NAME OF ASSIGNEE] By:  

 

  Title:

 

[Consented to and]13 Accepted:

BANK OF AMERICA, N.A., as Administrative Agent

By:  

 

  Title: [Consented to:]14 By:  

 

  Title:

 

11

Add additional signature blocks as needed.

12

Add additional signature blocks as needed.

13

To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

14

To be added only if the consent of the Borrower and/or other parties (e.g. Swing
Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.

--------------------------------------------------------------------------------

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][[the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of Holdings, the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by Holdings, the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.06 of the Credit
Agreement (subject to such consents, if any, as may be required under
Section 10.06 of the Credit Agreement), (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of [the][the relevant] Assigned Interest, shall
have the obligations of a Lender thereunder, (iv) it is sophisticated with
respect to decisions to acquire assets of the type represented by [the][such]
Assigned Interest and either it, or the Person exercising discretion in making
its decision to acquire [the][such] Assigned Interest, is experienced in
acquiring assets of such type, (v) it has received a copy of the Credit
Agreement, and has received or has been accorded the opportunity to receive
copies of the most recent financial statements delivered pursuant to
Section 6.01 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender, attached hereto is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by [the][such] Assignee; and (b) agrees that (i) it will,
independently and without reliance upon the Administrative Agent, [the][any]
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date. Notwithstanding the foregoing, the Administrative Agent
shall make all payments of interest, fees or other amounts paid or payable in
kind from and after the Effective Date to [the][the relevant] Assignee.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.

--------------------------------------------------------------------------------

Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by facsimile or other electronic transmission (e.g., “pdf” or “tif”)
shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by,
and construed in accordance with, the law of the State of New York.

--------------------------------------------------------------------------------

EXHIBIT F

FORM OF

GUARANTEE AND COLLATERAL AGREEMENT

See attached.

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

ENGILITY HOLDINGS, INC.,

ENGILITY CORPORATION

and certain of their Subsidiaries

in favor of

BANK OF AMERICA, N.A.,

as Administrative Agent

Dated as of July 17, 2012

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page  

SECTION 1.

 

DEFINED TERMS

     1   

1.1

 

Definitions

     1   

1.2

 

Other Definitional Provisions

     9   

SECTION 2.

 

GUARANTEE

     10   

2.1

 

Guarantee of Obligations

     10   

2.2

 

Limitation on Obligations Guaranteed

     10   

2.3

 

Nature of Guarantee; Continuing Guarantee; Waivers of Defenses Etc.

     11   

2.4

 

Rights of Reimbursement, Contribution and Subrogation

     13   

2.5

 

Payments

     14   

2.6

 

Subordination of Other Obligations

     14   

2.7

 

Financial Condition of the Borrower and other Guarantors

     14   

2.8

 

Bankruptcy, Etc.

     15   

2.9

 

Duration of Guaranty, Discharge of Guaranty Upon Sale or other Disposition of
Guarantor

     15   

2.10

 

Reinstatement

     16   

SECTION 3.

 

GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL

     16   

SECTION 4.

 

REPRESENTATIONS AND WARRANTIES

     17   

4.1

 

[Reserved]

     18   

4.2

 

Title; No Other Liens

     18   

4.3

 

Valid, Perfected First Priority Liens

     18   

4.4

 

Name; Jurisdiction of Organization, Etc.

     18   

4.5

 

Inventory and Equipment

     19   

4.6

 

Special Collateral; Excluded Collateral

     19   

4.7

 

Investment Property

     19   

4.8

 

Receivables

     20   

4.9

 

Intellectual Property

     21   

4.10

 

Letter of Credit Rights

     22   

4.11

 

Commercial Tort Claims

     22   

SECTION 5.

 

COVENANTS

     22   

5.1

 

[Reserved]

     22   

5.2

 

Delivery and Control of Instruments, Chattel Paper, Negotiable Documents,
Investment Property and Deposit Accounts

     23   

5.3

 

Maintenance of Perfected Security Interest; Further Documentation

     24   

5.4

 

Changes in Locations, Name, Jurisdiction of Incorporation, etc.

     24   

5.5

 

Notices

     25   

5.6

 

Investment Property

     25   

5.7

 

Voting and Other Rights with Respect to Pledged Securities

     26   

5.8

 

Receivables

     27   

5.9

 

Intellectual Property

     28   

5.10

 

Government Receivables

     29   

5.11

 

Perfection

     31   

 

i

--------------------------------------------------------------------------------

         Page  

SECTION 6.

 

REMEDIAL PROVISIONS

     31   

6.1

 

Certain Matters Relating to Receivables

     31   

6.2

 

Communications with Obligors; Grantors Remain Liable

     32   

6.3

 

Proceeds to be Turned Over To Agent

     32   

6.4

 

Application of Proceeds

     33   

6.5

 

UCC and Other Remedies

     33   

6.6

 

Effect of Securities Laws

     35   

6.7

 

Deficiency

     36   

SECTION 7.

 

POWER OF ATTORNEY AND FURTHER ASSURANCES

     36   

7.1

 

Agent’s Appointment as Attorney-in-Fact, etc.

     36   

7.2

 

Authorization of Financing Statements

     38   

7.3

 

Further Assurances

     38   

SECTION 8.

 

THE AGENT

     39   

8.1

 

Authority of Agent

     39   

8.2

 

Duty of Agent

     40   

8.3

 

Exculpation of the Agent

     41   

8.4

 

Delegation of Duties

     42   

8.5

 

Secured Parties

     43   

SECTION 9.

 

MISCELLANEOUS

     43   

9.1

 

Amendments in Writing

     43   

9.2

 

Notices

     43   

9.3

 

No Waiver by Course of Conduct; Cumulative Remedies

     43   

9.4

 

Enforcement Expenses; Indemnification

     44   

9.5

 

Successors and Assigns

     44   

9.6

 

Secured Parties

     44   

9.7

 

Counterparts

     44   

9.8

 

Severability

     45   

9.9

 

Section Headings

     45   

9.10

 

Integration/Conflict

     45   

9.11

 

GOVERNING LAW

     45   

9.12

 

Submission to Jurisdiction; Waivers

     45   

9.13

 

Acknowledgments

     46   

9.14

 

Additional Grantors

     46   

9.15

 

Releases

     46   

9.16

 

WAIVER OF JURY TRIAL

     47   

9.17

 

No Fiduciary Duty

     48   

 

ii

--------------------------------------------------------------------------------

SCHEDULES   

Schedule 1

   Notice Addresses of Grantors

Schedule 2

   Description of Investment Property

Schedule 3

   Filings and Other Actions Required to Perfect Security Interest

Schedule 4

   Exact Legal Name; Jurisdiction of Organizations, Location of Chief Executive
Office or Sole Place of Business (If Applicable) and Organizational ID

Schedule 5

   Location of Inventory and Equipment

Schedule 6

   Intellectual Property

Schedule 7

   Letter of Credit Rights

Schedule 8

   Commercial Tort Claims EXHIBITS   

Exhibit A

   LLC and Partnership Interest Provisions

Exhibit B

   Form of Uncertificated Securities Control Agreement

Exhibit C-1

   Form of Copyright Security Agreement

Exhibit C-2

   Form of Patent Security Agreement

Exhibit C-3

   Form of Trademark Security Agreement ANNEXES   

Annex I

   Form of Assumption Agreement

--------------------------------------------------------------------------------

GUARANTEE AND COLLATERAL AGREEMENT, dated as of July 17, 2012, among each of the
signatories hereto designated as a Grantor on the signature pages hereto
(together with any other entity that may become a party hereto as a Grantor as
provided herein, the “Grantors”) and Bank of America, N.A., as Administrative
Agent (in such capacity and together with its successors and assigns in such
capacity, the “Agent”) for (i) the banks and other financial institutions or
entities (the “Lenders”) from time to time parties to the Credit Agreement,
dated as of July 17, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Engility Holdings,
Inc., a Delaware corporation (“Holdings”), Engility Corporation, a Delaware
corporation (the “Borrower”), the Lenders and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, and (ii) the other
Secured Parties (as hereinafter defined).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders and the L/C Issuer have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
businesses;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders and the
L/C Issuer to make their respective extensions of credit to the Borrower under
the Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Agent for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the Agent, the
Lenders and the L/C Issuer to enter into the Credit Agreement and to induce the
Lenders and the L/C Issuer to make their respective extensions of credit to the
Borrower thereunder, and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, each Grantor hereby agrees with
the Agent, for the benefit of the Secured Parties, as follows:

SECTION 1. DEFINED TERMS

1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms which are defined in the UCC are used
herein as so defined (and if defined in more than one article of the UCC shall
have the meaning specified in Article 9 thereof): Accounts, Account Debtor,
As-Extracted Collateral, Authenticate, Certificated

--------------------------------------------------------------------------------

Security, Chattel Paper, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Electronic Chattel Paper, Entitlement Order, Equipment,
General Intangibles, Farm Products, Financial Asset, Fixtures, Goods,
Health-Care-Insurance Receivable, Instruments, Inventory, Letter of Credit
Rights, Manufactured Homes, Money, Payment Intangibles, Securities Account,
Securities Intermediary, Security, Security Entitlement, Supporting Obligations,
Tangible Chattel Paper and Uncertificated Security.

(b) The following terms shall have the following meanings:

“After-Acquired Intellectual Property” shall have the meaning set forth in
Section 5.9(c).

“Agreement” shall mean this Guarantee and Collateral Agreement, as the same may
be amended, restated, supplemented, or otherwise modified from time to time.

“Bankruptcy Proceeding” shall mean (a) any voluntary or involuntary case or
proceeding under the United States Bankruptcy Code, state bankruptcy law or
similar law with respect to any Loan Party; (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to any Loan Party or with respect to a material portion of their
respective assets; (c) any liquidation, dissolution, reorganization or winding
up of any Loan Party whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy (other than any of the foregoing expressly
permitted under the covenants contained in the Loan Documents); or (d) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of any Loan Party.

“Collateral” shall have the meaning set forth in Section 3(a).

“Collateral Account” shall mean (i) any collateral account established by the
Agent as provided in Section 6.1 or 6.3 or (ii) any cash collateral account
established as provided in the Credit Agreement.

“Controlling Parties” shall mean, prior to the Discharge of Credit Agreement
Obligations, the Required Lenders, and, thereafter, the Majority Holders.

“Copyright Licenses” shall mean all agreements and licenses providing for the
grant to or from a Grantor of any right in or to any Copyright (including,
without limitation, those listed on Schedule 6).

“Copyrights” shall mean, with respect to any Grantor, all of such Grantor’s
right, title and interest in and to all works of authorship and all intellectual
property rights therein, all United States and foreign copyrights (whether or
not the underlying works of authorship have been published), including but not
limited to copyrights in software and databases, all designs (including but not
limited to all industrial designs, “Protected Designs” within the meaning of 17
U.S.C. 1301 et. seq. and Community designs), and all “Mask Works” (as defined in
17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered,
and with respect to any and all of the foregoing: (i) all registrations and
applications for registration thereof including,

 

2

--------------------------------------------------------------------------------

without limitation, the registrations and applications listed on Schedule 6,
(ii) all extensions, renewals, and restorations thereof, (iii) all rights to sue
or otherwise recover for any past, present and future infringement or other
violation thereof, (iv) all Proceeds of the foregoing, including, without
limitation, license fees, royalties, income, payments, claims, damages, proceeds
of suit and other payments now or hereafter due and/or payable with respect
thereto, and (v) all other rights of any kind accruing thereunder or pertaining
thereto throughout the world.

“Deposit Account” shall mean all “deposit accounts” as defined in Article 9 of
the UCC and all other accounts maintained with any financial institution (other
than Securities Accounts or Commodity Accounts), and shall include, without
limitation, all of the accounts listed on Schedule 2 under the heading “Deposit
Accounts” together, in each case, with all funds held therein and all
certificates or instruments representing any of the foregoing.

“Discharge of Credit Agreement Obligations” shall have the meaning set forth in
Section 8.1(b).

“Equity Interests” (i) shall mean with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents, including membership interests (however designated, whether
voting or non-voting) of the equity of such Person, including, if such person is
a partnership, partnership interests (whether general or limited), if such
Person is a limited liability company, membership interests, and, if such Person
is a trust, all beneficial interests therein, and shall also include any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of property of, such corporation,
partnership, limited liability company or trust, whether outstanding on the date
hereof or issued on or after the date hereof and (ii) shall include, without
limitation, all Pledged Stock, Pledged Partnership Interests and Pledged LLC
Interests.

“Excluded Assets” shall mean any (i) margin stock (within the meaning of
Regulation U of the Federal Reserve Board); (ii) permit, lease, license,
contract or agreement to which any Grantor is a party or any of its rights or
interests thereunder if and only to the extent that the grant of a security
interest hereunder (a) is prohibited by or a violation of any law, rule or
regulation applicable to such Grantor or (b) shall constitute or result in a
breach of a term or provision of, or the termination of or a default under the
terms of, such permit, lease, license, contract or agreement (other than to the
extent that any such law, rule, regulation, term or provision would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any
relevant jurisdiction or any other applicable law (including any debtor relief
law or principle of equity); provided, however, that the Collateral shall
include (and such security interest shall attach and the definition of Excluded
Assets shall not then include) immediately at such time as the contractual or
legal prohibition shall no longer be applicable and to the extent severable, and
shall attach immediately to any portion of such permit, lease, license, contract
or agreement not subject to the prohibitions specified in clauses (a) or
(b) above; (iii) property owned by any Grantor that is subject to a purchase
money Lien or Capital Lease Obligation permitted under Section 7.03 of the
Credit Agreement if the agreement pursuant to which such Lien is granted (or the
document providing for such Capital Lease Obligation) prohibits, or requires the
consent of any Person other than the Grantors which has not been obtained as a
condition to, the creation of any other Lien on such property; provided further,
that the

 

3

--------------------------------------------------------------------------------

exclusions referred to in clauses (ii) and (iii) of this definition shall not
include any Proceeds of such permit, lease, license, contract or agreement or
property; (iv) assets as to which the Agent and the Borrower reasonably agree
that the cost of obtaining or perfecting a security interest therein is
excessive in relation to the benefit afforded to the Secured Parties thereby;
(v) any “intent-to-use” application for registration of a Trademark filed
pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the
filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an
“Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with
respect thereto, solely to the extent, if any, that, and solely during the
period, if any, in which, the grant of a security interest therein would impair
the validity or enforceability of any registration that issues from such
intent-to-use application under applicable federal law; (vi) Equity Interests in
any Person that is not a wholly-owned Subsidiary of a Grantor to the extent that
a grant of a security interest in such Equity Interests is prohibited by the
terms of such Person’s Organization Documents, (viii) Excluded Foreign
Subsidiary Voting Stock, (viii) Deposit Accounts exclusively used for payroll,
payroll taxes and other employee wage and benefit payments, (ix) assets to the
extent a security interest in such assets would result in materially adverse tax
consequences (including as a result of the operation of Section 956 of the Code
or any similar law or regulation in any applicable jurisdiction) and (x) assets
to the extent a security interest in such assets is prohibited by applicable
law, rule or regulation (other than to the extent that any such law, rule or
regulation would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable
law (including any debtor relief law or principle of equity); provided, however,
that the Collateral shall include (and such security interest shall attach and
the definition of Excluded Assets shall not then include) immediately at such
time as the legal prohibition shall no longer be applicable and to the extent
severable, and shall attach immediately to any portion of such assets not
subject to the prohibitions specified in this clause (x); provided further, that
the exclusions referred to in this clause (x) shall not include any Proceeds of
such assets.

“Excluded Foreign Subsidiary Voting Stock” shall mean any voting stock in excess
of 65% of the total outstanding amount of any class of voting stock of a Foreign
Subsidiary.

“Foreign Intellectual Property”: shall mean Intellectual Property governed by,
or arising or existing under, pursuant to or by virtue of, the laws of any
jurisdiction other than the United States of America, any state thereof or the
District of Columbia.

“Foreign Security Documents” shall mean the collective reference to the security
agreements, debentures, pledge agreements, charges and other similar documents
and agreements pursuant to which any Grantor purports to pledge or grant a
security interest in any property or assets located outside of the United States
(including any Pledged Equity Interests of any Issuer organized under a
jurisdiction other than the United States or any state or locality thereof)
securing the Obligations.

“Guarantors” shall mean the collective reference to each Grantor and, for the
avoidance of doubt, shall include the Borrower.

 

4

--------------------------------------------------------------------------------

“Insurance” shall mean (i) all insurance policies covering any or all of the
Collateral (regardless of whether the Agent is the loss payee thereof) and
(ii) any key man life insurance policies.

“Intellectual Property” shall mean, with respect to any Grantor, the collective
reference to all rights, priorities and privileges relating to intellectual
property of such Grantor, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade
Secrets and Trade Secret Licenses, and all rights to sue or otherwise recover
for any past, present and future infringement, dilution, misappropriation, or
other violation or impairment thereof, including the right to receive all
Proceeds therefrom, including, without limitation, license fees, royalties,
income payments, claims, damages, proceeds of suit and other payments now or
hereafter due and/or payable with respect thereto.

“Intellectual Property Security Agreements” shall mean, collectively, the
Copyright Security Agreement substantially the form of Exhibit C-1, the Patent
Security Agreement substantially in the form of Exhibit C-2, and the Trademark
Security Agreement substantially in the form of Exhibit C-3.

“Intercompany Note” shall mean any promissory note evidencing loans made by any
Loan Party to any other Loan Party.

“Investment Property” shall mean the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the UCC on the date
hereof including, without limitation, all Certificated Securities and
Uncertificated Securities, all Security Entitlements, all Securities Accounts,
all Commodity Contracts and all Commodity Accounts (other than any Excluded
Foreign Subsidiary Voting Stock), (ii) all security entitlements, in the case of
any United States Treasury book-entry securities, as defined in 31 C.F.R.
section 357.2, or, in the case of any United States federal agency book-entry
securities, as defined in the corresponding United States federal regulations
governing such book-entry securities, and (iii) whether or not constituting
“investment property” as so defined, all Pledged Notes, all Pledged Equity
Interests, all Pledged Security Entitlements and all Pledged Commodity
Contracts.

“Issuers” shall mean the collective reference to each issuer of Pledged Equity
Interests.

“Majority Holders” shall have the meaning assigned to such term in Section
8.1(b).

“Material Intellectual Property” shall mean any Intellectual Property included
in the Collateral that is material to the business of any Grantor or is
otherwise of material value.

“Obligations” shall mean all Obligations (as defined in the Credit Agreement)
including, without limitation, those arising under Section 2 hereof.

“Obligee Guarantor” shall have the meaning set forth in Section 2.6.

 

5

--------------------------------------------------------------------------------

“Patent Licenses” shall mean all agreements and licenses providing for the grant
to or from a Grantor of any right in or to any Patent (including, without
limitation, those listed on Schedule 6).

“Patents” shall mean, with respect to any Grantor, all of such Grantor’s right,
title and interest in and to all patentable inventions and designs, all United
States, foreign, and multinational patents, certificates of invention, and
similar industrial property rights, and applications for any of the foregoing,
including, without limitation, (i) each patent and patent application listed on
Schedule 6, (ii) all reissues, substitutes, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations thereof,
(iii) all inventions and improvements described and claimed therein, (iv) all
rights to sue or otherwise recover for any past, present and future infringement
or other violation thereof, (v) all Proceeds of the foregoing, including,
without limitation, license fees, royalties, income, payments, claims, damages,
proceeds of suit and other payments now or hereafter due and/or payable with
respect thereto, and (vi) all other rights accruing thereunder or pertaining
thereto throughout the world.

“Perfected IP” shall have the meaning set forth in Section 5.9(d).

“Permitted Lien” shall mean, collectively, the Liens permitted under
Section 7.01 of the Credit Agreement.

“Pledged Commodity Contracts” shall mean all Commodity Contracts listed on
Schedule 2 and all other Commodity Contracts to which any Grantor is party from
time to time.

“Pledged Debt Securities” shall mean all debt securities now owned or hereafter
acquired by any Grantor, including, without limitation, the debt securities
listed on Schedule 2, together with any other certificates, options, rights or
security entitlements of any nature whatsoever in respect of the debt securities
of any Person that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect.

“Pledged Equity Interests” shall mean all Equity Interests, and shall include
Pledged LLC Interests, Pledged Partnership Interests and Pledged Stock;
provided, however, that in no event shall “Pledged Equity Interests” include any
Excluded Assets.

“Pledged LLC Interests” shall mean all membership interests and other interests
of any Grantor now owned or hereafter acquired in any limited liability company
including, without limitation, all limited liability company interests listed on
Schedule 2 under the heading “Pledged LLC Interests” and the certificates, if
any, representing such limited liability company interests and any interest of
such Grantor on the books and records of such limited liability company and any
securities entitlements relating thereto and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests and any other warrant, right or option or other agreement to acquire
any of the foregoing, all management rights, all voting rights, any interest in
any capital account of a member in such limited liability company, all rights as
and to become a member of the limited liability company, all rights of the
Grantor under any shareholder or voting trust

 

6

--------------------------------------------------------------------------------

agreement or similar agreement in respect of such limited liability company, all
of the Grantor’s right, title and interest as a member to any and all assets or
properties of such limited liability company, and all other rights, powers,
privileges, interests, claims and other property in any manner arising out of or
relating to any of the foregoing; provided, however, that in no event shall
“Pledged LLC Interests” include any Excluded Assets.

“Pledged Notes” shall mean all promissory notes now owned or hereafter acquired
by any Grantor including, without limitation, those listed on Schedule 2 and all
Intercompany Notes at any time issued to any Grantor.

“Pledged Partnership Interests” shall mean all partnership interests and other
interests of any Grantor now owned or hereafter acquired in any general
partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule 2 under the heading “Pledged Partnership Interests” and the
certificates, if any, representing such partnership interests, and any interest
of such Grantor on the books and records of such partnership and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests and any other warrant, right or option to acquire any of the
foregoing, all management rights, all voting rights, any interest in any capital
account of a partner in such partnership, all rights as and to become a partner
of such partnership, all of the Grantor’s rights, title and interest as a
partner to any and all assets or properties of such partnership, and all other
rights, powers, privileges, interests, claims and other property in any manner
arising out of or relating to any of the foregoing; provided, however, that in
no event shall “Pledged Partnership Interests” include any Excluded Assets.

“Pledged Stock” shall mean all shares of capital stock now owned or hereafter
acquired by such Grantor, including, without limitation, all shares of capital
stock described on Schedule 2 under the heading “Pledged Stock”, and the
certificates, if any, representing such shares and any interest of such Grantor
in the entries on the books of the issuer of such shares and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares and any
other warrant, right or option to acquire any of the foregoing; provided,
however, that in no event shall “Pledged Stock” include any Excluded Assets.

“Pledged Securities” shall mean the collective reference to the Pledged Debt
Securities, the Pledged Notes and the Pledged Equity Interests regardless of
whether constituting Securities under the UCC.

“Pledged Security Entitlements” shall mean all security entitlements with
respect to the financial assets listed on Schedule 2 and all other security
entitlements of any Grantor.

“Proceeds” shall mean all “proceeds” as such term is defined in
Section 9-102(a)(64) of the UCC and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.

 

7

--------------------------------------------------------------------------------

“Receivable” shall mean all Accounts and any other any right to payment for
goods or other property sold, leased, licensed or otherwise disposed of or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper or classified as a Payment Intangible and whether or not it has
been earned by performance. References herein to Receivables shall include any
Supporting Obligation or collateral securing such Receivable.

“Secured Parties” shall mean, collectively, the Joint Lead Arrangers, the Agent,
the Lenders, the Swing Line Lender, the L/C Issuer, the Cash Management Banks,
the Hedge Banks, each Indemnitee pursuant to Section 10.04(b) of the Credit
Agreement and each sub-agent appointed by the Agent from time to time pursuant
to Section 9.05 of the Credit Agreement.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Trademark Licenses” shall mean all agreements and licenses providing for the
grant to or from a Grantor of any right in or to any Trademark (including,
without limitation, those listed on Schedule 6).

“Trademarks” shall mean, with respect to any Grantor, all of such Grantor’s
right, title and interest in and to all domestic, foreign and multinational
trademarks, service marks, trade names, corporate names, company names, business
names, fictitious business names, trade dress, trade styles, logos, Internet
domain names, other indicia of origin or source identification, and general
intangibles of a like nature, whether registered or unregistered, and, with
respect to any and all of the foregoing, (i) all registrations and applications
for registration thereof including, without limitation, the registrations and
applications listed on Schedule 6, (ii) all extensions and renewals thereof,
(iii) all of the goodwill of the business connected with the use of and
symbolized by any of the foregoing, (iv) all rights to sue or otherwise recover
for any past, present and future infringement, dilution, or other violation
thereof, (iv) all Proceeds of the foregoing, including, without limitation,
license fees, royalties, income, payments, claims, damages, proceeds of suit and
other payments now or hereafter due and/or payable with respect thereto, and
(v) all other rights of any kind accruing thereunder or pertaining thereto
throughout the world.

“Trade Secret Licenses” shall mean all agreements and licenses providing for the
grant to or from a Grantor of any right in or to any Trade Secret.

“Trade Secrets” shall mean, with respect to any Grantor, all of such Grantor’s
right, title and interest in and to (i) all trade secrets and all confidential
and proprietary information, including know-how, manufacturing and production
processes and techniques, inventions, research and development information,
technical data, financial, marketing and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information, and with respect to any and all of the foregoing (i) all rights to
sue or otherwise recover for any past, present and future misappropriation or
other violation thereof,

 

8

--------------------------------------------------------------------------------

(ii) all Proceeds of the foregoing, including, without limitation, license fees,
royalties, income, payments, claims, damages, proceeds of suit and other
payments now or hereafter due and/or payable with respect thereto, and (iii) all
other rights of any kind accruing thereunder or pertaining thereto throughout
the world.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the perfection or priority of, or
remedies with respect to, any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of New
York, the term “UCC” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions hereof
relating to such perfection, priority or remedies.

“Vehicles” shall mean all cars, trucks, trailers, construction and earth moving
equipment and other Equipment of any nature covered by a certificate of title
law of any jurisdiction and all tires and other appurtenances to any of the
foregoing.

1.2 Other Definitional Provisions. (a) The words “hereof”, “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule, Exhibit and Annex references are to this
Agreement unless otherwise specified. References to any Schedule, Exhibit or
Annex shall mean such Schedule, Exhibit or Annex as amended or supplemented from
time to time in accordance with this Agreement.

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(c) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

(d) The expressions “payment in full,” “paid in full” and any other similar
terms or phrases when used herein with respect to the Obligations shall mean the
unconditional, final and irrevocable payment in full, in cash, in immediately
available funds, of all of the Obligations.

(e) The use herein of the word “include” or “including”, when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not non-limiting
language (such as “without limitation” or “but not limited to” or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.

(f) All references herein to provisions of the UCC shall include all successor
provisions under any subsequent version or amendment to any Article of the UCC.

 

9

--------------------------------------------------------------------------------

SECTION 2. GUARANTEE

2.1 Guarantee of Obligations.

Each of the Guarantors hereby, jointly and severally, absolutely,
unconditionally and irrevocably, guarantees, as primary obligor and not merely
as surety, to the Agent, for the benefit of the Secured Parties and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by each other Guarantor, including the
Borrower, when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations. Each Guarantor shall be liable under its
guarantee set forth in this Section 2.1, without any limitation as to amount,
for all present and future Obligations, including specifically all future
increases in the outstanding amount of the Loans or other Obligations and other
future increases in the Obligations, whether or not any such increase is
committed, contemplated or provided for by the Loan Documents, the Secured Cash
Management Agreements or the Secured Hedge Agreements on the date hereof.
Without limiting the generality of the foregoing, each Guarantor’s liability
shall extend to all Obligations (including, without limitation, interest, fees,
costs and expenses) that would be owed by any other obligor on the Obligations
but for the fact that they are unenforceable or not allowable due to the
existence of a Bankruptcy Proceeding involving such other obligor because it is
the intention of the Guarantors and Secured Parties that the Obligations which
are guaranteed by the Guarantors pursuant hereto should be determined without
regard to any rule of law or order which may relieve the Borrower or any other
Guarantor of any portion of such Obligations.

2.2 Limitation on Obligations Guaranteed. (a) Notwithstanding any other
provision hereof, the right of recovery against each Guarantor under Section 2
hereof shall not exceed $1.00 less than the lowest amount which would render
such Guarantor’s obligations under Section 2 hereof void or voidable under
applicable law, including, without limitation, the Uniform Fraudulent Conveyance
Act, Uniform Fraudulent Transfer Act or any similar foreign, federal or state
law to the extent applicable to the guaranty set forth herein and the
obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Agent and the Guarantors hereby irrevocably agree that the Obligations of
each Guarantor under the guarantee set forth in Section 2 hereof at any time
shall be limited to the maximum amount as will result in the Obligations of such
Guarantor under the guarantee set forth in Section 2 hereof not constituting a
fraudulent transfer or conveyance after giving full effect to the liability
under the guarantee set forth in Section 2 hereof and its related contribution
rights but before taking into account any liabilities under any other guarantee
by such Guarantor. For purposes of the foregoing, all guarantees of such
Guarantor other than the guarantee under Section 2 hereof will be deemed to be
enforceable and payable after the guaranty under Section 2 hereof. To the
fullest extent permitted by applicable law, this Section 2.2(a) shall be for the
benefit solely of creditors and representatives of creditors of each Guarantor
and not for the benefit of such Guarantor or the holders of any Equity Interest
in such Guarantor.

(b) Each Guarantor agrees that Obligations may at any time and from time to time
be incurred or permitted in an amount exceeding the maximum liability of such
Guarantor under Section 2.2(a) without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of any Secured Party hereunder.

 

10

--------------------------------------------------------------------------------

2.3 Nature of Guarantee; Continuing Guarantee; Waivers of Defenses Etc. (a) Each
Guarantor understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing guarantee of payment and performance and not
merely of collectability. Each Guarantor waives, to the maximum extent permitted
by applicable law, diligence, presentment, protest, demand for payment and
notice of dishonor, default or nonpayment to or upon the Borrower or any of the
other Guarantors with respect to the Obligations. Without limiting the
generality of the foregoing, this Guaranty and the obligations of the Guarantors
hereunder and the Liens granted hereunder shall be valid and enforceable and
shall not be subject to any reduction, limitation, impairment, setoff, defense,
counterclaim, discharge or termination for any reason (other than a Discharge of
the Obligations).

(b) Each Guarantor agrees that the Obligations of each Guarantor hereunder are
independent of the Obligations of each other Guarantor or any other guarantee of
the Obligations and when making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by any Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Guarantor or
any other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of the Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of any Secured Party against
any Guarantor. For the purposes hereof “demand” shall include the commencement
and continuance of any legal proceedings.

(c) No payment made by the Borrower, any of the other Guarantors, any other
guarantor or any other Person or received or collected by any Secured Party from
the Borrower, any of the other Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment remain liable for the Obligations until the Discharge of the
Obligations.

(d) Without limiting the generality of the foregoing, each Guarantor and Grantor
agrees that its obligations under the guarantee contained in this Section 2, and
any Lien granted hereunder, shall not be affected by, and shall remain in full
force and effect without regard to, and hereby waives, to the maximum extent
permitted by applicable law, all rights, claims or defenses (other than a
defense of payment) that it might otherwise have (now or in the future) with
respect to each of the following (whether or not such Guarantor has knowledge
thereof):

(i) the validity or enforceability of the Credit Agreement or any other Loan
Document or any Secured Hedge Agreement or Secured Cash Management Agreement,
any of the Obligations or any guarantee or right of offset with respect thereto
at any time or from time to time held by any Secured Party;

 

11

--------------------------------------------------------------------------------

(ii) any renewal, extension or acceleration of, or any increase in the amount of
the Obligations, or any amendment, supplement, modification or waiver of, or any
consent to departure from, the Loan Documents or any Secured Hedge Agreement or
Secured Cash Management Agreement;

(iii) any failure or omission to assert or enforce or agreement or election not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy (whether arising under any Loan Documents, any
Secured Hedge Agreement or any Secured Cash Management Agreements, at law, in
equity or otherwise) with respect to the Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of
the Obligations;

(iv) any change, reorganization or termination of the corporate structure or
existence of the Borrower or any other Guarantor or any of their Subsidiaries
and any corresponding restructuring of the Obligations;

(v) settlement, compromise, release, or discharge, or acceptance of or refusal
of any offer of payment or performance with respect to, or substitutions for,
the Obligations or subordinate the Obligations to any other obligations;

(vi) any failure to perfect or maintain the perfection or priority of any
security for the Obligations (including without limitation, the Collateral) or
any release of any or all such security;

(vii) exercise remedies with respect to any security for the Obligations
(including, without limitation, the Collateral) at such time and in such order
and in such manner as the Agent and the Secured Parties may decide and whether
or not every aspect thereof is commercially reasonable and whether or not such
action constitutes an election of remedies and even if such action operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy that any Guarantor would otherwise have and without limiting the
generality of the foregoing or any other provisions hereof, each Guarantor
hereby expressly waives any and all benefits which might otherwise be available
to such Guarantor under California Civil Code Sections 2809, 2810, 2819, 2939,
2845, 2848, 2849, 2850, 2855, 2899 and 3433; and

(viii) any other circumstance whatsoever which may or might in any manner or to
any extent vary the risk of any Guarantor or Grantor as an obligor in respect of
the Obligations or which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower or any other Guarantor or Grantor
for the Obligations, or of such Guarantor under the guarantee contained in this
Section 2, whether in a Bankruptcy Proceeding or in any other instance.

 

12

--------------------------------------------------------------------------------

(e) In addition each Guarantor further waives any and all other defenses,
set-offs or counterclaims (other than a defense of payment or performance in
full hereunder) which may at any time be available to or be asserted by it, the
Borrower, or any other Guarantor or Person against any Secured Party, including,
without limitation, failure of consideration, breach of warranty, statute of
frauds, statute of limitations, accord and satisfaction and usury.

2.4 Rights of Reimbursement, Contribution and Subrogation.

In case any payment is made on account of the Obligations by any Guarantor or is
received or collected on account of the Obligations from any Guarantor or its
property:

(a) If such payment is made by a Guarantor (including the Borrower) or from its
property in respect of the Obligations of another Guarantor, such Guarantor
shall be entitled, subject to and upon (but not before) a Discharge of the
Obligations, (A) to demand and enforce reimbursement for the full amount of such
payment from such other Guarantor (including the Borrower) and (B) to demand and
enforce contribution in respect of such payment from each other Guarantor which
has not paid its fair share of such payment, as necessary to ensure that (after
giving effect to any enforcement of reimbursement rights provided hereby) each
Guarantor pays its fair share of the unreimbursed portion of such payment. For
this purpose, the fair share of each Guarantor as to any unreimbursed payment
shall be determined based on an equitable apportionment of such unreimbursed
payment among all Guarantors based on the relative value of their assets and any
other equitable considerations deemed appropriate by the court. For purposes of
the foregoing, all guarantees of any Guarantor other than the guarantee under
Section 2 hereof will be deemed to be enforceable and payable after the guaranty
under Section 2 hereof.

(b) If and whenever (after Discharge of the Obligations) any right of
reimbursement or contribution becomes enforceable by any Guarantor (including
the Borrower) against any other Guarantor (including the Borrower) whether under
Sections 2.2(a) or otherwise, such Guarantor shall be entitled, subject to and
upon Discharge of the Obligations, to be subrogated (equally and ratably with
all other Guarantors entitled to reimbursement or contribution from any other
Guarantor as set forth in this Section 2.4) to any security interest that may
then be held by the Agent upon any Collateral granted to it in this Agreement.
Any right of subrogation of any Guarantor (including the Borrower) shall be
enforceable solely after a Discharge of the Obligations and solely against the
Guarantors, and not against the Secured Parties, and neither the Agent nor any
other Secured Party shall have any duty whatsoever to warrant, ensure or protect
any such right of subrogation or to obtain, perfect, maintain, hold, enforce or
retain any Collateral for any purpose related to any such right of subrogation.
If subrogation is demanded by any Guarantor, then, after Discharge of the
Obligations, the Agent shall deliver to the Guarantors making such demand, or to
a representative of such Guarantor or of the Guarantors generally, an instrument
satisfactory to the Agent transferring, on a quitclaim basis without any
recourse, representation, warranty or any other obligation whatsoever, whatever
security interest the Agent then may hold in whatever Collateral may then exist
that was not previously released or disposed of or acquired by the Agent.

 

13

--------------------------------------------------------------------------------

(c) All rights and claims arising under this Section 2.4 or based upon or
relating to any other right of reimbursement, indemnification, contribution or
subrogation that may at any time arise or exist in favor of any Guarantor
(including the Borrower) as to any payment on account of the Obligations made by
it or received or collected from its property shall be fully subordinated in all
respects to the prior Discharge of the Obligations. Until Discharge of the
Obligations, no Guarantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim. If any such payment or
distribution is made or becomes available to any Guarantor in any bankruptcy
case or receivership or insolvency or liquidation proceeding, such payment or
distribution shall be delivered by the person making such payment or
distribution directly to the Agent, for application to the payment of the
Obligations. If any such payment or distribution is received by any Guarantor,
it shall be held by such Guarantor in trust, as trustee of an express trust for
the benefit of the Secured Parties, and shall forthwith be transferred and
delivered by such Guarantor to the Agent, in the exact form received and, if
necessary, duly endorsed.

(d) The obligations of the Guarantors under the Loan Documents, including their
liability for the Obligations and the enforceability of the security interests
granted thereby, are not contingent upon the validity, legality, enforceability,
collectability or sufficiency of any right of reimbursement, contribution or
subrogation arising under this Section 2.4. The invalidity, insufficiency,
unenforceability or uncollectability of any such right shall not in any respect
diminish, affect or impair any such obligation or any other claim, interest,
right or remedy at any time held by any Secured Party against any Guarantor or
its property. The Secured Parties make no representations or warranties in
respect of any such right and shall have no duty to assure, protect, enforce or
ensure any such right or otherwise relating to any such right.

2.5 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Agent without set-off or counterclaim in Dollars in immediately
available funds at the office of the Agent located at the Administrative Agent’s
Office specified in the Credit Agreement.

2.6 Subordination of Other Obligations. Any Indebtedness of the Borrower or any
other Guarantor now or hereafter held by any other Guarantor (the “Obligee
Guarantor”) shall hereby be subordinated in right of payment to the Guaranteed
Obligations upon the occurrence and during the continuance of an Event of
Default, and any such Indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for the Agent on behalf of the Secured Parties and shall forthwith be
paid over to the Agent for the benefit of the Secured Parties to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of the Obligee Guarantor under any other provision
hereof.

2.7 Financial Condition of the Borrower and other Guarantors. The Loans may be
made to the Borrower or continued from time to time and any Secured Hedge
Agreements and Secured Cash Management Agreements may be entered into from time
to time, in each case, without notice to or authorization from any Guarantor
regardless of the financial or

 

14

--------------------------------------------------------------------------------

other condition of the Borrower or any other Guarantor at the time of any such
grant or continuation or at the time such Secured Hedge Agreement or Secured
Cash Management Agreement is entered into, as the case may be. No Secured Party
shall have any obligation to disclose or discuss with any Guarantor its
assessment, or any Guarantor’s assessment, of the financial condition of the
Borrower or any other Guarantor. Each Guarantor represents and warrants that
such Guarantor has adequate means to obtain information from the Borrower and
the other Guarantors on a continuing basis concerning the financial condition of
the Borrower and the other Guarantors and their ability to perform their
obligations under the Loan Documents and Secured Cash Management Agreements and
Secured Hedge Agreements, and each Guarantor assumes responsibility for being
and keeping informed of the financial condition of the Borrower and the other
Guarantors and of all circumstances bearing upon the risk of nonpayment of the
Obligations. Each Guarantor hereby waives, to the maximum extent permitted by
applicable law, and relinquishes any duty on the part of any Secured Party to
disclose any matter, fact or thing relating to the business, operations or
condition of the Borrower or any other Guarantor now known or hereafter known by
any Secured Party.

2.8 Bankruptcy, Etc. Until a Discharge of the Obligations, no Guarantor shall,
without the prior written consent of the Agent, commence or join with any other
person in commencing any Bankruptcy Proceeding of or against the Borrower or any
other Guarantor. The obligations of the Guarantors hereunder shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
case or Bankruptcy Proceeding, voluntary or involuntary, involving the Borrower
or any other Guarantor or by any defense which the Borrower or any other
Guarantor may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding. To the fullest extent
permitted by law, the Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay the Agent, or allow the claim of the Agent in respect of, any such
interest, fees, costs, expenses or other Obligations accruing or arising after
the date on which such case or proceeding is commenced.

2.9 Duration of Guaranty, Discharge of Guaranty Upon Sale or other Disposition
of Guarantor. i. Except as provided in 2.9(b) below, the guarantee contained in
this Section 2 shall remain in full force and effect until the Discharge of the
Obligations.

(a) If all or a portion of the Equity Interests of any Guarantor (other than
Holdings or the Borrower) or any of its successors in interest hereunder shall
be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions of the Loan Documents to a Person that
is not an Affiliate of the Borrower or any other Guarantor, such that such
Guarantor is no longer a Subsidiary of the Borrower, or pursuant to any other
transaction permitted by the Credit Agreement any Guarantor (other than Holdings
or the Borrower) ceases to be a Subsidiary of the Borrower, the Guaranty of such
Guarantor or such successor in interest, as the case may be, hereunder shall
automatically be discharged and released without any further action by any
Secured Party or other Person effective as the time of such sale or disposition.
In connection with any termination or release pursuant to this Section 2.9, the
Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense,
all documents that such Guarantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this
Section 2.9 shall be without recourse to or warranty by the Agent.

 

15

--------------------------------------------------------------------------------

2.10 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded, disgorged or must
otherwise be restored or returned by any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
other Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or
any other Guarantor or any substantial part of its property, or otherwise, all
as though such payments had not been made.

SECTION 3. GRANT OF SECURITY INTEREST;

CONTINUING LIABILITY UNDER COLLATERAL

(a) Each Grantor hereby grants to the Agent, for the benefit of the Secured
Parties, a security interest in, all of the following property, in each case,
wherever located and now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the “Collateral”), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations:

(i) all Accounts, including all Receivables;

(ii) all Chattel Paper;

(iii) all Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all General Intangibles;

(vii) all Instruments;

(viii) all Insurance

(ix) all Intellectual Property;

(x) all Inventory;

(xi) all Investment Property;

(xii) all Letter of Credit Rights;

(xiii) all Money;

(xiv) all Pledged Equity Interests;

(xv) all Vehicles;

 

16

--------------------------------------------------------------------------------

(xvi) all Goods not otherwise described above;

(xvii) all Collateral Accounts;

(xviii) all books, records, ledger cards, files, correspondence, customer lists,
blueprints, technical specifications, manuals, computer software, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon;

(xix) all commercial tort claims now or hereinafter described on Schedule 8; and

(xx) to the extent not otherwise included, all Proceeds, products, accessions,
rents and profits of any and all of the foregoing and all collateral security,
Supporting Obligations and guarantees given by any Person with respect to any of
the foregoing.

Notwithstanding the foregoing provisions of this Section 3(a), the foregoing
grant of a security interest shall not extend to, and the term “Collateral”
shall not include Excluded Assets. Notwithstanding the foregoing, the Grantors
shall not be required to perfect the grant of a security interest in any
Collateral that constitutes motor vehicles and other assets subject to
certificates of title except to the extent perfection can be obtained by filing
a financing statement pursuant to the New York UCC.

(b) Notwithstanding anything herein to the contrary, (i) each Grantor shall
remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Agent or any
Secured Party, and (ii) each Grantor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
Receivables and any agreements relating to Pledged Partnership Interests or
Pledged LLC Interests, to perform all of the obligations undertaken by it
thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Agent nor any Secured Party shall have any obligation or
liability under any of such agreements by reason of or arising out of this
Agreement or any other document related thereto nor shall the Agent or any
Secured Party have any obligation to make any inquiry as to the nature or
sufficiency of any payment received by it or have any obligation to take any
action to collect or enforce any rights under any agreement included in the
Collateral, including, without limitation, any agreements relating to any
Receivables, Pledged Partnership Interests or Pledged LLC Interests.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Agent, the Lenders and the L/C Issuer to enter into the Credit
Agreement and to induce the Lenders and the L/C Issuer to make their respective
extensions of credit to the Borrower thereunder, and to induce the Cash
Management Banks and Hedge Banks to enter into Secured Cash Management
Agreements and Secured Hedge Agreements, each

 

17

--------------------------------------------------------------------------------

Grantor hereby represents and warrants to the Secured Parties on (i) the date on
which each of the conditions in Section 4.02 of the Credit Agreement is
satisfied and (ii) the date of each Credit Extension, that:

4.1 [Reserved].

4.2 Title; No Other Liens. Such Grantor owns each item of the Collateral free
and clear of any and all Liens or claims, including, without limitation, liens
arising as a result of such Grantor becoming bound (as a result of merger or
otherwise) as Grantor under a security agreement entered into by another Person,
except, in the case of all Collateral other than Pledged Equity Interests,
Permitted Liens and, in the case of Pledged Equity Interests, for non-consensual
Permitted Liens imposed by operation of law. To the knowledge of the Grantors,
no financing statement, mortgage or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Agent, for the benefit of the Secured
Parties, pursuant to this Agreement or as are permitted by the Credit Agreement
or as to which documentation to terminate the same shall have been delivered to
the Agent.

4.3 Valid, Perfected First Priority Liens. (a) Except as enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting the enforcement
of creditors’ rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law), the security
interests granted pursuant to this Agreement constitute a legal and valid
security interest in favor of the Agent, for the benefit of the Secured Parties,
securing the payment and performance of each Grantor’s Obligations and (i) upon
completion of the filings and other actions specified on Schedule 3 (all of
which, in the case of all filings and other documents referred to on said
Schedule, have been delivered to the Agent in duly completed and duly executed
form, as applicable, and may be filed by the Agent at any time) and payment of
all filing fees, will constitute fully perfected security interests in all of
the Collateral, and (ii) are prior to all other Liens on the Collateral except,
in the case of all Collateral other than Pledged Equity Interests, Permitted
Liens and, in the case of Pledged Equity Interests, non-consensual Permitted
Liens imposed by operation of law.

4.4 Name; Jurisdiction of Organization, Etc. On the date hereof, such Grantor’s
exact legal name (as indicated on the public record of such Grantor’s
jurisdiction of formation or organization), jurisdiction of organization,
organizational identification number, if any, and the location of such Grantor’s
chief executive office or sole place of business are specified on Schedule 4. On
the date hereof, each Grantor is organized solely under the law of the
jurisdiction so specified and has not filed any certificates of domestication,
transfer or continuance in any other jurisdiction. Except as specified on
Schedule 4, it has not changed its name, jurisdiction of organization, chief
executive office or sole place of business, if applicable, or its corporate
structure in any way (e.g., by merger, consolidation, change in corporate form
or otherwise) within the past five years and has not within the last five years
become bound (whether as a result of merger or otherwise) as grantor under a
security agreement entered into by another Person, which has not heretofore been
terminated. Unless otherwise stated on Schedule 4, such Grantor is not a
transmitting utility as defined in UCC § 9-102(a)(80).

 

18

--------------------------------------------------------------------------------

4.5 Inventory and Equipment. (a) On the date hereof, the Inventory and the
Equipment (other than Inventory and Equipment in transit) are kept at the
locations listed on Schedule 5. The provisions of this Section 4.5(a) shall not
apply to Equipment or Inventory that is in transit, that has been sold
(including sales on consignment or approval in the ordinary course of business),
that is out for repair, that is at other locations for purposes of onsite
maintenance or repair or to Equipment and Inventory at locations with less than
$1,000,000 in aggregate value

(b) Any Inventory now or hereafter produced by any Grantor included in the
Collateral has been and will be produced in compliance with the requirements of
the Fair Labor Standards Act, as amended.

(c) None of the Inventory or Equipment is in the possession of an issuer of a
negotiable document (as defined in Section 7-104 of the UCC) therefor or is
otherwise in the possession of any bailee or warehouseman.

4.6 Special Collateral; Excluded Collateral. None of the Collateral constitutes,
or is the Proceeds of, (1) Farm Products, (2) As-Extracted Collateral,
(3) Manufactured Homes, (4) Health-Care Insurance Receivables, (5) timber to be
cut, or (6) aircraft engines, satellites, ships or railroad rolling stock. No
material portion of the Collateral consists of Vehicles or other goods subject
to a certificate of title.

4.7 Investment Property. (a) Schedule 2 hereto sets forth under the headings
“Pledged Stock”, “Pledged LLC Interests” and “Pledged Partnership Interests”
respectively, all of the Pledged Stock, Pledged LLC Interests and Pledged
Partnership Interests owned by any Grantor and such Pledged Equity Interests
constitute the percentage of issued and outstanding shares of stock, percentage
of membership interests or percentage of partnership interests of the respective
issuers thereof indicated on such Schedule. Schedule 2 hereto sets forth under
the heading “Pledged Debt Securities” or “Pledged Notes” all of the Pledged Debt
Securities and Pledged Notes representing or evidencing Indebtedness from time
to time owed to any Grantor and all of such Pledged Debt Securities and Pledged
Notes, have been, in the case of those issued by Affiliates of such Grantor, or,
in the case of those issued by Persons that are not Affiliates of such Grantor,
to the knowledge of such Grantor have been, duly authorized, authenticated,
issued, and delivered and are the legal, valid and binding obligation of the
issuers thereof enforceable in accordance with their terms and are not in
default, and in the case of those issued by Affiliates of such Grantor,
constitute all of the issued and outstanding inter-company indebtedness owed
from Affiliates evidenced by an instrument or certificated security of the
respective issuers thereof owing to such Grantor. Schedule 2 hereto (as such
Schedule may be amended from time to time) sets forth under the headings
“Securities Accounts,” “Commodities Accounts,” and “Deposit Accounts”
respectively, all of the Securities Accounts, Commodities Accounts and Deposit
Accounts, in which each Grantor has an interest and in which such Grantor
customarily maintains cash or assets with a market value in excess of $50,000.
Each Grantor is the sole entitlement holder or customer of each such account,
and such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Agent pursuant hereto or as set forth on Schedule 2 hereto)
having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the
UCC) over, or any other interest in, any such Securities Account, Commodity
Account or Deposit Account or any securities, commodities or other property
credited thereto.

 

19

--------------------------------------------------------------------------------

(b) The Pledged Stock pledged by such Grantor hereunder constitute all of the
issued and outstanding shares of all classes of the Equity Interests of each
Issuer owned by such Grantor other than any such Equity Interests that are
Excluded Assets.

(c) All the shares of the Pledged Equity Interests have been duly and validly
issued and are fully paid and nonassessable. No Grantor is in default of its
obligations under any Organization Document of any Issuer of Pledged Equity
Interests.

(d) None of the Pledged LLC Interests or Pledged Partnership Interests are, or
represent interests in entities that are: (a) registered as investment
companies, (b) are dealt in or traded on securities exchanges or markets or
(c) have opted to be treated as securities under the Uniform Commercial Code of
any jurisdiction.

(e) No consent, approval or authorization of any Person is required for the
pledge by such Grantor of the Pledged Equity Interests pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by
such Grantor, whether under the Organization Documents of any Issuer of Pledged
Equity Interests or otherwise, except such as have been obtained and are in full
force and effect.

(f) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property and Deposit Accounts pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except, in the case of Pledged Equity Interests, non-consensual
Permitted Liens imposed by operation of law and, in the case of all other
Collateral, any Permitted Liens, and there are no outstanding warrants, options
or other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests.

4.8 Receivables. (a) No amount in excess of $500,000 individually or $1,000,000
in the aggregate payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Tangible Chattel Paper which has
not been delivered to the Agent or constitutes Electronic Chattel Paper that has
not been subjected to the control (within the meaning of Section 9-105 of the
UCC) of the Agent.

(b) Each Receivable (i) is and will be the legal, valid and binding obligation
of the Account Debtor in respect thereof, representing an unsatisfied obligation
of such Account Debtor, (ii) is and will be enforceable in accordance with its
terms, (iii) is not and will not be subject to any setoffs, defenses, taxes or
counterclaims (except with respect to refunds, returns and allowances in the
ordinary course of business with respect to damaged merchandise) and (iv) is and
will be in compliance with all applicable laws; provided, that with respect to
Receivables owed by an Account Debtor who is not an Affiliate of any Grantor
each of, the foregoing shall be to the best knowledge of such Grantor.

 

20

--------------------------------------------------------------------------------

4.9 Intellectual Property.

(a) Schedule 6 lists all of the following Intellectual Property, to the extent
owned by such Grantor: (i) issued Patents and pending Patent applications,
(ii) registered Trademarks and applications for the registration of Trademarks
and (iii) registered Copyrights, and applications to register Copyrights. All
such Intellectual Property is recorded in the name of such Grantor. Except as
set forth on Schedule 6, such Grantor is the sole and exclusive owner of the
entire right, title and interest in and to such Intellectual Property, as well
as any other Material Intellectual Property owned by such Grantor, in each case
free and clear of all Liens, except for Permitted Liens.

(b) Except as set forth on Schedule 6, all Material Intellectual Property of
such Grantor is subsisting and has not been adjudged invalid or unenforceable,
in whole or in part, nor, in the case of Patents, is any of such Patents the
subject of a reexamination proceeding, and each Material Intellectual Property
registration and application of such Grantor is unexpired and in full force and
effect.

(c) Except for those matters which both (i) are disclosed on Schedule 6 and
(ii) could not reasonably be expected to have a Material Adverse Effect, no
action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, alleging that such Grantor, or the conduct of such Grantor’s
business infringes, misappropriates, dilutes, or otherwise violates the
intellectual property rights of any other Person. Except as set forth on
Schedule 6, to the knowledge of such Grantor, no Person is engaging in any
activity that infringes, misappropriates, dilutes or violates any Material
Intellectual Property of such Grantor.

(d) Schedule 6 lists all exclusive inbound U.S. Copyright Licenses, Patent
Licenses, and Trademark Licenses held by such Grantor that constitute Material
Intellectual Property.

(e) [Reserved.]

(f) Such Grantor monitors the nature and quality of all products sold and all
services rendered by such Grantor under or in connection with all Trademarks
constituting Material Intellectual Property and has taken all commercially
reasonable action to cause all licensees of all such Trademarks to comply with
such Grantor’s standards of quality.

(g) To the extent expressly mandated by law, such Grantor has been using
appropriate statutory notice of registration in connection with its use of
registered Trademarks constituting Material Intellectual Property, and
appropriate notice of its trademark rights in common law Trademarks constituting
Material Intellectual Property, proper marking practices in connection with its
Patents constituting Material Intellectual Property, and appropriate notice of
copyright in connection with the publication of its Copyrights constituting
Material Intellectual Property.

(h) Such Grantor has been using appropriate statutory notice of registration in
connection with its use of registered Trademarks constituting Material
Intellectual Property, and

 

21

--------------------------------------------------------------------------------

appropriate notice of its trademark rights in common law Trademarks constituting
Material Intellectual Property, proper marking practices in connection with its
Patents constituting Material Intellectual Property, and appropriate notice of
copyright in connection with the publication of its Copyrights constituting
Material Intellectual Property.

(i) Such Grantor has not made a previous assignment, sale, transfer, exclusive
license, or similar arrangement constituting a present or future assignment,
sale, transfer, exclusive license or similar arrangement of any Material
Intellectual Property that has not been terminated or released.

(j) Except for those matters that are disclosed on Schedule 6, no holding,
decision, ruling, or judgment has been rendered in any action or proceeding
before any court or administrative authority challenging the validity,
enforceability, or scope of, or such Grantor’s right to register, own or use,
any Material Intellectual Property of such Grantor or such Grantor’s ownership
interest therein, and no such action or proceeding is pending or, to the best of
such Grantor’s knowledge, threatened.

(k) Except for those matters that are disclosed on Schedule 6, no settlements or
consents, covenants not to sue, coexistence agreements, non-assertion
assurances, or releases have been entered into by such Grantor or bind such
Grantor in any manner that impacts such Grantor’s rights to own, license or use
any Material Intellectual Property. The consummation of the transactions
contemplated by this Agreement will not result in the termination, suspension,
limitation or other impairment of any of such Grantor’s rights in its Material
Intellectual Property.

(l) Such Grantor has taken commercially reasonable steps to protect the
confidentiality of its Trade Secrets constituting Material Intellectual Property
in accordance with industry standards.

4.10 Letter of Credit Rights. No Grantor is a beneficiary or assignee under any
letter of credit with potential value in excess of $500,000 other than the
letters of credit described on Schedule 7 hereto, which Schedule shall be
promptly updated by the applicable Grantor from time to time to reflect any
additional letter of credit rights with potential value in excess of $500,000
obtained since such Schedule was last delivered.

4.11 Commercial Tort Claims. No Grantor has any commercial tort claims with a
potential value in excess of $500,000 other than those described on Schedule 8,
which Schedule shall be promptly updated by the Grantor and delivered to the
Agent from time to time to reflect any additional commercial tort claims with a
potential value in excess of $500,000 arising since such Schedule was last
delivered.

SECTION 5. COVENANTS

Each Grantor covenants and agrees with the Secured Parties that, from and after
the date of this Agreement until the Discharge of the Obligations:

5.1 [Reserved].

 

22

--------------------------------------------------------------------------------

5.2 Delivery and Control of Instruments, Chattel Paper, Negotiable Documents,
Investment Property and Deposit Accounts.

(a) If any amount in excess of $1,000,000 individually or in the aggregate
payable under or in connection with any of the Collateral is or shall become
evidenced or represented by any Instrument, Certificated Security, Negotiable
Document or Tangible Chattel Paper, such Instrument (other than checks received
in the ordinary course of business), Certificated Security, Negotiable Documents
or Tangible Chattel Paper shall be immediately delivered to the Agent, duly
endorsed in a manner satisfactory to the Agent, to be held as Collateral
pursuant to this Agreement.

(b) If any of the Collateral with a value in excess of $1,000,000 individually
or in the aggregate is or shall become “Electronic Chattel Paper” such Grantor
shall ensure that (i) a single authoritative copy exists which is unique,
identifiable, unalterable (except as provided in clauses (iii), (iv) and (v) of
this paragraph), (ii) such authoritative copy identifies the Agent as the
assignee and is communicated to and maintained by the Agent or its designee,
(iii) copies or revisions that add or change the assignee of the authoritative
copy can only be made with the participation of the Agent, (iv) each copy of the
authoritative copy and any copy of a copy is readily identifiable as a copy and
not the authoritative copy and (v) any revision of the authoritative copy is
readily identifiable as an authorized or unauthorized revision.

(c) If any of the Collateral is or shall become evidenced or represented by an
Uncertificated Security, such Grantor shall cause the Issuer thereof either
(i) to register the Agent as the registered owner of such Uncertificated
Security, upon original issue or registration of transfer, or (ii) so long as
such Issuer is not an Immaterial Subsidiary, to agree in writing with such
Grantor and the Agent that such Issuer will comply with instructions with
respect to such Uncertificated Security originated by the Agent without further
consent of such Grantor, such agreement to be in substantially the form of
Exhibit B or otherwise in form and substance reasonably satisfactory to the
Agent.

(d) Each Grantor shall maintain Securities Entitlements, Securities Accounts and
Deposit Accounts with a value in excess of $1,000,000, individually or in the
aggregate, only with financial institutions that have agreed to comply with
entitlement orders and instructions issued or originated by the Agent without
further consent of such Grantor, such agreement to be in form and substance
reasonably satisfactory to the Agent.

(e) If any of the Collateral with a value in excess of $1,000,000 individually
or in the aggregate is or shall become evidenced or represented by a Commodity
Contract, such Grantor shall cause the Commodity Intermediary with respect to
such Commodity Contract to agree in writing with such Grantor and the Agent that
such Commodity Intermediary will apply any value distributed on account of such
Commodity Contract as directed by the Agent without further consent of such
Grantor, such agreement to be in form and substance reasonably satisfactory to
the Agent.

(f) In addition to and not in lieu of the foregoing, if any Issuer of any
Investment Property is organized under the law of, or has its chief executive
office in, a

 

23

--------------------------------------------------------------------------------

jurisdiction outside of the United States, and such Issuer is not an Immaterial
Subsidiary, each Grantor shall take such additional actions, including, without
limitation, causing the Issuer to register the pledge on its books and records,
as may be necessary or advisable or as may be reasonably requested by the Agent,
under the laws of such jurisdiction to insure the validity, perfection and
priority of the security interest of the Agent.

5.3 Maintenance of Perfected Security Interest; Further Documentation. (a) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.

(b) Such Grantor will furnish to the Agent from time to time statements and
Schedules further identifying and describing the Collateral and such other
reports in connection with the assets and property of such Grantor as the Agent
may reasonably request, all in reasonable detail.

(c) At any time and from time to time, upon the written request of the Agent,
and at the sole expense of such Grantor, such Grantor will promptly and duly
authorize, execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, (i) the
filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) in the case of Investment Property,
Deposit Accounts and any other relevant Collateral, taking any actions necessary
to enable the Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto to the extent required thereunder,
including, without limitation, executing and delivering and causing the relevant
depositary bank or securities intermediary to execute and deliver a control
agreement in form and substance reasonably satisfactory to the Agent.

(d) In the event that a Grantor hereafter acquires any Collateral of a type
described in Section 4.6(a) hereof, it shall promptly notify the Agent in
writing and take such actions and execute such documents and make such filings
all at such Grantor’s expense as the Agent may reasonably request in order to
ensure that the Agent has a valid, perfected, first priority security interest
in such Collateral, subject, in the case of priority only, to any Permitted
Liens. Notwithstanding the foregoing, no Grantor shall be required to so notify
the Agent or to take any such action unless the Collateral is of a material
value or is material to such Grantor’s business.

5.4 Changes in Locations, Name, Jurisdiction of Incorporation, etc. Such Grantor
will not, except upon 10 days’ prior written notice to the Agent (or such
shorter notice period as shall be reasonably satisfactory to the Agent) and
delivery to the Agent of duly authorized and, where required, executed copies of
all additional financing statements and other documents reasonably requested by
the Agent to maintain the validity, perfection and priority of the security
interests provided for herein without limiting the prohibitions on mergers
involving the Grantors contained in the Credit Agreement, change its legal name,
jurisdiction of

 

24

--------------------------------------------------------------------------------

organization or, in the case of a Grantor that is not a registered organization
organized under the law of a state of the United States, the location of its
chief executive office or sole place of business (if applicable) from that
referred to in Section 4.4.

5.5 Notices. Such Grantor will advise the Agent promptly, in reasonable detail,
of:

(a) any Lien (other than any Permitted Lien) on any of the Collateral which
would adversely affect the ability of the Agent to exercise any of its remedies
hereunder; and

(b) the occurrence of any other event which could reasonably be expected to have
a material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

5.6 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any stock or other ownership certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the capital stock or other Pledged Equity Interest of any Issuer,
whether in addition to, in substitution of, as a conversion of, or in exchange
for, any shares of or other ownership interests in the Pledged Equity Interests,
or otherwise in respect thereof, such Grantor shall accept the same as the agent
of the Secured Parties, hold the same in trust for the Secured Parties and
deliver the same forthwith to the Agent in the exact form received, duly
endorsed by such Grantor to the Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Agent so requests, signature guaranteed, to be held by the Agent,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Equity Interests
upon the liquidation or dissolution of any Issuer shall be paid over to the
Agent to be held by it hereunder as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on or in
respect of the Pledged Equity Interests or any property shall be distributed
upon or with respect to the Pledged Equity Interests pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Agent, be delivered to
the Agent to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Pledged Equity Interests shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Agent, hold such
money or property in trust for the Secured Parties, segregated from other funds
of such Grantor, as additional collateral security for the Obligations.

(b) Without the prior written consent of the Agent (not to be unreasonably
withheld), such Grantor will not (i) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof or any interest
therein or (ii) without the prior written consent of the Agent (not to be
unreasonably withheld), cause or permit any Issuer of any Pledged Partnership
Interests or Pledged LLC Interests which are not securities (for purposes of the
UCC) to elect or

 

25

--------------------------------------------------------------------------------

otherwise take any action to cause such Pledged Partnership Interests or Pledged
LLC Interests to be treated as securities for purposes of the UCC; provided,
however, that, notwithstanding the foregoing, if any Issuer of any Pledged
Partnership Interests or Pledged LLC Interests takes any such action in
violation of the foregoing in this clause (vii), such Grantor shall promptly
notify the Agent in writing of any such election or action and, in such event,
shall use commercially reasonable efforts to take steps necessary or advisable
to establish the Agent’s “control” thereof.

(c) Each Grantor which is an Issuer, agrees that (i) it will be bound by the
terms of this Agreement relating to the Pledged Equity Interests issued by it
and will comply with such terms insofar as such terms are applicable to it,
(ii) it will notify the Agent promptly in writing of the occurrence of any of
the events described in Section 5.6(a) with respect to the Pledged Equity
Interests issued by it and (iii) the terms of Sections 5.7(c) and 6.6 shall
apply to it, mutatis mutandis, with respect to all actions that may be required
of it pursuant to Section 5.7(c) or 6.6 with respect to the Pledged Equity
Interests issued by it.

(d) In addition, each Grantor which is an Issuer or an owner of any Pledged
Equity Interests or a partner, shareholder or member, as the case may be, in a
partnership, limited liability company or other entity, in each case, hereby
consents to the grant by each other Grantor of the security interest hereunder
in favor of the Agent and to the transfer of any Pledged Equity Interest
(including Pledged Equity Interests in a partnership, limited liability company
or other entity) to the Agent or its nominee following an Event of Default and
to the substitution of the Agent or its nominee as a partner, member or
shareholder or other equity holder of the Issuer of the related Pledged Equity
Interest or as a substituted partner, shareholder or member in such partnership,
limited liability company or other entity with all the rights, powers and duties
of a general partner, limited partner, shareholder or member, as applicable.

(e) With respect to any Equity Interests required to be pledged hereunder in any
Domestic Subsidiary that is organized as a limited liability company or limited
partnership and pledged hereunder, either (i) such Equity Interests shall be
represented by a certificate and the applicable Grantor shall cause the Issuer
of such Equity Interests to elect to treat such Equity Interests as a “security”
within the meaning of Article 8 of the Uniform Commercial Code of the
jurisdiction of organization or formation, as applicable, of such Issuer by
including in its Organization Documents language substantially similar to the
provisions set forth in Exhibit A hereto or (ii) the applicable Grantor shall
cause the Issuer of such Equity Interests not to elect to have such Equity
Interests treated as a “security” within the meaning of Article 8 of the Uniform
Commercial Code of the jurisdiction of organization or formation, as applicable,
of such Issuer.

5.7 Voting and Other Rights with Respect to Pledged Securities. (a) Unless an
Event of Default shall have occurred and be continuing and the Agent shall have
given notice to the relevant Grantor of the Agent’s intent to exercise its
corresponding rights pursuant to Section 5.7(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Equity Interests
and all payments made in respect of the Pledged Notes or Pledged Debt
Securities, in each case paid in the normal course of business of the relevant
Issuer, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Equity Interests;
provided, however, that no vote shall be cast or corporate or other ownership
right exercised or other action taken which would materially and adversely
impair the Collateral or which would result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.

 

26

--------------------------------------------------------------------------------

(b) If an Event of Default shall occur and be continuing and the Agent shall
give notice of its intent to exercise such rights to the relevant Grantor or
Grantors: (i) all rights of each Grantor to exercise or refrain from exercising
the voting and other consensual rights which it would otherwise be entitled to
exercise pursuant hereto shall cease and all such rights shall thereupon become
vested in the Agent who shall thereupon have the sole right, but shall be under
no obligation, to exercise or refrain from exercising such voting and other
consensual rights and (ii) the Agent shall have the right, without notice to any
Grantor, to transfer all or any portion of the Pledged Equity Interests to its
name or the name of its nominee or agent. In addition, the Agent shall have the
right at any time, without notice to any Grantor, to exchange any certificates
or instruments representing any Pledged Equity Interests for certificates or
instruments of smaller or larger denominations. In order to permit the Agent to
exercise the voting and other consensual rights which it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder each Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the Agent all
proxies, dividend payment orders and other instruments as the Agent may from
time to time reasonably request and each Grantor acknowledges that the Agent may
utilize the power of attorney set forth herein.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Equity Interest pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Equity Interests directly to the Agent.

5.8 Receivables. (a) Other than in the ordinary course of business consistent
with its past practice, such Grantor will not (i) grant any extension of the
time of payment of any Receivable required to be included in the Collateral,
(ii) compromise or settle any Receivable required to be included in the
Collateral for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable required to be
included in the Collateral, (iv) allow any credit or discount whatsoever on any
Receivable required to be included in the Collateral or (v) amend, supplement or
modify any Receivable required to be included in the Collateral in any manner
that could adversely affect the value thereof.

(b) Such Grantor will deliver to the Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.

(c) Other than in the ordinary course of business consistent with its past
practice, each Grantor shall perform and comply in all material respects with
all of its obligations with respect to the Receivables.

 

27

--------------------------------------------------------------------------------

5.9 Intellectual Property. (a) Such Grantor (either itself or through licensees)
will not, without the prior written consent of the Agent, discontinue use of any
Material Intellectual Property, or do any act or omit to do any act whereby any
Material Intellectual Property may lapse, become abandoned, cancelled, dedicated
to the public, forfeited, or otherwise impaired, or abandon any application or
any right to file an application for a Copyright, Patent, or Trademark
constituting Material Intellectual Property.

(b) Such Grantor shall take all commercially reasonable steps, including in any
proceeding before the United States Patent and Trademark Office or the United
States Copyright Office, to pursue any application and maintain any registration
or issuance of each Trademark, Patent, and Copyright owned by or exclusively
licensed to such Grantor and constituting Material Intellectual Property,
including, but not limited to, those applications and registrations listed on
Schedule 6.

(c) Such Grantor agrees that, (i) should it obtain an ownership interest in any
item of Intellectual Property which is not now a part of the Collateral,
(ii) should it obtain an exclusive license to any registered Copyright which is
not now a part of the Collateral, (iii) should it (either by itself or through
any agent, employee, licensee, or designee) file any application for the
registration or issuance of any Intellectual Property with the United States
Patent and Trademark Office, the United States Copyright Office, or any similar
office or agency in any other country or in any political subdivision of any of
the foregoing, or (iv) should it file a Statement of Use or an Amendment to
Allege Use with respect to any “intent-to-use” Trademark application
(collectively, the “After-Acquired Intellectual Property”), then the provisions
of Section 3 shall automatically apply thereto, and any such After-Acquired
Intellectual Property shall automatically become part of the Collateral, and it
shall give prompt (and, in any event within fifteen Business Days after the last
day of the fiscal quarter of the Borrower in which such Grantor acquires such
ownership interest) written notice thereof to the Agent in accordance herewith,
and it shall provide the Agent promptly (and, in any event within fifteen
Business Days after the last day of the fiscal quarter of the Borrower in which
such Grantor acquires such ownership interest) with an amended Schedule 6 hereto
and promptly take the actions specified in 5.19(d) with respect thereto.

(d) Such Grantor agrees to execute Intellectual Property Security Agreements
with respect to any United States issued Patents and Patent applications, any
United States registered Trademarks and applications for the registration of
Trademarks, any United States registered Copyrights and applications to register
Copyrights, and any Copyright Licenses that grant to such Grantor any exclusive
right in or to any United States registered Copyright (collectively, “Perfected
IP”), in each case, included in the Collateral as of the date hereof, as well as
any Perfected IP constituting After-Acquired Intellectual Property, in
substantially the form of Exhibits C-1, C-2, and C-3 in order to record the
security interest granted herein to the Agent for the benefit of the Secured
Parties with the United States Patent and Trademark Office and the United States
Copyright Office, and such Grantor shall promptly execute and deliver, and have
recorded, any and all other agreements, instruments, documents, and papers as
the Agent may reasonably request to evidence the Secured Parties’ security
interest in any such Intellectual Property with any other applicable offices,
agencies, or Governmental Authorities within the United States.

 

28

--------------------------------------------------------------------------------

(e) [Reserved.]

(f) Such Grantor shall promptly notify the Agent if it knows or has reason to
know that any item of Material Intellectual Property may become (i) abandoned or
dedicated to the public or placed in the public domain, (ii) invalid or
unenforceable or (iii) subject to any adverse determination or development
regarding such Grantor’s ownership, registration or use or the validity or
enforceability of such item of Intellectual Property (including the institution
of, or any adverse development with respect to, any action or proceeding in the
United States Patent and Trademark Office, the United States Copyright Office,
any state registry, any foreign counterpart of the foregoing, or any court other
than non-final office actions before the United States Patent and Trademark
Office or the United States Copyright Office in connection with the prosecution
of an application for registration).

(g) To the extent expressly mandated by law, such Grantor (itself and through
licensees) will use proper notice of its Intellectual Property rights in
connection with the use of any of its Material Intellectual Property.

(h) In the event that any Person initiates, or threatens in writing to initiate,
any action or proceeding alleging that such Grantor, or the conduct of such
Grantor’s business, infringes, misappropriates, dilutes, or otherwise violates
the intellectual property of any other Person, and such action or proceeding
could reasonably be expected to have a Material Adverse Effect, such Grantor
shall promptly notify the Agent after it learns thereof.

(i) In the event that any Material Intellectual Property owned by any Grantor is
infringed, misappropriated, diluted or otherwise violated by another Person,
such Grantor shall (i) promptly take all reasonable actions in such Grantor’s
reasonable business judgment to stop such infringement, misappropriation,
dilution or other violation and protect its rights in such Material Intellectual
Property including, but not limited to, the initiation of a suit for injunctive
relief and to recover damages, and (ii) promptly notify the Agent after it
learns thereof.

(j) Such Grantor shall take all commercially reasonable steps to protect the
secrecy of all Trade Secrets constituting Material Intellectual Property,
including, without limitation, entering into confidentiality agreements with
employees and consultants and labeling and restricting access to secret
information and documents.

5.10 Government Receivables. Within 60 days after the Closing Date (or such
longer time period as the Agent may agree in its sole discretion), with respect
to any Receivables relating to Material Government Contracts in effect as of the
Closing Date after giving effect to the Transactions, the validity, perfection
or enforcement of the security interest of the Agent therein is subject to the
Federal Assignment of Claims Act, 31 U.S.C. 3727, the Federal Assignment of
Contracts Act, 41 U.S.C. 15 or any similar state or foreign statute, each
Grantor shall deliver to the Agent all documentation necessary or desirable to
ensure the validity, perfection and enforcement of the security interest of the
Agent therein, including, without limitation, executed notices to the applicable
Governmental Authority of the security interest of the Agent therein. Together
with the delivery of each Compliance Certificate pursuant to Section 6.02(b) of
the Credit Agreement, each Grantor shall notify the Agent in writing of the

 

29

--------------------------------------------------------------------------------

entering into of any new Material Government Contract during the relevant period
(and shall provide a written summary of each such new Material Government
Contract in a form reasonably satisfactory to the Agent) and with respect to any
Receivables relating to such new Material Government Contracts, the validity,
perfection or enforcement of the security interest of the Agent therein is
subject to the Federal Assignment of Claims Act, 31 U.S.C. 3727, the Federal
Assignment of Contracts Act, 41 U.S.C. 15 or any similar state or foreign
statute, each Grantor shall, at the time of the delivery of the notice to the
Agent of the entering into of such new Material Government Contracts, deliver to
the Agent all documentation necessary or desirable to ensure the validity,
perfection and enforcement of the security interest of the Agent therein,
including, without limitation, executed notices to the applicable Governmental
Authority of the security interest of the Agent therein. At the reasonable
request of the Agent, with respect to any Receivables relating to Government
Contracts that are not Material Government Contracts, the validity, perfection
or enforcement of the security interest of the Agent therein is subject to the
Federal Assignment of Claims Act, 31 U.S.C. 3727, the Federal Assignment of
Contracts Act, 41 U.S.C. 15 or any similar state or foreign statute, each
Grantor shall deliver to the Agent all documentation necessary or desirable to
ensure the validity, perfection and enforcement of the security interest of the
Agent therein, including, without limitation, executed notices to the applicable
Governmental Authority of the security interest of the Agent therein. With
respect to any Receivables relating to Government Contracts, the validity,
perfection or enforcement of the security interest of the Agent therein is
subject to the Federal Assignment of Claims Act, 31 U.S.C. 3727, the Federal
Assignment of Contracts Act, 41 U.S.C. 15 or any similar state or foreign
statute, at the reasonable request of the Agent or upon the occurrence and
during the continuance of an Event of Default, each Grantor shall (and each
Grantor authorizes the Agent to take all such steps) take all steps necessary or
desirable to ensure the validity, perfection and enforcement of the security
interest of the Agent therein, including, without limitation, the giving of
notice to the applicable Governmental Authority of the security interest of the
Agent therein, the filing of an original of and true copies of this Agreement
with the appropriate governmental offices and any sureties as required by
applicable law and regulations and the obtaining of the consent of the
applicable Governmental Authority to the assignment of payments thereunder to
the Agent. Unless the Agent otherwise agrees in its sole discretion, commencing
on the 60th day after the Closing Date (or such later date as the Agent may
agree in its sole discretion), each Grantor shall cause all collections of,
payments of and other Proceeds of Receivables relating to Government Contracts
to be deposited in and held in Securities Accounts or Deposit Accounts subject
to control agreements reasonably satisfactory to the Agent; provided that
collections of, payments of and other Proceeds of Receivables relating to
Government Contracts entered into prior to the Closing Date may be deposited in
the Borrower’s account number 0005138684212 located at BB&T Bank or the
Borrower’s account number 15374386 located at Citibank, N.A., if consistent,
including with respect to the amount and type of such collections, payments or
Proceeds, with the past practice of the Borrower, which such accounts the Agent
acknowledges are not and will not be subject to control agreements unless
otherwise required by Section 5.2; provided further that if the outstanding
balance held in the Borrower’s account number 0005138684212 located at BB&T Bank
or the Borrower’s account number 15374386 located at Citibank, N.A. exceeds
$50,000, the Borrower shall promptly cause such outstanding balance to be
transferred to a Securities Account or Deposit Account subject to a control
agreement reasonably satisfactory to the Agent. Notwithstanding anything to the

 

30

--------------------------------------------------------------------------------

contrary contained herein, if any contract with any applicable Governmental
Authority requires consent by or on behalf of such applicable Governmental
Authority in order for any such Receivable to be included in the Collateral or
for the Secured Parties to perfect their security interest thereon and/or obtain
the full benefits of such security interest, such Grantor shall only be required
to exercise commercially reasonably efforts to obtain such consent (and if such
consent cannot be obtained after the exercise of such commercially reasonable
efforts, no Grantor shall be in breach hereof).

5.11 Perfection. Notwithstanding anything to the contrary herein, no Grantor
shall be required to perfect the security interests granted by this Agreement
(including security interests in cash, Deposit Accounts, Securities
Entitlements, Negotiable Documents, Securities Accounts, Commodity Contracts,
Supporting Obligations, Letter of Credit Rights and Investment Property included
in the Collateral) by any means other than by (i) filings pursuant to the UCC of
the relevant State(s) or the District of Columbia or in the case of any Grantor
not organized under the laws of the United States, the District of Columbia,
(ii) filings in the United States Patent and Trademark Office or the United
States Copyright Office, or successor office, that are necessary or advisable
for the purpose of perfecting, confirming, enforcing, or protecting the security
interests granted in certain Intellectual Property, (iii) entering into control
agreements with respect to any Securities Entitlements, Securities Accounts and
Deposit Accounts as required by Section 5.2(d), (iv) delivery to the
Administrative Agent (or its bailee) to be held in its possession in the United
States of all Collateral consisting of (A) each certificate representing any
Pledged Equity Interests, together with an undated stock (or analagous) power,
in form and substance reasonably satisfactory to the Agent, covering such
certificate duly executed in blank and (B) Instruments (other than checks
received in the ordinary course of business), Certificated Securities,
Negotiable Documents and Tangible Chattel Paper as required by Section 5.2(a),
(v) taking the actions required by Section 5.2(c) with respect to Uncertificated
Securities, (vi) complying with the requirements of Section 5.2(e) with respect
to Commodity Contracts, (vii) complying with the requirements of Section 5.10
and (viii) such means as are expressly contemplated by this Agreement
(including, without limitation, Sections 4.10, 4.11 and 5.2(f).

SECTION 6. REMEDIAL PROVISIONS

6.1 Certain Matters Relating to Receivables. (a) The Agent shall have the right
annually (or, if an Event of Default has occurred and is continuing, at any
time) to make test verifications of the Receivables in any manner and through
any medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Agent may require in
connection with such test verifications. Annually (or, if an Event of Default
has occurred and is continuing, at any time), upon the Agent’s request and at
the expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Agent to furnish to the Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Receivables.

(b) The Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables and each Grantor hereby agrees to continue to collect all amounts
due or to become due to such Grantor under the Receivables and any Supporting
Obligation and diligently exercise each material right it may have under any
Receivable and any Supporting Obligation, in each

 

31

--------------------------------------------------------------------------------

case, at its own expense consistent with its reasonable business judgment;
provided, however, that the Agent may curtail or terminate said authority at any
time after the occurrence and during the continuance of an Event of Default. If
required by the Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) be deposited by such Grantor in the exact form received, duly endorsed by
such Grantor to the Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Agent, subject to withdrawal by the Agent
for the account of the Secured Parties only as provided in Section 6.4, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Secured Parties, segregated from other funds of such Grantor. Each such deposit
of Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.

(c) If an Event of Default has occurred and is continuing, at the Agent’s
request, each Grantor shall deliver to the Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.

6.2 Communications with Obligors; Grantors Remain Liable. (a) The Agent in its
own name or in the name of others may at any time after the occurrence and
during the continuance of an Event of Default communicate with obligors under
the Receivables to verify with them to the Agent’s satisfaction the existence,
amount and terms of any Receivables.

(b) After the occurrence and during the continuance of an Event of Default, the
Agent may at any time notify, or require any Grantor to so notify, the Account
Debtor or counterparty on any Receivable of the security interest of the Agent
therein. In addition, after the occurrence and during the continuance of an
Event of Default, the Agent may upon written notice to the applicable Grantor,
notify, or require any Grantor to notify, the Account Debtor or counterparty to
make all payments under the Receivable directly to the Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. No Secured Party shall have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by any
Secured Party of any payment relating thereto, nor shall any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

6.3 Proceeds to be Turned Over To Agent. In addition to the rights of the
Secured Parties specified in Section 6.1 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash,

 

32

--------------------------------------------------------------------------------

Cash Equivalents, checks and other near-cash items shall be held by such Grantor
in trust for the Secured Parties, segregated from other funds of such Grantor,
and shall, forthwith upon receipt by such Grantor, be turned over to the Agent
in the exact form received by such Grantor (duly endorsed by such Grantor to the
Agent, if required). All Proceeds received by the Agent hereunder shall be held
by the Agent in a Collateral Account maintained under its sole dominion and
control. All Proceeds while held by the Agent in a Collateral Account (or by
such Grantor in trust for the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.4.

6.4 Application of Proceeds. At such intervals as may be agreed upon by the
Borrower and the Agent (acting with the consent of the Controlling Parties), or,
if an Event of Default shall have occurred and be continuing, at any time at the
Agent’s election, the Agent may (and, if directed by the Controlling Parties,
shall), notwithstanding the provisions of Section 2.05 of the Credit Agreement,
apply all or any part of the Collateral and/or net Proceeds thereof (after
deducting fees and expenses as provided in Section 6.5) realized through the
exercise by the Agent of its remedies hereunder, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2, in
payment of the Obligations. The Agent shall apply any such Collateral or
Proceeds thereof to be applied in the order specified in Section 8.03 of the
Credit Agreement. In addition, with respect to any proceeds of Insurance
received by the Agent, (x) if no Event of Default shall have occurred and be
continuing, (i) such Insurance Proceeds shall be returned to the Grantors if
permitted or required by the Credit Agreement or (ii) if not so permitted or
required by the Credit Agreement, then such Insurance Proceeds shall be applied
in accordance with this Section 6.4 and (y) if an Event of Default shall have
occurred and be continuing, then such Insurance Proceeds shall be applied in
accordance with this Section 6.4.

6.5 UCC and Other Remedies. (a) If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC (whether
or not the UCC applies to the affected Collateral) and its rights under any
other applicable law or in equity. Without limiting the generality of the
foregoing, if an Event of Default shall occur and be continuing, the Agent,
without demand of performance or other demand, defense, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, presentments, protests, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, license, assign, give option or options to purchase, or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of any Secured Party, on the internet or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent may store, repair or recondition any
Collateral or otherwise prepare any Collateral for disposal in the manner and to
the extent that the Agent deems appropriate. Each Secured Party shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such

 

33

--------------------------------------------------------------------------------

private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. For purposes of bidding and making
settlement or payment of the purchase price for all or a portion of the
Collateral sold at any such sale made in accordance with the UCC, the Agent
shall be entitled to use and apply any of the Obligations, on a pro rata basis,
as a credit on account of the purchase price for any Collateral payable by the
Agent at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days’ notice to such Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. The Agent may sell the
Collateral without giving any warranties as to the Collateral. The Agent may
specifically disclaim or modify any warranties of title or the like. The
foregoing will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. Each Grantor agrees that it would
not be commercially unreasonable for the Agent to dispose of the Collateral or
any portion thereof by using Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets. Each Grantor
hereby waives any claims against the Agent arising by reason of the fact that
the price at which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even if the
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree. Each Grantor further agrees, at the Agent’s request, to
assemble the Collateral and make it available to the Agent at places which the
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Agent shall have the right to enter onto the property where any Collateral
is located without any obligation to pay rent and take possession thereof with
or without judicial process. The Agent shall have no obligation to marshal any
of the Collateral.

(b) The Agent shall deduct from such Proceeds all reasonable out-of-pocket costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements. Any net Proceeds
remaining after such deductions shall be applied or retained by the Agent in
accordance with Section 6.4. Only after such application and after the payment
by the Agent of any other amount required by any provision of law, including,
without limitation, Section 9-615(a) of the UCC, need the Agent account for the
surplus, if any, to any Grantor. If the Agent sells any of the Collateral upon
credit, the Grantor will be credited only with payments actually made by the
purchaser and received by the Agent and applied to indebtedness of the purchaser
in connection with such credit. In the event the purchaser fails to pay for the
Collateral, the Agent may resell the Collateral and the applicable Grantor shall
be credited with proceeds of the sale subject, to the previous sentence. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against any Secured Party arising out of the exercise by
it or them of any rights hereunder.

 

34

--------------------------------------------------------------------------------

(c) If an Event of Default shall occur and be continuing, in the event of any
Disposition of any of the Intellectual Property, the goodwill of the business
connected with and symbolized by any Trademarks subject to such Disposition
shall be included, and the applicable Grantor shall supply the Agent or its
designee with such Grantor’s know-how and expertise, and with documents and
things embodying the same, relating to the exploitation of such Intellectual
Property, including the manufacture, distribution, advertising and sale of
products or the provision of services under such Intellectual Property, and such
Grantor’s customer lists and other records and documents relating to such
Intellectual Property and to the manufacture, distribution, advertising and sale
of such products and services.

(d) For the purpose of enabling Agent to exercise rights and remedies under this
Section 6.5 (including in order to take possession of, collect, receive,
assemble, process, appropriate, remove, realize upon, sell, assign, license out,
convey, transfer or grant options to purchase any Collateral) at such time as
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to Agent, for the benefit of the Secured Parties, the
following rights that may be exercised by the Agent upon the occurrence of and
during the continuation of an Event of Default: (i) an irrevocable, nonexclusive
and assignable license (exercisable without payment of royalty or other
compensation to such Grantor), subject, in the case of Trademarks, to sufficient
rights to quality control and inspection in favor of such Grantor to avoid the
risk of invalidation of such Trademarks, to use, practice, license, sublicense,
and otherwise exploit any and all Intellectual Property now owned or held or
hereafter acquired or held by such Grantor (which license shall include access
to all media in which any of the licensed items may be recorded or stored and to
all software and programs used for the compilation or printout thereof to the
extent permitted by the terms of applicable licenses) and (ii) an irrevocable
license (without payment of rent or other compensation to such Grantor) to use,
operate and occupy all real property owned, operated, leased, subleased, or
otherwise occupied by such Grantor.

6.6 Effect of Securities Laws. (a) Each Grantor recognizes that the Agent may be
unable to effect a public sale of any or all the Pledged Equity Interests or the
Pledged Debt Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Agent shall be under no obligation to delay a sale of any
of the Pledged Equity Interests or the Pledged Debt Securities for the period of
time necessary to permit the Issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if such Issuer would agree to do so.

 

35

--------------------------------------------------------------------------------

(b) Each Grantor agrees to use its best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Equity Interests or the Pledged Debt Securities pursuant
to this Section 6.6 valid and binding and in compliance with any and all other
applicable Requirements of Law. Each Grantor further agrees that a breach of any
of the covenants contained in this Section 6.6 will cause irreparable injury to
the Secured Parties, that the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.6 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred or a defense of payment.

6.7 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
any Secured Party to collect such deficiency.

SECTION 7. POWER OF ATTORNEY AND FURTHER ASSURANCES

7.1 Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby
irrevocably constitutes and appoints the Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such Grantor and
in the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable required to be
included in the Collateral hereunder or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect to
any other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the Agent
may request to evidence the Secured Parties’ security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or purchase any insurance called for by the
terms of the Loan Documents and pay all or any part of the premiums therefor and
the costs thereof;

 

36

--------------------------------------------------------------------------------

(iv) execute, in connection with any sale provided for in Section 6.5 or 6.6,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral;

(v) (1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Agent or as the Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Collateral;
(3) sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Agent may deem appropriate; (7) assign any Copyright, Patent or
Trademark owned by such Grantor (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the Agent
shall in its reasonable discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Agent were the absolute owner
thereof for all purposes, and do, at the Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the Agent
reasonably deems necessary to protect, preserve or realize upon the Collateral
and the Secured Parties’ security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do; and

(vi) execute, in the name of such Grantor, any and all documents necessary to
comply with Section 5.10 hereof;

provided, however, that nothing herein contained shall be construed as requiring
or obligating the Agent or any other Secured Party to make any commitment or to
make any inquiry as to the nature or sufficiency of any payment received by the
Agent or any other Secured Party, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby,
and no action taken or omitted to be taken by the Agent or any other Secured
Party with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of any Grantor or to any claim or
action against the Agent or any other Secured Party. It is understood and agreed
that the appointment of the Agent as the agent and attorney-in-fact of the
Grantors for the purposes set forth above is coupled with an interest and is
irrevocable. The provisions of this Section shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Loan Document
with respect to the Collateral or any part thereof or impose any obligation on
the Agent or any other Secured Party to proceed in any particular manner with
respect to the Collateral or any part thereof, or in any way limit the exercise
by the

 

37

--------------------------------------------------------------------------------

Agent or any other Secured Party of any other or further right which it may have
on the date of this Agreement or hereafter, whether hereunder, under any other
Loan Document, by law or otherwise.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Agent
agrees that, except as provided in Section 7.1(b), it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement; provided, however, that unless an Event of Default has occurred and
is continuing or time is of the essence, the Agent shall not exercise this power
without first making demand on the Grantor and the Grantor failing to promptly
comply therewith.

(c) The reasonable out-of-pocket expenses of the Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Credit Loans that are Base Rate Loans
under the Credit Agreement, from the date of payment by the Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

7.2 Authorization of Financing Statements. Each Grantor acknowledges that
pursuant to Section 9-509(b) of the UCC and any other applicable law, the Agent
is authorized to file or record financing or continuation statements, and
amendments thereto, and other filing or recording documents or instruments with
respect to the Collateral in such form and in such offices as the Agent
reasonably determines appropriate to perfect or maintain the perfection of the
security interests of the Agent under this Agreement to the extent provided
herein. Each Grantor agrees that such financing statements may describe the
collateral in the same manner as described in the Collateral Documents or as
“all assets” or “all personal property” of such Grantor, whether now owned or
hereafter existing or acquired by such Grantor or such other description as the
Agent, in its sole judgment, determines is necessary or advisable. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.

7.3 Further Assurances. Each Grantor agrees that from time to time, at the
expense of such Grantor, it shall promptly execute and deliver all further
instruments and documents and take all further action that may be necessary or
desirable or that the Agent may reasonably request in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of any
Collateral. Without limiting the generality of the foregoing, each Grantor
shall:

(i) file such financing or continuation statements, or amendments thereto,
record security interests in Intellectual Property and execute and deliver such
other agreements, instruments, endorsements, powers of attorney or notices, as
may be necessary or desirable, or as the Agent may reasonably request, in order
to effect, reflect, perfect and preserve the security interests granted or
purported to be granted hereby;

 

38

--------------------------------------------------------------------------------

(ii) take all actions necessary to ensure the recordation of appropriate
evidence of the liens and security interest granted hereunder in any United
States Intellectual Property with any intellectual property registry in which
said Intellectual Property is registered or issued or in which an application
for registration or issuance is pending, including, without limitation, the
United States Patent and Trademark Office, the United States Copyright Office
and the various Secretaries of State. For the avoidance of doubt, no Grantor
shall be required to take any action in order to perfect a security interest in
Foreign Intellectual Property owned by such Grantor;

(iii) annually (or, if an Event of Default has occurred and is continuing, at
any reasonable time), upon request by the Agent, assemble the Collateral and
allow inspection of the Collateral by the Agent or persons designated by the
Agent;

(iv) at the Agent’s reasonable request, appear in and defend any action or
proceeding that may affect such Grantor’s title to or the Agent’s interest in
all or any part of the Collateral; and

(v) furnish the Agent with such information regarding the Collateral, including,
without limitation, the location thereof, as the Agent may reasonably request
from time to time.

SECTION 8. THE AGENT

8.1 Authority of Agent. (a) Each Grantor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
other Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Grantors, the Agent shall be conclusively presumed
to be acting as agent for the Secured Parties with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

(b) The Agent has been appointed to act as Agent hereunder by the Lenders and,
by their acceptance of the benefits hereof, the other Secured Parties. The Agent
shall be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or

 

39

--------------------------------------------------------------------------------

refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Credit Agreement;
provided, that the Agent shall, after the termination of all Commitments, the
expiration or termination of all Letters of Credit (other than Letters of Credit
as to which arrangements satisfactory to the Administrative Agent and the L/C
Issuer shall have been made) and the payment in full of all Obligations (other
than contingent indemnification obligations as to which no claim has been
asserted) under the Credit Agreement and the other Loan Documents (the
“Discharge of Credit Agreement Obligations”), exercise, or refrain from
exercising, any remedies provided for herein and otherwise act in accordance
with the instructions of the holders of a majority (the “Majority Holders”) of
the sum of (x) the aggregate settlement or termination amount (exclusive of
expenses and similar payments but including any early termination payments then
due) under all Secured Hedge Agreements and (y) all amounts payable under
Secured Cash Management Agreements (exclusive of expenses and similar payments).
For purposes of the foregoing sentence, the settlement or termination value for
any hedge that has not been terminated or closed out at the time of the relevant
determination shall be a termination, close-out unwind or equivalent value as
calculated by the appropriate swap counterparties and reported to the Agent upon
request or, if any such counterparty does not provide such calculation, such
value as shall be determined by the Agent in its sole discretion; provided, that
any Secured Hedge Agreement with a termination or close-out amount that is a
negative number shall be disregarded for purposes of determining the Majority
Holders. In furtherance of the foregoing provisions of this Section 8.1, each
Secured Party, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Agent for the benefit of the Secured
Parties in accordance with the terms of this Section 8.1. The provisions of the
Credit Agreement relating to the Agent, including, without limitation, the
provisions relating to resignation or removal of the Agent and the powers and
duties and immunities of the Agent, are incorporated herein by this reference
and shall survive any termination of the Credit Agreement. Each Secured Party
authorizes the Agent to credit bid all or any part of the Obligations held by
it.

8.2 Duty of Agent. The Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the UCC or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar property for its own account. Neither
Agent nor any other Secured Party nor any of their respective officers,
directors, partners, employees, agents, attorneys or other advisors,
attorneys-in-fact or affiliates shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Secured Parties hereunder are solely to protect the Secured
Parties’ interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except to the extent that any

 

40

--------------------------------------------------------------------------------

such act or failure to act is found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted solely and proximately from
their own gross negligence or willful misconduct in breach of a duty owed to
such Grantor.

8.3 Exculpation of the Agent. ii. The Agent shall not be responsible to any
Secured Party for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency hereof or of any Collateral
Document or the validity or perfection of any security interest or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
the Agent to the Secured Parties or by or on behalf of any Secured Party to the
Agent or any Secured Party in connection with the Collateral Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Loan Party or any other Person liable for the payment of any
Obligations, nor shall the Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Collateral Documents or as to the
existence or possible existence of any Event of Default or Default or to make
any disclosures with respect to the foregoing.

(a) Neither the Agent nor any of its officers, partners, directors, employees or
agents shall be liable to the Secured Parties for any action taken or omitted by
the Agent under or in connection with any of the Collateral Documents, except to
the extent that any such act or failure to act is found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from their own gross negligence or willful misconduct in
breach of a duty owed to the Secured Parties. The Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to take
an action) in connection herewith or any of the Collateral Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until the Agent shall have been instructed in respect
thereof by the Controlling Parties and, upon such instruction, the Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such written
instructions. Without prejudice to the generality of the foregoing, (i) the
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings, the Borrower and
their Subsidiaries), accountants, experts and other professional advisors
selected by it, and (ii) no Secured Party shall have any right of action
whatsoever against the Agent as a result of the Agent acting or (where so
instructed) refraining from acting hereunder or under any of the Collateral
Documents in accordance with the Credit Agreement or in the limited
circumstances specified in Section 8.1(b) hereof, the Majority Holders.

(b) Without limiting the indemnification provisions of the Credit Agreement,
each of the Secured Parties not party to the Credit Agreement severally agrees
to indemnify the Agent, to the extent that the Agent shall not have been
reimbursed by any Loan Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Agent in

 

41

--------------------------------------------------------------------------------

exercising its powers, rights and remedies or performing its duties hereunder or
under the Collateral Documents or otherwise in its capacity as the Agent in any
way relating to or arising out of this Agreement or the Collateral Documents;
provided, that no such Secured Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent that any such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted solely and proximately from
such Agent’s gross negligence or willful misconduct in breach of a duty owed to
such Secured Party If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.

(c) No direction given to the Agent which imposes, or purports to impose, upon
the Agent any obligation not set forth in or arising under this Agreement or any
Collateral Document accepted or entered into by the Agent shall be binding upon
the Agent.

(d) Prior to the Discharge of Credit Agreement Obligations, the Agent may resign
in accordance with Section 9.06 of the Credit Agreement. After the Agent’s
resignation in accordance with Section 9.06 of the Credit Agreement, the
provisions of Sections 8 hereof and the provisions of the Credit Agreement, if
any, shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent. Upon the acceptance of
any appointment as the Agent by a successor Agent in accordance with
Section 9.06 of the Credit Agreement, the retiring Agent shall promptly transfer
all Collateral within its possession or control to the possession or control of
the successor Agent and shall execute and deliver such notices, instructions and
assignments as may be necessary or desirable to transfer the rights of the Agent
in respect of the Collateral to the successor Agent. From and after the
Discharge of Credit Agreement Obligations, the Majority Holders shall be
entitled to appoint the successor Agent upon the resignation of the Agent and
the provisions of the Credit Agreement relating to the Agent in its capacity as
Administrative Agent, including, without limitation, the provisions relating to
resignation or removal of the Administrative Agent and the powers and duties and
immunities of the Administrative Agent are incorporated herein by this reference
and shall survive any termination of the Credit Agreement.

8.4 Delegation of Duties. The Agent may perform any and all of its duties and
exercise its rights and powers under this Agreement or under any Collateral
Document by or through any one or more sub-agents appointed by the Agent. The
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 Affiliates. All of the
rights, benefits, and privileges (including the exculpatory and indemnification
provisions) of this Article 8 shall apply to any of the Affiliates of the Agent,
to any sub-agent of the Agent and to the Affiliates of any such sub-agent, and
shall apply to their respective activities in connection with the transactions
contemplated hereby and by the other Collateral Documents as well as activities
as the Agent. Notwithstanding anything herein to the contrary, each sub-agent
appointed by the Agent or Affiliate of the Agent or Affiliate of such sub-agent,
shall be a third party beneficiary under this Agreement with respect to all such
rights, benefits and privileges (including exculpatory rights and rights to
indemnification) and shall

 

42

--------------------------------------------------------------------------------

have all of the rights and benefits of a third party beneficiary, including an
independent right of action to enforce such rights, benefits and privileges
(including exculpatory rights and rights to indemnification) directly, without
the consent or joinder of any other Person, against any or all of the Loan
Parties and the Secured Parties, and such rights, benefits and privileges
(including exculpatory rights and rights to indemnification) shall not be
modified or amended without the consent of such sub-agent or Affiliate acting in
such capacity.

8.5 Secured Parties. No Secured Party shall have any right individually to
realize upon any of the Collateral or to enforce any guarantee of the
Obligations except to the extent expressly contemplated by this Agreement or the
other Loan Documents, it being understood and agreed that all powers, rights and
remedies under the Loan Documents may be exercised solely by the Agent on behalf
of the Secured Parties in accordance with the terms thereof. In the event of a
foreclosure by the Agent on any of the Collateral pursuant to a public or
private sale or other disposition, the Agent or any other Secured Party may be
the purchaser or licensor of any or all of such Collateral at any such sale or
other disposition, and the Agent, as agent for and representative of the Secured
Parties (but not any Secured Party or Secured Parties in its or their respective
individual capacities unless the Controlling Parties shall otherwise agree in
writing) shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by the Agent on behalf
of the Secured Parties at such sale or other disposition. Each Secured Party,
whether or not a party hereto, will be deemed, by its acceptance of the benefits
of the Collateral and of the guarantees of the Obligations provided under the
Loan Documents, to have agreed to the foregoing provisions.

SECTION 9. MISCELLANEOUS

9.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 10.01 of the Credit Agreement. After the Discharge of Credit Agreement
Obligations, the provisions of this Agreement may be waived, amended,
supplemented or otherwise modified by a written instrument executed by each
Grantor and the Majority Holders.

9.2 Notices. All notices, requests and demands to or upon the Agent or any
Grantor hereunder shall be effected in the manner provided for in Section 10.02
of the Credit Agreement; provided, that any such notice, request or demand to or
upon any Grantor shall be addressed to such Grantor at its notice address set
forth on Schedule 1.

9.3 No Waiver by Course of Conduct; Cumulative Remedies. No Secured Party shall
by any act (except by a written instrument pursuant to Section 9.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure
to exercise, nor any delay in exercising, on the part of any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by any Secured Party of any right or remedy hereunder on
any one

 

43

--------------------------------------------------------------------------------

occasion shall not be construed as a bar to any right or remedy which such
Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

9.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay or
reimburse each Secured Party for all its costs and expenses incurred in
collecting against such Grantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Grantor is a party, including, without limitation,
the reasonable and documented fees and disbursements of counsel to each Secured
Party and of counsel to the Agent.

(b) Each Grantor agrees to pay, and to save the Secured Parties harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.

(c) Each Grantor (including the Borrower) agrees to pay, and to save the Secured
Parties (including all Indemnitees pursuant to Section 10.04(b) of the Credit
Agreement who, by their acceptance of the benefits hereof, agree to be bound by
this Agreement) harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to indemnify the Agent and the Lenders pursuant to
Section 10.04(b) of the Credit Agreement (it being understood and agreed that
the indemnification obligations set forth in this Section 9.4(c) shall apply to
the Secured Parties to the same extent that they apply to the Agent and the
Lenders under Section 10.04(b) of the Credit Agreement).

(d) The agreements in this Section shall survive repayment of the Obligations
and all other amounts payable under the Credit Agreement, the other Loan
Documents and all Secured Hedge Agreements and Secured Cash Management
Agreements.

9.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Secured
Parties and their successors and assigns; provided, that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Agent and any such assignment, transfer
or delegation without such consent shall be null and void.

9.6 Secured Parties. By accepting the benefits of this Agreement and the
Collateral, each of the Secured Parties agrees to be bound by the terms of the
Collateral Documents and Article IX of the Credit Agreement (which Article IX
shall be incorporated by reference herein). This Section 9.18 shall survive any
termination of the Credit Agreement.

9.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts

 

44

--------------------------------------------------------------------------------

taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by facsimile or other
electronic transmission (e.g., “.pdf” or “tif” format) shall be effective as
delivery of a manually executed counterpart hereof.

9.8 Severability. In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties hereto shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

9.9 Section Headings. The Section and headings and Table of Contents used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

9.10 Integration/Conflict. This Agreement and the other Loan Documents represent
the entire agreement of the Grantors, the Agent and the other Secured Parties
with respect to the subject matter hereof and thereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof and thereof. There are no promises, undertakings, representations
or warranties by any Agent or any other Secured Party relative to the subject
matter hereof and thereof not expressly set forth or referred to herein or
therein. In the case of any Collateral “located” outside the United States
(including any Equity Interests of an Issuer organized under a jurisdiction
other than the United States or any state or other locality thereof), in the
event of any conflict or inconsistency between the provisions of this Agreement
and the provisions of any applicable Foreign Security Document which cannot be
resolved by both provisions being complied with, the provisions contained in
such Foreign Security Document shall govern to the extent of such conflict with
respect to such Collateral.

9.11 GOVERNING LAW. THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING
OUT OF OR RELATING TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR
OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES
THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN
ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND
EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

9.12 Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents (whether sounding in
contract, tort or otherwise) to which it is a party, or for recognition and
enforcement of any judgment in respect

 

45

--------------------------------------------------------------------------------

thereof, to the exclusive general jurisdiction of the courts of the State of New
York sitting in the Borough of Manhattan, the courts of the United States for
the Southern District of New York sitting in the Borough of Manhattan, and
appellate courts from any thereof;

(b) agrees that all claims in respect of any such action or proceeding shall be
heard and determined in such New York state court or, to the fullest extent
permitted by applicable law, in such federal court;

(c) agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law and that nothing in this Agreement or any
other Loan Document shall affect any right that any Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against the Grantor or any of its assets in the courts of any
jurisdiction;

(d) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(e) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the Agent
shall have been notified pursuant thereto;

(f) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law; and

(g) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover any special, exemplary, punitive or consequential damages.

9.13 Acknowledgments. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party; and

(b) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

9.14 Additional Grantors. Each Subsidiary of the Borrower that is required to
become a party to this Agreement pursuant to Section 6.10(c) of the Credit
Agreement shall become a Grantor and Guarantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex I hereto.

9.15 Releases. (a) At such time as there has been a Discharge of the
Obligations, the Collateral shall be automatically released from the Liens
created hereby, and

 

46

--------------------------------------------------------------------------------

this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the Agent shall
deliver to such Grantor any Collateral held by the Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.

(b) If any of the Collateral shall be Disposed of by any Grantor in a
transaction permitted by the Credit Agreement, then (i) the Liens created hereby
on such Collateral shall automatically be released and (ii) the Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Subsidiary Guarantor shall be released from its
obligations hereunder in the event that all or a portion of the Equity Interests
of such Subsidiary Guarantor shall be Disposed of in a transaction permitted by
the Credit Agreement such that such Subsidiary Guarantor is no longer a
Subsidiary of the Borrower or otherwise becomes an Excluded Subsidiary.

(c) Each Grantor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement originally filed in connection herewith without the prior written
consent of the Agent, subject to such Grantor’s rights under Section 9-509(d)(2)
of the UCC.

9.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT, BREACH OF DUTY, COMMON LAW,
STATUTE OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION. EACH PARTY HERETO FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
IT JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

47

--------------------------------------------------------------------------------

9.17 No Fiduciary Duty. Section 10.16 of the Credit Agreement is incorporated
herein, mutatis, mutandis (to apply to this Agreement rather than to the Credit
Agreement).

 

48

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

GRANTORS: ENGILITY CORPORATION By:  

 

  Name:   Title: ENGILITY HOLDINGS, INC. By:  

 

  Name:   Title: INTERNATIONAL RESOURCES GROUP LTD. By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

AGENT:

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

EXECUTION VERSION

Schedule 1

NOTICE ADDRESSES OF GRANTORS

 

Schedule 1 - 1

--------------------------------------------------------------------------------

Schedule 2

DESCRIPTION OF PLEDGED INVESTMENT PROPERTY

Pledged Stock:

 

Grantor

   Issuer    Issuer’s
Jurisdiction Under
New York UCC
Section 9-305(a)(2)    Class of
Stock    Stock
Certificate
No.    Percentage of
Outstanding
Shares    No. or
% of
Shares
Owned                                                      

Pledged Notes:

 

Grantor

   Issuer    Payee    Principal
Amount                           

 

Schedule 2 - 1

--------------------------------------------------------------------------------

Pledged Debt Securities:

 

Grantor

   Issuer    Issuer’s
Jurisdiction Under
New York UCC
Section 9-305(a)(2)    Payee    Principal
Amount                                    

Securities Accounts:

 

Grantor

   Issuer of
Financial
Asset    Description of
Financial
Asset    Securities
Intermediary
(Name and
Address)    Securities
Account
(Number and
Location)    Securities
Intermediary’s
Jurisdiction Under
New York UCC
Section 9-305(a)(3)                                             

Commodity Contracts:

 

Grantor

   Description of
Commodity
Contract    Commodity
Intermediary
(Name and
Address)    Commodity
Account
(Number and
Location)    Commodity
Intermediary’s
Jurisdiction Under
New York UCC
Section 9-305(a)(4)                                    

 

Schedule 2 - 2

--------------------------------------------------------------------------------

Pledged Partnership Interests:

 

Grantor

   Issuer    Type of
Partnership
Interest
(e.g.,
General or
Limited)    Certificated
(Y/N)    Certificate No.
(if any)    % of
Outstanding
Partnership
Interests
of the
Partnership                                             

Pledged LLC Interests:

 

Grantor

   Issuer    Certificated
(Y/N)    Certificate No.
(if any)    No. or
% of
Pledged
Units    % of
Outstanding
LLC
Interests of
the Issuer                                             

 

Schedule 2 - 3

--------------------------------------------------------------------------------

Other Pledged Equity Interests:

 

Grantor

   Issuer    Class of
Interests    Certificated
(Y/N)    Certificate No.
(if any)    No. of
Pledged
Units/% of
Outstanding
Interests of
the Issuer                                             

Deposit Accounts:

 

Grantor

   Name of
Depositary
Bank    Account
Number    Account
Name                           

Commodities Accounts:

 

Grantor

   Description of
Commodity
Contract    Commodity
Intermediary
(Name and
Address)    Commodity
Account
(Number and
Location)    Commodity
Intermediary’s
Jurisdiction Under
New York UCC
Section 9-305(a)(4)                                    

 

Schedule 2 - 4

--------------------------------------------------------------------------------

Schedule 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings

Copyright, Patent and Trademark Filings

Actions with respect to Investment Property

Other Actions

 

Schedule 3 - 1

--------------------------------------------------------------------------------

Schedule 4

EXACT LEGAL NAME, JURISDICTION OF ORGANIZATION, LOCATION OF CHIEF EXECUTIVE
OFFICE OR SOLE PLACE OF BUSINESS (IF APPLICABLE) AND ORGANIZATIONAL ID

 

Exact Legal Name of Grantor

  

Jurisdiction of Organization

  

Organizational I.D.

  

Chief Executive Office or Sole Place
of Business

                          

 

Schedule 4 - 1

--------------------------------------------------------------------------------

Schedule 5

LOCATION OF INVENTORY AND EQUIPMENT

 

Grantor

  

Locations

                       

 

Schedule 5 - 1

--------------------------------------------------------------------------------

Schedule 6

COPYRIGHTS

PATENTS

 

Borrower/Grantor

  

Title

  

Filing Date/Issued Date

  

Status

  

Application/ Registration No.

                                   

TRADEMARKS

 

Borrower/Grantor

  

Title

  

Filing Date/Issued Date

  

Status

  

Application/ Registration No.

                                   

INTELLECTUAL PROPERTY LICENSES

 

Schedule 6 - 1

--------------------------------------------------------------------------------

Schedule 7

LETTER OF CREDIT RIGHTS

--------------------------------------------------------------------------------

Schedule 8

COMMERCIAL TORT CLAIMS

--------------------------------------------------------------------------------

EXHIBIT A

TO GUARANTEE AND COLLATERAL AGREEMENT

[INSERT INTO LLC/PARTNERSHIP AGREEMENT]

Section         . Pledgee’s Rights

Section [        ]. Notwithstanding anything contained herein to the contrary,
each [Member/Partner] shall be permitted to pledge or hypothecate any or all of
its [Units/Partnership Interests], including all interests, economic rights,
control rights and status rights as a [Member/Partner], to any lender to the
Company or an affiliate of the Company or any agent acting on such lender’s
behalf, and any transfer of such [Units/Partnership Interests] pursuant to any
such lender’s (or agent’s) exercise of remedies in connection with any such
pledge or hypothecation shall be permitted under this Agreement with no further
action or approval required hereunder. Notwithstanding anything contained herein
to the contrary, upon a default under the financing giving rise to any pledge or
hypothecation of [Units/Partnership Interests], the lender (or agent) shall have
the right, as set forth in the applicable pledge or hypothecation agreement, and
without further approval of any [Member/Partner] and without becoming a
[Member/Partner], to exercise the membership/partnerships voting rights of the
[Member/Partner] granting such pledge or hypothecation. Notwithstanding anything
contained herein to the contrary, and without complying with any other
procedures set forth in this Agreement, upon the exercise of remedies in
connection with a pledge or hypothecation, (a) the lender (or agent) or
transferee of such lender (or agent), as the case may be, shall become a
[Member/Partner] under this Agreement and shall succeed to all of the rights and
powers, including the right to participate in the management of the business and
affairs of the [Company/Partnership], and shall be bound by all of the
obligations, of a [Member/Partner] under this Agreement without taking any
further action on the part of such lender (or agent) or transferee, as the case
may be, and (b) following such exercise of remedies, the pledging
[Member/Partner] shall cease to be a [Member/Partner] and shall have no further
rights or powers under this Agreement. The execution and delivery of this
Agreement by a [Member/Partner] shall constitute any necessary approval of such
[Member/Partner] under the [Limited Liability Company/Partnership] Act to the
foregoing provisions of this Section         . This Section          may not be
amended or modified so long as any of the [Units/Partnership Interests] is
subject to a pledge or hypothecation without the pledgee’s (or the Transferee of
such pledgee’s) prior written consent. Each recipient of a pledge or
hypothecation of the [Units/Partnership Interests] shall be a third party
beneficiary of the provisions of this Section         .

 

Exhibit A - 1

--------------------------------------------------------------------------------

EXHIBIT B

TO GUARANTEE AND COLLATERAL AGREEMENT

FORM OF UNCERTIFICATED SECURITIES CONTROL AGREEMENT

This UNCERTIFICATED SECURITIES CONTROL AGREEMENT (as amended, supplemented or
otherwise modified from time to time, the “Control Agreement”) dated as of
                 ,         , is made by and among                     , a
                     corporation (the “Grantor”), BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity and together with its successors and
assigns in such capacity, the “Agent”) for the Secured Parties (as defined in
the Guarantee and Collateral Agreement referred to below), and
                    , a                      (the “Issuer”).

WHEREAS, the Grantor has granted to the Agent for the benefit of the Secured
Parties a security interest in the uncertificated securities of the Issuer owned
by the Grantor from time to time (collectively, the “Pledged Securities”), and
all additions thereto and substitutions and proceeds thereof (collectively, with
the Pledged Securities, the “Collateral”) pursuant to a Guarantee and Collateral
Agreement, dated as of July 17, 2012 (as amended, restated, supplemented, or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”),
among the Grantor and the other persons party thereto as grantors in favor of
the Agent.

WHEREAS, the following terms which are defined in Articles 8 and 9 of the
Uniform Commercial Code in effect in the State of New York on the date hereof
(the “UCC”) are used herein as so defined: Adverse Claim, Control, Instruction,
Proceeds and Uncertificated Security.

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

SECTION 1. Notice of Security Interest. The Grantor, the Agent and the Issuer
are entering into this Control Agreement to perfect, and to confirm the priority
of, the Agent’s security interest in the Collateral. The Issuer acknowledges
that this Control Agreement constitutes written notification to the Issuer of
the Agent’s security interest in the Collateral. The Issuer agrees to promptly
make all necessary entries or notations in its books and records to reflect the
Agent’s security interest in the Collateral and, upon request by the Agent, to
register the Agent as the registered owner of any or all of the Pledged
Securities. The Issuer acknowledges that the Agent has control over the
Collateral.

SECTION 2. Collateral. The Issuer hereby represents and warrants to, and agrees
with the Grantor and the Agent that, (i) the pledge by the Grantor of, and the
granting by the Grantor of a security interest in, the Pledged Securities to the
Agent, for the benefit of the Secured Parties, does not violate the charter,
by-laws or any other Organization Document governing the Issuer or the Pledged
Securities, (ii) the Pledged Securities are uncertificated securities, (iii) the
issuer’s jurisdiction is, and during the term of this Control Agreement shall
remain, the State of [                    ], (iv) Schedule 1 contains a true and
complete description of the Pledged Securities as of the date hereof and
(v) except for the claims and interests of the Agent and the Grantor in the
Collateral, the Issuer does not know of any claim to or security interest or
other interest in the Collateral.

 

Exhibit B - 1

--------------------------------------------------------------------------------

SECTION 3. Control. The Issuer hereby agrees, upon written direction from the
Agent and without further consent from the Grantor, (a) to comply with all
instructions and directions of any kind originated by the Agent concerning the
Collateral, to liquidate or otherwise dispose of the Collateral as and to the
extent directed by the Agent and to pay over to the Agent all proceeds without
any setoff or deduction, and (b) except as otherwise directed by the Agent, not
to comply with the instructions or directions of any kind originated by the
Grantor or any other person.

SECTION 4. Other Agreements. The Issuer shall notify promptly the Agent and the
Grantor if any other person asserts any lien, encumbrance, claim (including any
adverse claim) or security interest in or against any of the Collateral. In the
event of any conflict between the provisions of this Control Agreement and any
other agreement governing the Pledged Securities or the Collateral, the
provisions of this Control Agreement shall control.

SECTION 5. Protection of Issuer. The Issuer may rely and shall be protected in
acting upon any notice, instruction or other communication that it reasonably
believes to be genuine and authorized.

SECTION 6. Termination. This Control Agreement shall terminate automatically
upon receipt by the Issuer of written notice executed by the Agent that (i) the
Discharge of Credit Agreement Obligations has occurred, or (ii) all of the
Collateral has been released, whichever is sooner, and the Issuer shall
thereafter be relieved of all duties and obligations hereunder.

SECTION 7. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, to the
Grantor’s and the Agent’s addresses as set forth in the Guarantee and Collateral
Agreement, and to the Issuer’s address as set forth below, or to such other
address as any party may give to the others in writing for such purpose:

 

[Name of Issuer]     [Address of Issuer]    

Attention:  

 

 

Telephone:   (    )     -          

Telecopy:   (    )     -          

SECTION 8. Amendments in Writing. None of the terms or provisions of this
Control Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the parties hereto.

SECTION 9. Entire Agreement. This Control Agreement and the Guarantee and
Collateral Agreement of the parties hereto with respect to the subject matter
hereof and thereof

 

Exhibit B - 2

--------------------------------------------------------------------------------

and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof and thereof. There are no
promises, undertakings, representations or warranties by any Agent relative to
the subject matter hereof and thereof not expressly set forth or referred to
herein or therein.

SECTION 10. Execution in Counterparts. This Control Agreement may be executed by
one or more of the parties to this Control Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Control Agreement by facsimile or other electronic transmission (e.g.,
“.pdf” or “tif” format) shall be effective as delivery of a manually executed
counterpart hereof.

SECTION 11. Successors and Assigns. This Control Agreement shall be binding upon
the successors and assigns of each of the parties hereto and shall inure to the
benefit of the Secured Parties and their successors and assigns; provided that
neither the Grantor nor the Issuer may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Agent and any such assignment, transfer or delegation without such consent
shall be null and void.

SECTION 12. Severability. In the event any one or more of the provisions
contained in this Control Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 13. Section Headings. The Section headings used in this Control
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

SECTION 14. Submission to Jurisdiction; Waivers. Each of the Grantor and the
Issuer hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Control Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the exclusive general jurisdiction of the courts
of the State of New York sitting in the Borough of Manhattan, the courts of the
United States for the Southern District of New York sitting in the Borough of
Manhattan, and appellate courts from any thereof;

(b) agrees that all claims in respect of any such action or proceeding shall be
heard and determined in such New York state court or, to the fullest extent
permitted by applicable law, in such federal court;

 

Exhibit B - 3

--------------------------------------------------------------------------------

(c) agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law and that nothing in this Control Agreement
shall affect any right that any Secured Party may otherwise have to bring any
action or proceeding relating to this Control Agreement or any other Loan
Document against the Grantor or any of its assets in the courts of any
jurisdiction;

(d) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(e) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Grantor at its
address referred to in Section 7 or at such other address of which the Agent
shall have been notified pursuant thereto;

(f) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law; and

(g) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover any special, exemplary, punitive or consequential damages.

SECTION 15. Governing Law and Jurisdiction. This Control Agreement has been
delivered to and accepted by the Agent and will be deemed to be made in the
State of New York. THIS CONTROL AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY
ARISING OUT OF OR RELATING TO THIS CONTROL AGREEMENT (WHETHER ARISING IN
CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW
(OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING
PERFECTION AND EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

SECTION 16. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT, BREACH OF DUTY, COMMON LAW, STATUTE OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO

 

Exhibit B - 4

--------------------------------------------------------------------------------

ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CONTROL AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. EACH PARTY HERETO
FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES IT JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

Exhibit B - 5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Control Agreement to
be duly executed and delivered as of the date first above written.

 

[NAME OF GRANTOR] By:  

 

Name: Title:

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

Name: Title: [NAME OF ISSUER] By:  

 

Name: Title:

 

Exhibit B - 6

--------------------------------------------------------------------------------

EXHIBIT C-1

TO GUARANTEE AND COLLATERAL AGREEMENT

FORM OF COPYRIGHT SECURITY AGREEMENT

This COPYRIGHT SECURITY AGREEMENT, dated as of July 17, 2012 (this “Agreement”),
is made by each of the signatories hereto (each a “Grantor” and collectively,
the “Grantors”) in favor of Bank of America, N.A., as Administrative Agent for
the Secured Parties (in such capacity and together with its successors and
assigns in such capacity, the “Agent”).

WHEREAS, pursuant to that certain Credit Agreement dated as of July 17, 2012,
among Engility Holdings, Inc., Engility Corporation (the “Borrower”), the
Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer (as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
the Lenders and the L/C Issuer have severally agreed to make their respective
extensions of credit to the Borrower upon the terms and conditions set forth
therein;

WHEREAS, as a condition precedent to the obligation of the Lenders and the L/C
Issuer to make their respective extensions of credit to the Borrower under the
Credit Agreement, the Grantors entered into a Guarantee and Collateral Agreement
dated as of July 17, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guarantee and Collateral Agreement”), among
each of the Grantors from time to time party thereto and the Agent, pursuant to
which each of the Grantors granted to the Agent, for the benefit of the Secured
Parties, a security interest in the Copyright Collateral (as defined below); and

WHEREAS, pursuant to the Guarantee and Collateral Agreement, each Grantor agreed
to execute and deliver this Agreement, in order to record the security interest
granted to the Agent for the benefit of the Secured Parties with the United
States Copyright Office.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Agent as follows:

 

SECTION 1. Defined Terms

Capitalized terms used but not defined herein shall have the respective meanings
given thereto in the Guarantee and Collateral Agreement, and if not defined
therein, shall have the respective meanings given thereto in the Credit
Agreement.

 

SECTION 2. Grant of Security Interest

Each Grantor hereby grants to the Agent, for the benefit of the Secured Parties,
a security interest in all of the following property, in each case, wherever
located and now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the

 

Exhibit C-1 - 1

--------------------------------------------------------------------------------

future may acquire any right, title or interest (collectively, the “Copyright
Collateral”) as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor’s Obligations:

(a) all works of authorship and all intellectual property rights therein, all
United States and foreign copyrights (whether or not the underlying works of
authorship have been published), including but not limited to copyrights in
software and databases, all designs (including but not limited to all industrial
designs, “Protected Designs” within the meaning of 17 U.S.C. 1301 et. seq. and
Community designs), and all “Mask Works” (as defined in 17 U.S.C. 901 of the
U.S. Copyright Act), whether registered or unregistered, and with respect to any
and all of the foregoing: (i) all registrations and applications for
registration thereof including, without limitation, the registrations and
applications listed on Schedule A attached hereto, (ii) all extensions,
renewals, and restorations thereof, (iii) all rights to sue or otherwise recover
for any past, present and future infringement or other violation thereof,
(iv) all Proceeds of the foregoing, including, without limitation, license fees,
royalties, income, payments, claims, damages, proceeds of suit and other
payments now or hereafter due and/or payable with respect thereto, and (v) all
other rights of any kind accruing thereunder or pertaining thereto throughout
the world (collectively “Copyrights”); and

(b) all agreements, licenses and covenants pursuant to which such Grantor has
been granted exclusive rights in any registered Copyrights or has otherwise been
granted or has granted a covenant not to sue for infringement or other violation
of any registered Copyrights, including, without limitation, each agreement
listed on Schedule A attached hereto.

 

SECTION 3. Security Agreement

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Agent for the Secured
Parties pursuant to the Guarantee and Collateral Agreement, and the Grantors
hereby acknowledge and affirm that the rights and remedies of the Agent with
respect to the security interest in the Copyright Collateral made and granted
hereby are more fully set forth in the Guarantee and Collateral Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Agreement is deemed to
conflict with the Guarantee and Collateral Agreement, the provisions of the
Guarantee and Collateral Agreement shall control.

 

SECTION 4. Governing Law

THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING
TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN
THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY
PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND EFFECT OF
PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

 

Exhibit C-1 - 2

--------------------------------------------------------------------------------

SECTION 5. Counterparts

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

[Remainder of page intentionally left blank]

 

Exhibit C-1 - 3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

[GRANTORS] By:  

 

Name: Title:

 

Exhibit C-1 - 4

--------------------------------------------------------------------------------

Accepted and Agreed:

Bank of America, N.A.,

as Administrative Agent

By:  

 

Name: Title:

 

Exhibit C-1 - 5

--------------------------------------------------------------------------------

SCHEDULE A

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS

 

Title

   Registration No.    Registration Date                              

COPYRIGHT APPLICATIONS

 

Title

   Application / Case No.    Filing Date                              

EXCLUSIVE COPYRIGHT LICENSES

 

Description of Copyright License

   Name of Licensor    Registration Number
of underlying Copyright                              

 

Exhibit C-1 - 6

--------------------------------------------------------------------------------

EXHIBIT C-2

TO GUARANTEE AND COLLATERAL AGREEMENT

FORM OF PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT, dated as of July 17, 2012 (this “Agreement”), is
made by each of the signatories hereto (each a “Grantor” and collectively, the
“Grantors”) in favor of Bank of America, N.A., as Administrative Agent for the
Secured Parties (in such capacity and together with its successors and assigns
in such capacity, the “Agent”).

WHEREAS, pursuant to that certain Credit Agreement dated as of July 17, 2012,
among Engility Holdings, Inc., Engility Corporation (the “Borrower”), the
Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer (as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
the Lenders and the L/C Issuer have severally agreed to make their respective
extensions of credit to the Borrower upon the terms and conditions set forth
therein;

WHEREAS, as a condition precedent to the obligation of the Lenders and the L/C
Issuer to make their respective extensions of credit to the Borrower under the
Credit Agreement, the Grantors entered into a Guarantee and Collateral Agreement
dated as of July 17, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guarantee and Collateral Agreement”), among
each of the Grantors from time to time party thereto and the Agent, pursuant to
which each of the Grantors granted to the Agent, for the benefit of the Secured
Parties, a security interest in the Patent Collateral (as defined below); and

WHEREAS, pursuant to the Guarantee and Collateral Agreement, each Grantor agreed
to execute and deliver this Agreement, in order to record the security interest
granted to the Agent for the benefit of the Secured Parties with the United
States Patent and Trademark Office.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Agent as follows:

 

SECTION 1. Defined Terms

Capitalized terms used but not defined herein shall have the respective meanings
given thereto in the Guarantee and Collateral Agreement, and if not defined
therein, shall have the respective meanings given thereto in the Credit
Agreement.

 

SECTION 2. Grant of Security Interest

Each Grantor grants to the Agent, for the benefit of the Secured Parties, a
security interest in all of the following property, in each case, wherever
located and now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future

 

Exhibit C-2 - 1

--------------------------------------------------------------------------------

may acquire any right, title or interest (collectively, the “Patent Collateral”)
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of such
Grantor’s Obligations:

all patentable inventions and designs, all United States, foreign, and
multinational patents, certificates of invention, and similar industrial
property rights, and applications for any of the foregoing, including, without
limitation, (i) each patent and patent application listed on Schedule A attached
hereto (ii) all reissues, substitutes, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations thereof,
(iii) all inventions and improvements described and claimed therein, (iv) all
rights to sue or otherwise recover for any past, present and future infringement
or other violation thereof, (v) all Proceeds of the foregoing, including,
without limitation, license fees, royalties, income, payments, claims, damages,
proceeds of suit and other payments now or hereafter due and/or payable with
respect thereto, and (vi) all other rights accruing thereunder or pertaining
thereto throughout the world.

 

SECTION 3. Security Agreement

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Agent for the Secured
Parties pursuant to the Guarantee and Collateral Agreement, and the Grantors
hereby acknowledge and affirm that the rights and remedies of the Agent with
respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Guarantee and Collateral Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Agreement is deemed to
conflict with the Guarantee and Collateral Agreement, the provisions of the
Guarantee and Collateral Agreement shall control.

 

SECTION 4. Governing Law

THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING
TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN
THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY
PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND EFFECT OF
PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

 

Exhibit C-2 - 2

--------------------------------------------------------------------------------

SECTION 5. Counterparts

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

[Remainder of page intentionally left blank]

 

Exhibit C-2 - 3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

[GRANTORS] By:  

 

Name: Title:

 

Exhibit C-2 - 4

--------------------------------------------------------------------------------

Accepted and Agreed:

Bank of America, N.A.,

as Administrative Agent

By:  

 

Name: Title:

 

Exhibit C-2 - 5

--------------------------------------------------------------------------------

SCHEDULE A

to

PATENT SECURITY AGREEMENT

PATENTS AND PATENT APPLICATIONS

 

Title

  

Application No.

  

Filing Date

  

Patent No.

  

Issue Date

                                                           

 

Exhibit C-2 - 6

--------------------------------------------------------------------------------

EXHIBIT C-3

TO GUARANTEE AND COLLATERAL AGREEMENT

FORM OF TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT, dated as of July 17, 2012 (this “Agreement”),
is made by each of the signatories hereto (each a “Grantor” and collectively,
the “Grantors”) in favor of Bank of America, N.A., as Administrative Agent for
the Secured Parties (in such capacity and together with its successors and
assigns in such capacity, the “Agent”).

WHEREAS, pursuant to that certain Credit Agreement dated as of July 17, 2012,
among Engility Holdings, Inc., Engility Corporation (the “Borrower”), the
Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer (as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
the Lenders and the L/C Issuer have severally agreed to make their respective
extensions of credit to the Borrower upon the terms and conditions set forth
therein;

WHEREAS, as a condition precedent to the obligation of the Lenders and the L/C
Issuer to make their respective extensions of credit to the Borrower under the
Credit Agreement, the Grantors entered into a Guarantee and Collateral Agreement
dated as of July 17, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guarantee and Collateral Agreement”), among
each of the Grantors from time to time party thereto and the Agent, pursuant to
which each of the Grantors granted to the Agent, for the benefit of the Secured
Parties, a security interest in the Trademark Collateral (as defined below); and

WHEREAS, pursuant to the Guarantee and Collateral Agreement, each Grantor agreed
to execute and deliver this Agreement, in order to record the security interest
granted to the Agent for the benefit of the Secured Parties with the United
States Patent and Trademark Office.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Agent as follows:

 

SECTION 1. Defined Terms

Capitalized terms used but not defined herein shall have the respective meanings
given thereto in the Guarantee and Collateral Agreement, and if not defined
therein, shall have the respective meanings given thereto in the Credit
Agreement.

 

Exhibit C-3 - 1

--------------------------------------------------------------------------------

SECTION 2. Grant of Security Interest in Trademark Collateral

SECTION 2.1 Grant of Security. Each Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of the following
property, in each case, wherever located and now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the “Trademark
Collateral”) as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor’s Obligations:

all domestic, foreign and multinational trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
dress, trade styles, logos, Internet domain names, other indicia of origin or
source identification, and general intangibles of a like nature, whether
registered or unregistered, and, with respect to any and all of the foregoing,
(i) all registrations and applications for registration thereof including,
without limitation, the registrations and applications listed on Schedule A
attached hereto, (ii) all extensions and renewals thereof, (iii) all of the
goodwill of the business connected with the use of and symbolized by any of the
foregoing, (iv) all rights to sue or otherwise recover for any past, present and
future infringement, dilution, or other violation thereof, (iv) all Proceeds of
the foregoing, including, without limitation, license fees, royalties, income,
payments, claims, damages, proceeds of suit and other payments now or hereafter
due and/or payable with respect thereto, and (v) all other rights of any kind
accruing thereunder or pertaining thereto throughout the world.

SECTION 2.2 Certain Limited Exclusions. Notwithstanding anything herein to the
contrary, in no event shall the Trademark Collateral include or the security
interest granted under Section 2.1 hereof attach to any “intent-to-use”
application for registration of a Trademark filed pursuant to Section 1(b) of
the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use”
pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use”
pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the
extent, if any, that, and solely during the period, if any, in which, the grant
of a security interest therein would impair the validity or enforceability of
any registration that issues from such intent-to-use application under
applicable federal law.

 

SECTION 3. Security Agreement

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Agent for the Secured
Parties pursuant to the Guarantee and Collateral Agreement, and the Grantors
hereby acknowledge and affirm that the rights and remedies of the Agent with
respect to the security interest in the Trademark Collateral made and granted
hereby are more fully set forth in the Guarantee and Collateral Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Agreement is deemed to
conflict with the Guarantee and Collateral Agreement, the provisions of the
Guarantee and Collateral Agreement shall control.

 

SECTION 4. Governing Law

THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING
TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES

 

Exhibit C-3 - 2

--------------------------------------------------------------------------------

THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN
ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND
EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

 

SECTION 5. Counterparts

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

[Remainder of page intentionally left blank]

 

Exhibit C-3 - 3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

[GRANTORS] By:  

 

Name: Title:

 

Exhibit C-3 - 4

--------------------------------------------------------------------------------

Accepted and Agreed:

Bank of America, N.A.,

as Administrative Agent

By:  

 

Name: Title:

 

Exhibit C-3 - 5

--------------------------------------------------------------------------------

SCHEDULE A

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND APPLICATIONS

 

Mark

  

Serial No.

  

Filing Date

  

Registration No.

  

Registration Date

                                                           

 

Exhibit C-3 - 6

--------------------------------------------------------------------------------

ANNEX I

TO GUARANTEE AND COLLATERAL AGREEMENT

FORM OF ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT, dated as of [                    ] (this
“Assumption”), is made by [NAME OF ADDITIONAL GRANTOR], [JURISDICTION OF
ORGANIZATION AND ENTITY TYPE] (the “Additional Grantor”), in favor of BANK OF
AMERICA, N.A., as Administrative Agent (in such capacity and together with its
successors and assigns in such capacity, the “Agent”), for the benefit of
(i) the banks and other financial institutions and entities party to the Credit
Agreement (as defined below) and (ii) the other Secured Parties (as defined in
the Guarantee and Collateral Agreement (as defined below)). All capitalized
terms not defined herein shall have the meaning ascribed to them in the
Guarantee and Collateral Agreement.

WHEREAS, Engility Holdings, Inc., Engility Corporation (the “Borrower”), the
Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, have entered into a Credit Agreement dated as of
July 17, 2012 (as the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement dated as of July 17, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Guarantee
and Collateral Agreement”) in favor of the Agent, for the benefit of the Secured
Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is agreed:

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 9.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Guarantor and Grantor thereunder with the same force
and effect as if originally named therein as a Guarantor and Grantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor and Grantor thereunder. The
information set forth in Annex 1-A hereto is hereby added to the information set
forth in Schedules                      26 to the Guarantee and Collateral
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 4 of the Guarantee and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.

 

26 

Refer to each Schedule which needs to be supplemented.

 

Annex I - 1

--------------------------------------------------------------------------------

2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT AND ANY DISPUTE, CLAIM OR
CONTROVERSY ARISING OUT OF OR RELATING TO THIS ASSUMPTION AGREEMENT (WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT
GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE
LAW GOVERNING PERFECTION AND EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY
INTERESTS).

3. Successors and Assigns. This Assumption Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Additional Grantor may not assign, transfer or delegate
any of its rights or obligations under this Assumption Agreement without the
prior written consent of the Agent and any such assignment, transfer or
delegation without such consent shall be null and void.

 

Annex I - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

ADDITIONAL GRANTOR: [NAME] By:  

 

  Name:   Title:

 

Accepted and Agreed:

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

Annex I - 3

--------------------------------------------------------------------------------

Annex I-A

to Assumption Agreement

Schedule [    ]

Schedule [    ]

Schedule [    ]

 

Annex I - 4

--------------------------------------------------------------------------------

EXHIBIT G

FORM OF

SIMPSON, THACHER & BARTLETT LLP OPINION

See attached.

--------------------------------------------------------------------------------

July 17, 2012

Bank of America, N.A., as Administrative Agent (the “Administrative Agent”),

Swing Line Lender, and L/C Issuer under the

Credit Agreement, as hereinafter defined

and

The Lenders listed on Schedule I hereto

 

Re:    Credit Agreement dated as of July 17, 2012 (the “Credit Agreement”) among
Engility Holdings, Inc., a Delaware corporation (“Holdings”), Engility
Corporation, a Delaware corporation (the “Borrower”), the lending institutions
identified in the Credit Agreement (the “Lenders”) and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer

Ladies and Gentlemen:

We have acted as counsel to the Borrower, Holdings (the “Guarantor”) and the
subsidiary of the Borrower named on Schedule II attached hereto (the “Subsidiary
Guarantor”; the Borrower, the Guarantor and the Subsidiary Guarantor being
referred to herein collectively as the “Credit Parties”) in connection with the
preparation, execution and delivery of the following documents:

 

  (i) the Credit Agreement;

 

  (ii) the Notes delivered to the Lenders on the date hereof;

 

  (iii) the Guarantee and Collateral Agreement;

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

 

  (iv) the Patent Security Agreement dated as of July 17, 2012 made by the
Borrower in favor of the Administrative Agent; and

 

  (v) the Trademark Security Agreement dated as of July 17, 2012 made by the
Borrower and the Subsidiary Guarantor in favor of the Administrative Agent.

The documents described in the foregoing clauses (i) through (v) are
collectively referred to herein as the “Credit Documents,” and the documents
described in the foregoing clauses (iii) through (v) are collectively referred
to herein as the “Security Documents.” Unless otherwise indicated, capitalized
terms used but not defined herein shall have the meanings assigned to such terms
in the Credit Agreement. This opinion letter is furnished to you pursuant to
Section 4.01(a)(v) of the Credit Agreement.

We have examined the following:

 

  (i) the Credit Agreement, signed by each Credit Party that is a party thereto,
by the Administrative Agent, by the Swing Line Lender, by the L/C Issuer and by
the Lenders;

 

  (ii) each other Credit Document, signed by each Credit Party that is a party
thereto;

 

  (iii) forms of the Notes to be delivered after the date hereof; and

 

  (iv) unfiled copies of the financing statements listed on Schedule III hereto
(the “Delaware Financing Statements”), naming the Credit Parties indicated on
such Schedule III as debtors and the Administrative Agent as secured party,
which we understand will be filed in the Office of the Secretary of State of the
State of Delaware (the “Delaware Filing Office”).

In addition, we have examined, and have relied as to matters of fact upon, the
documents delivered to you at the closing, and upon originals, or duplicates or
certified or conformed copies, of such corporate records, agreements, documents
and other instruments and such certificates or comparable documents of public
officials and of officers and representatives of the Credit Parties, and have
made such other investigations, as we have deemed relevant and necessary in
connection with the opinions hereinafter set forth. In such examination, we have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as duplicates
or certified or conformed copies and the authenticity of the originals of such
latter documents. In addition, we have relied as to certain matters of fact upon
the representations made in the Credit Documents.

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

In addition, we have assumed that (1) the Credit Parties have rights in the
Collateral (as defined in the Guarantee and Collateral Agreement) existing on
the date hereof and will have rights in property that becomes Collateral after
the date hereof and, (2) “value” (as defined in Section 1-201(44) of the Uniform
Commercial Code as in effect in the State of New York (the “New York UCC”)) has
been given by the Lenders to the Credit Parties for the security interests and
other rights in the Collateral.

In rendering the opinion set forth in paragraph 4 below with respect to the
Notes, we have assumed that at the time of any execution and delivery of Notes
after the date hereof, the board of directors of the Borrower (or any committee
thereof acting pursuant to authority properly delegated to such committee by
such board of directors) has not taken any action to rescind or otherwise reduce
the prior authorization of the issuance of such Notes.

Based upon and subject to the foregoing, and subject to the qualifications and
limitations set forth herein, we are of the opinion that:

1. Each of the Credit Parties (a) is validly existing and in good standing as a
corporation under the law of the State of Delaware, (b) has the corporate power
and authority to execute and deliver each of the Credit Documents to which it is
a party, and to borrow and perform its obligations thereunder and to grant the
security interests to be granted by it pursuant to the Security Documents and
(c) has duly authorized, executed and delivered each Credit Document to which it
is a party.

2. The execution and delivery by any Credit Party of the Credit Documents to
which it is a party, its borrowings in accordance with the terms of the Credit
Documents, the performance of its payment obligations thereunder and the
granting of the security interests to be granted by it pursuant to the Security
Documents (a) will not result in any violation of (1) the certificate of
incorporation or by-laws of such Credit Party or (2) assuming that proceeds of
borrowings will be used in accordance with the terms of the Credit Agreement,
any federal or New York statute or the Delaware General Corporation Law or any
rule or regulation issued pursuant to any federal or New York statute or the
Delaware General Corporation Law or any order known to us issued by any court or
governmental agency or body and (b) will not breach or result in a default under
any of the agreements identified on Schedule IV hereto.

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

3. No consent, approval, authorization, order, filing, registration or
qualification of or with any federal or New York governmental agency or body or
any Delaware governmental agency or body acting pursuant to the Delaware General
Corporation Law is required for the execution and delivery by any Credit Party
of the Credit Documents to which it is a party, the borrowings by any Credit
Party in accordance with the terms of the Credit Documents, the performance by
any Credit Party of its payment obligations under the Credit Documents to which
it is a party or the granting of any security interests under the Security
Documents, except filings required for the perfection of security interests
granted pursuant to the Security Documents and consents, waivers, approvals,
filings and registrations described on Schedule 5.03 to the Credit Agreement,
all of which have been obtained, filed or made and, to our knowledge, remain in
full force and effect.

4. Assuming that each of the Credit Documents is a valid and legally binding
obligation of each of the parties thereto (other than the Credit Parties) and
assuming that (a) execution, delivery and performance by each Credit Party of
the Credit Documents to which it is a party do not violate the laws of any
applicable laws (excepting the federal laws of the United States, the law of the
State of New York, and the Delaware General Corporation Law) and (b) execution,
delivery and performance by each Credit Party of the Credit Documents to which
it is a party do not constitute a breach of or default under any agreement or
instrument which is binding upon such Credit Party (except that we do not make
the assumption in the foregoing clause with respect to the agreements that are
the subject of clause (b) of opinion paragraph 2 of this opinion letter), each
Credit Document constitutes and each Note delivered to a Lender after the date
hereof, assuming the due execution and delivery by the Credit Party that is the
maker of such Note, will constitute the valid and legally binding obligation of
each Credit Party that is a party thereto, enforceable against such Credit Party
in accordance with its terms.

5. To our knowledge there is no action, suit or proceeding now pending before or
by any court, arbitrator or governmental agency, body or official to which any
Credit Party is a party or to which the business, assets or property of any
Credit Party is subject, and no such action, suit or proceeding is threatened to
which any Credit Party would be a party or to which the business, assets or
property of any Credit Party would be subject, that in either case questions the
validity of the Credit Documents.

6. No Credit Party is an “investment company” within the meaning of, and subject
to regulation under, the Investment Company Act of 1940, as amended.

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

7. Assuming that the Borrower will comply with the provisions of the Credit
Agreement relating to the use of proceeds, the execution and delivery of the
Credit Agreement by the Borrower and each other Credit Party entitled to borrow
under the Credit Agreement and the making of the Loans under the Credit
Agreement will not violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System.

8. Each of the Security Documents creates in favor of the Administrative Agent
for the benefit of the Secured Parties a security interest in the Collateral
described therein in which a security interest may be created under Article 9 of
the New York UCC (the “Security Agreement Article 9 Collateral”).

9. The Guarantee and Collateral Agreement creates in favor of the Administrative
Agent for the benefit of the Secured Parties a security interest under the New
York UCC in the investment property identified on Schedule 2 to the Guarantee
and Collateral Agreement (the “Pledged Securities”).

10. The Administrative Agent will have a perfected security interest in the
Pledged Securities for the benefit of the Secured Parties under the New York UCC
upon delivery to the Administrative Agent for the benefit of the Secured Parties
in the State of New York of the certificates representing the Pledged Securities
in registered form, indorsed in blank by an effective indorsement or accompanied
by undated stock powers with respect thereto duly indorsed in blank by an
effective indorsement. Assuming neither the Administrative Agent nor any of the
Secured Parties has notice of any adverse claim to the Pledged Securities, the
Administrative Agent will acquire the security interest in the Pledged
Securities for the benefit of the Secured Parties free of any adverse claim.

11. The Administrative Agent will have a perfected security interest for the
benefit of the Secured Parties in that portion of the Collateral constituting
the U.S. patent registrations and trademark registrations of the Credit Parties
listed, and correctly identified, on Schedule 6 to the Guarantee and Collateral
Agreement, upon (a) the filing of UCC financing statements under the laws of the
jurisdiction in which each such Credit Party is located (as determined in
accordance with Section 9-307 of the New York UCC), and (b) the timely filing
and recording of the Patent Security Agreement and the Trademark Security
Agreement, including Schedule A to each thereof, in the United States Patent and
Trademark Office in the manner specified by such office and in accordance with
its rules and regulations.

Although we express no opinion as to the law of the State of Delaware (other
than the Delaware General Corporation Law), we have reviewed Article 9 of the
Uniform Commercial Code in effect in the State of Delaware as set forth in the
Commerce Clearing House, Inc.

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

Secured Transactions Guide as supplemented through July 3, 2012 (the “Delaware
UCC”) and, based solely on such review, we advise you that (a) the Delaware
Financing Statements are in appropriate form for filing in the Delaware Filing
Office and (b) upon the filing of the Delaware Financing Statements in the
Delaware Filing Office, the Administrative Agent will have a perfected security
interest for the benefit of the Secured Parties in that portion of the Security
Agreement Article 9 Collateral in which a security interest is perfected by
filing a financing statement in the Delaware Filing Office.

Our opinions in paragraphs 4, 8, and 9 above are subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally,
(ii) general equitable principles (whether considered in a proceeding in equity
or at law) and (iii) an implied covenant of good faith and fair dealing. Our
opinion in paragraph 4 above also is subject to the qualification that certain
provisions of the Security Documents may not be enforceable in whole or in part,
although the inclusion of such provisions does not render the Security Documents
invalid, and the Security Documents and the law of the State of New York contain
adequate remedial provisions for the practical realization of the rights and
benefits afforded thereby.

Our opinions in paragraphs 8 and 9 and our advice in the second preceding
paragraph above, are limited to Article 9 of the New York UCC or the Delaware
UCC, as the case may be, and our opinion in paragraph 10 is limited to Articles
8 and 9 of the New York UCC, and, therefore, those opinion and advice paragraphs
do not address collateral of a type not subject to Article 8 or 9, as the case
may be, of the New York UCC or the Delaware UCC. In addition we express no
opinion as to what law governs perfection of the security interests granted in
the collateral covered by this opinion letter.

We express no opinion and render no advice with respect to:

(ii) perfection of any security interest in (1) any collateral of a type
represented by a certificate of title, (2) any proceeds and (3) any collateral
consisting of money or Cash Equivalents;

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

(iii) perfection of any security interest the priority of which is subject to
Section 9-334 of the New York UCC;

(iv) except to the extent expressed in opinion paragraph 10, the priority of any
security interest;

(v) the effect of Section 552 of the Bankruptcy Code (11 U.S.C. Section 552)
(relating to property acquired by a pledgor after the commencement of a case
under the United States Bankruptcy Code with respect to such pledgor) and
Section 506(c) of the Bankruptcy Code (11 U.S.C. Section 506(c)) (relating to
certain costs and expenses of a trustee in preserving or disposing of
collateral);

(vi) the effect of any provision of the Credit Documents that is intended to
establish any standard other than a standard set forth in the New York UCC as
the measure of the performance by any party thereto of such party’s obligations
of good faith, diligence, reasonableness or care or of the fulfillment of the
duties imposed on any secured party with respect to the maintenance, disposition
or redemption of collateral, accounting for surplus proceeds of collateral or
accepting collateral in discharge of liabilities;

(vii) the effect of any provision of the Credit Documents that is intended to
permit modification thereof only by means of an agreement in writing signed by
the parties thereto;

(viii) the effect of any provision of the Credit Documents insofar as it
provides that any Person purchasing a participation from a Lender or other
Person may exercise set-off or similar rights with respect to such participation
or that any Lender or other Person may exercise set-off or similar rights other
than in accordance with applicable law;

(ix) the effect of any provision of the Credit Documents imposing penalties or
forfeitures;

(x) the enforceability of any provision of the Credit Documents to the extent
that such provision constitutes a waiver of illegality as a defense to the
performance of contract obligations; and

(xi) the effect of any provision of the Credit Documents relating to
indemnification or exculpation in connection with violations of any securities
laws or relating to indemnification, contribution or exculpation in connection
with willful, reckless or criminal acts or gross negligence of the indemnified
or exculpated Person or the Person receiving contribution.

In connection with the provisions of the Credit Documents whereby the parties
submit to the jurisdiction of the courts of the United States of America located
in the State and County of New York, we note the limitations of 28 U.S.C.
Sections 1331 and 1332 on subject matter jurisdiction of the federal courts. In
connection with the provisions of the Credit Documents that

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.    JULY 17, 2012

 

relate to forum selection (including, without limitation, any waiver of any
objection to venue or any objection that a court is an inconvenient forum), we
note that under NYCPLR Section 510 a New York State court may have discretion to
transfer the place of trial, and under 28 U.S.C. Section 1404(a) a United States
district court has discretion to transfer an action from one federal court to
another.

We do not express any opinion herein concerning any law other than the federal
law of the United States, the law of the State of New York and the Delaware
General Corporation Law.

This opinion letter is rendered to you in connection with the above described
transactions. This opinion letter may not be relied upon by you for any other
purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent, except that this opinion letter
may be furnished to but may not be relied upon by (i) any purchaser (or
potential purchaser) of an interest in or a participation in the Commitments or
Loans, (ii) the independent auditors and attorneys of the addressees hereof on
the basis that they make no further disclosure, (iii) governmental entities or
other regulatory authorities having jurisdiction over the Lenders which require
the Lenders to furnish this opinion letter and (iv) Persons involved in a legal
proceeding relating to the Commitments or Loans.

 

Very truly yours, SIMPSON THACHER & BARTLETT LLP

--------------------------------------------------------------------------------

SCHEDULE I

THE LENDERS

Bank of America, N.A.

Barclays Bank PLC

Credit Agricole Corporate & Investment Bank

Regions Bank

Suntrust Bank

Capital One, N.A.

Sumitomo Mitsui Banking Corporation

Manufacturers and Traders Trust Company

PNC Bank, National Association

The Bank of Nova Scotia

California First National Bank

--------------------------------------------------------------------------------

SCHEDULE II

SUBSIDIARY GUARANTOR

International Resources Group Ltd., a Delaware corporation

--------------------------------------------------------------------------------

SCHEDULE III

DELAWARE FINANCING STATEMENTS

The following financing statements on form UCC-1, naming the Person listed below
as debtor and the Administrative Agent as secured party for the benefit of the
Secured Parties, to be filed in the offices listed opposite the name of such
party:

 

Debtor

  

Filing Office

Engility Holdings, Inc.

 

  

Office of the Secretary of State of the State of Delaware

 

Engility Corporation

 

  

Office of the Secretary of State of the State of Delaware

 

International Resources Group Ltd.

   Office of the Secretary of State of the State of Delaware

--------------------------------------------------------------------------------

SCHEDULE IV

1. Distribution Agreement

2. Tax Matters Agreement

3. Transition Services Agreement dated as of July 16, 2012 between L-3
Communications Corporation and the Borrower

4. Employee Matters Agreement dated as of July 16, 2012 between L-3
Communications Corporation and the Borrower

5. Master Supply Agreement dated as of July 16, 2012 between L-3 Communications
Corporation (as Seller) and the Borrower (as Buyer)

6. Master Supply Agreement dated as of July 16, 2012 between L-3 Communications
Corporation (as Buyer) and the Borrower (as Seller)

--------------------------------------------------------------------------------

EXHIBIT H-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOR FOREIGN LENDERS THAT ARE NOT

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES)

Date:                     

Reference is hereby made to that certain Credit Agreement, dated as of July 17,
2012 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Engility Corporation, a Delaware
corporation (the “Borrower”), Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT H-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOR FOREIGN PARTICIPANTS THAT ARE NOT

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES)

Date:                     

Reference is hereby made to that certain Credit Agreement, dated as of July 17,
2012 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Engility Corporation, a Delaware
corporation (the “Borrower”), Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT H-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOR FOREIGN PARTICIPANTS THAT ARE

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES)

Date:                     

Reference is hereby made to that certain Credit Agreement, dated as of July 17,
2012 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Engility Corporation, a Delaware
corporation (the “Borrower”), Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT H-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOR FOREIGN LENDERS THAT ARE

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES)

Date:                     

Reference is hereby made to that certain Credit Agreement, dated as of July 17,
2012 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Engility Corporation, a Delaware
corporation (the “Borrower”), Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT I

FORM OF

SOLVENCY CERTIFICATE

Date:             , 2012

Reference is hereby made to that certain Credit Agreement, dated as of July 17,
2012 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement”; the terms defined therein
being used herein as therein defined), among Engility Corporation, a Delaware
corporation (the “Borrower”), Engility Holdings, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The undersigned hereby certifies that he/she is the Chief Financial Officer of
the Borrower and, in such capacity and not in his/her individual capacity,
certifies that, on the date hereof and immediately after giving effect to the
consummation of the Transactions:

(a) the fair value of the assets of Holdings, the Borrower and its Subsidiaries
on a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise of Holdings, the Borrower and
its Subsidiaries on a consolidated basis;

(b) the present fair saleable value of the property of Holdings, the Borrower
and its Subsidiaries on a consolidated basis will be greater than the amount
that will be required to pay the probable liability of the debts and other
liabilities, subordinated, contingent or otherwise of Holdings, the Borrower and
its Subsidiaries on a consolidated basis, as such debts and other liabilities
become absolute and matured;

(c) Holdings, the Borrower and its Subsidiaries on a consolidated basis will be
able to pay the debts and liabilities, subordinated, contingent or otherwise of
Holdings, the Borrower and its Subsidiaries on a consolidated basis, as such
debts and liabilities become absolute and matured; and

(d) Holdings, the Borrower and its Subsidiaries on a consolidated basis will not
have unreasonably small capital with which to conduct the businesses in which
they are engaged as such businesses are now conducted and are proposed to be
conducted following the Closing Date.

For the purposes of the foregoing, the amount of contingent liabilities on the
date hereof and immediately after giving effect to the consummation of the
Transactions shall be computed as the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that is
reasonably expected to become an actual or matured liability.

[Signature page follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first
written above.

 

ENGILITY CORPORATION By:  

 

Name:   Title:   Chief Financial Officer

--------------------------------------------------------------------------------

EXHIBIT J

FORM OF

PERFECTION QUESTIONNAIRE

See attached.

--------------------------------------------------------------------------------

PERFECTION QUESTIONNAIRE27

            , 2012

In connection with that certain Credit Agreement, dated as of             , 2012
(as amended, restated, amended and restated, replaced, refinanced, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and among
Engility Corporation, a Delaware corporation (the “Borrower”), the financial
institutions from time to time party thereto (the “Lenders”) and Bank of
America, N.A., as administrative agent (in such capacity, the “Administrative
Agent”), the Borrower hereby certifies on behalf of itself and each other
grantor specified below (the Borrower and such other grantors, collectively, the
“Grantors”) as follows:

 

I. CURRENT INFORMATION

1. A. Legal Names, Organizations, Jurisdictions of Organization and
Organizational Identification Numbers. The full and exact legal name (as it
appears in each respective certificate or articles of incorporation, limited
liability membership agreement or similar organizational documents, in each case
as amended to date), the type of organization (or if the Borrower or a
particular Grantor is an individual, please indicate so), the jurisdiction of
organization (or formation, as applicable), and the organizational
identification number (not tax i.d. number) of the Borrower and each other
Grantor are as follows:

 

Name of Borrower/Grantor

   Type of Organization (e.g.
corporation, limited
liability company, limited
partnership)    Jurisdiction of
Organization/
Formation    Organizational
Identification
Number                  

B. Chief Executive Offices and Mailing Addresses. The chief executive office
address (or the principal residence if the Borrower or a particular Grantor is a
natural person) and the preferred mailing address (if different than chief
executive office or residence) of the Borrower and each other Grantor are as
follows:

 

Name of Borrower/Grantor

   Address of Chief Executive Office
(or for natural persons,  residence)    Mailing Address (if different  than
CEO or residence)            

C. Special Debtors. Except as specifically identified below none of the Grantors
is a: (i) transmitting utility (as defined in Section 9-102(a)(80)),
(ii) primarily engaged in farming operations (as defined in
Section 9-102(a)(35)), (iii) a trust, (iv) a foreign air carrier within the
meaning of the federal aviation act of 1958, as amended or (v) a branch or
agency of a bank which bank is not organized under the law of the United States
or any state thereof.

 

27 

The information provided in this Perfection Questionnaire gives effect to the
Transactions (as defined in the Credit Agreement).

--------------------------------------------------------------------------------

2.

 

Name of Borrower/Grantor

   Type of Special Grantor

None.

     

D. Trade Names/Assumed Names.

Current Trade Names. Set forth below is each trade name or assumed name
currently used by the Borrower or any other Grantor or by which the Borrower or
any Grantor is known or is transacting any business:

 

Borrower/Grantor

   Trade/Assumed Name      

E. Changes in Names, Jurisdiction of Organization or Corporate Structure.

Except as set forth below, neither the Borrower nor any other Grantor has
changed its name, jurisdiction of organization or its corporate structure in any
way (e.g. by merger, consolidation, change in corporate form, change in
jurisdiction of organization or otherwise) within the past five (5) years:

 

Borrower/Grantor

   Date of Change    Description of Change            

F. Prior Addresses.

Except as set forth below, neither the Borrower nor any other Grantor has
changed its chief executive office, or principal residence if the Borrower or a
particular Grantor is a natural person, within the past five (5) years:

 

Borrower/Grantor

   Prior
Address/City/State/Zip
Code      

G. Acquisitions of Equity Interests or Assets.

A. Except as set forth below, neither the Borrower nor any Grantor has acquired
the equity interests of another entity or substantially all the assets of
another entity within the past five (5) years:

 

Borrower/Grantor

   Date of
Acquisition    Description
of
Acquisition            

B. The jurisdiction of organization of the acquired entities set forth in clause
(A) above, together with each such entity’s chief executive office and location
of material assets immediately prior to such acquisition is set forth below:

 

Entity Name

   Jurisdiction of Organization    Address of Chief
Executive  Office    Locations of Material Assets
prior to acquisition                  

--------------------------------------------------------------------------------

H. Corporate Ownership and Organizational Structure.

Attached as Exhibit A hereto is a true and correct chart showing the ownership
relationship of the Borrower and all of its affiliates after giving effect to
the Spin-Off (as defined in the Credit Agreement).

 

II. INFORMATION REGARDING CERTAIN COLLATERAL

A. Investment Related Property

1. Equity Interests. Set forth below is a list of all equity interests owned by
the Borrower and each Grantor together with the type of organization which
issued such equity interests (e.g. corporation, limited liability company,
partnership or trust):

 

Borrower/ Grantor

   Issuer    Type of
Organization    % of
Shares
owned by
Borrower/Grantor    % of
Interest
Pledged    Certificate No.
(if uncertificated,
please indicate so)    Par
Value                                    

2. Securities Accounts. Set forth below is a list of all securities accounts in
which the Borrower or any other Grantor customarily maintains securities or
other assets having an aggregate value in excess of $50,000:

 

Borrower/Grantor

   Type of
Account    Name & Address of
Financial  Institutions            

3. Deposit Accounts. Set forth below is a list of all bank accounts (checking,
savings, money market or the like) in which the Borrower or any other Grantor
customarily maintains in excess of $50,000:

 

Borrower/Grantor

   Type of
Account    Account
Number    Name & Address of
Financial  Institutions                  

4. Debt Securities & Instruments. Set forth below is a list of all debt
securities and instruments owed to the Borrower or any other Grantor in the
principal amount of greater than $50,000:

 

Borrower/Grantor

   Issuer of
Instrument    Principal Amount
of Instrument    Maturity
Date                  

--------------------------------------------------------------------------------

B. Intellectual Property. Set forth below is a list of all U.S. copyright
registrations and applications, U.S. patents and patent applications, and U.S.
trademark registrations and applications, all licenses thereof and other
material U.S. intellectual property owned or used, or hereafter adopted, held or
used, by the Borrower and each other Grantor:

1. Copyrights, Copyright Applications and Copyright Licenses

 

Borrower/Grantor

   Title    Filing Date/Issued Date    Status    Application/
Registration
No.                        

2. Patents, Patent Applications and Patent Licenses

 

Borrower/Grantor

   Title    Filing Date/Issued Date    Status    Application/
Registration
No.                        

3. Trademarks, Trademark Applications and Trademark Licenses

 

Borrower/Grantor

   Title    Filing Date/Issued Date    Status    Application/
Registration
No.                        

C. Tangible Personal Property in Possession of Warehousemen, Bailees and Other
Third Parties. Except as set forth below, no persons (including, without
limitation, warehousemen and bailees) other than the Borrower or any other
Grantor have possession of any material amount (fair market value of $50,000 or
more) of tangible personal property of the Borrower or any other Grantor:

 

Borrower/Grantor

   Address/City/State/Zip Code    County    Description of
Assets and  Value

None.

        

D. Tangible Personal Property in Former Article 9 Jurisdictions and Canada. Set

--------------------------------------------------------------------------------

forth below are all the locations within the Commonwealth of Puerto Rico and any
Province of Canada where the Borrower or any other Grantor currently maintains
or has maintained any material amount (fair market value of $50,000 or more) of
its tangible personal property (including goods, inventory and equipment) of
such Borrower or any other Grantor (whether or not in the possession of such
Borrower or any other Grantor) within the past five (5) years:

 

Borrower/Grantor

   Address/City/Province or
Commonwealth   

E. Real Estate Related UCC Collateral

1. Fixtures. Set forth below are all the locations where the Borrower or any
other Grantor owns any real property or, to the extent the aggregate remaining
rent payments due under any lease exceed $2,000,000, any real property subject
to such lease:

 

Borrower/Grantor

   Address/City/State/Zip Code    County    Owned or
Leased         

2. “As Extracted” Collateral. Set forth below are all the locations where the
Borrower or any other Grantor owns, leases or has an interest in any wellhead or
minehead:

 

Borrower/Grantor

   Address/City/State/Zip Code    County      

3. Timber to be Cut. Set forth below are all locations where the Borrower or any
other Grantor owns goods that are timber to be cut:

 

Borrower/Grantor

   Address/City/State/Zip Code    County      

--------------------------------------------------------------------------------

III. AUTHORITY TO FILE FINANCING STATEMENTS

3. The undersigned, on behalf of the Borrower and each other Grantor, hereby
authorizes the Administrative Agent to file financing or continuation
statements, and amendments thereto, in all jurisdictions and with all filing
offices as the Administrative Agent may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted or to be granted
to the Administrative Agent under the Credit Agreement and each other Loan
Document (as defined in the Credit Agreement). Such financing statements may
describe the collateral in the same manner as described in the Guarantee and
Collateral Agreement (as defined in the Credit Agreement) or may contain an
indication or description of collateral that describes such property in any
other manner as the Administrative Agent may determine, in its sole discretion,
is necessary, advisable or prudent to ensure the perfection of the security
interest in the collateral granted to the Administrative Agent, including,
without limitation, describing such property as “all assets” or “all personal
property.”

--------------------------------------------------------------------------------

4. IN WITNESS WHEREOF, the undersigned hereto has caused this Perfection
Questionnaire to be executed as of the date first written above by its officer
thereunto duly authorized.

 

ENGILITY CORPORATION By:  

 

  Name:     Title: